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As filed with the Securities and Exchange Commission on May, 12 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ORIUS CORP.
(Exact name of registrant as specified in its charter)
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FLORIDA 1623 65-0894212
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Number) Identification No.)
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NATG HOLDINGS, LLC*
(Exact name of registrant as specified in its charter)
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DELAWARE 1623 65-0894212
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Number) Identification No.)
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1401 FORUM WAY, SUITE 400
WEST PALM BEACH, FLORIDA 33401
TELEPHONE: (561) 687-8300
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
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ROBERT E. AGRES
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
1401 FORUM WAY, SUITE 400
WEST PALM BEACH, FLORIDA 33401
TELEPHONE: (561) 687-8300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
DENNIS M. MYERS, ESQ.
KIRKLAND & ELLIS
200 E. Randolph Drive
Chicago, Illinois 60601
Telephone: (312) 861-2000
* The companies listed on the next page are also included in this Form S-4
Registration Statement as additional Registrants.
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: The exchange will occur as soon as practicable after the effective date
of this Registration Statement.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(2) REGISTRATION FEE(1)
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12 3/4% Senior Subordinated Notes due 2010, Series
B.................................................. $150,000,000 100% $39,600(1)
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Guarantees on Senior Subordinated Notes(2)........... -- -- (3)
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(1) Calculated in accordance with Rule 457 under the Securities Act of 1933, as
amended.
(2) All subsidiary guarantors are wholly owned subsidiaries of the Registrant
and have each guaranteed the Notes being registered. Pursuant to Rule
457(n), no separate fee is payable with respect to the guarantees being
registered hereby.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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I.R.S. EMPLOYER
EXACT NAME OF ADDITIONAL REGISTRANTS* JURISDICTION OF FORMATION IDENTIFICATION NO.
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Orius Capital Corp....................................... Delaware 65-1003658
North American Tel-Com Group, Inc........................ Florida 65-0776495
CATV Subscriber Services, Inc............................ North Carolina 56-1005072
Cablemasters Corp........................................ Pennsylvania 25-1447079
Channel Communications, Inc.............................. Kansas 48-0922004
Excel Cable Construction, Inc............................ Florida 59-2871649
Mich-Com Cable Services Incorporated..................... Michigan 38-2781181
State Wide CATV, Inc..................................... Florida 59-3408942
U.S. Cable, Inc.......................................... Wisconsin 39-1028450
DAS-CO of Idaho, Inc..................................... Idaho 82-0292893
Network Cabling Services, Inc............................ Texas 74-2176106
Schatz Underground Cable, Inc............................ Missouri 43-1264442
Copenhagen Utilities & Construction, Inc................. Oregon 93-0653868
Texel Corporation........................................ Virginia 54-1250992
LISN Company............................................. Ohio 34-1568854
Arion Sub, Inc........................................... Delaware 34-1894569
LISN, Inc................................................ Ohio 34-1009157
Irwin Telecom Services, L.P.............................. Texas 65-0974352
Irwin Telecom Holdings, Inc.............................. Delaware 65-0974351
Fenix Holdings, Inc...................................... Florida 39-1846969
Fenix Telecom Services Limited Partnership............... Wisconsin 65-0997844
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* The address for each of the additional Registrants is c/o Orius Corp., 1401
Forum Way, Suite 400, West Palm Beach, Florida 33401, telephone (561) 687-8300.
The primary standard industrial classification number for each of the additional
Registrants is 1623.
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THIS INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR
IS IT AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 12, 2000
PROSPECTUS
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[ORIUS CAPITAL LOGO]
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
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EXCHANGE OFFER FOR
$150,000,000
12 3/4% SENIOR SUBORDINATED NOTES DUE 2010
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WE ARE OFFERING TO EXCHANGE:
UP TO $150,000,000 OF OUR NEW 12 3/4% SENIOR SUBORDINATED NOTES DUE 2010, SERIES
B
FOR
A LIKE AMOUNT OF OUR OUTSTANDING 12 3/4% SENIOR SUBORDINATED NOTES.
MATERIAL TERMS OF EXCHANGE OFFER
- - The terms of the notes to be issued in the exchange offer are substantially
identical to the outstanding notes, except that the transfer restrictions and
registration rights relating to the outstanding notes will not apply to the
exchange notes.
- - There is no existing public market for the outstanding notes or the exchange
notes. We do not intend to list the exchange notes on any securities exchange
or seek approval for quotation through any automated trading system.
- - Expires 5:00 p.m., New York City time, , 2000, unless
extended.
- - The exchange of notes will not be a taxable event for U.S. federal income tax
purposes.
- - Not subject to any condition other than that the exchange offer not violate
applicable law or any applicable interpretation of the Staff of the SEC.
- - We will not receive any proceeds from the exchange offer.
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FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 10 OF
THIS PROSPECTUS.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES
TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
, 2000
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary.............................. 1
Risk Factors.................................... 10
Forward-Looking Statements May Prove
Inaccurate.................................... 18
Market Ranking and Other Data is Subject to
Change and Cannot be Verified with Complete
Accuracy...................................... 18
LISN Acquisition................................ 19
The Exchange Offer.............................. 22
Use of Proceeds................................. 31
Capitalization.................................. 31
Unaudited Pro Forma Financial Statements........ 32
Supplemental Unaudited Pro Forma Financial
Data.......................................... 38
Selected Historical Financial Data.............. 41
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 42
Business........................................ 50
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Management...................................... 63
Certain Relationships and Related Party
Transactions.................................. 69
Principal Stockholders.......................... 72
Description of Parent's Securities.............. 73
Description of Senior Credit Facilities......... 75
Description of the Notes........................ 78
Book Entry, Delivery and Form................... 118
United States Federal Income Tax Consequence.... 122
Plan of Distribution............................ 125
Legal Matters................................... 126
Independent Accountants......................... 127
Available Information........................... 128
Index to Financial Statements................... F-1
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As used in this prospectus, references to "we," "our" and "Orius" refer to
Orius Corp. and all of its subsidiaries. In those situations where it is
important to distinguish between Orius Corp. and its subsidiaries, we use the
term "Parent" to refer only to Orius Corp. We refer to NATG Holdings, LLC and
Orius Capital Corp. as the "Issuers."
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PROSPECTUS SUMMARY
This summary contains basic information about our company and this exchange
offer. This summary does not contain all of the information that may be
important to you in deciding whether to participate in the exchange offer. We
encourage you to read this prospectus in its entirety.
SUMMARY OF THE EXCHANGE OFFER
The Initial Offering of
Outstanding Notes............. We sold the outstanding notes on February 4,
2000 to Deutsche Bank Securities Inc. and Banc
of America Securities LLC. We collectively
refer to these parties in this prospectus as
the "initial purchasers." The initial
purchasers subsequently resold the outstanding
notes to qualified institutional buyers
pursuant to Rule 144A under the Securities Act.
Registration Rights
Agreement..................... Simultaneously with the initial sale of the
outstanding notes, we entered into a
registration rights agreement for the exchange
offer. In the registration rights agreement, we
agreed, among other things, to use our
reasonable best efforts to file a registration
statement with the SEC and to complete this
exchange offer within 120 days of issuing the
outstanding notes. The exchange offer is
intended to satisfy your rights under the
registration rights agreement. After the
exchange offer is complete, you will no longer
be entitled to any exchange or registration
rights with respect to your outstanding notes.
The Exchange Offer............ We are offering to exchange the exchange notes,
which have been registered under the Securities
Act for your outstanding notes, which were
issued on February 4, 2000 in the initial
offering. In order to be exchanged, an
outstanding note must be properly tendered and
accepted. All outstanding notes that are
validly tendered and not validly withdrawn will
be exchanged. We will issue exchange notes
promptly after the expiration of the exchange
offer.
Resales....................... We believe that the exchange notes issued in
the exchange offer may be offered for resale,
resold and otherwise transferred by you without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that:
- the exchange notes are being acquired in the
ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the exchange notes
issued to you in the exchange offer; and
- you are not an affiliate of ours.
If any of these conditions are not satisfied
and you transfer any exchange notes issued to
you in the exchange offer without delivering a
prospectus meeting the requirements of the
Securities Act or without an exemption from
registration of your exchange notes from these
requirements, you may incur liability
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under the Securities Act. We will not assume,
nor will we indemnify you against, any such
liability.
Each broker-dealer that is issued exchange
notes in the exchange offer for its own account
in exchange for outstanding notes that were
acquired by that broker-dealer as a result of
market-making or other trading activities, must
acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act
in connection with any resale of the exchange
notes. A broker-dealer may use this prospectus
for an offer to resell, resale or other
retransfer of the exchange notes issued to it
in the exchange offer.
Record Date................... We mailed this prospectus and the related
exchange offer documents to registered holders
of outstanding notes on , 2000.
Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time, , 2000, unless we
decide to extend the expiration date.
Conditions to the Exchange
Offer......................... The exchange offer is not subject to any
condition other than that the exchange offer
not violate applicable law or any applicable
interpretation of the Staff of the SEC.
Procedures for Tendering
Outstanding Notes............. We issued the outstanding notes as global
securities. When the outstanding notes were
issued, we deposited the global notes
representing the outstanding notes with United
States Trust Company of New York, as book-entry
depositary. United States Trust Company issued
a certificateless depositary interest in each
global note we deposited with it, which
represents a 100% interest in the notes, to The
Depositary Trust Company, known as DTC.
Beneficial interests in the outstanding notes,
which are held by direct or indirect
participants in DTC through the certificateless
depositary interest, are shown on records
maintained in book-entry form by DTC.
You may tender your outstanding notes through
book-entry transfer in accordance with DTC's
Automated Tender Offer Program, known as ATOP.
To tender your outstanding notes by a means
other than book-entry transfer, a letter of
transmittal must be completed and signed
according to the instructions contained in the
letter. The letter of transmittal and any other
documents required by the letter of transmittal
must be delivered to the exchange agent by
mail, facsimile, hand delivery or overnight
carrier. In addition, you must deliver the
outstanding notes to the exchange agent or
comply with the procedures for guaranteed
delivery. See "The Exchange Offer -- Procedures
for Tendering Outstanding Notes" for more
information.
Do not send letters of transmittal and
certificates representing outstanding notes to
us. Send these documents only to the exchange
agent. See "The Exchange Offer -- Exchange
Agent" for more information.
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Special Procedures for
Beneficial Owners............. If you are the beneficial owner of book-entry
interests and your name does not appear on a
security position listing of DTC as the holder
of the book-entry interests or if you are a
beneficial owner of outstanding notes that are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender the book-entry interest
or outstanding notes in the exchange offer, you
should contact the person in whose name your
book-entry interests or outstanding notes are
registered promptly and instruct that person to
tender on your behalf.
Withdrawal Rights............. You may withdraw the tender of your outstanding
notes at any time prior to 5:00 p.m., New York
City time on , 2000.
Federal Income Tax
Considerations................ The exchange of outstanding notes will not be a
taxable event for United States federal income
tax purposes. See "United States Federal Income
Tax Consequences" for a more detailed
discussion of the U.S. federal income tax
consequences of the exchange offer and the
ownership and disposition of the exchange
notes.
Use of Proceeds............... We will not receive any proceeds from the
issuance of exchange notes pursuant to the
exchange offer. We will pay all of our expenses
incident to the exchange offer.
Exchange Agent................ United States Trust Company of New York is
serving as the exchange agent in connection
with the exchange offer.
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SUMMARY OF TERMS OF THE EXCHANGE NOTES
The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes, except that the exchange notes will be registered
under the Securities Act. As a result, the exchange notes will not bear legends
restricting their transfer and will not contain the registration rights and
liquidated damage provisions contained in the outstanding notes. The exchange
notes represent the same debt as the outstanding notes. Both the outstanding
notes and the exchange notes are governed by the same indenture. We use the term
notes in this prospectus to collectively refer to the outstanding notes and the
exchange notes.
Issuers.................... The exchange notes will be joint and several
obligations of NATG and Orius Capital. Orius
Capital is a wholly owned subsidiary of NATG, which
in turn is a wholly owned subsidiary of Parent.
Orius Capital was formed in connection with the
offering of the outstanding notes. Orius Capital
has no assets, no liabilities other than the
outstanding notes and no operations, and is
prohibited from engaging in any business activities
other than in connection with the notes.
Securities Offered......... $150,000,000 in principal amount of 12 3/4% senior
subordinated notes due 2010, Series B.
Maturity................... February 1, 2010.
Interest Rate.............. 12 3/4% per year, calculated using a 360-day year.
Interest Payment Dates..... February 1 and August 1, commencing August 1, 2000.
Ranking.................... The exchange notes will be unsecured senior
subordinated obligations of the issuers and will
rank (1) junior to their existing and future senior
debt, (2) senior to all debt of the issuers that is
expressly subordinated to the exchange notes and
(3) equal to all other debt and other obligations
of the issuers. As of December 31, 1999, on a pro
forma basis giving effect to the offering of the
outstanding notes, the issuers would have had
approximately $251.4 million of senior debt, in
addition to approximately $88.6 million that they
would have had available to borrow under the senior
credit facilities.
Guarantees................. The issuers' obligations under the exchange notes
and the related indenture will be jointly,
severally and unconditionally guaranteed on an
unsecured senior subordinated basis by Parent and
by all of the issuers' existing and future domestic
subsidiaries. We collectively refer to these
subsidiaries in this prospectus as the guarantors.
See "Description of the Notes -- Guarantees." As of
December 31, 1999, on a pro forma basis giving
effect to the offering of the outstanding notes,
the guarantors would have had approximately $251.4
million of senior debt to which their guarantees of
the outstanding notes would have been subordinated.
Optional Redemption........ Except as described in the next paragraph, the
issuers cannot redeem the exchange notes until
February 1, 2005. Thereafter, they may redeem some
or all of the notes at the redemption prices listed
in the "Description of the Notes" section under the
heading "Optional Redemption."
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At any time before February 1, 2003, the issuers
can choose to redeem up to 35% of the notes issued
under the indenture with money raised in one or
more equity offerings, as long as:
- they pay 112.75% of the principal amount of the
notes, plus accrued interest;
- they give notice of redemption within 60 days of
completing the equity offering; and
- at least 65% of the aggregate principal amount of
notes issued under the indenture remains
outstanding afterwards.
Change of Control Offer.... If a change of control occurs, the issuers must
offer to purchase exchange notes from holders at
101% of their principal amount, plus accrued
interest.
The issuers might not be able to pay you the
required price for exchange notes you present at
the time of a change of control, because:
- they might not have enough funds at that time; or
- the terms of their senior debt may prevent them
from paying that amount.
Asset Sale Proceeds........ If we engage in asset sales, we generally must
either (1) invest the net cash proceeds from such
sales in our business, (2) prepay senior debt
within a period of time or (3) make an offer to
purchase a principal amount of exchange notes equal
to the excess net cash proceeds from the asset
sale. The purchase price of the exchange notes out
of the asset sale proceeds will be 100% of their
principal amount, plus accrued interest.
Certain Covenants.......... The indenture under which the outstanding notes
were issued will govern the exchange notes. This
indenture contains covenants limiting our ability
to, among other things:
- incur additional debt;
- pay dividends or distributions on our capital
stock or repurchase our capital stock;
- issue stock of subsidiaries;
- make certain investments;
- create liens on our assets to secure debt;
- enter into transactions with affiliates;
- merge or consolidate with another company; and
- transfer and sell assets.
These covenants are subject to a number of
important limitations and exceptions.
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ORIUS CORP.
Unless otherwise indicated, pro forma financial data presented in this
prospectus for 1998 and 1999 give effect to (1) our acquisition of LISN
Holdings, Inc. and its subsidiaries in December 1999, (2) the 16 other
acquisitions we have completed since March 1998 and (3) the original issuance of
the outstanding notes and the application of the proceeds from that issuance, as
if each of these transactions had occurred at the beginning of the period
presented.
We are one of the largest independent providers of comprehensive telecom
infrastructure services in the U.S., with operations in 48 states over the past
twelve months. We offer a full spectrum of services, including:
- External Telecom Services -- installation, design, engineering and
maintenance of fiber optic, coaxial and copper cable networks for the
telecom industry, which consists of the telecommunications services
segment and the broadband services segment; and
- Internal Telecom Services -- engineering, furnishing and installation of
network equipment and related components and related maintenance
services, primarily in the central offices of telecommunications services
providers, which we refer to as "EF&I Services," and similar network
services for commercial, governmental and institutional entities, which
we refer to as "Network Services."
Our ability to provide comprehensive, quality service on a nationwide basis
positions us as a leading, full-service provider of telecom infrastructure
services.
Our principal customers are providers of telecom services, including
telecommunications services and broadband services. Providers of
telecommunications services generally include the Regional Bell Operating
Companies and other incumbent local exchange carriers, competitive local
exchange carriers and long distance carriers. Our primary telecommunications
services customers include Ameritech, AT&T, Bell Atlantic, DTI, GTE, MCI
WorldCom, Pacific Bell, Southwestern Bell, U.S. West and Williams
Communications. Broadband services refer to the emerging initiative of
traditional cable companies to provide a comprehensive package of cable service,
telephone service, Internet access and other data and voice transmission
services. Our primary broadband services customers include Adelphia, AT&T
Broadband & Internet Services, Charter Communications, Comcast, Cox
Communications, MediaCom, MediaOne and Time Warner. In addition, we provide our
Network Services for commercial, governmental and institutional customers such
as Compaq, Dell, EDS, the FDIC and the World Bank.
COMPETITIVE STRENGTHS
We believe that we possess a number of competitive strengths that position
us as a leading provider of telecom infrastructure services and provide us with
the ability to meet the increased demand for these services and to take
advantage of the strong technology-driven growth occurring in the telecom
industry, including:
- Comprehensive Service Capabilities. We are one of the few service
providers with the capability to offer our customers integrated and
comprehensive telecom infrastructure services, including installation,
design, engineering, furnishing and maintenance services.
- Broad Geographic Coverage. Consolidation in the telecom industry has
created geographically diverse telecom services providers who require
telecom infrastructure services providers like us with similarly broad
geographical capabilities.
- Strong Customer Relationships. More than 80% of our 1999 pro forma
revenue was derived from repeat customers. As a result of our strong
customer relationships, we are well positioned to capitalize on the
increasing trend of telecom services providers towards greater
outsourcing of their telecom infrastructure needs.
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- Reputation and Commitment to Quality. We believe that we have a
reputation in our industry for responsive, high quality service, as
evidenced by LISN's receipt of customer service awards, including
Siemens' "1998 Contractor of the Year" and GTE's "Supplier Recognition
Award" in 1997.
- Decentralized Operating Strategy. We manage our operations on a
decentralized basis while maintaining overall operating and financial
controls and strategic planning at our corporate headquarters. We believe
that our decentralized operating structure retains the entrepreneurial
spirit of each of the businesses we acquire and permits us to capitalize
on the acquired businesses' customer relationships, local and regional
market knowledge, local brand name recognition and specialized skills.
- Experienced Management. Our executive management and the senior
management of our operating subsidiaries have an average of over 20 years
of experience in the telecom infrastructure services industry and our
chief executive officer, William J. Mercurio, has more than 25 years of
experience in this industry.
BUSINESS STRATEGY
Our objective is to enhance our position as one of the largest independent
providers of comprehensive telecom infrastructure services in the U.S. We seek
to utilize our competitive strengths to take advantage of substantial growth
opportunities in the telecom industry that favor large companies like us with
significant capital resources. Key elements of our growth and operating
strategies include the following:
- Continuing to Grow Internally. We believe we can continue to achieve
internal growth by:
- Continuing to Develop National Service Capabilities;
- Focusing on Cross-Selling Opportunities;
- Maximizing Performance of Existing Operations; and
- Expanding Our Service Offerings.
- Selectively Pursuing Strategic Acquisitions
- Attracting, Training and Retaining Highly Qualified Personnel
LISN ACQUISITION
On December 15, 1999, Parent and LISN Holdings, Inc. entered into a series
of transactions that resulted in LISN becoming a wholly owned subsidiary of
NATG. In connection with the LISN acquisition, Parent was acquired by an
investor group consisting of LISN's former stockholders, including Willis Stein
& Partners and members of LISN's management, certain new co-investors and
members of Parent's and its subsidiaries' management. Willis Stein & Partners,
its co-investors and members of LISN's management invested cash in the aggregate
of $112.2 million in LISN and exchanged their LISN securities for similar
securities issued by Parent as part of the LISN acquisition. For a more detailed
description of the components of the LISN acquisition, see "LISN Acquisition."
RECENT DEVELOPMENTS
Since January of this year we have completed three acquisitions. In January
2000, we completed the acquisition of Irwin Utilities of Texas, Inc. and three
related entities. Irwin is a Dallas, Texas based provider of External Telecom
Services to telecom services providers in a variety of states. Irwin's primary
customers include AT&T Broadband & Internet Services, Charter Communications and
Time Warner. In April 2000, we completed the acquisitions of Fenix
Communications, Inc. and Fenix Limited Partnership, which we collectively refer
to as "Fenix," and Midwest Splicing and Activation, Inc. Fenix and Midwest
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provide External Telecom Services to broadband service providers in and around
the Great Lakes region of the U.S. and the Midwest region of the U.S.,
respectively. Fenix's primary customer is Charter Communications and Midwest's
primary customers include Media One and Paragon Cable. The aggregate purchase
price for these acquisitions was approximately $44.5 million, consisting of
approximately $35.5 million of cash, $7.7 million of Parent's securities and the
assumption of $1.3 million of debt. We funded $15.5 million of the cash purchase
price with borrowings under our senior credit facilities. These three companies
had aggregate revenue and EBITDA for the year ended December 31, 1999 of $43.6
million and $10.6 million, respectively. Our revenue and cash flow provided by
operations were $167.0 million and $13.8 million, respectively, for the year
ended December 31, 1999.
EQUITY INVESTOR
Willis Stein & Partners is a leading private equity investment firm based
in Chicago, Illinois that specializes in negotiated investments in the telecom,
business services, media and publishing, manufacturing, financial services and
health care industries. Willis Stein & Partners, through its limited partnership
funds, had approximately $1.2 billion of assets under management as of December
31, 1999. Other investments sponsored by Willis Stein & Partners in the telecom
and media sectors include The Petersen Companies, Protocol Holdings, College
Television Network, Interlink Communication Partners and LISN Holdings, Inc.
Unless otherwise noted, references in this offering memorandum to Willis Stein &
Partners refer to Willis Stein & Partners II, L.P., Willis Stein & Partners
Dutch, L.P. and their respective management companies.
RISK FACTORS
For a discussion of some of the factors that you should consider before
participating in this exchange offer, see "Risk Factors."
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Parent is a Florida corporation, NATG is a Delaware limited liability
company and Orius Capital is a Delaware corporation. Our principal executive
offices are located at 1401 Forum Way, Suite 400, West Palm Beach, Florida
33401. Our telephone number is (561) 687-8300.
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SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA
Set forth below is summary unaudited pro forma financial data for Orius.
The summary unaudited pro forma financial data has been derived by the
application of pro forma adjustments to the historical consolidated financial
statements of LISN, Orius and each of the companies acquired by us since March
1998 (collectively, the "Acquired Companies"). The summary unaudited pro forma
financial data presented below is intended to give you a better understanding of
what the results of operations of all of our businesses might have looked like
had they been combined as of the beginning of the period presented and what our
combined financial position might have looked like at December 31, 1999. You
should read the summary unaudited pro forma financial data in conjunction with
the information contained in "Unaudited Pro Forma Financial Statements,"
"Selected Historical Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Supplemental Unaudited Pro
Forma Financial Data" and the financial statements and the related notes
appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
(DOLLARS IN
THOUSANDS)
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................. $551,941
Expenses:
Direct costs............................................ 398,095
General and administrative.............................. 54,100
Depreciation and amortization........................... 25,128
--------
Total expenses............................................ 477,323
Income from operations.................................... 74,618
Other Expense:
Interest expense, net................................... 62,429
Other expense........................................... 159
--------
Income before income tax provision and extraordinary
charge.................................................. 12,030
Provision for income taxes................................ 9,924
--------
Net income before extraordinary charge.................... $ 2,106
========
OTHER DATA:
Ratio of earnings to fixed charges........................ 1.18
<CAPTION>
AT
DECEMBER 31,
1999
------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 8,705
Working capital........................................... 100,148
Total assets.............................................. 656,074
Total debt(1)............................................. 542,548
Total stockholders' deficit............................... (186,141)
</TABLE>
- ---------------
(1) Debt does not include letters of credit issued under the revolving credit
facility in the amount of $7.2 million that will expire in accordance with
their terms upon the exercise of the call options described under the
heading "LISN Acquisition."
9
<PAGE> 14
RISK FACTORS
You should carefully consider the following factors and the other
information in this prospectus before you decide whether to participate in the
exchange offer.
RISKS ASSOCIATED WITH THE EXCHANGE OFFER
THERE IS NO PUBLIC MARKET FOR THE NOTES--YOU MAY NOT BE ABLE TO SELL YOUR NOTES
The exchange notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:
- the liquidity of any trading market that may develop;
- the ability of holders to sell their exchange notes; or
- the price at which the holders would be able to sell their exchange
notes.
If a trading market were to develop, the exchange notes might trade at
higher or lower prices than their principal amount or purchase price, depending
on many factors, including prevailing interest rates, the market for similar
debentures and our financial performance.
We understand that the initial purchasers presently intend to make a market
in the notes. However, they are not obligated to do so, and any market-making
activity with respect to the notes may be discontinued at any time without
notice. In addition, any market-making activity will be subject to the limits
imposed by the Securities Act and the Securities Exchange Act, and may be
limited during the exchange offer or the pendency of an applicable shelf
registration statement. There can be no assurance that an active trading market
will exist for the notes or that any trading market that does develop will be
liquid.
In addition, any outstanding note holder who tenders in the exchange offer
for the purpose of participating in a distribution of the exchange notes may be
deemed to have received restricted securities, and if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
YOUR OUTSTANDING NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW
THE EXCHANGE OFFER PROCEDURES
We will issue exchange notes pursuant to this exchange offer only after a
timely receipt of your outstanding notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your outstanding notes, please allow sufficient time to ensure timely
delivery. We are under no duty to give notification of defects or irregularities
with respect to the tenders of outstanding notes for exchange.
IF YOU DO NOT EXCHANGE YOUR OUTSTANDING NOTES, YOUR OUTSTANDING NOTES WILL
CONTINUE TO BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND YOU MAY BE
UNABLE TO SELL YOUR OUTSTANDING NOTES
We did not register the outstanding notes, nor do we intend to do so
following the exchange offer. Outstanding notes that are not tendered will
therefore continue to be subject to the existing transfer restrictions and may
be transferred only in limited circumstances under the securities laws. If you
do not exchange your outstanding notes, you will lose your right to have your
outstanding notes registered under the federal securities laws. As a result, if
you hold outstanding notes after the exchange offer, you may be unable to sell
your outstanding notes.
10
<PAGE> 15
RISKS RELATING TO THE NOTES
WE HAVE SUBSTANTIAL DEBT, SO WE MAY NOT BE ABLE TO MAKE PAYMENTS ON THE NOTES
We have indebtedness that is substantial in relation to our stockholders'
equity. As of December 31, 1999, on a pro forma basis giving effect to the
offering of the outstanding notes, we would have had $542.5 million in aggregate
principal amount of consolidated indebtedness outstanding, $251.4 million of
which would have been senior to the notes, and a stockholders' deficit of $186.1
million.
Our substantial indebtedness could have important consequences for you,
including:
- we may have difficulty making payments on the notes;
- our ability to obtain additional financing for working capital, capital
expenditures, acquisitions, or general corporate purposes may be
impaired;
- a substantial portion of our cash flow from operations must be dedicated
to the payment of principal and interest on our debt, reducing the funds
available to us for other purposes including expansion through
acquisitions and expansion of our service offerings;
- certain of our borrowings are and will continue to be at variable rates
of interest, which exposes us to the risk of a rise in interest rates;
- substantially all of our assets have been pledged to secure our
obligations under our senior credit facilities and will be unavailable to
secure other debt, which will limit our ability to obtain additional debt
financing;
- we may be substantially more leveraged than some of our competitors,
which may place us at a competitive disadvantage; and
- our substantial indebtedness may hinder our ability to adjust rapidly to
changing market conditions and could make us more vulnerable in the event
of a downturn in general economic conditions or our business.
Our ability to make scheduled payments or to refinance our obligations with
respect to our indebtedness will depend on our financial and operating
performance, which, in turn, is subject to prevailing economic conditions and to
financial, business and other factors beyond our control. If our cash flow and
capital resources are insufficient to fund our debt service obligations, we may
be forced to reduce or delay scheduled expansion and capital expenditures, sell
material assets or operations, obtain additional capital or restructure our
debt. We cannot assure you that our operating performance, cash flow and capital
resources will be sufficient for payment of our debt in the future. In the event
that we are required to dispose of material assets or operations or restructure
our debt to meet our debt service and other obligations, we cannot assure you as
to the terms of any such transaction or how soon any such transaction could be
completed. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."
DESPITE SUBSTANTIAL LEVELS OF DEBT, WE MAY STILL BE ABLE TO INCUR EVEN MORE
DEBT, WHICH COULD FURTHER EXACERBATE THE RISKS DESCRIBED ABOVE
We may be able to incur substantial debt in the future. The terms of the
indenture and the senior credit facilities permit the incurrence of additional
debt under some circumstances. In particular, as of December 31, 1999, on a pro
forma basis, we would have been able to incur an additional $88.6 million of
borrowings under our revolving credit facility. If new debt is added to our
existing debt, the related risks that you face as a holder of the notes could
intensify.
THE NOTES AND THE GUARANTEES ARE SUBORDINATED TO SENIOR DEBT
Payment on the notes is subordinated in right of payment to all of our
senior indebtedness, including the senior credit facilities. As of December 31,
1999, on a pro forma basis, the aggregate principal amount
11
<PAGE> 16
of our consolidated indebtedness to which the notes would have been subordinated
was approximately $251.4 million. By reason of the subordination provisions of
the indenture, in the event of the insolvency, liquidation, reorganization,
dissolution or other winding-up of the issuers, holders of notes will not
receive any payment on the notes until all senior debt, including the senior
credit facilities, is paid in full. As a result, in the event of such a
proceeding, holders of the notes may receive less, ratably, than holders of
senior debt. In addition, no payment will be able to be made in respect of the
notes during the continuance of payment defaults on our senior debt, and
payments on the notes may be prohibited for up to 180 consecutive days in the
event of certain non-payment defaults on our senior debt. The notes are
unsecured, and are effectively subordinated to all secured obligations to the
extent of the value of the assets securing such obligations. The guarantees are
similarly subordinated and, as of December 31, 1999, on a pro forma basis, would
have been subordinated to approximately $251.4 million of debt.
YOU SHOULD NOT RELY ON ORIUS CAPITAL OR ON PARENT'S GUARANTEE IN EVALUATING AN
INVESTMENT IN THE NOTES
Orius Capital was formed in connection with the initial offering of the
outstanding notes and has no assets and no operations and is prohibited from
engaging in any business activities, except in connection with the notes. In
addition, Parent is a holding company whose sole source of operating income and
cash flow is derived from NATG and whose only material asset is NATG's capital
stock. Parent is therefore dependent upon dividends and distributions of NATG's
earnings to perform its obligations under its guarantee. As a result, Parent's
guarantee provides little, if any, additional credit support for the notes.
Furthermore, the indenture does not impose any restrictions on the business or
operations of Parent or on, among other things, the amount of indebtedness that
Parent may incur.
NATG CONDUCTS ALL OF ITS OPERATIONS THROUGH SUBSIDIARIES
NATG is a holding company. Its subsidiaries conduct substantially all of
its operations and own substantially all of its assets. NATG's cash flow and its
ability to meet its debt service obligations depend upon the cash flow of its
subsidiaries and the payment of funds by its subsidiaries in the form of loans
and dividends. NATG's subsidiaries are not obligated to make funds available to
NATG for payments on the notes. In addition, the ability of its subsidiaries to
make payments to it will depend on their earnings, the terms of their debt,
business and tax considerations and legal restrictions.
THE NOTES ARE UNSECURED -- YOUR RIGHT TO ENFORCE REMEDIES IS LIMITED BY THE
RIGHTS OF HOLDERS OF SECURED DEBT
The notes are not secured by any of Parent's assets or any of its
subsidiaries' assets. Our obligations under our senior credit facilities are
secured by substantially all of Parent's assets and its subsidiaries' assets. If
an Issuer becomes insolvent or is liquidated, or if payment under the senior
credit facilities is accelerated, the lenders under the senior credit facilities
will be entitled to exercise the remedies available to a secured lender under
applicable law. These lenders will have a claim on all assets securing the
senior credit facilities before the holders of unsecured debt, including the
notes.
OUR SENIOR CREDIT FACILITIES AND THE INDENTURE GOVERNING THE NOTES RESTRICT OUR
OPERATIONS
Our senior credit facilities contain numerous restrictive covenants,
including, among other things, covenants that limit our ability to borrow money,
make capital expenditures, use assets as security in other transactions, make
restricted payments or restricted investments, incur contingent obligations,
sell assets and enter into leases and transactions with affiliates. In addition,
the senior credit facilities require Parent to meet financial ratios and tests,
including:
- a minimum consolidated net worth test;
- a maximum consolidated total leverage test;
- a minimum interest coverage test; and
- a minimum consolidated fixed charge coverage test.
12
<PAGE> 17
Our ability to comply with the covenants and other terms of our senior
credit facilities and the indenture and to satisfy our debt obligations will
depend on our future operating performance. In the event that we fail to comply
with the various covenants contained in our senior credit facilities, we would
be in default under our senior credit facilities, and, in such case, the
maturity of substantially all of our long-term indebtedness could be
accelerated.
The indenture also imposes operating and financial restrictions on us that
limit our ability to:
- borrow money;
- make dividends and other restricted payments;
- use assets as security in other transactions;
- enter into transactions with affiliates;
- pay dividends on or purchase our stock or our significant restricted
subsidiaries' stock;
- enter into new businesses;
- issue and sell stock of restricted subsidiaries; and
- sell assets or merge with or into other companies.
A default under the indenture would also constitute an event of default
under our senior credit facilities and the lenders under the senior credit
facilities could elect to declare all amounts borrowed under the senior credit
facilities, together with accrued interest, to be due and payable. If we were
unable to repay these borrowings, the lenders could proceed against our assets,
which secure our borrowings under the senior credit facilities. If the
indebtedness under the senior credit facilities was accelerated, we cannot
assure you that we would be able to repay the indebtedness under the senior
credit facilities and the notes in full. See "Description of Senior Credit
Facilities" and "Description of the Notes."
THE GUARANTEES MAY BE UNENFORCEABLE DUE TO FRAUDULENT CONVEYANCE STATUTES
The obligations of the guarantors may be subject to challenge under state
or federal fraudulent transfer laws. In general, under fraudulent conveyance
laws, a court can subordinate or avoid an obligation such as a guarantee if it
determines that the obligation was incurred with actual intent to hinder, delay
or defraud creditors or if the guarantor did not receive fair consideration or
reasonably equivalent value for the guarantee and the guarantor also:
- was insolvent or rendered insolvent as a result of the guarantee;
- was engaged in a business or transaction for which the guarantor's
remaining assets constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay at maturity.
Generally an entity is insolvent if:
- the sum of its debts, including contingent or unliquidated debts, is
greater than all of its property at a fair valuation; or
- the present fair salable value of its assets is less than the amount
required to pay its probable liability on existing debts as they become
due.
If a guarantee were determined to be a fraudulent conveyance, it could be
unenforceable.
13
<PAGE> 18
WE MAY NOT BE ABLE TO REPURCHASE THE NOTES UPON A CHANGE OF CONTROL OFFER
Upon the occurrence of specified change of control events, we are required
to offer to purchase each holder's notes at a price of 101% of their principal
amount plus accrued interest. We may not have sufficient financial resources to
purchase all of the notes that holders tender to us upon a change of control
offer. The occurrence of a change of control could also constitute an event of
default under the senior credit facilities and/or any of our future credit
agreements. Our bank lenders may also have the right to prohibit any such
purchase, in which event we would be in default on the notes. See "Description
of the Notes -- Change of Control."
RISKS RELATING TO OUR BUSINESS
OUR HISTORICAL AND PROPOSED GROWTH BY ACQUISITION MAY ADVERSELY AFFECT OUR
OPERATING RESULTS
Acquisitions involve a number of special risks including:
- failure of the acquired businesses to achieve the results we expect;
- diversion of our management's attention from operational matters;
- our inability to retain key personnel of the acquired businesses;
- risks associated with unanticipated events or liabilities;
- the potential disruption of our business; and
- customer dissatisfaction or performance problems at the acquired
businesses.
If we are unable to integrate or successfully manage the companies we have
acquired, including LISN, or the businesses that we may acquire in the future,
we may not realize anticipated cost savings and revenue growth, which may result
in reduced profitability or operating losses. In addition, we expect to face
competition for acquisition candidates, which may limit the number of our
acquisition opportunities and may lead to higher acquisition prices. The
realization of all or any of the risks described above could materially and
adversely affect the reputation of our company and our results of operations.
WE MAY NOT BE ABLE TO CONTINUE OUR GROWTH THROUGH ACQUISITIONS
We may be unable to support our strategy of growth through acquisitions if
we cannot finance future acquisitions. We expect to use Parent's equity or debt
securities for all or a portion of the consideration for future acquisitions. If
Parent's equity securities do not maintain a sufficient value or potential
acquisition candidates are unwilling to accept Parent's equity or debt
securities as part of the consideration for the sale of their businesses, we may
be required to utilize more of our cash resources to pursue our acquisition
program, whether through additional borrowings under our senior credit
facilities, cash on hand or otherwise. Using cash for acquisitions limits our
financial flexibility and makes us more likely to seek additional capital
through future debt or equity financings. If we seek to issue more debt, we may
have to agree to financial covenants that limit our operational and financial
flexibility. When we seek additional debt or equity financings, we cannot be
certain that we will be able to complete such financings or that we will be able
to complete such financings on terms acceptable to us. We are required to obtain
the consent of our senior lenders for acquisitions that exceed minimum levels of
cash consideration and the aggregate amount we can borrow under the senior
credit facilities to finance acquisitions is limited. We cannot readily predict
the timing, size and success of our acquisition efforts or the capital we will
need for these efforts.
WE MAY ENCOUNTER DIFFICULTIES IN MANAGING OUR GROWTH
Our recent growth has placed, and is expected to continue to place, a
significant strain on our managerial, operational and financial resources. To
manage any future growth, we must continue to implement and improve our
operational and financial systems, and must expand, train and manage our
14
<PAGE> 19
expanded employee base. We cannot assure you that we will not encounter
unexpected difficulties in managing the expansion of our operations, or that our
systems, products and controls will be adequate to support our expanded
operations. Any inability to manage growth effectively could have a material
adverse effect on our business, results of operations and financial condition.
ALL OF OUR CUSTOMER CONTRACTS CAN BE CANCELED ON SHORT NOTICE
All of our customer contracts are cancelable upon 90 days' notice or less
without penalty, except, in some cases, for the recovery of our actual committed
costs and profit on work performed up to the date of cancellation. Accordingly,
we cannot assure you that our future revenues will approximate our historical
performance. In addition, because all of our customer contracts are cancelable,
our backlog, which was approximately $559.3 million as of March 31, 2000, is not
necessarily indicative of our future revenue. If any canceled contracts are not
replaced with contracts from other customers, or if we do not receive orders
under our master service agreements, our revenue would decrease, we could be
unable to meet our fixed expenses and our profitability could be materially and
adversely affected.
WE ARE DEPENDENT ON BELL ATLANTIC AS OUR LARGEST CUSTOMER
Our revenue from Bell Atlantic represented approximately 21% of our pro
forma revenue for 1999. In recent months, our revenue from Bell Atlantic has
increased in both absolute terms and as a percentage of our revenue and this
trend may continue for the foreseeable future. The loss of Bell Atlantic as a
customer or a significant decline in its demand for our services could have a
material adverse effect on us. Many of our contracts with Bell Atlantic do not
guarantee us a particular amount of work, therefore, despite the long-term
nature of some of these contracts, they do not provide us with the security that
a typical long-term contract might.
WE HAVE EXPERIENCED AND EXPECT TO CONTINUE TO EXPERIENCE QUARTERLY VARIATIONS IN
REVENUES AND NET INCOME
Our revenue and net income in the first quarter and the fourth quarter have
in the past been, and may in the future be, materially and negatively affected
by adverse holiday season shutdowns, weather conditions and the year-end
budgetary spending patterns of our customers.
Quarterly variations in our revenues and net income result from many
factors, including:
- the timing and magnitude of acquisitions;
- variations in the margins of projects performed during any particular
quarter;
- the timing and volume of work under new agreements;
- the spending patterns of customers;
- the termination of existing agreements;
- costs we incur to support growth internally or otherwise;
- the change in mix of our customers, contracts and business;
- fluctuations in construction and design costs; and
- regional and general economic conditions.
WE ARE VULNERABLE TO FLUCTUATIONS IN INTEREST RATES
A substantial portion of our existing indebtedness, including all of our
indebtedness under our senior credit facilities, bears interest at variable
rates. We currently hedge a portion of our exposure to fluctuations in interest
rates. As a result, we are vulnerable to interest rate fluctuations, and an
increase in interest rates could substantially increase our interest expense,
which could in turn have a material adverse effect on our business, results of
operations and financial condition.
15
<PAGE> 20
OUR MASTER SERVICE, TURNKEY AND OTHER MAINTENANCE SERVICE AGREEMENTS SUBJECT US
TO UNCERTAIN REVENUE GROWTH AND SUBSTANTIAL UNREIMBURSED EXPENDITURES
A significant decline in work assigned to us under our master service,
turnkey and other maintenance service agreements could materially and adversely
affect our results of operations due to a decline in revenue and our inability
to offset expenditures for working capital and equipment. Under our master
service agreements, our customers have no obligation to undertake any
installation projects or other work with us. In addition, our customers may use
their own regularly employed personnel instead of us. Therefore, despite the
long-term nature of these master service agreements, they do not give us the
security that typical long-term contracts may provide. Similarly, under our
other maintenance agreements, our customers do not generally guarantee us a
particular amount of work. Under our turnkey agreements, the substantial working
capital and equipment required during the initial stages of these agreements and
the fixed unit-priced nature of these agreements subject us to additional risks.
WE MAY BE UNABLE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES
Our ability to provide high-quality services on a timely basis requires
that we employ an adequate number of skilled engineers, installation
technicians, equipment operators, linemen, foremen, cable and fiber splicers and
project managers. Accordingly, our ability to increase our productivity and
profitability will be limited by our ability to attract, train and retain
skilled personnel. We, like many of our competitors, are currently experiencing
shortages of qualified personnel. We cannot be certain that we will be able to
maintain an adequate skilled labor force necessary to operate efficiently and to
support our growth strategy or that our labor expenses will not increase as a
result of a shortage in the supply of skilled personnel. To the extent we cannot
hire employees on a full-time basis, we are often required to hire independent
contractors at rates higher than those we would pay to our own employees for
comparable work.
TECHNOLOGICAL AND REGULATORY CHANGES COULD REDUCE DEMAND FOR OUR SERVICES
New technologies could reduce the need for installation, repair and
replacement of wireline services, which could reduce the demand for our
services. The telecom industry is subject to rapid changes in technology.
Wireline systems used for the transmission of video, voice and data are subject
to potential displacement by various technologies, including wireless
technologies. Our customers may develop new technologies that allow users to
receive enhanced services without a significant upgrade of their existing
telecommunications networks. Additionally, the telecom industry is subject to
significant governmental regulation at the federal, state and local levels.
Regulatory changes in the telecom industry could reduce the demand for our
services. Due in part to changes in the regulatory environment, the telecom
industry has been characterized by a high level of consolidation that may result
in the loss of one or more customers.
WE MAY BE UNABLE TO SUCCESSFULLY COMPETE WITH OTHER COMPANIES IN THE INDUSTRY
Our industry is highly competitive and is served by numerous small,
owner-operated companies, a few large national companies and several large
regional companies. There are relatively few barriers to entry in our industry
and we expect that competition will intensify in the future. As a result, any
organization that has adequate financial resources and access to technical
expertise may become one of our competitors.
Competition in the industry depends on a number of factors, including
price. Our competitors may have lower overhead cost structures and may,
therefore, be able to provide their services at lower rates than we can. Our
competitors may have greater market presence, engineering and marketing
capabilities, and financial, technological and personnel resources than those
available to us. As a result, they may be able to develop and expand their
customer base more quickly, adapt more swiftly to new or emerging technologies
and changes in customer requirements, take advantage of acquisition and other
opportunities more readily, and devote greater resources to the marketing and
sale of their products and services than we can. In addition, our competitive
position within our industry would suffer if we were to lose our status as a
"preferred" service provider to our significant customers. We also face
competition from the in-house
16
<PAGE> 21
service organizations of our existing or prospective customers who often employ
personnel that perform some of the same types of services as we do. Our business
would be negatively impacted if these customers increased the amount of services
performed by their in-house organizations. Accordingly, we cannot assure you
that we will be able to maintain or enhance our competitive position.
THE INTERESTS OF OUR CONTROLLING STOCKHOLDERS COULD CONFLICT WITH THOSE OF THE
HOLDERS OF THE NOTES
Willis Stein & Partners will own capital stock representing approximately
42% of the outstanding voting power of Parent after we exercise our rights under
the call options with Parent's stockholders. Willis Stein & Partners and all of
our other stockholders have entered into an investors agreement governing the
composition of Parent's board of directors. Willis Stein & Partners has the
right to designate a majority of the members of that board. As a result, Willis
Stein & Partners has the ability to appoint new management and approve any
action requiring the approval of Parent's stockholders. The directors have the
authority to make decisions affecting Parent's capital structure, including the
issuance of additional indebtedness and the declaration of dividends. We cannot
assure you that the interests of Willis Stein & Partners do not and will not
conflict with the interests of the holders of the Notes.
THE DEPARTURE OF KEY PERSONNEL COULD DISRUPT OUR BUSINESS
We depend upon the continued services and experience of our senior
management team, including William J. Mercurio, our President and Chief
Executive Officer, and of the managers of businesses we acquire. The loss of the
services of any of our key employees could have a material adverse effect on our
business by disrupting our business plan and growth strategy.
WE COULD BE ADVERSELY AFFECTED BY ENVIRONMENTAL AND SAFETY REQUIREMENTS
We are subject to the requirements of federal, state and local
environmental and occupational health and safety laws and regulations. These
requirements are complex, constantly changing and have tended to become more
stringent over time. It is possible that these requirements may change or
liabilities may arise in the future in a manner that could have a material
effect on our business. We cannot assure you that we have been or will be at all
times in complete compliance with all such requirements or that we will not
incur material costs or liabilities in connection with such requirements in the
future.
THE HISTORICAL FINANCIAL STATEMENTS INCLUDED IN THIS OFFERING MEMORANDUM ARE OF
LIMITED VALUE IN EVALUATING OUR HISTORICAL PERFORMANCE OR IN DETERMINING WHETHER
TO INVEST IN THE NOTES
We had no substantive operations prior to March 1998. Since March 1998, we
have acquired 17 companies, including the acquisition of LISN in December 1999.
The deemed acquisition of Parent by LISN and all of our other acquisitions were
accounted for using the purchase method of accounting. As a result, the
historical financial statements of NATG's predecessor or LISN, as the case may
be, do not include the results of operations of acquisitions prior to the date
they were acquired. Due to the significant number of acquisitions that we have
completed over the last two years, the historical financial statements of LISN
and NATG's predecessor are not reflective of our ongoing operations. In
addition, prior to their acquisition by us, many of the acquired companies were
operated with different strategic and financial objectives. Some of the former
owners of the businesses we acquired sought to maximize cash flow and
stockholder distributions, rather than reinvest earnings in future growth. In
addition, our acquired businesses operated under varying tax structures, which
influenced the historical level of owners' compensation. As a result, the
historical financial statements of these acquired businesses are generally not
representative of their operations following their acquisition.
17
<PAGE> 22
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
All statements other than statements of present or historical facts, and
our opinions and beliefs relating thereto, included in this offering memorandum,
including, without limitation, statements regarding our future financial
position, business strategy, budgets, projected costs and plans and objectives
of management for future operations, are forward-looking statements. In
addition, forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or the negative thereof or
variations thereon or similar terminology. All subsequent written and oral
forward-looking statements attributable to us, or persons acting on our behalf,
are expressly qualified in their entirety by the cautionary statements. Although
we believe that the expectations reflected in such forward-looking statements
are reasonable, we can give no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from our expectations are disclosed under "Risk Factors" and
elsewhere in this offering memorandum, including, among others:
- our substantial debt and significant debt service obligations;
- changes in the laws and regulations governing the telecom industry;
- the competitive nature of the telecom infrastructure industry;
- changes in our relationships with our major customers;
- changes in technology that could reduce demand for our services;
- our ability to attract and retain qualified key employees; and
- our ability to successfully integrate acquired businesses, including
LISN.
MARKET, RANKING AND OTHER DATA IS SUBJECT TO CHANGE AND CANNOT BE VERIFIED WITH
COMPLETE CERTAINTY
The market, ranking and other data contained in this offering memorandum
are based either on independent industry publications, reports by market
research firms or other published independent sources, or on management's own
estimates and, in each case, are believed by management to be reasonable
estimates. However, market data is subject to change and cannot always be
verified with complete certainty due to limits on the availability and
reliability of raw data, the voluntary nature of the data gathering process and
other limitations and uncertainties inherent in any statistical survey of market
size. In addition, consumption patterns and consumer preferences can and do
change. As a result, you should be aware that market, ranking and other similar
data set forth in this offering memorandum, and estimates and beliefs based on
such data, may not be reliable.
18
<PAGE> 23
LISN ACQUISITION
On December 15, 1999, Parent and LISN entered into a series of transactions
that resulted in LISN becoming a wholly owned subsidiary of NATG. In connection
with the LISN acquisition, Parent was acquired by an investor group consisting
of LISN's former stockholders, including Willis Stein & Partners and members of
LISN's management, new co-investors and members of Parent's and its
subsidiaries' management. The principal components of the LISN acquisition
included:
- Additional Investment. Willis Stein & Partners, a group of co-investors
and members of LISN's management invested cash in the aggregate of $112.2
million in LISN immediately prior to the exchange described below.
- Exchange of LISN Securities. LISN's former stockholders, including Willis
Stein & Partners and members of LISN's management, exchanged all of their
outstanding junior subordinated notes, preferred stock and common stock
of LISN for a similar strip of securities issued by Parent.
- Borrowings. NATG borrowed: (1) approximately $275.0 million, excluding
$9.3 million under standby letters of credit described below, under the
new multi-tranche senior credit facilities providing for aggregate
borrowings of up to $375.0 million, consisting of a (i) $100.0 million
revolving credit facility to be used for permitted acquisitions and
working capital, with sublimits of $75.0 million for acquisition loans
and $50.0 million for working capital loans, (ii) $75.0 million tranche A
term loan, with a $50.0 million letter of credit subfacility and (iii)
$200.0 million tranche B term loan, and (2) $100.0 million under a senior
subordinated term loan.
- Redemption of Parent Securities. We either redeemed, or entered into put
and call arrangements pursuant to which we will redeem during the second
and third quarters of 2000, all of Parent's outstanding capital stock
other than a portion of the capital stock owned by members of Parent's or
its subsidiaries' management and the securities issued to LISN's former
stockholders. Our obligations in respect of these put and call agreements
are supported by letters of credit issued under the senior credit
facilities. A total of $46.5 million of letters of credit were issued
under the tranche A term loan letter of credit subfacility to fund the
amounts payable upon exercise of our call options. As of March 31, 2000,
$40.8 million had been drawn under these letters of credit to fund
amounts payable upon the exercise of a portion of the call options.
Additional amounts will be drawn during the second and third quarters of
2000 to fund the remaining amounts payable upon exercise of the remaining
call options. Additional standby letters of credit in an aggregate amount
of $9.3 million were issued under the revolving credit facility but will
expire in accordance with their terms without being drawn when we
exercise our call options. As of March 31, 2000, $2.1 million of these
standby letters of credit had expired.
- Rollover of Parent Equity. Substantially all of Parent's management
stockholders rolled over approximately one-half the value of their equity
interests in Parent. As part of the rollover, such stockholders exchanged
a portion of their existing common stock for newly issued junior
subordinated notes and preferred stock of Parent.
- Repayment of Existing Indebtedness. NATG repaid an aggregate of $179.8
million of indebtedness of its subsidiaries and $82.3 million of LISN's
indebtedness.
We refer to all of the foregoing transactions and payment of all of the
fees and expenses associated with these transactions collectively as the LISN
acquisition. In addition, unless otherwise indicated, we have assumed throughout
this prospectus that we have exercised all of the call options described above.
We entered into the put and call arrangements described above as an
accommodation to certain of Parent's former stockholders for their personal tax
planning.
Following the exercise of the call options, the investor group led by
Willis Stein & Partners will own capital stock representing approximately 67% of
Parent's voting power and the management of Parent and
19
<PAGE> 24
its subsidiaries, including LISN, will own capital stock representing
approximately 33% of Parent's voting power.
The LISN acquisition resulted in each stockholder of Parent, except to the
extent such stockholders' shares are subject to put and call agreements, owning
Parent common stock, series C preferred stock and junior subordinated notes,
with values representing approximately 9%, 54% and 37%, respectively, of the
fair market value of such securities. For more information regarding the terms
of Parent's common stock, preferred stock and junior subordinated notes, see
"Description of Parent's Securities."
The following table summarizes the sources and uses of funds in connection
with the LISN acquisition as of December 15, 1999:
<TABLE>
<CAPTION>
SOURCES OF FUNDS AMOUNT
- ---------------- -------------
(IN MILLIONS)
<S> <C>
Senior credit facilities........ $275.0
Senior subordinated term loan... 100.0
New investment.................. 112.2
Retained investment:
LISN stockholders............. 170.3
Parent stockholders........... 91.7
Cash on hand.................... 2.3
------
TOTAL SOURCES......... $751.5
======
</TABLE>
<TABLE>
<CAPTION>
USES OF FUNDS AMOUNT
- ------------- -------------
(IN MILLIONS)
<S> <C>
Refinance existing $262.1
indebtedness..................
Exchange of LISN securities..... 170.3
Redemption of Parent 213.2
securities....................
Rollover of Parent equity....... 91.7
Fees and expenses............... 14.2
------
TOTAL USES............ $751.5
======
</TABLE>
The new investment includes approximately $41.3 million in aggregate
principal amount of Parent's junior subordinated notes, $60.8 million in
aggregate liquidation preference of Parent's preferred stock and $10.1 million
of Parent's common stock, based on its estimated fair market value.
The retained investment by LISN includes approximately $62.7 million in
aggregate principal amount of Parent's junior subordinated notes, $92.3 million
in aggregate liquidation preference of Parent's preferred stock and $15.3
million of Parent's common stock, based on its estimated fair market value. The
retained investment by Parent's stockholders includes approximately $33.7
million in aggregate principal amount of Parent's junior subordinated notes,
$49.7 million in aggregate liquidation preference of Parent's preferred stock
and $8.3 million of Parent's common stock, based on its estimated fair market
value.
20
<PAGE> 25
The following diagram sets forth the corporate structure of Parent and its
subsidiaries following the LISN acquisition and the initial offering of the
outstanding notes:
[FLOW CHART]
Management's ownership of 33% includes 24.5% attributable to stockholders
of Orius prior to the LISN acquisition.
21
<PAGE> 26
EXCHANGE OFFER; REGISTRATION RIGHTS
The issuers, the guarantors and the initial purchasers entered into a
registration rights agreement in connection with the original issuance of the
notes. The registration rights agreement provides that we will, at our expense,
for the benefit of the holders of the notes:
(1) within 120 days after the date on which the outstanding notes were
issued, file a registration statement on an appropriate registration form (the
"exchange offer registration statement") with respect to a registered exchange
offer to exchange the notes for exchange notes, which exchange notes will have
terms substantially identical in all material respects to the notes except that
the exchange notes will not contain terms with respect to transfer restrictions;
(2) cause the exchange offer registration statement to be declared
effective under the Securities Act within 210 days after the date on which the
outstanding notes were issued;
(3) keep the exchange offer open for not less than 30 days, or longer if
required by applicable law, after the date notice of the exchange offer is
mailed to the holders.
For each of the notes surrendered pursuant to the exchange offer, the
holder who surrendered such note will receive an exchange note having a
principal amount equal to that of the surrendered note. Interest on each
exchange note will accrue (A) from the later of (i) the last interest payment
date on which interest was paid on the outstanding note surrendered in exchange
for the exchange note, or (ii) if the note is surrendered for exchange on a date
in a period which includes the record date for an interest payment date to occur
on or after the date of such exchange and as to which interest will be paid, the
date of that interest payment date or (B) if no interest has been paid on the
outstanding note, from the date on which the outstanding notes were issued.
Under existing interpretations of the SEC contained in several no-action
letters to third parties, the exchange notes will be freely transferable by
holders of the notes, other than our affiliates after the exchange offer without
further registration under the Securities Act. However, each holder that wishes
to exchange its outstanding notes for exchange notes will be required to
represent:
(1) that any exchange notes to be received by it will be acquired in the
ordinary course of its business,
(2) that at the time of the commencement of the exchange offer it has no
arrangement or understanding with any person to participate in the distribution
within the meaning of Securities Act of the exchange notes in violation of the
Securities Act,
(3) that it is not our affiliate as defined in Rule 405 promulgated under
Securities Act,
(4) if such holder is not a broker-dealer, that it is not engaged in, and
does not intend to engage in, the distribution of exchange notes,
(5) if such holder is a broker-dealer (a "participating broker-dealer")
that will receive exchange notes for its own account in exchange for outstanding
notes that were acquired as a result of market-making or other trading
activities, that it will deliver a prospectus in connection with any resale of
such exchange notes, and
(6) such holder is not acting on behalf of any person or entity that could
not truthfully make the foregoing representations.
We will agree to make available, during the period required by the
Securities Act, a prospectus meeting the requirements of the Securities Act for
use by participating broker-dealers and other persons, if any, with similar
prospectus delivery requirements for use in connection with any resale of
exchange notes.
If,
(1) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, we are not permitted to effect an
exchange offer,
22
<PAGE> 27
(2) the exchange offer is not consummated within 255 days of the date
on which the outstanding notes were issued,
(3) in certain circumstances, certain holders of unregistered exchange
notes so request, or
(4) in the when of any holder that participates in the exchange offer,
such holder does not receive exchange notes on the date of the exchange
that may be sold without restriction under state and federal securities
laws,
then in each case, we will promptly deliver to the holders and the trustee
and at our sole expense, as promptly as practicable: (A) file a shelf
registration statement covering resales of the outstanding notes (the "shelf
registration statement") and (B) use our respective best efforts to keep
effective the shelf registration statement until the earlier of two years after
the date on which the outstanding notes were issued or the time when all of the
applicable notes have been sold under the shelf registration statement. We will,
in the event that a shelf registration statement is filed, provide to each
holder copies of the prospectus that is a part of the shelf registration
statement, notify each holder when the shelf registration statement for the
outstanding notes has become effective and take other actions as are required to
permit unrestricted resales of the outstanding notes. A holder that sells
outstanding notes pursuant to the shelf registration statement will be required
to be named as a selling security holder in the related prospectus and to
deliver a prospectus to purchasers, will be subject to applicable civil
liability provisions under Securities Act in connection with the sales and will
be bound by the provisions of the registration rights agreement that are
applicable to the holder, including indemnification rights and obligations.
If we fail to comply with any of the above provisions or if the exchange
offer registration statement or the shelf registration statement fails to become
effective, then, as liquidated damages, additional interest shall become payable
in respect of the outstanding notes as follows:
(1) if (A) neither the exchange offer registration statement nor the
shelf registration statement is filed with the SEC on or prior to 120 days
after the date on which the outstanding notes were issued or (B)
notwithstanding that we have consummated or will consummate an exchange
offer, we are required to file a shelf registration statement and such
shelf registration statement is not filed on or prior to the date required
by the registration rights agreement, then commencing on the day after the
required filing date, additional interest shall accrue on the principal
amount of the notes at a rate of 0.5% per annum for the first 90 days
immediately following the required filing date, and the additional interest
rate will increase by an additional 0.5% per annum at the beginning of each
subsequent 90-day period; or
(2) if (A) neither the exchange offer registration statement nor a
shelf registration statement is declared effective by the 210th day after
the date on which the outstanding notes were issued or, with respect to any
shelf registration statement, the later of the 60th day after the date the
shelf registration was filed or the 210th day after the date on which
outstanding notes were issued, or (B) notwithstanding that we have
consummated or will consummate an exchange offer, we are required to file a
shelf registration statement and the shelf registration statement is not
declared effective by the SEC on or prior to the relevant effectiveness
date, then, commencing on the day after either such required effectiveness
date, additional interest shall accrue on the principal amount of the notes
at a rate of 0.5% per annum for the first 90 days immediately following the
required effectiveness date, and the additional interest rate will increase
by an additional 0.5% per annum at the beginning of each subsequent 90-day
period; or
(3) if (A) the issuers have not exchanged exchange notes for all
securities validly tendered in the exchange offer on or prior to the 30th
day after the effective date of the exchange offer registration statement,
(B) if applicable, a shelf registration statement has been declared
effective and the shelf registration statement ceases to be effective at
any time during the effectiveness period, or (C) we effect a suspension
period in accordance with the terms of the registration rights agreement,
then in each case, additional interest shall accrue at a rate of 0.50% per
annum for the first 90 days commencing on the (x) 31st day after the
effective date, in the case of (A) above, (y)the day such
23
<PAGE> 28
shelf registration statement ceases to be effective in the case of (B)
above or (z) the day such suspension period commences in the case of (C)
above, and the additional interest rate shall increase by an additional
0.50% per annum at the beginning of each subsequent 90-day period;
The additional interest rate on the notes may not accrue under more than one of
the foregoing clauses (1) through (3) at any one time and at no time shall the
aggregate amount of additional interest accruing exceed in the aggregate 1.5%
per annum. In addition, (A) upon the filing of the exchange offer registration
statement or a shelf registration statement in the case of clause (1) above, (B)
upon the effectiveness of the exchange offer registration statement or a shelf
registration statement in the case of clause (2) above, or (C) or upon (X) the
exchange of the applicable exchange notes for all notes tendered, in the case of
clause (3)(A) above), (Y) the effectiveness of the applicable shelf registration
statement which had ceased to remain effective, in the case of clause (3)(B)
above, or (Z) the termination of the suspension period, in the case of clause
(3)(C) above, additional interest on the notes shall cease to accrue.
Any amounts of additional interest due pursuant to clause (1), (2) or (3)
above will be payable in cash on the same original interest payment dates as the
notes.
Following the consummation of the exchange offer, holders of the
outstanding notes who were eligible to participate in the exchange offer but who
did not tender its outstanding notes will not have any further registration
rights and the outstanding notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for the
outstanding notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all outstanding notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date of the exchange offer. We will issue $1,000 principal amount
of exchange notes in exchange for each $1,000 principal amount of outstanding
notes accepted in the exchange offer. holders may tender some or all of its
outstanding notes pursuant to the exchange offer. However, outstanding notes may
be tendered only in integral multiples of $1,000.
The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes except that:
(1) the exchange notes bear a Series B designation and a different CUSIP
Number from the outstanding notes;
(2) the exchange notes have been registered under the Securities Act and
hence will not bear legends restricting the transfer thereof; and
(3) the holders of the exchange notes will not be entitled to certain
rights under the registration rights agreement, including the
provisions providing for an increase in the interest rate on the
outstanding notes in certain circumstances relating to the timing of
the exchange offer, all of which rights will terminate when the
exchange offer is terminated.
The exchange notes will evidence the same debt as the outstanding notes and will
be entitled to the benefits of the indenture.
As of the date of this prospectus, $150,000,000 aggregate principal amount
of the outstanding notes were outstanding. We have fixed the close of business
on , 2000 as the record date for the exchange offer for purposes of
determining the persons to whom this prospectus and the letter of transmittal
will be mailed initially.
Holders of outstanding notes do not have any appraisal or dissenters'
rights under the General Corporation Law of Delaware, or the Indenture in
connection with the exchange offer. We intend to
24
<PAGE> 29
conduct the exchange offer in accordance with the applicable requirements of the
Exchange Act and the rules and regulations of the SEC thereunder.
We will be deemed to have accepted validly tendered outstanding notes when,
as and if we have given oral or written notice thereof to the exchange agent.
The exchange agent will act as agent for the tendering holders for the purpose
of receiving the exchange notes from us.
If any tendered outstanding notes are not accepted for exchange because of
an invalid tender, the occurrence of specified other events set forth in this
prospectus or otherwise, the certificates for any unaccepted outstanding notes
will be returned, without expense, to the tendering holder thereof as promptly
as practicable after the expiration date of the exchange offer.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" will mean 5:00 p.m., New York City time, on
, 2000, unless we, in our sole discretion, extend the exchange
offer, in which case the term "expiration date" will mean the latest date and
time to which the exchange offer is extended.
In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral or written notice and will mail to the registered holders
an announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.
We reserve the right, in our sole discretion, (1) to delay accepting any
outstanding notes, to extend the exchange offer or to terminate the exchange
offer if any of the conditions set forth below under "-- Conditions" have not
been satisfied, by giving oral or written notice of any delay, extension or
termination to the exchange agent or (2) to amend the terms of the exchange
offer in any manner. Any delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof to the registered holders.
INTEREST ON THE EXCHANGE NOTES
The exchange notes will bear interest from their date of issuance. Holders
of outstanding notes that are accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the date of issuance of the
exchange notes. Such interest will be paid with the first interest payment on
the exchange notes on August 1, 1999. Interest on the outstanding notes accepted
for exchange will cease to accrue upon issuance of the exchange notes.
Interest on the exchange notes is payable semi-annually on each February 1
and August 1, commencing on August 1, 2000.
PROCEDURES FOR TENDERING
Only a holder of outstanding notes may tender outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must complete, sign
and date the letter of transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if required by the letter of transmittal or transmit an
agent's message in connection with a book-entry transfer, and mail or otherwise
deliver the letter of transmittal or the facsimile, together with the
outstanding notes and any other required documents, to the exchange agent prior
to 5:00 p.m., New York City time, on the expiration date. To be tendered
effectively, the outstanding notes, letter of transmittal or an agent's message
and other required documents must be completed and received by the exchange
agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m.,
New York City time, on the expiration date. Delivery of the outstanding notes
may be
25
<PAGE> 30
made by book-entry transfer in accordance with the procedures described below.
Confirmation of the book-entry transfer must be received by the exchange agent
prior to the expiration date.
The term "agent's message" means a message, transmitted by a book-entry
transfer facility to, and received by, the exchange agent forming a part of a
confirmation of a book-entry, which states that the book-entry transfer facility
has received an express acknowledgment from the participant in the book-entry
transfer facility tendering the outstanding notes that the participant has
received and agrees: (1) to participate in ATOP; (2) to be bound by the terms of
the letter of transmittal; and (3) that we may enforce the agreement against the
participant.
By executing the letter of transmittal, each holder will make to us the
representations set forth above in the third paragraph under the heading
"-- Purpose and Effect of the Exchange Offer."
The tender by a holder and our acceptance thereof will constitute agreement
between the holder and us in accordance with the terms and subject to the
conditions set forth in this prospectus and in the letter of transmittal or
agent's message.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
OR AGENT'S MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT
THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT
TO US. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member of the Medallion System unless the
outstanding notes tendered pursuant to the letter of transmittal are tendered
(1) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the letter of
transmittal or (2) for the account of a member firm of the Medallion System. In
the event that signatures on a letter of transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, the guarantee must be by a
member firm of the Medallion System.
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed in this prospectus, the
outstanding notes must be endorsed or accompanied by a properly completed bond
power, signed by the registered holder as the registered holder's name appears
on the outstanding notes with the signature thereon guaranteed by a member firm
of the Medallion System.
If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations or others acting in a fiduciary or representative
capacity, the person signing should so indicate when signing, and evidence
satisfactory to us of its authority to so act must be submitted with the letter
of transmittal.
We understand that the exchange agent will make a request promptly after
the date of this prospectus to establish accounts with respect to the
outstanding notes at DTC for the purpose of facilitating the exchange offer, and
subject to the establishment thereof, any financial institution that is a
participant in DTC's system may make book-entry delivery of outstanding notes by
causing DTC to transfer the outstanding notes into the exchange agent's account
with respect to the outstanding notes in accordance with DTC's procedures for
the transfer. Although delivery of the outstanding notes may be effected through
book-entry transfer into the exchange agent's account at DTC, unless an agent's
message is received by the exchange agent in compliance with ATOP, an
appropriate letter of transmittal properly
26
<PAGE> 31
completed and duly executed with any required signature guarantee and all other
required documents must in each case be transmitted to and received or confirmed
by the exchange agent at its address set forth below on or prior to the
expiration date, or, if the guaranteed delivery procedures described below are
complied with, within the time period provided under the procedures. Delivery of
documents to DTC does not constitute delivery to the exchange agent.
All questions as to the validity, form, eligibility, including time of
receipt, acceptance of tendered outstanding notes and withdrawal of tendered
outstanding notes will be determined by us in our sole discretion, which
determination will be final and binding. We reserve the absolute right to reject
any and all outstanding notes not properly tendered or any outstanding notes our
acceptance of which would, in the opinion of our counsel, be unlawful. We also
reserve the right in our sole discretion to waive any defects, irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer, including the instructions in
the letter of transmittal, will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within the time we determine. Although we intend to notify
holders of defects or irregularities with respect to tenders of outstanding
notes, neither we, the exchange agent nor any other person will incur any
liability for failure to give the notification. Tenders of outstanding notes
will not be deemed to have been made until the defects or irregularities have
been cured or waived. Any outstanding notes received by the exchange agent that
are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the exchange agent to the tendering
holders, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and (1) whose
outstanding notes are not immediately available, (2) who cannot deliver their
outstanding notes, the letter of transmittal or any other required documents to
the exchange agent or (3) who cannot complete the procedures for book-entry
transfer, prior to the expiration date, may effect a tender if:
(A) the tender is made through a member firm of the Medallion System;
(B) prior to the expiration date, the exchange agent receives from a
member firm of the Medallion System a properly completed and duly executed
Notice of Guaranteed Delivery by facsimile transmission, mail or hand
delivery setting forth the name and address of the holder, the certificate
number(s) of the outstanding notes and the principal amount of outstanding
notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days after
the expiration date, the letter of transmittal or facsimile thereof
together with the certificate(s) representing the outstanding notes or a
confirmation of book-entry transfer of the outstanding notes into the
exchange agent's account at DTC, and any other documents required by the
letter of transmittal will be deposited by the member firm of the Medallion
System with the exchange agent; and
(C) the properly completed and executed letter of transmittal of
facsimile thereof, as well as the certificate(s) representing all tendered
outstanding notes in proper form for transfer or a confirmation of
book-entry transfer of the outstanding notes into the exchange agent's
account at DTC, and all other documents required by the letter of
transmittal are received by the exchange agent within five New York Stock
Exchange trading days after the expiration date.
Upon request to the exchange agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, tenders of outstanding
notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the expiration date.
27
<PAGE> 32
To withdraw a tender of outstanding notes in the exchange offer, a
telegram, telex, letter or facsimile transmission notice of withdrawal must be
received by the exchange agent at its address set forth in this prospectus prior
to 5:00 p.m., New York City time, on the expiration date of the exchange offer.
Any notice of withdrawal must:
(1) specify the name of the person having deposited the outstanding
notes to be withdrawn;
(2) identify the outstanding notes to be withdrawn, including the
certificate number(s) and principal amount of the outstanding notes, or, in
the case of outstanding notes transferred by book-entry transfer, the name
and number of the account at DTC to be credited;
(3) be signed by the holder in the same manner as the original
signature on the letter of transmittal by which the outstanding notes were
tendered, including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee with respect to the
outstanding notes register the transfer of the outstanding notes into the
name of the person withdrawing the tender; and
(4) specify the name in which any outstanding notes are to be
registered, if different from that of the person depositing the outstanding
notes to be withdrawn.
All questions as to the validity, form and eligibility, including time of
receipt, of the notices will be determined by us, whose determination will be
final and binding on all parties. Any outstanding notes so withdrawn will be
deemed not to have been validly tendered for purposes of the exchange offer and
no exchange notes will be issued with respect thereto unless the outstanding
notes so withdrawn are validly retendered. Any outstanding notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without cost to the holder as soon as practicable after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn
outstanding notes may be retendered by following one of the procedures described
above under "--Procedures for Tendering" at any time prior to the expiration
date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange notes for, any outstanding notes,
and may terminate or amend the exchange offer as provided in this prospectus
before the acceptance of the outstanding notes, if:
(1) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might materially impair our ability to proceed
with the exchange offer or any material adverse development has occurred in
any existing action or proceeding with respect to us or any of our
subsidiaries; or
(2) any law, statute, rule, regulation or interpretation by the Staff
of the SEC is proposed, adopted or enacted, which, in our sole judgment,
might materially impair our ability to proceed with the exchange offer or
materially impair the contemplated benefits of the exchange offer to us; or
(3) any governmental approval has not been obtained, which approval
we will, in our sole discretion, deem necessary for the consummation of the
exchange offer as contemplated by this prospectus.
If we determine in our sole discretion that any of the conditions are not
satisfied, we may (1) refuse to accept any outstanding notes and return all
tendered outstanding notes to the tendering holders, (2) extend the exchange
offer and retain all outstanding notes tendered prior to the expiration of the
exchange offer, subject, however, to the rights of holders to withdraw the
outstanding notes (see "--Withdrawal of Tenders") or (3) waive the unsatisfied
conditions with respect to the exchange offer and accept all properly tendered
outstanding notes which have not been withdrawn.
28
<PAGE> 33
EXCHANGE AGENT
United States Trust Company of New York has been appointed as exchange
agent for the exchange offer. Questions and requests for assistance, requests
for additional copies of this prospectus or of the letter of transmittal and
requests for Notice of Guaranteed Delivery should be directed to the exchange
agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: Overnight Courier and By Hand Delivery After
4:30 p.m., New York City time, on the
expiration date:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844, Cooper Station 770 Broadway, 13th Floor
Attn: Corporate Trust Services Attn: Corporate Trust Services
New York, New York 10276-0844 New York, New York 10003
By Hand Prior to 4:30 p.m., New York City Facsimile Transmission:
time: (212) 780-0592 or (212) 420-6211
111 Broadway, Lower Level For Information Telephone (call toll-free):
Attn: Corporate Trust Window (800) 548-6565
New York, New York 10006
</TABLE>
DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telecopy, telephone or in person by our and our affiliates' officers
and regular employees.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses incurred in connection with these services.
We will pay the cash expenses to be incurred in connection with the
exchange offer. Such expenses include fees and expenses of the exchange agent
and trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
outstanding notes, which is face value, as reflected in our accounting records
on the date of exchange. Accordingly, we will not recognize any gain or loss for
accounting purposes as a result of the exchange offer. The expenses of the
exchange offer will be deferred and charged to expense over the term of the
exchange notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The outstanding notes that are not exchanged for exchange notes pursuant to
the exchange offer will remain restricted securities. Accordingly, the
outstanding notes may be resold only:
(1) to us upon redemption thereof or otherwise;
- so long as the outstanding notes are eligible for resale pursuant
to Rule 144A, to a person inside the United States whom the
seller reasonably believes is a qualified institutional buyer
within the meaning of Rule 144A under the Securities Act in a
transaction meeting the requirements of Rule 144A, in accordance
with Rule 144 under the Securities Act, or
29
<PAGE> 34
pursuant to another exemption from the registration requirements of
the Securities Act, which other exemption is based upon an opinion
of counsel reasonably acceptable to us;
- outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act; or
- pursuant to an effective registration statement under the Securities
Act, in each case in accordance with any applicable securities laws
of any state of the United States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of exchange notes, based on interpretations by the
Staff of the SEC set forth in no-action letters issued to third parties, we
believe that a holder or other person who receives exchange notes, whether or
not the person is the holder, other than a person that is our affiliate within
the meaning of Rule 405 under the Securities Act,in exchange for outstanding
notes in the ordinary course of business and who is not participating, does not
intend to participate, and has no arrangement or understanding with any person
to participate, in the distribution of the exchange notes, will be allowed to
resell the exchange notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the exchange notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act.
However, if any holder acquires exchange notes in the exchange offer for the
purpose of distributing or participating in a distribution of the exchange
notes, the holder cannot rely on the position of the Staff of the SEC expressed
in the no-action letters or any similar interpretive letters, and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction, unless an exemption from registration
is otherwise available. Further, each broker-dealer that receives exchange notes
for its own account in exchange for outstanding notes, where the outstanding
notes were acquired by the broker-dealer as a result of market-making activities
or other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of the exchange notes.
30
<PAGE> 35
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement. We will not receive any cash proceeds from the
issuance of the exchange notes. In consideration for issuing the exchange notes
contemplated in this prospectus, we will receive outstanding notes in like
principal amount, the form and terms of which are the same as the form and terms
of the exchange notes, except as otherwise described in this prospectus.
The net proceeds from the issuance of the outstanding notes, after
deducting the underwriting discount and expenses, was $143.6 million. We used a
portion of these proceeds to repay $100.0 million in aggregate principal amount
outstanding under the senior subordinated term loan, plus accrued interest. We
used the remaining $43.6 to repay a portion of the tranche B term loan at 101%
of the principal amount repaid, plus accrued interest. As of December 31, 1999,
the interest rate on borrowings under the senior subordinated term loan was
12.4% and the interest rate on borrowings under the tranche B term loan was
9.4%. The borrowings under the senior subordinated term loan were due and
payable on December 15, 2007. The tranche B term loan is payable in quarterly
installments, with the final installment due December 15, 2006. The proceeds
from the senior subordinated term loan and the tranche B term loan were used to
finance a portion of the LISN acquisition. See "LISN Acquisition,"
"Capitalization" and "Description of Senior Credit Facilities."
CAPITALIZATION
The following table sets forth, as of December 31, 1999: (1) Orius' pro
forma consolidated capitalization prior to the offering of the outstanding
notes, and (2) Orius' pro forma consolidated capitalization as adjusted to give
effect to the offering of the outstanding notes. See "Use of Proceeds" and
"Unaudited Pro Forma Financial Statements."
<TABLE>
<CAPTION>
AT DECEMBER 31, 1999
------------------------
PRO FORMA PRO FORMA
PRIOR TO AFTER THE
THE OFFERING OFFERING
------------ ---------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Long-term debt, including current portion:
Senior credit facilities:
Revolving credit facility(1)(2)........................... $ 15,500 $ 15,500
Tranche A term loan....................................... 70,934 70,934
Tranche B term loan....................................... 200,000 156,440
Equipment debt, leases and other............................ 8,511 8,511
--------- ---------
Total senior debt................................. 294,945 251,385
Senior subordinated term loan............................... 100,000 --
Senior subordinated notes................................... -- 150,000
Junior subordinated notes................................... 141,163 141,163
--------- ---------
Total long-term debt.............................. 536,108 542,548
Participating, redeemable preferred stock................... 208,081 208,081
Stockholders' deficit....................................... (186,141) (186,141)
--------- ---------
Total capitalization.............................. $ 558,048 $ 564,488
--------- ---------
</TABLE>
- ------------
(1) Our revolving credit facility provides for up to $100.0 million of
borrowings to be used for permitted acquisitions and working capital
purposes, with sublimits of $75.0 million for acquisition loans and $50.0
million for working capital loans. See "Description of Senior Credit
Facilities."
(2) Does not include letters of credit under the revolving credit facility in
the amount of $7.2 million that will expire in accordance with their terms
upon the exercise of the call options, as described under the "LISN
Acquisition."
31
<PAGE> 36
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
Set forth below are unaudited pro forma financial statements for Orius. The
unaudited pro forma financial statements have been prepared by the application
of pro forma adjustments to the historical financial statements of LISN, Orius
and each of the Acquired Companies. Orius acquired eight businesses in 1998, six
in 1999 and completed the acquisitions of Irwin, Fenix and Midwest Splicing in
2000. The unaudited pro forma financial statements have been prepared to reflect
LISN as the acquiring corporation for accounting purposes in the LISN
acquisition even though it became a subsidiary of Orius in that transaction.
LISN has been treated as the acquiring corporation for accounting purposes as a
result of LISN's former stockholders acquiring control of Parent in the LISN
acquisition.
The unaudited pro forma financial statements presented below are intended
to give you a better understanding of what the results of operations of all of
our businesses might have been had they been combined as of the beginning of the
period presented and what our combined financial position might have been at
December 31, 1999. We prepared the unaudited pro forma statements of operations
data by (1) combining the historical results of LISN, Orius and each of the
Acquired Companies as if LISN had acquired Orius and Orius had acquired each of
the Acquired Companies at the beginning of the period presented and (2)
adjusting such combined historical results to reflect:
(a) the application of purchase accounting to those acquisitions,
(b) the elimination of certain non-recurring expenses and adjustments
reflecting different depreciation and amortization policies,
(c)the financing transactions associated with those acquisitions and
(d) the sale of the notes and the application of the net proceeds from
that sale.
We prepared the unaudited pro forma balance sheet data by combining the
historical balance sheet data of Orius, Irwin, Fenix and Midwest Splicing as of
December 31, 1999 and adjusting such data to reflect items (a), (c) and (d)
described above with respect to those acquisitions. LISN, Orius and the Acquired
Companies may have performed differently if they had been combined as of or on
the dates presented. You should not rely on these unaudited pro forma financial
statements as being indicative of the historical results that we would have had
or the future results that we will experience.
You should read these unaudited pro forma financial statements in
conjunction with the information contained in "Selected Historical Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and "Supplemental Unaudited Pro Forma Financial Data" and the
financial statements and the related notes appearing elsewhere in this
prospectus.
32
<PAGE> 37
ORIUS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA BALANCE SHEET
DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACQUIRED COMBINATION OFFERING
ORIUS COMPANIES(1) ADJUSTMENTS ADJUSTMENTS PRO FORMA
-------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................... $ 28,664 $ 1,420 $(21,379)(2) $ -- $ 8,705
Accounts receivable, net........................ 128,781 7,813 -- 136,594
Costs and estimated earnings in excess of
billings...................................... 24,675 176 -- -- 24,851
Inventories..................................... 16,454 491 -- -- 16,945
Other current assets............................ 4,728 142 -- -- 4,870
-------- ------- -------- --------- ---------
Total current assets...................... 203,302 10,042 (21,379) -- 191,965
-------- ------- -------- --------- ---------
Property and equipment, net....................... 44,400 3,875 -- -- 48,275
Goodwill, net..................................... 359,882 -- 35,061(2) -- 394,943
Deferred financing costs, net..................... 1,247 -- -- 6,440(4) 7,687
Deferred tax assets............................... -- -- -- -- --
Other assets...................................... 13,147 57 -- -- 13,204
-------- ------- -------- --------- ---------
Total assets.............................. $621,978 $13,974 $ 13,682 $ 6,440 $ 656,074
======== ======= ======== ========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Current portion of debt and equipment leases.... $ 5,505 $ 335 $ -- $ -- $ 5,840
Accounts payable -- trade....................... 29,641 2,026 -- -- 31,667
Accrued liabilities............................. 34,051 (266) -- -- 33,785
Deferred revenues............................... -- 297 -- -- 297
Payable to shareholder.......................... 11,454 -- -- -- 11,454
Deferred tax liability.......................... 5,949 148 -- -- 6,097
Other current liabilities....................... 1,293 1,384 -- -- 2,677
-------- ------- -------- --------- ---------
Total current liabilities................. 87,893 3,924 -- -- 91,817
-------- ------- -------- --------- ---------
Long-term debt.................................... -- -- 15,500(2) -- 15,500
Tranche A term loan............................... 24,250 -- 46,684(3) -- 70,934
Tranche B term loan............................... 200,000 -- -- (43,560)(4) 156,440
Senior subordinated term loan..................... 100,000 -- -- (100,000)(4) --
Senior subordinated notes......................... -- -- -- 150,000(4) 150,000
Junior subordinated notes......................... 134,973 -- 2,831(2) -- 141,163
3,359(3)
Long-term portion of debt and equipment leases.... 2,139 1,032 (500)(2) -- 2,671
Deferred income tax liability..................... 5,609 -- -- -- 5,609
-------- ------- -------- --------- ---------
Total liabilities......................... 554,864 4,956 67,874 6,440 634,134
-------- ------- -------- --------- ---------
Securities subject to put and call arrangements... 54,946 -- (54,946)(3) -- --
Series C participating, redeemable preferred
stock........................................... 199,019 -- 4,159(2) 208,081
4,903(3)
-------- ------- -------- --------- ---------
Total other securities.................... 253,965 -- (45,884) 208,081
-------- ------- -------- --------- ---------
Stockholders' (deficit)
Common stock, $.01 par value, 200,000,000 shares
authorized.................................... 25 68 (68)(2) -- 25
Additional paid-in capital...................... 33,591 150 560(2) 34,301
Treasury stock.................................... (20) 20(2) --
Retained (deficit) earnings....................... (220,467) 8,820 (8,820)(2) -- (220,467)
-------- ------- -------- --------- ---------
Total stockholders' (deficit)............. (186,851) 9,018 (8,308) -- (186,141)
-------- ------- -------- --------- ---------
Total liabilities and stockholders'
(deficit)............................... $621,978 $13,974 $ 13,682 $ 6,440 $ 656,074
======== ======= ======== ========= =========
</TABLE>
33
<PAGE> 38
ORIUS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(DOLLARS IN THOUSANDS)
(1) Represents the balance sheets of Irwin, Fenix and Midwest Splicing.
(2) Reflects the acquisitions of Irwin, Fenix and Midwest Splicing, including:
(i) cash not acquired of $879 and cash of $20,000 used to fund the
acquisitions, (ii) repayment of indebtedness of $500, (iii) $15,500 of
borrowings under our senior credit facilities, (iv) estimated goodwill
resulting from purchase accounting of $35,061, (v) issuance of Parent
securities valued at $7,700 and (vi) the elimination of the Acquired
Companies' equity.
(3) Reflects the exercise of the call options relating to the LISN acquisition,
including: (i) the redemption of $39,420 of Parent's series B preferred
stock, funded through letters of credit under the tranche A term loan, and
(ii) the redemption of $15,526 of Parent's common stock in exchange for
$7,264 in cash, $4,903 of Parent's series C preferred stock and $3,359 of
Parent's junior subordinated notes. At March 31, 2000, call options for $12
million in redeemable common stock remained unexercised. We expect to
exercise the remaining call options during the second and third quarter of
2000.
(4) Reflects adjustments for the sources and uses of funds upon consummation of
the offering of the notes, as follows:
<TABLE>
<S> <C>
SOURCES:
Issuance of the notes..................................... $150,000
========
USES:
Retirement of existing senior subordinated term loan...... $100,000
Retirement of portion of tranche B term loan.............. 43,560
Deferred financing costs.................................. 6,440
--------
Total uses.......................................... $150,000
========
</TABLE>
34
<PAGE> 39
ORIUS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LISN
ACQUIRED ACQUISITION OFFERING
LISN(1) ORIUS(2) COMPANIES(3) ADJUSTMENTS ADJUSTMENTS PRO FORMA
-------- -------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $167,018 $314,821 $70,102 $ -- $ -- $551,941
Expenses:
Direct costs.................. 118,539 237,652 43,404 (1,500)(4) -- 398,095
General and administrative.... 20,577 39,721 11,039 (5,175)(4) -- 54,100
(12,062)(5)
Depreciation and
amortization............... 1,358 10,293 2,102 11,375(6) -- 25,128
-------- -------- ------- -------- ------- --------
Total expenses.................. 140,474 287,666 56,545 (7,362) -- 477,323
Income from operations.......... 26,544 27,155 13,557 7,362 -- 74,618
Other (Income) expense:
Interest expense, net......... 11,149 14,007 1,870 31,957(7) 3,446(9) 62,429
Other (income) expense........ 362 (174) (29) -- -- 159
-------- -------- ------- -------- ------- --------
Income (loss) before income tax
provision..................... 15,033 13,322 11,716 (24,595) (3,446) 12,030
Provision for income taxes...... 4,937 6,134 3,737 (5,605)(8) 721(8) 9,924
-------- -------- ------- -------- ------- --------
Net income (loss) (10).......... $ 10,096 $ 7,188 $ 7,979 $(18,990) $(4,167) $ 2,106
======== ======== ======= ======== ======= ========
</TABLE>
35
<PAGE> 40
ORIUS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(1) Results for the year ended December 31, 1999 represent the combined
historical results for such periods of LISN (which had no material
operations prior to 1998) and LISN, Inc. and Orius from December 15, 1999
through December 31, 1999. LISN and ARION, Inc., which were companies under
common control, were combined in the May 1999 recapitalization.
(2) Results for the period ended December 14, 1999 represent the actual
historical consolidated results of Orius, including results for the Acquired
Companies from their date of acquisition.
(3) Represents the results of the Acquired Companies in the related period prior
to the date of acquisition and related acquisition adjustments. See
"Supplemental Unaudited Pro Forma Financial Data" for further detail and
discussion.
(4) Reflects the decrease resulting from differentials between the compensation
levels of the former owners of LISN and the terms of their employment
agreements entered into with the Company. After the acquisition of LISN, the
duties and responsibilities of the owners who remained employed with the
Company have not and will not change and additional costs have not and are
not expected to be incurred related to their efforts.
(5) Reflects the elimination of one-time expenses associated with the LISN
acquisition included in Orius' historical statement of operations. As the
acquired company for accounting purposes, Orius reflected these costs as
expenses in the period incurred. Included in this adjustment are
professional fees totaling $6,248 for advisors, lawyers and accountants, and
compensation expense of $5,814 associated with the accelerated vesting of
options under Orius' stock option plan at the time of the LISN acquisition.
(6) Reflects the amortization of goodwill generated due to the LISN acquisition
based on a goodwill life of 25 years.
(7) The increase in pro forma interest expense as a result of the LISN
acquisition is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C>
Revolving credit facility(i)................................ $ --
Tranche A term loan(ii)..................................... 6,440
Tranche B term loan(iii).................................... 19,160
Senior subordinated term loan(iv)........................... 12,580
Junior subordinated notes(v)................................ 16,524
Commitment fee(vi).......................................... 500
Capital leases and equipment loans.......................... 261
Amortization of deferred financing costs(vii)............... 1,771
Acquisition related interest(viii).......................... 1,747
--------
Total pro forma interest expense............................ $ 58,983
Elimination of historical interest(ix)...................... (27,026)
--------
Net increase in interest expense............................ $ 31,957
========
</TABLE>
- ------------
(i)On a pro forma basis as a result of the LISN acquisition, there was no
amount drawn on the revolving credit facility.
(ii)
Represents interest on the $70.9 million tranche A term loan using an
assumed interest rate of 9.08%.
(iii)
Represents interest on the $200.0 million tranche B term loan using an
assumed interest rate of 9.58%.
(iv)
Represents interest on the $100.0 million senior subordinated term loan
using an assumed rate of 12.58%.
(v)Represents interest on the $137.7 million junior subordinated notes at an
interest rate of 12%.
(vi)
Represents a 0.5% commitment fee on the unused portion of the revolving
credit facility.
(vii)
Represents amortization of deferred financing costs of $14,237 over an
average life of six years.
(viii)
Represents interest on the $15.5 million used to fund the Fenix
acquisition at an assumed interest rate of 9.08% and interest on the
junior subordinated notes issued in connection with the Irwin, Fenix and
Midwest Splicing acquisitions.
(ix)
Represents the elimination of historical interest expense paid or payable
by Orius in cash.
(8) Reflects the income tax rate that would have been in effect if the Acquired
Companies had been combined and subject to a federal statutory rate of 35%
and the applicable state statutory rate for each of the Acquired Companies
throughout the period presented.
36
<PAGE> 41
ORIUS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME -- (CONTINUED)
(9) The increase in pro forma interest expense resulting from the offering of
the notes consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C>
Revolving credit facility(i)................................ $ --
Tranche A term loan(ii)..................................... 6,440
Tranche B term loan(iii).................................... 14,987
Senior subordinated notes(iv)............................... 19,126
Junior subordinated notes(v)................................ 16,524
Commitment fee(vi).......................................... 500
Capital leases and equipment loans.......................... 261
Amortization of deferred financing costs(vii)............... 2,844
Acquisition related interest(viii).......................... 1,747
--------
Total pro forma interest expense............................ $ 62,429
Pro forma interest prior to the offering.................... (58,983)
--------
Net increase in interest expense............................ $ 3,446
========
</TABLE>
- ------------
(i)On a pro forma basis as a result of the offering of the notes, there was
no amount drawn on the revolving credit facility.
(ii)
Represents interest on the $70.9 million tranche A term loan using an
assumed interest rate of 9.08%.
(iii)
Represents interest on the remaining $156.4 million tranche B term loan
following the repayment of $43.6 million of the tranche B term loan with
the proceeds from the sale of the outstanding notes, using an assumed
interest rate of 9.58%.
(iv)
Represents interest on the notes at an interest rate of 12.75%.
(v)Represents interest on the $137.7 million junior subordinated notes at an
interest rate of 12%.
(vi)
Represents a 0.5% commitment fee on the unused portion of the revolving
credit facility.
(vii)
Represents amortization of deferred financing costs of $20,677 over an
average life of six years.
(viii)
Represents interest on the $15.5 million used to fund the Fenix
acquisition at an assumed interest rate of 9.08% and interest on the
junior subordinated notes issued in connection with the Irwin, Fenix and
Midwest acquisitions.
(ix)
Represents the elimination of pro forma interest expense prior to the
offering of the outstanding notes.
(10) EBITDA for the year ended December 31, 1999 was $99,587. EBITDA is defined
as net income before interest expense, income taxes, depreciation and
amortization. EBITDA is not a measure of financial performance under
generally accepted accounting principals and should not be considered an
alternative to operating income or net income as a measure of operating
performance or to net cash provided by operating activities as a measure of
liquidity.
37
<PAGE> 42
SUPPLEMENTAL UNAUDITED PRO FORMA FINANCIAL DATA
Set forth below is supplemental unaudited pro forma financial data for the
Acquired Companies. The supplemental unaudited pro forma financial data has been
derived by the application of pro forma adjustments to the historical financial
statements of each of the Acquired Companies. Orius acquired eight businesses in
1998, six in 1999 and completed the acquisition of Irwin in January 2000 and the
acquisitions of Fenix and Midwest Splicing in April 2000.
The supplemental unaudited pro forma financial data presented below is
intended to give you additional information as to how the amounts set forth in
the unaudited pro forma statement of income under the column "Acquired
Companies" in the Unaudited Pro Forma Financial Statements were calculated. We
obtained the pro forma statements of operations data by (1) combining the
historical results of each of the Acquired Companies from the beginning of the
period until their acquisition by Orius and (2) adjusting the combined
historical results to reflect (a) the application of purchase accounting to the
acquisitions, (b) the elimination of certain non-recurring expenses and
adjustments reflecting different depreciation and amortization policies and (c)
the financing transactions associated with the acquisitions. The Acquired
Companies may have performed differently if they had been combined as of or on
the dates presented. You should not rely on the supplemental unaudited pro forma
data as being indicative of the historical results that we would have had or the
future results that we will experience.
You should read this supplemental unaudited pro forma financial data in
conjunction with the information contained in "Unaudited Pro Forma Financial
Statements," "Selected Historical Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and the related notes appearing elsewhere in this prospectus.
38
<PAGE> 43
SUPPLEMENTAL UNAUDITED PRO FORMA FINANCIAL DATA(1)
YEAR ENDED DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NETWORK
DAS-CO SCHATZ COPENHAGEN CABLING TEXEL IRWIN FENIX MIDWEST
------ ------ ---------- ------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................... $3,660 $5,127 $3,877 $3,520 $10,363 $19,180 $15,426 $8,949
Expenses:
Direct costs......................... 1,910 3,847 2,783 2,851 7,462 13,096 6,172 5,283
General and administrative........... 369 1,006 330 313 635 3,874 7,502 1,037
Depreciation and amortization........ 121 317 160 48 72 628 245 230
------ ------ ------ ------ ------- ------- ------- ------
Total expenses......................... 2,400 5,170 3,273 3,212 8,169 17,598 13,919 6,550
Income from operations................. 1,260 (43) 604 308 2,194 1,582 1,507 2,399
Other (Income) Expense:
Interest expense, net................ (2) (4) (10) 31 (43) 34 75 42
Other (income) expense............... (1) -- -- 1 (18) (12) 1
------ ------ ------ ------ ------- ------- ------- ------
Income before income tax provision and
Extraordinary charge................. 1,263 (39) 614 276 2,255 1,548 1,444 2,356
Provision for income taxes............. 17 -- -- 172 61 (34) 100 176
------ ------ ------ ------ ------- ------- ------- ------
Income before extraordinary charge..... $1,246 $ (39) $ 614 $ 104 $ 2,194 $ 1,582 $ 1,344 $2,180
====== ====== ====== ====== ======= ======= ======= ======
<CAPTION>
ADJUSTMENTS PRO FORMA
----------- ---------
<S> <C> <C>
Revenues............................... $ -- $70,102
Expenses:
Direct costs......................... -- 43,404
General and administrative........... (4,027)(2) 11,039
Depreciation and amortization........ 281 (3) 2,102
------- -------
Total expenses......................... (3,746) 56,545
Income from operations................. 3,746 13,557
Other (Income) Expense:
Interest expense, net................ 1,747 (4) 1,870
Other (income) expense............... -- (29)
------- -------
Income before income tax provision and
Extraordinary charge................. 1,999 11,716
Provision for income taxes............. 3,245 (5) 3,737
------- -------
Income before extraordinary charge..... $(1,246) $ 7,979
======= =======
</TABLE>
39
<PAGE> 44
NOTES TO SUPPLEMENTAL UNAUDITED PRO FORMA FINANCIAL DATA
(DOLLARS IN THOUSANDS)
(1) Results for the year ended December 31, 1999 represent the results of the
Acquired Companies purchased in the related period prior to their date of
acquisition.
(2) The acquisition adjustments to general and administrative expenses consist
of the following:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C>
Owner's compensation(i)..................................... $(4,209)
Rent expense(ii)............................................ 182
-------
$ 4,207
=======
</TABLE>
(i) Reflects the decrease resulting from differentials between the
compensation levels of former owners of the Acquired Companies and the
terms of their employment agreements with Orius. After the acquisition
of the Acquired Companies, the duties and responsibilities of the
owners who remained employed with Orius have not and will not change,
and additional costs have not and are not expected to be incurred
related to their efforts. Also reflects the elimination of compensation
expense associated with the distribution of excess cash balances to the
former owners of the Acquired Companies immediately prior to their
dates of acquisition.
(ii) Reflects the rent expense resulting from our current lease terms as
compared to lease terms entered into by former owners. In addition,
reflects the increase in rent expense and the corresponding decrease in
real estate tax expense resulting from our leasing rather than owning
certain related facilities which were not, and in the case of Irwin
will not be, purchased from the former owners of the Acquired
Companies.
(3) Depreciation has been derived utilizing the property, plant and equipment
values of each of the Acquired Companies at the time of their acquisition,
rather than utilizing values of property, plant and equipment actually held
by each of the Acquired Companies in the period presented. Reflects the
impact on depreciation resulting from (1) the application of Orius'
depreciation policy rather than those of the former owners of the Acquired
Companies and (2) any decrease in depreciation resulting from leasing rather
than owning certain related facilities. In addition, reflects the change in
depreciation resulting from the write-up of property, plant and equipment to
fair value arising from purchase accounting.
The acquisition adjustments to depreciation and amortization expense consist
of the following:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C>
Depreciation
Change in accounting policy............................... $(1,363)
Write-up of property, plant and equipment................. 242
Amortization of goodwill.................................. 1,402
-------
$ 281
=======
</TABLE>
(4) Represents interest of $1,407 on amounts drawn on the revolving credit
facility to fund the Fenix acquisition using an assumed interest rate of
9.08% and interest of $340 on the junior subordinated notes issued in
connection with the acquisitions of Irwin, Fenix and Midwest using an
assumed interest rate of 12%.
(5) Reflects the income tax rate that would have been in effect if the Acquired
Companies had been combined and subject to a federal statutory rate of 35%
and the applicable state statutory rate for each of the acquired businesses
throughout the period presented.
40
<PAGE> 45
SELECTED HISTORICAL FINANCIAL DATA
In connection with the LISN acquisition, LISN's former stockholders
acquired control of Orius. As a result, LISN has been treated as the acquiring
corporation for accounting purposes even though it became a subsidiary of Orius
in the LISN acquisition. Therefore, LISN is our corporate predecessor for
accounting purposes and its historical financial statements are deemed to be our
historical financial statements.
The following table presents historical financial data for LISN, Inc., as
of and for each of the years ended December 31, 1995, 1996 and 1997. Results for
the years ended December 31, 1998 and 1999 represent the combined historical
results for such periods of LISN (which had no material operations prior to
1998) and LISN, Inc. and the results of Orius for the period from December 15,
1999 through December 31, 1999. LISN and LISN, Inc., which were companies under
common control, were combined in a May 1999 recapitalization. Historical
financial statements for LISN (the name of which was ARION, Inc. prior to the
recapitalization) are included elsewhere in this prospectus.
The selected historical financial data should be read in conjunction with
the information contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" "Certain Relationships and Related Party
Transactions" and the financial statements and related notes included elsewhere
in this prospectus. The financial data set forth below has been reclassified to
the classifications used for the pro forma financial data set forth elsewhere in
this prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................. $ 167,018 $76,371 $40,226 $20,512 $13,876
Expenses:
Direct costs............................................ 118,539 52,659 29,691 15,425 10,468
General and administrative.............................. 20,577 10,627 6,063 3,688 3,121
Depreciation and amortization........................... 1,358 383 179 145 148
--------- ------- ------- ------- -------
Total expenses............................................ 140,474 63,669 35,933 19,258 13,737
Income (loss) from operations............................. 26,544 12,702 4,293 1,254 139
Other (Income) Expense:
Interest expense, net................................... 11,149 450 178 139 108
Other (income) expense.................................. 362 (14) (53) 8 7
--------- ------- ------- ------- -------
Income (loss) before tax provision........................ 15,033 12,266 4,168 1,107 24
Provision for income taxes................................ 4,937 -- -- -- --
--------- ------- ------- ------- -------
Net income (loss) before extraordinary charge............. $ 10,096 $12,266 $ 4,168 $ 1,107 $ 24
========= ======= ======= ======= =======
OTHER DATA:
Ratio of earnings to fixed charges........................ 2.20 21.93 14.19 5.27 1.14
<CAPTION>
AT DECEMBER 31,
-------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........................................... $ 115,410 $19,347 $ 5,137 $ 2,404 $ 1,468
Goodwill, net............................................. 359,882 -- -- -- --
Total assets.............................................. 621,978 28,599 16,043 7,175 4,367
Series C participating, redeemable preferred stock........ 199,019 -- -- -- --
Securities subject to put and call arrangements........... 54,946 -- -- -- --
Total debt................................................ 466,866 1,182 3,071 1,678 1,546
Total shareholders equity (net capital deficit)........... (186,851) 18,248 7,141 11 1,855
</TABLE>
41
<PAGE> 46
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis contains statements of a
forward-looking nature relating to future events or our future financial
performance. These statements are only predictions and the actual events or
results may differ materially from the results discussed in the forward-looking
statements. Factors that could cause or contribute to these differences include,
but are not limited to, those discussed in "Risk Factors," as well as those
discussed elsewhere in this prospectus. The historical results set forth in this
discussion and analysis are not necessarily indicative of trends with respect to
our actual or projected future financial performance. This discussion and
analysis should be read in conjunction with the financial statements and related
notes which appear elsewhere in this prospectus.
OVERVIEW
We are one of the largest independent providers of comprehensive telecom
infrastructure services in the U.S., with operations in 48 states over the past
twelve months. We offer a full spectrum of services, including:
- External Telecom Services -- installation, design, engineering and
maintenance of fiber optic, coaxial and copper cable networks for the
telecom industry; and
- Internal Telecom Services -- engineering, furnishing and installation of
network equipment and related components and related maintenance
services, primarily in the central offices of telecommunications services
providers, which we refer to as "EF&I Services," and similar network
services for commercial, governmental and institutional entities, which
we refer to as "Network Services."
Of our pro forma revenues for the year ended December 31, 1999, approximately
63% was derived from External Telecom Services and 37% was derived from Internal
Telecom Services. Of these revenues, 51% was from services provided to
telecommunications services providers, 38% was from services provided to
broadband services providers and 11% was from services provided to our
commercial, governmental and other customers.
Many of our contracts are awarded on the basis of competitive bids, the
final terms and pricing of which are frequently negotiated with the customer.
However, many of our contracts that are with customers with whom we enjoy a
long-standing business relationship are renegotiated prior to expiration without
competing bids. Generally, contracts for External Telecom Services provide that
we will furnish a specified unit of service for a specified unit price. For
example, we contract to install cable for a specified rate per foot. We
recognize revenue as the related work is performed. Production reports are
inspected and approved by both our on-site quality control manager and the
customer's on-site project manager. We also provide our External Telecom
Services through master service agreements, under which we provide all specified
services under a specified dollar amount within a defined geographic area, and
turnkey agreements, under which we provide comprehensive design, engineering,
installation and maintenance services.
Our Internal Telecom Services contracts are provided on a
project-by-project basis, with revenue recognized on a percentage-of-completion
basis. Under this method, revenue is recognized on a cost-to-cost method based
on total cost incurred to date as a percentage of total estimated cost to
complete the contract. These projects generally require two to three months to
complete, with an average revenue of $20,000. We also provide our Network
Services under maintenance agreements, under which we agree to furnish a
specified unit of service for a specified price and bill our customers based on
the services performed.
Project-specific agreements are billed on either a unit basis, as work is
completed, or a deferred unit or milestone basis, when work on a specified
segment of an entire project is completed. Unbilled revenues consist of
work-in-process on contracts based on work performed, but not yet billed. All
costs associated
42
<PAGE> 47
with unbilled revenues are recorded as expenses in the same period as the
unbilled revenue. Customers are generally billed weekly. This process is
intended to keep disputed billings to a minimum, improve receivable collections
and reduce our risk on deferred billing projects. Master service agreements are
billed on a unit basis with bills delivered upon completion of a unit of work.
Turnkey agreements are billed both on a unit and deferred unit or milestone
basis. We generally bill our Internal Telecom Services customers upon job
completion, with a lag of approximately two weeks between job completion and
billing.
Direct costs include all direct costs of providing services to our
customers, other than depreciation on fixed assets that we own or use under
capital leases. We utilize subcontracted labor when the volume of our work
exceeds the capacity of our regularly employed labor force. By utilizing an
established pool of experienced subcontractors, we are able to capture
additional business which we would otherwise be unable to perform utilizing only
our in-house labor force. The benefit of the additional revenue generated
through the use of subcontracted labor is partially offset by the relatively
higher labor costs as compared to the cost of our internal work force. Materials
are typically provided by our External Telecom Services customers, other than in
connection with turnkey agreements, for which we supply materials. As part of
Internal Telecom Services, we supply accessory equipment, such as shelves, racks
and cable for use in the installation of central office equipment.
General and administrative costs include all costs of our management
personnel and the management of our subsidiaries, rent, utilities, travel and
centralized costs such as insurance administration, professional costs and
clerical and administrative overhead. Our operating subsidiaries' senior
management, and, with respect to national accounts, our executive management,
handle all sales and marketing functions as part or their regular duties and,
therefore, we do not incur material selling expenses beyond that included under
general and administrative expenses.
ACQUISITIONS
NATG's corporate predecessor, North American Tel-Com Group, was
incorporated in Florida in 1997. Parent was incorporated in Delaware in January
1999. As a result of a corporate reorganization in February 1999, NATG became a
subsidiary of Parent. We had no substantive operations until March 1998.
Beginning in March 1998, we acquired Cablemasters Corp., Channel
Communications, Inc., Excel Cable Construction, Inc. and Mich-Com Cable
Services, Incorporated. In June 1998, we acquired U.S. Cable, Inc., and in
August 1998, we acquired CATV Subscriber Services, Inc., Burn-Techs, Inc. and
State Wide CATV, Inc.
In February 1999, we acquired DAS-CO of Idaho, Inc., Schatz Underground
Cable, Inc., Copenhagen Utilities & Construction, Inc. and Network Cabling
Services, Inc. In May 1999, we acquired Texel Corporation and in December 1999,
we acquired LISN. In January 2000, we acquired Irwin and in April 2000, we
acquired Fenix and Midwest Splicing.
Our 17 completed acquisitions had pro forma 1999 revenues of approximately
$551.9 million. Prior to their acquisition by us, many of these companies were
operated with different strategic and financial objectives. Some of the former
owners of the businesses we acquired sought to maximize cash flow and
stockholder distributions, rather than reinvest earnings in future growth. In
addition, our acquired businesses operated under varying tax structures, which
influenced the historical level of owners' compensation. As a result of the
foregoing, direct costs and general and administrative expenses as a percentage
of revenue may not be comparable among the acquired businesses on a historical
basis.
In connection with the LISN acquisition, LISN's former stockholders
acquired control of Parent. As a result, LISN has been treated as the acquiring
corporation for accounting purposes even though it became a subsidiary of NATG
in the LISN acquisition. Therefore, LISN is our corporate predecessor for
accounting purposes and its historical financial statements are deemed to be our
historical financial statements.
43
<PAGE> 48
The deemed acquisition of Parent by LISN and all of our previous
acquisitions were accounted for using the purchase method of accounting. As a
result, the historical financial statements of LISN and NATG, as the case may
be, do not include the results of operations of acquisitions prior to the date
they were acquired. The excess of the fair value of the consideration paid or to
be paid for the acquisitions, including LISN's deemed acquisition of Parent, of
$360.5 million over the fair value of the net assets so purchased has been
recorded as goodwill. The majority of this goodwill is being amortized over its
estimated useful life of 25 years as a non-cash charge to operating income. The
effect on our net income of these amortization expenses, a majority of which are
not deductible for tax purposes, is expected to be approximately $14.4 million
per year. As a result of the foregoing, we believe that the historical financial
statements of NATG and LISN included in this offering memorandum are not fully
reflective of the ongoing operations of the Company.
We entered into a credit facility in connection with our February 1999
acquisitions and incurred a one-time non-cash related charge of approximately
$770,000, net of tax benefit of approximately $431,200, representing the
write-off of deferred financing costs. In connection with the refinancing of
this credit facility as part of the LISN Acquisition, we incurred a similar
non-cash charge of approximately $2.1 million net of tax benefit of
approximately $1.1 million, representing the write-off of deferred financing
costs.
Since January of this year we have completed three acquisitions. In January
2000, we completed the acquisition of Irwin. Irwin is a Dallas, Texas based
provider of External Telecom Services to telecom services providers in a variety
of states. Irwin's primary customers include AT&T Broadband & Internet Services,
Charter Communications and Time Warner. In April 2000, we completed the
acquisitions of Fenix and Midwest Splicing. Fenix and Midwest provide External
Telecom Services to broadband service providers in and around the Great Lakes
region of the U.S. and the Midwest region of the U.S., respectively. Fenix's
primary customer is Charter Communications and Midwest's primary customers
include Media One and Paragon Cable. The aggregate purchase price for these
acquisitions was approximately $44.5 million, consisting of approximately $35.5
million of cash, $7.7 million of Parent's securities and the assumption of $1.3
million of debt. We funded $15.5 million of the cash purchase price with
borrowings under our senior credit facilities. These three companies had
aggregate revenue and EBITDA for the year ended December 31, 1999 of $43.6
million and $10.6 million, respectively.
RESULTS OF OPERATIONS
HISTORICAL
In connection with the LISN acquisition, LISN's former stockholders
acquired control of Parent. As a result, LISN has been treated as the acquiring
corporation for accounting purposes even though it became a subsidiary of NATG
in the LISN acquisition. Therefore, LISN is our corporate predecessor for
accounting purposes and its historical financial statements are deemed to be our
historical financial statements. The financial data referred to below for the
years ended December 31, 1998 and 1999 represent the combined historical results
for such periods of LISN (which had no material operations prior to 1998) and
LISN, Inc. for both periods, and of Orius for the period from December 15, 1999
through December 31, 1999. LISN and LISN, Inc., which were companies under
common control, were combined in a May 1999 recapitalization. Historical
financial statements for LISN (the name of which was ARION, Inc. prior to the
recapitalization) are included elsewhere in this prospectus. See "Selected
Historical Financial Data." The financial data for the year ended December 31,
1997 was derived from the audited financial statements of LISN, Inc., LISN's
largest predecessor company. The financial data referred to below has been
reclassified to conform to the classifications used for the pro forma data above
and, as a result, differs from those used in the historical financial statements
of ARION, Inc. and LISN, Inc.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
Revenue. Revenue increased 119%, or $90.6 million, from $76.4 million for
the year ended December 31, 1998 to $167.0 million for the year ended December
31, 1999. This increase was due
44
<PAGE> 49
primarily from increased revenue from EF&I Services performed for Bell Atlantic
in both existing and new geographic markets.
Direct Costs. Direct costs increased 125%, or $65.9 million, from $52.7
million for the year ended December 31, 1998 to $118.5 million for the year
ended December 31, 1999. The increase was the result of an increase in our labor
force due to our increased level of activity, and represents a 2% increase in
direct costs as a percentage of revenue from 69% for the year ended December 31,
1998 to 71% for the year ended December 31, 1999. This increase is attributable
to an increased use of subcontractors necessary to achieve revenue growth and a
one-time bonus of $1.5 million paid to installers and engineers in connection
with the recapitalization of LISN in May 1999.
General and Administrative Expenses. General and administrative expenses
increased 94%, or $9.9 million, from $10.6 million for the year ended December
31, 1998 to $20.5 million for the year ended December 31, 1999. The increase in
general and administrative expenses was due primarily to a one-time bonus of
$5.0 million paid to LISN's administrative employees in connection with the
recapitalization of LISN in May 1999. These amounts represent a 2.0% decrease in
general and administrative expenses as a percentage of revenue from 14% for the
year ended December 31, 1998 to 12% for the year ended December 31, 1999. This
decrease resulted from leveraging these expenses over an increased revenue base.
Depreciation and Amortization Expense. Depreciation and amortization
expense was $0.4 for the year ended December 31, 1998 and $1.4 for the year
ended December 31, 1999. This increase was primarily due to the amortization of
$0.2 million of finance costs in connection with the recapitalization of LISN in
May 1999 and the amortization of $0.7 million in goodwill in connection with the
LISN acquisition.
Interest Expense. Interest expense was $0.5 for the year ended December 31,
1998 and $10.5 million for the year ended December 31, 1999. This increase was
due to higher levels of debt incurred in connection with the recapitalization of
LISN in May 1999.
Provision for Income Taxes. The provision for income taxes was $0.0 for the
year ended December 31, 1998 and $4.9 million for the year ended December 31,
1999, reflecting an effective tax rate of 31% for federal, state and local taxes
for the year ended December 31, 1999. This increase is the result of the change
in LISN's status from an S corporation to a C corporation in connection with the
recapitalization of LISN in May 1999. As an S corporation, LISN was generally
not subject to federal income tax at the corporate level.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
Revenue. Revenue increased 90.0%, or $36.2 million, from $40.2 million for
the year ended December 31, 1997 to $76.4 million for the year ended December
31, 1998. This increase was primarily due to increased revenue from EF&I
Services performed for Bell Atlantic, AT&T and Ameritech in existing and new
geographic markets.
Direct Costs. Direct costs increased 78.0%, or $23.2 million, from $29.7
million for the year ended December 31, 1997 to $52.9 million for the year ended
December 31, 1998. The increase was the result of an increase in LISN's labor
force due to an increased level of activity, and represents a 4.7% decrease in
direct costs as a percentage of revenue from 73.9% for the year ended December
31, 1997 to 69.2% for the year ended December 31, 1998. This decrease was
attributable to the improved productivity of LISN's labor force.
General and Administrative Expenses. General and administrative expenses
increased 76.3%, or $4.5 million, from $5.9 million for the year ended December
31, 1997 to $10.4 million for the year ended December 31, 1998. These amounts
represent a 1.1% decrease in general and administrative expenses as a percentage
of revenue from 14.7% for the year ended December 31, 1997 to 13.6% for the year
ended December 31, 1998. The increase in general and administrative expenses was
primarily due to increases in administrative staff and salaries, and accounted
for $3.0 million of the $4.5 million increase.
45
<PAGE> 50
Depreciation and Amortization Expense. Depreciation and amortization
expense was $179,000 for the year ended December 31, 1997 and $383,000 for the
year ended December 31, 1998.
Interest Expense. Interest was $178,000 for the year ended December 31,
1997 and $450,000 for the year ended December 31, 1998.
PRO FORMA AND COMBINED RESULTS OF OPERATIONS
The following table sets forth certain unaudited pro forma financial data
and such data as a percentage of revenue for the periods indicated. Financial
data for the years ended December 31, 1998 and December 31, 1999 give pro forma
effect to those transactions described under the heading "Unaudited Pro Forma
Financial Statements," as if those transactions had occurred at the beginning of
the periods presented. See "Unaudited Pro Forma Financial Statements." For
purposes of the discussion below, we have included unaudited pro forma financial
data because we believe it provides a more meaningful basis for period-to-period
comparisons than the actual historical financial data.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1999 1998
(PRO FORMA) (PRO FORMA)
---------------- ----------------
$ % $ %
------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................................................... $551.9 100.0% $370.2 100.0%
Direct costs.............................................. 398.1 72.1% 265.7 71.8%
General and administrative expenses....................... 54.1 9.8% 41.7 11.3%
Depreciation and amortization expense..................... 25.1 4.5% 21.9 5.9%
Interest expense, net..................................... (62.4) (11.3)% (62.4) (16.9)%
Provision for income taxes................................ 9.9 1.8% (3.9) (1.1)%
OTHER DATA:
EBITDA.................................................... 99.6 18.1% 62.8 17.0%
</TABLE>
Pro Forma Year Ended December 31, 1999 Compared to Pro Forma Year Ended
December 31, 1998
Revenue. Revenue increased 49%, or $181.7 million, from $370.2 million for
the year ended December 31, 1998 to $551.9 million for the year ended December
31, 1999. This growth was attributable in part to a 45% increase in revenue from
our External Telecom Services customers, which accounted for $107.2 million, or
59%, of the total increase. Favorable weather conditions at key external telecom
project sites and a general increase in demand for our External Telecom Services
contributed to this increase. Revenue from our Internal Telecom Services
customers increased 57%, which accounted for $74.5 million, or 41%, of the total
increase. Included in that amount was a $69.0 million increase in revenue for
EF&I Services, primarily performed for Bell Atlantic, which accounted for 38% of
the total increase. Revenue from Network Services grew 10% over the comparable
period, or $5.5 million, due to a general increase in demand for our Network
Services.
Direct Costs. Direct costs increased 50%, or $132.4 million, from $265.7
million for the year ended December 31, 1998 to $398.1 million for the year
ended December 31, 1999. The increase was the result of an increase in our level
of activity. Direct costs increased as a percentage of revenue from 71.8% for
the year ended December 31, 1998 to 72.1% for the year ended December 31, 1999.
This increase is attributable to an increase in subcontracted labor, which is
more expensive than our internal labor force.
General and Administrative Expenses. General and administrative expenses
increased 30%, or $12.4 million, from $41.7 million for the year ended December
31, 1998 to $54.1 for the year ended December 31, 1999. The increase in general
and administrative expenses was due to increased payroll and other expenses
required to service our increased level of activity. These amounts represent a
1.5% decrease in general and administrative expenses as a percentage of revenue
from 11.3% for the year ended December 31, 1998 to 9.8% for the year ended
December 31, 1999. This decrease resulted from leveraging
46
<PAGE> 51
these expenses over an increased revenue base. We expect to be able to maintain
this level of general and administrative expenses as a percentage of revenue for
the year ending December 31, 2000.
Depreciation and Amortization Expense. Depreciation and amortization
expense was $21.9 million for the year ended December 31, 1998 and $25.1 million
for the year ended December 31, 1999.
Interest Expense. Interest expense, net, was $62.4 million for the year
ended December 31, 1998 and $62.4 million for the year ended December 31, 1999.
We expect that our interest expense will increase in 2000 over 1999 levels due
to the utilization of the $100.0 million in borrowing capacity under the senior
credit facilities, which is available for working capital and acquisitions.
Provision for Income Taxes. The provision for income taxes increased $13.8
million, from a benefit of $3.9 million for the year ended December 31, 1998 to
an expense of $9.9 million for the year ended December 31, 1999. Our effective
tax rate rate increased from (19)% for the year ended December 31, 1998 to 82%
for the year ended December 31, 1999. Our effective tax rate is affected by the
non-deductibility of $9.6 million of goodwill in each period attributable to
acquisitions, which will cause us to experience a significantly higher effective
tax rate than statutory levels for the foreseeable future.
LIQUIDITY AND CAPITAL RESOURCES
In connection with the LISN acquisition, we entered into the senior credit
facilities. The senior credit facilities provide for aggregate borrowings of up
to $375.0 million, consisting of the following:
- $100.0 million revolving credit facility to be used for permitted
acquisitions and for working capital purposes, with sublimits of $75.0
million for acquisition loans and $50.0 million for working capital loans
and a maximum of $100.0 million in borrowings at any one time;
- $75.0 million tranche A term loan with a $50.0 million letter of credit
subfacility; and
- $200.0 million tranche B term loan.
Working capital loans borrowed under the revolving credit facility can only
be used for working capital purposes, capital expenditures and other general
corporate purposes. Acquisition loans borrowed under the revolving credit
facility may only be used to finance a limited number of acquisitions that are
otherwise permitted by the terms of the senior credit facilities. To the extent
that the amount borrowed for acquisition loans exceeds $50.0 million, the amount
available for working capital loans is reduced dollar for dollar.
The proceeds of the tranche A and tranche B term loans were used to finance
the LISN acquisition and, except as described below, were fully drawn down at
the closing of the LISN acquisition and may not be reborrowed. Our obligation to
certain of our stockholders in connection with the put and call agreements
entered into in connection with the LISN acquisition are supported by $46.5
million of letters of credit issued under the tranche A term loan letter of
credit subfacility. These letters of credit will be drawn to fully fund the
amounts payable upon the exercise of our call options. As of March 31, 2000, we
had drawn $40.8 under these letters of credit. In addition, a total of $7.2
million of standby letters of credit have been issued under the revolving credit
facility. These standby letters of credit will expire in accordance with their
terms without being drawn when we exercise our call options. As of March 31,
2000, there was $232.7 million of outstanding indebtedness under the senior
credit facilities (excluding $5.7 million of letters of credit and $7.2 million
of standby letters of credit), $34.8 million available under the revolving
credit facility for working capital and other corporate purposes and $75.0
million available for acquisitions, although no more than $100.0 million in the
aggregate may be borrowed under the revolving credit facility.
As of March 31, 2000, rates on borrowings under the senior credit
facilities ranged from 8.9% to 9.5%. Borrowings of working capital under the
revolving credit facility are due December 15, 2004 and may be borrowed, repaid
and reborrowed prior to maturity. Until December 15, 2001, acquisition loans
under the revolving credit facility may be borrowed, repaid and reborrowed. On
December 15, 2001, any acquisition loans outstanding will be converted into an
amortizing term loan, payable quarterly, with 20% of the loan
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payable in 2002, 25% of the loan payable in 2003 and 55% of the loan payable in
2004, with the final payment due December 15, 2004. Borrowings under the tranche
A term loan are due December 15, 2004 and borrowings under the tranche B term
loan are due December 15, 2006. The tranche A and tranche B term loans are
payable quarterly in arrears beginning March 31, 2000.
Our senior credit facilities and the indenture governing the notes contain
numerous restrictive covenants, including, among other things, covenants that
limit the issuers' ability to borrow money, make capital expenditures, use
assets as security in other transactions, pay dividends, incur contingent
obligations, sell assets and enter into leases and transactions with affiliates.
In addition, the senior credit facilities require us to meet specified financial
ratios and tests. In the event that we fail to comply with the various covenants
contained in our senior credit facilities, we would be in default under our
senior credit facilities, and, in any such case, the maturity of substantially
all of our long-term indebtedness could be accelerated. All borrowings under the
senior credit facilities are guaranteed by, and are secured by substantially all
of the assets of, Parent and all of our present and future domestic
subsidiaries.
We used approximately $43.2 million of the proceeds from the offering of
the notes to repay $42.6 in aggregate principal amount of the tranche B term
loan. Under the terms of the senior credit facilities, we were required to repay
this amount at 101% of the principal amount. We used approximately $102.0
million of the proceeds of the offering of the notes to repay our $100.0 senior
subordinated term loan, plus accrued interest, that was used to fund a portion
of the LISN acquisition.
We expect that our principal sources of liquidity will be from cash flow
generated from operations and borrowings under the senior credit facilities. We
believe that such funds will be sufficient to meet our needs for the next twelve
months. Our principal uses of liquidity will be to meet our debt service
obligations, provide working capital availability, finance our capital
expenditures and partially fund future acquisitions.
The combined capital expenditures of NATG and LISN for 1999 were
approximately $13.0 million. Our capital expenditures for 1999 included an
upgrade to our management information system and for additions to vehicles and
equipment of approximately $8.9 million and a $1.2 million expansion of LISN's
Amherst, Ohio corporate offices, including a $420,000 land purchase. We
anticipate that our capital expenditures in 2000 will be approximately $16.0
million.
The majority of our working capital requirements are attributable to billed
and unbilled accounts receivable. As of December 31, 1999, on a pro forma basis,
our billed days sales outstanding were 76 days and our unbilled days sales
outstanding were 14 days. We believe our days sales outstanding for billed and
unbilled receivables are generally in-line with the industry average and
generally reflect the payment policies of telecom services providers. Our
accounts receivable balance has increased due to the increased utilization of
milestone billing by our customers. With milestone billing, a customer will only
accept a bill upon completion of a discrete portion of a project, without regard
to the time it takes for the portion to be completed. The milestone billing
terms for our large turnkey projects, which represent 14% of the balance of our
receivables, have been a significant contributor to our balance of receivables
days sales outstanding. We have taken proactive steps to try to reduce our
unbilled accounts receivable balance and have been successful in negotiating
pre-payments with respect to our turnkey contracts to alleviate the burden on
our working capital.
As part of our growth strategy, we intend to pursue selective acquisitions.
We cannot predict the timing, size or success of any prospective acquisitions
and the related capital commitments. To the extent that we seek to grow by
acquisitions that involve consideration other than Parent's securities, our
capital requirements may increase. We expect to fund future acquisitions
primarily with issuances of additional Parent securities, the available portion
of our acquisition facility and cash flow from operations.
As of December 31, 1999, we had $28.7 million of cash and cash equivalents,
working capital of $115.4 million, including $5.5 million of short-term debt,
and long-term debt of $326.4 million, net of current maturities, and no
borrowings under our $100.0 million revolving credit facility.
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During the year ended December 31, 1999, operating activities provided
$13.8 million. We used net cash in investing activities of $170.2 million,
including $166.1 million relating to the LISN acquisition. Financing activities
provided a net cash flow of $182.3 million, resulting primarily from borrowings
under the senior credit facilities.
SEASONALITY; FLUCTUATIONS OF QUARTERLY RESULTS
Our operations are seasonal, generally resulting in reduced revenues and
profits during the first and fourth quarters relative to other quarters. Factors
affecting the seasonality of our business are holiday season shut-downs, adverse
weather conditions and year-end budgetary spending patterns of our customers.
These factors can negatively affect telecom systems repair, replacement and
expansion. Additionally, our industry can be highly cyclical. As a result, our
business volume may be adversely affected by declines in new projects in various
geographic regions. Quarterly results may also be materially affected by the
timing and magnitude of acquisitions and related costs, variations in the
margins of projects performed during any particular quarter, the timing and
volume of work under new agreements, customer spending patterns, termination of
existing agreements, costs incurred in connection with internal growth, changes
in our mix of customers, contracts or business, fluctuations in construction and
design costs, and regional and general economic conditions. Accordingly, our
operating results in any particular quarter may not be indicative of the results
that can be expected for any other quarter or for the entire year.
MARKET RISK
Market risk is the potential loss arising from adverse changes in market
rates and prices, such as foreign currency exchange and interest rates. Although
we are not subject to material foreign currency exchange risk, we are exposed to
changes in interest rates. All of our debt, other than the notes, is variable
rate debt. Interest rate changes generally do not affect the fair market value
of variable rate debt but do impact future earnings and cash flows, assuming
other factors are held constant. Conversely, for fixed rate debt, interest
changes do not impact future cash flow and earnings, but do impact the fair
market value of fixed rate debt, assuming other factors are held constant. At
March 31, 2000, we had variable rate debt of approximately $232.7 million and
fixed rate debt of approximately $150.0 million. Holding other variables
constant (such as debt levels) a one percentage point increase in interest rates
would have had an estimated impact on pre-tax earnings and cash flows for next
year of approximately $2.1 million. In order to manage our interest rate risk,
we have entered into interest rate cap agreements and swaps with a notional
amount of $118.0 million as of March 31, 2000. These agreements limit, but do
not eliminate, our exposure in the event LIBOR exceeds 7.0%.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement is effective for our 2001
financial statements. This Statement requires that entities recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Due to the complexity of
this Statement, we are still evaluating the impact, if any, on our financial
statements.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101,
"Revenue Recognition" (SAB 101), which affects the recognition and disclosures
about revenues. SAB 101 is applicable for our second quarter 2000 financial
statements. We do not expect the adoption of SAB 101 to have a significant
impact on our financial statements.
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BUSINESS
INTRODUCTION
We are one of the largest independent providers of comprehensive telecom
infrastructure services in the U.S., with operations in 48 states over the past
twelve months. We offer a full spectrum of services, including:
- External Telecom Services -- installation, design, engineering and
maintenance of fiber optic, coaxial and copper cable networks for the
telecom industry; and
- Internal Telecom Services -- engineering, furnishing and installation of
network equipment and related components and related maintenance
services, primarily in the central offices of telecommunications services
providers, which we refer to as "EF&I Services," and similar network
services for commercial, governmental and institutional entities, which
we refer to as "Network Services."
Our ability to provide comprehensive, quality service on a nationwide basis
positions us as a leading, full-service provider of telecom infrastructure
services to the telecom industry. For the year ended December 31, 1999, we had
pro forma revenue of $551.9 million and pro forma EBITDA of $99.6 million.
Our 1999 pro forma revenue was derived 63% from External Telecom Services
and 37% from Internal Telecom Services. More than 80% of our 1999 pro forma
revenue was generated from repeat customers, often under turnkey agreements,
master service agreements and preferred provider arrangements. Our principal
customers include providers of telecommunications services, such as Ameritech,
AT&T, Bell Atlantic, DTI, GTE, MCI WorldCom, Pacific Bell, Southwestern Bell,
U.S. West and Williams Communications, and providers of broadband services, such
as Adelphia, AT&T Broadband & Internet Services, Charter Communications,
Comcast, Cox Communications, MediaCom, MediaOne and Time Warner. We also provide
our Network Services for customers such as Compaq, Dell, EDS, the FDIC and World
Bank.
The LISN acquisition provided us with access to the significant and rapidly
growing central office EF&I Services market. As a result of this acquisition, we
believe we are the largest independent provider of EF&I Services to the telecom
industry in the U.S. We design configurations for a broad range of equipment
installations using our engineering capabilities, implement such designs with
our extensive installation expertise and furnish our customers with a variety of
accessory equipment such as racking materials, wire and cables.
INDUSTRY TRENDS
We estimate that the market for telecom infrastructure services exceeded
$40 billion in 1998 and that the market possesses positive growth dynamics. The
MultiMedia Telecommunications Association estimates that telecommunications and
broadband services providers spent over $19 billion on telecom infrastructure
services in 1998 and projects expenditures will grow at a compound annual rate
of approximately 14% through 2002. According to World Information Technologies,
Inc., expenditures for EF&I Services accounted for approximately $5 billion of
the total telecom infrastructure services expenditures by telecommunications and
broadband services providers in 1998, and are projected to grow at a compound
annual rate of approximately 41% through 2002. Expenditures for Network Services
by commercial, governmental and institutional entities are estimated by
Dataquest to have exceeded $20 billion in 1998 and are estimated by Dataquest to
grow at a compound annual rate of approximately 18% through 2002.
We believe that our industry presents substantial growth opportunities for
large companies like us with significant capital resources, broad geographic
coverage, comprehensive technical capabilities and the
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ability to provide responsive, high quality service on a consistent basis.
Growth in our industry has been driven by the following trends:
- Telecom Deregulation. The Telecommunications Act of 1996 substantially
revised prior law by preempting state and local government control over
access to the telecommunications and cable television market. The
Telecommunications Act eliminated regulatory barriers to competition such
as the antitrust consent decree that had restricted the Regional Bell
Operating Companies from offering long distance telephone service, many
federal pricing regulations that had affected cable television providers
and FCC restrictions that had prevented telephone companies from offering
cable television services. In response to these changes, existing and
newly created companies have raced to install new networks and upgrade
existing networks to enter new markets to maintain or gain market share.
The Telecommunications Act also required that competitive local exchange
carriers be granted access to existing central offices of incumbent local
exchange carriers, a practice known as co-location, which requires
rewiring of the switches and has significantly increased demand for EF&I
Services. We believe the elimination of these entry barriers has
increased and will continue to increase competition among telecom
services providers and drive additional investment in telecommunications
network infrastructure. In addition, many state regulatory commissions
have eliminated pricing regulations for telecom providers, thus requiring
these providers to become efficient in installing and maintaining their
telecom and cable television networks so as to be price competitive. As a
result, providers are entering new markets, offering services that once
were reserved for incumbent providers, and expanding and improving their
existing networks.
- Increased Voice, Video and Data Traffic on Telecom Networks. Growth in
demand for Internet services, telecommunications voice and data traffic,
electronic commerce, delivery of information and entertainment services,
and the growth, use and reliance on personal computers has created an
increased need for greater bandwidth. Bandwidth refers to both the speed
and breadth of voice, video and data communications. Bandwidth is limited
by the size and the physical and technological characteristics of the
cable, equipment or other facilities through which communications flow.
Because of the physical limitations of existing network facilities,
telecom services providers are upgrading facilities with new and
innovative technology, expanding and, in many cases, replacing existing
telecom infrastructure to allow for increased bandwidth in order to offer
faster and greater volume of communications flow.
- Increased Outsourcing. The level of outsourcing by telecom services
providers is expected to continue to increase due to the need of these
service providers to upgrade and expand their networks as a result of
increased competition. The outsourcing trend has largely been driven by
the efforts of telecom services providers to expedite the expansion,
maintenance, replacement and enhancement of their networks, to reduce
costs and to focus on their core competencies. Companies that specialize
in providing telecom infrastructure services to the telecom industry are
generally able to provide these services on a lower cost basis. In
addition, we believe that telecom services providers are seeking to
reduce the number of their telecom infrastructure services providers, and
thereby the administrative expense and managerial burden of managing
their services providers, by establishing preferred relationships with a
select number of services providers that are able to consistently offer
comprehensive solutions to their network needs across a broad geographic
area.
- Customer Consolidation. While deregulation has created new market
participants, consolidation in the telecom industry has created
geographically diverse and in some cases integrated providers. The
expansion of the geographic markets served by telecom services providers
has increased the requirement for telecom infrastructure services
providers to have broad geographic coverage capabilities. As the size and
scope of telecom services providers have expanded, they are increasingly
requiring telecom infrastructure services providers to provide
installation, design, engineering, and maintenance services
simultaneously over multiple geographic regions. Many of the smaller
regional and local companies in our industry do not have the financial
resources or
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personnel necessary to provide comprehensive service capabilities over a
broad geographic area or the ability to manage multiple projects.
- Emergence of Preferred Service Providers. We believe that telecom
services providers increasingly prefer to simplify vendor management
through the use of telecom infrastructure service providers with
significant capital resources, broad geographic coverage, comprehensive
technical capabilities and the ability to provide responsive, quality
service on a consistent basis. Telecom infrastructure services providers
must be able to rapidly mobilize their capital equipment, financial
assets and personnel resources to effectively respond to the increasing
scale and time constraints of customer demands. As telecom services
providers expand their geographic market, we believe they often desire to
extend existing relationships with their existing telecom infrastructure
service providers to these new markets and are increasing the use of
turnkey and master service agreements. Turnkey agreements typically
require the telecom infrastructure service provider to install, design,
engineer and often maintain a comprehensive network for a specific
project. Master service agreements typically require the telecom
infrastructure service provider to install, design and maintain systems
and equipment for a variety of projects over a three to five year period
in a specified geographic area. Telecom infrastructure services providers
must be able to support the substantial initial working capital and
equipment commitments required for these turnkey and master service
agreements. This trend favors large services providers like us with
significant capital resources over smaller industry competitors.
COMPETITIVE STRENGTHS
We believe that we possess a number of competitive strengths that position
us as a leading provider of telecom infrastructure services and provide us with
the ability to meet the increased demand for these services and to take
advantage of the strong technology-driven growth occurring in the telecom
industry, including:
- Comprehensive Service Capabilities. We are one of the few service
providers with the capability to offer our customers integrated and
comprehensive telecom infrastructure services, including installation,
design, engineering, furnishing and maintenance services. This capability
is important to our customers, who increasingly prefer to simplify their
vendor management through the use of fewer preferred service providers
who can offer comprehensive solutions to their telecom infrastructure
needs. In addition, we believe our comprehensive service capabilities
across nearly all competing telecom infrastructure technologies minimizes
our risk of technological obsolescence.
- Broad Geographic Coverage. Consolidation in the telecom industry has
created geographically diverse telecom services providers who require
telecom infrastructure services providers with similarly broad
geographical capabilities. The telecom infrastructure services industry
is highly fragmented, with the five largest companies, including us,
accounting for less than 10% of estimated total industry revenues, and
includes hundreds of significantly smaller local and regional companies
that can only offer their services over a limited geographic area. Our
ability to provide our services to customers on a nationwide basis
positions us to be a preferred service provider to our customers and
provides us with a competitive advantage over local and regional
companies in our industry. We have significantly broadened our geographic
presence in the past two years through strategic acquisitions, including
our acquisition of LISN, and currently have operations in 47 states.
- Strong Customer Relationships. More than 80% of our 1999 pro forma
revenue was derived from repeat customers. Through our operating
subsidiaries, we have enjoyed business relationships with many of our
larger customers for more than 20 years. In addition, we are a preferred
service provider to a number of these customers. As a result of our
strong customer relationships, we are well positioned to capitalize on
the increasing trend of telecom services providers towards greater
outsourcing of their telecom infrastructure needs.
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- Reputation and Commitment to Quality. We believe that we have a
reputation in our industry for responsive, high quality service, as
evidenced by LISN's receipt of customer service awards, including
Siemens' "1998 Contractor of the Year" and GTE's "Supplier Recognition
Award" in 1997. Our commitment to quality is further evidenced by LISN's
achievement in September 1998 and continued renewal of ISO 9002
certification.
- Decentralized Operating Strategy. We manage our operations on a
decentralized basis while maintaining overall operating and financial
controls and strategic planning at our corporate headquarters. Our
operating subsidiaries have been in business for an average of more than
20 years and retain responsibility for the operations, profitability and
growth of their individual businesses. We believe that our decentralized
operating structure retains the entrepreneurial spirit of each of the
businesses we acquire and permits us to capitalize on the acquired
businesses' customer relationships, local and regional market knowledge,
local brand name recognition and specialized skills. At the same time,
our management team coordinates overall marketing strategies to maximize
the utilization of our resources and reviews operations at our
subsidiaries to identify those practices that can be implemented
successfully throughout our operations.
- Experienced Management. Our executive management and the senior
management of our operating subsidiaries have an average of over 20 years
of experience in the telecom infrastructure services industry and our
chief executive officer, William J. Mercurio, has more than 25 years of
experience in this industry. Our executive management team also has
substantial acquisition experience, having completed 15 acquisitions
since 1998, including the LISN Acquisition. In addition, we have
generally retained key personnel from acquired companies, which has
enabled us to strengthen our management team. We also benefit from the
considerable financial, management and acquisition experience of our
largest stockholder, Willis Stein & Partners, a leading private equity
investment firm based in Chicago, Illinois with more than $1.2 billion of
assets under management as of December 31, 1999.
BUSINESS STRATEGY
Our objective is to enhance our position as one of the largest independent
providers of comprehensive telecom infrastructure services in the U.S. We seek
to utilize our competitive strengths to take advantage of substantial growth
opportunities in the telecom industry that favor large companies like us with
significant capital resources. Key elements of our growth and operating
strategies include the following:
- Continue to Grow Internally. We believe we can continue to achieve
internal growth by:
Continuing to Develop National Service Capabilities. To meet our
customers' increasing preference for service providers who can provide
telecom infrastructure services on a nationwide basis, we have expanded
our business to include operations in 48 states. Continued expansion
into markets in which we do not currently have a significant presence is
fundamental to our strategy of enhancing our position as one of the
largest providers of comprehensive telecom infrastructure services in
the U.S. Part of this strategy involves securing large, long-term
contracts in new geographic markets that provide us with the local
presence necessary to capture business from other potential customers in
these markets.
Focusing on Cross-Selling Opportunities. Our comprehensive service
offerings and broad geographic coverage provide us with the opportunity
to expand our service offerings across our customer base. For example,
we believe that our strong relationships with our External Telecom
Services customers located in the Southwestern and Western regions of
the U.S. provide us with the opportunity to expand our EF&I Services in
these regions. Similarly, our strong relationships with our EF&I
Services customers in the Northeastern and Mid-Atlantic regions of the
U.S. provide us with the opportunity to expand our External Telecom
Services in that region.
Maximizing Performance of Existing Operations. We have been able to
increase internal growth by enhancing the performance of the businesses
we have acquired through the integration
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of their resources with our existing operations. Although our operating
subsidiaries retain responsibility for the operations, profitability and
growth of their individual businesses, our executive management team has
responsibility for overall operations, financing, capital expenditures,
corporate strategy, acquisitions and the coordination of overall
marketing and bidding strategies to maximize the utilization of our
resources. By combining overlapping operations of the businesses we have
acquired, we have achieved, and believe we can continue to achieve, more
efficient asset and personnel utilization and reductions in incremental
overhead and general and administrative expenses. As we grow internally
and acquire additional businesses, we will seek to realize additional
cost savings and other benefits through shared purchasing, bidding,
scheduling and the establishment of best practices.
Expanding Our Service Offerings. We believe that opportunities
exist to grow internally by expanding the services we offer. We are
targeting new services that are complementary to the services we
currently offer, such as installing telecommunications software,
installing and maintaining wireless networks and providing testing,
turn-up, monitoring and dispatch repair and maintenance services. We
believe that opportunities also exist in the Internal Telecom Services
market to generate additional revenue by providing our current services
for a broader set of manufacturers' products. In addition, we are
expanding our design and engineering services, which are in particularly
high demand by telecom services providers. The expansion of our design
and engineering services can provide us with both an increased revenue
stream and the opportunity to exert greater control over project flow
and specifications, which in turn can provide us with a competitive
advantage in bidding for the related installation and maintenance work.
- Selectively Pursuing Strategic Acquisitions. We plan to continue to
pursue strategic acquisitions in the fragmented telecom infrastructure
services industry. We have acquired 17 companies since March 1998,
including our acquisition of LISN, and have gained significant experience
in identifying, purchasing and integrating telecom infrastructure
businesses. We seek out acquisition candidates that have strong
historical and projected financial performance and experienced management
teams that will be compatible with our corporate culture and operating
philosophy. In addition, we look for acquisition candidates that satisfy
one or more of the following criteria: (1) adding additional and/or
complementary technical capabilities; (2) increasing our range of
services; (3) increasing our customer base; (4) expanding our geographic
presence; (5) increasing our penetration of existing markets; and (6)
creating potential operating synergies. We believe that our national
presence, financial resources, experienced management and decentralized
operating strategy will continue to make us attractive to acquisition
candidates.
- Attract, Train and Retain Highly Qualified Personnel. We focus on
attracting and retaining a highly trained and motivated workforce in
order to consistently deliver innovative customer solutions and
high-quality service. Our strategy is to become the employer of choice in
each of the markets in which we operate by offering our employees
comprehensive ongoing internal technical and managerial training programs
throughout their careers, competitive compensation and employee benefits,
career development opportunities, geographic mobility and equity
participation in our success.
TELECOM INFRASTRUCTURE SERVICES
EXTERNAL TELECOM SERVICES
Design and Engineering. We offer a variety of design and engineering
capabilities as part of our External Telecom Services. We design aerial, buried
and underground fiber optic, coaxial and copper cable systems for all segments
of our customers' network infrastructure. Our engineering services include the
design of service area concept boxes, terminals, buried and aerial drops and the
proper administration of feeder and distribution cable pairs. For competitive
access providers, we design building entrance laterals, fiber rings and conduit
systems. We obtain rights of way and permits in support of engineering
activities,
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and provide installation management and inspection personnel in conjunction with
engineering services or on a stand-alone basis. In addition, for broadband
services providers we perform make ready studies, strand mapping, field walk
out, computer-aided radio frequency design and drafting, and fiber optic cable
routing and design.
Installation and Maintenance. We provide a full range of installation and
maintenance services to our customers. The services we provide include the
splicing and placing of cable, excavation of trenches in which to place the
cable, placement of related structures such as poles, anchors, conduits,
manholes, cabinets and closures, placement of drop cable from the main
distribution lines to the customer's home and businesses, and maintenance and
removal of these facilities. We have the capacity to directionally bore the
placement of cables, a highly specialized and increasingly necessary method of
placing buried cable networks in congested urban and suburban markets where
trenching is highly impractical due to the disruptive effect of trenching on the
surrounding area. We also employ a licensed rail plow device which enables us to
bury cable on railway easements expeditiously at a low cost.
INTERNAL TELECOM SERVICES
EF&I Services
Engineering. We engineer design configurations for a broad range of
equipment installations, ranging from low-end frame relays, which serve as an
interface between user and network equipment, to advanced broadband digital
cross-connect systems and digital subscriber lines, or DSLs, and platforms,
which enable high speed data and video transmission. Our engineers create
computer-generated schematic drawings that are tailored to each specific
installation project. All drawings are verified for accuracy with the central
office records through site surveys or on-line database checks. Our engineers
develop creative solutions to installation and upgrade projects for central
office switching, transmission and power systems. Our engineers work closely
with customers' engineers to develop detailed installation instructions and
drawings to ensure that the installation process is performed efficiently and
correctly.
Equipment Furnishing. We provide accessory equipment such as shelves, racks
and cable for use in the installation of central office equipment. This service
ensures an availability of supplies and enables us to meet accelerated
installation timetables. Our furnishing operations provide us with a significant
competitive advantage as a result of our ability to ship equipment on a
just-in-time basis in 24 hours or less and to pre-pack materials specific to a
given job site on a lower cost basis.
Installation. Our team of over 1,200 installation technicians has extensive
experience installing a full range of central office equipment, including
asynchronous and synchronous optical network multiplexers, T1 repeaters, digital
loop carrier systems, data bridges, network monitoring devices, alarming
systems, routers, power equipment, DSL and other equipment. Prior to beginning
installation, the installation technician reviews engineering drawings and
checks job site materials against specifications. The responsibilities of the
installation team include taking inventory of equipment, mounting, cabling and
wiring to schematics, performing functional equipment tests, integrating new
equipment with the existing exchange, and updating all specifications and
drawings. The installation team tests the system prior to reporting a completed
package to engineering in order to ensure that the equipment functions properly.
Network Services
We provide a variety of interior wiring services which include the
installation, design, engineering and maintenance of communications networks in
commercial, institutional and governmental facilities. These services generally
include the establishment and maintenance of computer operations, telephone
systems, local area networks and wide area networks, Internet access and systems
for monitoring environmental controls or security procedures.
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ACQUISITION PROGRAM
Since our formation in August 1997, we have acquired 17 telecom
infrastructure services providers. These companies had pro forma revenues for
the twelve months ended December 31, 1999 of approximately $551.9 million. For a
list of the businesses we have acquired, see "Management's Discussion and
Analysis of Financial Condition and Results of Operation -- Acquisitions."
We believe that we are regarded by acquisition candidates as an attractive
acquiror because of the following factors:
- our strategy for creating a nationwide comprehensive and professionally
managed business servicing the telecom industry,
- opportunities to participate in a larger organization with greater access
to capital resources,
- our decentralized operating strategy which retains the entrepreneurial
spirit of the acquired businesses by allowing acquired companies to
retain responsibility for their own individual operations, profitability
and growth,
- our potential for increased profitability due to centralized
administrative functions, enhanced management information systems and
economies of scale, and
- the potential for owners of the businesses being acquired to realize some
liquidity, while continuing to participate in our planned growth through
continued equity ownership in our company.
We have developed a set of financial, geographic and management criteria
designed to assist management in the evaluation of acquisition candidates. We
seek out acquisition candidates that have strong historical and projected
financial performance and experienced management teams that will be compatible
with our corporate culture and operating philosophy. In addition, we look for
acquisition candidates that satisfy one or all of the following criteria:
- whether the acquisition will add additional and/or complementary
technical capabilities,
- whether the acquisition will augment our market share or increase our
range of services,
- composition and size of the candidate's customer base,
- whether the geographic location of the candidate will enhance or expand
our market area or ability to attract other acquisition candidates, and
- potential synergies gained by combining the acquisition candidate with
our existing operations.
We anticipate that acquisition candidates will typically have annual revenues
ranging from $10 million to $40 million, although we would consider acquiring a
company with revenues outside this range. All acquisitions are subject to
initial evaluation and approval by our management before being recommended to
our board of directors. The evaluation by management includes comprehensive
financial, accounting and legal due diligence of the acquisition candidate. We
expect the management of our acquired companies to continue to play an
instrumental role in identifying and assisting in the completion of future
acquisitions.
BIDDING AND CONTRACTS
Our senior management team coordinates overall bidding strategies to
maximize the utilization of our resources, with all bids over $1.0 million being
approved by our senior management. Bids are prepared utilizing the local
expertise of our operating subsidiaries. When appropriate, our operating
subsidiaries work together in bidding for, winning and executing new contracts
by pooling their available resources, technical expertise and coverage in
different geographic areas.
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EXTERNAL TELECOM SERVICES
Our three primary types of External Telecom Services contracts include:
- installation contracts for specific projects,
- master service agreements for all specified services within a defined
geographic territory, and
- turnkey agreements for comprehensive installation, design, engineering
and maintenance services.
Project-Specific Contracts. We refer to contracts covering bids for
particular services at specified prices as project-specific contracts.
Generally, these contracts cover most installation projects with a duration of
one year or longer. The majority of these contracts provide that we will furnish
a specified unit of service for a specified price. For example, we contract to
install cable for a specified rate per foot. Pro forma revenue for
project-specific contracts was approximately $156 million in 1997, $194 million
in 1998 and $269 million for the year ended December 31, 1999.
Master Service Agreements. We refer to contracts with telecom services
providers to perform all work within a specific geographic area as master
service agreements. Under master service agreements, project services are
provided upon the execution of work orders, which will describe the work to be
undertaken. Each master service agreement contemplates hundreds of individual
installation and maintenance projects, generally resulting in less than $50,000
in revenue per project. These agreements generally have a term ranging from
three to five years and often contain price adjustment provisions based on
inflation. Under our master service agreements, our customers generally reserve
the right to use their own regularly employed personnel to perform services. In
addition, our customers generally retain the right to solicit competitive bids
with respect to projects that exceed a specified dollar amount, generally
$50,000. Pro forma revenue for master service agreements was approximately $41
million in 1997, $41 million in 1998 and $40 million for the year ended December
31, 1999.
Turnkey Agreements. We refer to contracts covering a comprehensive spectrum
of services, including the installation, design, engineering, and maintenance of
telecommunications and broadband networks on a fixed unit-priced basis, as
turnkey agreements. As we continue to grow and expand the scope of services we
provide, we are able to enter into an increasing number of contracts to provide
turnkey services. Even though these are generally long-term agreements, the
pricing for our services is not necessarily fixed because these agreements often
contain price adjustment provisions that are favorable to us, as well as
performance and completion incentives. Because turnkey contracts are invoiced
based on units of work completed at specified milestones per the contracts'
terms, these agreements require substantial initial working capital and
equipment, which historically have been partially funded by customer
prepayments. Pro forma revenue for turnkey agreements was approximately $0 in
1997, $5 million in 1998 and $38 million for the year ended December 31, 1999.
Our contracts for External Telecom Services are awarded on a competitive
basis, a negotiated basis, or a combination of the two depending on the nature
of the contract and the customer. Upon receipt of a request for proposal, we
develop a detailed bid which meets the unique specifications and requirements of
each project. This process often entails strategic business analysis, resource
planning, network design, cost and engineering studies and, in some cases,
development of financing alternatives for the project. Bids may be structured as
fixed price or cost plus, depending on the requirements of the request for
proposal, and are typically quoted on a per unit basis. In either case, we
believe that we enjoy a favorable competitive position due to our ability to
provide a full range of high quality installation, design, engineering and
maintenance services nationwide. Although master service agreements have
historically been awarded in a competitive bidding process, recent trends have
been toward securing or extending these contracts on negotiated terms. With the
rapid expansion of telecommunications and broadband networks, we believe that
more master service agreements will be awarded on the basis of negotiated terms
to the telecommunications or broadband services providers' preferred providers,
as opposed to the competitive bidding process. All of our External Telecom
Services contracts are generally terminable upon 90 days' notice or less.
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<PAGE> 62
INTERNAL TELECOM SERVICES
EF&I Services Contracts. We generally provide EF&I Services on a
project-by-project basis. Each of these projects generates average revenue of
approximately $20,000 and requires from two weeks to three months to complete,
with the majority completed in less than a month. In 1998 we completed
approximately 5,000 individual EF&I Services projects, and in 1999, we completed
approximately 8,000 additional projects. Pro forma revenue for EF&I Services
contracts was $21 million in 1996, $40 million in 1997, $76 million in 1998 and
$145 million in 1999.
Regional Bell Operating Companies are our primary customers for EF&I
Services. We typically secure two or three-year, fixed price agreements with the
Regional Bell Operating Companies, who generally establish non-binding contracts
with only "preferred" vendors. We have achieved preferred status with many of
our customers, including Bell Atlantic and Ameritech. These non-binding
contracts outline the payment terms and pricing parameters for various types of
projects. Although these contracts do not stipulate a minimum amount of work to
be designated to a vendor during the term of the contract, preferred provider
status does act as a barrier to entry, allowing preferred providers to perform
their services at their maximum service capacity. Regional Bell Operating
Companies such as Bell Atlantic typically limit their number of preferred
vendors to between three and six vendors per region.
We calculate the pricing of our projects for other customers based on the
type of equipment to be installed and the complexity of the engineering and
installation services required. We generally recognize revenue from EF&I
Services contracts on our books as a percentage of project completion, with
completion being measured by comparing actual costs incurred to estimated
project costs, and bill our customers at job completion. Because our EF&I
projects are generally short in duration (two weeks to three months, but
generally less than one month) and are for less than $20,000, this method of
revenue recognition does not present any material risk of misstating revenues.
The lag between completion and billing is approximately two weeks and payments
are due within 45 days from the billing date (net 30 terms). Progress billing is
only allowed in the Bell Atlantic contract and on a job-by-job negotiated basis
with other customers.
Network Services Contracts. We generally provide our Network Services on a
project-by-project basis for a fixed fee and recognize revenue on a percentage
of completion basis as our costs are incurred. Each of these projects generates
average revenue of approximately $15,000 and generally requires one week to 30
days to complete. These contracts are generally billed upon project completion.
We also provide our Network Services under maintenance agreements, under which
we agree to furnish a specified unit of service for a specified price and bill
our customers based on the services performed.
CUSTOMERS
We served a diverse group of more than 200 customers during 1999, which can
be categorized in three broad market segments:
- telecommunications services providers, such as Regional Bell Operating
Companies, incumbent local exchange carriers, competitive local exchange
carriers, long-distance service providers and independent telephone
companies, which accounted for approximately 51% of our pro forma 1999
revenue;
- broadband services providers, such as Media One and Time Warner, which
accounted for approximately 38% of our 1999 pro forma revenue; and
- commercial entities, such as Dell and Compaq, governmental entities such
as the FDIC, and institutional entities, such as utility providers and
public school districts, requiring Network Services, which together
accounted for approximately 11% of our 1999 pro forma revenue.
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<PAGE> 63
The following table sets forth our top ten customers, which accounted for
approximately 63.3% of our 1999 pro forma revenue:
TOP 10 CUSTOMERS
<TABLE>
<CAPTION>
% OF REVENUE FOR
THE YEAR ENDED
NAME MARKET SEGMENT SERVICES PROVIDED DECEMBER 31, 1999
- ---- ------------------ ----------------- -----------------
<S> <C> <C> <C>
Bell Atlantic Telecommunications Internal Telecom 20.8
AT&T Broadband Broadband External Telecom 10.8
Time Warner Broadband External Telecom 6.3
Media One Broadband External Telecom 4.7
Digital Teleport Telecommunications External Telecom 4.5
U.S. West Telecommunications External Telecom 4.1
Williams Communications Telecommunications External Telecom 3.6
Charter Communications Broadband External Telecom 3.6
AT&T Telecommunications Internal Telecom 2.8
Metro Media Fiber Telecommunications External Telecom 2.2
</TABLE>
In recent months, our revenue from Bell Atlantic has increased in both
absolute terms and as a percentage of our revenue and this trend may continue
for the foreseeable future. Bell Atlantic contributed approximately 61% of
LISN's 1998 revenue. Because LISN's business with Bell Atlantic is governed by
13 separate relationships with individual Bell Atlantic operating units that are
each independently responsible for issuance of work orders to LISN within their
operating regions, customer diversification effectively exists within the Bell
Atlantic relationship, since a change in our relationship with one unit will not
necessarily affect our relationship with the other units. Bell Atlantic's need
for telecom infrastructure services has kept LISN operating at or near full
capacity for the past seven years in the regions LISN serves Bell Atlantic.
SALES AND MARKETING
Our sales and marketing efforts are focused on increasing the value of
comprehensive services provided to existing customers, actively cross-marketing
additional services to our existing customer base and developing new customer
relationships. These efforts are primarily the responsibility of regional
management, supplemented by our executive management team with respect to
national accounts. Regional management at each of our operating subsidiaries has
been responsible for developing and maintaining successful long-term
relationships with customers, which helps facilitate our repeat business and
generate cross-marketing opportunities.
We currently have a sales and marketing integration team, comprised of
executive management of Parent and senior management of its subsidiaries,
including LISN, working to maximize our sales and marketing opportunities. This
team is actively identifying logical cross-selling opportunities, developing
procedures for joint-bidding and developing procedures for delivering sales
opportunities to the business unit best positioned to respond to the customer's
requirements.
Many of our customers or prospective customers have a qualification
procedure for becoming an approved vendor based upon the satisfaction of
particular performance and safety standards set by the customer. These customers
often maintain a list of vendors meeting their standards and award contracts for
individual jobs only to vendors which meet their standards. This customer
approval process has been expedited by our achievement in September 1998 of ISO
9002 certification. We strive to maintain our status as a preferred and
qualified vendor to these customers.
BACKLOG
We define our backlog as the uncompleted portion of services to be
performed under project specific contracts and the estimated value of future
services that we expect to provide under master service agreements and other
contracts. As of March 31, 2000, our pro forma backlog was approximately $559
million. Of that amount, approximately $353 million was for work scheduled to be
performed in 2000
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<PAGE> 64
and approximately $178 million is for work scheduled to be performed in 2001.
All our backlog can be canceled at any time upon the notice provided in these
agreements without penalty except, in some cases, for the recovery of our actual
committed costs and profit on work performed up to the date of cancellation.
However, we have not historically had any significant cancellations. We are
unable to provide backlog information for periods prior to 1999 since our
subsidiaries did not maintain any consistent information on contract backlog
prior to their acquisition by Parent.
Under our master service agreements and certain of our maintenance
contracts, our customers do not commit to the volume of services to be
purchased. Rather, these contractual provisions commit us to perform these
services if requested by the customer and commit the customer to obtain these
services from us if they are not performed internally. Many of the contracts are
multi-year contracts and we include revenues from all the services projected to
be performed over the life of the contract in our backlog based upon our
historical relationships with our customers and experience in these types of
contracts.
SAFETY AND RISK MANAGEMENT
We are committed to ensuring that our employees perform their work in a
safe environment. We regularly communicate with our employees to promote safety
and to instill safe work habits through our company-wide employee training and
educational programs. We have dedicated risk managers at each of our operating
subsidiaries who review all accidents and claims, examine trends and implement
changes in procedures or communications to address any safety issues. We also
have a dedicated risk manager at our corporate headquarters who monitors the
risk management programs at our subsidiaries and establishes overall corporate
risk management objectives and standards.
EMPLOYEES
As of December 31, 1999, on a pro forma basis, we had approximately 4,600
employees, approximately 9% of whom were salaried, approximately 78% of whom
were paid on an hourly basis and approximately 13% of whom were paid on a
production basis. Our hourly employees have an average hourly wage of $16 per
hour. Our employees are generally non-union, although we do provide union labor
when required, as in certain markets such as New York City. As of January 15,
2000, approximately 20% of our employees were affiliated with unions. We
maintain a core of technical and managerial personnel from which we draw to
supervise all projects. As the need arises, we also subcontract with independent
contractors to supply additional manpower to complete specific projects. As of
December 31, 1999, on a pro forma basis, we had approximately 1,500
subcontracted workers. We consider relations with our employees to be good.
We employ more than 750 qualified installers with skill levels that meet or
exceed Bellcore GR-1275-CORE section 23, an industry-wide quality standard.
Technicians go through a two-week formal training period and an estimated 12 to
18 more months on the job before they are fully trained. Most of the technicians
have a trade school/high school education or have prior experience in the
telecom sector. Recruiting, training and retaining technicians is a key focus
area for us.
EQUIPMENT AND FACILITIES
We operate a fleet of owned and leased trucks and trailers, support
vehicles and specialty installation equipment, such as backhoes, excavators,
trenchers, generators, boring machines, cranes, wire pullers and tensioners. The
total size of the equipment fleet is approximately 2,200 units. We believe that
these vehicles generally are well-maintained and adequate for our present
operations. We believe that in the future, we will be able to lease or purchase
this equipment at favorable prices due to our larger size and the volume of our
leasing and purchasing activity.
Our corporate headquarters are located in leased space in West Palm Beach,
Florida. The total leased area for our corporate headquarters and our
subsidiaries' headquarters is approximately 125,000 square feet and the total
annual base rent for these facilities is approximately $1.1 million. The leases
for these facilities have terms ranging from month-to-month to five years. None
of the individual leases is material
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<PAGE> 65
to our operations. Our subsidiaries also lease various district field offices,
equipment yards, shop facilities and temporary storage locations. We also lease
other smaller properties as necessary to enable us to efficiently perform our
obligations under master service agreements and other contracts. We believe that
our facilities are generally adequate for our needs. We do not anticipate
difficulty in replacing such facilities or securing additional facilities, if
needed. All of our owned properties and our leases are pledged to secure
repayment of the senior credit facilities.
Each of our facilities is leased, with the exception of the headquarters
for Schatz Underground Cable in Villa Ridge, Missouri, the training, warehouse
and distribution facility for Schatz Underground Cable in Kansas City, Missouri,
the LISN headquarters in Amherst, Ohio and LISN's training and regional office
in Lorain, Ohio. The following is a list of our material facilities.
<TABLE>
<CAPTION>
FACILITY LOCATION
- -------- -------------------
<S> <C>
Orius Headquarters.......................................... West Palm Beach, FL
Texel headquarters.......................................... Reston, VA
Copenhagen Utilities & Construction headquarters............ Clackamas, OR
Network Cabling Services headquarters....................... Houston, TX
Schatz Underground Cable headquarters....................... Villa Ridge, MO
Schatz Underground Cable training facility.................. Kansas City, MO
DAS-CO of Idaho headquarters................................ Nampa, ID
State Wide CATV headquarters................................ Tampa, FL
CATV Subscriber Services headquarters....................... Greensboro, NC
U.S. Cable headquarters..................................... O'Fallon, MO
Channel Communications headquarters......................... Sheboygan, WI
Cablemaster headquarters.................................... Erie, PA
Mich-Com Cable Construction headquarters.................... Stuart, FL
Excel Cable Construction headquarters....................... Jacksonville, FL
LISN headquarters........................................... Amherst, OH
LISN regional office facility............................... Beltsville, MD
LISN regional office facility............................... E. Rutherford, NJ
LISN sales facility......................................... Dallas, TX
LISN regional office facility............................... Green Bay, WI
LISN regional office facility............................... Elkhorn, WI
LISN regional office facility............................... Washington, DC
LISN regional office facility............................... Timonium, MD
LISN engineering facility................................... Westborough, MA
LISN regional office facility............................... Youngstown, OH
LISN training and regional office facility.................. Lorain, OH
LISN sales facility......................................... Denver, CO
LISN regional office facility............................... King of Prussia, PA
Fenix headquarters.......................................... Green Bay, WI
Midwest Splicing headquarters............................... Arden Hills, MN
Irwin headquarters.......................................... Dallas, TX
</TABLE>
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<PAGE> 66
COMPETITION
The telecom infrastructure services industry is highly fragmented, with the
five largest companies, including us, accounting for less than 10% of total
estimated industry revenues in 1998. The industry consists of a small number of
large companies with a national presence and hundreds of smaller local and
regional companies that generally have more limited service capabilities and
geographic coverage. The telecom infrastructure industry is highly competitive,
requiring substantial resources and skilled and experienced personnel. We
compete with other companies in all of the markets in which we operate, some of
the larger of which may have greater financial, technical and marketing
resources than we do, including Dycom Industries, Inc., MasTec, Inc., Quanta
Services, Inc. and others. There are relatively few barriers to entry into the
markets in which we operate and, as a result, any organization that has adequate
financial resources, access to technical expertise and customer relationships
may become a competitor to us. We may also face competition from the in-house
service organizations of our existing or prospective customers which often
employ personnel who perform some of the same types of services as those
provided by us. Although a significant portion of these services is currently
outsourced, we cannot assure you that our existing or prospective customers will
continue to outsource service requirements for installation, design, engineering
and maintenance services in the future.
We believe that the principal competitive factors in the telecom
infrastructure industry include technical expertise, reputation, price, quality
of service, availability of skilled technical personnel, geographic presence,
breadth of service offerings, adherence to industry standards and financial
stability. We believe that we compete favorably within our industry on the basis
of these factors.
LEGAL PROCEEDINGS
We occasionally are a party to legal proceedings incidental to our ordinary
business operations. At present, we are not a party to any pending legal
proceedings that we believe could have a material adverse effect on our
business, financial condition or results of operations.
E. Scott Kasprowicz, President of our subsidiary Texel Corporation, has
filed suit against us alleging that we breached the stock purchase agreement
pursuant to which we purchased the stock of Texel from Mr. Kasprowicz. Mr.
Kasprowicz alleges that we owe him $3,664,626.75 as a result of a purchase price
adjustment under that agreement. It is our position that no amounts are owed Mr.
Kasprowicz as a result of the purchase price adjustment and we therefore intend
to defend this action.
ENVIRONMENTAL MATTERS
Our facilities and operations are subject to federal, state and local
environmental and occupational health and safety requirements, including those
relating to discharges of substances to the air, water and land, the handling,
storage and disposal of wastes and the cleanup of properties affected by
pollutants. We do not currently anticipate any material adverse effect on our
business or financial condition as a result of our efforts to comply with such
requirements.
In the future, federal, state, local or foreign governments could enact new
or more stringent laws or issue new or more stringent regulations concerning
environmental and worker health and safety matters that could effect our
operations. Also, in the future, contamination may be found to exist at our
facilities or off-site locations where we have sent wastes. We could be held
liable for such newly-discovered contamination. It is possible that changes in
environmental and worker health and safety requirements or liabilities from
newly-discovered contamination could have a material effect on our business.
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth information concerning Parent's executive
officers and directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
William J. Mercurio.................... 59 President, Chief Executive Officer and Chairman of
the Board of Directors
Robert E. Agres........................ 39 Vice President and Chief Financial Officer
Joseph P. Powers....................... 54 Vice President -- Operations
George M. Priggins..................... 53 Vice President -- Human Resources
Martin Kobs............................ 49 President -- Telecommunications Services Group
William Mullen......................... 47 President -- Broadband Services Group and Director
Donald J. Vanke........................ 57 President and CEO -- LISN and Director
Gregory M. Barr........................ 34 Director
Robert C. Froetscher................... 42 Director
Jack E. Reich.......................... 49 Director
Avy H. Stein........................... 46 Director
</TABLE>
William J. Mercurio has been Parent's President, Chief Executive Officer
and Chairman of Parent's Board of Directors since its formation in August 1997.
Mr. Mercurio has more than 25 years of experience in our industry. From 1995 to
1997, Mr. Mercurio served as President and Chief Executive Officer of Able
Telcom Holding Corp., a publicly-traded telecom installation, design,
engineering and maintenance services company. From 1986 to 1995, Mr. Mercurio,
who is a certified public accountant, owned a consulting and accounting firm.
From 1971 to 1986, Mr. Mercurio held various positions with Burnup & Sims, Inc.
at the time a publicly-traded telecom infrastructure service provider, including
Senior Vice President, Chief Financial Officer and was a member of the Board of
Directors. While at Burnup & Sims, Mr. Mercurio participated in over 30
acquisitions and was responsible for all financing and accounting matters.
Robert E. Agres has been Parent's Chief Financial Officer since June 1998.
From 1993 to 1997, Mr. Agres served as Senior Vice President and Chief Financial
Officer of Triarc Beverage Group, where he was primarily responsible for
Triarc's subsidiary, Royal Crown Company, Inc. From 1997 to 1998 Mr. Agres was a
private financial consultant. Mr. Agres, who is a CPA, has more than 15 years of
experience in accounting and financial reporting including work at two public
companies and public accounting at KMG prior to joining Parent.
Joseph P. Powers has been Parent's Vice President for Operations since its
formation in August 1997. Mr. Powers has more than 32 years of experience in the
telecom infrastructure services industry. From 1995 to 1997, he served as
President of Able Communication Services, Inc., a wholly-owned subsidiary of
Able Telcom. From 1990 to 1995, he was Director of Operations for Voltelcon, the
telecom installation, design, engineering and maintenance services division of
Volt Information Sciences.
George M. Priggins was appointed Parent's Vice President of Human Resources
in May 2000. Mr. Priggins has over 25 years of experience in human resources,
most recently serving as Vice President of Human Resources for BICC Cables
Corporation from 1988 to 2000, where he was responsible for all aspects of human
resources in North America.
Martin Kobs was appointed President -- Telecommunications Services Group in
October 1999 and has been with Parent since July 1998. Mr. Kobs has over 26
years of experience in the telecom industry. From 1996 to 1998, Mr. Kobs served
as President of Able Integrated Systems, a subsidiary of Able Telcom. From 1993
to 1996, Mr. Kobs was Director of Operations for Volt Information Sciences. From
1986 to 1998, he served as Operations Manager of Burnup & Sims Communications
Services.
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William Mullen has served as a Director of Parent since July 1998. He has
served as President -- Broadband Services Group since October 1999 and prior to
that was President of U.S. Cable, where he worked in various capacities since
1972.
Donald J. Vanke has served as a Director of Parent since the LISN
acquisition. Mr. Vanke has been President and CEO of LISN since 1998 and, prior
to that time, was Vice President of LISN. As Vice President, Mr. Vanke was
responsible for quality, purchasing, finance and information systems. Prior to
joining LISN, he was President and CEO of DCM, a manufacturer of direct current
motors, from 1978 until 1984. Prior to that Mr. Vanke was Vice President of
Tenna, a manufacturer of electric antennae and mirrors from 1972 until 1978.
From 1964 until 1972, Mr. Vanke was a Manager at Ernst & Young.
Gregory M. Barr has served as a Director of Parent since the LISN
acquisition. Mr. Barr is a principal at Fleet Equity Partners. Prior to joining
Fleet, Mr. Barr was with McKinsey & Company where he worked as a management
consultant in a variety of industries and at Goldman, Sachs & Company as a
financial analyst in the Investment Banking Division. Mr. Barr serves on the
board of directors of several privately-held companies.
Robert C. Froetscher has served as a Director of Parent since the LISN
acquisition. Mr. Froetscher is a Managing Director of Willis Stein & Partners.
Prior to joining Willis Stein & Partners in 1998, Mr. Froetscher was Senior Vice
President and General Manager of APAC Teleservices with responsibility for
running two of APAC's divisions from 1996 to 1997. From 1994 to 1996 he was Vice
President, Sales and Service for Ameritech's Consumer Division, directed 5,300
employees and had responsibility for a business that generated $4.5 billion in
revenue in 1996. Previously, Mr. Froetscher spent almost nine years with MCI in
a variety of executive positions in marketing, sales, service and operations.
Jack E. Reich has served as a Director of Parent since the LISN
acquisition. Mr. Reich has spent 25 years in the communications industry and
held various positions in the local, long distance, data, equipment
manufacturing and Internet segments of this industry. Currently, Mr. Reich is
President of KJE, Inc., a management and investment consulting firm. Most
recently, he served as President and Chief Executive Officer of e.spire
Communications, Inc. from December 1996 through November 1998. e.spire is a
public competitive local exchange carrier. Prior to joining e.spire, Mr. Reich
served as President of Custom Business Service with Ameritech, Inc. Mr. Reich
joined Ameritech from MCI where he held various positions from April 1986 to
April 1994. Mr. Reich departed MCI as their President of the Multi-National
Accounts Division responsible for marketing and operations to that company's
largest customers. Mr. Reich currently serves on the board of directors of
Digex, Inc. (DIGX), a publicly held web-hosting company.
Avy H. Stein has served as a Director of Parent since the LISN acquisition.
Mr. Stein is a Managing Director of Willis Stein & Partners. Prior to the
formation of Willis Stein & Partners in 1994, Mr. Stein was a Managing Director
of Continental Illinois Venture Corporation from 1989 through 1994. Previously,
Mr. Stein served as a consultant to the CEO of NL Industries, Inc. From 1985 to
1988, he was founder/ CEO of Regent Corporation. From 1984 to 1985, Mr. Stein
was President of Cook Energy Corporation and Vice President of Corporate
Planning and Legal Affairs at Cook International, Inc. From 1980 through 1983,
Mr. Stein was an attorney with Kirkland & Ellis.
Each director is elected to serve until the next annual meeting of
stockholders or until a successor is duly elected and qualified. Each of the
current directors were elected pursuant to the terms of an investor rights
agreement. See "Certain Relationships and Related Party Transactions -- Investor
Rights Agreement." There are no family relationship between any of our executive
officers or directors.
DIRECTOR COMPENSATION
Parent does not currently pay any fees to its directors. However, all
directors are reimbursed for out-of-pocket expenses incurred in connection with
the rendering of services as a director.
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EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal year ended
December 31, 1999 concerning compensation Parent paid to its chief executive
officer and the four other executive officers who were its most highly
compensated officers during those years. Other annual compensation primarily
represents amounts paid for auto allowances.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------- OTHER ANNUAL
NAME SALARY BONUS COMPENSATION (2)
- ---- -------- -------- ----------------
<S> <C> <C> <C>
William J. Mercurio................................. $373,750(1) $100,000 $ 9,000
Robert E. Agres..................................... 155,833 25,000 0
Joseph P. Powers.................................... 191,667 60,000 6,600
William Mullen...................................... 157,693 40,000 1,014
Donald J. Vanke..................................... 300,000 505,770 0
</TABLE>
- ---------------
(1) In connection with certain of our 1999 acquisitions, we paid Mr. Mercurio
and Associates, P.A., an affiliate of Mr. Mercurio, a consulting fee of
$550,000 for assistance in identification of, and due diligence with respect
to, acquisition candidates.
(2) Represents amounts paid for car allowances.
OPTION GRANT TABLE
The following table shows all grants of stock options to the named
executive officers during the year ended December 31, 1999 under Parent's former
stock option plan, which was terminated in connection with the LISN acquisition.
Each of the outstanding options was terminated in exchange for an amount equal
to the difference between (1) the per share price paid to the holders of
Parent's common stock who received cash for their shares of common stock in
connection with the LISN Acquisition, less (2) the exercise price of each
option. In connection with the LISN acquisition, Mr. Agres received $132,949 in
exchange for his options to purchase Parent's common stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED EXERCISE
UNDERLYING OPTIONS TO EMPLOYEES PRICE
NAME GRANTED(#)(1) IN FISCAL YEAR (PER SHARE) EXPIRATION DATE
---- -------------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
William J. Mercurio................. -- -- -- --
Robert E. Agres..................... -- -- -- --
Joseph P. Powers.................... -- -- -- --
William Mullen...................... -- -- -- --
Donald J. Vanke..................... -- -- -- --
</TABLE>
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<PAGE> 70
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows aggregate exercises of options in the year ended
December 31, 1999 by the named executive officers and the aggregate value of
unexercised options held by each named executive officer as of December 31,
1999.
AGGREGATE OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
YEAR END(#) YEAR END($)
SHARES ------------- -------------
ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ----------------- ------------- -------------
<S> <C> <C> <C> <C>
William J. Mercurio................... -- -- -- --
Robert E. Agres(1).................... 15,541 130,374 -- --
Joseph P. Powers...................... -- -- -- --
William Mullen........................ -- -- 0/252,226.32 $0/$1,664,166
Donald J. Vanke(2)....................
</TABLE>
- ---------------
(1) Mr. Agres' options became vested and were exercised in connection with the
LISN acquisition.
(2) At the time of the LISN acquisition, Mr. Vanke held options to purchase
679.66 shares of LISN common stock. In connection with the LISN acquisition,
these options were converted into the right to purchase 250,533.2 shares of
Parent's common stock (as adjusted for our March 2000 10-for-1 stock split)
and 1,693.12 shares of Parent's series C preferred stock. The calculated
value of these options is based on the values per share at the time of the
LISN acquisition.
EXECUTIVE EMPLOYMENT AGREEMENTS
Mr. Mercurio. In connection with the LISN acquisition, Parent entered into
a senior management agreement with Mr. Mercurio. The agreement provides that Mr.
Mercurio shall serve as president, chief executive officer and chairman of the
board of Parent and shall devote his full business time and attention to its
affairs. The agreement is for a term ending on February 28, 2003. Mr. Mercurio
is entitled under the agreement to a base salary equal to $470,000 per year,
which may be increased by the board in its discretion and will be subject to
yearly increases based on the Consumer Price Index. In addition to his base
salary, Mr. Mercurio is entitled to receive an annual bonus based upon Parent's
financial performance, as measured by its EBITDA. Mr. Mercurio will not receive
a bonus unless Parent's EBITDA is greater than 1.125 times its prior year's
EBITDA. If EBITDA exceeds this amount, Mr. Mercurio is entitled to receive a
bonus ranging from 50% to 100% of his base salary.
Parent and Mr. Mercurio may each terminate the agreement at any time, with
or without cause, provided that, if we terminate Mr. Mercurio without "cause,"
or if he terminates his employment with "good reason," we must continue to pay
him his base salary for two years and must pay him a pro rata portion of his
bonus for the year of his termination. "Cause" includes the commission of a
felony or a crime involving moral turpitude; an act or omission with respect to
Parent involving dishonesty or fraud that has resulted in or is likely to result
in material harm to Parent; chronic drug or alcohol use; the repeated failure to
perform his duties as directed by the board; negligent or willful misconduct
with respect to Parent; or the material breach of the terms of his management
agreement. "Good reason" means the relocation of our executive offices outside
of West Palm Beach, Florida; a material breach by us of the terms of the
management agreement; or the assignment to Mr. Mercurio of duties inconsistent
with his position at Parent.
If Parent terminates Mr. Mercurio for cause or if he terminates his
employment without good reason, he would be entitled to receive only his base
salary through the date of termination. If Mr. Mercurio is terminated for
disability, he is entitled to receive his base salary for six months. In the
event the agreement is terminated according to its terms in February 2003,
Parent may, at its option, continue to pay Mr. Mercurio his base salary for one
year as a severance payment. Mr. Mercurio has agreed not to compete with Parent
until the later of (1) the second anniversary of the termination of the
management
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agreement if Mr. Mercurio resigns without good reason or is terminated with
cause or (2) such time as we cease making any severance payments to him under
the management agreement.
Under the management agreement, Parent has agreed to sell to Mr. Mercurio
shares of Parent's common stock equal to .75% of its outstanding common stock
for a price per share equal to the price at which shares were purchased by all
investors in the LISN acquisition. Mr. Mercurio will purchase these shares by
issuance of a promissory note, which is secured by a pledge of the shares. Fifty
percent of these shares will vest over four years. The remaining 50% vest on the
fifth anniversary of the closing of the LISN acquisition, provided that vesting
will be accelerated with respect to 25% of this 50% in each year that Parent
achieves its EBITDA target. All of Mr. Mercurio's shares will become immediately
vested upon the occurrence of the following events: (1) Willis Stein & Partners
ceases to own 50% of the shares owned by it as of the closing of the LISN
acquisition, (2) if prior to an initial public offering of Parent, a person or
group of persons who were not stockholders immediately after the LISN
acquisition acquire a number of shares necessary to elect a majority of the
board or (3) a change of control occurs. A "change of control" means (1) any
person who was not a stockholder immediately following the LISN acquisition owns
the greater of (a) 25% of Parent's voting stock or (b) the greatest combined
voting power of any person who was a stockholder immediately following the LISN
acquisition; (2) during any two year period, persons who constituted the board
at the beginning of the period cease to constitute a majority of the board; (3)
if Parent consummates a merger and stockholders who were stockholders prior to
the merger cease to own 80% of the surviving company's equity; (4) a sale of all
or substantially all of Parent's assets; or (5) any person commences a tender
offer or receives an option to acquire 25% or more of Parent's voting stock,
unless the board makes a good faith determination that this action would not
constitute a material change in the control of Parent.
If Mr. Mercurio ceases to be employed by Parent for any reason, Parent will
have the option to repurchase his unvested shares at their original cost. Parent
will be able to purchase his vested shares only if he fails to repay the
promissory note issued to purchase the shares within 60 days following his
termination. Mr. Mercurio's shares will be subject to the restrictions on
transfer contained in the investor rights agreement, described under the heading
"Certain Relationships and Related Party Transactions -- Investor Rights
Agreement."
Messrs. Agres and Powers. Parent also entered into employment agreements
with Mr. Agres and Mr. Powers. Mr. Agres' agreement provides that he will be
employed as Chief Financial Officer for a term ending December 14, 2001 and will
receive a base salary of $195,000 per year. Mr. Powers agreement provides that
he will be employed as a Vice President for a term ending February 28, 2003 and
will receive a base salary of $230,000 per year. Parent may terminate Messrs.
Agres' and Powers' employment at any time for "cause," which includes (1) a
material breach of the terms of the executive's agreement, (2) willful
misconduct in the performance of the executive's duties; (3) an act of fraud
intended to result in the executive's enrichment at Parent's expense, (4)
conviction of a felony or fraud, (5) entry of an order preventing the executive
from performing activities that are essential to the performance of the
executive's agreement, or (6) willful or deliberate conduct intended to
materially damage Parent's business. If either of Messrs. Agres or Powers is
terminated for cause or voluntarily terminates his employment, he would be
entitled to receive his base salary through the date of termination. If either
Messrs. Agres or Powers is terminated due to disability, he would be entitled to
receive his base salary for one year following termination. If either is
terminated without cause, he would be entitled to receive his base salary for
the remainder of his employment term. Mr. Agres has agreed not to compete with
Parent for a period ending the later of (1) December 14, 2001 and (2) one year
after the termination of his employment. Mr. Powers has agreed not to compete
with Parent for a period ending the later of (1) February 28, 2003 or (2) one
year after the termination of his employment.
Mr. Mullen. Mr. Mullen has an employment agreement with Parent, as amended
on September 24, 1999, which expires on June 30, 2002. Mr. Mullen's employment
agreement provides that he will receive a base salary of $220,000, which will
increase to $225,000, effective March 24, 2000. Mr. Mullen is also entitled to a
bonus based on the performance of the broadband services segment of our External
Telecom
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Services business. If Parent terminates Mr. Mullen without cause, it must pay
him his base salary through June 29, 2001. If Parent terminates Mr. Mullen's
employment for cause, he will be entitled to his base salary through the date of
termination. "Cause" includes (1) the commission of a felony or fraud, (2) the
entry of a judgment enjoining him from performing the services required by his
employment agreement, (3) willful misconduct or (4) any other material breach of
his employment agreement. Mr. Mullen has agreed not to compete with the Company
through the later of June 30, 2002 or one year after the termination of his
employment.
Mr. Vanke. Mr. Vanke has an employment agreement with LISN, dated May 28,
1999, which expires on May 27, 2001. Mr. Vanke's employment agreement provides
that he will serve as President and Chief Executive Officer of LISN and will
receive a base salary of $300,000. In addition, Mr. Vanke receives a bonus equal
to 100% of his base salary based on the achievement of certain EBITDA targets by
LISN, as determined by Mr. Vanke and LISN's board of directors prior to the
start of each fiscal year. If LISN terminates Mr. Vanke without cause or if he
terminates his employment for good reason prior to May 2001, LISN must pay Mr.
Vanke his base salary through the later of six months following his termination
or through May 2001. If Mr. Vanke's employment is terminated for cause or if he
terminates his employment without good reason, he will be entitled to only his
base salary through the date of termination. "Cause" includes (1) the commission
of a felony or fraud, (2) chronic drug or alcohol abuse or conduct causing LISN
substantial public disgrace, (3) substantial and repeated failure to perform his
duties as directed by LISN's board of directors, (4) gross negligence or willful
misconduct or (5) any other material breach of his employment agreement. "Good
Reason" includes the relocation of LISN's offices outside of the Cleveland, Ohio
area or the Company's breach of the terms of the employment agreement. Mr. Vanke
has agreed not to compete with LISN during his employment and for two years
thereafter.
STOCK OPTIONS
Mr. Agres held options under Parent's former stock option plan, which was
terminated in connection with the LISN acquisition. Each of his outstanding
options was terminated in exchange for an amount equal to the difference between
(1) the per share price paid to holders of Parent's common stock who received
cash for their shares of common stock in connection with the LISN acquisition,
less (2) the exercise price for the option. In connection with the LISN
acquisition, Mr. Agres received $132,949 in exchange for his options to Parent
common stock.
PARENT EQUITY INCENTIVE PLAN
In connection with the LISN acquisition, Parent intends to adopt a new
equity incentive plan. We anticipate that the plan will provide for the grant of
shares of Parent's common stock and series C preferred stock or options to
purchase such shares to its and its subsidiaries' employees, directors,
officers, consultants and advisors. Under the plan, Parent shall reserve for
issuance (1) an aggregate number of shares of common stock equal to 5.0% of the
number of shares of Parent's common stock issued and outstanding upon
consummation of the LISN acquisition to those persons identified below and (2)
107,103 shares of common stock and 7,238 shares of series C preferred stock that
will be reserved for issuance upon the exercise of options issued to former LISN
option holders. We expect that 1.25% of the common stock available for issuance
under the plan will be reserved for issuance upon exercise of options granted to
employees who were hired after the date of the LISN acquisition and that 3.0% of
the shares of common stock available for issuance under the plan will be
reserved for issuance upon exercise of options granted to employees who were
employees prior to the date of the LISN acquisition. In addition, a number of
shares of common stock equal to .75% of the shares of Parent's common stock
outstanding as of the consummation of the LISN acquisition will be reserved for
issuance to Mr. Mercurio, pursuant to the terms of his senior management
agreement, as described above under "-- Executive Employment Agreements."
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
GENERAL
We have, from time to time, entered into various transactions with certain
of our officers, directors and principal stockholders and entities in which
these parties have an interest. We believe that these transactions have been on
terms no less favorable to us than could be obtained in a transaction with an
independent third party.
TRANSACTIONS IN CONNECTION WITH THE LISN ACQUISITION
General
In connection with the LISN acquisition, Messrs. Mercurio, Agres, Powers
and Mullen received the following in exchange for their equity interests in
Parent and Mr. Vanke received the following in exchange for his equity interest
in LISN:
<TABLE>
<CAPTION>
SERIES C JUNIOR
NAMED EXECUTIVE COMMON PREFERRED SUBORDINATED
OFFICER CASH STOCK(1) STOCK NOTES
- --------------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C>
William J. Mercurio(2)................... $8,007,183 538,590 4,261 $2,945,133
Robert E. Agres(3)....................... 410,213 18,650 148 101,981
Joseph P. Powers(4)...................... 1,959,105 131,780 1,043 720,581
William Mullen........................... 3,415,154 229,710 1,818 1,256,132
Donald J. Vanke(5)....................... -- 266,250 2,107 1,455,934
</TABLE>
- ---------------
(1) As adjusted for our March 2000 10-for-1 stock split.
(2) Includes amounts received by trusts in which Mr. Mercurio's wife serves as
trustee.
(3) Includes $132,949 received by Mr. Agres in exchange for his options to
purchase Parent common stock.
(4) Includes amounts received by Mr. Powers' wife.
(5) Includes amounts received by Mr. Vanke in exchange for his additional
investment of $900,000 at the time of the LISN acquisition.
Investor Rights Agreement
In connection with the LISN acquisition, Parent and each of its
stockholders entered into an investor rights agreement. This agreement provides
that Parent's board of directors will be established at seven directors or any
higher number designated by Willis Stein & Partners. The agreement provides that
the board will consist of:
- Parent's chief executive officer, who will initially be Mr. Mercurio;
- one person designated by Parent's stockholders prior to the LISN
acquisition, provided that the designee is one of Parent's or Parent's
subsidiaries' senior executives and the designee is reasonably acceptable
to Willis Stein & Partners, and who initially will be Mr. Mullen;
- one person designated by Willis Stein & Partners, provided that the
designee is one of Parent's or Parent's subsidiaries' senior executives
and the designee is reasonably acceptable to Parent's chief executive
officer, and who will initially be Mr. Vanke; and
- the remainder shall be designated by Willis Stein & Partners, and
initially will be Mr. Stein, Mr. Froetscher, Mr. Barr and Mr. Reich.
The investor agreement generally restricts the transfer of any shares of
Parent's stock or junior subordinated notes held by the parties to the investor
agreement by requiring that Willis Stein & Partners approve any transfers of
these securities, with some limited exceptions. The parties to the investor
agreement have granted Parent a right of first refusal with respect to its stock
and junior subordinated notes, which, if not exercised by Parent, may be
exercised by Willis Stein & Partners and some of its other stockholders. Each
party to the investor agreement has the right to participate in any transfer of
shares by any other party to the agreement, with some limited exceptions. In
addition, Parent has agreed not to issue
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any equity securities to Willis Stein & Partners or its affiliates unless the
parties to the investor agreement are given the opportunity to purchase their
pro rata share on substantially the same terms. Each party to the investor
agreement has agreed to consent to a sale of Parent if Willis Stein & Partners
votes to approve the sale.
The investor agreement also provides that Willis Stein & Partners may
request, at any time, that all or any portion of its common stock or class B
common stock be registered with the SEC. In the event that Willis Stein &
Partners makes a request for registration, the other parties to the investor
agreement who hold common stock or class B common stock will be entitled to
participate in the registration. Parent has also granted the parties to the
investor agreement piggyback registration rights with respect to registrations
by it and Parent has agreed to pay all expenses relating to the piggyback
registrations.
Put and Call Agreements
In connection with the LISN acquisition, we entered into put and call
agreements with HIG Capital LLC ("HIG") and with some of our other stockholders.
We entered into the put and call arrangements as an accommodation to certain of
Parent's former stockholders for their personal tax planning. These agreements
granted us the right, through LISN, to acquire additional stock held by HIG and
by these stockholders. If we do not exercise our call, these stockholders have
the right to require us to purchase their shares. Our payment of the call price
is secured by letters of credit in the aggregate amount of $46.5 million under
the senior credit facilities, $40.8 million of which was drawn as of March 31,
2000. See "Description of Senior Credit Facilities."
On March 1, 2000, we exercised our right to acquire the 7,546.38 shares of
series B preferred stock held by HIG and all accrued and unpaid dividends on
those shares, which constituted all of Parent's outstanding series B preferred
stock. We paid HIG $4.6 million for the option to repurchase its shares and an
aggregate of $39.4 million to the shares upon the exercise of our call.
Under the call agreement with Parent's other stockholders, Parent was
granted the right to acquire an aggregate of 1,290,471.82 shares of Parent's
common stock, a portion of would be exchanged for newly issued shares of
Parent's series C preferred stock and junior subordinated notes. We paid these
stockholders an aggregate of $1.8 million for this call option. As of March 31,
2000, we had exercised our call option with respect to 295,901 of the shares.
The time period for exercise of both the put and call varies slightly with
respect to certain stockholders depending on the individual stockholder's
holding period with respect to its shares. The remainder of our call options are
expected to be exercised in the second and third quarters of 2000. The aggregate
amount of consideration that we would be required to pay if those stockholders
with outstanding puts exercised their put would be approximately $5.6 million in
cash, plus the issuance of 3,708 shares of Parent's series C preferred stock and
$2.6 million of Parent's junior subordinated notes.
Pledge and Voting Agreements
Pursuant to pledge and voting agreements, those stockholders that are
parties to the put and call agreements described above have granted LISN a
security interest in the stock that is subject to the call agreement to secure
their performance of their obligations under the call agreements. In addition,
these stockholders have appointed Parent's secretary to vote their shares in
favor or against all matters submitted to a vote of stockholders in the same
proportion as the other shares of our common stock are voted, provided that the
other shares of common stock are voted in accordance with the investor rights
agreement described above, and have agreed not to exercise any of their rights
with respect to the series C preferred stock.
Consulting Agreement with Mr. Reich
LISN is a party to a consulting agreement with Mr. Reich, who has served on
Parent's board of directors since the LISN Acquisition. This agreement provides
for consulting payments to Mr. Reich in an
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amount of $15,000 per month. In exchange, Mr. Reich provides consulting services
for five days per month, in such areas as identifying and consummating
acquisitions, sales and marketing and human resources. LISN compensates Mr.
Reich for consulting in excess of five days per month at a rate of $3,000 per
day. The agreement is for a term beginning June 1, 1999 and expired November 30,
1999. We expect to assume this agreement and to extend the agreement through
June 1, 2000. Mr. Reich received options to purchase shares of LISN common stock
at the time this agreement was entered into, which were converted into options
to purchase 9,394.99 shares of Parent common stock and 634.92 shares of Parent
series C preferred in connection with the LISN acquisition.
RELATED PARTY LEASES
Parent is a party to two leases with entities controlled by Mr. Ebersole, a
former director of Orius, for the lease of Channel's headquarters and office
space. The combined monthly rent for both leases is approximately $12,100. These
leases expire in April 2000 and April 2001, respectively. The lease expiring in
April 2000 has been on a year-to-year basis since 1995.
U.S. Cable, Inc., a subsidiary of NATG, is a party to a lease agreement
with WMC Properties, a general partnership that is 25% owned by William Mullen,
a director of NATG. The lease is for U.S. Cable's headquarters and office space
located in O'Fallon, Missouri at a current rate of $61,800 per year, subject to
an increase of 3% per annum. The lease expires July 2003.
1999 ACQUISITIONS
In February 1999, we acquired Schatz, DAS-CO, Copenhagen and Network in a
transaction that was designed to give tax-free treatment to the issuance of
stock to the former stockholders of the acquired companies. To complete these
acquisitions all of the existing stockholders of these companies exchanged their
interests in the respective companies for new interests in Parent. HIG acquired
7,546.38 shares of Parent's series B preferred stock for $7.6 million, which
will be redeemed pursuant to a call agreement for an aggregate of $44.0 million
in cash. We entered into this call agreement with HIG as an accommodation to HIG
for its tax planning. Parent also sold 1,066,219 shares of its common stock to
its then existing stockholders and employees for $2.4 million. The following
officers, directors and former principal stockholders, and their immediate
family members and affiliated entities, purchased the number of shares indicated
at $2.34 per share in cash: Mr. Mercurio -- 132,319, Mr. Agres -- 41,444, and
Mr. Mullen -- 106,717. In connection with the 1999 acquisitions, Parent paid (1)
Mercurio and Associates, PA., an affiliate of Mr. Mercurio, a consulting fee of
$550,000 for assistance in identification of, and due diligence with respect to,
acquisition candidates and (2) HIG $267,000 for fees and expenses.
RECAPITALIZATION OF LISN
LISN was recapitalized in May 1999 by an investor group led by Willis Stein
& Partners, certain co-investors and members of LISN's management. Willis Stein
& Partners and its co-investors contributed approximately $70.3 million in
capital. Willis Stein & Partners and its co-investors received $49.2 million in
junior subordinated notes, $10.6 million in preferred stock and $10.5 million in
common stock. Members of management retained approximately 15% of LISN's equity.
In connection with the recapitalization, LISN agreed to make a cash payment
to three of its former stockholders based on LISN's results of operations for
the year ended December 31, 1999, including Mr. Vanke. Based on LISN's results
of operations, LISN paid these stockholders an aggregate of $4.0 million, $0.5
million of which was paid to a trust formed for the benefit of Mr. Vanke.
FAMILY RELATIONSHIPS
Rosemarie Mulholland, the daughter of Mr. Mercurio, is Parent's Secretary
and Treasurer. Ms. Mulholland, a certified public accountant, received total
compensation of $90,967 from us in 1999, including a salary of $80,467 and an
accrued bonus of $10,500. Ms. Mulholland also received options to purchase 9,325
shares of our common stock, which were repurchased in connection with the LISN
Acquisition for $77,701 in cash.
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PRINCIPAL STOCKHOLDERS
All of the outstanding capital securities of NATG is owned by Parent. Orius
Capital is a wholly owned subsidiary of NATG. The table below lists information
about the beneficial ownership of Parent's capital stock as of March 31, 2000,
including shares which these persons have the right to acquire within 60 days
upon the exercise of options, by (a) each person whom we know to own
beneficially more than 5% of any class of Parent's stock, (b) each of Parent's
directors and named executive officers and (c) all of Parent's directors and
executive officers as a group. Unless otherwise stated, each of the persons in
the table has sole voting and investment power with respect to the securities
beneficially owned. In calculating beneficial ownership, we have assumed the
exercise of the call agreements with certain of Parent's stockholders to
purchase shares of their stock during the first half of 2000. See "Certain
Relationships and Related Party Transactions -- Put and Call Agreements" for a
description of these agreements. We have otherwise calculated beneficial
ownership in accordance with the applicable rules and regulations under the
Exchange Act. See "Description of Parent's Securities" for a description of the
terms of Parent's capital stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
-----------------------
SERIES C PERCENT OF
PREFERRED COMMON VOTING
STOCK STOCK POWER(1)
--------- ----------- ----------
<S> <C> <C> <C>
Willis Stein & Partners(2)................................. 84,896.6 10,730,017 42.6%
Fleet Equity Partners(3)................................... 12,073.9 1,526,009 6.1
Goldman, Sachs & Co.(4).................................... 10,643.8 1,345,258 5.3
Procific(5)................................................ 10,643.8 1,345,258 5.3
Jeffrey J. Ebersole........................................ 10,107.4 1,277,468 5.1
William J. Mercurio(6)..................................... 4,261.3 538,586 2.1
Robert E. Agres............................................ 147.6 18,650 *
William Mullen............................................. 1,817.5 229,713 *
Joseph P. Powers(7)........................................ 1,042.6 131,775 *
Donald J. Vanke............................................ 2,106.6 266,252 1.1
Gregory M. Barr(3)......................................... -- -- --
Robert C. Froetscher(2).................................... -- -- --
Jack E. Reich.............................................. -- -- --
Avy H. Stein(2)............................................ -- -- --
All Directors and Officers as a group (10 persons)......... 106,419.9 13,450,327 53.4
</TABLE>
- ------------
* Less than one percent.
(1) Each stockholder owns common stock and series C preferred stock in equal
proportions. Therefore, each stockholders' ownership percentage of each
class of stock is the same as its aggregate ownership percentage.
(2) Includes shares held by Willis Stein & Partners II, L.P. and Willis Stein &
Partners Dutch, L.P. Mr. Froetscher and Mr. Stein are Managing Directors of
Willis Stein & Partners. Each disclaims beneficial ownership of the shares
held by the investments funds associated with Willis Stein & Partners. The
address for Willis Stein & Partners is 227 West Monroe Street, Suite 4300,
Chicago, IL 60606.
(3) Includes shares held by Chisholm Partners III, L.P., Kennedy Plaza Partners,
Fleet Venture Resources, Inc. and Fleet Equity Partners VI, L.P. These
entities are affiliates of Fleet Equity Partners, of which Mr. Barr is a
principal. Mr. Barr disclaims beneficial ownership of the shares held by
these entities. The address for Fleet Equity Partners is 50 Kennedy Plaza,
Providence, RI 02903.
(4) Includes shares held by GS Private Equity Partners III, L.P., GS Equity
Partners II, L.P., GS Private Equity Partners II Offshore, GS Private Equity
Partners II Direct Fund, GS Private Equity Partners III Offshore and GS
Private Equity Partners Connecticut, which are private equity investment
funds affiliated with Goldman, Sachs & Co. The address for Goldman, Sachs &
Co. is One New York Plaza, 40th Floor, New York, NY 10004.
(5) The address for Procific is P.O. Box 7106 Corniche Street, Abu Dhabi, United
Arab Emirates.
(6) Includes shares held by various trusts in which Mr. Mercurio's wife serves
as trustee.
(7) Includes shares held of record by Mr. Powers' wife.
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DESCRIPTION OF PARENT'S SECURITIES
GENERAL
Parent's authorized capital stock consists of: 10,000 shares of series A
convertible preferred stock, par value $.0001 per share; 7,596.38 shares of
series B convertible preferred stock, par value $.0001 per share; 200,000,000
shares of series C participating preferred stock, par value $.01 per share;
200,000,000 shares of series D preferred stock, par value $.01 per share;
200,000,000 shares of common stock, par value $.01 per share; and 200,000,000
shares of class B common stock, $.01 per share. As of March 31, 2000, there were
no shares of series A preferred stock, no shares of series B preferred stock,
196,748.05 shares of series C preferred stock, no shares of series D preferred
stock, 19,005,175.40 shares of class B common stock and 16,276,038.69 shares of
common stock outstanding. Parent's classes of stock generally differ with
respect to dividend payment, liquidation preference, redemption, conversion and
voting rights. All classes of its stock vote together as a class on all matters
to be voted upon by its stockholders. The common stock is entitled to one vote
per share. The class B common is entitled to 10 votes per share. Upon the
exercise of all outstanding call options, each share of class B common will
automatically convert into one share of common stock. The number of votes per
share of series C preferred stock is subject to adjustment based on its
liquidation value per share. As of December 15, 2000, the series C preferred
stock was entitled to 75 votes per share.
SERIES C PREFERRED STOCK
Dividends on the series C preferred stock accrue daily at a rate of 12% per
annum on the liquidation value of the series C preferred stock plus all
accumulated and unpaid dividends. The liquidation value of the series C
preferred stock is $1,000. These dividends are cumulative and must be paid
before dividends are paid on any shares of common stock. Holders of series C
preferred stock also participate in any dividends paid to the holders of common
stock on an as converted basis. Upon a liquidation of Parent, the holders of
series C preferred stock would be entitled to receive the liquidation value of
their stock plus accrued and unpaid dividends prior to any distributions to the
holders of common stock. The series C preferred stock will be redeemed on
December 31, 2019 at its purchase price, plus accrued dividends and plus the
liquidation value of the common stock into which it is convertible.
Upon the consummation of an initial public offering, the holders of a
majority of the series C preferred stock may cause all or any portion of the
outstanding series C preferred stock to be converted into (1) shares of class B
common (or, if no shares of class B common are outstanding, common stock), and
(2) shares of series D preferred stock. Each holder of series C preferred stock
will receive (1) a number of shares of common stock equal to series C
liquidation value divided by the conversion price for the series C preferred
stock and (2) the number of shares of series D preferred stock with a
liquidation value equal to the liquidation value of the series C preferred stock
converted, plus accrued and unpaid dividends.
The series D preferred stock is similar in rights and preferences to the
series C preferred stock, but is not convertible into common stock and is
redeemable by Parent at any time. In addition, a majority of the holders of the
series D preferred stock may cause Parent to redeem some or all of the series D
preferred stock at any time. Parent may pay the redemption price for the series
D preferred stock by issuance of common stock with an equivalent fair market
value in lieu of cash if it is prohibited by the terms of its debt from making
the redemption payment in cash or if the holders of the series D preferred stock
do not object to receiving the redemption payment in common stock.
COMMON STOCK
Dividends on the common stock are payable when and as declared by Parent's
board of directors, subject to the rights of the holders of any preferred stock.
The holders of the common stock participate in any distributions upon
liquidation ratably, subject to the rights of the holders of its preferred
stock.
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JUNIOR SUBORDINATED NOTES
As of March 31, 2000, there was $136.4 million of Parent's junior
subordinated notes outstanding. Following our exercise of our rights under call
agreements with certain of Parent's stockholders to acquire shares of their
stock during the second and third quarters of 2000, there will be $140.5 million
of junior subordinated notes outstanding.
The LISN acquisition resulted in each stockholder of Parent, except to the
extent such stockholder's shares are subject to put and call agreements, owning
Parent common stock, series C preferred stock and junior subordinated notes with
fair values representing approximately 9%-54%-37%, respectively, of the fair
market value of such securities. Parent's obligations under the junior
subordinated notes are subordinated to all of Parent's senior debt (as defined
under the terms of the junior subordinated notes), including its guarantee in
respect of the senior credit facilities and the notes. The junior subordinated
notes bear interest at a rate of 12.0% per annum, a maximum of 40% of which is
payable in cash beginning January 15, 2001, and the remainder of which is
deferred and accrues as additional principal. In addition, after December 15,
2004, if at the end of any interest accrual period the amount of accrued and
unpaid original issue discount exceeds an amount equal to the product of the
issue price and the yield to maturity (the "Maximum Amount"), then interest will
be paid so as to reduce the unpaid original issue discount to an amount less
than the Maximum Amount. Cash interest can be paid by Parent only to the extent
Parent has available funds and only so long as such payments are permitted under
the terms of, among other things, the senior credit facilities and the notes.
Because Parent is a holding company with no independent operations, the
only sources of funds for making payments on the subordinated promissory notes
are (1) dividends from NATG, the payment of which is limited by the terms of the
senior credit facilities and the notes and (2) additional capital contributions
from its stockholders. If there is a default under the junior subordinated notes
because NATG is prohibited under the terms of the senior credit facilities or
the notes from paying sufficient dividends for Parent to meet its cash interest
obligations under its junior subordinated notes, or if Parent otherwise defaults
on its obligations in respect of the junior subordinated notes, the holders of
the junior subordinated notes will be prohibited from taking any actions or
exercising any remedies against Parent or any of its subsidiaries until all
senior debt, including the senior credit facilities and the Notes, has been
repaid in full; provided, that the holders may accelerate their junior
subordinated notes if senior debt is accelerated, but are prohibited from taking
any further action. The junior subordinated notes become due and payable on the
later of (1) December 15, 2009 and (2) the first anniversary of the date on
which any debt raised in a high yield offering, such as the notes being issued
in this offering, is repaid.
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DESCRIPTION OF SENIOR CREDIT FACILITIES
General. In connection with the LISN acquisition, NATG entered into the
senior credit facilities with Bankers Trust Company, Bank of America, N.A. and
certain other lenders. The senior credit facilities provide for aggregate
borrowings of approximately $375.0 million. The senior credit facilities consist
of the following:
- $75.0 million tranche A term loan with a $50.0 million letter of credit
subfacility;
- $200.0 million tranche B term loan, and
- $100.0 million revolving credit facility to be used for permitted
acquisition loans and for working capital purposes, with sublimits of
$75.0 million for acquisition loans and $50.0 million for working capital
loans and a maximum of $100.0 million in borrowings at any one time.
As of March 31, 2000, there was $232.7 million of outstanding indebtedness
under the senior credit facilities (excluding $5.7 million of letters of credit
and $7.2 million of standby letters of credit) and $34.8 million available under
the senior credit facilities for working capital and other corporate purposes
and $75.0 million available for acquisitions. The amount outstanding under the
senior credit facilities includes $5.7 million of letters of credit issued under
the tranche A term loan letter of credit subfacility. These letters of credit
support the obligations under put and call agreements with some of Parent's
stockholders. These letters of credit will be drawn to fully fund the amounts
payable upon exercise of our call options. In addition, the amount available for
working capital loans has been reduced by $7.2 million of letters of credit
issued under the revolving credit facility to support other contingent
obligations in connection with the put and call agreements. These letters of
credit will expire in accordance with their terms without being drawn upon
exercise of the call options. We intend to use a portion of the proceeds of this
offering to repay a portion of the tranche B term loan. See "Use of Proceeds."
Interest. Amounts outstanding under the senior credit facilities bear
interest, at our option, at a rate per annum equal to either (1) the base rate
or (2) the eurodollar rate, as determined by Bankers Trust Company, in each case
plus an additional margin. The base rate is the higher of (x) the rate announced
from time to time by Bankers Trust Company as its prime lending rate, and (y)
the overnight federal funds rate plus 0.5%. The additional margin for the
revolving credit facility, including for any acquisition loans converted into
term loans under that facility, and the tranche A term loan is initially 2.0%
for base rate loans and 3.0% for eurodollar rate loans. The additional margin
for tranche B term loans is initially 2.5% for base rate loans and 3.5% for
eurodollar rate loans. The additional margin for tranche A term loans and the
revolving credit facility adjusts according to a performance pricing grid based
on our ratio of total debt to EBITDA, ranging from (1) for base rate loans, 2.0%
to 0.75% and (2) for eurodollar rate loans, 3.0% to 1.75%. As of December 30,
1999, our borrowings under the senior credit facilities bore interest at rates
ranging from 8.9% to 9.4%.
Maturity. Borrowings under the revolving credit facility that are used for
working capital purposes are due December 15, 2004 and may be borrowed, repaid
and reborrowed prior to maturity. Until December 15, 2001, amounts borrowed
under the revolving credit facility that are used for acquisitions may be
borrowed, repaid and reborrowed. On December 15, 2000, (1) any such acquisition
loans outstanding will be converted into an amortizing term loan, payable
quarterly, with 20% of the loan payable in 2002, 25% of the loan payable in 2003
and 55% of the loan payable in 2004, with the final payment due December 15,
2004 and (2) to the extent that acquisition loans exceed $50.0 million on that
date, amounts available for working capital purposes will be permanently reduced
to the difference between $100.0 million and the amount of the converted
acquisition loans.
Borrowings under the tranche A term loan are due December 15, 2004 and
borrowings under the tranche B term loan are due December 15, 2006. The tranche
A and tranche B term loans will be repaid pursuant to the following annual
amortization schedule, payable quarterly in arrears beginning March 31,
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2000. The amortization schedule for the tranche B term loan will be adjusted
following the repayment of a portion of that loan with the proceeds of the
offering. See "Use of Proceeds."
<TABLE>
<CAPTION>
AMORTIZATION
-----------------------------------------
YEAR TRANCHE A TERM LOAN TRANCHE B TERM LOAN
- ---- ------------------- -------------------
<S> <C> <C>
1.................... $ 6,000,000 $ 1,573,593
2.................... 11,250,000 1,573,593
3.................... 15,000,000 1,573,593
4.................... 18,750,000 1,573,593
5.................... 24,000,000 1,573,593
6.................... -- 74,745,672
7.................... -- 74,745,672
</TABLE>
Prepayment Penalty on Tranche B Term Loan. If we repay all or any portion
of the tranche B term loan with the proceeds of a senior subordinated notes
offering, such as this offering, prior to December 15, 2001, we must repay the
tranche B term loan at 101% of the principal amount of that loan.
Use of Proceeds. Subject to the applicable sublimits, the proceeds of the
revolving credit facility are available solely for working capital purposes,
capital expenditures and other general corporate purposes and to finance
acquisitions permitted under the terms of the senior credit facilities, subject
to restrictions on the number and value of acquisitions made. The proceeds of
the tranche A and tranche B term loans were used to finance the LISN acquisition
and were fully drawn down at the closing of the LISN acquisition, other than the
letters of credit issued under the tranche A term loan letter of credit
subfacility, which loans will be made when such letters of credit are drawn upon
in connection with our exercise of the call options. Tranche A and tranche B
term loans may not be reborrowed.
Security and Guarantees. The senior credit facilities are secured by a
first priority security interest in substantially all of our existing and
after-acquired tangible and intangible assets, including, without limitation,
receivables, contract rights, securities, intellectual property, inventory,
equipment, real estate and all stock and promissory notes, with the exception
that no more than 65% of the voting stock of any of our foreign subsidiaries
shall be pledged. All of the borrowers' obligations under the senior credit
facilities are fully and unconditionally guaranteed by all of its present and
future domestic subsidiaries and by Parent.
Covenants. The senior credit facilities require us to meet certain
financial tests, including, without limitation, minimum net worth, maximum
leverage ratio, minimum fixed charge coverage ratio, minimum interest coverage
ratio and maximum capital expenditure tests. In addition, borrowings under the
acquisition facility are subject to additional debt incurrence tests. The senior
credit facilities contain certain covenants, including the following:
- restrictions on indebtedness;
- restrictions on mergers, consolidations and some types of acquisitions
and asset sales;
- restrictions on dividends and stock repurchases; and
- restrictions on the types of businesses in which we can engage.
Events of Default. The senior credit facilities contain customary events of
default, including, without limitation:
- payment defaults;
- breaches of representations and warranties;
- covenant defaults;
- cross-defaults to certain other indebtedness, including the Notes;
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- certain events of bankruptcy and insolvency;
- the failure of any guaranty or security document supporting the senior
credit facilities to be in full force and effect; and
- a change of control of Parent.
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DESCRIPTION OF THE NOTES
The outstanding notes were issued under an indenture among the issuers,
Parent, the other guarantors and United States Trust Company of New York, as
trustee. The following is a summary of the material provisions of the indenture.
It does not include all of the provisions of the indenture. We urge you to read
the indenture because it defines your rights. The terms of the notes include
those stated in the indenture and those made part of the indenture by reference
to the Trust Indenture Act of 1939, as amended. A copy of the indenture may be
obtained from the issuers. You can find definitions of certain capitalized terms
used in this description under "-- Certain Definitions."
The notes are unsecured obligations of the issuers, ranking subordinate in
right of payment to all Senior Debt to the extent set forth in the indenture.
The issuers issued the notes in fully registered form in denominations of
$1,000 and integral multiples of $1,000. The trustee presently is acting as
paying agent and registrar for the notes. The notes may be presented for
registration of transfer and exchange at the offices of the registrar, which is
currently the trustee's corporate trust office. The issuers may change any
paying agent and registrar without notice to holders of the notes. The issuers
will pay principal, and premium, if any, on the notes at the trustee's corporate
trust office in New York, New York. At the issuers' option, interest may be paid
at the trustee's corporate trust office or by check mailed to the registered
address of holders of the notes.
Any notes that remain outstanding after the completion of the exchange
offer, together with the exchange notes issued in connection with the exchange
offer, will be treated as a single class of securities under the indenture.
In the event that Parent ceases to own and control a majority of the voting
securities of NATG, all references in the indenture to Parent's board of
directors will be deemed to be references to NATG's board of directors.
PRINCIPAL, MATURITY AND INTEREST
Notes in an aggregate principal amount of $150.0 million were issued on the
original issue date of the notes. Additional notes may be issued from time to
time after the original issue date, subject to the limitations set forth under
"-- Certain Covenants -- Limitation on Incurrence of Additional Indebtedness."
The aggregate principal amount of notes issued under the indenture shall not
exceed $300.0 million. The notes will mature on February 1, 2010. Interest on
the notes will accrue at the rate of 12 3/4% per annum and will be payable
semiannually in cash on each February 1 and August 1 commencing on August 1,
2000, to the persons who are registered holders at the close of business on the
fifteenth day of the month immediately preceding the applicable interest payment
date. Interest payable at maturity will be payable to the person to whom
principal is payable. Interest on the notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from and
including the original issue date of the notes. The interest rate on the notes
is subject to increase in some circumstances.
The notes will not be entitled to the benefit of any mandatory sinking
fund.
REDEMPTION
Optional Redemption. Except as described below, the notes are not
redeemable before February 1, 2005. Thereafter, the issuers may redeem the notes
at their option, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the following redemption prices if redeemed during the
twelve-month
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period commencing on February 1 of the year set forth below. The redemption
prices are expressed as percentages of the principal amounts of the notes.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2005..................................................... 106.375%
2006..................................................... 104.250%
2007..................................................... 102.125%
2008 and thereafter...................................... 100.000%
</TABLE>
In addition, the issuers must pay accrued and unpaid interest on the notes
redeemed.
Optional Redemption Upon Equity Offerings. At any time, from time to time,
on or prior to February 1, 2003, the issuers may, at their option, use the net
cash proceeds of one or more equity offerings to redeem up to 35% of the
aggregate principal amount of the notes issued under the indenture at a
redemption price equal to 112.75% of the principal amount of the notes plus
accrued and unpaid interest on the notes, if any, to the date of redemption;
provided that:
(1) at least 65% of the aggregate principal amount of notes issued
under the indenture remains outstanding immediately after the redemption;
and
(2) the issuers make the redemption not more than 60 days after the
consummation of the equity offering.
The issuers are not prohibited, however, from acquiring the notes by means
other than a redemption, whether pursuant to a tender offer or otherwise,
assuming the acquisition of the notes does not otherwise violate any provision
of the indenture.
SELECTION AND NOTICE OF REDEMPTION
In the event that the issuers choose to redeem less than all of the notes,
selection of the notes for redemption will be made by the trustee either:
(1) in compliance with the requirements of the principal national
securities exchange, if any, on which the notes are listed; or,
(2) on a pro rata basis, by lot or by such method as the trustee shall
deem fair and appropriate.
No notes of a principal amount of $1,000 or less shall be redeemed in part.
If a partial redemption is made with the net cash proceeds of an equity
offering, the trustee will select the notes only on a pro rata basis or on as
nearly a pro rata basis as is practicable, subject to DTC procedures. Notice of
redemption will be mailed by first-class mail at least 30 but not more than 60
days before the redemption date to each holder of notes to be redeemed at its
registered address. On and after the redemption date, interest will cease to
accrue on notes or portions thereof called for redemption as long as the issuers
have deposited with the paying agent funds in satisfaction of the applicable
redemption price.
SUBORDINATION
The payment of all obligations on or relating to the notes is subordinated
in right of payment, to the extent described below and in the indenture, to the
prior payment in full in cash or cash equivalents of all obligations in respect
of senior debt, including with respect to the senior secured credit agreement.
Notwithstanding the foregoing, payments and distributions made relating to the
notes pursuant to the trust described under "-- Legal Defeasance and Covenant
Defeasance" shall not be so subordinated in right of payment.
The holders of senior debt will be entitled to receive payment in full in
cash or cash equivalents of all obligations due in respect of senior debt,
including interest after the commencement of any bankruptcy or
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other like proceeding, whether or not such interest is an allowed claim in any
such proceeding, before the holders of notes will be entitled to receive any
payment or distribution of any kind or character with respect to any obligations
on, or relating to, the notes in the event of any distribution to creditors of
the issuers:
(1) in a liquidation or dissolution of either issuer;
(2) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to either issuer or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of either issuer's assets and liabilities.
The issuers also may not make any payment or distribution of any kind or
character with respect to any obligations on, or relating to, the notes or
acquire any notes for cash or property or otherwise if:
(1) a payment default on any senior debt occurs and is continuing; or
(2) any other default occurs and is continuing on Designated Senior
Debt that permits holders of the Designated Senior Debt to accelerate its
maturity and the trustee receives a notice of the default (a "Payment
Blockage Notice") from the representative of any Designated Senior Debt.
Payments on and distributions with respect to any obligations on, or with
respect to, the notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which the
default is cured or waived; and
(2) in case of a nonpayment default, the earliest of (x) the date on
which all nonpayment defaults are cured or waived, so long as no other
event of default exists, (y) 180 days after the date on which the
applicable Payment Blockage Notice is received or (z) the date on which the
trustee receives notice from the Representative for the Designated Senior
Debt rescinding the Payment Blockage Notice, unless the maturity of any
Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless the default shall have
been cured or waived for a period of not less than 90 consecutive days. However,
any subsequent action, or any breach of any financial covenants for a period
commencing after the date of delivery of the initial Payment Blockage Notice
that in either case would give rise to a default pursuant to any provisions
under which a default previously existed or was continuing shall constitute a
new default for this purpose.
The issuers must promptly notify holders of senior debt if payment of the
notes is accelerated because of an event of default.
As a result of the subordination provisions described above in the event of
a bankruptcy, liquidation or reorganization of an issuer, holders of the notes
may recover less ratably than creditors of the issuer who are holders of senior
debt.
At December 31, 1999, on a pro forma basis, the aggregate amount of senior
debt outstanding would have been $251.4 million, excluding unused commitments of
$88.6 million under the senior secured credit agreement.
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GUARANTEES
The guarantors will, jointly and severally, unconditionally guarantee the
issuers' obligations under the notes and the indenture. Each guarantee will be
subordinated to the prior payment in full of senior debt of the relevant
guarantor in the same manner and to the same extent that the notes are
subordinated to senior debt. Each guarantee will rank equally with all other
senior subordinated debt of the relevant subsidiary guarantor. A guarantor will
not be permitted to incur indebtedness that is junior in right of payment to
senior indebtedness but senior in right of payment to its guarantee.
At December 31, 1999 on a pro forma basis giving effect to the offering of
the outstanding notes:
- outstanding senior debt of the guarantors would have been $251.4 million;
and
- the guarantors would have had no senior subordinated indebtedness other
than the guarantees.
Although the indenture limits the amount of indebtedness that the guarantor
subsidiaries may incur, this indebtedness may be substantial and all of it may
be senior debt of the guarantors.
The obligations of each guarantor under its guarantee will be limited as
necessary to prevent that guarantee from constituting a fraudulent conveyance or
fraudulent transfer under applicable law.
In the event a guarantor is sold or disposed of, whether by merger,
consolidation, the sale of its capital stock or the sale of all or substantially
all of its assets and whether or not the guarantor is the surviving corporation
in the transaction, to a person which is not Parent, an issuer or a Restricted
Subsidiary, the guarantor will be released from its obligation under its
guarantee if, among other things, the sale or other disposition is in compliance
with the indenture, including the covenants described under "-- Certain
Covenants -- Limitation on Asset Sales" and "-- Certain Covenants -- Merger,
Consolidation and Sale of Assets."
In addition, a guarantor will be released from its obligations under the
indenture, its guarantee and the registration rights agreement if Parent
designates the subsidiary as an Unrestricted Subsidiary and the designation
complies with the other applicable provisions of the indenture.
CHANGE OF CONTROL
Upon the occurrence of a change of control, each holder will have the right
to require that the issuers purchase all or a portion of the holder's notes
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount of the notes plus accrued
interest to the date of purchase.
Within 30 days following the date upon which the issuers obtain actual
knowledge that a change of control occurred, the issuers must send, by first
class mail, a notice to each holder, with a copy to the trustee, which notice
shall govern the terms of the Change of Control Offer. The notice shall state,
among other things, the purchase date, which must be no earlier than 30 days nor
later than 45 days from the date the notice is mailed, other than as may be
required by law or stock exchange rule (the "Change of Control Payment Date").
Holders electing to have a note purchased pursuant to a Change of Control Offer
will be required to surrender the note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the note completed, to the paying agent at
the address specified in the notice prior to the close of business on the third
business day prior to the Change of Control Payment Date.
Prior to the mailing of the notice referred to above, but in any event
within 30 days following the date upon which the issuers obtain actual knowledge
of any change of control, the issuers covenant to:
(1) repay in full and terminate all commitments under indebtedness
under the senior secured credit agreement and all other senior debt the
terms of which require repayment upon a change of control or offer to repay
in full and terminate all commitments under all indebtedness under the
senior secured credit agreement and all other senior debt and to repay the
indebtedness owed to each lender which has accepted such offer; or
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(2) obtain the requisite consents under the senior secured credit
agreement and all other senior debt to permit the repurchase of the notes
as provided below.
If the issuers do not first repay their senior debt or obtain the consent
of the lenders of their senior debt as described above, the issuers will be
prohibited from offering to repurchase or repurchasing the notes. The issuers'
failure to comply with the covenant described in the immediately preceding
paragraph may constitute an event of default described in clause (3), but shall
not constitute an event of default described in clause (2), under "Events of
Default" below.
If a Change of Control Offer is made, there can be no assurance that the
issuers will have available funds sufficient to pay the change of control
purchase price for all the notes that might be delivered by holders seeking to
accept the Change of Control Offer. In the event the issuers are required to
purchase outstanding notes pursuant to a Change of Control Offer, the issuers
expect that they would seek third party financing to the extent it does not have
available funds to meet its purchase obligations. However, there can be no
assurance that the issuers would be able to obtain this financing.
The definition of change of control includes a phrase relating to the sale,
lease, exchange or other transfer of "all or substantially all" of the assets of
NATG and its Restricted Subsidiaries taken as a whole. Although there is a
developing body of case law interpreting the phrase "substantially all," there
is no precise definition of the phrase under applicable law. Accordingly, in
certain circumstances there may be a degree of uncertainty in ascertaining
whether a particular transaction would involve a disposition of "all or
substantially all" of the assets of NATG and its Restricted Subsidiaries taken
as a whole, and therefore it may be unclear as to whether a change of control
has occurred and whether the holders have the right to require the issuers to
repurchase the notes.
Neither the issuers nor the trustee may waive the covenant relating to a
holder's right to redemption upon a change of control. Restrictions in the
indenture described in this prospectus on the ability of Parent and its
Restricted Subsidiaries to incur additional indebtedness, to grant liens on its
property, to make Restricted Payments and to make Asset Sales may also make more
difficult or discourage a takeover, whether favored or opposed by management.
Consummation of any of these transactions in certain circumstances may require
redemption or repurchase of the notes, and there can be no assurance that the
issuers or the acquiring party will have sufficient financial resources to
effect the redemption or repurchase. These restrictions and the restrictions on
transactions with affiliates may, in certain circumstances, make more difficult
or discourage any leveraged buyout of Parent or any of its Restricted
Subsidiaries by management. While the restrictions cover a wide variety of
arrangements which have traditionally been used to effect highly leveraged
transactions, the indenture may not afford the holders protection in all
circumstances from the adverse aspects of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction.
The issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations under the Exchange
Act or other securities laws to the extent those laws and regulations are
applicable in connection with the repurchase of notes pursuant to a Change of
Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with the "Change of Control" provisions of the indenture,
the issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the "Change of
Control" provisions of the indenture by virtue of complying with those laws.
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CERTAIN COVENANTS
The indenture contains, among other things, the following covenants:
Limitation on Restricted Payments. NATG shall not, and shall not permit any
of its Restricted Subsidiaries to directly or indirectly:
(A) declare or pay any dividend or make any distribution on or in
respect of shares of NATG's capital stock to holders of its capital stock,
other than dividends or distributions payable in Qualified Capital Stock of
NATG,
(B) purchase, redeem or otherwise acquire or retire for value any
capital stock of NATG or any capital stock of any subsidiary of NATG not
held by an issuer or subsidiary guarantor, or any warrants, rights or
options to purchase or acquire shares of any class of that capital stock,
or declare or pay any dividend, or make any distribution, on or in respect
of that capital stock,
(C) make any principal payment on, purchase, defease, redeem, prepay
or otherwise acquire or retire for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any
subordinated indebtedness, or
(D) make any Restricted Investment (each of the foregoing actions set
forth in clauses (A), (B), (C) and (D) being referred to as a "Restricted
Payment");
provided, that a Restricted Payment may be made, if at the time of the
Restricted Payment and immediately after giving effect to the Restricted
Payment,
(a) no default or event of default shall have occurred and be
continuing,
(b) NATG is able to incur at least $1.00 of additional indebtedness,
other than Permitted Indebtedness, in compliance with the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness," and
(c) the aggregate amount of Restricted Payments, including the
proposed Restricted Payment, made subsequent to December 31, 1999 shall not
exceed the sum of:
(x) 50% of the cumulative Consolidated Net Income, or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss, of
NATG earned subsequent to December 31, 1999 and through the last day of
the fiscal quarter ending prior to the date the Restricted Payment
occurs (the "Reference Date") treating that period as a single
accounting period; plus
(y) 100% of the aggregate net cash proceeds of, or fair market
value of property other than cash, determined in good faith by the Board
of NATG, constituting, any equity contribution received by NATG from a
holder of NATG's capital stock to the extent not required to be used to
repay indebtedness under the senior secured credit agreement or redeem
notes under the indenture; plus
(z) (i) the lesser of (I) 100% of the aggregate amount of cash
and/or fair market value of property other than cash, as determined in
good faith by the board of directors of Parent, received by an issuer or
subsidiary guarantor from the disposition or sale of any Restricted
Investment, other than to a subsidiary of Parent, that was made after
the original issue date of the notes and (II) the initial amount of that
Investment; plus
(ii) an amount equal to the net reduction in Restricted Investments
in Unrestricted Subsidiaries of NATG resulting from dividends,
repayments of loans or advances or other transfers of assets, in each
case to an issuer or subsidiary guarantor from an Unrestricted
Subsidiary; plus
(iii) to the extent any Unrestricted Subsidiary of NATG is
redesignated as a Restricted Subsidiary, the lesser of (I) the amount
of NATG's initial Investment in the Unrestricted
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Subsidiary and (II) the fair market value of NATG's investment in the
Unrestricted Subsidiary as of the date of its redesignation;
provided, that no amount shall be included in this clause (z) to the
extent the amount is included in Consolidated Net Income of NATG.
The foregoing provisions in this covenant do not, however, prohibit:
(1) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of the dividend or
notice of the redemption if the dividend or redemption would have been
permitted on the date of declaration or notice;
(2) the acquisition of any subordinated indebtedness, either (i)
solely in exchange for shares of Qualified Capital Stock of Parent, (ii)
through the application of net proceeds of a substantially concurrent sale
for cash, other than to a Restricted Subsidiary of Parent, of shares of
Qualified Capital Stock of Parent, or (iii) with the net cash proceeds of
Permitted Refinancing Indebtedness used to refinance the subordinated
indebtedness;
(3) so long as no default or event of default shall have occurred and
be continuing, dividends or loans to Parent to enable Parent to repurchase
junior subordinated notes and/or capital stock of Parent from former or
current employees, officers, directors or consultants of Parent or any of
its subsidiaries or their authorized representatives upon the death,
disability or termination of employment of these persons, in an amount not
to exceed $2.0 million in any calendar year; provided, that NATG may carry
over and make in a subsequent year, in addition to the amounts permitted
for a given fiscal year, the amount of dividends or loans permitted to have
been made but not made in any preceding fiscal year up to a maximum of
$10.0 million in any fiscal year;
(4) so long as no default or event of default shall have occurred and
be continuing, dividends or loans to Parent not to exceed $100,000 in any
fiscal year, to enable Parent to make payments to holders of its capital
stock in lieu of issuance of fractional shares of its capital stock;
(5) dividends or loans to Parent to enable Parent to repurchase, or
the repurchase by NATG or a Restricted Subsidiary of NATG, for cash
pursuant to, and in compliance with, the put/call agreements certain shares
of Parent common stock and Parent preferred stock issued and outstanding
prior to the original issue date of the notes;
(6) dividends or loans to Parent in an amount not to exceed $250,000
in any calendar year for the purpose of permitting Parent to pay its
ordinary operating expenses, including, without limitation, directors'
fees, indemnification obligations, professional fees and expenses;
(7) dividends or loans to Parent solely for the purpose of paying
franchise taxes, federal, state and local income taxes and any related
interest and penalties, if any, payable by Parent, provided, that any the
income is attributable to income of NATG and its Restricted Subsidiaries;
or
(8) so long as no default or event of default shall have occurred and
be continuing or would occur as a consequence of the Restricted Payment,
other Restricted Payments in an aggregate amount not to exceed $7.5 million
since the original issue date of the notes.
In determining the aggregate amount of Restricted Payments made subsequent
to the original issue date of the notes in accordance with clause (c) of the
first paragraph of this covenant, amounts expended pursuant to clauses (1),
(2)(i), (2)(ii), (3), (4) and (6), in each case to the extent not duplicative of
amounts already included.
The amount of all Restricted Payments other than cash or an Investment,
which shall be valued as set forth in the definition of Investments, shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by NATG or the subsidiary,
as the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this covenant shall
be determined by the board of directors of
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Parent, whose resolution shall be conclusive. The board of directors'
determination must be based upon an opinion or appraisal issued by an
independent financial adviser if the fair market value exceeds $10.0 million.
Not later than the date of making any Restricted Payment, NATG shall
deliver to the trustee an officers' certificate stating that the Restricted
Payment complies with the indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon Parent's latest available internal quarterly financial statements.
Limitation on Incurrence of Additional Indebtedness. NATG shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
incur any indebtedness, other than Permitted Indebtedness, provided, that if no
default or event of default shall have occurred and be continuing at the time or
as a consequence of the incurrence of the indebtedness, NATG or any subsidiary
guarantor may incur indebtedness including, without limitation, Acquired
Indebtedness, if on the date of the incurrence of the indebtedness, after giving
effect to the incurrence of the indebtedness, the Consolidated Fixed Charge
Coverage Ratio is greater than 2.0 to 1.0 during the period commencing on the
original issue date of the notes and ending January 31, 2002, 2.25 to 1.0 during
the period commencing February 1, 2002 and ending January 31, 2004, and 2.5 to
1.0 thereafter; provided, further, that NATG shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly, incur any Contingent
Obligations in respect of any Junior Subordinated Notes.
Limitation on Transactions with Affiliates. NATG shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction with or for the benefit of any affiliate
(each an "affiliate transaction") other than (1) affiliate transactions
permitted under the following paragraph and (2) affiliate transactions on terms
that are no less favorable to NATG or the Restricted Subsidiary, as the case may
be, than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a person that is not an
affiliate of NATG or the Restricted Subsidiary. All affiliate transactions and
each series of related affiliate transactions that are similar or part of a
common plan involving aggregate payments or other property with a fair market
value in excess of $2.5 million shall be approved by the board of directors of
NATG or the Restricted Subsidiary, as the case may be, the approval shall be
evidenced by a resolution stating that the board of directors has determined
that the transaction complies with these provisions. If NATG or any Restricted
Subsidiary enters into an affiliate transaction that involves an aggregate fair
market value of more than $10.0 million, NATG or the Restricted Subsidiary, as
the case may be, shall, prior to the consummation of the transaction, obtain an
opinion that the affiliate transaction complies with the requirements of this
covenant from an independent financial advisor and file the opinion with the
trustee.
The restrictions set forth in the preceding paragraph shall not apply to:
(1) reasonable fees and compensation paid to and indemnity provided on
behalf of, officers, directors, employees, agents or consultants of Parent,
NATG or any Restricted Subsidiaries of NATG as determined in good faith by
Parent's board of directors or senior officers;
(2) transactions exclusively between or among any of NATG or any
Restricted Subsidiaries of NATG, provided that the transactions are not
otherwise prohibited by the indenture;
(3) any agreement as in effect as of the original issue date of the
notes or any amendment to those agreements or any transaction contemplated
by those agreements or any replacement agreement so long as any the
amendment or replacement agreement is not more disadvantageous to NATG or
its Subsidiaries, as the case may be, in any material respect, than the
original agreement as in effect on the original issue date of the notes;
(4) Restricted Payments permitted under the covenant described under
"-- Certain Covenants -- Limitation on Restricted Payments";
(5) any issuance of securities or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans of Parent entered
into in the ordinary course of business and approved by Parent's board of
directors;
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(6) the payment of reasonable and customary management, consulting and
advisory fees and related out of pocket expenses of Willis Stein and its
affiliates, including, without limitation, in connection with acquisitions,
divestitures, or financings by Parent or any of its Restricted
Subsidiaries, in each case as may be approved by the board of directors of
Parent in good faith;
(7) loans and advances to employees and officers of Parent and its
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1.0 million at any time outstanding;
(8) indemnification agreements provided for the benefit of Parent or
any Restricted Subsidiary of Parent from officers, directors, employees
agents or consultants of Parent or any Restricted Subsidiary of Parent;
(9) transactions effected as part of a Qualified Receivables
Transaction; and
(10) the payment to Jack Reich for consulting services pursuant to his
consulting agreement with Parent and its subsidiaries as in effect as of
the original issue date of the notes or any amendment to the agreement or
any transaction contemplated by the agreement or in any replacement
agreement so long as any amendment or replacement agreement is not more
disadvantageous to Parent or its Subsidiaries, as the case may be, in any
material respect than the original agreement as in effect on the original
issue date of the notes.
Limitation on Liens. NATG shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any lien on or with respect to any property or asset of any kind
of NATG or any of its Restricted Subsidiaries, whether now owned or later
acquired, or any income or profits from the property or assets, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any lien with respect to the property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, unless, (1) in the case of liens securing
subordinated indebtedness, the notes and guarantees are secured by a lien on the
property, assets or proceeds that is senior in priority to the liens and (2) in
all other cases, the notes and guarantees are equally and ratably secured.
Notwithstanding the foregoing, this covenant shall not prohibit or apply to
(A) liens securing the senior secured credit agreement;
(B) liens securing senior debt and liens securing senior debt of the
guarantors;
(C) liens securing the notes and the guarantees;
(D) liens of an issuer or subsidiary guarantor on assets of any other
issuer or subsidiary guarantor; and
(E) permitted liens.
Prohibition on Incurrence of Senior Subordinated Debt. NATG shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
incur any indebtedness, other than the notes and the guarantees and indebtedness
owed to an issuer or a wholly owned Restricted Subsidiary of an issuer, that is
by its terms, or by the terms of any agreement governing the indebtedness,
subordinated in right of payment to any other indebtedness of the person unless
the indebtedness (1) is incurred by an issuer or subsidiary guarantor and (2) is
by its terms, or by the terms of any agreement governing the indebtedness, made
expressly subordinate to the obligations of the issuer or subsidiary guarantor
under the indenture, the notes, in the case of an issuer, and the guarantees, in
the case of a subsidiary guarantor, to the same extent and in the same manner as
the obligations are subordinated to senior debt.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. NATG shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit
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to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary of NATG to:
(1) pay dividends or make any other distributions on or in respect of
its capital stock;
(2) make loans or advances to pay any indebtedness or other obligation
owed to any issuer or subsidiary guarantor; or
(3) transfer any of its property or assets to any issuer or subsidiary
guarantor,
except for such encumbrances or restrictions existing under or by reason of:
(a) applicable law, regulations or orders of any governmental or
judicial authority;
(b) the indenture, the notes, the guarantees, or the senior secured
credit agreement to the extent incurred in accordance with the indenture;
(c) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of NATG or any Restricted Subsidiary of
NATG;
(d) agreements existing on the original issue date of the notes to the
extent and in the manner those agreements are in effect on the original
issue date of the notes;
(e) any restriction or encumbrance contained in contracts for sale of
assets permitted by the indenture in respect of the assets being sold
pursuant to those contracts pending the close of the sale, which
encumbrance or restriction is not applicable to any asset other than the
asset being sold pursuant to that contract;
(f) Purchase Money Obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in
clause (3) above on the property so acquired;
(g) restrictions of the nature described in clause (3) above on the
transfer of assets subject to any lien permitted under the indenture
imposed by the holder of the lien;
(h) any instrument governing indebtedness or capital stock of a person
acquired by NATG or any of its Restricted Subsidiaries as in effect at the
time of the acquisition, except to the extent the indebtedness or capital
stock was incurred in connection with or in contemplation of the
acquisition, which encumbrance or restriction is not applicable to any
person, or the properties or assets of any person, other than the person,
or the property or assets of the person, so acquired, provided that, in the
case of indebtedness, the indebtedness was permitted by the terms of the
indenture to be incurred;
(i) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(j) any encumbrance or restriction on a Receivables Entity effected in
connection with a Qualified Receivables Transaction;
(k) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
or
(l) an agreement governing indebtedness incurred to refinance the
indebtedness issued, assumed or incurred pursuant to an agreement referred
to in clause (b) or (d) above, provided, that the provisions relating to
the encumbrance or restriction contained in the indebtedness are no less
favorable to the issuers or subsidiary guarantors in any material respect
as determined by the board of directors of Parent in its reasonable and
good faith judgment than the provisions relating to the encumbrance or
restriction contained in agreements referred to in clause (b) or (d) above.
Merger, Consolidation and Sale of Assets. No issuer shall, in a single
transaction or series of related transactions, consolidate or merge with or into
any person, or sell, assign, transfer, lease, convey or
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otherwise dispose of, or cause or permit any Restricted Subsidiary of the issuer
to sell, assign, transfer, lease, convey or otherwise dispose of, all or
substantially all of the assets of the issuer and its Restricted Subsidiaries,
determined on a consolidated basis for the issuer and its Restricted
Subsidiaries, whether as an entirety or substantially as an entirety to any
person unless:
(1) either
(i) the issuer shall be the surviving or continuing corporation or
(ii) the person, if other than the issuer, formed by such
consolidation or into which the issuer is merged or the person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the issuer and its Restricted
Subsidiaries substantially as an entirety (for purposes of this
paragraph, the "Surviving Entity") (x) shall be a corporation,
partnership, trust or a limited liability company organized and validly
existing under the laws of the United States or any state thereof or the
District of Columbia and (y) shall expressly assume, by supplemental
indenture, executed and delivered to the trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of
the notes and the performance of every covenant of the notes, this
indenture and the registration rights agreement on the part of the
issuer to be performed or observed;
(2) immediately after giving effect to the transaction and the
assumption contemplated by clause (1)(ii)(y) above, including giving effect
to any indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of the transaction, the issuer or
the Surviving Entity, as the case may be, shall be able to incur at least
$1.00 of additional indebtedness, other than Permitted Indebtedness,
pursuant to the covenant described under "-- Certain
Covenants -- Limitation on Incurrence of Additional Indebtedness";
(3) immediately before and immediately after giving effect to the
transaction and the assumption contemplated by clause (1)(ii)(y) above,
including, without limitation, giving effect to any indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any lien
granted in connection with or in respect of the transaction, no default or
event of default shall have occurred or be continuing; and
(4) the issuer or Surviving Entity, as the case may be, shall have
delivered to the trustee an officers' certificate and an opinion of
counsel, each stating that the consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with the transaction, the supplemental
indenture comply with the applicable provisions of this indenture and that
all conditions precedent in this indenture relating to the transaction have
been satisfied. Notwithstanding the foregoing, the merger of an issuer with
an affiliate incorporated solely for the purpose of reincorporating or
similarly reorganizing such in another jurisdiction shall be permitted.
For purposes of the immediately preceding paragraph, the transfer of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of an issuer the capital stock of which constitutes all or
substantially all of the properties and assets of the issuer, shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
issuer.
Each guarantor, other than any guarantor whose guarantee is to be released
in accordance with the terms of the guarantee and the indenture in connection
with any transaction complying with the provisions of the covenant described
under "-- Certain Covenants -- Limitation on Asset Sales", shall not, and NATG
shall not cause or permit any guarantor to, consolidate with or merge with or
into any person unless:
(1) the entity formed by or surviving any the consolidation or merger,
if other than the guarantor, is a corporation, partnership, trust or
limited liability company organized and existing under the laws of the
United States or any state thereof or the District of Columbia;
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(2) the entity assumes by supplemental indenture all of the
obligations of the guarantor under the indenture and on its guarantee;
(3) immediately after giving effect to the transaction, no default or
event of default shall have occurred and be continuing; and
(4) immediately after giving effect to the transaction and the use of
any net proceeds from the transaction on a pro forma basis, Parent could
satisfy the provisions of clause (2) of the first paragraph of this
covenant.
Any merger or consolidation of a guarantor with and into an issuer, with
the issuer being the surviving entity, or a guarantor that is a wholly owned
subsidiary of an issuer need only comply with clause (4) of the first paragraph
of this covenant.
Notwithstanding anything to the contrary in this covenant, no transaction
shall be permitted under this covenant unless after giving effect to the
transaction, there shall be a co-issuer of the notes that is a corporation
organized and existing under the laws of the United States or any state of the
United States or the District of Columbia.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of an issuer in accordance with this covenant in
which the issuer is not the continuing corporation, the successor person formed
by the consolidation or into which the issuer is merged or to which the
conveyance, lease or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the issuer under the indenture and
the notes with the same effect as if the Surviving Entity had been named as an
issuer.
Limitation on Asset Sales. NATG shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale, unless
(1) NATG or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of the Asset Sale which, taken as a
whole, is at least equal to the fair market value of the assets sold or
otherwise disposed of, as determined in good faith, by Parent's board of
directors;
(2) at least 75% of the consideration received by the issuers or the
Restricted Subsidiary, as the case may be, from the Asset Sale is received
at the time of the disposition and consists of one of the following:
(a) cash or cash equivalents;
(b) any liabilities, as shown on NATG's or such Restricted
Subsidiary's most recent balance sheet, of NATG or any such Restricted
Subsidiary, other than liabilities that are by their terms subordinated
to the notes, that are assumed by the transferee of the assets,
(c) any securities, notes or other obligations received by NATG or
the subsidiary from the transferee that are converted by NATG or the
Subsidiary into cash within 180 days after the Asset Sale, to the extent
of the cash received; and
(d) any combination of the foregoing.
(3) upon the consummation of an Asset Sale, NATG shall apply, or cause
its Restricted Subsidiary to apply, the Net Cash Proceeds relating to the
Asset Sale within 365 days of receipt of the Net Cash Proceeds either (A)
to prepay any senior debt and, in the case of any senior debt under any
revolving credit facility, effect a permanent reduction in the availability
under the revolving credit facility; provided that the permanent reduction
in availability need not be made prior to December 15, 2001 to the extent
that the senior debt being repaid had been borrowed under the acquisition
subfacility of the revolving credit facility under the senior secured
credit agreement and/or (B) to invest in or to acquire other properties and
assets that replace the properties and assets that were the subject of the
Asset Sale or in properties and assets that will be used or useful in a
Permitted
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Business ("replacement assets") and/or (C) to acquire all or substantially
all of the assets of, or all of the voting stock of, another person engaged
in a Permitted Business, provided, that if voting stock is acquired, the
person becomes a subsidiary guarantor;
provided, that NATG may not sell or otherwise dispose of any capital stock of
the Orius Capital except in compliance with the covenant described under
"-- Certain Covenants -- Merger, Consolidation and Sale of Assets."
Pending the final application of any Net Cash Proceeds, NATG or the
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Cash Proceeds in any manner that is not otherwise
prohibited by the indenture. On the 366th day after an Asset Sale or the earlier
date, if any, on which the senior management or board of directors, as the case
may be, of NATG or the Restricted Subsidiary determines not to apply the Net
Cash Proceeds relating to the Asset Sale as set forth in clause (3) of the
preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), the aggregate
amount of Net Cash Proceeds which has not been applied on or before the Net
Proceeds Offer Trigger Date as permitted in clause (3) of the next preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by NATG or the
Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on
a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60
days following the applicable Net Proceeds Offer Trigger Date, from all holders
on a pro rata basis, that principal amount of notes equal to the Net Proceeds
Offer Amount at a price equal to 100% of the principal amount of the notes to be
purchased, plus accrued and unpaid interest on the notes, if any, to the date of
purchase; provided, that if at any time any non-cash consideration received by
NATG or the Restricted Subsidiary, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash, other
than interest received with respect to any non-cash consideration, then the
conversion or disposition shall be deemed to constitute an Asset Sale under the
indenture and the Net Cash Proceeds of the Asset Sale shall be applied in
accordance with this covenant. The issuers may defer the Net Proceeds Offer
until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $10.0 million resulting from one or more Asset Sales, at which time,
the entire unutilized Net Proceeds Offer Amount, and not just the amount in
excess of $10.0 million, shall be applied as required pursuant to this
paragraph.
In the event of the transfer of substantially all, but not all, of the
property and assets of NATG and its Restricted Subsidiaries as an entirety to a
person in a transaction permitted under the covenant described under "-- Certain
Covenants -- Merger, Consolidation and Sale of Assets," the successor
corporation shall be deemed to have sold the properties and assets of NATG and
its Subsidiaries not so transferred for purposes of this covenant, and shall
comply with the provisions of this covenant with respect to the deemed sale as
if it were an Asset Sale. In addition, the fair market value of the properties
and assets of NATG or the subsidiaries deemed to be sold pursuant to this
paragraph less the fair market value of all liabilities of the person related to
such property and assets not transferred shall be deemed to be Net Cash Proceeds
for purposes of this covenant.
(c) Notwithstanding the foregoing provisions of this covenant, NATG and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with the foregoing provisions of this covenant to the extent that:
(1) at least 75% of the consideration for the Asset Sale constitutes
Replacement Assets; and
(2) the Asset Sale is for fair market value as determined in good
faith by the board of directors of Parent;
provided, that any consideration not constituting Replacement Assets received by
NATG or any of its Restricted Subsidiaries in connection with any Asset Sale
permitted to be consummated under this clause (c) shall constitute Net Cash
Proceeds subject to the provisions the foregoing provisions of this covenant.
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Notice of each Net Proceeds Offer shall be mailed or caused to be mailed,
by first class mail, by NATG or the relevant subsidiary within 30 days following
the applicable Net Proceeds Offer Trigger Date to all holders of notes at their
last registered addresses, with a copy to the trustee. A Net Proceeds Offer
shall remain open for a period of 20 business days or a longer period as may be
required by law. The notice shall contain all instructions and materials
necessary to enable the holders to tender notes pursuant to the Net Proceeds
Offer and shall comply with the procedures set forth in the indenture. To the
extent that the aggregate amount of notes tendered is less than the Net Proceeds
Offer Amount, NATG or the relevant Restricted Subsidiary may use the remaining
Net Proceeds Offer Amount for general corporate purposes or for any other
purpose not prohibited by the indenture, and any remaining Net Cash Proceeds
then be deemed not to constitute Net Cash Proceeds.
NATG and its Restricted Subsidiaries intend to comply with the requirements
of Rule 14e-1 under the Exchange Act to the extent those laws and regulations
are applicable in connection with the repurchase of notes pursuant to a Net
Proceeds Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this covenant, NATG and its
Restricted Subsidiaries shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations under
this covenant by virtue of their compliance with those laws.
The agreements governing the issuers' outstanding senior debt currently
prohibit the issuers from purchasing any notes, and also provide that specified
change of control or asset sale events with respect to the issuers would
constitute a default under those agreements. Any future credit agreements or
other agreements relating to senior debt to which the issuers become parties may
contain similar restrictions and provisions. In the event a change of control or
Asset Sale occurs at a time when the issuers are prohibited from purchasing
notes, the issuers could seek the consent of their senior lenders to the
purchase of notes or could attempt to refinance the borrowings that contain the
prohibition. If the issuers do not obtain the necessary consent or repay the
borrowings, the issuers would be prohibited from purchasing the notes. In that
case, the issuers' failure to purchase tendered notes would constitute an event
of default under the indenture which would, in turn, constitute a default under
the senior debt. In these circumstances, the subordination provisions in the
indenture would likely restrict payments to the holders of notes.
Conduct of Business. NATG shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any business other than Permitted
Businesses.
Orius Capital shall engage in no business other than the issuance of the
notes. Notwithstanding the foregoing, Orius Capital may engage in those
activities that are incidental to (A) the maintenance of is corporate existence
in compliance with applicable law, (B) legal, tax and accounting matters in
connection with any of the foregoing activities and (C) entering into, and
performing its obligations under, the Documents to which it is a party.
Reports to Holders. Whether or not required by the rules and regulations of
the SEC, so long as any notes are outstanding, Parent and the issuers shall
furnish the holders of notes:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
Parent or the issuers were required to file those Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of Parent and its consolidated Subsidiaries, or, if Parent shall
cease to own more than a majority of the voting securities of NATG, of NATG
and its consolidated subsidiaries, showing in the case of Parent's
financial statements, in reasonable detail, either on the face of the
financial statements or in the related footnotes, the information required
to be presented with respect to the issuers and the guarantors under Staff
Accounting Bulletin 53 or any successor interpretation or rule of the SEC
and, with respect to the annual information only, a report by the certified
independent accountants of Parent and its consolidated subsidiaries, or, if
Parent shall cease to own more than a majority of the voting securities of
NATG, of NATG and its consolidated subsidiaries, in each case, within five
days after the time specified in the rules and regulations of the SEC;
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(2) all current reports that would be required to be filed with the
SEC on Form 8-K if Parent or the issuers were required to file those
reports, in each case within two days after the time periods specified in
the SEC's rules and regulations.
Following the consummation of the exchange offer contemplated by a
registration rights agreement, whether or not required by the rules and
regulations of the SEC, Parent or NATG will file a copy of all of the above
information and reports with the SEC for public availability within the time
periods specified in the SEC's rules and regulations, unless the SEC will not
accept the filing, and make the information available to securities analysts and
prospective investors upon request. In addition, for so long as any notes remain
outstanding, NATG shall furnish to the holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. Parent and the
issuers will also comply with the other provisions of TIA sec. 314(a).
Additional Subsidiary Guarantees. NATG will cause any subsidiary of NATG
that after the original issue date of the notes first becomes a guarantor of an
issuer's obligations under the senior secured credit agreement to, within 10
days of the date on which it became a guarantor (1) execute and deliver to the
trustee a supplemental indenture pursuant to which the subsidiary shall
unconditionally guarantee all of the issuers' obligations under the notes and
the indenture on the terms set forth in the indenture and (2) deliver to the
trustee an opinion of counsel that the supplemental indenture has been duly
authorized, executed and delivered by the subsidiary and constitutes a legal,
valid, binding and enforceable obligation of the subsidiary. Thereafter, the
subsidiary shall be a guarantor for all purposes of the indenture.
In the event that the senior secured credit agreement shall no longer be in
effect, NATG shall cause any Domestic Restricted Subsidiary of NATG, other than
a Receivables Entity or a Restricted Subsidiary that is already a guarantor, to
promptly (1) execute and deliver to the trustee a supplemental indenture
pursuant to which the subsidiary shall unconditionally guarantee all of the
issuers' obligations under the notes and the indenture on the terms set forth in
the indenture and (2) deliver to the trustee an opinion of counsel that the
supplemental indenture has been duly authorized, executed and delivered by the
subsidiary and constitutes a legal, valid, binding and enforceable obligation of
the subsidiary. Thereafter, the subsidiary shall be a guarantor for all purposes
of the indenture.
Payments for Consent NATG will not, and will not permit any of its
subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any holder of notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the indenture or the notes unless the consideration is offered to be paid and
is paid to all holders of the notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to the consent,
waiver or agreement.
Disposal of Subsidiary Stock. Except for any sale of 100% of the capital
stock or other equity securities of a Restricted Subsidiary effected in
compliance with the covenants described under "-- Certain
Covenants -- Limitation on Restricted Payments" and "-- Certain
Covenants -- Merger, Consolidation and Sale of Assets," NATG will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly sell,
assign, pledge or otherwise encumber or dispose of any shares of capital stock
or other equity securities of any Restricted Subsidiary of NATG, except (1) to
qualify directors if required by applicable law, (2) to an issuer or subsidiary
guarantor, and (3) liens in favor of the lenders under the senior secured credit
agreement.
EVENTS OF DEFAULT
The following events are defined in the indenture as "events of default":
(1) the failure to pay interest on any notes when the interest becomes
due and payable and the default continues for a period of 30 days, whether
or not the payment is prohibited by the subordination provisions of the
indenture;
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(2) the failure to pay the principal on any notes, when the principal
becomes due and payable, at maturity, upon redemption or otherwise,
including the failure to make a payment to purchase notes tendered pursuant
to a Change of Control Offer or a Net Proceeds Offer or a Mandatory
Redemption, whether or not the payment is prohibited by the subordination
provisions of the indenture;
(3) a default in the observance or performance of any other covenant
or agreement contained in the indenture which default continues for a
period of 30 days after the issuers receive written notice specifying the
default and demanding that such default be remedied from the trustee or the
holders of at least 25% of the outstanding principal amount of the notes;
(4) the failure to pay at final stated maturity, giving effect to any
applicable grace periods and any extensions of the maturity date, the
principal amount of any indebtedness of NATG or any Restricted Subsidiary
of NATG or the acceleration of the final stated maturity of the
indebtedness if the aggregate principal amount of the indebtedness,
together with the principal amount of any other indebtedness in default for
failure to pay principal at final maturity or which has been accelerated,
aggregates $10.0 million or more at any time; provided that NATG or its
Restricted Subsidiary shall have a 20-day grace period to cure the
foregoing default;
(5) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against NATG or any of its Significant
Subsidiaries and the judgments remain undischarged, unpaid or unstayed for
a period of 60 days after the judgment or judgments become final and non-
appealable;
(6) specified events of bankruptcy affecting Parent, an issuer or any
of their Significant Subsidiaries; or
(7) (i) any guarantee or any provision of any guarantee shall cease to
be in full force or effect, other than in accordance with its express
terms, or (ii) Parent or any other guarantor or any person acting by or on
behalf of the guarantor shall deny or disaffirm the guarantor's obligations
under its guarantee, or (iii) Parent or any other guarantor shall default
in the due performance or observance of any term, covenant or agreement on
its part to be performed or observed, after giving effect to any applicable
grace periods, pursuant to its guarantee.
If an event of default, other than an event of default specified in clause
(6) above with respect to an issuer, shall occur and be continuing, the trustee
or the holders of at least 25% in principal amount of the notes then outstanding
may declare the principal of and accrued interest on all the notes to be due and
payable by notice in writing to the issuers and the trustee specifying the
respective event of default and that it is a "notice of acceleration" (the
"acceleration notice"), and the same:
(1) shall become immediately due and payable; or
(2) if there are any amounts outstanding under the senior secured
credit agreement, shall become immediately due and payable upon the first
to occur of an acceleration under the senior secured credit agreement or 5
business days after receipt by the issuers and the representative under the
senior secured credit agreement of the acceleration notice but only if the
event of default is then continuing.
If an event of default specified in clause (6) above with respect to an
issuer occurs and is continuing, then all unpaid principal of, and premium, if
any, and accrued and unpaid interest on all of the outstanding notes shall
become and be immediately due and payable without any declaration or other act
on the part of the trustee or any holder.
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The indenture provides that, at any time after a declaration of
acceleration with respect to the notes as described in the preceding paragraph,
the holders of a majority in principal amount of the notes may rescind and
cancel the declaration and its consequences:
(1) if the rescission would not conflict with any judgment or decree;
(2) if all existing events of default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
the acceleration;
(3) to the extent the payment of interest is lawful, interest on
overdue installments of interest and overdue principal, which has become
due otherwise than by the declaration of acceleration, has been paid;
(4) if the issuers have paid the trustee its reasonable compensation
and reimbursed the trustee for its expenses, disbursements and advances;
and
(5) in the event of the cure or waiver of an event of default of the
type described in clause (6) of the description above of events of default,
the trustee shall have received an officers' certificate to the effect that
the event of default has been cured or waived. No rescission shall affect
any subsequent default or impair any right consequent to any subsequent
default.
The holders of a majority in principal amount of the notes may waive any
existing default or event of default under the indenture, and its consequences,
except a default in the payment of the principal of or interest on any notes.
Holders of the notes may not enforce the indenture or the notes except as
provided in the indenture and under the TIA. Subject to the provisions of the
indenture relating to the duties of the trustee, the trustee is under no
obligation to exercise any of its rights or powers under the indenture at the
request, order or direction of any of the holders, unless the holders have
offered to the trustee reasonable indemnity. Subject to all provisions of the
indenture and applicable law, the holders of a majority in aggregate principal
amount of the then outstanding notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee.
Under the indenture, Parent and the issuers are required to provide
officers' certificates to the trustee promptly upon any officer obtaining
knowledge of any default or event of default that has occurred and, if
applicable, describe the default or event of default and its status. In
addition, Parent and the issuers are required to provide this certification at
least annually whether or not they know of any default or event of default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
A director, officer, employee, member, stockholder or incorporator, as
such, of Parent or any of its subsidiaries shall not have any liability for any
obligations of the issuers in respect of the notes or for any claim based on, in
respect of or by reason of those obligations or their creation; provided, that
the foregoing shall in no way limit the obligations of any guarantor in respect
of the guarantees. Each holder by accepting a note waives and releases this
liability, and this waiver and release are part of the consideration for the
issuance of the notes.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The issuers may, at their option and at any time, elect to have their
obligations and the obligations of the guarantors discharged with respect to the
outstanding notes and guarantees ("Legal Defeasance").
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Legal Defeasance means that the issuers shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding notes, except
for:
(1) their obligations with respect to the notes concerning issuing
temporary notes, registration of notes, mutilated, destroyed, lost or
stolen notes and the maintenance of an office or agency for payments;
(2) the rights, powers, trust, duties and immunities of the trustee
and the issuers' obligations in connection with those rights, powers,
trust, duties and immunities; and
(3) the Legal Defeasance provisions of the indenture.
In addition, the issuers may, at their option and at any time, elect to
have the obligations of the issuers released with respect to specified covenants
that are described in the indenture ("Covenant Defeasance") and thereafter any
omission to comply with those covenants shall not constitute a default or event
of default with respect to the notes. In the event Covenant Defeasance occurs,
certain events, not including non-payment, bankruptcy, receivership,
reorganization and insolvency event, described under "events of default" will no
longer constitute an event of default with respect to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the issuers must irrevocably deposit with the trustee, in trust,
for the benefit of the holders cash in U.S. dollars, non-callable U.S.
government obligations, or a combination of the foregoing, in an amount as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the notes on the stated date for payment or on the
applicable redemption date, as the case may be;
(2) in the case of Legal Defeasance, each issuer shall have delivered
to the trustee an opinion of counsel in the United States reasonably
acceptable to the trustee confirming that:
(a) the issuers have received from, or there has been published by,
the Internal Revenue Service a ruling; or
(b) since the date of the indenture, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and the opinion of counsel shall
confirm that, the holders will not recognize income, gain or loss for
federal income tax purposes as a result of the Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if the Legal
Defeasance had not occurred;
(3) in the case of Covenant Defeasance, each issuer shall have
delivered to the trustee an opinion of counsel in the United States
reasonably acceptable to the trustee confirming that the holders will not
recognize income, gain or loss for federal income tax purposes as a result
of the Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if the Covenant Defeasance had not occurred;
(4) no default or event of default shall have occurred and be
continuing on the date of such deposit, other than a default or event of
default with respect to the indenture resulting from the incurrence of
indebtedness, all or a portion of which will be used to defease the notes
concurrently with such incurrence;
(5) the Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under the indenture, other
than a default or event of default with respect to the indenture resulting
from the incurrence of indebtedness, all or a portion of which will be used
to defease the notes concurrently with the incurrence, or any other
material agreement or instrument to
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which Parent or any of its Restricted Subsidiaries is a party or by which
Parent or any of its Restricted Subsidiaries is bound;
(6) each issuer shall have delivered to the trustee an officers'
certificate stating that the deposit was not made by the issuers with the
intent of preferring the holders over any other creditors of the issuers or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the issuers or others;
(7) each issuer shall have delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(8) each issuer shall have delivered to the trustee an opinion of
counsel to the effect that:
(a) the trust funds will not be subject to any rights of holders of
senior debt or Guarantor Senior Debt, including, without limitation,
those arising under the indenture; and
(b) assuming no intervening bankruptcy of an issuer between the
date of deposit and the 91st day following the date of deposit and that
no holder is an insider of an issuer, after the 91st day following the
date of deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; and
(9) specified other customary conditions precedent are satisfied.
Notwithstanding the foregoing, the opinion of counsel required by clause
(2) above with respect to a Legal Defeasance need not be delivered if all notes
not previously delivered to the trustee for cancellation (1) have become due and
payable or (2) will become due and payable on the maturity date within one year
under arrangements satisfactory to the trustee for the giving of notice of
redemption by the trustee in the name, and at the expense, of the issuers.
SATISFACTION AND DISCHARGE
The indenture will be discharged and will cease to be of further effect,
except as to surviving rights or registration of transfer or exchange of the
notes, as expressly provided for in the indenture as to all outstanding notes
when:
(1) either:
(a) all the notes authenticated and delivered have been delivered to
the trustee for cancellation; or
(b) all notes not previously delivered to the trustee for cancellation
have become due and payable and the issuers shall have irrevocably
deposited or caused to be deposited with the trustee funds in an amount
sufficient to pay principal of, premium, if any, and interest on the
outstanding notes not previously delivered to the trustee for cancellation,
for principal of, premium, if any, and interest on the notes to the date of
deposit together with irrevocable instructions from the issuers directing
the trustee to apply the funds to the payment of the notes at maturity or
redemption, as the case may be;
(2) the issuers have paid all other sums payable under the indenture by
them; and
(3) each issuer has delivered to the trustee an officers' certificate and
an opinion of counsel stating that all conditions precedent under the indenture
relating to the satisfaction and discharge of the indenture have been complied
with.
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MODIFICATION OF THE INDENTURE
From time to time, the issuers, the guarantors and the trustee, without the
consent of the holders, may amend the indenture for certain specified purposes,
including curing ambiguities, defects or inconsistencies, so long as such change
does not, in the opinion of the trustee, adversely affect the rights of any of
the holders in any material respect. In formulating its opinion on those
matters, the trustee will be entitled to rely on evidence as it deems
appropriate, including, without limitation, only on (a) an opinion of counsel
and (b) an officers' certificate. Other modifications and amendments of the
indenture may be made with the consent of the holders of a majority in principal
amount of the then outstanding notes issued under the indenture, except that,
without the consent of each holder affected the modification or amendment, no
amendment may:
(1) reduce the amount of notes whose holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any notes, or change the date on which any notes may
be subject to redemption or reduce the redemption or purchase price of the
notes;
(4) make any notes payable in money other than that stated in the
notes;
(5) make any change in provisions of the indenture protecting the
right of each holder to receive payment of principal of and interest on
such note on or after the due date thereof or to bring suit to enforce such
payment;
(6) modify or change any provision of the indenture or the related
definitions affecting the subordination or ranking of the notes or any
guarantee in a manner which adversely affects the holders; or
(7) release (i) Parent or (ii) any guarantor that is a Significant
Subsidiary of Parent or an issuer from any of its obligations under its
guarantee or the indenture otherwise than in accordance with the terms of
the indenture.
GOVERNING LAW
The indenture provides that it, the notes and any guarantees will be
governed by, and construed in accordance with, the laws of the state of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of these principles would require that the law of
another jurisdiction be applied.
THE TRUSTEE
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture or the TIA. During the existence of an event of default, the
trustee will exercise such rights and powers vested in it by the indenture, and
use the same degree of care and skill in its exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
The indenture and the provisions of the TIA contain certain limitations on
the rights of the trustee, should it become a creditor of an issuer, to obtain
payments of claims in certain cases or to realize on certain property received
in respect of any claim as security or otherwise. Subject to the TIA, the
trustee will be permitted to engage in other transactions; provided that if the
trustee acquires any conflicting interest as described in the TIA, it must
eliminate the conflict or resign.
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CERTAIN DEFINITIONS
Set forth below is a summary of some of the defined terms used in the
indenture. Reference is made to the indenture for the full definition of all of
these terms, as well as any other terms used in this description for which no
definition is provided.
"Acquired Indebtedness" means indebtedness of a person or any of its
Restricted Subsidiaries existing at the time the person becomes a Restricted
Subsidiary of NATG or at the time it merges or consolidates with or into NATG or
any of its Restricted Subsidiaries or is assumed in connection with the
acquisition of assets from the person and in each case whether or not incurred
by the person in connection with, or in anticipation or contemplation of, the
person becoming a Restricted Subsidiary of NATG or the acquisition, merger or
consolidation.
"Acquisition Loans" means all Acquisition Loans under and as defined in the
senior secured credit agreement as in effect on the original issue date of the
notes.
"affiliate" means, as applied to any person, any other person directly or
indirectly controlling, controlled by, or under common control with, that
person. For the purposes of this definition, "control", as applied to any
person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that person, whether
through the ownership of voting securities or by contract or otherwise.
Notwithstanding the foregoing for purposes of the covenant described under
"-- Certain Covenants -- Limitation on Transactions with Affiliates," any person
who owns more than 10% of voting equity of a second person or who is an officer
or director of that second person shall be an affiliate of that second person.
"Asset Acquisition" means (a) an Investment by NATG or any of its
Restricted Subsidiaries in any other person pursuant to which the person shall
become a Restricted Subsidiary of NATG or shall be merged with or into NATG or
any Restricted Subsidiary of NATG or (b) the acquisition by NATG or any
Restricted Subsidiary of NATG of the assets of any person, other than a
Restricted Subsidiary of NATG, not in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance
transfer, lease, other than operating leases entered into in the ordinary course
of business, assignment or other transfer for value by Parent or any Restricted
Subsidiary of NATG to any person other than NATG or any wholly owned Restricted
Subsidiary of NATG of (a) any capital stock of any Restricted Subsidiary of
NATG; or (b) any other property or assets of NATG or any Restricted Subsidiary
of NATG other than in the ordinary course of business; provided, that Asset
Sales shall not include:
(1) a transaction or series of related transactions for which NATG or
any Restricted Subsidiary of NATG receives aggregate consideration of less
than $1,000,000;
(2) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of NATG as permitted under the covenant
described under "-- Certain Covenants -- Merger, Consolidation and Sale of
Assets;"
(3) any sale or other disposition of obsolete assets no longer used or
useful in the business of NATG or any of its Restricted Subsidiaries;
(4) a disposition consisting of the making of a Permitted Investment,
the making of a Restricted Payment permitted under the covenant described
under "-- Certain Covenants -- Limitation on Restricted Payments," or the
liquidation of cash equivalents;
(5) the leasing or licensing of real or personal property, including
intellectual property, in the ordinary course of business for periods not
in excess of one year, subject to automatic renewals;
(6) the issuance of capital stock by a Restricted Subsidiary of NATG
to NATG or a wholly owned Restricted Subsidiary of NATG;
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(7) sales of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity for cash or Purchase Money Notes in an amount equal to
the fair market value of the accounts receivable and related assets;
(8) transfers of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction," or a
fractional undivided interest therein, by a Receivables Entity in a
Qualified Receivables Transaction; and
(9) the cancellation of promissory notes issued to Parent as permitted
under the covenant described under clause (9) of the covenant described
under "-- Certain Covenants -- Limitations on Transactions with
Affiliates."
"board of directors" means, as to any person, the board of directors of
that person or any duly authorized committee of that person's board of directors
or, in the case of a person that is not a corporation, the analogous governing
body of that person.
"board resolution" means, with respect to any person, a copy of a
resolution certified by the secretary or an assistant secretary of that person
to have been duly adopted by the board of directors of that person and to be in
full force and effect on the date of the certification, and delivered to the
trustee.
"business day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in the city of New York are required or authorized
by law or other governmental action to be closed.
"capital stock" means (1) with respect to any person that is a corporation,
any and all shares, interests, participations or other equivalents, however
designated and whether or not voting, of corporate stock, including each class
of common stock and preferred stock of that person and including any warrants,
options or rights to acquire any of the foregoing and instruments convertible
into any of the foregoing, and (2) with respect to any person that is not a
corporation, any and all partnership, membership or other equity interests of
that person.
"Capitalized Lease Obligation" means, as to any person, the obligations of
that person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of the obligations at any date shall be the capitalized amount of the
obligations at that date, determined in accordance with GAAP.
"cash equivalents" means
(1) any evidence of indebtedness, maturing not more than one year
after the date of issue, issued by the United States of America or any
instrumentality or agency of the United States of America, the principal,
interest and premium, if any, of which is guaranteed fully by, or backed by
the full faith and credit of, the United States of America,
(2) dollar denominated time deposits, certificates of deposit and
bankers acceptances maturing not more than one year after the date of
purchase, issued by (x) any lender under the senior secured credit
agreement, (y) a commercial banking institution having, or which is the
principal banking subsidiary of a bank holding company having, combined
capital and surplus and undivided profits of not less than $200.0 million
and a commercial paper rating of "P-1" or higher according to Moody's,
"A-1" or higher according to S&P or the equivalent rating by any other
nationally recognized rating agency (any such bank, an "Approved Bank") or
(z) a non-United States commercial banking institution which is either
currently ranked among the 100 largest banks in the world by assets,
according to the American Banker, has combined capital and surplus and
undivided profits of not less than $500.0 million or whose commercial paper
or the commercial paper of the bank's holding company has a rating of "P-1"
or higher according to Moody's, "A-1" or higher according to S&P or the
equivalent rating by any other nationally recognized rating agency,
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(3) commercial paper, maturing not more than 270 days after the date
of purchase, issued or guaranteed by a corporation, other than Parent or
any subsidiary of Parent or any of their respective affiliates, organized
and existing under the laws of any state within the United States of
America with a rating, at the time as of which any determination thereof is
to be made, of "P-1" or higher according to Moody's or "A-1" or higher
according to S&P,
(4) demand deposits with any bank or trust company maintained in the
ordinary course of business,
(5) repurchase or reverse repurchase agreements covering obligations
of the type specified in clause (1) with a term of not more than seven days
with any Approved Bank, and
(6) shares of any money market mutual fund rated at least AAA or the
equivalent thereof by S&P or at least AAA or the equivalent by Moody's.
"change of control" means
(1) any sale, lease or transfer of all or substantially all of the
assets of NATG and its Restricted Subsidiaries, taken as a whole, to any
person or group, as that term is used in Section 13(d)(3) of the Exchange
Act,
(2) the liquidation or dissolution of Parent or any issuer,
(3) prior to a Qualified IPO, (A) WSP and its affiliates cease to
beneficially own, and have the exclusive power to vote with respect to,
directly or indirectly, at least 35% of the outstanding voting securities
of Parent entitled to vote, including, without limitation, pursuant to any
valid and enforceable stockholders or other voting agreement, for the
election of a majority of the members of the board of directors of Parent,
and in any event sufficient to direct or cause the direction of the
management and policies of Parent, (B) any person or group, as that term is
used in Section 13(d)(3) of the Exchange Act, other than Willis Stein and
its affiliates or a Permitted Group, shall become the owner, directly or
indirectly, beneficially or of record, of a greater number of the voting
securities of Parent than the number of voting securities of Parent then
owned beneficially and of record by Willis Stein and its affiliates or (C)
the nominees of Willis Stein and its affiliates shall at any time fail or
cease to constitute a majority of the members of the board of directors of
Parent,
(4) after a Qualified IPO, (A) (i) any person or group, as that term
is used in Section 13(d)(3) of the Exchange Act, other than Willis Stein
and its affiliates or a Permitted Group, shall at any time become the
owner, directly or indirectly, beneficially or of record, of shares
representing more than 35% of the outstanding voting securities of Parent
and (ii) the percentage of voting securities beneficially owned by Willis
Stein and its affiliates is less than the percentage so owned or acquired
by that person or group, or (B) the replacement of a majority of the
directors on the board of directors of Parent over a two-year period from
the directors who constituted the board of directors of Parent at the
beginning of that period, and the replacement shall not have been approved
by a vote of at least a majority of the board of directors of Parent then
still in office who either were members of such board of directors at the
beginning of that period or whose election as a member of the board of
directors was previously so approved, or
(5) Parent ceases to beneficially own and have the exclusive power to
vote with respect to all of the issued and outstanding capital stock of
NATG free and clear of all liens other than liens arising under the senior
secured credit agreement.
"common stock" of any person means any and all shares, interests or other
participations in, and other equivalents, however designated and whether voting
or non-voting, of that person's common stock, whether outstanding on the
original issue date of the notes or issued after the original issue date of the
notes, and includes, without limitation, all series and classes of common stock.
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"Consolidated EBITDA" means, for any period for any person, the sum,
without duplication, of the amounts for that period of
(1) Consolidated Net Income,
(2) Consolidated Interest Expense,
(3) provisions for taxes based on income,
(4) total depreciation expense,
(5) total amortization expense, and
(6) other non-cash items reducing Consolidated Net Income,
less other non-cash items increasing Consolidated Net Income other than the
accrual of revenue in the ordinary course of business, all of the foregoing as
determined on a consolidated basis for the person and its subsidiaries in
conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio of
Consolidated EBITDA of NATG during the four full fiscal quarters for which
internal financial statements are available ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
NATG for that four quarter period.
In addition to, and without limitation of, the foregoing, for purposes of
this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of the
calculation to
(1) the incurrence or repayment of any indebtedness of NATG or any of
its Restricted Subsidiaries, and the application of the proceeds from the
incurrence or repayment giving rise to the need to make the calculation and
any incurrence or repayment of other indebtedness and the application of
the proceeds from the incurrence or repayment, other than the incurrence or
repayment of indebtedness in the ordinary course of business for working
capital purposes pursuant to working capital facilities, occurring during
the four quarter period or at any time subsequent to the last day of the
four quarter period and on or prior to the Transaction Date, as if the
incurrence or repayment, as the case may be, and the application of the
proceeds from the incurrence or repayment, occurred on the first day of the
four quarter period and
(2) any Asset Sales or other dispositions or Asset Acquisitions,
including, without limitation,
(i) any Asset Acquisition giving rise to the need to make the
calculation as a result of NATG or one of its Restricted Subsidiaries,
including any person who becomes a Restricted Subsidiary as a result of
the Asset Acquisition, incurring indebtedness and
(ii) any Consolidated EBITDA, provided that the Consolidated EBITDA
shall be included only to the extent includable pursuant to the
definition of "Consolidated Net Income" or to the extent it is excluded
pursuant to clause (2) of the definition of "Consolidated Net Income",
and shall be calculated on a pro forma basis with respect to the Asset
Acquisition taking into account the Pro Forma Adjustments, if any,
resulting from the Asset Acquisitions, attributable to the assets which
are the subject of the Asset Acquisition or Asset Sale during the four
quarter period or at any time subsequent to the four quarter period,
occurring during the four quarter period or at any time subsequent to the
last day of the four quarter period and on or prior to the Transaction Date, as
if the Asset Sale or other disposition or Asset Acquisition, including any
related incurrence of indebtedness, occurred on the first day of the four
quarter period.
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If NATG or any of its Restricted Subsidiaries directly or indirectly
guarantees indebtedness of a third person, the preceding sentence shall give
effect to the incurrence of the guaranteed indebtedness as if NATG or such
Restricted Subsidiary had directly incurred or otherwise assumed the guaranteed
indebtedness, calculated to avoid duplication. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator, but
not the numerator, of this "Consolidated Fixed Charge Coverage Ratio,"
(a) interest on outstanding indebtedness, determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined of the Transaction Date, shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on the indebtedness in
effect on the Transaction Date;
(b) if interest on any indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
(c) notwithstanding clause (a) above, interest on indebtedness
determined on a fluctuating basis, to the extent the interest is covered by
Interest Rate Agreements relating to the indebtedness, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation
of those agreements.
"Consolidated Fixed Charges" shall mean, with respect to any person for any
period, the sum, without duplication, of
(1) Consolidated Interest Expense, before amortization or write-off of
debt issuance costs associated with the offering of the notes on the
original issue date of the notes, plus
(2) to the extent not included in Consolidated Interest Expense, the
product of
(x) the amount of all dividend payments on any series of capital
stock of that person, other than dividends paid in Qualified Capital
Stock, paid in cash during such period, times
(y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal,
state and local tax rate of that person, expressed as a decimal.
"Consolidated Interest Expense" shall mean, with respect to any person for
any period, the sum of, without duplication:
(1) the aggregate of the interest expense of that person and its
Restricted Subsidiaries for the period determined on a consolidated basis
in accordance with GAAP, including without limitation,
(a) any amortization of debt discount and amortization or write-off
of deferred financing costs,
(b) the net costs under Interest Rate Agreements,
(c) all capitalized interest and
(d) the interest portion of any deferred payment obligation; and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by that person and its
Restricted Subsidiaries during the period as determined on a consolidated
basis in accordance with GAAP.
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"Consolidated Net Income" shall mean, for any period for any person, the
net income or loss of the person and its Restricted Subsidiaries on a
consolidated basis for the period taken as a single accounting period determined
in conformity with GAAP; provided, that there shall be excluded
(1) the income or loss of any person, other than a Restricted
Subsidiary of the person, in which any other person, other than such first
person or any of its Restricted Subsidiaries, has a joint interest, except
to the extent of the amount of dividends or other distributions actually
paid to that person or any of its Restricted Subsidiaries by such second
person during the period,
(2) the income or loss of any other person accrued prior to the date
it becomes a Restricted Subsidiary of such first person or is merged into
or consolidated with such first person or any of its Restricted
Subsidiaries or whose assets are acquired by such first person or any of
its Restricted Subsidiaries,
(3) the income of any subsidiary of such first person to the extent
that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary,
(4) any after-tax gains or losses attributable to Asset Sales, without
regard to the $1.0 million limitation set forth in the definition of Asset
Sales, and
(5) to the extent not included in clauses (1) through (4) above, any
net non-cash extraordinary gains or net noncash extraordinary losses.
For purposes of computing Consolidated Net Income there shall be excluded
from the computation of Consolidated Net Income, without duplication and to the
extent not otherwise excluded from the computation of Consolidated Net Income,
(a) non-recurring fees and expenses incurred in connection with the
consummation of the LISN acquisition in an aggregate amount not to exceed
$16.0 million and
(b) non-recurring fees and expenses incurred in connection with the
issuance of the notes on the original issue date of the notes in an
aggregate amount not to exceed $7.0 million.
For purposes of computing Consolidated Net Income, but only to the extent
used in determining the Consolidated Fixed Charge Coverage Ratio, there shall be
excluded from the computation, without duplication and to the extent not
otherwise excluded from the computation, non-recurring fees and expenses
incurred in connection with the consummation of any Asset Acquisition in an
aggregate amount not to exceed 5% of the total consideration for the Asset
Acquisition.
"Contingent Obligations" means as to any person, any obligation of that
person guaranteeing or intending to guarantee any indebtedness, leases,
dividends or other obligations ("primary obligations") of any other person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the person, whether or not contingent,
(1) to purchase any primary obligation or any property constituting
direct or indirect security for the primary obligation,
(2) to advance or supply funds (a) for the purchase or payment of any
primary obligation or (b) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor,
(3) to purchase property, securities or services primarily for the
purpose of assuring the owner of any primary obligation of the ability of
the primary obligor to make payment of the primary obligation or
(4) otherwise to assure or hold harmless the owner of the primary
obligation against loss in respect of the primary obligation;
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provided, that the term "Contingent Obligation" shall not include endorsements
of instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which the
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect of the primary obligation, assuming
the person is required to perform under the primary obligation, as determined by
the person in good faith.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement designed to protect NATG or any of its Restricted
Subsidiaries against fluctuations in currency values.
"default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an event of default.
"Designated Senior Debt" means (1) indebtedness under or in respect of the
senior secured credit agreement and (2) any other indebtedness constituting both
senior debt and Guarantor Senior Debt which, at the time of determination, has
an aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing senior debt as "Designated Senior Debt"
by the issuers.
"Disqualified Capital Stock" means that portion of any capital stock which,
by its terms, or by the terms of any security into which it is convertible or
for which it is exchangeable, or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder of the capital stock on or prior
to the maturity date. Notwithstanding the preceding sentence, any capital stock
that would constitute Disqualified Capital Stock solely because the holder of
the capital stock has the right to require the repurchase of the capital stock
upon the occurrence of a change of control or an asset sale, each such term
being defined in substantially the same manner as the corresponding terms in the
indenture, shall not constitute Disqualified Capital Stock if the terms of the
capital stock provide that the capital stock may not be repurchased or redeemed
pursuant to those provisions unless the issuers have first complied with their
obligations described under the captions "-- Change of Control" and "Certain
Covenants -- Limitation on Asset Sales" and that the repurchase or redemption
complies with the covenant under the caption "-- Certain Covenants -- Limitation
on Restricted Payments."
"Documents" has the meaning ascribed to such term in the senior secured
credit agreement as in effect on the original issue date of the notes.
"Equity Offering" means a public or private offering of Qualified Capital
Stock of Parent or an issuer, other than public offerings with respect to
Parent's or an issuer's common stock on Form S-8 or any replacement form for
such Form S-8.
"Existing Debt" means the indebtedness of NATG and its Restricted
Subsidiaries that was incurred prior to, and remained outstanding after, the
issuance of the notes on the original issue date of the notes and the
application of the proceeds from the issuance of the notes; provided, that
Existing Debt shall not include any obligations in respect of the senior secured
credit agreement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in any other statements by any other
entity as may be approved by a significant segment of the accounting profession
of the United States, as in effect from time to time.
"guarantees" means the guarantees of the notes by the guarantors.
"guarantor" means
(1) Parent,
(2) each Restricted Subsidiary of Parent other than the issuers and
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(3) each Restricted Subsidiary of Parent that in the future executes a
supplemental indenture in which such Restricted Subsidiary agrees to be
bound by the terms of the indenture as a guarantor;
provided that any person constituting a guarantor as described above shall cease
to constitute a guarantor when its respective guarantee is released in
accordance with the terms of the indenture.
"Guarantor Senior Debt" means with respect to any guarantor, the principal
of, premium, if any, interest, including any interest accruing subsequent to the
filing of a petition of bankruptcy, whether or not the interest is an allowed
claim under applicable law, fees, expenses, indemnities and other amounts and
obligations incurred or owing on any indebtedness of a guarantor, whether
outstanding on the original issue date of the note or thereafter created,
incurred, assumed or guaranteed, unless, in the case of any particular
indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that the indebtedness shall not
be senior in right of payment to the guarantee of the guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Debt" shall also
include the principal of, premium, if any, interest on, including any interest
accruing subsequent to the filing of a petition of bankruptcy whether or not the
interest is an allowed claim under applicable law, on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature under the
senior secured credit agreement, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities and (y) all IRA Obligations, in each case whether
outstanding on the original issue date of the notes or later incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include
(1) any indebtedness of a guarantor to a subsidiary of the guarantor,
(2) indebtedness to, or guaranteed on behalf of, any director,
officer, employee of either a guarantor or any subsidiary of a guarantor,
including, without limitation, amounts owed for compensation,
(3) indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services,
(4) indebtedness represented by Disqualified Capital Stock,
(5) any liability for federal, state, local or other taxes owed or
owing a guarantor,
(6) indebtedness to the extent incurred in violation of the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness,"
(7) indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to the guarantor, and
(8) any indebtedness which is, by its express terms, subordinated in
right of payment to any other indebtedness of a guarantor including,
without limitation, in the case of Parent, indebtedness evidenced by the
junior subordinated notes.
"Hedging Obligations" of any person means any obligation of such person
under
(1) an Interest Rate Agreement,
(2) a Currency Agreement, and
(3) any Synthetic Arrangement.
"incur" means, with respect to any indebtedness or other obligation of any
person, to create, issue, incur, by conversion, exchange or otherwise, assume,
including by the acquisition of assets subject to indebtedness, guarantee or
otherwise become liable in respect of the indebtedness or other obligation or
the recording, as required pursuant to GAAP or otherwise, of any indebtedness or
other obligation on the balance sheet of person; provided, that (x) any
amendment, modification or waiver of any document
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pursuant to which indebtedness was previously incurred shall only be deemed to
be an incurrence of indebtedness if and to the extent the amendment,
modification or waiver (1) increases the principal of, or interest rate or
premium payable on, the indebtedness or (2) changes to an earlier date the
stated maturity, or the date of any scheduled or required principal payment on,
the indebtedness or the time or circumstances under which the indebtedness shall
be redeemed and (y) any indebtedness of a person existing at the time the person
becomes, after the original issue date of the notes, a Restricted subsidiary of
NATG, whether by merger, consolidation, acquisition or otherwise, shall be
deemed to be incurred by the Restricted Subsidiary at the time it becomes a
Restricted Subsidiary of NATG.
"indebtedness" of any person shall mean, without duplication,
(1) all indebtedness of the person for borrowed money,
(2) the deferred purchase price of assets or services, including any
earn-out obligations in connection with any acquisition, which in
accordance with GAAP would be shown on the liability side of the balance
sheet of that person,
(3) the face amount of all letters of credit issued for the account of
that person and, without duplication, all unreimbursed drafts drawn
thereunder,
(4) all indebtedness of a second person secured by any lien on any
property owned by such first person, excluding advances or prepayments made
to any Borrower or any of their subsidiaries pursuant to turnkey agreements
entered into in the ordinary course of business with TCI or any of its
affiliates, whether or not the indebtedness has been assumed,
(5) all Capitalized Lease Obligations of that person,
(6) all obligations of that person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations,
(7) all Hedging Obligations of that person, and
(8) all Contingent Obligations of that person, other than Contingent
Obligations arising from the guarantee by that person of the obligations of
Parent and/or its subsidiaries to the extent the guaranteed obligations do
not constitute indebtedness and are otherwise permitted under the
indenture;
provided, that indebtedness shall not include trade payables and accrued
expenses, in each case arising in the ordinary course of business.
"Independent Financial Advisor" means an accounting, appraisal, valuation
or investment banking firm (1) that does not, and whose directors, officers and
employees or affiliates do not, have a direct or indirect financial interest in
Parent or any of its subsidiaries and (2) which, in the judgment of the board of
directors of Parent, is otherwise independent and qualified to perform the task
for which it is to be engaged.
"Interest Payment Date" means the stated maturity of an installment of
interest on the notes.
"Interest Rate Agreement" means any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect Parent or any Restricted Subsidiary
of Parent against fluctuations in interest rates.
"Investment" by any person in any other person means, with respect to any
person, any direct or indirect loan or other extension of credit, including,
without limitation, a guarantee, or capital contribution to, by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others, or any purchase, acquisition by the
person of any capital stock, bonds, notes, debentures or other securities or
evidences of indebtedness issued by, any other person. "Investment" shall
exclude extensions of trade credit by the issuers and their Restricted
Subsidiaries on commercially reasonable terms in accordance with their normal
trade practices and advances to employees for moving,
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entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business. For the purposes of the covenant described
under "-- Certain Covenants -- Limitation on Restricted Payments":
(1) NATG shall be deemed to have made an "Investment" equal to the
fair market value of the net assets of any Restricted Subsidiary of NATG at
the time that the Restricted Subsidiary is designated an Unrestricted
Subsidiary and the aggregate amount of Investments made subsequent to the
original issue date of the notes shall exclude, to the extent the
designation as an Unrestricted Subsidiary was included as a Restricted
Payment, the fair market value of the net assets of any Unrestricted
Subsidiary at the time that the Unrestricted Subsidiary is designated a
Restricted Subsidiary, not to exceed the amount of the Investment deemed
made at the date of designation of the subsidiary as an Unrestricted
Subsidiary; and
(2) the amount of any Investment shall be the original cost of the
Investment plus the cost of all additional Investments by NATG or any of
its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, writedowns or write-offs with respect to
the Investment, reduced by the payment of dividends or distributions,
including tax sharing payments, in connection with the Investment or any
other amounts received in respect of the Investment; provided that no
payment of dividends or distributions or receipt of any amounts in respect
of the Investment shall reduce the amount of any Investment if the payment
of dividends or distributions or receipt of any amounts would be included
in Consolidated Net Income. If NATG or any Restricted Subsidiary of NATG
sells or otherwise disposes of any capital stock of any Restricted
Subsidiary of NATG such that, after giving effect to the sale or
disposition, NATG no longer owns, directly or indirectly, more than 50% of
the outstanding common stock of the Restricted Subsidiary, NATG shall be
deemed to have made an Investment on the date of the sale or disposition
equal to the fair market value of the capital stock of the Restricted
Subsidiary not sold or disposed of.
"Investor Rights Agreement" means the investor rights agreement, dated
December 15, 1999, between Parent and its stockholders entered into in
connection with the LISN acquisition, as in effect on the original issue date of
the notes.
"IRA Obligation" means the obligations of a person under an Interest Rate
Agreement.
"junior subordinated notes" means, collectively, those certain unsecured
and unguaranteed 12% subordinated promissory notes dated December 15, 1999
outstanding on the original issue date of the notes and additional junior
subordinated promissory notes issued after the original issue date of the notes
with substantially similar terms.
"lien" means any lien, mortgage, pledge, assignment, security interest,
charge, hypothecation, preference, priority, privilege, lease or encumbrance of
any kind, including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest,
and any option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"maturity date" means February 1, 2010, the final maturity date of the
notes.
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or cash equivalents including payments in respect of deferred
payment obligations when received in the form of cash or cash equivalents, other
than the portion of any such deferred payment constituting interest, received by
Parent or any of its Restricted Subsidiaries from the Asset Sale net of
(1) reasonable out-of-pocket expenses and fees relating to the Asset
Sale, including, without limitation, legal, accounting and investment
banking fees and sales commissions,
(2) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements,
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(3) any portion of any of the proceeds which Parent determines in good
faith should be reserved for post-closing adjustments, to the extent Parent
delivers to the trustee an officers' certificate signed by the chief
financial officer of Parent as to this determination, provided that on the
day all post-closing adjustments have been determined, which shall not be
later than six months following the date of the respective Asset Sale, the
amount, if any, by which the reserved amount in respect of the sale or
disposition exceeds the actual post-closing adjustments payable by Parent
or any of its Restricted Subsidiaries shall constitute Net Cash Proceeds
received by Parent or the Restricted Subsidiaries on that date, and
(4) repayment of indebtedness that is required to be repaid in
connection with the Asset Sale.
"Non-Recourse Debt" means indebtedness:
(1) as to which neither NATG nor any of its Restricted Subsidiaries,
other than a Receivables Entity, (a) provides credit support of any kind,
including any undertaking, agreement or instrument that would constitute
indebtedness, (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender; and
(2) as to which the lenders thereof have been notified in writing that
they will not have any recourse to the stock or assets of NATG or any of
its Restricted Subsidiaries, other than a Receivables Entity.
"noteholder" or "holder" means the person in whose name a note is
registered on the registrar's books.
"officer" means, with respect to any person, the chairman of the board, the
chief executive officer, the president, any vice president, the chief financial
officer, the controller, the treasurer or the secretary of such person.
"officers' certificate" of a person means a certificate signed by two
officers of that person.
"opinion of counsel" means a written opinion from legal counsel which
opinion and counsel are reasonably acceptable to the trustee.
"parent preferred stock" means the series C participating preferred stock
of Parent.
"Permitted Business" means the business of Parent and its Restricted
Subsidiaries as of the original issue date of the notes and any business
reasonably related, complementary or ancillary to that business or a reasonable
expansion of that business.
"Permitted Group" means any group of investors deemed to be a person, as
defined in Section 13(d)(3) of the Exchange Act, by virtue of the Investor
Rights Agreement.
"Permitted Indebtedness" means
(1) obligations under this indenture, the notes and the guarantees,
(2) indebtedness incurred pursuant to the senior secured credit
agreement in an aggregate principal amount at any time outstanding not to
exceed $410.0 million, less the amount of all permanent prepayments of
Senior Term Loans actually made and permanent reductions of commitments
relating to Revolving Loans or Acquisition Loans and the termination of
unused Rollover Letters of Credit availability,
(3) Existing Debt,
(4) IRA Obligations covering indebtedness otherwise permitted by the
indenture to the extent the notional principal amount of the IRA
Obligations does not exceed the principal amount of the indebtedness to
which the IRA Obligations relate,
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(5) the incurrence by NATG or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
the value of foreign currencies or the cost of commodities purchased or
received by NATG or any of its Restricted Subsidiaries,
(6) Permitted Refinancing Indebtedness,
(7) indebtedness of NATG or a Restricted Subsidiary of NATG to NATG or
a Restricted Subsidiary of NATG, provided, that (y) if as of any date any
person other than NATG or a Restricted Subsidiary of NATG holds any
indebtedness or holds a lien in respect of any indebtedness, other than a
lien in connection with the senior secured credit agreement, that date
shall be deemed the incurrence of indebtedness not constituting Permitted
Indebtedness by the issuer of that indebtedness and (z) if an issuer or
subsidiary guarantor is the obligor on that indebtedness, that indebtedness
shall constitute subordinated indebtedness,
(8) indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business,
provided that the indebtedness must be extinguished within five business
days of incurrence,
(9) obligations in respect of workers' compensation claims,
self-insurance obligations, performance, surety and other similar bonds and
completion guarantees provided by NATG or a Restricted Subsidiary of NATG
in the ordinary course of business in accordance with customary industry
practice, in amount and for purposes customary in the industry,
(10) indebtedness arising from agreements of NATG or Restricted
Subsidiary of NATG providing for indemnification, adjustment of purchase
price, earn out or other similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets, or a
Restricted Subsidiary of NATG, other than guarantees of indebtedness
incurred by any person acquiring all or any portion of the business, assets
or Restricted Subsidiary for the purpose of financing the acquisition,
provided that the maximum assumable liability in respect of all of this
indebtedness shall at no time exceed the gross proceeds actually received
by an issuer or subsidiary guarantor in connection with the disposition,
(11) Capitalized Lease Obligations, mortgage financings and Purchase
Money Obligations of an issuer or subsidiary guarantor incurred for the
purpose of financing all or a part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of an issuer or subsidiary guarantor, not to exceed $20.0 million
at any one time outstanding,
(12) guarantees by an issuer or subsidiary guarantor of indebtedness
of an issuer or subsidiary guarantor that was incurred in accordance with
the terms of the indenture,
(13) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any indebtedness in the
form of additional indebtedness with the same terms, provided, in each
case, that the amount of the foregoing is included in Consolidated Fixed
Charges of NATG as accrued,
(14) the incurrence by a Receivables Entity of indebtedness in a
Qualified Receivables Transaction that is Non-Recourse Debt, except for
Standard Securitization Undertakings,
(15) customary earn-out obligations owing in connection with any Asset
Acquisition,
(16) unsecured indebtedness of Restricted Subsidiaries of NATG not
organized under the laws of the United States or any state of the United
States and consisting of working capital lines of credit in an aggregate
amount not to exceed the dollar equivalent of $5.0 million at any time
outstanding,
(17) the incurrence of indebtedness arising from the endorsement of
negotiable instruments in the ordinary course of business, and
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(18) additional unsecured indebtedness of NATG or its Restricted
Subsidiaries, other than Contingent Obligations NATG or its Restricted
Subsidiaries with respect to junior subordinated notes, in an aggregate
principal amount not to exceed $5.0 million at any one time outstanding.
"Permitted Investments" means
(1) Investments by NATG or any Restricted Subsidiary of NATG, other
than a Receivables Entity, in a person if as a result of the Investment
that Person transfers or conveys all or substantially all of its assets to
NATG or any Restricted Subsidiary of NATG, other than a Receivables Entity,
provided, that the person's primary business is a Permitted Business,
(2) Investments by NATG or any Restricted Subsidiary of NATG, other
than a Receivables Entity, in NATG or any Restricted Subsidiary of NATG,
other than a Receivables Entity, or in any person if, as a result of the
Investment, that person shall become, whether by consolidation, merger or
otherwise, a Restricted Subsidiary of NATG, provided, that the person's
primary business is a Permitted Business,
(3) Investments by NATG or its Restricted Subsidiaries existing on the
original issue date of the notes, which shall exclude any Investment
described in clause (9) below,
(4) Investments in cash and cash equivalents;
(5) loans and advances to employees and officers of Parent and its
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1.0 million at any one time
outstanding,
(6) Interest Rate Agreements entered into in the ordinary course of
NATG's or its Restricted Subsidiaries' businesses and otherwise in
compliance with the indenture,
(7) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of the trade creditors or customers,
(8) Investments made by NATG or its subsidiaries as a result of
consideration received in connection with an Asset Sale made in compliance
with the covenant described under "-- Certain Covenants -- Limitation on
Asset Sales",
(9) Investments in women/minority owned business enterprises in an
aggregate amount not to exceed $5.0 million at any time,
(10) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases,
(11) Investments by NATG or any Guarantor in a Receivables Subsidiary
or any Investment by a Receivables Subsidiary in any other person, in each
case in connection with a Qualified Receivables Transaction, provided, that
the Investment in a Receivables Entity is in the form of a Purchase Money
Note or an equity interest,
(12) indebtedness permitted to be incurred under the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness", and
(13) additional Investments not to exceed $5.0 million at any time.
"Permitted Liens" means
(1) liens for taxes or claims either (a) not delinquent or (b)
contested in good faith by appropriate proceedings and as to which Parent
or a Subsidiary shall have set aside on its books reserves as may be
required by GAAP,
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(2) statutory liens of landlords and liens of carriers, warehousemen,
mechanics and materialmen and other liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent or being contested
in good faith by appropriate proceedings, provided that (x) any proceedings
commenced for the enforcement of the liens shall have been stayed or
suspended within 30 days of the commencement of the proceedings and (y) a
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made,
(3) liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other
similar obligations, exclusive of obligations for the payment of borrowed
money,
(4) any attachment or judgment lien not constituting an event of
default under clause (5) under the definition of "Events of Default",
(5) Permitted Real Property Encumbrances, easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of Parent or any of its
Restricted Subsidiaries,
(6) any interest or title of a lessor under any Capitalized Lease
Obligation or mortgage permitted to be incurred under clause (11) of the
definition of Permitted Indebtedness, provided that the liens do not extend
to any property or assets which is not leased property subject to the
Capitalized Lease Obligation or mortgage or other property subject to a
permitted lien held by the lien holder of the Capitalized Lease Obligation,
(7) liens to finance property or assets, including the cost of
construction, of any Restricted Subsidiary of NATG acquired in the ordinary
course of business provided that (A) the related Purchase Money Obligations
shall be permitted to be incurred under the covenant described under
"-- Certain Covenants -- Limitation on Incurrence of Additional
Indebtedness," and shall not exceed the cost of such property or assets,
including the cost of construction, and shall not be secured by any
property or assets of NATG or any Restricted Subsidiary other than the
property and assets so acquired and (B) the lien securing such indebtedness
shall be created within 90 days of the acquisition or construction,
(8) liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of NATG or any
of its Restricted Subsidiaries, including rights of offset and set-off,
(9) liens arising out of consignment or similar arrangements for the
sale of goods in the ordinary course of business,
(10) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of Parent and its Restricted
Subsidiaries,
(11) liens arising from filing Uniform Commercial Code financing
statements regarding leases,
(12) liens in favor of TCI or any of its affiliates securing advances
made to NATG or any of its Restricted Subsidiaries pursuant to turnkey
agreements entered into in the ordinary course of business with TCI or any
of its affiliates, provided that the liens shall only attach to property,
including proceeds of the property, which is purchased with the applicable
advance and shall automatically terminate when the applicable advance has
been fully paid,
(13) liens attaching solely to cash earnest money deposits made by
NATG or any of its Restricted Subsidiaries in connection with any letter of
intent or purchase agreement entered into by it in connection with an Asset
Acquisition,
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(14) liens deemed to exist in connection with repurchase agreements
and other similar Permitted Investments,
(15) customary rights of set off, revocation, refund or chargeback
under deposit agreements or under the UCC of banks or other financial
institutions where any issuer maintains deposits in the ordinary course of
business permitted by the indenture,
(16) liens on accounts receivable for which attempts at collection
have been undertaken by a third party authorized by the person owing the
accounts receivable,
(17) liens arising from the granting of a license by NATG or any
Restricted Subsidiary of NATG to any person in the ordinary course of
business,
(18) liens arising by operation of law on insurance policies and the
proceeds of insurance policies to secure premiums under the insurance
policies,
(19) liens relating solely to assets to be sold in any Asset Sale
permitted in the indenture and arising pursuant to the sale agreements
governing the Asset Sale,
(20) liens on property of a person existing at the time the person is
acquired by, merged with or into, or consolidated with NATG or any
Restricted Subsidiary of NATG, provided that the liens were in existence
prior to the contemplation of the acquisition, merger or consolidation and
do not extend to any assets other than those of the person acquiring merged
into or consolidated with NATG or the Restricted Subsidiary,
(21) liens existing on the original issue date of the notes,
(22) liens on assets transferred to a Receivables Entity or on assets
of a Receivables Entity, in either case incurred in connection with a
Qualified Receivables Transaction, and
(23) liens incurred in the ordinary course of business of any
Restricted Subsidiary of NATG with respect to obligations that do not
exceed $3.0 million in the aggregate at any one time outstanding and that
(a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit, other than trade credit in the ordinary
course of business, and (b) do not in the aggregate materially detract from
the value of the property or materially impair the use of the property in
the operation of business by the Restricted Subsidiary.
"Permitted Real Property Encumbrances" means
(1) those liens, encumbrances and other matters affecting title to any
real property securing senior debt to the extent found reasonably
acceptable by the agent for the senior debt,
(2) easements, encroachments, covenants, rights of way, minor defects,
irregularities, encumbrances on title or similar restrictions on any real
property securing senior debt which do not, in the reasonable opinion of
the agents for that senior debt, materially impair the real property for
the purposes for which it is held by the owner or lessor of the real
property or the lien on the real property created in favor of that senior
debt, and
(3) municipal and zoning ordinances, which are not violated in any
material respect by the existing improvements and the present use of any
real property securing senior debt.
"Permitted Refinancing Indebtedness" means any refinancing by NATG or any
Restricted Subsidiary of NATG of indebtedness incurred in accordance with the
covenant described under the caption "-- Certain Covenants -- Limitation on
Incurrence of Additional Indebtedness" (other than pursuant to clauses (2), (4),
(5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), or (18)
of the definition of Permitted Indebtedness), in each case that does not:
(A) result in an increase in the aggregate principal amount of
indebtedness of the person as of the date of the proposed refinancing, plus
the amount of any premium required to be paid under the
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terms of the instrument governing the indebtedness and plus the amount of
reasonable expenses incurred by the person in connections with the
refinancing; or
(B) create indebtedness with: (1) a weighted average life to maturity
that is less than the weighted average life to maturity of the indebtedness
being refinanced or (2) a final maturity earlier than the final maturity of
the indebtedness being refinanced;
provided, that if (x) the indebtedness being refinanced ranked equally with
the notes or the guarantees, the refinancing indebtedness shall rank either
equally with or junior to the notes or the guarantees, as applicable, and (y)
the indebtedness being refinanced constituted subordinated indebtedness, the
refinancing indebtedness shall be subordinated to the notes and the guarantees,
as applicable, at least to the same extent and in the same manner as the
indebtedness being refinanced.
"person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality any government or political subdivision.
"principal" of any indebtedness, including the notes, means the principal
amount of the indebtedness plus the premium, if any, on the indebtedness;
provided, that in the case of indebtedness issued with original issue discount,
"principal" shall refer to the accreted value of the indebtedness.
"Pro Forma Adjustments" means, with respect to a particular Asset
Acquisition, adjustments to eliminate the effect of any non-recurring expenses
or income from the Asset Acquisition with respect to NATG and its Restricted
Subsidiaries or any acquired person or assets on Consolidated EBITDA, determined
in good faith by the chief financial officer of Parent and approved by the board
of directors of Parent, as set forth in an officers' certificate delivered to
the trustee setting forth in reasonable detail the basis for the adjustments.
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from NATG or any of its
Restricted Subsidiaries to a Receivables Entity in connection with a Qualified
Receivables Transaction, which note shall be repaid from cash available to the
Receivables Entity, other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest,
principal and other amounts owing to the investors and amounts paid in
connection with the purchase of newly generated receivables.
"Purchase Money Obligations" of any person shall mean any obligations of
that person or any of its Restricted Subsidiaries to any seller or any other
person incurred or assumed in connection with the purchase of real or personal
property to be used in the business of that person or any of its Restricted
Subsidiaries within 180 days of the purchase.
"Put/Call Agreement" means the Orius Call Agreements, Orius Put Agreements,
HIG Call Agreements and HIG Put Agreements, as each of these terms is defined in
the Reorganization Agreement and as each may be amended, restated, supplemented
or otherwise modified from time to time.
"Qualified Capital Stock" means any capital stock that is not Disqualified
Capital Stock or that is not indebtedness that is convertible or exchangeable
into capital stock.
"Qualified IPO" means a bona fide underwritten sale to the public of
Parent's common stock pursuant to a registration statement, other than on Form
S-8 or any other form relating to securities issuable under any benefit plan of
Parent or any of its Restricted Subsidiaries, as the case may be, that is
declared effective by the SEC and results in gross cash proceeds, exclusive of
underwriter's discounts and commissions and other expenses, of at least $50.0
million.
"Qualified Receivables Transaction" means any transaction or series of
transactions pursuant to which NATG or any of its Restricted Subsidiaries may
sell, convey or otherwise transfer to (a) a Receivables Entity, in the case of a
transfer by NATG or any of its Restricted Subsidiaries, and (b) any other person
in case of a transfer by a Receivables Entity, or may grant a security interest
in, any accounts receivable,
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whether now existing or arising or acquired in the future, of NATG or any of its
Restricted Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing the accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect to the
accounts receivable and equipment, proceeds of the accounts receivable and other
assets, including contract rights, which are customarily transferred or in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable, all of the
foregoing for the purpose of providing working capital financing on terms that
are more favorable to NATG and its Restricted Subsidiary than would otherwise be
available at that time.
"Receivables Entity" means a wholly owned subsidiary of NATG, or another
person in which NATG or any Restricted Subsidiary of NATG makes an Investment
and to which NATG or any Restricted Subsidiary of NATG transfers accounts
receivable and related assets, that engages in no activities other than in
connection with the financing of accounts receivable and that is designated by
the board of directors of NATG, as provided below, as a Receivables Entity (a)
no portion of the indebtedness or any other obligations, contingent or
otherwise, of which (i) is guaranteed by NATG or any of its Restricted
Subsidiaries, other than such Receivables Entity, excluding guarantees of
obligations, other than the principal of, and interest on, indebtedness,
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates NATG or any of its Restricted Subsidiaries, other than the Receivables
Entity in any way other than pursuant to Standard Securitization Undertakings or
(iii) subjects any property or asset of NATG or any of its Restricted
Subsidiaries, other than the Receivables Entity, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings, (b) with which neither NATG nor any of its
Restricted Subsidiaries, other than the Receivables Entity, has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to NATG or such Restricted Subsidiary than those that might be
obtained at the time from persons that are not affiliates of Parent, other than
fees payable in the ordinary course of business in connection with servicing
receivables of such entity, and (c) to which neither NATG nor any Restricted
Subsidiary of NATG, other than such Receivables Entity, has any obligation to
maintain or preserve the entity's financial condition or cause the entity to
achieve certain levels of operating results. Any designation by the board of
directors shall be evidenced to the trustee by filing with the trustee a
certified copy of the resolution of the board of directors giving effect to the
designation and an officers' certificate certifying that the designation
complied with the foregoing conditions.
"Record Date" means the applicable Record Date specified in the notes;
provided that if any specified date is not a business day, the Record Date shall
be the first day immediately preceding the specified day that is a business day.
"Redemption Date," when used with respect to any note to be redeemed, means
the date fixed for the redemption pursuant to the indenture and the notes.
"Redemption Price," when used with respect to any note to be redeemed,
means the price fixed for the redemption, payable in immediately available
funds, pursuant to the indenture and the notes.
"refinance" means, in respect of any security or indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or indebtedness in exchange or replacement for, such
security or indebtedness in whole or in part. "Refinanced" and "refinancing"
shall have correlative meanings.
"registrar" means the person acting as such under the indenture.
"Registration Rights Agreement" means the registration rights agreement
dated as of the original issue date of the notes among the issuers, the
guarantors and the initial purchasers.
"Reorganization Agreement" means the Agreement and Plan of Reorganization,
dated November 8, 1999, by and among LISN Holdings, Parent and Orius Merger Sub,
Inc.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks a
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representative, then the representative for the Designated Senior Debt shall at
all times be the holders of a majority in outstanding principal amount of the
Designated Senior Debt in respect of any Designated Senior Debt.
"Responsible Officer" means, when used with respect to the trustee, any
officer in the corporate trust office of the trustee including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, or any other officer of the trustee who customarily performs
functions similar to those performed by the persons who at the time hold these
offices, respectively, or to whom any corporate trust matter is referred because
of the officer's knowledge of and familiarity with the particular subject.
"Restricted Investment" means any investment other than a Permitted
Investment.
"Restricted Subsidiary" of any person means any subsidiary of that person
which at the time of determination is not an Unrestricted Subsidiary. For the
avoidance of doubt, the issuers shall be deemed to be Restricted Subsidiaries of
Parent, and Orius Capital shall be deemed to be a Restricted Subsidiary of NATG.
"Revolving Loans" means all Revolving Loans under and as defined in the
senior secured credit agreement as in effect on the original issue date of the
notes.
"Rollover Letters of Credit" means all Rollover Letters of Credit under and
as defined in the senior secured credit agreement as in effect on the original
issue date of the notes.
"S&P" means Standard & Poor's Ratings Services.
"senior debt" means the principal of, premium, if any, interest, including
any interest accruing subsequent to the filing of a petition of bankruptcy
whether or not the interest is an allowed claim under applicable law, fees and
expenses on any indebtedness of an issuer, whether outstanding on the original
issue date of the notes or later created, incurred, assumed or guaranteed,
unless, in the case of any particular indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that the indebtedness shall not be senior in right of payment to the
notes. Without limiting the generality of the foregoing, "senior debt" shall
also include the principal of, premium, if any, and interest on, including any
interest accruing subsequent to the filing of a petition of bankruptcy whether
or not the interest is an allowed claim under applicable law, and all other
amounts owing in respect of, (x) all monetary obligations of every nature under
the senior secured credit agreement, including, without limitation, obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities and (y) all IRA Obligations, in each case
whether outstanding on the original issue date of the notes or later incurred.
Notwithstanding the foregoing, "senior debt" shall not include
(1) any indebtedness of an issuer to a subsidiary of Parent,
(2) any indebtedness to, or guaranteed on behalf of, any director,
officer or employee of Parent or any of its subsidiaries, including,
without limitation, amounts owed for compensation
(3) indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services,
(4) indebtedness represented by Disqualified Capital Stock,
(5) any liability for federal, state, local or other taxes owed or
owing by an issuer,
(6) indebtedness to the extent incurred in violation of the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness,"
(7) indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to an issuer and
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(8) any indebtedness which is, by its express terms, subordinated in
right of payment to any other indebtedness of an issuer.
"Senior Loans" means all Loans under and as defined in the senior secured
credit agreement.
"senior secured credit agreement" means the credit agreement, dated as of
December 15, 1999, among NATG, LISN, LLC, the various lending institutions party
to the credit agreement and Bankers Trust Company, as agent, together with the
documents related to the credit agreement, including, without limitation, any
guaranty agreements and security documents, in each case as these agreements may
be amended, including any amendment and restatement of these agreements,
supplemented, replaced, refinanced or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring, including increasing the amount of available borrowings
under these agreements so long as the increased amount is permitted by the
covenant described under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness" or adding or deleting subsidiaries as additional
borrowers or guarantors under these agreements, all or any portion of the
indebtedness under the agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Senior Term Loan" means all term loans under and as defined in the senior
secured credit agreement as in effect on the original issue date of the notes
and shall include any Acquisition Term Loans, as defined in the senior secured
credit agreement as in effect on the original issue date of the notes to the
extent termed out and any subsequent term loans under the senior secured credit
agreement that refinance such term loans or Acquisition Term Loans, or any
subsequent term loans.
"Significant Subsidiary," with respect to any person, means any Restricted
Subsidiary of that person that satisfies the criteria for a "significant
subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the Securities
Act.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by NATG or any subsidiary of NATG that
are reasonably customary in Qualified Receivables Transactions intended to
create Non-Recourse Debt.
"Subordinated Indebtedness" means indebtedness of any issuer or guarantor
which is expressly subordinated in right of payment to the obligations of the
issuer or guarantor in respect of the indenture, the notes and the guarantees,
as applicable.
"subsidiary" means, with respect to any person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled, without regard to the occurrence of any contingency, to vote
in the election of the person or persons, whether directors, managers, trustees
or other persons performing similar functions, having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that person or one or more of the
other subsidiaries of that person or a combination thereof.
"subsidiary guarantor" means any guarantor that is also a subsidiary of
NATG.
"Synthetic Arrangement" means any derivative product that provides for the
synthetic purchase or repurchase of any indebtedness or securities, including
equity and debt securities.
"TCI" shall mean TCI Atlantic, Inc., a Colorado corporation.
"Unrestricted Subsidiary" of any person means (1) any subsidiary of such
person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the board of directors of that person in the
manner provided below and (2) any subsidiary of an Unrestricted Subsidiary.
The board of directors of a person may designate any subsidiary, including
any newly acquired or newly formed subsidiary, of that person to be an
Unrestricted Subsidiary unless the subsidiary owns any capital stock of, or owns
or holds any lien on any property of, Parent or any other Restricted Subsidiary
of
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Parent that is not a subsidiary of the subsidiary to be so designated; provided
that (x) Parent delivers a copy of the relevant board resolution to the trustee
together with an officers' certificate from Parent certifying that the
designation complies with the terms of the indenture, including the requirements
set forth in this definition and in the covenant described under "-- Certain
Covenants -- Limitation on Incurrence of Additional Indebtedness," and (y) each
subsidiary to be so designated and each of its subsidiaries has not at the time
of designation, and does not thereafter, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to any
indebtedness pursuant to which the lender has recourse to any of the assets of
Parent or any of its Restricted Subsidiaries; and, provided, further, that under
no circumstances may an issuer be designated as an Unrestricted Subsidiary.
The board of directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if (x) immediately after giving effect to the
designation, Parent would be able to incur at least $1.00 of additional
indebtedness, other than Permitted Indebtedness, in compliance with the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of Additional
Indebtedness," and (y) immediately before and immediately after giving effect to
the designation, no default or event of default shall have occurred and be
continuing. Any designation shall be evidenced to the trustee by promptly filing
with the trustee a copy of the board resolution giving effect to the designation
and an officers' certificate from Parent certifying that the designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and obligations
guaranteed by, the United States of America for the payment of which the full
faith and credit of the United States of America is pledged and which are not
callable or redeemable at the issuer of the obligation's option.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"voting securities" means any class of capital stock of a person pursuant
to which the holders of the capital stock have, at the time of determination,
the general voting power under ordinary circumstances to vote for the election
of directors, managers, trustees or general partners of the person, irrespective
of whether or not at the time any other class or classes will have or might have
voting power by reason of the happening of any contingency.
"weighted average life to maturity" means, when applied to any indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of the indebtedness into (b) the sum of the total of
the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity, or other required payment of
principal, including payment at final maturity, in respect of the indebtedness
by (ii) the number of years, calculated to the nearest one-twelfth, which will
elapse between that date and the making of the payment.
"wholly owned Restricted Subsidiary" of any person means any wholly owned
subsidiary of that person, which at the time of determination is a Restricted
Subsidiary of that person.
"Wholly Owned Subsidiary" of any person means any subsidiary of that person
of which all the outstanding voting securities, are owned by that person or any
wholly owned subsidiary of that person other than in the case of a foreign
subsidiary, directors' qualifying shares or an immaterial amount of shares
required to be owned by other persons pursuant to applicable law.
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BOOK-ENTRY; DELIVERY AND FORM
THE GLOBAL NOTES
Rule 144A Global Note. Notes that were offered and sold to QIBs pursuant to
Rule 144A were issued in the form of one or more registered notes in global
form, without interest coupons (collectively, the "Rule 144A Global Note"). The
Rule 144A Global Note was deposited on the original issue date of the notes with
DTC and was registered in the name of Cede & Co., as nominee of DTC, or are in
the custody of the trustee pursuant to the FAST Balance Certificate Agreement
between DTC and the trustee. Interests in the Rule 144A Global Note were
available for purchase only by QIBs.
Regulation S Global Notes. Notes offered and Sold in offshore transactions
to Non-U.S. Persons in reliance on Regulation S were issued in the form of one
or more registered notes in global form, without interest coupons (collectively,
the "Regulation Global Note"). The Regulation S Global Note is deposited with,
or on behalf of, a custodian for DTC in the manner described in the preceding
paragraph for credit to the respective accounts of the purchasers or to such
other accounts as they may have directed at Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System "Euroclear", or
Clearstream Banking, societe anonyme.
Investors may hold their interests in the Regulation S Global Note directly
through Euroclear or Cedel, or through organizations other than Euroclear or
Cedel that are participants in the DTC system. Euroclear and Cedel will hold the
interests in the Regulation S Global Note on behalf of their participants
through customers' securities accounts in their respective names on the books of
their respective depositaries. These depositaries, in turn, will hold the
interests in the Regulation S Global Note in customers' securities accounts in
the depositaries' names on the books of DTC.
Institutional Accredited Investor Global Note. In connection with the sale
of notes to an institutional accredited investor, beneficial interests in any of
the global notes may be exchanged for interests in a separate note in registered
form, without interest coupons (the "Institutional Accredited Investor Global
Note"), which was deposited on the original issue date of the outstanding notes
with, or on behalf of, a custodian for DTC in the manner described in the
preceding paragraphs.
Except as set forth below, the rule 144A Global Note, the Regulation S
Global Note and the Institutional Accredited Investor Global Note (collectively,
the "global notes") may be transferred, in whole and not in part, solely to
another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in the global notes may not be exchanged for notes in physical,
certificated form except in the limited circumstances described below.
All interests in the global notes, including those held through Euroclear
or Clearstream, may be subject to the procedures and requirements of DTC. Those
interests held through Euroclear or Clearstream may also be subject to the
procedures and requirements of such systems.
EXCHANGES AMONG THE GLOBAL NOTES
Exchanges of beneficial interests in one global note for interests in
another global note will be subject to the applicable rules and procedures of
DTC and its direct and indirect participants, including Clearstream and
Euroclear. Any beneficial interest in one of the global notes that is
transferred to a person who takes delivery in the form of an interest in another
global note will, upon transfer, cease to be an interest in that global note and
become an interest in the global note to which the beneficial interest is
transferred and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in
the global note to which the beneficial interest is transferred for as long as
it remains an interest in that global note.
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CERTAIN BOOK-ENTRY PROCEDURES FOR THE GLOBAL NOTES
The descriptions of the operations and procedures of DTC, Euroclear and
Clearstream set forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
we nor the initial purchasers takes any responsibility for these operations or
procedures, and investors are urged to contact the relevant system or its
participants directly to discuss these matters.
DTC has advised us that it is (1) a limited purpose trust company organized
under the laws of the State of New York, (2) a "banking organization" within the
meaning of the New York Banking Law, (3) a member of the Federal Reserve System,
(4) a "clearing corporation" within the meaning of the Uniform Commercial Code,
as amended and (5) a "clearing agency" registered pursuant to Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitates the clearance and settlement of securities transactions between
participants through electronic book-entry changes to the accounts of its
participants, thereby eliminating the need for physical transfer and delivery of
certificates. DTC's participants include securities brokers and dealers,
including the initial purchasers, banks and trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies, referred to as "indirect participants", that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. Investors who are not participants may beneficially own securities
held by or on behalf of DTC only through participants or indirect participants.
Pursuant to procedures established by DTC (1) upon deposit of each global
note, DTC credited the accounts of participants designated by the initial
purchasers with an interest in the global note and (2) ownership of the notes is
shown on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC, with respect to the interests of participants, and
the records of participants and the indirect participants, with respect to the
interests of persons other than participants.
The laws of some jurisdictions may require that some types purchasers of
securities take physical delivery of the securities in definitive form.
Accordingly, the ability to transfer interests in the notes represented by a
global note to these persons may be limited. In addition, because DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in notes represented by a global note to pledge or transfer the interest to
persons or entities that do not participate in DTC's system, or to otherwise
take actions in respect of the interest, may be affected by the lack of a
physical definitive security in respect of the interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
or such nominee, as the case may be, will be considered the sole owner or holder
of the notes represented by the global note for all purposes under the
indenture. Except as provided below, owners of beneficial interests in a global
note will not be entitled to have notes represented by the global note
registered in their names, will not receive or be entitled to receive physical
delivery of certificated notes, and will not be considered the owners or holders
thereof under the indenture for any purpose, including with respect to the
giving of any direction, instruction or approval to the trustee under the
indenture. Accordingly, each holder owning a beneficial interest in a global
note must rely on the procedures of DTC and, if the holder is not a participant
or an indirect participant, on the procedures of the participant through which
the holder owns its interest, to exercise any rights of a holder of notes under
the indenture or a global note. We understand that under existing industry
practice, in the event that we request any action of holders of notes, or a
holder that is an owner of a beneficial interest in a global note desires to
take any action that DTC, as the holder of such global note, is entitled to
take, DTC would authorize the participants to take the action and the
participants would authorize holders owning through the participants to take the
action or would otherwise act upon the instruction of the holders. Neither we
nor the trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of notes by DTC, or for
maintaining, supervising or reviewing any records of DTC relating to the notes.
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Payments with respect to the principal of, and premium, if any, liquidated
damages, if any, and interest on, any notes represented by a global note
registered in the name of DTC or its nominee on the applicable record date will
be payable by the trustee to or at the direction of DTC or its nominee in its
capacity as the registered holder of the global note representing the notes
under the indenture. Under the terms of the indenture, the issuers and the
trustee may treat the persons in whose names the notes, including the global
notes, are registered as the owners of the notes for the purpose of receiving
payment on the notes and for any and all other purposes whatsoever. Accordingly,
neither we nor the trustee has or will have any responsibility or liability for
the payment of these amounts to owners of beneficial interests in a global note,
including principal, premium, if any, liquidated damages, if any, and interest.
Payments by the participants and the indirect participants to the owners of
beneficial interests in a global note will be governed by standing instructions
and customary industry practice and will be the responsibility of the
participants or the indirect participants and DTC.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Clearstream will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
notes, cross-market transfers between the participants in DTC, on the one hand,
and Euroclear or Clearstream participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of the system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global notes in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global note from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day, which must be a business day for Euroclear and
Clearstream, immediately following the settlement date of DTC. Cash received in
Euroclear or Clearstream as a result of sales of interest in a global note by or
through a Euroclear or Clearstream participant to a participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or Clearstream cash account only as of the business day for
Euroclear or Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the global notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
CERTIFICATED NOTES
If (1) we notify the trustee in writing that DTC is no longer willing or
able to act as a depositary or DTC ceases to be registered as a clearing agency
under the Exchange Act and a successor depositary is not appointed within 90
days of this notice or cessation, (2) we, at our option, notify the trustee in
writing that they elect to cause the issuance of notes in definitive form under
the indenture or (3) upon the occurrence and continuation of an event of default
under the indenture if DTC so requests, then, upon surrender by DTC of the
global notes, certificated notes will be issued to each person that DTC
identifies as the beneficial owner of the notes represented by the global notes.
Upon any such issuance, the trustee is
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required to register the certificated notes in the name of the person or persons
or the nominee of any of these persons and cause the same to be delivered to
these persons.
Neither we nor the trustee shall be liable for any delay by DTC or any
participant or indirect participant in identifying the beneficial owners of the
related notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes, including with
respect to the registration and delivery, and the respective principal amounts,
of the notes to be issued.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax consequences
of ownership of the notes. This discussion is a general summary only and does
not address all tax aspects of ownership of the notes that may be relevant to a
prospective investor's particular circumstances. This discussion deals only with
notes held as capital assets and does not deal with the consequences to special
classes of holders of the notes, such as dealers in securities or currencies,
life insurance companies, tax exempt entities, financial institutions, persons
with a functional currency other than the U.S. dollar, U.S. expatriates or
investors in pass-through entities such as partnerships. It does not deal with
the effects of any arrangement entered into by a holder of the notes that
partially or completely hedges the notes, or otherwise holds the notes as part
of a synthetic security or other integrated investment. In general, this
discussion assumes that a holder acquires notes at original issue. The
discussion is based upon the Internal Revenue Code of 1986, as amended, and the
related regulations, rulings, and judicial decisions as of the date of this
prospectus, any of which may be repealed or modified in a manner resulting in
federal income tax consequences that differ from those described below. This
discussion does not address the tax considerations arising under the laws of any
foreign, state or local jurisdiction. In addition, the discussion relies upon
the description provided to us by the DTC, Euroclear, and Clearstream of their
depository procedures and the procedures of their participants and indirect
participants in maintaining a book-entry system reflecting beneficial ownership
of the notes.
PURCHASERS OF THE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING
U.S. FEDERAL INCOME TAX CONSEQUENCES RESULTING FROM THEIR PARTICULAR SITUATIONS,
AND STATE, LOCAL, FRANCHISE, GIFT AND ESTATE TAX CONSEQUENCES, OR OTHER
CONSEQUENCES UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
U.S. HOLDERS
The following discussion addresses the U.S. federal income tax consequences
to a U.S. holder of a note. For purposes of this discussion, a "U.S. holder" is
a noteholder that is (1) a citizen or resident of the United States for United
States federal income tax purposes, including an alien individual who is a
lawful permanent resident of the United States or meets the "substantial
presence" test prescribed under the Code, (2) a corporation, partnership, or
other entity organized under the laws of the United States or any political
subdivision of the United States, (3) an estate taxed by the United States
without regard to its source of income or (4) a trust if the trust has validly
elected to be treated as a United States person for U.S. federal income tax
purposes or if (a) a court within the United States can exercise primary
supervision over its administration and (b) one or more United States persons
have authority to control all of its substantial decisions.
Exchange Offer in Connection with Registration of the Notes
We have obtained an opinion from Kirkland & Ellis that the exchange of the
outstanding notes for the exchange notes, which have substantially identical
terms, in connection with the registration of the exchange notes will not be a
taxable event for federal income tax purposes. Consequently, no gain or loss
will be recognized by U.S. holders and non-U.S. holders of the outstanding notes
upon receipt of the exchange notes and ownership of the exchange notes will be
considered a continuation of ownership of the outstanding notes. For purposes of
determining gain or loss upon the subsequent sale or exchange of the exchange
notes, a holder will have the same tax basis and holding period in the exchange
notes that the holder had in the outstanding notes. The U.S. federal income tax
consequences of holding and disposing of the exchange notes will be the same as
those of holding and disposing of the outstanding notes.
Payments of Interest
Payments of stated interest on a note will be taxable as ordinary interest
income at the time it is received or accrued, depending upon the method of
accounting applicable to the holder of the note.
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Additional Interest
The interest rate on the notes may be increased if the notes are not
registered with the SEC within prescribed time periods. We believe that the
possibility that any additional interest will be paid is "remote and incidental"
under applicable Treasury Regulations and, therefore, that any additional
interest will be taxable to U.S. holders at the time that it accrues or is
received in accordance with each U.S. holder's method of accounting. The
Internal Revenue Service may take a different position, which could affect the
time when the additional interest, if any, would be taxable to a U.S. holder.
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or retirement of the notes, a U.S. Holder will
recognize gain or loss equal to the difference between the amount realized upon
the sale, exchange or retirement, less a portion allocable to any accrued and
unpaid interest, which will be taxable as ordinary income, and the U.S. holder's
adjusted tax basis in the notes. A U.S. holder's adjusted tax basis in the notes
generally will be the U.S. holder's cost of the notes, less any principal
payments received by the holder.
Gain or loss recognized by a U.S. holder on the sale, exchange or
retirement of the notes will be capital gain or loss. The gain or loss will be
long-term capital gain or loss if the notes have been held by the U.S. holder
for more than twelve months. In the case of a noncorporate U.S. holder,
long-term capital gain is subject to a maximum U.S. Federal tax rate of 20%. The
deductibility of capital losses by U.S. holders is subject to certain
limitations.
Market Discount
Any gain or loss on a disposition of a note would generally be a capital
gain or loss. However, a subsequent purchaser of a note who did not acquire the
note at its original issue, and who acquires the note at a price that is less
than the stated redemption price of the note at its maturity (i.e., the face
amount of the note if it is issued at par), may be required to treat the note as
a "market discount bond." Any recognized gain on a disposition of the note would
then be treated as ordinary income to the extent that it does not exceed the
"accrued market discount" on the note. In general, accrued market discount is
that amount that bears the same ratio to the excess of the stated redemption
price of the note over the purchaser's basis in the note immediately after its
acquisition, as the number of days the purchaser holds the note bears to the
number of days after the date the purchaser acquired the note up to and
including the date of its maturity. In addition, there are rules deferring the
deduction of all or part of the interest expense on indebtedness incurred or
continued to purchase or carry such bond and permitting a purchaser to elect to
include accrued market discount in income on a current basis.
Backup Withholding and Information Reporting
In general, a U.S. holder of a note will be subject to backup withholding
at the rate of 31% with respect to interest, principal and premium, if any, paid
on a note unless the holder (1) is an entity, including corporations, tax-exempt
organizations and certain qualified nominees, that is exempt from withholding
and, when required, demonstrates this fact or (2) provides us with its Taxpayer
Identification Number ("TIN"), which, for an individual, would be the holder's
Social Security Number, certifies that the TIN provided is correct and that the
holder has not been notified by the Internal Revenue Service that it is subject
to backup withholding due to underreporting of interest or dividends and
otherwise complies with applicable requirements of the backup withholding rules.
In addition, payments of interest, principal and premium to U.S. holders that
are not corporations, tax-exempt organizations or qualified nominees will
generally be subject to information reporting requirements.
The amount of any backup withholding from a payment to a U.S. holder will
be allowed as a credit against the holder's federal income tax liability and may
entitle the holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
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NON-U.S. HOLDERS
The following discussion addresses the principal U.S. federal income tax
consequences to a noteholder that is not a U.S. holder. We refer to these
holders in this discussion as non-U.S. holders. As discussed above, this
discussion does not address all tax aspects of ownership of the notes that may
be relevant to a prospective investor's particular circumstances, including
holding the notes through a partnership or holding the notes through a hybrid
entity, i.e. an entity that is a pass-through entity for U.S. tax purposes but
not for foreign tax purposes.
Payments of Interest
Generally, payments of stated interest on a note will not be subject to
U.S. federal income tax if the interest qualifies as portfolio interest.
Interest on the notes will qualify as portfolio interest if the non-U.S. holder
(1) does not actually or constructively own 10% or more of the total combined
voting power of our voting stock, (2) is not a "controlled foreign corporation"
with respect to which we are a "related person," as those terms are defined in
the Internal Revenue Code and (3) provides the required certifications that the
beneficial owner of the notes is not a U.S. person. However, the interest on the
notes will be taxed at regular U.S. federal income tax rates if the interest
constitutes income that is effectively connected with the conduct of a U.S.
trade or business and, if the non-U.S. holder can claim the benefit of an income
tax treaty, the interest is attributable to a U.S. permanent establishment or
fixed base. This income is referred to in this discussion as U.S. trade or
business income. If the non-U.S. holder is a corporation, interest that
constitutes U.S. trade or business income may also be subject to the "branch
profits tax" at 30% or, if applicable, a lower rate determined by an income tax
treaty.
Interest that neither qualifies as portfolio interest nor constitutes U.S.
trade or business income will be subject to U.S. withholding tax at the rate of
30%, unless the withholding tax is reduced or eliminated by an applicable income
tax treaty. To claim the protection of an income tax treaty, a non-U.S. holder
must provide a properly executed Form 1001 prior to the payment of interest, and
must periodically update Form 1001 or, if necessary, provide us with the
applicable successor form. New regulations scheduled to take effect on January
1, 2001, will replace these forms with new forms and procedures, and may require
a non-U.S. holder to obtain a TIN and provide documentary evidence of residence
in order to claim a treaty benefit.
Sale, Exchange or Redemption of Notes
Gain realized by a non-U.S. holder on the sale, exchange, redemption or
other disposition of a note generally will not be subject to U.S. federal income
tax unless (1) the gain constitutes U.S. trade or business income, (2) the
non-U.S. holder is an individual who holds the note as a capital asset and is
present in the United States for 183 days or more in the taxable year of the
disposition or (3) the non-U.S. holder is a former citizen or resident of the
United States subject to certain rules related to that status.
Federal Estate Tax
Notes held by an individual who is not a citizen or resident of the United
States for U.S. federal estate tax purposes at the time of his or her death will
not be subject to U.S. federal estate tax if the interest on the notes qualifies
for the portfolio interest exemption from U.S. federal income tax under the
rules described above.
Information Reporting and Backup Withholding
We must report to the Internal Revenue Service and to each non-U.S. holder
any interest that is subject to U.S. withholding tax or that is exempt from
withholding tax pursuant to either a tax treaty or the portfolio interest
exemption. Copies of these information returns may also be available to the tax
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authorities of the country in which the non-U.S. holder resides under the
provisions of various treaties or agreements for the exchange of information.
Non-U.S. holders other than corporations may be subject to backup
withholding and additional information reporting. Neither backup withholding nor
information reporting will apply to payments of portfolio interest by us to a
non-U.S. holder if the non-U.S. holder properly certifies that it is not a U.S.
holder or otherwise establishes an exemption. However, the certification or
exemption is not effective if we or our paying agent has actual knowledge that
the holder is a U.S. holder or that the conditions of another exemption relied
upon by the non-U.S. holder are not satisfied.
Payments of principal on the notes by us to a non-U.S. holder may be
subject to backup withholding and information reporting unless the non-U.S.
holder properly certifies as to those items described below in connection with
payments made by brokers or otherwise establishes an exemption, provided that
neither we nor our paying agent has actual knowledge that the holder is a U.S.
holder or that the conditions of another exemption relied upon by the non-U.S.
holder are not satisfied.
Neither backup withholding nor information reporting will apply to the
payment of proceeds from the disposition of the notes to or through the U.S.
office of any broker if the non-U.S. holder (1) properly certifies (A) that he
is not a U.S. holder, (B) that he does not expect to be present within the
United States for 183 days or more during the calendar year and (C) none of his
gains from transactions effected with the payor during the calendar year are
expected to be effectively connected with a U.S. trade or business; or (2)
otherwise establishes an exemption, and neither we nor our paying agent has
actual knowledge that the conditions of any claimed exemption are not satisfied.
If proceeds from the disposition of the notes are paid to or though the foreign
office of a U.S. broker, information reporting, but not backup withholding, is
required unless the broker has documentary evidence that the owner is a foreign
person and the broker has no actual knowledge to the contrary. Similar rules
apply to the foreign office of a foreign broker if either (1) the foreign broker
is a controlled foreign corporation with the meaning of the Internal Revenue
Code or (2) 50% or more of the gross income of the foreign broker during a
specified testing period was effectively connected with the conduct of a trade
or business within the United States. If proceeds from the disposition of the
notes are paid to or through the foreign office of a foreign broker that does
not have these characteristics, neither information reporting nor backup
withholding is required.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a non-U.S. holder will be allowed as
a refund or credit against the non-U.S. holder's federal income tax liability.
New regulations revising the information and reporting rules will become
effective on January 1, 2001. In general, these new regulations will not
materially change the withholding and information reporting requirements, but
will change various forms and certification procedures. Non-U.S. holders should
consult their own tax advisors concerning the applicability and effect, if any,
of the new regulations on an investment in the exchange notes.
PLAN OF DISTRIBUTION
Each participating broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the exchange notes. This prospectus,
as it may be amended or supplemented from time to time, may be used by a
participating broker-dealer in connection with resales of exchange notes
received in exchange for outstanding notes if the outstanding notes were
acquired as a result of market-making activities or other trading activities. We
have agreed that we will make this prospectus, as amended or supplemented,
available to any participating broker-dealer for use in connection with these
resales for a period of time as is necessary to comply with applicable law;
provided that this period shall not be required to exceed 270 days.
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We will not receive any proceeds from any sales of the exchange notes by
participating broker dealers. Exchange notes received by participating
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the exchange notes or
a combination of these methods of resale, at market prices prevailing at the
time of resale, at prices related to prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from a participating broker-dealer and/or the purchasers of any
exchange notes. Any participating broker-dealer that resells the exchange notes
that were received by it for its own account pursuant to the exchange offer and
any broker or dealer that participates in a distribution of the exchange notes
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit on the resale of the exchange notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
participating broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of one year after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any participating broker-dealer that requests these documents in
the letter of transmittal.
Prior to the exchange offer, there has not been any public market for the
outstanding notes. The outstanding notes have not been registered under the
Securities Act and will be subject to restrictions on transferability to the
extent that they are not exchanged for exchange notes by holders who are
entitled to participate in this exchange offer. The holders of outstanding
notes, other than any holder that is our affiliate within the meaning of Rule
405 under the Securities Act, who are not eligible to participate in the
exchange offer are entitled to certain registration rights, and we are required
to file a shelf registration statement with respect to their outstanding notes.
The exchange notes will constitute a new issue of securities with no established
trading market. We do not intend to list the exchange notes on any national
securities exchange or to seek the admission thereof to trading in the National
Association of Securities Dealers Automated Quotation System. In addition, any
market making activity will be subject to the limits imposed by the Securities
Act and the Exchange Act and may be limited during the exchange offer and the
pendency of the shelf registration statements. Accordingly, no assurance can be
given that an active public or other market will develop for the exchange notes
or as to the liquidity of the trading market for the exchange notes. If a
trading market does not develop or is not maintained, holders of the exchange
notes may experience difficulty in reselling the exchange notes or may be unable
to sell them at all. If a market for the exchange notes develops, it may be
discontinued at any time.
LEGAL MATTERS
The validity of the exchange notes and the guarantees and other legal
matters, including the tax-free nature of the exchange, will be passed upon on
our behalf by Kirkland & Ellis, a partnership that includes professional
corporations, Chicago, Illinois.
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INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Orius Corp. and subsidiaries
(formerly LISN Holdings, Inc.) as of December 31, 1999 and 1998 and for each of
the three years ended December 31, 1999 included in this prospectus have been
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Orius Corp. and subsidiaries
(formerly NATG Holdings Inc.) as of December 14, 1999 and December 31, 1998 and
for the period ended December 14, 1999 and the year ended December 31, 1998
included in this prospectus have been included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of Channel Communications, Inc.,
f/k/a Kenya Corp., as of December 31, 1997 and for the year then ended included
in this prospectus have been included in reliance on the report of Williams,
Young, LLC, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The financial statements of U.S. Cable, Inc. as of September 30, 1997 and
June 30, 1998 and for the year ended September 30, 1997 and the nine months
ended June 30, 1998 included in this prospectus have been included in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
The financial statements of DAS-CO of Idaho, Inc. as of December 31, 1998
and for each of two years in the period ended December 31, 1998 included in this
prospectus have been included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Schatz Underground Cable, Inc. as of December
31, 1998 and for the year ended December 31, 1998 included in this prospectus
have been included in reliance on the report of Milhouse, Martz & Neal, L.L.P.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Copenhagen Utilities and Construction, Inc. as
of December 31, 1998 and for each of two years in the period ended December 31,
1998 included in this prospectus have been included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Texel Corporation as of December 31, 1997 and
1998 and for each of two years in the period ended December 31, 1998 included in
this offering memorandum have been included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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AVAILABLE INFORMATION
We are not currently subject to the periodic reporting and other
informational requirements of the Exchange Act. We have agreed that, whether or
not it is required to do so by the rules and regulations of the SEC, for so long
as any of the notes remain outstanding, we will furnish to the holders of the
notes and file with the SEC, unless the SEC will not accept the filing,
following the consummation of the exchange offer: (1) all quarterly and annual
financial information that would be required to be contained in a filing with
the SEC on Forms 10-Q and 10-K if we or Parent were required to file those
forms, including a Management's Discussion and Analysis of Financial Condition
and Results of Operations and, with respect to the annual information only, a
report by our certified independent accountants and (2) all reports that would
be required to be filed with the SEC on Form 8-K if we were required to file
those reports. All reports filed with the SEC will be available on the SEC's web
site at http:\\www.sec.gov. In addition, for so long as any of the notes remain
outstanding, we have agreed to make available to any prospective purchaser of
the notes or beneficial owner of the notes in connection with any sale of the
notes, the information required by Rule 144A(d)(4) under the Securities Act.
128
<PAGE> 133
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
Financial Statements -- December 31, 1999, 1998 and 1997
Report of Independent Accountants......................... F-3
Consolidated Balance Sheets............................... F-4
Consolidated Statements of Income......................... F-5
Consolidated Statements of Cash Flows..................... F-6
Consolidated Statements of Changes in Stockholders'
Equity................................................. F-8
Notes to Consolidated Financial Statements................ F-9
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
Financial Statements -- December 14, 1999 and December 31,
1998
Report of Independent Accountants......................... F-23
Consolidated Balance Sheet................................ F-24
Consolidated Statement of Income.......................... F-25
Consolidated Statement of Cash Flows...................... F-26
Consolidated Statement of Changes in Stockholders'
Equity................................................. F-27
Notes to Consolidated Financial Statements................ F-28
CHANNEL COMMUNICATIONS, INC.
Financial Statements -- December 31, 1997
Report of Independent Accountants......................... F-41
Consolidated Balance Sheets............................... F-43
Consolidated Statements of Income and retained Earnings... F-44
Consolidated Statements of Cash Flows..................... F-45
Notes to Consolidated Financial Statements................ F-46
U.S. CABLE, INC.
Financial Statements -- September 30, 1997 and June 30,
1998
Report of Independent Accountants......................... F-49
Balance Sheets............................................ F-50
Statements of Operations.................................. F-51
Statements of Cash Flows.................................. F-52
Statements of Changes in Shareholders' Equity............. F-53
Notes to Financial Statements............................. F-54
DAS-CO OF IDAHO, INC.
Financial Statements -- December 31, 1997 and 1998
Report of Independent Accountants......................... F-59
Balance Sheets............................................ F-60
Statements of Operations.................................. F-61
Statements of Cash Flows.................................. F-62
Statements of Changes in Stockholders' Equity............. F-63
Notes to Financial Statements............................. F-64
SCHATZ UNDERGROUND CABLE, INC.
Financial Statements -- December 31, 1998
Independent Auditor's Report.............................. F-67
Balance Sheets............................................ F-68
Statements of Income and Retained Earnings................ F-69
Statements of Cash Flows.................................. F-70
Notes to Financial Statements............................. F-71
</TABLE>
F-1
<PAGE> 134
<TABLE>
<S> <C>
COPENHAGEN UTILITIES AND CONSTRUCTION, INC.
Consolidated Financial Statements -- December 31, 1997 and
1998
Report of Independent Accountants......................... F-75
Consolidated Balance Sheets............................... F-76
Consolidated Statements of Operations..................... F-77
Consolidated Statements of Cash Flows..................... F-78
Notes to Consolidated Financial Statements................ F-79
TEXEL CORPORATION
Financial Statements -- December 31, 1997 and 1998 and
March 31, 1998 and 1999 unaudited
Report of Independent Accountants......................... F-85
Balance Sheets............................................ F-86
Statements of Operations.................................. F-87
Statements of Cash Flows.................................. F-88
Statements of Changes in Shareholders' Equity............. F-89
Notes to Financial Statements............................. F-90
</TABLE>
F-2
<PAGE> 135
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of Orius Corp.
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, stockholders' equity (net capital
deficiency) and of cash flows present fairly, in all material respects, the
financial position of Orius Corp. and Subsidiaries (formerly LISN Holdings,
Inc., the Company) as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
March 31, 2000
F-3
<PAGE> 136
ORIUS CORP AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 28,664,199 $ 2,788,838
Accounts receivable....................................... 128,780,860 13,260,102
Costs and estimated earnings in excess of billings........ 24,675,434 6,632,421
Inventories............................................... 16,453,878 2,405,224
Other current assets...................................... 4,728,028 70,825
------------- -----------
Total current assets.............................. 203,302,399 25,157,410
Property and equipment, net................................. 44,399,631 3,386,839
Goodwill, net............................................... 359,881,615 --
Other assets................................................ 14,394,187 54,520
------------- -----------
Total assets...................................... $ 621,977,832 $28,598,769
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of debt and leases........................ $ 5,505,387 $ 82,933
Accounts payable -- trade................................. 29,640,803 3,294,811
Accrued liabilities....................................... 34,050,765 5,874,098
Payable to shareholder.................................... 11,454,413 --
Deferred tax liability.................................... 5,948,752 --
Other current liabilities................................. 1,292,191 --
------------- -----------
Total current liabilities......................... 87,892,311 9,251,842
------------- -----------
Long-term debt and leases................................... 461,360,979 1,099,267
Deferred tax liability...................................... 5,609,352 --
------------- -----------
466,970,331 1,099,267
------------- -----------
Commitments and contingencies............................... -- --
Securities subject to put and call arrangements............. 54,946,000 --
Series C participating, redeemable preferred stock.......... 199,019,074 --
Stockholders' equity (net capital deficiency):
Common stock, no par value, 200,000 shares authorized..... -- 11,000
Common stock $.01 par value, 200,000,000 shares
authorized............................................. 25,025 --
Paid in capital........................................... 33,590,975 --
Retained (deficit) earnings............................... (220,465,884) 18,236,660
------------- -----------
Total stockholders' equity (net capital
deficiency)..................................... (186,849,884) 18,247,660
------------- -----------
Total liabilities and stockholders' equity (net
capital deficiency)............................. $ 621,977,832 $28,598,769
============= ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 137
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Revenues............................................. $167,018,298 $76,371,641 $40,226,291
Expenses:
Direct costs....................................... 118,539,189 52,659,507 29,690,823
General and administrative......................... 20,576,668 10,626,753 6,062,985
Depreciation and amortization...................... 1,357,765 383,469 179,247
------------ ----------- -----------
Total operating expenses................... 140,473,622 63,669,729 35,933,055
------------ ----------- -----------
Income from operations..................... 26,544,676 12,701,912 4,293,236
Other expense (income):
Interest expense, net.............................. 11,148,761 450,595 177,822
Miscellaneous...................................... 362,105 (14,913) (52,600)
------------ ----------- -----------
Total other expenses....................... 11,510,866 435,682 125,222
------------ ----------- -----------
Income before provision from income taxes
and extraordinary charge................. 15,033,810 12,266,230 4,168,014
Provision for income taxes........................... 4,936,866 -- --
------------ ----------- -----------
Income before extraordinary charge................... 10,096,944 12,266,230 4,168,014
Extraordinary charge for debt retirement, net of tax
benefit of $897,000................................ 1,372,239 -- --
------------ ----------- -----------
Net income........................................... $ 8,724,705 $12,266,230 $ 4,168,014
============ =========== ===========
Pro forma net income data:
Net income as reported............................. $ 8,724,705 $12,266,230 $ 4,168,014
Pro forma adjustment to provision for income
taxes........................................... 1,199,320 4,293,180 1,417,125
------------ ----------- -----------
Pro forma net income............................... $ 7,525,385 $ 7,973,050 $ 2,750,889
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 138
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997
------------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................ $ 8,724,705 $12,266,230 $ 4,168,014
Adjustments to reconcile net income to net cash used
for operating activities:
Depreciation and amortization..................... 1,357,765 383,469 179,247
Extraordinary charge.............................. 1,372,239 -- --
Deferred taxes.................................... 64,100 -- --
Change in assets and liabilities:
Accounts receivable............................ (4,705,053) (6,190,981) (5,601,655)
Costs and estimated earnings in excess of
billings..................................... (8,755,989) (2,513,966) --
Inventories.................................... (82,260) (1,527,110) --
Other assets................................... 2,919,324 17,677 (56,401)
Accounts payable -- trade...................... 4,849,725 388,861 1,078,044
Accrued expenses............................... 8,039,232 3,095,168 1,545,116
------------- ----------- -----------
Net cash provided by operating
activities.............................. 13,783,788 5,919,348 1,312,365
------------- ----------- -----------
Cash flows from investing activities:
Purchases of property and equipment............... (4,015,434) (1,923,554) (1,038,702)
Purchase of Orius Corp., net of cash acquired..... (166,130,033) -- --
Investment in other entities...................... (100,000) -- --
Increase in accounts receivable -- related
party.......................................... -- (619,521)
------------- ----------- -----------
Net cash used for investing activities.... (170,245,467) (1,923,554) (1,658,223)
------------- ----------- -----------
Cash flows from financing activities:
Amounts paid for deferred financing costs......... (12,391,361) -- --
Decrease in overdraft............................. -- (164,525) --
Distributions paid to shareholders................ (6,141,864) (1,160,000) --
Proceeds from notes payable -- bank............... 403,531,510 --
Payments of notes payable -- bank................. (256,131,105) (2,562,200) 821,508
Issuance of junior notes.......................... 637,000 -- --
Issuance of common stock.......................... 67,867,196 -- --
Issuance of preferred stock....................... 136,955 -- --
Investment by LISN shareholders................... 112,239,334 -- --
Advances from bank for construction costs......... -- 673,742 570,658
Retirement of common stock........................ (127,410,625) -- --
------------- ----------- -----------
Net cash provided by (used for) financing
activities.............................. 182,337,040 (3,212,983) 1,392,166
------------- ----------- -----------
Net increase in cash.............................. 25,875,361 782,811 1,046,308
Cash at beginning of period....................... 2,788,838 2,006,027 959,719
------------- ----------- -----------
Cash at end of period............................. $ 28,664,199 $ 2,788,838 $ 2,006,027
============= =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 139
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997
----------- -------- --------
<S> <C> <C> <C>
Supplemental information disclosure:
Interest paid............................................ $ 9,172,948 $111,875 $159,519
Income taxes paid........................................ $ 1,055,422 $ -- $ --
Non-cash activity:
Deferred stock redemption................................ $ 7,885,450 $ -- $ --
Deferred taxes resulting from conversion to C
corporation........................................... 4,574,200 -- --
Exchange of common stock for junior notes................ 58,100,000 -- --
Exchange of common stock for preferred stock............. 12,491,500 -- --
Deemed dividend on preferred stock....................... 826,042 -- --
Transfer of junior notes and accrued interest to Orius... 62,677,993 -- --
Rollover of Orius Corp. common stock..................... 83,421,453 -- --
Exchange of common stock for Orius Corp. common stock.... 15,260,297 -- --
Exchange of Series A preferred stock for Orius Series C
participating, redeemable preferred stock............. 13,525,078 -- --
Accretion associated with Series C participating,
redeemable preferred stock............................ 79,811,918 -- --
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-7
<PAGE> 140
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
TOTAL
STOCKHOLDERS'
COMMON STOCK RETAINED EQUITY (NET
------------------------ EARNINGS CAPITAL
SHARES AMOUNT (DEFICIT) DEFICIENCY)
--------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Balance at December 1996................. 1,100,000 $ 11,000 $ -- $ 11,000
Adjustment for LISN Holdings, Inc. and
LISN Inc. combination............... 2,962,416 2,962,416
Net income............................. 4,168,014 4,168,014
--------- ------------ ------------- -------------
Balances at December 31, 1997............ 1,100,000 11,000 7,130,430 7,141,430
Distributions to S Corporation
stockholders........................ (1,160,000) (1,160,000)
Net income............................. 12,266,230 12,266,230
--------- ------------ ------------- -------------
Balances at December 31, 1998............ 1,100,000 11,000 18,236,660 18,247,660
Distributions to S Corporation
stockholders........................ (6,141,864) (6,141,864)
Effects of recapitalization
transaction:
Retirement of common stock.......... (951,499) (9,515) (127,401,110) (127,410,625)
Issuance of common stock............ 505,548 67,731,151 67,731,151
Exchange of common stock for junior
notes and Series A redeemable
preferred stock................... (508,005) (52,608,384) (17,983,116) (70,591,500)
Conversion to C corporation......... (4,577,600) (4,577,600)
Accretion of amounts due for
redemption of common stock........ (11,511,641) (11,511,641)
Proceeds from private placement of
Strips.............................. 973 136,045 136,045
Effects of December 15, 1999
transaction with Orius Corp.:
Exchange of common stock for Orius
common stock...................... 986,778
Investment by LISN shareholders..... 751,804 10,101,540 10,101,540
Exchange of LISN Holdings, Inc.
junior subordinated notes for
Orius Corp. notes................. 616,949 8,254,163 8,254,163
Accretion associated with Series C
participating, redeemable
preferred stock including
dividends......................... (79,811,918) (79,811,918)
Net income............................. 8,724,705 8,724,705
--------- ------------ ------------- -------------
Balances at December 31, 1999............ 2,502,548 $ 33,616,000 $(220,465,884) $(186,849,884)
========= ============ ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-8
<PAGE> 141
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
1. BASIS OF PRESENTATION
OVERVIEW
Orius Corp. (Orius or the Company), a holding company with no independent
operations, is the parent of NATG Holdings, LLC (NATG) and is the successor to
LISN Holdings, Inc. (LISN, formerly Arion, Inc.). NATG is engaged in the
business of providing telecommunications infrastructure services in the
continental United States.
Prior to the Orius/LISN transaction discussed below, LISN and Orius Corp.
and its subsidiaries operated separate businesses. During 1999, LISN underwent a
recapitalization, and later in 1999 LISN and Orius entered into a business
combination. See Note 15 for further discussion. The 1998 and 1997 financial
statements presented herein are those of LISN. The 1999 statement of income
presents the operation of only LISN through December 14, 1999 and includes the
operations of NATG from December 15, 1999 through December 31, 1999.
LISN RECAPITALIZATION
On May 28, 1999, Arion, Inc. (Arion) entered into a Recapitalization
Agreement whereby, Arion was renamed LISN Holdings, Inc. The assets of Arion
were then transferred to Arion Sub, Inc., a wholly-owned subsidiary of Arion.
Also, on May 28, 1999, the shareholders of LISN, Inc. contributed all of their
shares to Arion. The combination of LISN Holdings, Inc. and LISN, Inc. has been
accounted for in a manner similar to a pooling of interests because the entities
were under common control and, accordingly, the 1998 Arion financial statements
have been restated and referred to here as LISN Holdings, Inc. LISN, Inc.
continued to operate as a wholly-owned subsidiary of Arion. In connection with
this reorganization, Arion entered into a $75,000,000 credit facility that was
utilized to pay off all outstanding debt of LISN, Inc. as of May 27, 1999, and
to finance the redemption of Arion's outstanding shares. For further
information, see Note 3.
ORIUS/LISN TRANSACTION
On December 15, 1999, Orius and LISN entered into a business combination in
which the former stockholders of LISN acquired control of Orius and its
subsidiaries. Accordingly, LISN is considered the acquiring corporation and
corporate predecessor for accounting purposes. Also in connection with the
transaction, the Company entered into a $275,000,000 loan and credit facility
and a $100 million bridge loan that were utilized to pay off all the outstanding
debt of the Company and LISN as of December 14, 1999 (the valuation date). For
further information, see Note 5.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Significant estimates made in the preparation of these
financial statements include those related to the revenue recognized and costs
and expenses associated with contracts in process at period end, allowances for
doubtful accounts, and the estimated lives of long-lived
F-9
<PAGE> 142
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
assets. Actual results could differ from those estimates and such differences
may be material to the financial statements.
REVENUE RECOGNITION
Prior to the Orius/LISN transaction, substantially all of the Company's
revenues were earned from contracts under fixed price arrangements. For fixed
price contracts, the Company recognizes revenue and the related costs under the
percentage-of-completion method. Revenues and earnings from these contracts are
recognized as the related costs are incurred based on the relationship of costs
incurred to total estimated contract costs. Costs and estimated earnings in
excess of billings for contracts-in-progress represents revenue recognized but
not yet billed. Billings in excess of costs and estimated earnings represents
billings on contracts for which costs have not yet been incurred and revenue and
earnings have not been recognized.
In connection with the Orius/LISN transaction, the Company assumed and
continues to offer contracts that provide for payments for units delivered by
the Company. These contracts generally entitle the Company to revenue for each
unit of work completed. Accordingly, the Company accounts for revenue and
related costs associated with these types of contracts using the
units-of-delivery revenue recognition method. Revenue is recognized as the
related units are completed, and costs allocable to the delivered units are
recognized as the cost of earned revenue. Unbilled revenues consist of
work-in-process on contracts based on management's estimate of work performed,
but not billed. All costs associated with unbilled revenues are recorded as
expenses in the same period as the unbilled revenue.
Additionally, the Company recognizes revenues from short-term contracts
with duration less than two weeks under the completed contract method. Billings
and costs are accumulated on the balance sheet, and no profit is recorded before
completion or substantial completion of the work.
At the time a loss on any contract becomes known, the entire amount of the
estimated loss is accrued.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents. For purposes of the
consolidated statements of cash flows, the Company considers these to be cash
equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets ranging from 3 to 39 years. Leasehold improvements
are amortized over the remaining term of the facilities' lease. When assets are
retired or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is recognized in
the period. Expenditures for maintenance and repairs are expensed as incurred.
INVENTORY
Inventories are stated at the lower of cost, on a first-in, first-out
basis, or market. Inventory consists of items purchased for use in projects and
substantially all of the Company's inventories can be used in multiple projects.
F-10
<PAGE> 143
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INCOME TAXES
For federal tax purposes and in selected states, LISN had elected to be
treated under Subchapter S of the Internal Revenue Code. As such, all income,
expenses, and tax credits were passed through to the individual stockholders.
State taxes were paid by LISN and recorded in general and administrative
expenses in 1998 and 1997.
Effective May 28, 1999, LISN converted to a C Corporation and accounts for
income taxes in accordance with Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires the use of the
liability method of computing deferred income taxes. Under this method deferred
income taxes are recorded to reflect the income tax consequences on future years
of temporary differences between the income tax and financial reporting bases of
assets and liabilities as of the balance sheet date. Under the liability method,
deferred income taxes are adjusted for tax rate changes as they occur. A net
deferred tax liability of $4,577,600 was established on May 28, 1999 as a result
of the conversion to a C corporation.
The Company and its subsidiaries file a consolidated federal income tax
return. Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Company's financial instruments approximate the
recorded values due to the relatively short terms of the instruments and the
floating interest rate on a substantial portion of the Company's debt. The
Company has entered interest rate cap arrangements, but the fair values of those
caps approximate their recorded values.
INTANGIBLE ASSETS
The excess of the purchase price over the fair market value of the tangible
net assets of acquired businesses (goodwill) is amortized on a straight-line
basis over its estimated useful life of 25 years. The appropriateness of the
carrying value of goodwill is reviewed periodically by the Company at a
subsidiary level. An impairment loss for the difference between fair value and
recorded value is recognized when the projected undiscounted future cash flows
are less than the carrying value of goodwill. No impairment loss has been
recognized in the period presented. Amortization expense from the date of the
Orius/LISN transaction and included in these financial statements was $602,498
for 1999. The intangible assets at December 31, 1999 are net of accumulated
amortization of $602,498.
Included in other assets are intangible assets for deferred financing costs
which are amortized over the term of the related debt facility. At December 31,
1999 deferred financing costs of $9,876,058 are included in other assets. For
1999, $755,267 of amortization expense related to these costs has been included
in interest expense.
CONCENTRATIONS OF CREDIT RISK
Substantially all of the Company's accounts receivable are due from
companies within the telecommunications industry located throughout the United
States. Credit is extended based on an evaluation of the customer's financial
condition and, generally, collateral is not required. Credit losses are provided
for in the consolidated financial statements.
The Company maintains various bank accounts and at times, amounts may be in
excess of FDIC insurance limits.
F-11
<PAGE> 144
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
STOCK OPTION PLANS
In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock Based Compensation," which was effective for the Company beginning August
1, 1996. SFAS No. 123 requires expanded disclosures of stock based compensation
arrangements with employees, and encourages, but does not require, compensation
cost to be measured based on the fair value of the equity instrument awarded.
Under SFAS No. 123, companies are permitted, however, to continue to apply
Accounting Principle Board (APB) Opinion No. 25, which recognized compensation
based on the intrinsic value of the equity instrument awarded. The Company
applies APB Opinion No. 25 to its stock based compensation awards to employees.
See Note 19.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes standards for the
accounting and reporting of derivative instruments, including certain derivative
instruments imbedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as other assets or liabilities in the statement of financial
position, and measure those instruments at fair value. This statement is
effective for the Company's 2001 financial statements. Due to the complexity of
this statement, the Company is still evaluating its impact, if any, on our
financial statements.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101,
"Revenue Recognition" (SAB 101), which affects the recognition and disclosures
about revenues. SAB 101 is applicable for the Company's second quarter 2000
financial statements. Management expects its adoption will not be significant to
the financial statements.
3. RECAPITALIZATION
On May 28, 1999, the Company sold 50.554778 shares of common stock for
$70,250,000 (less $2,518,849 of transaction related fees) and redeemed 95.149888
shares for $133,910,625 (less $6,500,000 which remained in the Company to fund
employee bonuses which were recorded as expenses). An additional $11,454,413
will be redeemed during 2000 and is reflected as a liability at December 31,
1999. Also on May 28, 1999, 41.81114 shares of common stock were converted to
Junior Notes (see Note 12) payable in the amount of $58,100,000 and 8.9894
shares of common stock were exchanged for 8.989394 shares of Series A Preferred
stock with a market value of $12,491,500. In accordance with the
Recapitalization Agreement, an additional 5.67469 shares of common stock were to
be redeemed for $7,885,450 on January 2, 2000.
4. STOCK SPLIT
The LISN Board of Directors authorized a stock split (10,000 to 1)
effective August 16, 1999 resulting in 146,042.82 shares of common stock
outstanding and 89,894 shares of Preferred Series A stock outstanding. All share
amounts presented in these financial statements have been restated to reflect
the share split.
5. ORIUS/LISN TRANSACTION
On December 15, 1999, LISN's former shareholders acquired control of Orius
and its wholly-owned subsidiary, NATG, through the following steps:
- Former LISN shareholders, members of management and certain co-investors
invested an aggregate cash amount of $112.2 million in LISN immediately
prior to the transaction. In exchange for this
F-12
<PAGE> 145
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
investment, a "strip" of Orius securities were issued comprised of $41.3
million of junior subordinated notes, $60.8 million of Series C redeemable
preferred stock and $10.1 million of common stock.
- Former LISN shareholders exchanged LISN common stock, preferred stock and
junior subordinated notes for a similar strip of securities issued by
Orius.
- NATG borrowed $328.5 million under the new multi-tranche senior credit
facilities and the senior subordinated term loan, and repaid
approximately $256.1 million of LISN and Orius indebtedness.
- Convertible preferred stock, junior subordinated notes, warrants and a
portion of the common stock of Orius were redeemed. This redemption
included put and call arrangements with certain Orius security holders
which will require payment of approximately $54.9 million and the
issuance of additional strips of Orius securities in the first half of
2000. See Notes 15 and 21.
- Orius management rolled over approximately one-half of the value of their
equity interests in Orius for a strip of securities comprised of $30.4
million in aggregate principal amount of Orius junior subordinated notes,
$44.7 in preferred stock and $8.3 million in common stock.
Although LISN is the acquiring corporation for accounting purposes, the
transaction resulted in LISN becoming a wholly-owned subsidiary of NATG which is
a wholly-owned subsidiary of Orius. As the accounting predecessor, LISN's
historical financial statements are the historical financial statements of Orius
and include the results of Orius' operations from December 15, 1999 through
December 31, 1999.
The total purchase consideration of $165.5 million in cash and $83.5
million in Orius rollover value (excluding amounts payable under put/call
arrangements) plus transaction related expenses of $6.3 million exceeded the
fair value of the tangible net assets acquired by $360.5 million, which is being
amortized on a straight-line basis over 25 years.
6. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
In addition to the recapitalization discussed in Note 3 and the Orius/LISN
transaction discussed in Note 5, Orius acquired twelve companies at various
times during 1998 and 1999 prior to the Orius/LISN transaction. The following
unaudited pro forma financial information represents the unaudited results of
operations as if the Orius/LISN transaction and the twelve Orius acquisitions
had occurred on January 1 of each year (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues.................................................... $508,386 $341,097
Net income (loss)........................................... 7,092 (10,600)
</TABLE>
The pro forma results do not necessarily represent results which would have
occurred if the combination had taken place on the basis assumed above, nor are
they indicative of the results of future combined operations.
7. ACCOUNTS RECEIVABLE
The allowance for doubtful accounts was $916,601 and $252,000 at December
31, 1999 and 1998, respectively. Included in accounts receivable at December 31,
1999 are unbilled receivables of $13,532,519 and retainage of $8,188,908.
F-13
<PAGE> 146
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The balances billed but not paid by customers pursuant to retaining
provisions in customer contracts will be due upon completion of the contracts
and acceptance by the customer. Based on the Company's experience with similar
contracts, the majority of the retention balances at December 31, 1999 are
expected to be collected within the next twelve months. Unbilled accounts
receivable relate to the Company's unit based contracts and represent revenue
the Company is entitled to based upon the units delivered as of the balance
sheet date.
8. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
Contracts totaling $174.5 million and $57.4 million were in process at
December 31, 1999 and December 31, 1998, respectively. Costs and estimated
earnings, and related billings on uncompleted projects at December 31 are as
follows:
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Costs and estimated earnings on uncompleted contracts....... $107,039,766 $40,008,845
Billings to date............................................ 82,364,332 33,376,424
------------ -----------
Net costs and earnings in excess of billings................ $ 24,675,434 $ 6,632,421
============ ===========
Costs and estimated earnings in excess of billings.......... 27,098,079 7,025,078
Billings in excess of costs and estimated earnings.......... (2,422,645) (392,657)
------------ -----------
Net costs and earnings in excess of billings................ $ 24,675,434 $ 6,632,421
============ ===========
</TABLE>
9. PROPERTY AND EQUIPMENT
Property and equipment consist of the following as of December 31, 1999 and
1998:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Land................................................... $ 519,250 $ 99,250
Building and improvements.............................. 3-39 years 7,026,897 2,152,599
Office equipment....................................... 3-6 years 5,598,133 1,027,062
Vehicles............................................... 5 years 9,558,244 903,581
Machinery and equipment................................ 10 years 23,539,784 482,515
----------- -----------
46,242,308 4,665,007
Less: accumulated depreciation......................... (1,842,677) (1,278,168)
----------- -----------
Property and equipment, net............................ $44,399,631 $ 3,386,839
=========== ===========
</TABLE>
Depreciation expense amounted to $606,767, $383,469 and $179,247 for the
years ended December 31, 1999, 1998 and 1997, respectively.
10. ACCRUED LIABILITIES
Accrued liabilities consist of the following as of December 31, 1999:
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Accrued compensation & benefits............................. $19,761,433 $5,021,189
Accrued post acquisition adjustments........................ 8,570,441 --
Accrued interest............................................ 1,655,952 --
Other....................................................... 4,062,939 852,909
----------- ----------
$34,050,765 $5,874,098
=========== ==========
</TABLE>
F-14
<PAGE> 147
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Included in accrued liabilities are post acquisition adjustments related to
companies acquired by NATG prior to the Orius/LISN transaction. Pursuant to
certain of the purchase agreements, the Company will be required to give
additional consideration of cash and Orius common stock to the former acquired
company shareholders upon attainment of specified financial criteria over the
period ended December 31, 1999 and the year ended December 31, 2000. The amount
of cash and shares to be issued cannot be determined until the periods expire
and the attainment of the criteria is established. The Company accounts for this
additional consideration when the specified financial criteria are achieved and
it is probable it will be paid. At December 31, 1999, based upon the attainment
of fiscal 1999 targets for certain acquisitions, additional consideration of
$3.0 million has been recorded as additional purchase price and included as a
liability to the former stockholders of the acquired companies. If targets are
achieved in 2000, the Company may be obligated to pay additional consideration
of $2.9 million and issue up to 120,000 shares of common stock. Additionally, at
December 31, 1999, certain purchase price adjustments in the amount of
approximately $5.6 million related to 1999 acquisitions have also been recorded.
11. INVESTMENTS
During 1999, LISN purchased 49% interests in two telecommunications
infrastructure companies for aggregate consideration of $100,000. LISN also
entered into credit agreements totaling $1.15 million with these investees
pursuant to which LISN is committed to loaning funds for the investees' working
capital. The Company accounts for these investments under the equity method.
Losses of $468,000 were recorded as part of other expense for 1999 which
represented the Company's 49% interest in the losses of the investees and
charges associated with anticipated losses on loans made under the credit
agreement to one of the investees. The investment value at December 31, 1999 is
zero.
12. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
As of December 31, 1998, the Company had a line of credit which allowed it
to borrow up to $10.0 million. The line of credit expired in May 1999. There
were no borrowings on this line of credit as of December 31, 1998.
On May 28, 1999, in connection with the Recapitalization Agreement (see
Note 3), LISN entered into a new $100.0 million Credit Agreement with
BankBoston. N.A. ("BankBoston"). The balance due of $75.0 million plus accrued
interest of $1,689,522 was repaid in connection with the Orius/LISN transaction.
Unamortized deferred financing fees of $2,269,239 were written off resulting in
an extraordinary charge to income of $1,372,239, net of tax benefits of
$897,000.
The Company moved into a new building in Amherst, Ohio in January 1998. The
Company entered into a 15 year mortgage note for $1.2 million with an annual
fixed interest rate of 9%, and monthly principal payments of $6,911 plus
interest through March 16, 2013. The balance due on this debt was $1.2 million
as of December 31, 1998. The outstanding balance was repaid in connection with
the Orius/ LISN transaction.
On December 15, 1999, NATG entered into a new credit agreement with
Deutsche Bank Securities Inc., Bankers Trust and a syndication of banks. The new
credit agreement includes a revolving credit facility, in an aggregate amount
not to exceed $100 million at any time, maturing on December 15, 2004, and a
$275 million senior secured term loan credit facility. The term loan facility is
allocated among a $75 million Term loan A with a letter of credit facility,
maturing on December 15, 2004; and a $200 million Term loan B facility, maturing
on December 15, 2006. At December 31, 1999, the total letters of credit issued
under the $100 million revolving credit facility and the $75 million Term A loan
facility were approximately $9.3 million and $46.5 million, respectively.
F-15
<PAGE> 148
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Amounts under the revolving credit facility and Term loan A facility bear
interest, at NATG's choice, of either the Federal Funds Rate plus 0.50% or the
Eurodollar rate, in each case plus an applicable margin of 0.75% to 2.00% and
1.75% to 3.00%, respectively, determined on the most recent total debt to EBITDA
ratio. Amounts under Term loan B facility bear interest, at NATG's choice, of
either Bankers Trust Prime Rate or the Federal Funds Rate plus 0.50%, in either
case plus a margin of 2.50%. Loans made under the revolving credit facility and
the Term loan A facility are collateralized by a pledge of all of the assets of
the Company and its subsidiaries. The credit facility also contains affirmative
and negative covenants relating to NATG's operations.
On December 15, 1999, NATG also entered into a credit agreement with
various lending institutions for a $100 million senior subordinated bridge loan
(the Bridge Loan) maturing December 15, 2007. Amounts under the Bridge Loan bear
interest at the lower of LIBOR plus 6.5% or 16% per annum.
At December 31, 1999, long-term debt and capital lease obligations
consisted of the following:
<TABLE>
<CAPTION>
1999
------------
<S> <C>
Bank credit facilities:
Revolving credit facility, maturing on December 15, 2004;
interest rate of prime or Federal Funds Rate plus 0.50%
or Eurodollar Rate, plus a margin of 0.75% to 2.0% or
1.75% to 3.0%, respectively, determined based on the
most recent total debt to EBITDA ratio................. $ --
Term loan A, amortizing with final payment due December
15, 2004; interest rate of prime or Federal Funds Rate
plus 0.50% or Eurodollar Rate, plus a margin of 0.75%
to 2.0% or 1.75% to 3.0%, respectively, determined
based on the most recent total debt to EBITDA ratio.... 28,531,511
Term loan B, amortizing with final payment due December
15, 2006; interest rate of prime or Federal Funds Rate
plus 0.50%, in either case plus a margin of 2.5%....... 200,000,000
Senior subordinated bridge loan maturing December 15,
2007; interest rate of LIBOR plus 6.5%................. 100,000,000
Junior subordinated notes including accrued interest of
$671,505 maturing on the later of December 15, 2009 or
the first anniversary of the date on which any debt
raised in a high yield offering is repaid; See Note 12;
interest rate of 12%................................... 134,972,505
Other debt and capital lease obligations.................... 3,362,350
------------
Total debt and capital lease obligations.................... 466,866,366
Less current portion........................................ (5,505,387)
------------
Long-term debt.............................................. $461,360,979
============
</TABLE>
In order to manage its interest rate risk, the Company entered into
interest rate cap agreements with aggregate notional amounts of $68.9 million at
December 31, 1999. These agreements limit the Company's exposure to increases in
LIBOR over 8%. The premiums paid for the interest rate caps were deferred and
are being amortized over the life of the caps and recognized as interest
expense.
CAPITAL LEASE OBLIGATIONS AND EQUIPMENT LOANS
Certain subsidiaries have obligations outstanding under capital leases and
other equipment financing arrangements. The remaining obligations are payable in
monthly installments expiring at various dates through June 2003.
F-16
<PAGE> 149
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
MATURITIES
At December 31, 1999, the estimated aggregate annual repayments for
long-term debt and capital lease obligations are as follows:
<TABLE>
<S> <C>
Maturities for fiscal years ending:
2,000..................................................... $ 5,505,387
2,001..................................................... 7,128,321
2,002..................................................... 8,280,205
2,003..................................................... 9,538,802
2,004..................................................... 11,441,146
Thereafter................................................ 424,972,505
------------
$466,866,366
============
</TABLE>
12. JUNIOR SUBORDINATED NOTES
On May 28, 1999, in connection with the Recapitalization Agreement, LISN
junior subordinated notes were issued for an aggregate principal balance of
$58.1 million in exchange for common stock. These notes bear interest at a rate
of 12% per annum compounded quarterly. On August 31, 1999, LISN issued an
additional $637,000 in junior notes in association with a private placement (see
Note 14).
In connection with the Orius/LISN transaction, these notes were exchanged
for $62.6 million of Orius junior subordinated notes representing the aggregate
unpaid principal and accrued interest outstanding at December 15, 1999.
In addition to the $62.6 million of junior subordinated notes exchanged
with the former LISN note holders, Orius junior subordinated notes were issued
to Orius management in the amount of $30.4 million in partial exchange for the
rollover of their equity value, and to new and existing investors in the amount
of $41.3 million in partial exchange for their cash investment.
The Orius junior subordinated notes bear interest at a rate of 12% per
annum. A maximum of 40% of the interest is payable in cash beginning January 15,
2001 and the remainder is deferred and accrues as additional principal. Cash
interest may be paid by Orius only to the extent Orius has available funds. NATG
is limited by the terms of its debt agreements as to the amount of dividends
which may be paid to Orius. In the event of default by Orius, the holders of the
junior notes are prohibited from seeking remedy against NATG until all senior
debt obligations are repaid.
13. LISN SERIES A PREFERRED STOCK
On May 28, 1999 the Company authorized 200,000 shares of Series A Preferred
Stock, par value $.01 per share. These shares bear interest at 12% per annum
paid in kind (no dividends to be received until liquidity event). These shares
rank senior to the common stock as to dividends and distributions upon the
Company's liquidation, winding up and dissolution. These shares are subordinated
to all of the Company's current and future liabilities and shall be redeemed on
December 31, 2019.
In connection with the Orius/LISN transaction, these shares were converted
into shares of Orius Series C preferred stock and at December 31, 1999 no shares
of the Series A preferred stock remain outstanding.
14. PRIVATE PLACEMENTS OF LISN STRIPS
During 1999, LISN sold to its employees strips of its securities for
$10,000 each. Each strip consisted of 10.7586 shares of LISN's Company's Class B
common stock, 10.8306 shares of LISN's Series A
F-17
<PAGE> 150
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
preferred stock, and $7,000 principal 12% Junior Subordinated Notes. LISN raised
$910,000 through these sales resulting in the issuance of 979.03 shares of
common stock and 985.58 shares of Series A preferred stock for $136,045 and
$136,955, respectively.
15. SECURITIES SUBJECT TO PUT AND CALL ARRANGEMENTS
At December 31, 1999, securities subject to put and call arrangements are
as follows:
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Securities subject to put and call arrangements:
Series B preferred stock.................................. $39,420,000
Redeemable common stock................................... 15,526,000
-----------
$54,946,000
===========
</TABLE>
As discussed in Notes 1 and 5, certain of the Orius securities are subject
to put and call arrangements whereby Orius Corp. has a call and the security
holders have a put. In March 2000, the Series B preferred stock and a portion of
the redeemable common stock were redeemed by Orius Corp. In connection with
those redemptions, NATG borrowed $41.1 million from its credit facilities and
paid Orius Corp. the funds. It is expected that the remainder of the redeemable
common stock will be retired by the Company in the first half of 2000 and NATG
will be required to fund that redemption through borrowings from its credit
facilities.
16. SERIES C PARTICIPATING PREFERRED STOCK
The Orius Series C participating preferred stock accrues dividends daily at
a rate of 12% per annum based on a liquidation value of $1,000 per share and
participates in any dividends paid to holders of the common stock. The Series C
participating preferred stock will be redeemed on December 31, 2019 at its
purchase price, plus accrued dividends and the liquidation value of the common
stock into which it is convertible.
At December 31, 1999, the total recorded value of the Series C preferred
stock has been determined based upon a purchase price of $1,000 per share,
accrued and unpaid dividends of $995,918 and a value per common share of $13.38.
The purchase price of $1,000 per share and the value per common share of $13.38
were based upon the values of the preferred and common stock purchased in
connection with the Orius/LISN transaction.
The amount attributable to the accretion to the redemption value of the
Series C preferred stock of $78,816,000 is recorded as a direct reduction of
retained earnings and reflects the adjustment to the preferred stock held by the
former LISN shareholders.
F-18
<PAGE> 151
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
17. INCOME TAXES
The components of the provision for income taxes for the period ended
December 31, 1999 are:
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Current
Federal................................................... $2,866,250
State..................................................... 1,109,517
----------
3,975,767
----------
Deferred.................................................... 47,346
Federal................................................... 16,754
----------
State..................................................... 64,100
----------
Total tax provision............................... $4,039,867
==========
</TABLE>
The types of temporary differences between the tax bases of assets and
liabilities and their net financial reporting amounts that give rise to the
deferred liabilities and assets at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Accrued liabilities and reserves............................ $ 870,906
Other....................................................... 146,521
-----------
Total deferred tax assets................................... 1,017,427
-----------
Unbilled accounts receivable................................ 4,272,295
Accumulated depreciation and amortization................... 5,468,413
Reversal of cash basis...................................... 931,371
Contract differences........................................ 249,385
Other....................................................... 636,640
-----------
Total deferred tax liabilities.............................. 11,558,104
-----------
Net deferred tax liability.................................. $10,540,677
===========
</TABLE>
The expected provision for income taxes at the statutory Federal income tax
rate and the actual provision for the period ended December 31, 1999 differs due
primarily to the effects of state taxes and non-deductible goodwill
amortization.
18. PROFIT SHARING AND 401(k) PLANS
The Company has a profit sharing plan covering all eligible employees, as
defined in the plan, which provides, in part, for annual discretionary Company
contributions not to exceed the maximum amount allowable as a deduction for
income tax purposes. Company contributions, included in general and
administrative expenses, were $1,050,000, $500,000 and $200,000 for the years
ended December 31, 1999, 1998 and 1997, respectively.
The Company has a 401(k) plan for all eligible employees. Effective with
the payroll dates after January 1, 1998, the Company contribution rate was 75%
of the first 5% of compensation contributed by the employee. Total Company
contributions amounted to $317,294, $221,501 and $61,685 for the years ended
December 31, 1999, 1998 and 1997, respectively.
F-19
<PAGE> 152
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
19. STOCK OPTION PLAN
On July 19, 1999, the shareholders of the Company approved the Management
Equity Agreement Plan (the "Plan"). The Plan authorized the granting of stock
options for an aggregate of 3,398 shares of common stock to certain officers and
key employees of the Company at an option price of $138.96 which is the
estimated fair value on the effective date of the grant. The Options may be
exercised only to the extent they have vested. As long as an employee investor
remains employed by the Company or its Subsidiaries, 10% of such employee
investor's options will become vested annually on March 31 of each year for a
five year period commencing March 31, 2000 (each a "Vesting Date"). An
additional 10% of an employee investor's options may vest and become exercisable
on each Vesting Date, subject to achievement by the Company of target operating
performance levels for the Company's then most recently completed fiscal year,
which performance targets shall be determined annually in advance by the Board.
All remaining options shall vest and become exercisable on July 19, 2006 as long
as such employee investor has been and remains continuously employed by the
Company as of such date. Upon sale of the Company, all or any portion of the
options which have not previously vested shall become vested and exercisable
upon the occurrence of such event. The options shall expire on July 19, 2009, if
not earlier exercised. No options had vested as of December 31, 1999.
The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" for measuring compensation
expense. The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation". If the Company had adopted the measurement criteria for
calculating compensation expense prescribed by SFAS 123, there would have been
no effect on the Company's consolidated financial statements for the nine months
ended December 31, 1999.
In connection with the LISN/Orius transaction, these options were equitably
adjusted and converted into options of Orius common stock.
20. SEGMENTS
Prior to the Orius/LISN transaction on December 15, 1999, the Company
operated as one segment in the internal telecom service market providing
engineering, furnishing and installation of network equipment and related
components and maintenance services. Subsequent to the transaction and to
strategically manage its business, the Company has designated an additional
operating segment. The external telecom services segment provides installation,
design engineering and maintenance of fiber optic, coaxial and copper cable
networks for the telecom industry.
Identifiable assets for each operating segment at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
1999
------------
<S> <C>
Internal telecom services................................... $ 91,905,511
External telecom services................................... 152,597,325
------------
Total identifiable assets................................... 244,502,836
------------
Goodwill.................................................... 359,881,615
Corporate................................................... 17,593,381
------------
Total assets................................................ $621,977,832
============
</TABLE>
Revenues and operating income for the year ended December 31, 1999 are
primarily related to the internal telecom services operating segment.
F-20
<PAGE> 153
ORIUS CORP. AND SUBSIDIARIES (FORMERLY LISN HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
21. COMMITMENTS AND CONTINGENCIES
LEASES
The Company occupies certain facilities under noncancelable lease
agreements classified as operating leases expiring at various dates through
fiscal 2002, some of which have options to renew. The Company also leases
certain vehicles and equipment under noncancelable operating agreements.
Aggregate rental expense was approximately $559,000 and $313,000 for the years
ended December 31, 1999 and 1998, respectively. Future minimum lease commitments
under these leases are as follows:
<TABLE>
<CAPTION>
OPERATING
LEASES
-----------
<S> <C>
For fiscal years ending:
2000...................................................... $ 2,967,589
2001...................................................... 2,562,525
2002...................................................... 2,431,040
2003...................................................... 2,282,787
2004...................................................... 1,712,527
Thereafter................................................ 382,307
-----------
$12,338,775
===========
</TABLE>
CREDIT LINES ISSUED TO INVESTEES
As discussed in Note 10, the Company has made loan commitments to two
investees. Any loans made pursuant to these commitments are exclusively for
working capital purposes. At December 31, 1999, open commitments under these
loan agreements total $890,000.
LITIGATION
The Company is involved in litigation from time to time in the ordinary
course of its business. In the opinion of management, it is expected that the
ultimate resolution of these matters will not have a material effect on the
Company's consolidated financial position or results of operations and cash
flows.
22. RELATED PARTY TRANSACTIONS
Certain subsidiaries of NATG lease administrative offices from partnerships
and corporations of which certain officers of the subsidiaries are the general
partners or shareholders. The total expense under these arrangements for the
period December 15, 1999 to December 31, 1999, was insignificant. Future minimum
lease commitments under these arrangements are $140,715 in 2000, $121,500 in
2001, $83,070 in 2002 and $33,768 in 2003.
23. SUBSEQUENT EVENTS
On January 31, 2000, the Company purchased Irwin Utilities of Texas, Inc.
for $16.8 million.
On February 9, 2000, the Company issued $150 million of 12 3/4% Senior
Subordinated Notes due 2010 (the Notes). The proceeds from the Notes were used
to repay the Bridge Loan and a portion of the Senior Term B.
During March 2000, Orius exercised its option to purchase $39.4 million of
its outstanding preferred stock and $1.7 million of its common stock. The funds
for the exercise of the call options were obtained from the Company's credit
facilities and the payment to Orius was reflected as a decrease in the Orius
Corp. securities subject to put and call arrangements.
F-21
<PAGE> 154
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors
of Orius Corp.
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, stockholders' equity (deficit) and
cash flows present fairly, in all material respects, the financial position of
Orius Corp. and its subsidiaries (formerly NATG Holdings, Inc.) at December 14,
1999 and December 31, 1998, and the results of their operations and their cash
flows for the year ended December 31, 1998 and the period ended December 14,
1999, in conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
March 31, 2000
F-22
<PAGE> 155
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 14, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 5,513,136 $ 2,252,303
Accounts receivable, net.................................. 101,953,422 33,673,017
Inventory................................................. 13,966,393 9,542,743
Costs and estimated earnings in excess of billings, net... 10,340,896 --
Other current assets...................................... 4,932,153 852,481
------------ -----------
Total current assets.............................. 136,706,000 46,320,544
Property and equipment, net................................. 37,794,883 15,474,071
Goodwill, net............................................... 102,430,132 26,860,511
Deferred financing costs, net............................... 4,835,284 1,400,527
Other assets, net........................................... 4,583,608 917,986
------------ -----------
$286,349,907 $90,973,639
============ ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Current portion of long term debt......................... $ 10,696,082 $ 5,864,268
Borrowings under credit facility.......................... 13,500,000 6,750,000
Accounts payable.......................................... 22,196,695 8,288,999
Accrued liabilities....................................... 20,049,076 5,889,749
Other liabilities......................................... 1,751,450 3,277,386
------------ -----------
Total current liabilities......................... 68,193,303 30,070,402
------------ -----------
Long term debt, less current portion........................ 157,848,906 42,649,585
Deferred income tax liability............................... 5,718,317 2,594,697
------------ -----------
Total liabilities........................................... 231,760,526 75,314,684
------------ -----------
Convertible preferred stock................................. 86,355,722 7,340,649
Value of redemption rights associated with junior
subordinated convertible note............................. 9,417,349 493,358
------------ -----------
95,773,071 7,834,007
------------ -----------
Stockholders' equity (deficit):
Warrants.................................................. 868,538 --
Common stock, par value $.01 per share; 51,804,555 shares
authorized; 14,437,509 and 10,897,151 shares issued and
outstanding at December 14, 1999 and December 31, 1998,
respectively........................................... 140 105
Additional paid-in capital................................ 31,483,834 7,427,745
Retained earnings (accumulated deficit)................... (73,536,202) 397,098
------------ -----------
Total stockholders' (deficit) equity.............. (41,183,690) 7,824,948
------------ -----------
Total liabilities and stockholders' (deficit)
equity......................................... $286,349,907 $90,973,639
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-23
<PAGE> 156
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED DECEMBER 14, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Revenues.................................................... $314,821,066 $81,550,425
Expenses:
Direct costs.............................................. 237,651,744 59,896,854
General and administrative................................ 39,721,043 8,645,007
Depreciation and amortization............................. 10,293,153 3,758,708
------------ -----------
Total operating expenses.......................... 287,665,940 72,300,569
------------ -----------
Income from operations............................ 27,155,126 9,249,856
Other expense (income):
Interest expense, net..................................... 14,006,556 2,507,395
Other income.............................................. (173,317) (72,345)
------------ -----------
Total other expenses.............................. 13,833,239 2,435,050
------------ -----------
Income before provision from income taxes and
extraordinary item..................................... 13,321,887 6,814,806
Provision for income taxes.................................. 6,133,638 3,328,290
------------ -----------
Income before extraordinary charge................ 7,188,249 3,486,516
Extraordinary charge for debt retirement, net of tax benefit
of $578,000............................................... 770,000 --
------------ -----------
Net income.................................................. $ 6,418,249 $ 3,486,516
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-24
<PAGE> 157
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED DECEMBER 14, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 6,418,249 $ 3,486,516
Adjustments to reconcile net income to net cash (used in)
operating activities:
Provision for uncollectible accounts...................... 874,880 405,284
Depreciation and amortization............................. 10,293,153 3,758,708
Extraordinary Charge...................................... 770,000 --
Amortization of deferred financing costs.................. 636,502 166,919
Loss (gain) on disposal of assets......................... -- 53,150
Deferred income tax benefit............................... 272,546 (307,439)
Charge associated with stock compensation................. 5,814,000 --
Changes in assets and liabilities:
(Increase) in accounts receivable...................... (40,727,147) (3,859,919)
(Increase) in inventories.............................. (3,593,650) (9,542,743)
(Increase) in costs and estimated earnings in excess of
billings............................................. (6,701,936) --
(Increase) in other assets............................. (7,046,518) 114,337
Increase in accounts payable and accrued liabilities... 16,845,962 2,318,033
(Decrease) in other liabilities........................ (977,343) (641,807)
------------- ------------
Net cash (used in) operating activities........... (17,121,302) (4,048,961)
------------- ------------
Cash flows from investing activities:
Capital expenditures...................................... (8,924,866) (3,923,200)
Proceeds from the sale of assets.......................... -- 75,510
Purchases of subsidiaries, net of cash acquired, including
payment to accounting acquiror in 1998................. (93,644,558) (40,934,547)
------------- ------------
Net cash (used in) investing activities........... (102,569,424) (44,782,237)
------------- ------------
Cash flows from financing activities:
Borrowings on notes payable and line of credit............ 302,441,669 61,306,677
Principal payments on notes payable and line of credit.... (184,012,666) (13,434,749)
Amounts paid for deferred financing costs................. (5,449,944) (1,567,446)
Distributions paid to stockholders........................ -- (6,117)
Proceeds from issuance of common stock.................... 2,403,123 --
Proceeds from issuance of convertible preferred stock, net
of costs............................................... 7,569,377 4,438,500
------------- ------------
Net cash provided by financing activities......... 122,951,559 50,736,865
------------- ------------
Net increase in cash and cash equivalents................... 3,260,833 1,905,667
Cash and cash equivalents at beginning of year.............. 2,252,303 346,636
------------- ------------
Cash and cash equivalents at end of year.................... $ 5,513,136 $ 2,252,303
============= ============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest.................................................. $ 11,832,699 $ 2,306,701
============= ============
Income taxes.............................................. $ 6,109,426 $ 2,769,243
============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-25
<PAGE> 158
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIODS ENDED DECEMBER 14, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
RETAINED TOTAL
COMMON STOCK COMMON STOCK ADDITIONAL EARNINGS STOCKHOLDERS'
----------------- ------------------- PAID-IN (ACCUMULATED EQUITY
SHARES AMOUNT SHARES AMOUNT WARRANTS CAPITAL DEFICIT) (DEFICIT)
------ -------- ---------- ------ -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997.... 275 $ 27,500 -- $ -- $ -- $ 386 $ 8,119,241 $ 8,147,127
Distributions................. (166,787) (166,787)
Shares exchanged.............. (275) (27,500) 2,779,387 27 -- 27,473 -- --
Cash payment to accounting
acquiror.................... (4,440,635) (7,646,365) (12,087,000)
Common stock issued for
acquisitions................ 8,117,764 78 -- 11,840,521 -- 11,840,599
Accretion associated with
junior subordinated
convertible note............ (493,358) (493,358)
Accretion associated with
convertible preferred stock,
including dividends......... (2,902,149) (2,902,149)
Net income.................... 3,486,516 3,486,516
---- -------- ---------- ---- -------- ----------- ------------ ------------
Balance at December 31, 1998.... -- -- 10,897,151 105 -- 7,427,745 397,098 7,824,948
Warrants issued............... 868,538 868,538
Common stock issued for
acquisitions................ 2,511,279 25 15,838,476 15,838,501
Other common stock
issuances................... 1,029,079 10 2,403,613 2,403,623
Charge associated with stock
compensation................ 5,814,000 5,814,000
Accretion associated with
junior subordinated
convertible note............ (8,923,991) (8,923,991)
Accretion associated with
junior convertible preferred
stock, including
dividends................... (71,427,558) (71,427,558)
Net income.................... 6,418,249 6,418,249
---- -------- ---------- ---- -------- ----------- ------------ ------------
Balance at December 14, 1999.... -- $ -- 14,437,509 $140 $868,538 $31,483,834 $(73,536,202) $(41,183,690)
==== ======== ========== ==== ======== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-26
<PAGE> 159
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 14, 1999 AND DECEMBER 31, 1998
1. COMMENCEMENT AND NATURE OF OPERATIONS
North American Tel-Com Group, Inc. (NATG) was formed in 1997 to create a
nationwide provider of comprehensive telecom infrastructure services. Prior to
March 31, 1998, NATG had no substantive operations. As further discussed in Note
2, NATG entered into a series of transactions with four other companies on March
31, 1998 and NATG began its commercial operations (the Simultaneous Business
Combination). Also discussed in Note 2, NATG went through a reorganization
during 1999 that resulted in the formation of Orius Corp. and NATG became an
indirect wholly-owned subsidiary of Orius Corp. (the Reorganization).
Orius Corp. entered into a business combination with LISN Holdings, Inc. on
December 15, 1999. That transaction was accounted for as a reverse acquisition
purchase with LISN Holdings, Inc. being deemed the accounting acquiror. As a
result of the acquisition by LISN Holdings, Inc., the 1999 financial statements
present the operations for Orius Corp. and its subsidiaries (the Company) as of
and for the period ended December 14, 1999.
2. THE SIMULTANEOUS BUSINESS COMBINATION AND THE REORGANIZATION
THE SIMULTANEOUS BUSINESS COMBINATION
On March 31, 1998, NATG and several other parties simultaneously entered
into a series of transactions and agreements including: a new stockholders'
agreement; preferred stock coupled with a redemption agreement (Notes 9 and 10)
and a junior subordinated note (Note 8) was issued to HIG Cable, Inc. (HIG), a
subsidiary of HIG Capital Management; a credit facility and loan agreement were
entered; and four stock exchange agreements were entered. The result of these
transactions was the commencement of Orius' operations.
Pursuant to the new stockholders agreement and the four stock exchange
agreements, Channel Communications, Inc. (Channel); Cablemasters Corp.
(Cablemasters); Excel Cable Construction, Inc. (Excel); and Mich-Com Cable
Services Incorporated (Mich-Com) each exchanged its common stock for common
stock of NATG and cash. In accordance with APB Opinion No. 16, Channel was
deemed to be the accounting acquiror of the other companies involved in the
Simultaneous Business Combination. This designation was made because after
giving effect to the transactions on March 31, 1998, Channel held the largest
percentage of voting common stock and was the largest entity involved in the
Simultaneous Business Combination. Accordingly, the cash paid of $12.1 million
to the former Channel shareholders was accounted for as a reduction of Channel's
March 31, 1998 equity and no value was ascribed to the NATG shares of common
stock received by the former Channel shareholders.
THE REORGANIZATION
At December 31, 1998, the organization consisted of eight subsidiaries
operating under NATG: Channel; Cablemasters; Excel; Mich-Com; U.S. Cable, Inc.
(U.S. Cable); CATV Subscriber Services, Inc. (CATV); Statewide CATV, Inc.
(Statewide); and Burn-Techs, Inc. (Burn-Techs). At December 31, 1998, the common
stock of NATG was owned by the former owners of these companies and certain
executive officers and founders of NATG. HIG Cable, Inc. owned all the
outstanding preferred stock.
On February 8, 1999, a reorganization occurred in connection with the
acquisition of four companies and related financing. Orius Corp., a Delaware
corporation, was formed, and it formed NATG Holdings, LLC (NATG Holdings), a
Delaware limited liability company. Orius Corp. held all of the interest in NATG
Holdings. NATG Holdings formed a subsidiary, NATG Merger Sub., which was merged
with and into NATG with NATG as the surviving corporation. As a result of the
Reorganization, NATG became
F-27
<PAGE> 160
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
an indirect wholly owned subsidiary of Orius. The Reorganization resulted in all
of the stockholders of NATG holding shares of Orius.
Shares of common and preferred stock of NATG were converted into one-tenth
of a share of common and preferred stock of Orius, respectively. This
one-for-ten exchange was the same for all stockholders and has been reflected in
these financial statements by restating all share amounts.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
The Company's operations consist primarily of installation, design,
engineering, and maintenance services for the telecom industry in the United
States.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include Orius Corp. and its
subsidiaries, all of which are wholly-owned. All material intercompany accounts
and transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Significant estimates made in the preparation of these
financial statements include those related to the revenue recognized and costs
and expenses associated with contracts in process at period end, allowances for
doubtful accounts, and the estimated lives of long-lived assets. Actual results
could differ from those estimates and such differences may be material to the
financial statements.
REVENUES
Prior to the acquisitions made in 1999, substantially all of the Company's
revenues were earned from contracts that provided for payments for units
delivered by the Company. These contracts generally entitle the Company to
revenue for each unit completed. Accordingly, the Company accounts for revenue
and related costs associated with these types of contracts using the
units-of-delivery revenue recognition method. Revenue is recognized as the
related units are completed, and costs allocable to the delivered units are
recognized as the cost of earned revenue. Unbilled revenues consist of
work-in-process on contracts based on management's estimate of work performed,
but not billed. All costs associated with unbilled revenues are recorded as
expenses in the same period as the unbilled revenue. The Company also receives
advances from customers related to certain of these contracts which are
reflected as deferred revenues on the balance sheet.
With the acquisitions discussed in Note 4, the Company assumed and began to
offer contracts under fixed price arrangements. Consequently, the Company
modified its revenue recognition policy to include these types of contracts. For
fixed price contracts, the Company recognizes revenue and the related costs
under the percentage-of-completion method. Revenues and earnings from these
contracts are recognized as the related costs are incurred based on the
relationship of costs incurred to total estimated contract costs. Costs and
estimated earnings in excess of billings for contracts-in-progress represents
revenue recognized but not yet billed. Billings in excess of costs and estimated
earnings represents billings on contracts for which costs have not yet been
incurred and revenue and earnings have not been recognized.
F-28
<PAGE> 161
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Additionally, NATG recognizes revenues from short-term contracts with
duration less than two weeks under the completed contract method. Billings and
costs are accumulated on the balance sheet, and no profit is recorded before
completion or substantial completion of the work.
At the time a loss on any contract becomes known, the entire amount of the
estimated loss is accrued.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all highly liquid investments with a
maturity of three months or less at the time of purchase. For purposes of the
consolidated statements of cash flows, the Company considers these to be cash
equivalents.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation and amortization is
computed over the estimated useful life of the assets utilizing the
straight-line method. The estimated useful lives of the assets are:
buildings -- 20-30 years; leasehold improvements -- the term of the respective
lease or the estimated useful life of the improvements, whichever is shorter;
vehicles -- 3-7 years; equipment and machinery -- 3-7 years; computer software
and hardware -- 3-5 years; and furniture and fixtures -- 5-7 years. Maintenance
and repairs are expensed as incurred; expenditures that enhance the value of the
property or extend its useful life are capitalized. When assets are sold or
returned, the cost and related accumulated depreciation are removed from the
accounts and the resulting gain or loss is included in income.
INVENTORY
Inventories are stated at the lower of cost, on a first-in, first-out
basis, or market. Inventory consists of items purchased for resale at cost based
on terms of customer contracts. Accordingly, there is no cost other than the
purchase price of the items purchased included in the carrying value.
Substantially all of the Company's inventories can be used in multiple
contracts.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company's financial instruments approximate their
recorded values due to the relatively short-terms of the instruments and the
floating interest rate of the Company's debt. CONCENTRATIONS OF CREDIT RISK
Substantially all of the Company's accounts receivable are due from
companies within the telecommunications industry located throughout the United
States. Credit is extended based on an evaluation of the customer's financial
condition and, generally, collateral is not required. Credit losses are provided
for in the consolidated financial statements.
The Company maintains various bank accounts and at times, amounts may be in
excess of FDIC insurance limits.
INTANGIBLE ASSETS
The excess of the purchase price over the fair market value of the tangible
net assets of acquired businesses (goodwill) is amortized on a straight-line
basis over estimated useful lives of 10 to 25 years. The appropriateness of the
carrying value of goodwill is reviewed periodically by the Company at a
subsidiary level. An impairment loss for the difference between fair value and
recorded value is recognized
F-29
<PAGE> 162
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
when the projected undiscounted future cash flows are less than the carrying
value of goodwill. No impairment loss has been recognized in the period
presented. Amortization expense was $3,321,242 and $766,953 for the fiscal
periods ending December 14, 1999 and December 31, 1998, respectively. The
intangible assets at December 14, 1999 and December 31, 1998 are net of
accumulated amortization of $4,088,196 and $766,953, respectively.
Deferred financing costs of $5,471,786 and $1,567,446 at December 14, 1999
and December 31, 1998, respectively, are being amortized over the term of the
related debt facility. For the period ended December 14, 1999 and December 31,
1998, $636,502 and $166,919, respectively, of amortization expense related to
these costs has been included in interest expense.
INCOME TAXES
Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities.
STOCK OPTION PLANS
In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock Based Compensation," which was effective for the Company beginning August
1, 1996. SFAS No. 123 requires expanded disclosures of stock based compensation
arrangements with employees, and encourages, but does not require, compensation
cost to be measured based on the fair value of the equity instrument awarded.
Under SFAS No. 123, companies are permitted, however, to continue to apply
Accounting Principle Board (APB) Opinion No. 25, which recognizes compensation
based on the intrinsic value of the equity instrument awarded. The Company
applies APB Opinion No. 25 to its stock based compensation awards to employees
and properly discloses the required pro forma effect of applying SFAS No. 123 on
net income included in Note 15.
RECLASSIFICATIONS
Certain amounts presented in the prior year financial statements have been
reclassified to conform to the current year presentation.
4. ACQUISITIONS
Orius acquired seven companies during 1998 (excluding Channel) for total
consideration of $39.6 million plus transaction related expenses of $1.2
million. The cash paid for acquisitions totaled $27.6 million (net of cash
acquired of $3.0 million) and the value of the common stock issued totaled $11.8
million. Additionally, approximately $7.5 million of debt was assumed. All of
the 1998 acquisitions were accounted for as purchases and were included in the
Company's operations from the dates of acquisition. The total goodwill
associated with these transactions was approximately $27.6 million.
During 1999, five companies were acquired for total consideration of
$107.75 million plus transaction related expenses of $1.65 million.
Additionally, approximately $7.1 million of debt was assumed. Cash paid for the
four acquisitions totaled $91.9 million (net of cash acquired of $4.8 million)
and the value of common stock issued (2,511,279 shares) totaled $15.8 million.
The purchase price of each acquisition is subject to a customary purchase price
adjustment mechanism. All the 1999 acquisitions were accounted for as purchases
and were included in the results of operations from the date of acquisition. The
goodwill associated with the 1999 acquisitions totaled $78.9 million.
Pursuant to certain of the purchase agreements, the Company may be required
to give additional consideration of cash and Orius common stock to the former
acquired-company shareholders upon
F-30
<PAGE> 163
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
attainment of specified financial criteria over the periods ended December 31,
1999 and the year ending December 31, 2000. The amount of shares and cash to be
issued cannot be determined until the periods expire and the attainment of the
criteria is established. The Company accounts for this additional consideration
when the specified financial criteria are achieved and it is probable it will be
paid. At December 14, 1999, based upon the expected attainment of fiscal 1999
targets for certain acquisitions, additional consideration of $1.5 million has
been recorded as additional purchase price and included as a liability to the
former stockholders of the acquired companies. If targets are achieved in 2000,
the Company may be obligated to pay additional consideration of $2.9 million and
issue up to 120,000 shares of common stock.
Since its commencement of operations, the following acquisitions have been
made by Orius:
<TABLE>
<CAPTION>
ACQUISITION PRIMARY PRINCIPAL
DATE LOCATION CUSTOMERS
----------- -------------- ------------------
<S> <C> <C> <C>
Cablemasters Corp............................. 3/31/98 Pennsylvania Cable TV
Excel Cable Construction, Inc................. 3/31/98 Florida Cable TV
Mich-Com Cable Services Incorporated.......... 3/31/98 Florida Cable TV
U.S. Cable, Inc............................... 6/30/98 Missouri Cable TV
CATV Subscriber Services, Inc................. 8/31/98 North Carolina Cable TV
State Wide CATV, Inc.......................... 8/31/98 Florida Cable TV
Burn-Techs, Inc............................... 8/31/98 Florida Telecommunications
Schatz Underground Cable...................... 2/26/99 Missouri Telecommunications
Copenhagen Utilities & Construction,.......... 2/26/99 Oregon Telecommunications
Das-Co of Idaho............................... 2/26/99 Idaho Telecommunications
Network Cabling Services...................... 2/26/99 Texas Network Services
Texel Corporation............................. 5/25/99 Virginia Network Services
</TABLE>
The following unaudited pro forma financial information represents the
unaudited pro forma results of operations as if the aforementioned acquisitions
completed during the periods ended December 31, 1998 and December 14, 1999 had
been completed on January 1, 1998. These pro forma results give effect to
increased interest expense for acquisition-related debt and amortization of
related goodwill. These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which would have been achieved had these acquisitions been completed on January
1, 1998 nor are the results indicative of the company's future results of
operations (in thousands and unaudited).
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
DECEMBER 14, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues.................................................... $341,368 $264,740
Net income.................................................. $ 10,236 $ 9,777
</TABLE>
F-31
<PAGE> 164
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
At December 14, 1999, contracts accounted for using the
percentage-of-completion method totaling $89.7 million were in process. Costs
and estimated earnings, and related billings on uncompleted projects at December
14, 1999 are as follows (in thousands):
<TABLE>
<S> <C>
Costs and estimated earnings on uncompleted contracts....... $41,189,851
Billings to date............................................ 30,848,955
-----------
Net costs and estimated earnings in excess of billings...... 10,340,896
===========
Costs and estimated earnings in excess of billings.......... 10,955,078
Billings in excess of costs and estimated earnings.......... (614,182)
-----------
Net costs and estimated earnings in excess of billings...... $10,340,896
===========
</TABLE>
6. ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
DECEMBER 14, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Contract billings........................................... $ 84,751,120 $23,673,522
Unbilled accounts receivable................................ 9,606,214 7,519,615
Retainage................................................... 8,197,404 2,818,579
------------ -----------
102,554,738 34,011,716
Less allowance for doubtful accounts........................ (601,316) (338,699)
------------ -----------
Accounts receivable, net.................................... $101,953,422 $33,673,017
============ ===========
</TABLE>
The balances billed but not paid by customers pursuant to retaining
provisions in customer contracts will be due upon completion of the contracts
and acceptance by the customer. Based on the Company's experience with similar
contracts, the majority of the retention balances at December 14, 1999 are
expected to be collected within the next twelve months. Unbilled accounts
receivable relate to the Company's unit based contracts and represent revenue
the Company is entitled to based upon the units delivered as of the balance
sheet date.
7. PROPERTY AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation
and consist of the following:
<TABLE>
<CAPTION>
DECEMBER 14, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Land, building and leasehold improvements................... $ 4,247,324 $ 616,258
Vehicles.................................................... 13,823,791 12,957,646
Equipment and machinery..................................... 28,276,378 7,579,213
Office equipment, including furniture and fixtures, and
computer equipment and software........................... 5,367,356 770,931
------------ -----------
51,714,849 21,924,048
Less: accumulated depreciation............................ (13,919,966) (6,449,977)
------------ -----------
Property and equipment, net................................. $ 37,794,883 $15,474,071
============ ===========
</TABLE>
F-32
<PAGE> 165
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Certain subsidiaries of the Company have entered into lease arrangements
accounted for as capitalized leases. The carrying value of assets under capital
leases at December 14, 1999 and December 31, 1998 was $950,227 and $474,326, net
of accumulated depreciation of $283,895 and $76,628, respectively. Assets under
capital leases are included as a component of vehicles and equipment and
machinery.
8. DEBT AND CAPITAL LEASE OBLIGATIONS
BANK CREDIT FACILITY
<TABLE>
<CAPTION>
DECEMBER 14, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Bank credit facility:
Revolving credit facility, maturing on April 1, 2005;
interest rate of LIBOR or Federal Funds Rate plus
0.50%, in either case plus a margin of 2.00% or 0.50%,
respectively........................................... $ -- $ 6,750,000
Revolving credit facility, maturing on February 26, 2004;
interest rate of LIBOR or Federal Funds Rate plus
0.50%, plus a margin ranging from 2.25% to 3.00% for
LIBOR and 1.25% to 2.00% for Federal Funds Margin based
on leverage ratio, beginning June 30, 1999............. 13,500,000 --
Term loan, amortizing with final payment due April 1,
2003; interest rate of LIBOR or Federal Funds plus
0.50%, in either case plus a margin of 2.00% or 0.50%,
respectively........................................... -- 27,625,000
Term loan, amortizing with final payment due April 1,
2005; interest rate of LIBOR or Federal Funds plus
0.50%, in either case plus a margin of 2.375% or
0.876%, respectively................................... -- 18,950,000
Term loan A, amortizing with final payment due December 1,
2003; interest rate of LIBOR or Federal Funds plus
0.50%, plus a margin ranging from 2.25% to 3.00% for
LIBOR and 1.25% to 2.00% for Federal Funds. Margin
based on leverage ratio, beginning
June 30, 1999.......................................... 92,400,000 --
Term loan B, amortizing with final payment due December 1,
2004; interest rate LIBOR on Federal Funds Rate plus
0.50%, in either case plus a margin of 3.75% or 2.75%,
respectively........................................... 57,600,000 --
Term loan C, amortizing with final payment due December 1,
2005; interest rate LIBOR on Federal Funds Rate plus
0.50%, in either case plus a margin of 5.00% or 4.00%,
respectively........................................... 14,231,464 --
Junior subordinated convertible note, due April 15, 2005,
interest rate of 9.00%................................. 1,150,000 1,063,750
Other debt and capital lease obligations.................. 3,163,524 875,103
------------ ------------
Total debt and capital lease obligations.......... 182,044,988 55,263,853
Less: current portion..................................... (24,196,082) (12,614,268)
------------ ------------
Long-term debt............................................ $157,848,906 $ 42,649,585
============ ============
</TABLE>
On February 26, 1999, NATG Holdings entered into a new credit agreement
with Merrill Lynch, Pierce Fenner & Smith Incorporated and PNC Bank, National
Association ("PNC"), as joint lead arrangers and a new syndication of banks
("New Credit Agreement"). The New Credit Agreement, which was amended on May 24
and September 23, 1999, includes a $50.0 million revolving credit facility,
F-33
<PAGE> 166
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
maturing in five years, and a $168.5 million senior secured term loan credit
facility. The term loan facility is allocated among a $95.5 million Term A
facility, maturing on December 1, 2003; a $58 million Term loan B facility,
maturing of December 1, 2004; and a $15 million Term loan C facility, maturing
on December 1, 2005. NATG Holdings borrowed under the New Credit Agreement to
complete its acquisitions in February and May 1999 and to repay substantially
all indebtedness of NATG, and terminate all commitments to make extensions of
credit to NATG, under NATG's old credit facility with PNC.
Amounts under the revolving credit facility and term loan facility bear
interest, at NATG Holdings' choice, at either LIBOR plus an applicable margin or
the higher of PNC's corporate base rate of interest or the Federal Fund Rate
plus 0.50% (the "ABR"), in each case plus an applicable margin. For LIBOR loans,
the margin is 3.00% for the revolving credit facility and Term loan A facility,
3.75% for the Term loan B facility and 5.00% for the Term loan C facility. For
ABR loans, the margin is 2.00% for the revolving facility and Term loan A
facility, 2.75% for the Term loan B facility and 4.00% for the Term loan C
facility. Outstanding amounts under the revolving credit facility and term loan
facility are secured by substantially all of NATG Holdings' assets and the
pledge of all the outstanding shares of common stock of each of Orius' direct
and indirect subsidiaries, including NATG. The credit facility also contains
affirmative and negative covenants relating to NATG Holdings' operations.
As a result of the termination and repayment of the indebtedness
outstanding under the old credit facility, the deferred financing costs
associated with the old credit facility totaling $1,348,000 were written off
resulting in an extraordinary charge to income of $770,000, net of tax benefits
of $578,000.
CAPITAL LEASE OBLIGATIONS AND EQUIPMENT LOANS
In addition to the borrowings under the credit facility, certain
subsidiaries have obligations outstanding under capital leases and other
equipment financing arrangements. The remaining obligations are payable in
monthly installments expiring at various dates through June 2003.
MATURITIES
At December 14, 1999, the estimated aggregate annual repayments for notes
payable and capital lease obligations are as follows:
<TABLE>
<S> <C>
Maturities for fiscal years:
2000...................................................... $ 24,196,082
2001...................................................... 24,348,597
2002...................................................... 27,073,905
2003...................................................... 26,905,927
2004...................................................... 48,861,646
Thereafter................................................ 30,658,831
------------
$182,044,988
============
</TABLE>
JUNIOR SUBORDINATED CONVERTIBLE NOTE
On March 31, 1998, the Company sold to HIG a $1,000,000, 9% junior
subordinated convertible note, due April 15, 2005 (the Junior Convertible Note).
The debt may be converted at any time, at the option of HIG or at the Company's
option upon an initial public offering, into 692,627 shares of the Company's
common stock. As further discussed in Note 10, the Company and HIG entered into
a redemption agreement that gives HIG certain rights to put its converted common
stock to the Company. Due to the conversion feature of the Junior Convertible
Note coupled with the redemption rights of HIG, the liability
F-34
<PAGE> 167
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
associated with the Junior Convertible Note is adjusted at each balance sheet
date to the greater of the principal plus interest due or the fair market value
of the converted common stock. At December 14, 1999, the fair market value of
the common stock is estimated at $13.38 per share. Accordingly, the liability
for the Junior Convertible Note is recorded at $9,267,349. The amount
attributable to the accretion to the fair value of the converted common stock
for the periods ended December 14, 1999 and December 31, 1998 of $8,923,991 and
$493,358, respectively, is recorded as a reduction of retained earnings and on a
separate line in the balance sheet. The interest charge for the periods ended
December 14, 1999 and December 31, 1998 totaled $90,000 and $63,500,
respectively and was recorded as interest expense.
9. CONVERTIBLE PREFERRED STOCK
During 1998, The company issued 10,000 shares of Series A Convertible
Preferred Stock (Series A Preferred) to HIG for $4,438,500, net of $61,500 of
issue costs. The Series A Preferred has an 8% cumulative dividend, is
convertible to shares of Orius common stock, has full voting rights on an as-if
converted basis and its conversion is at the discretion of HIG. Further, HIG was
given certain redemption rights discussed in Note 10. In connection with the
Reorganization discussed above, the number of shares of common stock into which
the Series A Preferred was convertible was changed to 3,116,828. At December 14,
1999 and December 31, 1998, the total recorded value of the Series A Preferred
has been determined based upon the convertible common shares into which the
Series A Preferred was convertible as of those dates at $2.34 per common share
and $13.38 per common share, respectively. The 1998 per common share price was
based upon the pricing of the February 26, 1999 Series B Convertible Preferred
Stock discussed below and the value of the common stock used in the December 15,
1999 transaction with LISN Holdings, Inc. discussed in Note 19. The accretion to
estimated fair value and dividends during the periods ended December 14, 1999
and December 31, 1998 was $34,993,495 and $2,902,149, respectively.
In connection with the acquisitions on February 26, 1999, HIG Cable West,
Inc. purchased 7,596.38 shares of Series B Convertible Preferred Stock (Series B
Preferred) for $7,569,377. The Series B Preferred has the same rights as the
Series A Preferred and may be converted into 3,252,290 shares of Orius Corp.
common stock. At December 14, 1999, the recorded value of the Series B Preferred
has been determined based upon the converted common shares of 3,252,290 at
$13.38 per share, or $43,515,640. The accretion to estimated fair value and
dividends from February 26, 1999 to December 14, 1999 totaled $36,434,063.
10. HIG REDEMPTION RIGHTS
The Company entered into a redemption agreement on March 31, 1998 with HIG
(the Redemption Agreement) that allows HIG to redeem its converted shares of
common stock derived from the Series A and Series B Preferred and Junior
Convertible Note. Pursuant to the Redemption Agreement, HIG may cause the
Company to redeem its converted shares of common stock at the earlier of a sale
of the Company, a merger involving the Company, commencement of liquidation or
bankruptcy proceedings, or April 15, 2005. Conversion can only occur for all of
the shares of Preferred Stock at once and the junior Convertible Note must be
converted at the same time. The redemption value of the converted shares of
common stock is the greater of fair market value at the date of redemption or
the initial purchase price for the Preferred Stock and junior Convertible Note
plus any accumulated and unpaid dividends and interest. In the event of an
initial public offering of Orius common stock, HIG's redemption rights are
terminated.
11. WARRANTS TO PURCHASE COMMON STOCK
In connection with entering the new credit agreement on February 26, 1999,
the Company issued to the joint lead arrangers and certain of the banks that
participated in the new credit agreement warrants to
F-35
<PAGE> 168
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
purchase a total of 371,853 shares of common stock. The warrants expire March
31, 2009 and entitle the holders to purchase common stock for $.01 per share.
The warrants are exercisable any time after the consummation of an initial
public offering, September 30, 2003 or in the event of a merger or other change
of control.
The estimated fair market value of the warrants at the date of issuance of
$868,538 has been reflected in the separate component of stockholders' equity
entitled warrants. An offsetting amount has been reflected as a discount or
reduction of the Company's long-term debt. The $858,538 of discount is being
recognized as interest expense using the effective interest method over 66
months which is the weighted average life of the credit agreement components
including the full capacity of the revolver and the Term A, B and C loans.
12. ISSUANCE OF COMMON STOCK
On February 26, 1999, the Company issued to certain of its then existing
stockholders 1,029,079 shares of common stock in exchange for cash of
$2,403,623.
13. INCOME TAXES
Effective January 1, 1997, Channel elected to be treated as an S
corporation for income tax purpose as allowed under the Internal Revenue Code.
With this conversion, the Company's net deferred tax balance of $220,276 was
reversed as a credit to the provision for income taxes. The tax liabilities for
the year ended December 31, 1997 were the responsibility of the individual
shareholder. In connection with the transaction on March 31, 1998, the Company's
S corporation status was terminated. With this termination, the Company was
required to recognize a deferred tax liability and corresponding charge to
income of $330,254 with payment to be spread over four years.
The components of the provision for income taxes for the periods ended
December 14, 1999 and December 31, 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Current
Federal................................................... $3,512,646 $2,912,700
State..................................................... 1,770,446 723,029
---------- ----------
5,283,092 3,635,729
---------- ----------
Deferred.................................................... 267,205 (555,460)
Federal................................................... 5,341 (82,213)
---------- ----------
State..................................................... 272,546 (637,693)
---------- ----------
Total tax provision............................... $5,555,638 $2,998,036
========== ==========
</TABLE>
F-36
<PAGE> 169
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The types of temporary differences between the tax bases of assets and
liabilities and their net financial reporting amounts that give rise to the
deferred liabilities and assets at December 14, 1999 and December 31, 1998 are
as follows:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Allowance for doubtful accounts............................. $ 525,750 $ 463,327
Other....................................................... 146,521 103,088
---------- ----------
Total deferred tax assets......................... 672,271 566,415
---------- ----------
Accumulated depreciation and amortization................... 5,718,307 1,893,553
Reversal of cash basis...................................... 931,371 1,267,559
Other....................................................... 886,025 --
---------- ----------
Total deferred tax liabilities.................... 7,535,703 3,161,112
---------- ----------
Net deferred tax liability........................ $6,863,432 $2,594,697
========== ==========
</TABLE>
A reconciliation of the expected provision for income taxes at the
statutory Federal income tax rate and the actual provision for the period ended
December 14, 1999 and December 31, 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
AMOUNT % AMOUNT %
---------- ---- ---------- ----
<S> <C> <C> <C> <C>
Expected total tax at statutory rate.................... $3,753,360 35.0 $2,317,034 34.0
State taxes, net of federal benefit..................... 1,150,673 10.7 519,677 6.8
Nondeductible amortization.............................. 919,821 8.6 268,452 2.8
Other, net.............................................. (268,216) (2.5) (107,127) (1.5)
---------- ---- ---------- ----
$5,555,638 51.8 $2,998,036 42.1
========== ==== ========== ====
</TABLE>
14. EMPLOYEE BENEFIT PLANS
Certain subsidiaries of the Company have defined contribution plans that
provide retirement benefits to all employees that elect to participate. Under
the plans, participating employees may defer up to 15% of their base pre-tax
compensation. Generally, the Company's contributions to the plans are
discretionary.
15. STOCK OPTION PLANS
The Company has reserved 518,045 shares of common stock under its 1998
Incentive Stock Option Plan (the "Plan") which was approved by the stockholders
on March 30, 1998. The Plan provides for the granting of options to key
employees. Options are exercisable over a period of 10 years. A summary of the
status of the Plan as of December 14, 1999 and December 31, 1998 and the changes
during the years then ended is presented below:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
PRICE PER EXERCISE
SHARES SHARE PRICE
------- ---------- --------
<S> <C> <C> <C>
Options granted............................................. 340,060 $4.83-8.69 $5.46
------- ---------- -----
Options outstanding, December 31, 1998...................... 340,060 4.83-8.69 5.46
------- ---------- -----
Options granted............................................. 366,820 6.76-8.69 7.37
Options forfeited........................................... 54,868 4.83-8.69 5.99
------- ---------- -----
Options outstanding, December 14, 1999...................... 652,012 $4.83-8.69 $6.55
======= ========== =====
</TABLE>
F-37
<PAGE> 170
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Grants of options under the plan are accounted for using the intrinsic
value method. Accordingly, no compensation cost has been recognized for grants
made to date. There would have been no difference in net income for the period
ended December 31, 1998 had compensation cost been determined under the
provisions of SFAS 123 regarding the minimum fair value of each grant. For
purposes of this calculation in 1998, the fair value of each option grant is
estimated as of the date of grant using the Black-Scholes option pricing model.
The weighted-average assumptions used in determining fair value as disclosed for
SFAS 123 were risk-free interest rates ranging from 5.0% to 5.7% and an option
life of six years. There would have been no difference in net income for the
period ended December 14, 1999 because the Company accelerated the vesting of
all options in connection with the transaction discussed in Note 19. As a result
of the acceleration, compensation expense of $5,814,000 was recognized and that
amount would have been approximately the same under SFAS No. 123.
16. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK
The operating subsidiaries obtain contracts from both public and private
concerns. For the periods ended December 14, 1999 and December 31, 1998,
approximately 36% and 56%, respectively, of the contract revenues were from
three customers (TCI, Time Warner, and MediaOne), with the largest customer
representing approximately 16% and 24%, respectively, of the contract revenues.
Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of trade accounts receivable.
The three customers noted above represent a significant portion of the Company's
customer base. As of December 14, 1999 and December 31, 1998, the total
outstanding trade receivables from these customers was approximately $37.4
million and $13 million, respectively, or 38% and 50%, respectively, of the
Company's outstanding trade receivables.
17. COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries have entered operating leases covering
office facilities, vehicles and equipment that have non-cancelable terms in
excess of one year. Certain of these leases contain renewal provisions and
generally require the Company to pay insurance, maintenance, and other operating
expenses. Total expense incurred under operating lease agreements for the
periods ended December 14, 1999 and December 31, 1998 were approximately
$4,325,647 and $1,183,300, respectively.
<TABLE>
<S> <C>
For fiscal years ending:
2000...................................................... $ 2,669,705
2001...................................................... 2,250,375
2002...................................................... 2,159,168
2003...................................................... 2,045,102
2004...................................................... 1,459,250
Thereafter................................................ 382,307
-----------
Total payments............................................ $10,965,907
===========
</TABLE>
18. RELATED PARTY TRANSACTIONS
Certain subsidiaries of the Company lease administrative offices from
partnerships and corporations of which certain officers of the subsidiaries are
the general partners or shareholders. The total expense under these arrangements
was $1,145,747 during the period ended December 14, 1999. The future minimum
lease commitments under these arrangements are $700,814 in 2000, $365,140 in
2001, $329,140 in 2002 and 2003 and $55,028 in 2004.
F-38
<PAGE> 171
ORIUS CORP. AND SUBSIDIARIES (FORMERLY NATG HOLDINGS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
19. SUBSEQUENT EVENTS
On December 15, 1999, the Company merged with LISN Holdings, Inc. In
connection with that transaction, all Orius common stock and common stock
equivalents (including the Series A and B Preferred Stock, Junior Convertible
Note and stock options) were either cashed out or exchanged for new securities
at an equivalent value of $13.38 per share. Additionally, all of the Orius debt
was retired.
F-39
<PAGE> 172
REPORT OF INDEPENDENT ACCOUNTANTS
Stockholder and Board of Directors of
Kenya Corporation and Subsidiary
Sheboygan, Wisconsin
We have audited the accompanying consolidated balance sheet of Channel
Communications, Inc. (f/k/a Kenya Corp.) as of December 31, 1997, and the
related consolidated statements of income and retained earnings and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the consolidated
financial position of Kenya Corporation and subsidiary as of December 31, 1997,
and the consolidated results of their operations and their consolidated cash
flows for the year then ended in conformity with generally accepted accounting
principles.
/s/ WILLIAMS, YOUNG & ASSOCIATES, LLC
Madison, Wisconsin
February 27, 1998
F-40
<PAGE> 173
CHANNEL COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 346,636
Accounts receivable, net.................................. 4,349,058
Unbilled accounts revenue................................. 1,495,732
Prepaid and other current assets.......................... 76,158
----------
Total current assets...................................... 6,267,584
----------
Property and equipment, net................................. 3,303,390
----------
Other assets................................................ 97,754
----------
Total assets...................................... $9,668,728
==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable.......................................... $1,244,919
Accrued expenses.......................................... 43,454
Accrued wages and benefits................................ 233,228
----------
Total liabilities................................. 1,521,601
----------
Stockholders' equity:
Common stock: $100 par value, 3,000 shares authorized, 275
issued and outstanding................................. 27,500
Additional paid-in capital................................ 386
Retained earnings......................................... 8,119,241
----------
Total stockholders' equity........................ 8,147,127
----------
Total liabilities and stockholders' equity........ $9,668,728
==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
F-41
<PAGE> 174
CHANNEL COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
REVENUES, NET:.............................................. $20,267,800
-----------
EXPENSES:
Direct costs................................................ 15,256,947
General and administrative.................................. 2,260,758
Depreciation and amortization............................... 823,602
-----------
Total............................................. 18,341,307
-----------
Operating income............................................ 1,926,493
Other (income) expense:
Interest income, net................................. (66,314)
Other income......................................... (69,812)
-----------
Income before income taxes.................................. 2,062,619
(Benefit) for income taxes.................................. (137,387)
-----------
Net Income.................................................. $ 2,200,006
Retained earnings beginning of year......................... 8,512,674
Less; distributions......................................... (2,593,439)
-----------
Retained earnings end of year............................... $ 8,119,241
===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
F-42
<PAGE> 175
CHANNEL COMMUNICATIONS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
Increase (Decrease) in cash and equivalents from:
Operating Activities:
Net Income.................................................. $2,200,006
Adjustments to reconcile net cash provided by (used in)
operating activities:
Provision for uncollectible accounts...................... 14,047
Depreciation and amortization............................. 823,602
Loss (gain) on disposal of assets......................... (13,705)
Deferred income tax benefit............................... (220,276)
Changes in assets and liabilities:
Accounts receivable and unbilled revenues................. (2,982,762)
Other current assets...................................... 86,050
Other noncurrent assets................................... 9,623
Accounts payable and accrued liabilities.................. (112,602)
Other liabilities......................................... (2,185,326)
----------
Net cash provided by (used in) operating activities......... (2,381,343)
----------
INVESTING ACTIVITIES:
Capital expenditures...................................... (211,947)
Proceeds from sale of assets.............................. 57,542
Collection on notes receivable stockholder................ 548,614
----------
Net cash provided by (used in) investing activities......... 394,209
----------
FINANCING ACTIVITIES:
Distributions paid to stockholder......................... (2,593,439)
----------
Net cash provided by (used in) financing activities......... (2,593,439)
----------
NET CASH INFLOW (OUTFLOW) FROM ALL ACTIVITIES............... (4,580,573)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............ 4,927,209
----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 346,636
==========
Cash paid for:
Interest.................................................. $ 19,858
Income taxes.............................................. $2,185,326
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
F-43
<PAGE> 176
CHANNEL COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature Of Business -- Channel Communications, Inc.'s (f/k/a Kenya
Corporation, the Company) constructs and installs cable television systems
throughout the United States. See Note 6 regarding concentration of business
with significant customers.
Principles Of Consolidation -- The consolidated financial statements
include the Company and its wholly-owned subsidiary, material intercompany
accounts and transactions have been eliminated.
Use Of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates and such differences may be material to the financial statements.
Estimates are used in the Company's revenue recognition of work-in-process,
allowance for doubtful accounts, depreciation and amortization, and in the
estimated lives of assets.
Revenues -- The Company's revenue consists principally of unit contracts.
Consequently, the Company accounts for revenue and related costs using the
units-of-delivery revenue recognition method. Revenue is recognized as the
related units are completed, and costs allocable to the delivered units are
recognized as the cost of earned revenue. Unbilled revenues consist of
work-in-process on contracts based on management's estimate of work performed,
but not billed. All costs associated with unbilled revenues are recorded as
expenses in the same period as the unbilled revenue. At the time a loss on a
contract becomes known, the entire amount of the estimated ultimate loss is
accrued. Deferred revenues consist principally of prepayments by customers for
the cost of material and services to be provided and are recognized as revenues
as the related material is used or services are provided.
Cash And Cash Equivalents -- Cash and cash equivalents include all highly
liquid investments with a maturity of three months or less at the time of
purchase. For purposes of the consolidated statements of cash flows, the Company
considers these to be cash equivalents.
Property And Equipment -- Property and equipment is stated at cost.
Depreciation and amortization is computed over the estimated useful life of the
assets utilizing the straight-line method. The estimated useful service lives of
the assets are: buildings -- 20-30 years; leasehold improvements -- the term of
the respective lease or the estimated useful life of the improvements, whichever
is shorter; vehicles -- 3-7 years; equipment and machinery -- 3-7 years;
computer software and hardware -- 3-5 years; and furniture and fixtures -- 5-7
years. Maintenance and repairs are expensed as incurred; expenditures that
enhance the value of the property or extend its useful life are capitalized.
When assets are sold or retired, the cost and related accumulated depreciation
are removed from the accounts and the resulting gain or loss is included in
income.
Fair Value Of Financial Instruments -- The fair value of the Company's
financial instruments approximate the carrying values.
Income Taxes -- The Company, with the consent of its stockholder, has
elected to be an S corporation under the Internal Revenue Code. In lieu of
corporation income taxes, the stockholders of an S corporation are taxed on
their proportionate share of the company's taxable income. Therefore, no
provision or liability for federal and state income taxes has been included in
the financial statements (see Note 5.)
F-44
<PAGE> 177
CHANNEL COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. ACCOUNTS RECEIVABLE
Accounts receivable at December 31, 1997 consist of the following:
<TABLE>
<S> <C>
Contract billings........................................... $4,067,489
Retainage.............................................. 301,569
----------
4,369,058
Less allowance for doubtful accounts................... 20,000
----------
Accounts receivable, net.................................. $4,349,058
==========
</TABLE>
The balances billed but not paid by customers pursuant to retainage
provisions in customer contracts will be due upon completion of the contracts
and acceptance by the customer. Based on the Company's experience with similar
contracts, the majority of the retention balances at December 31, 1997 are
expected to be collected within the next twelve months.
3. PROPERTY AND EQUIPMENT
The accompanying consolidated balance sheet includes the following property
and equipment at December 31, 1997:
<TABLE>
<S> <C>
Land, building and leasehold improvements................... $ 510,217
Vehicles.................................................. 3,010,131
Equipment and machinery................................... 3,331,415
Office equipment, including furniture and fixtures, and
computer equipment and software........................ --
----------
6,851,763
Less accumulated depreciation............................. 3,548,374
----------
Property and equipment, net............................... $3,303,389
==========
</TABLE>
F-45
<PAGE> 178
CHANNEL COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. DEBT AND CAPITAL LEASE OBLIGATIONS
At December 31, 1997, the Company had a revolving line-of-credit with a
bank for $2,500,000. At December 31, 1997, none of the line-of-credit had been
drawn.
5. INCOME TAXES
Effective January 1, 1997, Channel elected to be treated as an S
corporation for income tax purpose as allowed under the Internal Revenue Code.
With this conversion, the Company's net deferred tax balance of $220,276 was
reversed as a credit to the provision for income taxes. The tax liabilities for
the year ended December 31, 1997 were the responsibility of the individual
shareholder. The provision for income taxes also includes current year corporate
level state and local income taxes.
6. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK
The Company has three major customers (TCI, Time Warner and Media One) that
represented 72% of 1997 revenues. At December 31, 1997, trade receivables from
these three customers totaled $2,801,753.
Financial instruments, which potentially subject the Company to
concentrations of credit risk consist principally of trade accounts receivable.
Additionally, temporary cash investments periodically exceed Federal Deposit
Insurance Corporation (FDIC) Insurance. Bank balances in excess of FDIC
insurance at December 31, 1997 were $680,000.
7. COMMITMENTS AND CONTINGENCIES
The Company has entered into lease agreements for office and warehouse
facilities and vehicle leases. Future lease commitments under noncancelable
leases as of December 31, 1997 are as follows:
<TABLE>
<S> <C>
1998................................................. $234,006
--------
TOTAL........................................... $234,006
========
</TABLE>
The Company leases its primary office from its stockholder on a
month-to-month basis, at $5,600 per month, triple net. The company leases a
warehouse in Cleveland, Ohio from its stockholder on a month-to-month basis at
$5,000 per month, triple net. Lease expense to related parties was $127,200 in
1998.
Total lease expense was $352,913 for the year ended December 31, 1997.
The Company owns an office facility that it leases to another party for
$2,124 per month, through November 1998. The cost and accumulated depreciation
are $163,886 and $74,861, respectively.
8. PROFIT SHARING PLAN
The Company implemented a retirement savings plan and trust in 1994, a
401(k) plan that covers substantially all full-time employees of the Company
meeting certain eligibility requirements. Contributions to the plan are at the
discretion of the Board of Directors. Company contributions to the plan for the
year ended December 31, 1997, were $8,406.
F-46
<PAGE> 179
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Orius Corp.
In our opinion, the accompanying balance sheets and the related statements
of operations and of cash flows present fairly, in all material respects, the
financial position of U.S. Cable, Inc. at September 30, 1997 and June 30, 1998,
and the results of its operations and its cash flows for the year ended
September 30, 1997 and the nine months ended June 30, 1998 in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
April 1, 1999
F-47
<PAGE> 180
U.S. CABLE, INC.
BALANCE SHEETS
SEPTEMBER 30, 1997 AND JUNE 30, 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 4,251,340 $ 2,069,038
Accounts receivable....................................... 2,426,636 3,771,432
Deferred billings......................................... 1,393,030 2,706,321
Inventory................................................. 315,112 204,609
Prepaid expenses.......................................... 105,678 81,133
Income tax receivable..................................... -- 574,211
----------- -----------
Total current assets.............................. 8,491,796 9,406,744
----------- -----------
Property and equipment, net................................. 1,465,180 1,079,415
----------- -----------
Other assets................................................ 235,111 176,255
----------- -----------
Total assets...................................... $10,192,087 $10,662,414
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt...................... $ 167,433 $ --
Accounts payable.......................................... 665,798 1,014,495
Accrued payroll and payroll taxes......................... 3,294,402 3,026,879
Accrued expenses.......................................... 74,351 30,918
Income taxes payable...................................... 103,389 --
----------- -----------
Total current liabilities......................... 4,305,373 4,072,292
----------- -----------
Long-term debt.............................................. 649,187 --
----------- -----------
Shareholders' equity:
Redeemable common stock, no par value, 40,000 shares
authorized; 36,720 (1997) and 27,356 (1998) shares
issued and outstanding................................. 901,541 1,904,022
Retained earnings......................................... 6,329,855 4,686,100
Less treasury stock, 16,267 (1997) shares at cost......... (1,993,869) --
----------- -----------
Total shareholders' equity........................ 5,237,527 6,590,122
----------- -----------
Total liabilities and shareholders' equity........ $10,192,087 $10,662,414
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-48
<PAGE> 181
U.S. CABLE, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
AND THE PERIOD ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Revenues.................................................... $16,111,159 $12,354,223
----------- -----------
Cost of revenues:
Materials................................................. 404,374 466,178
Subcontracting fees....................................... 6,299,154 5,006,676
Direct labor.............................................. 1,860,541 1,445,939
Overhead expenses......................................... 3,543,693 2,326,318
----------- -----------
Total cost of revenues............................ 12,107,762 9,245,111
----------- -----------
Gross profit................................................ 4,003,397 3,109,112
General and administrative expenses......................... 2,175,709 3,440,303
----------- -----------
Income (loss) from operations............................... 1,827,688 (331,191)
----------- -----------
Other (income) expenses:
Interest income........................................... (125,026) (134,320)
Interest expense.......................................... 58,885 30,150
Miscellaneous............................................. (22,738) (145,101)
----------- -----------
Total other (income).............................. (88,879) (249,271)
----------- -----------
Income (loss) before income taxes........................... 1,916,567 (81,974)
Provision (Benefit) for income taxes........................ 766,725 (19,598)
----------- -----------
Net income (loss)........................................... $ 1,149,842 $ (62,376)
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-49
<PAGE> 182
U.S. CABLE, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
AND THE PERIOD ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
1997 1998
---------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss)......................................... $1,149,842 $ (62,376)
---------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Gain on investments, net.................................. (2,599) (29,629)
Gain on sale of equipment, net............................ (40,028) (70,947)
Depreciation.............................................. 458,508 334,187
Equity in earnings of affiliated company.................. (8,398) (20,259)
Deferred income tax provision............................. (25,000) 15,000
Changes in assets and liabilities
Accounts receivable.................................... 774,118 (1,344,796)
Deferred billings...................................... 650,560 (1,313,291)
Inventory.............................................. 71,361 110,503
Other assets........................................... 6,396 24,545
Accounts payable....................................... (421,080) 348,697
Accrued payroll and payroll taxes...................... 894,596 (267,523)
Accrued expenses....................................... (18,385) (43,433)
Income taxes payable/receivable........................ 78,569 (692,600)
---------- -----------
Total adjustment.................................. 2,418,618 (2,949,546)
---------- -----------
Net cash provided (used) by operating activities............ 3,568,460 (3,011,922)
---------- -----------
Cash flows from investing activities:
Purchases of property and equipment....................... (699,134) (493,830)
Proceeds from sale of property and equipment.............. 146,856 616,355
Proceeds from distributions of investment earnings........ 30,654 --
Proceeds from sale of investments......................... -- 120,049
Net increase in cash value of life insurance.............. (15,026) (11,305)
---------- -----------
Net cash (used in) provided by investing activities......... $ (536,650) $ 231,269
---------- -----------
Cash flows from financing activities:
Proceeds from borrowing on long-term debt................. 391,730 --
Principal payments on long-term debt...................... (561,999) (816,620)
Payments of dividends to shareholders..................... (207,392) (205,056
Sales of treasury stock................................... 1,132,328 1,620,027
Purchases of treasury stock............................... (391,730) --
---------- -----------
Net cash provided by financing activities................... 362,937 598,351
---------- -----------
Net decrease increase in cash and cash equivalent........... 3,394,747 (2,182,302)
Cash and cash equivalent --
Beginning of year......................................... 856,593 4,251,340
---------- -----------
Cash and cash equivalent --
End of year............................................... $4,251,340 $ 2,069,038
========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-50
<PAGE> 183
U.S. CABLE, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED SEPTEMBER 30, 1997
AND FOR THE PERIOD ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
------------------- RETAINED --------------------
SHARES AMOUNT EARNINGS SHARES AMOUNT
------ ---------- ----------- ------ -----------
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1996............. 36,720 $ 232,174 $ 5,387,405 19,697 $(2,065,100)
Net income.............................. 1,149,842
Dividends paid.......................... (207,392)
Purchases of 1,822 shares............... 1,822 (391,730)
Sales of 5,252 shares................... 669,367 (5,252) 462,961
------ ---------- ----------- ------ -----------
BALANCE AT SEPTEMBER 30, 1997............. 36,720 $ 901,541 $ 6,329,855 16,267 $(1,993,869)
Net loss................................ (62,376)
Dividends............................... (205,056)
Sales of 6,903 shares................... 1,017,666 (6,903) 602,361
Retirement of 9,364 shares.............. (9,364) (15,185) (1,376,323) (9,364) 1,391,508
------ ---------- ----------- ------ -----------
BALANCE AT JUNE 30, 1998.................. 27,356 $1,904,022 $ 4,686,100 -- $ --
====== ========== =========== ====== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-51
<PAGE> 184
U.S. CABLE, INC.
NOTES TO FINANCIAL STATEMENTS
THE YEAR ENDED SEPTEMBER 30, 1997
AND FOR THE PERIOD ENDED JUNE 30, 1998
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of certain significant accounting policies
followed in the preparation of the financial statements.
PRINCIPAL ACTIVITIES
U.S. Cable, Inc. (the "Company,") incorporated on December 12, 1963, is a
cable installation contractor for cable companies throughout the United States.
During the course of its business, the Company grants unsecured credit to its
customers.
BASIS OF ACCOUNTING
The Company's policy is to prepare its financial statements on the accrual
basis of accounting.
REVENUE RECOGNITION
Revenue is recorded as units and footages are actually installed. If the
unit price of a contract is determined to be below estimated cost, the entire
estimated ultimate loss is accrued.
DEFERRED BILLINGS
Deferred billings consist of unbilled accounts receivable for work
performed prior to the balance sheet date. All costs associated with the
deferred billings are also recognized as expenses as of the balance sheet date.
ACCOUNTS RECEIVABLE
Accounts receivable include amounts that represent retainage on contracts
which is collectible at the conclusion of the contracts. Retainage included in
the accounts receivable balance totaled $288,770 and $607,200 as of September
30, 1997 and June 30, 1998, respectively. Historically, the Company has not
experienced any significant bad debts or pricing adjustments and, accordingly,
there is no provision for bad debts or other allowances recorded as of any
balance sheet date.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all highly liquid investments purchased
with original maturities of three months or less.
INVENTORY
Inventory is stated at the lower of cost, on a first-in, first-out (FIFO)
basis, or market. Inventory consists primarily of purchased materials used in
the installation of cable systems.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost less accumulated depreciation.
Depreciation is computed using various accelerated and straight-line methods.
Repairs and maintenance charges which do not increase the useful lives of the
assets are charged to expense as incurred. Upon sale or retirement, the cost and
related accumulated depreciation are eliminated from the respective accounts and
resulting gain or loss included in other income.
F-52
<PAGE> 185
U.S. CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
TREASURY STOCK
The Company's common stock is no par value. When common stock is
repurchased, it is recorded as treasury stock at the cost of repurchase. When
treasury stock is sold, treasury stock is reduced by the lesser of the sale
price or original cost with any excess proceeds over cost used to increase
common stock. All treasury stock was retired during the period ended June 30,
1998.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes.
Deferred taxes, which have not been material, are recognized for differences
between the basis of assets and liabilities for financial statement and income
tax purposes.
FAIR VALUES OF FINANCIAL INSTRUMENTS
The fair values of the Company's financial instruments approximate the
carrying values due to their short-term maturities.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates and such
differences may be material to the financial statements.
Estimates are used in the Company's revenue recognition of work-in-process,
costs associated with the work-in-progress, allowances for doubtful accounts,
depreciation and amortization, and in the estimated lives of assets.
NOTE 2 -- STATEMENT OF CASH FLOWS
For the purpose of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.
<TABLE>
<CAPTION>
1997 1998
-------- -------
<S> <C> <C>
Cash paid during the year for:
Interest.................................................... $ 59,714 $49,732
======== =======
Income taxes................................................ $713,156 $83,791
======== =======
</TABLE>
F-53
<PAGE> 186
U.S. CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3 -- PROPERTY AND EQUIPMENT:
Property and equipment consist of the following:
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Land........................................................ $ 140,075 $ --
Buildings and improvements.................................. 414,903 --
Vehicles.................................................... 1,170,674 1,398,052
Construction equipment...................................... 848,179 885,981
Office equipment............................................ 117,477 68,701
----------- -----------
2,691,308 2,352,734
Accumulated depreciation.................................... (1,598,441) (1,614,133)
----------- -----------
Total............................................. $ 1,092,867 $ 738,601
=========== ===========
</TABLE>
NOTE 4 -- INVESTMENT IN AFFILIATED COMPANY
The Company has an investment in an affiliated company which is accounted
for using the equity method of accounting. The total investment was $19,026 at
September 30 1997. The Company sold its interest in the affiliated company
during 1998 for $62,144 resulting in a gain of $38,789. Cash received from the
affiliates in the form of distributions has not been significant.
NOTE 5 -- LONG-TERM DEBT
Long-term debt at September 30, 1997 consists of the following:
<TABLE>
<CAPTION>
1997
---------
<S> <C>
Promissory note to shareholder with annual installments of
$83,143 plus interest at the one-year U.S. Treasury Bill
rate determined at each anniversary....................... $ 415,714
Promissory note to shareholder payable in monthly
installments of $1,032 including interest at 8.75% Secured
by certain land........................................... 37,232
Promissory note to shareholder, payable in annual
installments of $65,288 plus interest (tied to the rate on
US Treasury Bills)........................................ 326,442
---------
Total............................................. 816,620
Less current portion........................................ (167,433)
---------
Total............................................. $ 649,187
=========
</TABLE>
NOTE 6 -- INCOME TAXES
The components of the provision for income taxes are:
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1997 1998
------------- --------
<S> <C> <C>
Current:
Federal................................................... $664,369 $(20,676)
State..................................................... 127,356 (13,922)
-------- --------
791,725 (34,598)
Deferred.................................................... (25,000) 15,000
-------- --------
Total tax provision (benefit)............................... $766,725 $(19,598)
======== ========
</TABLE>
F-54
<PAGE> 187
U.S. CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
The difference between income tax expense (or benefit) calculated by
multiplying the Federal statutory rate by income (or loss) before income taxes
and the reported amount of income tax expense (or benefit) is due state taxes
and nondeductible meals and entertainment expenses. Deferred tax assets and
liabilities are not significant.
NOTE 7 -- RETIREMENT PLAN
The Company has a qualified 401(k) profit sharing plan covering all
full-time employees employed one year. The Company matches 100% of the employee
deferral amount up to 2.5% of the employee's compensation. Total Company
contributions were $38,937 for the year ended September 30, 1997, and $30,845
for the period ended June 30, 1998.
NOTE 8 -- COMMON STOCK
All of the common stock of U.S. Cable, Inc., is subject to an agreement
between the company and its shareholders who have the right to require the
Company to repurchase shares at fair market value in the event of death,
retirement and certain financial hardships.
NOTE 9 -- CONCENTRATIONS OF BANK BALANCE
The Company maintains accounts with a bank totaling $4,251,340 and
$2,069,038 at September 30, 1997 and June 30, 1998, respectively. The cash at
this bank is primarily invested in cash equivalents.
NOTE 10 -- CONCENTRATION OF CUSTOMERS
Sales to three major customers; Media One, Time Warner and Cox
Communications, who operate cable television networks, for the year ended
September 30, 1997 and the period ended June 30, 1998 were $13,889,838 and
$10,857,676, respectively representing 95%, 86% and 88% of sales, respectively.
Account receivable from the three major customers at September 30, 1997 and June
30, 1998 were $3,475,362, and $6,102,784, and, respectively representing 91% and
94% of account receivable balance, respectively.
NOTE 11 -- DIVIDEND
The Board of Directors of the Company declared and paid the dividends of
$11 and $8 per share for the year ended September 30, 1997 and the period ended
June 30, 1998, respectively.
NOTE 12 -- RELATED PARTY TRANSACTIONS
The Company paid consultancy fees of $250,000 to its shareholders for the
period ended June 30, 1998 in connection with the negotiation of the sale of the
Company's common stock to North American Tel-Com Group, Inc. ("NATG"). These
amounts were recorded as administrative expenses.
The Company sold certain land, buildings, construction equipment and other
investments to a shareholder for $672,894 during the period ended June 30, 1998
resulting in a gain of approximately $110,000 which was recorded as
miscellaneous income. Management believes the prices paid by the shareholder
approximated fair market value.
The Company sold and purchased shares of common stock to certain employees
of the Company during all the periods presented. The share prices for these
transactions were determined by a formula which management believes resulted in
share prices that approximated the fair value of the common stock. There were no
differences between the formula prices per share and the prices per share paid
or received by the company. Accordingly, no compensation expense was recorded in
the financial statements for any of these transactions.
F-55
<PAGE> 188
U.S. CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 13 -- LEASE COMMITMENT
Prior to June 30, 1998, the Company sold its building to a shareholder and
leased it back commencing from July 1, 1998 under a capital lease agreement.
Under the capital lease agreement, the Company is required to pay the annual
lease payment for a term of five years commencing from July 1, 1998. The lease
payments are as follows:
<TABLE>
<S> <C>
1999........................................................ $ 60,000
2000........................................................ 60,000
2001........................................................ 60,000
2002........................................................ 60,000
2003........................................................ 60,000
--------
300,000
Less: Imputed interest...................................... (54,567)
--------
$245,433
========
</TABLE>
NOTE 14 -- SALE OF COMMON STOCK
On June 30, 1998 the Company's shareholders entered into a stock exchange
agreement with NATG. Pursuant to that transaction, all the shares of the
Company's common stock were exchanged for cash and shares of NATG common stock.
The financial statements of the Company as of and for the period ended June 30,
1998 do not reflect the share exchange agreement.
F-56
<PAGE> 189
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders
of DAS-CO of Idaho, Inc.
and the Board of Directors of Orius Corp.
In our opinion, the accompanying balance sheets and the related statements
of operations, stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of DAS-CO of Idaho, Inc. at December
31, 1998, and the results of its operations and its cash flows for each of the
two years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Boise, Idaho
May 3, 1999
F-57
<PAGE> 190
DAS-CO OF IDAHO, INC.
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
1998
----------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 826,986
Accounts receivable....................................... 4,551,536
Unbilled accounts receivable for contracts-in-process..... 433,416
Inventory................................................. 166,881
Other current assets...................................... 3,213
----------
Total current assets.............................. 5,982,032
----------
Property and equipment, net................................. 3,097,182
----------
Total assets...................................... $9,079,214
==========
LIABILITIES
Current liabilities:
Current portion of long-term debt......................... $ 208,500
Accounts payable.......................................... 1,258,516
Accrued liabilities....................................... 115,662
Profit sharing contribution payable....................... 100,000
Deferred revenue.......................................... 306,669
----------
Total current liabilities......................... 1,989,347
Long-term debt, less current portion........................ 284,828
----------
Total liabilities................................. 2,274,175
----------
Contingencies and Commitments (Note 8)
STOCKHOLDERS' EQUITY
Stockholders' equity:
Common stock, par value $1 per share; 5,000 shares
authorized and issued (including 1,200 shares held in
treasury).............................................. 5,000
Retained earnings......................................... 6,805,346
----------
Total............................................. 6,810,346
Less treasury stock, at cost.............................. (5,307)
----------
Total stockholders' equity........................ 6,805,039
----------
Total liabilities and stockholders' equity........ $9,079,214
==========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-58
<PAGE> 191
DAS-CO OF IDAHO, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Revenues.................................................... $19,126,148 $21,778,456
----------- -----------
Costs and expenses:
Cost of revenues.......................................... 13,682,534 15,415,090
Selling, general and administrative....................... 3,502,691 3,900,768
----------- -----------
Total............................................. 17,185,225 19,315,858
----------- -----------
Income from operations...................................... 1,940,923 2,462,598
Other (income) expense:
Interest income........................................... (62,683) (86,981)
Interest expense.......................................... 72,991 42,914
(Gain) loss on disposal of assets......................... (6,848) 4,238
----------- -----------
Income before income tax provision.......................... 1,937,463 2,502,427
Provision for income taxes.................................. -- --
----------- -----------
Net income........................................ $ 1,937,463 $ 2,502,427
=========== ===========
Pro Forma Tax Provision (Unaudited):
Income before income taxes................................ $ 1,937,463 $ 2,502,427
Pro forma provision for income taxes...................... 736,200 950,900
----------- -----------
$ 1,201,263 $ 1,551,527
=========== ===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-59
<PAGE> 192
DAS-CO OF IDAHO, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Increase (decrease) in cash and cash equivalents from:
OPERATING ACTIVITIES:
Net income................................................ $ 1,937,463 $ 2,502,427
Adjustments to reconcile net cash provided by operating
activities:
Depreciation and amortization.......................... 883,658 937,988
(Gain) loss on disposal of assets...................... (6,848) 4,238
Changes in assets and liabilities:
Accounts receivable.................................... (1,439,915) (369,267)
Unbilled accounts receivable for
contracts-in-process.................................. (352,258) 410,698
Inventories............................................ (139,356) (7,355)
Other current assets................................... (15,852) 56,199
Accounts payable....................................... 30,677 574,706
Accrued liabilities.................................... 62,631 (12,320)
Deferred revenue....................................... -- 306,669
----------- -----------
Net cash inflow from operating activities................. 960,200 4,403,983
----------- -----------
INVESTING ACTIVITIES:
Capital expenditures................................... (758,280) (1,014,322)
Proceeds from sale of assets........................... 6,848 90,362
----------- -----------
Net cash outflow from investing activities................ (751,432) (923,960)
----------- -----------
FINANCING ACTIVITIES:
Payments on line of credit............................. -- --
Proceeds from long-term debt........................... -- --
Principal payments on long-term debt................... (177,713) (223,006)
Distributions.......................................... (1,330,000) (2,713,414)
----------- -----------
Net cash outflow from financing activities................ (1,507,713) (2,936,420)
----------- -----------
Net cash (outflow) inflow from all activities............. (1,298,945) 543,603
Cash and cash equivalents at beginning of year............ 1,582,328 283,383
----------- -----------
Cash and cash equivalents at end of year.................. $ 283,383 $ 826,986
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest.................................... $ 72,991 $ 42,914
Noncash investing and financing activities:
Assets acquired through a capital lease................... $ -- $ --
Distribution of equipment to stockholders................. $ -- $ 306,664
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-60
<PAGE> 193
DAS-CO OF IDAHO, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
COMMON STOCK TOTAL
--------------- RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT EARNINGS STOCK EQUITY
------ ------ ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996................. 5,000 $5,000 $ 6,715,534 (5,307) $ 6,715,227
Net income................................... 1,937,463 1,937,463
Distributions................................ (1,330,000) (1,330,000)
----- ------ ----------- ------- -----------
Balance at December 31, 1997................. 5,000 $5,000 7,322,997 (5,307) 7,322,690
Net income................................... 2,502,427 2,502,427
Distributions................................ (3,020,078) (3,020,078)
----- ------ ----------- ------- -----------
Balance at December 31, 1998................. 5,000 $5,000 $ 6,805,346 $(5,307) $ 6,805,039
===== ====== =========== ======= ===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-61
<PAGE> 194
DAS-CO OF IDAHO, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DAS-CO of Idaho, Inc. (the Company) is a provider of installation, design,
engineering and maintenance services for the telecom industry, formerly in the
western United States. The Company is headquartered in Nampa, Idaho, and has
offices in Twin Falls and Pocatello, Idaho.
On February 26, 1999, the Company was sold to Orius Corp. headquartered in
West Palm Beach, Florida, (the acquisition).
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates
and such differences may be material to the financial statements.
Revenue: Revenues from contracts are recognized as the related costs are
incurred based on the relationship of costs incurred to total estimated contract
costs. Unbilled accounts receivable for contracts-in-process represents revenue
recognized but not billed. Deferred revenue represents billings on contracts for
which costs have not yet been incurred and revenue has not been recognized. At
the time a loss on a contract becomes known, the entire amount of the estimated
loss is accrued.
Cash and Cash Equivalents: Cash and cash equivalents include cash balances
on deposit with banks, overnight repurchase agreements, and various other
financial instruments purchased with a remaining maturity of three months or
less. At times, balances on deposit with banks may exceed amounts insured by the
Federal Deposit Insurance Corporation.
Inventory: Inventories are stated at the lower of cost, on a first-in,
first-out basis, or market.
Property and Equipment: Property and equipment is stated at cost.
Depreciation and amortization is computed over the estimated useful life of the
assets utilizing the straight-line method. The estimated useful lives of the
assets are: leasehold improvements -- the term of the respective lease or the
estimated useful life of the improvements, whichever is shorter; vehicles -- 5
years; equipment and machinery -- 5 years; computer equipment -- 3-5 years; and
other equipment -- 10 years. Maintenance and repairs are expensed as incurred;
expenditures that enhance the value of the property or extend its useful life
are capitalized. When assets are sold or retired, the cost and related
accumulated depreciation are removed from the accounts and the resulting gain or
loss is included in income.
Income Taxes: Prior to the acquisition date, the Company was an S
corporation for income tax purposes, and accordingly, any income tax liabilities
for the periods prior to acquisition were the responsibility of the respective
stockholders. Pro forma income taxes are calculated at a combined federal and
state tax rate of 38%.
Subsequent to the acquisition the Company became part of the consolidated
group for federal income tax purposes.
F-62
<PAGE> 195
DAS-CO OF IDAHO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
2. ACCOUNTS RECEIVABLE:
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
Contract billings........................................... $4,117,007
Retainage................................................... 434,529
----------
Total............................................. $4,551,536
==========
</TABLE>
The balances billed but not paid by customers pursuant to retainage
provisions in customer contracts will be due upon completion of the contracts
and acceptance by the customer. Based on the Company's experience with similar
contracts in recent years, retainages are expected to be collected within twelve
months.
3. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
Land and leasehold improvements............................. $ 282,400
Equipment and machinery..................................... 5,149,400
Vehicles.................................................... 2,274,269
Office equipment............................................ 252,865
Computer equipment.......................................... 128,337
-----------
8,087,271
Less accumulated depreciation and amortization.............. (4,990,089)
-----------
Property and equipment, net................................. $ 3,097,182
===========
</TABLE>
4. DEBT:
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
Contract payable with monthly payments of $19,802, including
interest at 7.062%, due April 2001; equipment is pledged
as collateral............................................. $ 493,328
---------
493,328
Less current portion........................................ (208,500)
---------
Total long-term debt........................................ $ 284,828
=========
</TABLE>
At December 31, 1998, the Company had an unsecured $1 million revolving
line of credit available through a financial institution, bearing interest at 2%
over the LIBOR index rate (7.75% at December 31, 1998). The note was guaranteed
by the stockholders. There were no amounts outstanding at December 31, 1998. As
part of the acquisition, the line of credit agreement was terminated.
F-63
<PAGE> 196
DAS-CO OF IDAHO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Maturities of long-term debt at December 31, 1998 are as follows:
<TABLE>
<S> <C>
1999........................................................ $208,500
2000........................................................ 223,582
2001........................................................ 61,246
--------
$493,328
========
</TABLE>
5. PROFIT SHARING PLAN:
The Company sponsors a 401(k) profit sharing plan covering substantially
all full-time employees. Company discretionary contributions to the plan totaled
$100,000 and $100,000 for 1997 and 1998, respectively.
6. TRANSACTIONS WITH RELATED PARTIES:
During 1998, the Company leased office and shop facilities from businesses
owned by a related party on a month-to-month basis. On February 26, 1999 these
lease agreements were restructured to require minimum annual lease payments of
$168,744 for each of the next five years. The lease agreements contain two
five-year renewal options, at which time lease terms will be renegotiated.
Rental expense for these leases totaled $169,200 and $155,000 for 1997 and 1998,
respectively.
The Company paid consulting fees to businesses owned by related parties.
These businesses provided property management, product development, and other
services to the Company. Consulting fees were $149,996 and $152,000 for 1997 and
1998, respectively. As a result of the acquisition, these services will no
longer be provided by these related parties.
At December 31, 1997 and 1998, the Company had related party receivables of
$5,027 and $9,477, respectively; and had related party payables of $14,100 and
$13,007, respectively.
7. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK:
In 1997, revenues from three customers, US West, Citizens and Idaho Power,
represented approximately 50%, 16%, and 15% of total revenue; and in 1998,
revenues from three customers represented approximately 41%, 13%, and 12% of
total revenue.
Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash and cash equivalents
and accounts receivable. The Company grants credit, generally without
collateral, to its customers, which include utility companies,
telecommunications providers and commercial companies located primarily in the
Western United States. Consequently, the Company is subject to potential credit
risk related to changes in business and economic factors throughout the Western
United States.
8. CONTINGENCIES AND COMMITMENTS:
The Company is subject to lawsuits and other legal claims in the normal
course of its operations. Management believes that the resolution of any such
lawsuits and legal claims, if any, will not have a material impact on the
Company's financial position, results of operations or cash flows.
F-64
<PAGE> 197
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
Schatz Underground Cable, Inc. and Orius Corp.
We have audited the accompanying balance sheet of Schatz Underground Cable,
Inc. as of December 31, 1998, and the related statements of income, retained
earnings and cash flows for the year ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Schatz Underground Cable,
Inc. as of December 31, 1998, and the results of its operations and its cash
flows for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
/s/ MILHOUSE, MARTZ & NEAL, L.L.P.
Maryland Heights, Missouri
February 17, 1999
F-65
<PAGE> 198
SCHATZ UNDERGROUND CABLE, INC.
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash (Note 12)............................................ $ 2,080,720
Accounts receivable, trade (Notes 1, 4 & 11).............. 5,533,608
Inventory (Notes 1, 2 & 4)................................ 873,287
Prepaid expenses.......................................... 269,579
Deferred income tax benefit (Note 6)...................... 1,193,204
Prepaid income taxes...................................... --
-----------
Total current assets.............................. 9,950,398
Property, plant and equipment (Notes 1, 3 & 5).............. 7,483,645
Other assets (Note 1)....................................... 19,332
-----------
Total assets...................................... $17,453,375
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, line of credit (Note 4).................... $ --
Notes payable, current (Note 5)........................... 2,543,486
Accounts payable.......................................... 540,973
Accrued salaries.......................................... 3,672,358
Accrued income taxes...................................... 225,784
Other accrued expenses.................................... 268,775
Customer deposits......................................... 316,498
-----------
Total current liabilities......................... 7,567,874
Notes payable, long-term (Note 5)........................... 4,182,397
Deferred income taxes (Note 6).............................. 163,769
Stockholders' equity:
Common stock, $1 par value; authorized 30,000 shares;
issued and outstanding 1,000 shares.................... 1,000
Paid-in capital........................................... 7,392
Retained earnings......................................... 5,530,943
-----------
Total stockholders' equity........................ 5,539,335
-----------
Total liabilities and stockholders equity......... $17,453,375
===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-66
<PAGE> 199
SCHATZ UNDERGROUND CABLE, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
Revenues, net............................................... $31,254,221
Direct costs................................................ 21,065,985
-----------
Gross margin.............................................. 10,188,236
General and administrative expenses......................... 9,136,881
-----------
Income from operations.................................... 1,051,355
Other income (expense):
Interest income........................................... 61,373
Other income.............................................. 34,699
Gain on sale of equipment................................. 41,249
Interest expense.......................................... (636,850)
Total other expense....................................... (499,529)
-----------
Income before provision for income taxes.................. 551,826
Provision for income taxes (Note 6):
Current................................................... 1,392,224
Deferred.................................................. (1,168,235)
-----------
223,989
-----------
Net income................................................ 327,837
Retained earnings, beginning of year........................ 5,203,106
-----------
Retained earnings, end of year............................ $ 5,530,943
===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-67
<PAGE> 200
SCHATZ UNDERGROUND CABLE, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $ 327,837
Adjustments to reconcile net income to net cash provided
by operating activities:
Gain on disposal of property, plant and equipment...... (41,249)
Depreciation and amortization........................ 2,200,018
Deferred taxes....................................... (1,168,235)
Changes in assets and liabilities:
Increase in accounts receivable................... (586,546)
Increase in inventory............................. (481,401)
Increase in prepaid expenses...................... (58,817)
Increase in prepaid income taxes.................. --
Increase in other assets.......................... (5,717)
Increase in accounts payable...................... 5,375
Increase in accrued expenses...................... 3,267,364
Decrease in customer deposits..................... (69,735)
Decrease in accrued income taxes.................. (223,093)
-----------
Net cash provided by operating activities......... 3,165,801
-----------
Cash flows from investing activities:
Purchase of property, plant and equipment................. (2,917,848)
Proceeds from sale of property and equipment.............. 134,124
-----------
Net cash used by investing activities............. (2,783,724)
-----------
Cash flows from financing activities:
Loan proceeds -- long term................................ 2,223,266
Payments on long-term debt................................ (1,251,960)
Payments to stockholder, net.............................. (190,000)
-----------
Net cash provided by financing activities......... 781,306
-----------
Net increase in cash........................................ 1,163,383
Cash, beginning of year..................................... 917,337
-----------
Cash, end of year........................................... $ 2,080,720
===========
Schedule of noncash investing and financing transactions:
Cost of property, plant and equipment purchased........... $ 2,944,135
Net book value of trade-ins............................... (26,287)
-----------
Cash paid for property, plant and equipment....... $ 2,917,848
===========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................... $ 636,850
Income taxes........................................... 1,627,615
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-68
<PAGE> 201
SCHATZ UNDERGROUND CABLE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The Company is a provider of installation, design, engineering and
maintenance services for the telecom industry. The company operates in the St.
Louis metropolitan area, as well as throughout the United States.
REVENUE AND COST RECOGNITION
Revenues from fixed price contracts are recognized on the
percentage-of-completion method for individual contracts. Revenues are
recognized based on fixed prices per contract for amount of work performed.
Changes in job performance, estimated profitability and final contract
settlements may result in revisions to costs and income, and are recognized in
the period in which the revisions are determined.
Contract costs include all direct materials, subcontracts, labor costs and
those indirect costs related to contract performance. General and administrative
costs are charged to expenses as incurred.
CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
ACCOUNTS RECEIVABLE, TRADE
Trade accounts receivable are recorded net of allowance for doubtful
accounts of $40,000 at December 31, 1998.
INVENTORY
Materials are valued at cost on the first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost. Depreciation has been
provided for in the financial statements using accelerated methods over the
estimated useful lives. Repairs and maintenance are charged to expense in the
year incurred. Additions and improvements are capitalized.
OTHER ASSETS
At December 31, 1998, other assets consist of the following:
<TABLE>
<S> <C>
Deposits.................................................... $11,715
Construction in progress.................................... 7,617
-------
$19,332
=======
</TABLE>
ACCRUED HEALTH INSURANCE
Through May 31, 1998, employees and their dependents were provided
comprehensive health care coverage under a self-funded plan. The Company pays
the first $50,000 in medical expenses per covered individual per year. Any
additional costs are paid by the Plan's underwriters. Premiums due the
underwriters are accrued and paid monthly. The Company's self-funded liability
is accrued based on actual claims filed. The Company ceased to be self-funded on
June 1, 1998 and paid all remaining self-funded liability; therefore, no
liability exists at December 31, 1998.
F-69
<PAGE> 202
SCHATZ UNDERGROUND CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
LEASE AGREEMENTS
Annual rentals pertaining to leases which convey merely the right to use
property are charged to current operations. Leases which are in substance
installment purchases of property are recorded as acquisitions with the asset
and the related obligation recorded in the balance sheet.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of financial instruments have been estimated by
management to approximate fair value.
ADVERTISING
The costs of advertising are expensed as incurred.
2. INVENTORY
Inventory consists of the following:
<TABLE>
<S> <C>
Work-in-process............................................. $865,046
Materials................................................... 8,241
--------
$873,287
========
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<S> <C>
Trucks, automobiles, equipment and tools.................... $15,217,306
Office furniture and equipment.............................. 216,662
Buildings and improvements.................................. 1,661,519
Land........................................................ 350,000
-----------
17,445,487
Less accumulated depreciation............................... 9,961,842
-----------
$ 7,483,645
===========
</TABLE>
Depreciation expense was $2,200,018 for year ended December 31, 1998.
4. NOTE PAYABLE, LINE-OF-CREDIT
The Company has an annually renewable agreement for a $2,000,000
line-of-credit with Jefferson Bank and Trust Company, which provides for
accounts receivable and inventory financing. Borrowings bear interest at 1/2%
above the Bank's prime rate and are secured by accounts receivable, inventory,
and personal guaranty of the stockholder.
F-70
<PAGE> 203
SCHATZ UNDERGROUND CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1998, no amount had been drawn against the line-of-credit.
5. NOTES PAYABLE
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Note payable, stockholder, payable in quarterly installments
of $47,500 plus interest at 9% Matures December 31,
2005...................................................... $1,330,000
Note payable, Jefferson Bank and Trust Company, payable in
monthly installments of $8,929 including interest at 8.5%.
Matures March 22, 2001 with outstanding balance due;
secured by real estate and a personal guaranty of the
stockholder............................................... 805,415
Note payable, Jefferson Bank and Trust Company, payable in
monthly installments of $33,333 plus interest at prime
plus 1/2%. Matures April 22, 2001, secured by equipment
and a personal guaranty of the stockholder................ 933,333
Note payable, Jefferson Bank and Trust Company, payable in
monthly installments of $25,000 plus interest at prime
plus 1/2% Matures April 22, 2001; secured by equipment and
a personal guaranty of the stockholder.................... 700,000
Note payable, Jefferson Bank and Trust Company, payable in
monthly installments of $50,000 plus interest at prime
plus 1/2%. Matures February 20, 2002 Secured by equipment
and personal guarantee of the stockholder................. 1,900,000
Note payable, Jefferson Bank and Trust Company, interest
only of prime plus 1/2%. Matures February 20, 1999.
Secured by equipment and personal guarantee of the
stockholders.............................................. 996,689
Note payable, individual, payable in monthly installments of
$1,822 including interest at 10.0% 5 year amortization.
Matures March 15, 2002 secured by a freightliner truck.... 60,446
----------
6,725,883
Less current portion........................................ 2,543,486
----------
$4,182,397
==========
</TABLE>
Maturities of debt for 1999 and the succeeding years are as follows:
<TABLE>
<CAPTION>
AMOUNT
----------
<S> <C>
1999........................................................ $2,543,486
2000........................................................ 1,552,089
2001........................................................ 1,764,932
2002........................................................ 295,376
2003........................................................ 190,000
Thereafter.................................................. 380,000
----------
$6,725,883
==========
</TABLE>
6. INCOME TAXES
The Corporation provides for deferred income taxes for temporary
differences between the financial and income tax reporting of accrued
shareholder bonus, depreciation, accrued vacation and allowance for doubtful
accounts.
7. RELATED PARTY TRANSACTIONS
The Company has a note payable with the stockholder as explained in Note 5.
F-71
<PAGE> 204
SCHATZ UNDERGROUND CABLE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
The Company leases additional facilities and real estate from the
stockholders at $2,550 and $2,000 a month, respectively, under month-to-month
leases.
8. RETIREMENT PLAN
The Company has a retirement plan (401k) which covers all employees meeting
minimum age and service requirements. The Company makes a matching contribution
of 25% of the first 4% of compensation an employee contributes. The Company made
$47,241 in matching contributions for the year ended December 31, 1998.
Under the plan, the Company can make discretionary contributions to the
plan. For the year ended December 31, 1998, no discretionary contributions were
made.
9. LEASE COMMITMENTS
The Company currently leases a facility in Kansas City under a long-term
lease expiring May 30, 1999. Minimum rental commitments under this lease are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
- ------------
<S> <C>
1999........................................................ $17,500
=======
</TABLE>
The Company leases equipment under month-to-month leases. The Company also
leases a facility at Nixa and real estate in Villa Ridge from the stockholder
under month-to-month leases.
10. MAJOR CUSTOMERS
Sales to four major customers were approximately $26,221,856 for the year
ended December 31, 1998, representing 83.7% of total sales for the year.
11. CREDIT RISK
The Company is involved in construction for various levels of government
and therefore issues credit under binding construction contracts to these
agencies. The Company also is engaged in commercial construction and issues
credit under binding construction contracts to various companies.
12. CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the organization to credit
risk include cash on deposit with one financial institution amounting to
$2,070,597 at December 31, 1998, which was insured for up to $100,000 by the
U.S. Federal Deposit Insurance Corporation.
F-72
<PAGE> 205
REPORT OF INDEPENDENT ACCOUNTANTS
To the Management of
Copenhagen Utilities & Construction, Inc.
and the Board of Directors of Orius Corp.
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, retained earnings and of cash
flows present fairly, in all material respects, the financial position of
Copenhagen Utilities & Construction, Inc. (the "Company") at December 31, 1998
and the results of its operations and its cash flows for each of the two years
in the period ended December 31, 1998, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
May 20, 1999
F-73
<PAGE> 206
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
1998
-----------
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 1,638,845
Short-term investments.................................... 750,000
Accounts receivable, net.................................. 3,980,602
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 2,217,739
Deferred income taxes..................................... 21,000
Prepaid expenses and other current assets................. 105,938
Income taxes receivable................................... 94,103
-----------
Total current assets.............................. 8,808,227
Vehicles, equipment and leasehold improvements, net......... 1,835,429
-----------
Total assets...................................... $10,643,656
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, including retainage of $499,749 in 1997
and $69,466 in 1998.................................... $ 1,300,495
Accrued liabilities....................................... 3,185,607
Long-term debt, current portion........................... 129,364
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 250,437
Income taxes payable
-----------
Total current liabilities......................... 4,865,903
Long-term debt.............................................. 28,032
-----------
Total liabilities................................. 4,893,935
-----------
Contingencies (Note 12)
Stockholders' equity:
Common stock:
Voting; 10,000 shares authorized, 2,496 issued and
outstanding in 1997 and 1998, par value $.02.......... 50
Nonvoting; 90,000 shares authorized, 59,904 shares
issued and outstanding in 1997 and 1998, par value
$.02.................................................. 1,198
Additional paid-in capital............................. 651,319
Retained earnings...................................... 5,097,154
-----------
Total stockholders' equity........................ 5,749,721
-----------
Total liabilities and stockholders' equity........ $10,643,656
===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-74
<PAGE> 207
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Contract revenue............................................ $48,377,526 $35,191,894
Contract costs.............................................. 39,166,200 27,092,236
----------- -----------
Gross profit........................................... 9,211,326 8,099,658
General and administrative expenses......................... 6,888,750 8,541,112
----------- -----------
Income (loss) from operations.......................... 2,322,576 (441,454)
----------- -----------
Other (income) expense:
Interest income........................................... (207,866) (238,701)
Interest expense.......................................... 43,126 68,882
(Gain) loss on disposal of assets......................... (3,238) (35,355)
----------- -----------
(167,978) (205,174)
----------- -----------
Income (loss) before income tax provision.............. 2,490,554 (236,280)
Income tax provision (benefit).............................. 900,000 (76,000)
----------- -----------
Net income (loss)...................................... 1,590,554 (160,280)
Retained earnings, beginning of year........................ 3,816,880 5,257,434
Dividends paid.............................................. (150,000) --
----------- -----------
Retained earnings, end of year.............................. $ 5,257,434 $ 5,097,154
=========== ===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-75
<PAGE> 208
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ 1,590,554 $ (160,280)
----------- -----------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 635,084 839,632
Gain on disposal of assets............................. (3,238) (35,355)
Net changes in operating assets and liabilities:
Accounts receivables................................. (645,554) 1,542,306
Prepaid expenses and other current assets............ (21,264) (29,638)
Costs and estimated earnings in excess of billings on
uncompleted contracts............................... (549,642) 220,677
Deferred income tax.................................. 11,000 (5,000)
Billings in excess of costs and estimated earnings on
uncompleted contracts............................... 180,963 (529,967)
Accounts payable..................................... 2,550 (1,219,275)
Accrued liabilities.................................. 1,164,688 1,072,971
Income taxes receivable.............................. (259,754) (529,553)
----------- -----------
Total adjustments................................. 514,833 1,326,798
----------- -----------
Net cash provided by operating activities......... 2,105,387 1,166,518
----------- -----------
Cash flows from investing activities:
Proceeds from disposal of assets.......................... 23,300 38,500
Purchase of vehicles, equipment and leasehold
improvements........................................... (449,190) (464,648)
Purchase of short-term investments........................ (750,000) --
----------- -----------
Net cash used in investing activities............. (1,758,190) (426,148)
----------- -----------
Cash flows from financing activities:
Dividends paid............................................ (150,000) 0
Contributions from shareholders........................... -- 109,085
Payments on long-term debt................................ (720,223) (311,370)
----------- -----------
Net cash used in financing activities............. (870,223) (202,285)
----------- -----------
Net increase in cash.............................. 59,274 538,085
Cash at beginning of year................................... 1,041,486 1,100,760
----------- -----------
Cash at end of year......................................... $ 1,100,760 $ 1,638,845
=========== ===========
Supplemental disclosure of noncash investing and financing
transactions:
Notes payable assumed by a related party recorded as
additional paid-in capital............................. $ -- $ 542,234
=========== ===========
Equipment purchased with notes payable.................... $ 405,277 $ 114,700
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for income taxes................................ $ 1,148,754 $ 458,553
=========== ===========
Cash paid for interest.................................... $ 72,336 $ 51,290
=========== ===========
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-76
<PAGE> 209
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
THE COMPANY
Copenhagen Utilities & Construction, Inc. (the "Company,") an Oregon
corporation since 1975, operates in Oregon, Washington, California and Nevada.
The Company is a provider of installation, design, engineering and maintenance
services for the telecom industry. The Company also provides installation
services for gas and water utilities. The Company is located in Clackamas,
Oregon and Sacramento, California.
These financial statements include the accounts of a special purpose
entity, Excel Equipment LLC, and is owned by the same shareholders as the
Company. On December 31, 1998, in preparation for the sale of the outstanding
shares of stock of the Company as discussed in Note 13, substantially all assets
of Excel were transferred to the Company, and the Company assumed a portion of
the Company's long-term debt. In connection with this transfer amounts owing
related entities by Excel totaling $542,234 was not assumed by the Company and
accordingly, was recorded as a contribution of capital.
Following is a summary of the Company's significant accounting policies:
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of
three months or less at date of purchase to be cash equivalents. The cost of
these investments approximates fair value. At times, temporary cash investments
may be in excess of the Federal Deposit Insurance Corporation insurance limit.
The Companies deposits in high credit quality investments with reputable
financial institutions.
SHORT-TERM INVESTMENTS
Short-term investments are stated at fair market value as of the balance
sheet date. Unrealized holding gains or losses are reported in the balance sheet
as a separate component of stockholders' equity until realized. Realized gains
and losses are included in operations.
The Company reported no unrealized gains or losses as the market value of
short-term investments approximated their cost at December 31, 1997 and 1998.
ACCOUNTING FOR LONG-TERM CONTRACTS
The accompanying financial statements have been prepared using the
percentage-of-completion method of accounting for long-term contracts. This
accounting method provides for the recognition of revenue on contracts which are
not yet completed. The amount of revenue recognized is based on the percentage
that contract costs incurred to date bear to estimated total contract costs,
except that anticipated losses are recognized in their entirety without
reference to percentage-of-completion. Contract costs include all subcontracts,
direct labor and benefits, materials and allocated equipment and indirect costs.
The Company allocates equipment and indirect costs to each contract based
on equipment usage and direct labor rates. These rates are reviewed and adjusted
periodically to reflect changes in the Company's total equipment and indirect
costs.
Revisions in estimated costs and earnings are reported in the accounting
period in which the facts requiring revisions become known.
Profits and losses from service and minor installation contracts are
recognized in the period the work is completed.
F-77
<PAGE> 210
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
OPERATING CYCLE
Assets and liabilities related to long-term contracts are included in
current assets and current liabilities in the accompanying balance sheets as
they will be liquidated in the normal course of contract completion, although
this may require more than one year.
VEHICLES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Vehicles, equipment and leasehold improvements are stated at cost.
Maintenance and repairs of a routine nature are charged to operations as
incurred; additions and improvements are capitalized. Gains and losses from
sales or retirements are included in operations.
Depreciation is computed by accelerated methods over the estimated useful
lives of the related assets, which are as follows:
<TABLE>
<S> <C>
Construction vehicles and equipment......................... 5 years
Office furniture and equipment.............................. 5 to 7 years
Leasehold improvements...................................... 15 years
</TABLE>
Amortization of leasehold improvements is classified as depreciation
expense for financial reporting.
INCOME TAXES
Deferred income taxes are provided for the expected future income tax
effect of differences between the tax basis of assets and liabilities and their
financial reporting amounts. At the balance sheet date, based on enacted tax
laws and statutory tax rates applicable to the years in which the differences
are expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
CONCENTRATIONS OF CREDIT RISK
The Company's cash and accounts receivable subject the Company to
concentrations of potential credit risk. The Company limits its risk by
depositing cash only with established financial institutions which maintain high
credit standings. The Company limits its exposure to losses on accounts
receivable by maintaining a broad customer base and performing the majority of
its contracts for public agencies.
The Company has a long-term service contract to provide service for one
major customer. The Company had total revenues of $16,521,016 and $15,219,596
for fiscal years 1997 and 1998, which comprises approximately 34.2% and 43.5%,
respectively.
2. SHORT-TERM INVESTMENTS:
Short-term investments at December 31, 1998 consist of municipal bonds with
an approximately 5.60% effective annual yield. The market value of these
investments approximated cost at December 31, 1998.
F-78
<PAGE> 211
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. ACCOUNTS RECEIVABLE:
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Construction contracts...................................... $3,533,164
Retainage on construction contracts......................... 457,438
----------
3,990,602
Less allowance for uncollectible accounts................... 10,000
----------
$3,980,602
==========
</TABLE>
Retainage billed but not due until contract completion is $457,438 at
December 31, 1998. The Company expects to collect the retainage over the next
year upon contract completion.
4. LONG-TERM CONTRACTS IN PROGRESS:
Following is a summary of long-term contracts in progress:
<TABLE>
<CAPTION>
1998
--------------------------
ESTIMATED
TOTAL CONTRACT
CONTRACT TO DATE
----------- ------------
<S> <C> <C>
Contract costs............................................. $45,321,883 $ 42,768,316
Gross profit............................................... 9,450,258 9,111,308
----------- ------------
Contract revenue......................................... $54,772,141 51,879,624
===========
Less billings.............................................. (49,912,322)
------------
Net underbillings........................................ $ 1,967,302
============
</TABLE>
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Costs and estimated earnings in excess of billings on
uncompleted contracts..................................... $2,217,739
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... (250,437)
----------
$1,967,302
==========
</TABLE>
5. VEHICLES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
Vehicles, equipment and leasehold improvements consist of the following:
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Construction vehicles and equipment......................... $5,995,829
Office furniture and equipment.............................. 500,407
Leasehold improvements...................................... 126,786
----------
6,623,022
Less accumulated depreciation............................... 4,787,593
----------
$1,835,429
==========
</TABLE>
6. LINE OF CREDIT:
The Company maintains an operating line of credit agreement with U.S. Bank
which renews annually in May. Funds are available to a maximum of $750,000,
subject to availability of collateral (80% of
F-79
<PAGE> 212
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
eligible accounts receivable). Borrowings under this agreement bear interest at
the bank's prime lending rate. There were no outstanding borrowings under the
line of credit agreement at December 31, 1998.
The line of credit agreement contains certain restrictive covenants related
to the Company's current ratio, net worth and debt to equity ratio. The Company
was in compliance with all requirements at December 31, 1998.
The Company maintains a term-financing line of credit agreement with U.S.
Bank for equipment acquisitions. Under this agreement, the Company may borrow up
to $750,000 (not to exceed 80% of the sales price of equipment acquired).
Borrowings bear interest at the bank's prime lending rate plus one-half percent
(8.75% at December 31, 1998). Loans are amortized over three to five years.
There were no outstanding borrowings under the equipment line of credit
agreement at December 31, 1998.
7. LONG-TERM DEBT:
Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
1998
--------
<S> <C>
Contracts payable to Case Credit Corporation (12) and
Western Traction Company (1) in aggregate monthly average
installments of $11,775, including interest ranging from
6% to 7.90%; maturing in November 1999; collateralized by
construction equipment.................................... $157,396
--------
157,396
Less amount due within one year............................. 129,364
--------
$ 28,032
========
</TABLE>
8. INCOME TAXES:
The income tax provision (benefit) reported in the accompanying statements
of operations and retained earnings consist of the following for the years ended
December 31:
<TABLE>
<CAPTION>
1997 1998
------------------------------------ -----------------------------------
CURRENTLY DEFERRED CURRENTLY DEFERRED
PAYABLE PROVISION PAYABLE PROVISION
(RECEIVABLE) (BENEFIT) TOTAL (RECEIVABLE) BENEFIT TOTAL
------------ ---------- -------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C>
Federal........................... $790,000 $ 8,000 $798,000 $(71,000) $ 2,000 $(69,000)
State............................. 99,000 3,000 102,000 (7,000) (7,000)
-------- ------- -------- -------- ------- --------
$889,000 $11,000 $900,000 $(71,000) $(5,000) $(76,000)
======== ======= ======== ======== ======= ========
Effective tax rate................ 36.1% (32.2)%
======== ========
</TABLE>
The income tax provision (benefit) result in effective rates which differ
from the statutory federal income tax rate (34%) for the following reasons:
<TABLE>
<CAPTION>
1997 1998
---------------- -----------------
<S> <C> <C> <C> <C>
Income tax at statutory federal income tax
rate....................................... $846,800 34.0% $(80,400) (34.0)%
State income taxes, net of federal benefit... 68,800 2.8% (7,000) (3.0)%
Permanent differences........................ 18,700 0.7% 12,700 5.4%
Fuel tax credit and other, net............... (34,300) (1.4)% (1,300) (0.6)%
-------- ---- -------- -----
$900,000 36.1% $(76,000) (32.2)%
======== ==== ======== =====
</TABLE>
F-80
<PAGE> 213
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred income taxes are recognized for the expected future income tax
effect of differences between the tax bases of assets and liabilities and their
financial reporting amounts (temporary differences). Following is a summary of
temporary differences and the related deferred income tax effect as of December
31, 1998:
<TABLE>
<CAPTION>
1998
------------------------
AMOUNT OF DEFERRED
TEMPORARY INCOME TAX
SOURCES OF TEMPORARY DIFFERENCES DIFFERENCES EFFECT
-------------------------------- ----------- ----------
<S> <C> <C>
Accrued insurance reserves.................................. $25,000 $10,000
Allowance for uncollectible accounts receivable............. 10,000 4,000
State tax net operating losses net of federal provision..... 165,000 7,000
-------
Deferred income tax benefit................................. $21,000
=======
</TABLE>
Recoverable income taxes totaling $94,103 reported in the accompanying
December 31, 1998 balance sheet result from federal and state estimated tax
payments which exceeded the Company's current income tax obligations.
9. OPERATING LEASE COMMITMENTS:
The Company leases office and shop facilities in Clackamas, Oregon and
Sacramento, California from its stockholders under lease agreements which
require the Company to pay certain operating costs such as property taxes,
insurance and utilities in addition to the basic rent.
The combined rent commitment under these leases is $19,000 per month
through February 2004, exclusive of operating costs.
Rent expense charged to operations under all operating leases, including
the leases with the Company's stockholders described above, totaled
approximately, $1,719,100 and $1,085,000 for 1997 and 1998, respectively. Rent
expense paid to a related party was $168,000 for each of the years ended 1997
and 1998.
10. EMPLOYEE BENEFIT PLANS:
RETIREMENT PLANS:
The Company's hourly field employees and certain salaried employees
participate in a multi-employer money purchase pension plan sponsored by the
Associated General Contractors of America, Inc. Contributions charged to
operations under this plan totaled approximately $683,000 and $604,000 for 1997
and 1998, respectively.
The Company maintains a defined contribution retirement plan under
provisions of Internal Revenue Code Section 401(k) for its eligible employees
not covered by the money purchase pension plan described above. The plan
requires the Company to match 50% of employee contributions, to a maximum
Company contribution of 3% of the employee's annual compensation (up to
specified limits set by law). The plan also allows for discretionary
contributions to be determined annually by the Company's Board of Directors.
Contributions charged to operations under this plan totaled approximately,
$64,000 and $54,000, for the years ended December 31, 1997 and 1998,
respectively.
F-81
<PAGE> 214
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INCENTIVE BONUS PLAN:
The Company has an incentive bonus plan for certain key employees under
which the employees can share in profits which the Company earns in excess of
predetermined norms. Bonuses earned under this formula have been paid or accrued
as of year-end. Bonuses paid by the Company were $4,035,000 and $5,218,500
during fiscal years 1997 and 1998, respectively.
11. RECAPITALIZATION:
In July 1997 the Company's stockholders recapitalized the Company by
creating a second class of (nonvoting) capital stock to facilitate business
succession plans. The stockholders exchanged 1,248 shares of $1 par value voting
common stock for 2,496 of voting common stock and 59,904 shares of nonvoting
common stock.
12. CONTINGENCIES:
The Company is a party to certain claims and suits arising out of the
conduct of its business. While there can be no assurance as to their ultimate
outcome, management does not believe these matters will have a material adverse
effect on its consolidated financial condition or operating results.
13. SUBSEQUENT EVENT:
On February 26, 1999, the stockholders of the Company sold all outstanding
shares of stock to the Orius Corporation of West Palm Beach, Florida for cash
and common stock.
F-82
<PAGE> 215
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder of
TEXEL Corporation and the
Board of Directors of Orius Corp.
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in shareholder's equity and of cash flows present fairly,
in all material respects, the financial position of TEXEL Corporation (the
Company) as of December 31, 1997 and 1998, and the results of its operations and
its cash flows for each of the two years in the period ended December 31, 1998,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Baltimore, Maryland
May 14, 1999
F-83
<PAGE> 216
TEXEL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ MARCH 31,
1997 1998 1999
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $1,395,669 $ 3,144,841 $ 2,125,996
Accounts receivable...................................... 4,725,915 7,172,628 6,525,215
Costs in excess of billings on uncompleted contracts..... 177,080 644,353 785,519
Prepaid expenses......................................... 52,570 -- 14,500
---------- ----------- -----------
Total current assets............................. 6,351,234 10,961,822 9,451,230
Property and equipment, net................................ 195,395 920,046 1,009,537
---------- ----------- -----------
Total assets..................................... $6,546,629 $11,881,868 10,460,767
========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 757,528 $ 2,028,443 1,297,074
Accrued expenses......................................... 414,636 618,298 786,053
Billings in excess of costs on uncompleted contracts..... 40,351 73,153 101,712
---------- ----------- -----------
Total current liabilities........................ 1,212,515 2,719,894 2,184,839
Deferred rent.............................................. -- 198,065 297,098
---------- ----------- -----------
Total liabilities................................ 1,212,515 2,917,959 2,481,937
---------- ----------- -----------
Shareholders' equity:
Common stock, par value $1.00, authorized 1,000 shares;
issued and outstanding 400 shares..................... 400 400 400
Additional paid in capital............................... 1,600 1,600 1,600
Treasury stock, 200 shares at cost....................... (24,000) (24,000) (24,000)
Retained earnings........................................ 5,356,114 8,985,909 8,000,830
---------- ----------- -----------
Total shareholders' equity....................... 5,334,114 8,963,909 7,978,830
---------- ----------- -----------
Total liabilities and shareholders' equity....... $6,546,629 $11,881,868 $10,460,767
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
F-84
<PAGE> 217
TEXEL CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
FOR THE YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
------------------------- -----------------------
1997 1998 1998 1999
----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Contract and service revenue.................. $21,832,078 $29,648,953 $7,410,948 $6,050,577
Cost of sales................................. 14,989,003 20,633,959 5,259,214 4,460,088
----------- ----------- ---------- ----------
Gross profit........................ 6,843,075 9,014,994 2,151,734 1,590,489
Selling, general and administrative
expenses.................................... 1,265,074 1,862,802 396,186 426,008
----------- ----------- ---------- ----------
Income from operations.............. 5,578,001 7,152,192 1,755,548 1,164,481
Other (income) expense
Interest income............................. (102,617) (127,621) (29,600) (30,652)
Other expense............................... 101,730 88,145 19,011 46,152
----------- ----------- ---------- ----------
Net Income.................................... $ 5,578,888 $ 7,191,668 $1,766,137 $1,148,981
=========== =========== ========== ==========
Pro Forma Tax Provision (Unaudited):
Income before income taxes.................. $ 5,578,888 $ 7,191,668 $1,766,137 $1,148,981
Pro forma provision for income taxes........ 2,120,000 2,732,800 671,132 436,612
----------- ----------- ---------- ----------
Total............................... $ 3,458,888 $ 4,458,868 $1,095,005 $ 712,369
=========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
F-85
<PAGE> 218
TEXEL CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
------------------------- -------------------------
1997 1998 1998 1999
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income................................ $ 5,578,888 $ 7,191,668 $ 1,766,137 $ 1,148,981
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation........................... 83,767 101,434 15,180 31,332
Changes in:
Accounts receivable.................. (735,921) (2,446,713) (547,239) 647,413
Prepaid expenses..................... (52,570) 52,570 37,291 (14,500)
Billings in excess of costs.......... 40,351 32,802 (17,909) 28,559
Accounts payable..................... 193,091 1,270,915 2,367,042 (731,369)
Accrued expenses..................... 30,805 203,662 168,442 167,755
Costs in excess of billings.......... (97,607) (467,273) (1,588,302) (141,166)
Deferred rent........................ -- 198,065 -- 99,033
----------- ----------- ----------- -----------
Net cash provided by operating
activities...................... 5,040,804 6,137,130 2,200,642 1,236,038
----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of property and equipment....... (89,460) (826,085) (27,948) (120,823)
----------- ----------- ----------- -----------
Net cash used in investing
activities...................... (89,460) (826,085) (27,948) (120,823)
----------- ----------- ----------- -----------
Cash flows from financing activities:
Distributions to stockholder.............. (4,751,016) (3,561,873) (1,102,500) (2,134,060)
----------- ----------- ----------- -----------
Net cash used in financing
activities...................... (4,751,016) (3,561,873) (1,102,500) (2,134,060)
----------- ----------- ----------- -----------
Increase in cash and cash equivalents....... 200,328 1,749,172 1,070,194 (1,018,845)
Cash and cash equivalents, beginning of
year...................................... 1,195,341 1,395,669 1,395,669 3,144,841
----------- ----------- ----------- -----------
Cash and cash equivalents, end of year...... $ 1,395,669 $ 3,144,841 $ 2,465,863 $ 2,125,996
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
F-86
<PAGE> 219
TEXEL CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
AND THE THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
ADDITIONAL
COMMON COMMON PAID-IN RETAINED TREASURY
SHARES STOCK CAPITAL EARNINGS STOCK TOTAL
------ ------ ---------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997....... 400 $400 $1,600 $ 4,528,242 $(24,000) $ 4,506,242
Net income..................... -- -- -- 5,578,888 -- 5,578,888
Distributions to shareholder... -- -- -- (4,751,016) -- (4,751,016)
--- ---- ------ ----------- -------- -----------
Balance at December 31, 1997..... 400 400 1,600 5,356,114 (24,000) 5,334,114
Net income..................... -- -- -- 7,191,668 -- 7,191,668
Distributions to shareholder... -- -- -- (3,561,873) -- (3,561,873)
--- ---- ------ ----------- -------- -----------
Balance at December 31, 1998..... 400 400 1,600 8,985,909 (24,000) 8,963,909
Net income (unaudited)........... 1,148,981 1,148,981
Distributions to shareholder
(unaudited).................... (2,134,060) (2,134,060)
--- ---- ------ ----------- -------- -----------
Balance at March 31, 1999
(unaudited).................... 400 $400 $1,600 $ 8,000,830 $(24,000) $ 7,978,830
=== ==== ====== =========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
F-87
<PAGE> 220
TEXEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Texel Corporation (the "Company") was incorporated in 1983 under the laws
of the Commonwealth of Virginia. The Company is a provider of premise wiring
services, primarily in the Washington, D.C. metropolitan area. The Company's
corporate headquarters are located in Reston, Virginia and as of April 30, 1999,
the Company had two regional field offices in Columbia, Maryland and Richmond,
Virginia.
The shareholder of the Company has signed a definitive agreement to sell
all of the Company's outstanding shares to Orius Corporation. The transaction is
expected to close on May 24, 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONTRACT REVENUE
The Company recognizes revenue from contracts in process on the percentage
of completion method of accounting based on contract costs incurred to date
compared with total estimated contract costs. Contract costs include all direct
labor, material, subcontract, depreciation, and other direct project costs
related to contract performance. General and administrative costs are charged to
expense as incurred.
Service revenue is recognized when the work is complete. This work is
primarily short term and completed within five days or less.
Revenues recognized in excess of amounts billed are classified as current
assets under costs in excess of billings, and amounts billed in excess of
revenues recognized to date are classified as current liabilities as billings in
excess of costs. Contract retentions are included in accounts receivable.
INCOME TAXES
The Company elected subchapter S-Corporation status effective January 1,
1984. As an S-Corporation, the shareholder reports profits or losses of the
Company, for Federal and State income tax purposes, on his individual income tax
return. As an S-Corporation, the Company was not subject to certain income taxes
at the corporate level. Substantially all payments made to the shareholder are
in the form of S-Corporation shareholder distributions. In conjunction with the
sale of the Company's outstanding stock, the Company's S-Corporation filing
status will be terminated and the Company will begin to be taxed as a
C-Corporation for federal and state income tax purposes. Pro forma income taxes
are calculated at a combined federal and state tax rate of 38%.
CASH AND CASH EQUIVALENTS
Cash equivalents are highly liquid short-term investments readily
convertible into cash. Cash equivalents consist primarily of time deposits and
certificates of deposit with various financial institutions. These investments
are carried at cost, which approximates market and mature within 90 days and
therefore are subject to minimal risk.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. The cost of assets sold or
retired and the related amounts of accumulated depreciation are eliminated from
the accounts and the resulting gain or loss is included in the income. Renewals
and betterments are capitalized. Repairs and maintenance are charged to expense
when incurred.
F-88
<PAGE> 221
TEXEL CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Depreciation is computed using the straight-line and accelerated methods
over the following estimated useful lives:
<TABLE>
<S> <C>
Furniture and fixtures...................................... 7.5 years
Machinery and equipment..................................... 5.5 years
Automobiles................................................. 5.5 years
Computer software........................................... 5.5 years
Leasehold improvements...................................... 31.5 years
</TABLE>
Depreciation expense in 1997 and 1998 was $83,767 and $101,434,
respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's assets and liabilities approximate
fair value due to the short-term maturity of these financial instruments.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from these estimates.
3. MAJOR CUSTOMERS
Sales to individual customers representing more than 10% of total sales
were approximately $5,933,000 and $11,246,000 in 1997 and 1998, respectively.
These amounts represent sales to 2 and 3 customers, respectively.
4. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at December 31:
<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Contract billings........................................... $4,261,637 $4,924,667
Unbilled accounts receivable................................ 360,083 1,845,201
Retainage................................................... 44,012 345,424
Rebates and other........................................... 60,183 57,336
---------- ----------
Total............................................. $4,725,915 $7,172,628
========== ==========
</TABLE>
The balances billed but not paid by customers pursuant to retainage
provisions in customer contracts will be due upon completion of the contracts
and acceptance by the customer. Based on the Company's experience with similar
contracts in recent years, the retention balances at December 31, 1997 and 1998
are expected to be collected within twelve months of year end.
F-89
<PAGE> 222
TEXEL CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
5. PROPERTY AND EQUIPMENT
Property and equipment, stated at cost, consisted of the following at
December 31:
<TABLE>
<CAPTION>
1997 1998
--------- ----------
<S> <C> <C>
Leasehold improvements...................................... $ 3,413 $ 687,427
Automobiles................................................. 345,061 424,502
Machinery and equipment..................................... 292,938 338,392
Computer software........................................... 83,891 83,891
Furniture and fixtures...................................... 50,598 67,774
--------- ----------
775,901 1,601,986
Less accumulated depreciation............................... (580,506) (681,940)
--------- ----------
Property and equipment, net....................... $ 195,395 $ 920,046
========= ==========
</TABLE>
6. COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS
<TABLE>
<CAPTION>
1997 1998
--------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $ 387,343 $ 2,673,895
Billings on uncompleted contracts........................... (250,614) (2,102,695)
--------- -----------
$ 136,729 $ 571,200
========= ===========
Costs in excess of billings on uncompleted contracts........ 177,080 644,353
Billings in excess of costs on uncompleted contracts........ (40,351) (73,153)
--------- -----------
$ 136,729 $ 571,200
========= ===========
</TABLE>
7. LEASE COMMITMENTS
The Company leases office space at various locations under noncancelable
operating leases expiring through 2005. Each lease agreement provides for an
annual escalation of 3%.
Certain office space is leased from Trison LLC, a real estate company owned
by the sole shareholder of the Company. The lease requires monthly payments of
approximately $33,000 over a 7-year term, with a 5-year renewal option. Based on
the terms of the lease, the Company received 10-month rent abatement in return
for making necessary leasehold improvements to the office space. The rent
abatement is recognized on a straight line basis over the term of the lease.
Rent expense for office space for the year ended December 31, 1998 was $307,323.
Minimum rental payments due under noncancelable operating leases are as
follows:
<TABLE>
<CAPTION>
RELATED
PARTY OTHER TOTAL
---------- ------- ----------
<S> <C> <C> <C>
1999................................................. $ 396,130 $36,784 $ 432,914
2000................................................. 396,130 18,059 414,189
2001................................................. 396,130 16,798 412,928
2002................................................. 396,130 17,303 413,433
2003................................................. 396,130 8,779 404,909
Thereafter........................................... 594,196 -- 594,196
---------- ------- ----------
Total future minimum lease payments........ $2,574,846 $97,723 $2,672,569
========== ======= ==========
</TABLE>
F-90
<PAGE> 223
TEXEL CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
8. ACCRUED EXPENSES
Accrued expenses were comprised of the following at December 31:
<TABLE>
<CAPTION>
1997 1998
-------- --------
<S> <C> <C>
Salaries, wages and benefits................................ $196,244 $273,352
Profit sharing.............................................. 115,304 177,399
Vacation accrual............................................ 49,448 59,012
Other....................................................... 53,640 108,535
-------- --------
Total............................................. $414,636 $618,298
======== ========
</TABLE>
9. PROFIT SHARING PLAN
A defined contribution retirement plan is maintained by the Company. All
full-time employees who have attained the age of twenty-one and completed one
year of service are eligible to participate in the plan. The participants may
elect to make a contribution up to 15% of their compensation not exceeding
$9,500 in 1998 as defined by the plan. The Company matches 20% of employee
contributions up to 4% of the employee's compensation. Vesting of Company
contributions occur ratably over a 7-year period. The Company also provides a
discretionary contribution to the profit sharing plan. During 1997 and 1998,
approximately $125,000 and $177,000, respectively, was expensed related to this
contribution.
10. OTHER RELATED PARTY TRANSACTIONS
The president and sole shareholder of the Company is the 30% shareholder of
Texel Systems, Inc., which is a company that performs certain phone and cable
system installation services. The Company occasionally uses Texel Systems, Inc.
as a subcontractor on its projects, and vice-versa. Total revenue and expense
recorded by the Company for services provided to or obtained from Texel Systems,
Inc. was approximately $44,000 and $173,000, respectively in 1998.
F-91
<PAGE> 224
- ------------------------------------------------------
- ------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY ONE TO GIVE ANY INFORMATION OR REPRESENT
ANYTHING TO YOU OTHER THAN THE INFORMATION CONTAINED IN THIS PROSPECTUS. YOU
MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS.
UNTIL , 2000, ALL DEALERS THAT, BUY, SELL OR TRADE THE EXCHANGE
NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS AND SUBSCRIPTIONS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................ 1
Risk Factors.............................. 10
Forward-Looking Statements May Prove
Inaccurate.............................. 18
Market Ranking and Other Data is Subject
to Change and Cannot Be Verified with
Complete Accuracy....................... 18
LISN Acquisition.......................... 19
The Exchange Offer........................ 22
Use of Proceeds........................... 31
Capitalization............................ 31
Unaudited Pro Forma Financial
Statements.............................. 32
Supplemental Unaudited Pro Forma Financial
Data.................................... 38
Selected Historical Financial Data........ 41
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 42
Business.................................. 50
Management................................ 63
Certain Relationships and Related Party
Transactions............................ 69
Principal Stockholders.................... 72
Description of Parent's Securities........ 73
Description of Senior Credit Facilities... 75
Description of the Notes.................. 78
Book Entry, Delivery and Form............. 118
United States Federal Income Tax
Consequences............................ 122
Plan of Distribution...................... 125
Legal Matters............................. 126
Independent Auditors...................... 127
Available Information..................... 128
Index to Financial Statements............. F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
--------------------
PROSPECTUS
--------------------
[ORIUS LOGO]
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
EXCHANGE OFFER FOR $150,000,000
12 3/4% SENIOR SUBORDINATED
NOTES DUE 2010
, 2000
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 225
PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following is a summary of the statutes, charter and bylaw provisions or
other arrangements under which the Registrants' directors and officers are
insured or indemnified against liability in their capacities as such. All of the
directors and officers of the Registrants are covered by insurance policies
maintained and held in effect by Orius Corp. against certain liabilities for
actions taken in their capacities as such, including liabilities under the
Securities Act.
REGISTRANTS INCORPORATED UNDER DELAWARE LAW
Orius Capital Corp., Arion Sub, Inc. and Irwin Telecom Holdings, Inc. are
incorporated under the laws of the State of Delaware. Section 145 of the General
Corporation Law of the State of Delaware (the "Delaware Statute") provides that
a Delaware corporation may indemnify any persons who are, or are threatened to
be made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), other than an action by or in the right of such corporation, by
reason of the fact that such person is or was an officer, director, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise (an "indemnified capacity"). The indemnity may include expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his conduct was illegal. Similar provisions apply to actions
brought by or in the right of the corporation, except that no indemnification
shall be made without judicial approval if the officer or director is adjudged
to be liable to the corporation. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred. Section 145 of the Delaware
Statute further authorizes a corporation to purchase and maintain insurance on
behalf of any indemnified person against any liability asserted against him and
incurred by him in any indemnified capacity, or arising out of his status as
such, regardless of whether the corporation would otherwise have the power to
indemnify him under the Delaware Statute.
Orius Capital Corp. and Arion Sub, Inc. The certificates of incorporation
of each of Orius Capital Corp. and Arion Sub, Inc. provide that, to the fullest
extent permitted by the Delaware Statute, no director of the corporation shall
be liable to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director.
The bylaws of each of Orius Capital Corp. and Arion Sub, Inc. provide that
each person who was or is made a party or is threatened to be made a party to or
is involved in proceeding by reason of the fact that he or she, or a person of
whom he or she is the legal representative, was serving in an indemnified
capacity, shall be indemnified and held harmless by the corporation to the
fullest extent that it is empowered to do so unless prohibited from doing so by
the Delaware Statute against all expense, liability and loss (including
reasonable attorney's fees); provided, however, that the corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the corporation. The right to indemnification
conferred by each of these corporation's bylaws is a contract right and includes
the right to be paid by the corporation the expenses incurred defending any such
proceeding in advance of its final disposition. The corporation may, by action
of its board of directors, provide indemnification to employees and agents of
the corporation with the same scope and effect as the indemnification of its
directors and officers.
The bylaws of these corporations further provide that the rights to
indemnification and to the advancement of expenses conferred in the bylaws are
not exclusive of any other right which any person has
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<PAGE> 226
under the corporation's certificates of incorporation or under any statute,
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Irwin Telecom Holdings, Inc. Irwin Telecom Holdings, Inc.'s certificate of
incorporation provides that no director of the corporation shall be liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (1) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (2) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (3) under Section 174 of the Delaware Statute for the
unlawful payment of dividends, or (4) for any transaction from which the
director derived any improper personal benefit.
Irwin Telecom Holdings, Inc.'s bylaws further provide that each person who
was or is made a party or is threatened to be made a party to a proceeding, by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, was serving in an indemnified capacity, shall be indemnified and
held harmless by the corporation to the fullest extent permitted by applicable
law, including attorney's fees; provided, however, that the corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the corporation.
The bylaws of Irwin Telecom Holdings, Inc. further provide that the rights
to indemnification conferred in the bylaws are not exclusive of any other right
which any person has under the corporation's certificates of incorporation or
under any statute, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
REGISTRANTS FORMED UNDER THE DELAWARE LIMITED LIABILITY COMPANY ACT
NATG Holdings, LLC is a limited liability company formed under the laws of
the state of Delaware. Section 18-108 of the Delaware Limited Liability Company
Act provides that, subject to any standards and restrictions, if any, set forth
in a company's limited liability company agreement, a limited liability company
may indemnify and hold harmless any member or manager or other person from and
against any and all claims and demands whatsoever.
Article XIII of NATG Holdings, LLC's Amended and Restated Limited Liability
Company Agreement provides that to the greatest extent not inconsistent with the
laws and public policy of Delaware, it will indemnify, as a matter of right, any
member, any member's representative, officers, directors, shareholders,
employees and agents and any of its officers who are made a party to any
proceeding because such member or individual is or was a member or an officer,
representative, director, shareholder, employee or agent of a member or any of
its officers against all liability incurred by such member or individual in
connection with any such action or proceeding.
REGISTRANTS INCORPORATED UNDER FLORIDA LAW
Orius Corp., North American Tel-Com Group, Inc., Statewide CATV, Inc.,
Excel Cable Construction, Inc. and Fenix Holdings, Inc., are incorporated under
the laws of the state of Florida. Section 607.0850 of the Florida Business
Corporation Act (the "Florida Statute") provides that a corporation may
indemnify directors and officers, as well as other employees and agents, along
with a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses incurred in legal
proceedings connected with their service to the corporation, if he or she acted
in good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation and, had no reasonable cause
to believe his or her conduct was unlawful. In the case of a proceeding brought
by or in the right of the corporation, the corporation may also indemnify
directors and officers as provided above, except that no indemnification may be
made in respect of any claim or issue as to which a person is adjudged liable to
the corporation unless a court rules that such person is fairly and reasonably
entitled to indemnification despite the adjudication of liability. Where an
officer or director is successful on the merits or otherwise in the defense of
any action referred
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<PAGE> 227
to above, the corporation must indemnify him against the expenses which such
officer or director has actually and reasonably incurred.
The Florida Statute provides that its indemnification provisions are not
are not exclusive and that a corporation may make any further indemnification of
its directors, officers, agents and employees unless a judgment or other final
adjudication establishes that the persons action or omissions were material to
the cause of action and constituted:
(1) a violation of criminal law, unless the person had reasonable
cause to believe his conduct was lawful;
(2) a transaction in which the person derived improper personal
benefit;
(3) in the case of a director, for unlawful distributions under the
Florida Statute; and
(4) willful misconduct or a conscious disregard for the best interests
of the corporation in a proceeding by or in the right of the corporation or
a shareholder.
The Florida Statute further authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was serving in an
indemnified capacity against any liability asserted against him and incurred by
him in any such capacity, arising out of his status as such, regardless of
whether the corporation would otherwise have the power to indemnify him under
the Florida Statute.
Orius Corp. and North American Tel-Com, Inc. Orius Corp.'s and North
American Tel-Com Inc.'s respective articles of incorporation provide that, to
the fullest extent permitted by the Florida Statute, a director of the
corporation shall not be liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director.
Their respective bylaws provide that any person, his heirs, or personal
representative, made, or threatened to be made, a party to any threatened,
pending, or completed proceeding, because he served in an indemnified capacity,
shall be indemnified by the corporation, and the corporation may advance his
related expenses to the full extent permitted by Florida law. In discharging his
duty, any director, officer, employee, or agent, when acting in good faith, may
rely upon information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented by (1)
one or more officers or employees of the corporation whom the director, officer,
employee, or agent reasonably believes to be reliable and competent in the
matters presented, (2) counsel, public accounts, or other persons as to matters
that the director, officer, employee, or agent believes to be within that
person's professional or expert competence, or (3) in the case of a director,
reasonably believes that the committee is competent. Their bylaws further
provide that the foregoing right of indemnification or reimbursement shall not
be exclusive of other rights to which the person, his heirs, or personal
representatives may be entitled and that the corporations may, upon the
affirmative vote of a majority of their respective boards of directors, purchase
insurance for the purpose of indemnifying these persons.
State Wide CATV, Inc. State Wide CATV, Inc.'s bylaws provide that the
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any proceeding by reason of the fact that he or she is or was
serving in an indemnified capacity, against expenses, including attorneys' fees,
judgments, fines, and amounts paid in settlements, actually and reasonably
incurred by him or her in connection with such proceeding, including any appeal
of such action, if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such conduct was unlawful. However, no
indemnification shall be provided in any action or suit by or in the right of
the corporation to procure a judgment in its favor, with respect to any claim,
issue, or matter as to which such person is adjudged to be liable for negligence
or misconduct in the performance of his or her duty to the corporation.
Excel Cable Construction, Inc. Excel Cable's articles of incorporation
provide that, to the fullest extent permitted by the Florida Statute, a director
of the corporation shall not be liable to the corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director. Excel Cable's
bylaws
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<PAGE> 228
provide that the corporation shall indemnify each of its directors and officers,
whether or not then in office (and his executor, administrator and heirs),
against all reasonable expenses actually and necessarily incurred by him in
connection with the defense of any litigation to which he may have been made a
party because he is or was a director or officer of the corporation. He shall
have no right to reimbursement, however, in relation to matters as to which he
has been adjudged liable to the corporation for negligence or misconduct in the
performance of his duties. The right to indemnity for expenses will also apply
to the expenses of suits which are compromised or settled if the court having
jurisdiction of the matter shall approve such settlement. Excel Corporation's
bylaws further provide that the right to indemnification provided in the bylaws
shall be in addition to and not exclusive of, all other rights to which such
director or officer may be entitled including, without limiting the generality
of the expenses as provided in Section 608.13 (14) (15) and (16) of the Florida
Statute and that the board of directors of the corporation may authorize the
purchase and maintenance of insurance to the extend provided in Section
608.13(17) of the Florida Statute.
Fenix Holdings, Inc.'s articles of incorporation provide that the
corporation shall indemnify any present or former officer or director, or person
exercising powers and duties of an officer or director, to the full extent
permitted by law.
REGISTRANTS INCORPORATED UNDER IDAHO LAW
DAS-CO of Idaho, Inc. is incorporated under the laws of the state of Idaho.
Sections 30-1-851 and 30-1-856 of the Idaho Business Corporation Act (the "Idaho
Statute") provide, among other things, that an Idaho corporation may indemnify
any person who was or is a party to a proceeding, by reason of the fact he is or
was a director or officer of the corporation, if he conducted himself in good
faith and reasonably believed that his conduct was in the best interests of, or
not opposed to the best interests of, the corporation, or, with respect to any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Notwithstanding the foregoing, the Idaho Statute prevents a
corporation from indemnifying a director in a proceeding brought by or in the
right of a corporation that results in a settlement or judgment against the
director (other than reasonable expenses incurred in connection with the
proceeding), or a proceeding in which the director received an improper
financial benefit as a result of his conduct. Section 856 of the Idaho Statute
prevents a corporation from indemnifying an officer for conduct that constitutes
either an intentional infliction of harm on the corporation or shareholders, or
an intentional violation of criminal law. Where a director or officer is
successful on the merits or otherwise in the defense of any proceeding referred
to above, the corporation must indemnify him against reasonable expenses
incurred by him in connection with the proceeding. A director or officer who is
a party to a proceeding may also apply for indemnification to the court
conducting the proceeding or to another court of competent jurisdiction. The
court may order indemnification if it determines that indemnification is either
required by the Idaho Statute or fair and reasonable under the relevant
circumstances.
The Idaho Statute also authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was serving in an indemnified
capacity against any liability asserted against or incurred by him in that
capacity or arising from his status as a director or officer, whether or not the
corporation would have the power to indemnify him under the Idaho Statute.
DAS-CO's articles of incorporation provide that, to the furthest extent
permitted by the corporation's bylaws and Idaho law, the corporation is
authorized to indemnify any of its officers, directors, employees and agents.
DAS-CO's articles of incorporation provide that the board of directors is
entitled to determine the terms of the indemnification, including the
advancement of expenses.
REGISTRANTS INCORPORATED UNDER KANSAS LAW
Channel Communications, Inc. is incorporated under the laws of the state of
Kansas. Under Section 17-6305 of the Kansas General Corporation Code (the
"Kansas Statute"), a corporation may indemnify any person serving in an
indemnified capacity against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him if
he acted in
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<PAGE> 229
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar provisions apply to actions brought by or in the right of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless a court determines that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses as
the court shall deem proper. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Kansas Statute further provides that a corporation may purchase and
maintain insurance on behalf of any person serving in an indemnified capacity
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, regardless of whether the
corporation would otherwise have the power to indemnify him under the Kansas
Statute.
Channel's articles of incorporation and bylaws do not contain provisions
regarding indemnification.
REGISTRANTS INCORPORATED UNDER MICHIGAN LAW
Mich-Com Cable Services Incorporated is incorporated under the laws of the
state of Michigan. Under the Michigan Business Corporation Act (the "Michigan
Statute"), a corporation is permitted it to indemnify any person who was, is or
is threatened to be made a party to any proceeding, other than an action, suit
or proceeding by or in the right of the corporation, by reason of the fact that
he or she was serving in an indemnified capacity against expenses, including
attorney fees, and judgments, penalties, fines and amounts paid in settlement
that are actually and reasonably incurred by him or her in connection with the
proceeding, if the indemnified person acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to, the best interests of the
corporation or its shareholders, and with respect to a criminal action or
proceeding, if he or she had no reasonable cause to believe his or her conduct
was unlawful. Similar provisions apply to actions brought by or in the right of
the corporation, except that no indemnification shall be made without judicial
approval with respect to a claim, issue, or matter in which the indemnified
person has been found liable to the corporation. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director has actually and reasonably incurred.
The Michigan Statute further provides that its provisions concerning
indemnification and advancement of expenses are not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under a corporation's articles of incorporation, its bylaws or a
contractual arrangement. In addition, the Michigan Statute authorizes a
corporation to purchase and maintain insurance on behalf of any person who is or
was serving in an indemnified capacity against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such,
regardless of whether the corporation would otherwise have the power to
indemnify him under the Michigan Statute.
Mich-Com Cable Service's bylaws provide that a director of the corporation
shall not be personally liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability:
(1) for any breach of the director's duty of loyalty to the
corporation or its shareholders;
(2) for acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of law;
(3) for unlawful distributions under Section 551(1) of the Michigan
Statute; and
(4) for any transaction from which the director derived an improper
personal benefit.
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REGISTRANTS INCORPORATED UNDER MISSOURI LAW
Schatz Underground Cable, Inc. is incorporated under the laws of the state
of Missouri. Under Section 351.355 of the General and Business Corporation Law
of Missouri (the "Missouri Statute"), a corporation may indemnify any persons
who are, or are threatened to be made, parties to any threatened, pending or
completed proceeding, other than an action by or in the right of such
corporation, by reason of the fact that such person is or was serving in an
indemnified capacity. The indemnity may include expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the corporation's best interests and, with respect to
any criminal action or proceeding, had no reasonable cause to believe that his
conduct was illegal. Similar provisions apply to actions brought by or in the
right of the corporation, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which such officer or director has actually and reasonably
incurred.
The Missouri Statute also permits such persons to seek indemnification
under any applicable bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. The Missouri Statute also permits a corporation to
provide further indemnity, in addition to that otherwise contemplated by the
Missouri Statute, if provided for in the articles of incorporation or a bylaw or
agreement authorized by a stockholder vote, provided that no such
indemnification can be made for conduct which is finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct. The Missouri
Statute also permits corporations to maintain insurance for officers and
directors against liabilities incurred while acting in such capacities whether
or not the corporation would be empowered to indemnify such persons under the
Missouri Statute.
Schatz Underground Cable's certificate of incorporation provides that each
present or former director or officer or other person serving in an indemnified
capacity, and his legal representatives, shall be indemnified by the corporation
against liabilities, expenses, counsel fees and costs reasonably incurred by him
or his estate in connection with, or arising out of, any proceeding in which he
is made a party by reason of his serving in an indemnified capacity; provided
that in neither case shall the corporation indemnify such persons with respect
to any matters as to which he shall finally be adjudged in any such action, suit
or proceeding, to have been liable for negligence or misconduct in the
performance of his duties as such director or officer. The indemnification in
Schatz's certificate of incorporation shall apply also in respect of any amount
paid in compromise of any proceeding asserted against such director or officer,
provided the board of directors shall have first approved the proposed
compromise settlement and determined that the officer or director involved was
not guilty of negligence or misconduct. The right to indemnification under
Schatz's certificate of incorporation are not be exclusive of any other rights
to which its directors or officers may be lawfully entitled.
REGISTRANTS INCORPORATED UNDER NORTH CAROLINA LAW
CATV Subscriber Services, Inc. is incorporated under the laws of the state
of North Carolina. Sections 55-8-52 and 55-8-56 of the North Carolina Business
Corporation Act (the "North Carolina Statute") require a corporation, unless its
articles of incorporation provide otherwise, to indemnify a director or officer
who has been wholly successful, on the merits or otherwise, in the defense of
any proceeding to which such director or officer was, or was threatened to be,
made a party because he is or was a director or officer of the corporation
against reasonable expenses incurred by him in connection with the proceeding.
In addition, the Section 55-8-51 of the North Carolina Statute provides
that a corporation may indemnify an individual made a party because he is or was
a director or officer of the corporation if he conducted himself in good faith
and reasonably believe his conduct was in the best interests of the
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corporation. The corporation may not indemnify an individual in connection with
a proceeding by or in the right of the corporation if the individual was
adjudged liable to the corporation in the proceeding or, in connection with any
other proceeding, if the individual was was adjudged liable on the basis that
personal benefit was improperly received by him. Unless prohibited by the
articles of incorporation, a director or officer also may make application and
obtain court-ordered indemnification if the court determines that such director
or officer is fairly and reasonably entitled to such indemnification as provided
in Sections 55-8-54 and 55-8-56 of the North Carolina Statute. A corporation may
also indemnify its employees, officers and agents to the same extent it
indemnifies its directors. CATV's articles of incorporation and bylaws do not
contain provisions concerning indemnification.
Additionally, Section 55-8-57 of the North Carolina Statute authorizes a
corporation to purchase and maintain insurance on behalf of an individual who is
or was a director, officer, employee or agent of the corporation against certain
liabilities incurred by such a person, whether or not the corporation is
otherwise authorized by the North Carolina Statute to indemnify that person.
REGISTRANTS INCORPORATED UNDER OHIO LAW
LISN Company and LISN, Inc. are incorporated under the laws of the state of
Ohio. Section 1701.13(E) of the Ohio Revised Code (the "Ohio Statute") allows
indemnification by a corporation to any person made or threatened to be made a
party to any proceeding, other than a proceeding by or in the right of the
corporation, by reason of the fact that he is or was serving in an indemnified
capacity, against expenses, including judgment and fines, if he acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to criminal actions, in which he
had no reasonable cause to believe that his conduct was unlawful. Similar
provisions apply to actions brought by or in the right of the corporation,
except that no indemnification shall be made in the person shall have been
adjudged to be liable for negligence or misconduct to the corporation unless a
court determines that the person, in view of all of the facts and circumstances
of the case, is fairly and reasonably entitled to indemnification. Where an
officer or director or other indemnified person s successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director has actually
and reasonably incurred.
The Ohio Statute further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise against any liability asserted against him and incurred by him in any
such capacity, arising out of his status as such, regardless of whether the
corporation would otherwise have the power to indemnify him under the Ohio
Statute. The indemnification provided under the Ohio Statute is not exclusive
and is in addition to any indemnification provided under a corporation's
articles, regulations or other agreement.
LISN, Inc.'s code of regulations provides that, to the fullest extent
authorized or permitted by law, the corporation shall indemnify and save
harmless any and all of its past, present and future shareholders, directors and
officers; and, if the board of directors so determines, any employees and other
agents of the corporation acting in any capacity at the request of or on behalf
of the corporation from and against any and all expenses, fees, liabilities or
amounts paid in settlement (including, but not limited to, attorneys' fees and
court costs) reasonably incurred by an indemnified individual with respect to
any threatened, pending or completed proceeding under which the indemnified
individual is a party or participant because of actions or omissions of the
corporation or any shareholder, director, officer, employee, agent or other
person acting in any capacity at the request of or on behalf of the corporation.
LISN Company's code of regulations provide for similar indemnification, but
prohibit indemnification for gross negligence or willful misconduct.
In addition, LISN Inc.'s and LISN Company's respective codes of regulations
provide that, whether or not the indemnification, provisions in the code of
regulations apply, the corporation may purchase and maintain insurance upon
and/or furnish similar protection for any indemnified individual to cover any
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liability such indemnified individual might incur from the exercise of the
indemnified individual's duties for the corporation or the indemnified
individual's capacity as an agent or representative of the corporation.
REGISTRANTS INCORPORATED UNDER OREGON LAW
Copenhagen Utilities & Construction, Inc. is incorporated under the laws of
the state of Oregon. The Oregon Business Corporation Act provides that an Oregon
corporation may indemnify any individual made a party to a proceeding because
the individual is or was a directors, other than an action by or in the right of
the corporation, if the person concerned acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation, was not adjudged liable on the basis of receipt of an improper
personal benefit and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct was unlawful. Similar provisions apply
with respect to actions by or in the right of the corporation, except that no
right of indemnification will be granted if the person is adjudged to be liable
to the corporation. Every person who has been wholly successful, on the merits
or otherwise, in the defense of any proceeding described above is entitled to
indemnification as a matter of right. In addition, a corporation may obtain
insurance for the protection of its directors and officers against any liability
asserted against them in their official capacities whether or not the
corporation would be able to indemnify such persons under Oregon law. The rights
of indemnification described above are not exclusive of any other rights of
indemnification to which the persons indemnified may be entitled under any
bylaw, agreement, vote of shareholders or directors or otherwise.
Copenhagen Utilities' articles of incorporation provide that directors of
the corporation shall, to the fullest extent permitted by Oregon law, not be
liable to the corporation or its shareholders for monetary damages for his
conduct as a director. Copenhagen Utilities' articles of incorporation further
provide that the corporation is authorized, to the fullest extent permitted
Oregon law and subject to its bylaws, to indemnify any of its officers,
directors, employees and agents, and that the board of directors of the
corporation is entitled to determine the terms of the indemnification, including
the advancement of expenses.
Copenhagen Utilities' bylaws provide that, unless prohibited by the Oregon
Statute, each person who was or is made a party or is threatened to be made a
party to or is involved in any threatened, pending, or completed proceeding by
reason of the fact that he or she was serving in an indemnified capacity, shall
be indemnified and held harmless by the corporation to the fullest extent
permitted by applicable law against all expense, liability and loss, including
attorneys' fees, reasonably incurred or suffered by such person. However, the
Copenhagen's bylaws provide that, with respect to proceedings seeking to enforce
rights to indemnification, the corporation shall not indemnify any such person
seeking indemnification in connection with a proceeding initiated by the person,
unless the proceeding was authorized by the board of directors of the
corporation.
REGISTRANTS INCORPORATED UNDER PENNSYLVANIA LAW
Cablemasters, Corp. is incorporated under the laws of the state of
Pennsylvania. The Pennsylvania Business Corporation Law provides that a
Pennsylvania corporation may, under specified circumstances, indemnify their
directors, officers, employees and agents in connection with actions, suits or
proceedings brought against them by third parties and in connection with actions
or suits by or in the right of the corporation, by reason of the fact that they
were or are directors, officers, employees and agents, against expenses,
including attorney's fees, and, in the case of proceedings brought by third
parties, against judgments, fines and amounts paid in settlement actually and
reasonably incurred in any proceeding.
Cablemasters' bylaws provide that it shall indemnify its directors and
officers and any other person designated as an indemnified representative by its
board of directors against any damage, judgment, amount paid in settlement,
fine, penalty, punitive damages, excise tax assessed with respect to an employee
benefit plan, or cost or expense, of any nature, including, without limitation,
attorneys' fees and disbursements, incurred in connection with any proceeding in
which an individual may be involved as a party or otherwise by reason of the
fact that such person is or was serving in an indemnified capacity,
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including, without limitation, liabilities resulting from any actual or alleged
breach or neglect of duty, error, misstatement or misleading statement,
negligence, gross negligence or act giving rise to strict or products liability,
except:
(1) where such indemnification is expressly prohibited by applicable
law;
(2) where the conduct of the indemnified representative has been
finally determined:
(i) to constitute willful misconduct or recklessness under the
Pennsylvania Statute or any superseding provision of law sufficient in
the circumstances to bar indemnification against liabilities arising
from the conduct; or
(ii) to be used upon or attributable to the receipt by the
indemnified representative from the corporation of a personal benefit to
which the indemnified representative is not legally entitled; or
(3) to the extent such indemnification has been finally determined in
a final adjudication to be otherwise unlawful.
Cablemasters' bylaws further provide that it shall not indemnify any person
for any liability incurred in a proceeding initiated or participated in as an
intervenor or amicus curiae by the person seeking indemnification unless the
initiation of or participation in the proceeding was authorized, either before
or after its commencement, by the affirmative vote of a majority of the
directors in office.
REGISTRANTS ORGANIZED UNDER TEXAS LAW
Network Cabling Services, Inc. is incorporated under the laws of the state
of Texas and Irwin Telecom Services, L.P. is a limited partnership organized
under the laws of the state of Texas. Article 2.02-1 of the Texas Business
Corporation Act and Section 11.02 of the Texas Revised Limited Partnership Act
(the "Texas L.P. Act" and together with the Texas Business Corporation Act, the
"Texas Statutes") authorize a Texas corporation or limited partnership to
indemnify a person who was, is, or is threatened to be made a named defendant or
respondent in a proceeding because the person is or was a director or a general
partner, as the case may be. The Texas Statutes provide that, unless a court of
competent jurisdiction determines otherwise, indemnification is permitted only
the indemnified person conducted himself in good faith and reasonably believed
that, in the case of conduct in his official capacity as a director of the
corporation or a general partner of a limited partnership, that his conduct was
in the corporation's or limited partnership's best interests, and, in all other
cases, that his conduct was at least not opposed to the corporation's or limited
partnership's best interests, or, in the case of any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. A person may be
indemnified under the Texas Statutes against judgments, penalties (including
excise and similar taxes), fines, settlements, and reasonable expenses actually
incurred by the person (including court costs and attorneys' fees), but if the
person is found liable to the corporation or limited partnership, or is found
liable on the basis that personal benefit was improperly received by him, the
indemnification is limited to reasonable expenses actually incurred and shall
not be made in respect of any proceeding in which the person has been found
liable for willful or intentional misconduct in the performance of his duty to
the corporation or limited partnership.
A corporation or limited partnership is obligated under the Texas Statutes
to indemnify a director or officer, in the case of a corporation, or a general
partner, in the case of a limited partnership, against reasonable expenses
incurred by him in connection with a proceeding in which he is named defendant
or respondent because he is or was director or officer or general partner, as
the case may be, if he has been wholly successful, on the merits or otherwise,
in the defense of the proceeding. Under the Texas Statutes, a corporation or
limited partnership may, to the extent consistent with law, provided further
indemnification in it's articles of incorporation, bylaws, by action of its
board of directors, limited partnership agreement, contract or as permitted by
common law and may purchase and maintain insurance or another arrangement on
behalf of person serving in an indemnified capacity against any liability
asserted against such person.
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The articles of incorporation and bylaws of Network Cabling Services do not
contain provisions governing indemnification.
Irwin Telecom Services, L.P.'s agreement of limited partnership provides
that the general partner, its officers, directors, employees and owners shall
not be liable, responsible or accountable in damages to any partner, or the
partnership, for any act or omission on behalf of the partnership performed or
omitted by them in good faith and in a manner reasonably believed by them to be
within the scope of the authority granted to the general partner by the
agreement of limited partnership and in the best interests of the partnership,
unless they have been guilty of gross negligence or willful misconduct. To the
full extent permitted by the Texas L.P. Act, the partnership shall indemnify the
general partner, its officers, directors and members, for, and hold the general
partner, its officer, directors and members, harmless from, any loss or damage
incurred by them by reason of any act or omission so performed or omitted by
them (and not involving gross negligence or willful misconduct). To the full
extent authorized or permitted by the Texas L.P. Act, the partnership shall pay
or reimburse reasonable expenses (including reasonable attorneys' fees) incurred
by the general partner, its officers, directors and members, who are a party to
a proceeding in advance of final disposition of such proceeding. The partnership
may purchase and maintain insurance on behalf of the general partner, its
officers, directors, employees and owners against any liability asserted against
or incurred by them as a result of being the general partner, its officers,
directors or members of the general partner, whether or not the partnership
would have the power to indemnify such person against the same liability under
the limited partnership agreement or the Texas L.P. Act.
REGISTRANTS INCORPORATED UNDER VIRGINIA LAW
Texel Corporation is incorporated under the laws of the state of Virginia.
The Virginia Stock Corporation Act (the "Virginia Statute") permits a
corporation to indemnify any persons who are, or are threatened to be made,
parties to any threatened, pending or completed proceeding by reason of the fact
that such person is or was serving in an indemnified capacity. The indemnity may
include expenses, including attorneys' fees, incurred by such person in
connection with such proceeding, provided such person acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was illegal. A Virginia corporation
may not indemnify a director who, in the case of proceeding brought by the
corporation, is adjudged to be liable to the corporation, or, in the case of
proceeding alleging improper personal benefit, is found to have improperly
received a personal benefit. Indemnification in connection with a proceeding
brought by or in the right of a corporation is limited to reasonable expenses
incurred in connection with the proceeding. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director has actually and reasonably incurred.
The Virginia Statute also permits such persons to seek indemnification
under any applicable bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. The Virginia Statute also permits a corporation to
provide further indemnity, in addition to that otherwise contemplated by the
Virginia Statute, if provided for in the articles of incorporation or a bylaw or
agreement authorized by a stockholder vote, provided that no such
indemnification can be made for willful misconduct or a knowing violation of
criminal law. The Virginia Statute also permits corporations to maintain
insurance for officers and directors against liabilities incurred while acting
in such capacities, whether or not the corporation would be empowered to
indemnify such persons under the Virginia Statute.
Texel Corporation's articles of incorporation and bylaws do not contain
provisions regarding indemnification.
REGISTRANTS ORGANIZED UNDER WISCONSIN LAW
U.S. Cable, Inc. is incorporated under the laws of the state of Wisconsin
and Fenix Telecom Services Limited Partnership is a limited partnership
organized under the laws of the state of Wisconsin. Sections 180.0850 to
180.0859 of the Wisconsin Corporate Statutes (the "Wisconsin Statute") require a
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corporation to indemnify any director or officer who is a party to any
threatened, pending or completed proceeding, to the extent the director or
officer has been successful on the merits or otherwise in the defense of the
proceeding, for all reasonable expenses incurred in the proceeding if the
director or officer was a party because he or she is a director or officer of
the corporation. If the director or officer is not successful in defense of the
proceeding, a corporation must indemnify the director or officer unless the
liability was incurred as a result of the breach or failure to perform a duty
which the director or officer owes to the corporation and the breach or failure
to perform constitutes: (1) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in which the
director or officer has a material conflict of interest; (2) a violation of
criminal law, unless the person has reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful; (3) a
transaction from which the person derived an improper personal profit; or (4)
willful misconduct. A corporation's articles of incorporation may limit its
obligation to indemnify under these provisions, although U.S. Cable's articles
do not contain such a limitation. The Wisconsin Statute also provides that a
corporation may purchase and maintain insurance for officers and directors
against liabilities incurred while acting in such capacities whether or not the
corporation would be empowered to indemnify such persons under the Wisconsin
Statute. U.S. Cable's bylaws provide for indemnification of its officers in
accordance with the terms of the Wisconsin Statute.
The agreement of limited partnership of Fenix Telecom Services Limited
Partnership provides that, to the fullest extent permitted by the Wisconsin
Revised Uniform Limited Partnership Act, the partnership will indemnify the
general partner, its officers, directors and members for any loss or damage
incurred by them by reason of any act or omission, provided that the act or
omission does not involve gross negligence or willful misconduct. The agreement
of limited partnership also provides that the partnership may purchase insurance
on behalf of the general partner, its officers, directors and members against
any liability asserted against such persons, regardless of whether the
partnership would have the power to indemnify such persons.
ITEM 21. EXHIBITS.
(a) The following exhibits are filed as part of this Registration
Statement or incorporated by reference herein:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
1.1 Purchase Agreement, dated February 4, 2000, among NATG
Holdings, LLC and Orius Capital Corp. (the "Issuers"), and
Orius Corp., North American Tel-Com Group, Inc., CATV
Subscriber Services, Inc., Cablemasters Corp., Channel
Communications, Inc., Excel Cable Construction, Inc.,
Mich-Com Cable Services Incorporated, State Wide CATV, Inc.,
U.S. Cable, Inc., DAS-CO of Idaho, Inc., Network Cabling
Services, Inc., Schatz Underground Cable, Inc., Copenhagen
Utilities & Construction, Inc., Texel Corporation, LISN
Company, LISN, Inc., Arion Sub, Inc., Irwin Telecom
Services, L.P. and Irwin Telecom Holdings, Inc.
(collectively, the "Guarantors") and Deutsche Bank
Securities Inc. and Banc of America Securities LLC
(collectively, the "Initial Purchasers").
2.1 Agreement and Plan of Reorganization, dated November 8,
1999, by and among Orius Corp., Orius Merger Sub., Inc. and
LISN Holdings, Inc.
2.2 Amendment Number One to Agreement and Plan of
Reorganization, dated January 13, 2000, by and among Orius
Corp., Orius Merger Sub, Inc. and LISN Holdings, Inc.
3.1 Second Amended and Restated Articles of Incorporation of
Orius Corp.
3.2 Bylaws of Orius Corp.
3.3 Certificate of Formation of NATG Holdings, LLC.
3.4 Amended and Restated Limited Liability Company Agreement of
NATG Holdings, LLC.
3.5 Certificate of Incorporation of Orius Capital Corp.
3.6 Bylaws of Orius Capital Corp.
3.7 Amended and Restated Articles of Incorporation of North
American Tel-Com Group, Inc.
</TABLE>
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<PAGE> 236
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
3.8 Bylaws of North American Tel-Com Group, Inc.
3.9 Articles of Incorporation of CATV Subscriber Services, Inc.
3.10 Bylaws of CATV Subscriber Services, Inc.
3.11 Certificate of Incorporation of Cablemasters Corp.
3.12 Bylaws of Cablemasters Corp.
3.13 Articles of Incorporation of Channel Communications, Inc.
3.14 Bylaws of Channel Communications, Inc.
3.15 Articles of Incorporation of Excel Cable Construction, Inc.
3.16 Bylaws of Excel Cable Construction, Inc.
3.17 Articles of Incorporation of Mich-Com Cable Services
Incorporated
3.18 Bylaws of Mich-Com Cable Services Incorporated.
3.19 Articles of Incorporation of State Wide CATV, Inc.
3.20 Bylaws of State Wide CATV, Inc.
3.21 Articles of Incorporation of U.S. Cable, Inc.
3.22 Restated Bylaws of U.S. Cable, Inc.
3.23 Amended and Restated Articles of Incorporation of DAS-CO of
Idaho, Inc.
3.24 Bylaws of DAS-CO of Idaho, Inc.
3.25 Articles of Incorporation of Network Cabling Services, Inc.
3.26 Bylaws of Network Cabling Services, Inc.
3.27 Articles of Incorporation of Schatz Underground Cable, Inc.
3.28 Bylaws of Schatz Underground Cable, Inc.
3.29 Amended and Restated Articles of Incorporation of Copenhagen
Utilities & Construction, Inc.
3.30 Amended and Restated Bylaws of Copenhagen Utilities &
Construction, Inc.
3.31 Articles of Incorporation of Texel Corporation.
3.32 Bylaws of Texel Corporation.
3.33 Articles of Incorporation of LISN Company.
3.34 Code of Regulations of LISN Company.
3.35 Certificate of Incorporation of Arion Sub, Inc.
3.36 Bylaws of Arion Sub, Inc.
3.37 Articles of Incorporation of LISN, Inc.
3.38 Amended and Restated Code of Regulations of LISN, Inc.
3.39 Certificate of Limited Partnership of Irwin Telecom
Services, L.P.
3.40 Agreement of Limited Partnership of Irwin Telecom Services,
L.P.
3.41 Certificate of Incorporation of Irwin Telecom Holdings, Inc.
3.42 Bylaws of Irwin Telecom Holdings, Inc.
*3.43 Articles of Incorporation of Fenix Holdings, Inc.
*3.44 Bylaws of Fenix Holdings, Inc.
*3.45 Certificate of Limited Partnership of Fenix Limited
Partnership.
*3.46 Agreement of Limited Partnership of Fenix Limited
Partnership.
4.1 Indenture, dated February 9, 2000, by and among the Issuers,
the Guarantors and United States Trust Company of New York,
as trustee (the "Trustee").
*4.2 Supplemental Indenture, dated April , 2000, among Fenix
Communications, Inc., Fenix Limited Partnership and the
Trustee.
4.3 Registration Rights Agreement, dated February 9, 2000, by
and among the Issuers, the Guarantors and the Initial
Purchasers.
</TABLE>
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<PAGE> 237
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
*5.1 Opinion of Kirkland & Ellis regarding the validity of the
securities offered hereby.
*8.1 Opinion of Kirkland & Ellis regarding federal income tax
considerations.
10.1 Credit Agreement, dated December 15, 1999, among Orius
Corp., NATG Holdings, LLC, LISN LLC, Bankers Trust Company,
as Agent, and various lending institutions, with Deutsche
Bank Securities, as Lead Arranger and Book Manager, Bank of
America, N.A., as Syndication Agent, and First Union
National Bank, as Documentation Agent.
10.2 Orius Corp. Investor Rights Agreement, dated November 8,
1999, by and among Orius Corp., Willis Stein & Partners II,
L.P., Willis Stein & Partners Dutch, L.P., LISN Holdings,
Inc. and each of the other stockholders listed on the
signature pages thereto.
*10.3 [Stock Option Plan]
10.4 Employment Agreement, dated December 14, 1999, by and
between Orius Corp. and Joseph P. Powers.
10.5 Employment Agreement, dated December 14, 1999, by and
between Orius Corp. and Robert Agres.
10.6 Senior Management Agreement, dated November 8, 1999, by and
between Orius Corp. and William J. Mercurio.
10.7 Employment Agreement, dated June 30, 1998, by and between
William G. Mullen and U.S. Cable, Inc., as amended pursuant
to a Letter Agreement dated September 24, 1999.
12 Computation of ratio of earnings to fixed charges
10.8 Employment Agreement, dated May 28, 1999, by and between
Donald J. Vanke and LISN, Inc.
*21.1 Subsidiaries of Orius Corp.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Milhouse, Martz & Neal, L.L.P.
23.3 Consent of Williams, Youg & Associates, LLC
*23.4 Consents of Kirkland & Ellis (included in Exhibits 5.1 and
8.1).
24.1 Power of Attorney (included on the signature pages hereto).
*25.1 Statement of Eligibility of Trustee on Form T-1 under the
Trust Indenture Act of 1939 of United States Trust Company
of New York.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Tender Instructions.
</TABLE>
- ------------------------
* To be filed by amendment.
(b) No financial statement schedules are required to be filed herewith
pursuant to this Item.
ITEM 22. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a directors, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of
II-13
<PAGE> 238
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue
(b) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as a part of this
Registration Statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this registration
statement as of the time it was declared effective.
(c) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(d) The undersigned hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the date of the registration statement through the date of
responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-14
<PAGE> 239
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NATG Holdings,
LLC has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of West Palm
Beach, State of Florida, on the 12th day of May, 2000.
NATG HOLDINGS, LLC
By: Orius Corp.
Its: Sole Member
By: /s/ WILLIAM J. MERCURIO
------------------------------------
William J. Mercurio
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM J. MERCURIO President (Principal Executive Officer
- ----------------------------------------------------- and Principal Accounting Officer)
William J. Mercurio
</TABLE>
II-15
<PAGE> 240
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Orius Capital
Corp. has duly caused this Registration Statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of West
Palm Beach, State of Florida, on the 12th day of May, 2000.
ORIUS CAPITAL CORP.
By: /s/ WILLIAM J. MERCURIO
------------------------------------
William J. Mercurio
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<C> <S>
Signature Title
/s/ WILLIAM J. MERCURIO President (Principal Executive Officer and
- --------------------------------------------------- Principal Accounting Officer) and Director
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- ---------------------------------------------------
Robert C. Froetscher
</TABLE>
II-16
<PAGE> 241
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Orius Corp. has
duly caused this Registration Statement on Form S-4 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of West Palm Beach,
State of Florida, on the 12th day of May, 2000.
ORIUS CORP.
By: /s/ WILLIAM J. MERCURIO
------------------------------------
William J. Mercurio
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM J. MERCURIO President, Chief Executive Officer (Principal Executive
- ----------------------------------------------------- Officer) and Director
William J. Mercurio
/s/ ROBERT E. AGRES Chief Financial Officer (Principal Accounting Officer)
- -----------------------------------------------------
Robert E. Agres
/s/ DONALD J. VANKE Director
- -----------------------------------------------------
Donald J. Vanke
/s/ AVY H. STEIN Director
- -----------------------------------------------------
Avy H. Stein
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ GREGORY M. BARR Director
- -----------------------------------------------------
Gregory M. Barr
</TABLE>
II-17
<PAGE> 242
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JACK E. REICH Director
- -----------------------------------------------------
Jack E. Reich
/s/ WILLIAM G. MULLEN Director
- -----------------------------------------------------
William G. Mullen
</TABLE>
II-18
<PAGE> 243
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, North American
Tel-Com Group, Inc. has duly caused this Registration Statement on Form S-4 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of West Palm Beach, State of Florida, on the 12th day of May, 2000.
NORTH AMERICAN TEL-COM GROUP, INC.
By: /s/ WILLIAM J. MERCURIO
------------------------------------
William J. Mercurio
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM J. MERCURIO President, Chief Executive Officer
- ----------------------------------------------------- (Principal Executive Officer) and Director
William J. Mercurio
/s/ ROBERT E. AGRES Chief Financial Officer (Principal Accounting
- ----------------------------------------------------- Officer)
Robert E. Agres
/s/ AVY H. STEIN Director
- -----------------------------------------------------
Avy H. Stein
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ WILLIAM G. MULLEN Director
- -----------------------------------------------------
William G. Mullen
/s/ DONALD J. VANKE Director
- -----------------------------------------------------
Donald J. Vanke
</TABLE>
II-19
<PAGE> 244
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CATV Subscriber
Services, Inc. has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of West Palm Beach, State of Florida, on the 12th day of May, 2000.
CATV SUBSCRIBER SERVICES, INC.
By: /s/ RAYMOND L. GALTELLI
------------------------------------
Raymond L. Galtelli
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ RAYMOND L. GALTELLI President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Raymond L. Galtelli
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-20
<PAGE> 245
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cablemasters
Corp. has duly caused this Registration Statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in City of West Palm
Beach of Florida, on the 12th day of May, 2000.
CABLEMASTERS CORP.
By: /s/ BERNARD E. CZARNECKI
------------------------------------
Bernard E. Czarnecki
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ BERNARD E. CZARNECKI President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Bernard E. Czarnecki
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-21
<PAGE> 246
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Channel
Communications, Inc. has duly caused this Registration Statement on Form S-4 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of West Palm Beach, State of Florida, on the 12th day of May, 2000.
CHANNEL COMMUNICATIONS, INC.
By: /s/ JEFFREY J. EBERSOLE
------------------------------------
Jeffrey J. Ebersole
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JEFFREY J. EBERSOLE President, Chief Executive Officer
- -------------------------------------------------------- (Principal Executive Officer and Principal
Jeffrey J. Ebersole Accounting Officer)
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-22
<PAGE> 247
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Excel Cable
Construction, Inc. has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of West Palm Beach, State of Florida, on the 12th day of May, 2000.
EXCEL CABLE CONSTRUCTION, INC.
By: /s/ DAVID F. MAI
------------------------------------
David F. Mai
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DAVID F. MAI President (Principal Executive Officer and
- -------------------------------------------------------- Principal Accounting Officer)
David F. Mai
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-23
<PAGE> 248
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mich-Com Cable
Services Incorporated has duly caused this Registration Statement on Form S-4 to
be signed on its behalf by the undersigned, thereunto duly authorized, in City
of West Palm Beach of Florida, on the 12th day of May, 2000.
MICH-COM CABLE SERVICES
INCORPORATED
By: /s/ LES SMITH
------------------------------------
Les Smith
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ LES SMITH President (Principal Executive Officer and
- -------------------------------------------------------- Principal Accounting Officer)
Les Smith
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-24
<PAGE> 249
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, State Wide
CATV, Inc. has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of West
Palm Beach, State of Florida, on the 12th day of May, 2000.
STATE WIDE CATV, INC.
By: /s/ MICHAEL WALLACE
------------------------------------
Michael Wallace
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ MICHAEL WALLACE President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Michael Wallace
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-25
<PAGE> 250
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, U.S. Cable,
Inc. has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in City of West Palm Beach
of Florida, on the 12th day of May, 2000.
U.S. CABLE, INC.
By: /s/ ROBERT MULLEN
------------------------------------
Robert Mullen
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ ROBERT MULLEN President (Principal Executive Officer and
- ----------------------------------------------------- Principal Accounting Officer)
Robert Mullen
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-26
<PAGE> 251
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, DAS-CO of
Idaho, Inc. has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in City of West
Palm Beach of Florida, on the 12th day of May, 2000.
DAS-CO OF IDAHO, INC.
By: /s/ WILLIAM H. OLDHAM
------------------------------------
William H. Oldham
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM H. OLDHAM President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
William H. Oldham
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-27
<PAGE> 252
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Network Cabling
Services, Inc. has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of West Palm Beach, State of Florida, on the 12th day of May, 2000.
NETWORK CABLING SERVICES, INC.
By: /s/ ROBERT APGAR
------------------------------------
Robert Apgar
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ ROBERT APGAR President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Robert Apgar
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-28
<PAGE> 253
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Schatz
Underground Cable, Inc. has duly caused this Registration Statement on Form S-4
to be signed on its behalf by the undersigned, thereunto duly authorized, in
City of West Palm Beach of Florida, on the 12th day of May, 2000.
SCHATZ UNDERGROUND CABLE, INC.
By: /s/ KEITH RECORD
------------------------------------
Keith Record
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ KEITH RECORD President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Keith Record
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-29
<PAGE> 254
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Copenhagen
Utilities & Construction, Inc. has duly caused this Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Palm Beach, State of Florida, on the 12th day of
May, 2000.
COPENHAGEN UTILITIES &
CONSTRUCTION, INC.
By: /s/ P. NICHOLAS JOHNSON
------------------------------------
P. Nicholas Johnson
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ P. NICHOLAS JOHNSON President (Principal Executive Officer and Principal
- -------------------------------------------------------- Accounting Officer)
P. Nicholas Johnson
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-30
<PAGE> 255
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Texel
Corporation has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of West
Palm Beach, State of Florida, on the 12th day of May, 2000.
TEXEL CORPORATION
By: /s/ E. SCOTT KASPROWICZ
------------------------------------
E. Scott Kasprowicz
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ E. SCOTT KASPROWICZ President (Principal Executive Officer and
- -------------------------------------------------------- Principal Accounting Officer) and Director
E. Scott Kasprowicz
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-31
<PAGE> 256
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, LISN Company
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in City of West Palm
Beach, State of Florida, on the 12th day of May, 2000.
LISN COMPANY
By: /s/ DONALD J. VANKE
------------------------------------
Donald J. Vanke
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DONALD J. VANKE President (Principal Executive Officer and Principal
- ----------------------------------------------------- Accounting Officer)
Donald J. Vanke
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-32
<PAGE> 257
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Arion Sub, Inc.
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in City of West Palm
Beach, State of Florida, on the 12th day of May, 2000.
ARION SUB, INC.
By: /s/ DONALD J. VANKE
------------------------------------
Donald J. Vanke
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DONALD J. VANKE President, Chief Executive Officer
- -------------------------------------------------------- (Principal Executive Officer and Principal
Donald J. Vanke Accounting Officer)
/s/ WILLIAM J. MERCURIO Director
- --------------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- --------------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- --------------------------------------------------------
Joseph P. Powers
</TABLE>
II-33
<PAGE> 258
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, LISN, Inc. has
duly caused this Registration Statement on Form S-4 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of West Palm Beach,
State of Florida, on the 12th day of May, 2000.
LISN, INC.
By: /s/ DONALD J. VANKE
------------------------------------
Donald J. Vanke
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DONALD J. VANKE President, Chief Executive Officer (Principal Executive
- ----------------------------------------------------- Officer)
Donald J. Vanke
/s/ JAMES WANTUCK Vice President of Finance (Principal Accounting Officer)
- -----------------------------------------------------
James Wantuck
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT C. FROETSCHER Director
- -----------------------------------------------------
Robert C. Froetscher
/s/ JOSEPH P. POWERS Director
- -----------------------------------------------------
Joseph P. Powers
</TABLE>
II-34
<PAGE> 259
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Irwin Telecom
Holdings, Inc. has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of West Palm Beach, State of Florida, on the 12th day of May, 2000.
IRWIN TELECOM HOLDINGS, INC.
By: /s/ GORDON R. IRWIN
------------------------------------
Gordon R. Irwin
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ GORDON R. IRWIN President (Principal Executive Officer
- ----------------------------------------------------- and Principal Accounting Officer)
Gordon R. Irwin
/s/ WILLIAM J. MERCURIO Director
- -----------------------------------------------------
William J. Mercurio
</TABLE>
II-35
<PAGE> 260
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Irwin Telecom
Services, L.P. has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in City of
West Palm Beach, State of Florida, on the 12th day of May, 2000.
IRWIN TELECOM SERVICES, L.P.
By: Schatz Underground Cable, Inc.
Its: General Partner
By:
/s/ KEITH RECORD
------------------------------------
Keith Record
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ KEITH RECORD President of Schatz Underground Cable, Inc.
- ----------------------------------------------------- (Principal-Executive-Officer-and-Principal Accounting
Keith Record Officer)
</TABLE>
II-36
<PAGE> 261
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Fenix Limited
Partnership has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of West
Palm Beach, State of Florida, on the 12th day of May, 2000.
FENIX TELECOM SERVICES LIMITED
PARTNERSHIP
By: LISN, Inc.
Its: General Partner
By: /s/ DONALD J. VANKE
------------------------------------
Donald J. Vanke
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DONALD J. VANKE President of LISN, Inc.
- ----------------------------------------------------- (Principal Executive Officer)
Donald J. Vanke
/s/ JAMES WANTUCK Vice President of Finance
- ----------------------------------------------------- (Principal Accounting Officer)
James Wantuck
</TABLE>
II-37
<PAGE> 262
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Fenix Holdings,
Inc. has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of West Palm
Beach, State of Florida, on the 12th day of May, 2000.
FENIX HOLDINGS, INC.
By: /s/ WILLIAM J. MERCURIO
------------------------------------
William J. Mercurio
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rosemarie Mulholland, William J. Mercurio and
Robert E. Agres, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on the 12th day of May,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM J. MERCURIO President, Director (Principal Executive Officer)
- -----------------------------------------------------
William J. Mercurio
/s/ ROBERT E. AGRES Treasurer (Principal Accounting Officer)
- -----------------------------------------------------
Robert E. Agres
</TABLE>
II-38
<PAGE> 1
Execution Version
EXHIBIT 1.1
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
$150,000,000
12 3/4% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
February 4, 2000
Deutsche Bank Securities Inc.
Banc of America Securities LLC
c/o Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019
Ladies and Gentlemen:
Each of NATG Holdings, LLC, a Delaware limited liability
company ("NATG LLC"), and Orius Capital Corp., a Delaware corporation ("Orius
Capital" and together with NATG LLC, the "Issuers"), Orius Corp., a Florida
corporation ("Parent"), and the other guarantors party hereto (the "Subsidiary
Guarantors" and together with the Issuers, the "Subsidiaries") each hereby
confirms its agreement with you, as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Issuers propose to issue and sell to the several purchasers named
in Schedule 1 hereto (the "Initial Purchasers") $150,000,000 aggregate principal
amount of their 12 3/4% Senior Subordinated Notes due 2010 (the "Notes"). The
Notes are to be issued under an indenture (the "Indenture") to be dated as of
February 9, 2000 by and among Parent, the Issuers, the Subsidiary Guarantors and
United States Trust Company of New York, as trustee (the "Trustee").
The Notes will be guaranteed (the "Guarantees"), jointly and
severally, by Parent and the Subsidiary Guarantors (together, the "Guarantors"),
on a senior subordinated basis.
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom.
In connection with the sale of the Notes, Parent and the
Subsidiaries have prepared a preliminary offering memorandum dated January 17,
2000 (the "Preliminary Memorandum") and will prepare a final offering memorandum
dated February 4, 2000 (the "Final Memorandum"; the Preliminary Memorandum and
the Final Memorandum each herein being referred to as a "Memorandum") each
setting forth or including a description of the terms of the Notes, the terms of
the offering of the Notes, a description of Parent and the Subsidiaries
<PAGE> 2
and any material developments relating to Parent and the Subsidiaries occurring
after the date of the most recent historical financial statements included
therein.
Parent and the Subsidiaries understand that the Initial
Purchasers propose to make an offering of the Notes only on the terms and in the
manner set forth in the Memorandum and Section 8 hereof as soon as the Initial
Purchasers deem advisable after this Agreement has been executed and delivered,
to persons in the United States whom the Initial Purchasers reasonably believe
to be qualified institutional buyers ("Qualified Institutional Buyers" or
"QIBs") as defined in Rule 144A under the Act, as such rule may be amended from
time to time ("Rule 144A"), and outside the United States to certain persons in
reliance on Regulation S under the Act.
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined in
Section 3 hereof) pursuant to which Parent and the Subsidiaries will agree,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Notes or the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act.
2. Representations and Warranties. Parent and the Subsidiaries
represent and warrant, jointly and severally to, and agree with, each Initial
Purchaser on and as of the date hereof and the Closing Date that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and, with respect to the Final Memorandum, at all
times subsequent from the date thereof up to the Closing Date,
contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Issuers in writing
by Deutsche Bank Securities Inc. ("DB") expressly for use in the
Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, which information is set forth in Section 12
hereof.
(b) As of the Closing Date, Parent will have the authorized,
issued and outstanding capitalization set forth in the Final
Memorandum, assuming the exercise of certain call options as described
therein; all of the outstanding capital stock (which term, for the
purposes of this Agreement, shall be deemed to include common stock,
preferred stock, limited liability company membership interests,
limited partnership interests, general partnership interests and all
other similar equity interests) of Parent and the Subsidiaries has
been, and as of the Closing Date will be, duly authorized and validly
issued, fully paid and nonassessable and not issued in violation of any
preemptive or
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<PAGE> 3
similar rights; Parent owns all of the capital stock of
NATG LLC; NATG LLC owns, directly or indirectly all of the capital
stock of Orius Capital and each Subsidiary Guarantor; each Subsidiary
is listed on Schedule 2 hereto; all of the outstanding shares of
capital stock of Parent and of each Subsidiary will be free and clear
of all of all liens, encumbrances, equities and claims or restrictions
on transferability or voting (other than (i) those imposed by the Act
and the securities or "Blue Sky" laws of certain jurisdictions, (ii)
those securing the obligations of Parent and the Subsidiaries under the
Credit Agreement, dated as of December 15, 1999 (the "Senior Secured
Credit Agreement") among Parent, NATG LLC, LISN, LLC, Bankers Trust
Company as Agent, and the lenders from time to time party thereto, and
(iii) such other liens, encumbrances, equities and claims as could not
reasonably be expected to have a material adverse effect on the general
affairs, management, existing business, condition (financial or
otherwise), prospects or results of operations of the Parent and the
Subsidiaries, taken as a whole (a "Material Adverse Effect")); except
as set forth in the Final Memorandum, there are no (i) options,
warrants or other rights to purchase from Parent or any Subsidiary,
(ii) agreements or other obligations of Parent or any Subsidiary to
issue or (iii) other rights to convert any obligation into, or exchange
any securities for, capital stock of Parent or any of the Subsidiaries.
Except for the Subsidiaries, the Company does not own, directly or
indirectly, any capital stock or any other equity or long-term debt
securities or have any equity interest in any firm, partnership, joint
venture or other entity; provided, that LISN, Inc. owns a 49% equity
interest in LB Price Communications, Inc., a Maryland corporation, and
a 49% equity interest in DLS Wallace Corp., an Ohio corporation.
(c) Each of Parent and each Subsidiary has been duly
incorporated or otherwise organized, is validly existing and is in good
standing as a corporation, limited liability company or limited
partnership, as the case may be, under the laws of its jurisdiction of
organization, with all requisite corporate or other organizational
power and authority to own its properties and carry on its business as
now conducted and as proposed to be conducted, and as described in the
Final Memorandum; Parent and each Subsidiary is duly qualified to do
business in good standing as a foreign corporation, foreign limited
liability company or foreign limited partnership, as the case may be,
in every jurisdiction where the ownership or leasing of its existing
properties and assets or the conduct of its existing business requires
such qualification, except where the failure to be so qualified could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(d) Each of the Issuers has all requisite corporate or other
organizational power and authority to execute, deliver and perform its
obligations under the Notes, the Exchange Notes and the Private
Exchange Notes (as defined in the Registration Rights Agreement). The
Notes, when issued, will be in the form contemplated by the Indenture.
The Notes, the Exchange Notes and the Private Exchange
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<PAGE> 4
Notes will have each been duly and validly authorized by the Issuers
and, when executed by the Issuers and authenticated by the Trustee in
accordance with the provisions of the Indenture and, in the case of the
Notes, when delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, and in the case of the
Exchange Notes and the Private Exchange Notes, when delivered to and
exchanged for the Notes in accordance with the terms of the
Registration Rights Agreement, will constitute valid and legally
binding obligations of each of the Issuers, entitled to the benefits of
the Indenture and enforceable against each of the Issuers in accordance
with their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and
the discretion of the court before which any proceeding therefore may
be brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(e) Each of Parent and each Subsidiary has all requisite
corporate or other organizational power and authority to execute,
deliver and perform its obligations under the Indenture. When executed
by Parent and each Subsidiary, the Indenture will meet the requirements
as of the date hereof for qualification under the Trust Indenture Act
of 1939, as amended (the "TIA"). The Indenture has been duly and
validly authorized by Parent and each Subsidiary and, when executed and
delivered by Parent and each Subsidiary (assuming the due
authorization, execution and delivery by the Trustee), will constitute
a valid and legally binding agreement of each of Parent and each
Subsidiary, enforceable against Parent and each Subsidiary in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(f) Each of Parent and each Subsidiary has all requisite
corporate or other organizational power and authority to execute,
deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by Parent and each Subsidiary and, when executed and
delivered by Parent and each Subsidiary (assuming the due
authorization, execution and delivery by the other parties thereto),
will constitute a valid and legally binding agreement of Parent and
each Subsidiary, enforceable against Parent and each Subsidiary in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(g) Each of Parent and each Subsidiary has all requisite
corporate or other organizational power and authority to execute,
deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by Parent and each Subsidiary of the transactions
contemplated hereby have been duly and validly authorized by Parent and
each
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<PAGE> 5
Subsidiary This Agreement has been duly and validly executed and
delivered by Parent and each Subsidiary.
(h) Each Guarantor has all requisite corporate power and
authority to execute, deliver and perform its obligations under its
Guarantee, and its guarantees of the Exchange Notes and the Private
Exchange Notes. Each such Guarantee and each such guarantee of the
Exchange Notes and Private Exchange Notes has been and validly
authorized and when executed and delivered by the applicable Guarantor
will constitute a valid and legally binding agreement of such Guarantor
enforceable against such Guarantor in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(i) No consent, approval, authorization or order of any court
or governmental agency or body, or third party is required for the
performance of this Agreement, the Registration Rights Agreement or the
Indenture by Parent or any Subsidiary or the consummation by Parent or
any Subsidiary of the transactions contemplated hereby, thereby or by
the Final Memorandum except (i) such as have been obtained, (ii) such
as may be required under (A) state securities or "Blue Sky" laws in
connection with the purchase and resale of the Notes by the Initial
Purchasers, (B) the Act with respect to the registration of the
Exchange Notes and the Private Exchange Notes pursuant to the
Registration Rights Agreement, or (C) the Trust Indenture Act of 1939,
as amended (the "TIA"), with respect to the registration of the
Exchange Notes and the Private Exchange Notes pursuant to the
Registration Rights Agreement, and (iii) such that could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. None of Parent or any Subsidiary is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of any statute,
judgment, decree, order, rule or regulation applicable to any of them
or any of their respective properties, business or assets, except for
any such breach or violation which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, or
(iii) in breach of or in default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any
of them or their respective properties, business or assets is subject
(collectively, "Contracts") except where such breach, default or
violation could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(j) The execution, delivery and performance by Parent and each
Subsidiary of this Agreement, the Indenture and the Registration Rights
Agreement and the consummation by Parent and each Subsidiary of the
transactions contemplated hereby and thereby
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<PAGE> 6
(including, without limitation, the issuance and sale of the Notes to
the Initial Purchasers) will not conflict with or constitute or result
in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation
of any of (i) the terms or provisions of any Contract, except for any
such conflict, breach, violation, default or event which could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (ii) the certificate of incorporation or
bylaws (or similar organizational document) of Parent or any
Subsidiary, or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof) any statute, judgment, decree, order, rule or regulation
applicable to Parent or any Subsidiary or any of their respective
properties or assets, except for any such conflict, breach or violation
which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(k) The audited financial statements, together with all
related notes and schedules, of each of (1) North American Tel-Com
Group, Inc. and subsidiaries, (2) Channel Communications, Inc. f/k/a
Kenya Corp., (3) U.S. Cable, Inc., (4) CATV Subscriber Services, Inc.
and its subsidiary, (5) DAS-CO of Idaho, Inc., (6) Schatz Underground
Cable, Inc., (7) Network Cabling Services, Inc., (8) Copenhagen
Utilities and Construction, Inc., (9) Texel Corporation, (10), LISN,
Inc. and (11) ARION, Inc., included in the Final Memorandum present
fairly in all material respects the financial position, results of
operations and cash flows of such companies at the dates and for the
periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis,
except as otherwise stated therein. The unaudited interim financial
statements of each of (1) Orius Corp. and subsidiaries (formerly North
American Tel-Com Group, Inc. and subsidiaries), (2) Network Cabling
Services, Inc. and (3) Texel Corporation, included in the Final
Memorandum present fairly in all material respects the financial
position, results of operations and cash flows of such companies at the
dates and for the periods to which they relate and have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. The summary and
selected financial and statistical data in the Final Memorandum present
fairly in all material respects the information shown therein and have
been prepared and compiled on a basis consistent with the audited
financial statements included therein, except as otherwise stated
therein. Each of Pricewaterhouse Coopers LLP, Williams, Young &
Associates, LLC, Milhouse, Martz & Neal, L.L.P. and BDO Seidman, LLP is
an independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder. The historical
financial statements (including the related notes) contained in the
Final Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Act.
(l) The pro forma financial statements (including the notes
thereto) included in the Preliminary Memorandum and the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii)
have been
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<PAGE> 7
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, (iii) have been properly
computed on the bases described therein; and (iv) except as disclosed
in the Preliminary Memorandum and the Final Memorandum, have been
prepared on a basis consistent with the historical financial statements
contained in the Preliminary Memorandum and the Final Memorandum; the
assumptions used in the preparation of the pro forma financial data and
other pro forma financial information included in the Preliminary
Memorandum and the Final Memorandum are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(m) There is not pending or, to the knowledge of Parent or any
Subsidiary, threatened any action, suit, proceeding, inquiry or
investigation to which any of Parent or any Subsidiary is a party, or
to which the property or assets of any of Parent or any Subsidiary are
subject, before or brought by any court, arbitrator or governmental
agency or body which, if determined adversely to Parent or any
Subsidiary could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Notes to be sold hereunder, the issuance of the
Guarantees, the use of any Memorandum in any jurisdiction, or the
consummation of the other transactions described in the Final
Memorandum.
(n) Each of Parent and each Subsidiary owns or possesses
adequate licenses or other rights to use all material patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by
it as described in the Final Memorandum, except as could not reasonably
be expected to have a Material Adverse Effect, and none of Parent or
the Subsidiaries has received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(o) Parent and each Subsidiary possesses all licenses,
permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum (collectively, the "Permits"), except as could not
reasonably be expected to have a Material Adverse Effect; Parent and
each Subsidiary has fulfilled and performed all of its obligations with
respect to such Permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of
the holder of any such Permit, except where the failure to perform such
obligation could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and none of
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<PAGE> 8
Parent or the Subsidiaries has received any written notice of any
proceeding relating to revocation or modification of any such Permit,
except where such revocation or modification could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(p) Since the date of the most recent financial statements
appearing in the Final Memorandum, except as described or contemplated
in the Final Memorandum, (i) none of Parent or the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or contracts
(written or oral) not in the ordinary course of business which
liabilities, obligations, transactions or contracts would, individually
or in the aggregate, be material to the general affairs, management,
business, condition (financial or otherwise), prospects or results of
operations of Parent and the Subsidiaries, taken as a whole (a
"Material Change"), (ii) none of Parent or any Subsidiary has purchased
any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock
(other than with respect to a Subsidiary, the purchase of, or dividend
or distribution on, capital stock owned by NATG LLC), and (iii) there
shall not have been any change in the capital stock, or long-term
indebtedness of Parent or any Subsidiary which would, individually or
in the aggregate, constitute a Material Change.
(q) Each of Parent and each Subsidiary has filed all necessary
federal, state, local and foreign income and franchise tax returns,
except where the failure to file such returns could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect, and has paid all taxes shown as due thereon; other than tax
deficiencies which Parent or any Subsidiary is contesting in good faith
and for which Parent or such Subsidiary has provided adequate reserves,
there is no tax deficiency that has been asserted against any of Parent
or any Subsidiary that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(r) Neither Parent nor any Subsidiary owns any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Notes will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Notes to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board. Without limiting the
foregoing, none of Parent, the Subsidiaries or any agent acting on
behalf of any of them has taken or will take any action that might
cause this Agreement or the sale of the Notes to violate Regulation T,
U or X of the Federal Reserve Board, in each case as in effect, or as
the same may hereafter be in effect, on the Closing Date.
(s) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which Parent and
the Subsidiaries believe to be reliable and accurate.
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<PAGE> 9
(t) Each of Parent and each Subsidiary has good and marketable
title to all real property and good title to all personal property
described in the Final Memorandum as being owned by it and good and
marketable title to a leasehold estate in the real and personal
property described in the Final Memorandum as being leased by it free
and clear of all liens, charges, encumbrances or restrictions (other
than those arising in connection with the Senior Secured Credit
Agreement), except to the extent the failure to have such title or the
existence of such liens, charges, encumbrances or restrictions could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All leases, contracts and agreements to which
any of Parent or any Subsidiary is a party or by which any of them is
bound are valid and enforceable against Parent or such Subsidiary, and,
to the knowledge of Parent and each Subsidiary, are valid and
enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(u) There are no legal or governmental proceedings involving
Parent or any Subsidiary or any of their respective properties or
assets known to any of them which would be required to be described in
a prospectus pursuant to the Act that are not described in the Final
Memorandum, and to the knowledge of Parent and the Subsidiaries no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others, nor are there any material contracts or other
documents which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum.
(v) Except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (A) each of
Parent and each Subsidiary is in compliance with applicable
Environmental Laws (as defined below), (B) each of Parent and each
Subsidiary has made all filings and provided all notices required under
any applicable Environmental Law, and has and is in compliance with all
Permits required under any applicable Environmental Laws and each of
them is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter or
request for information pending or, to the knowledge of Parent or any
Subsidiary, threatened against Parent or any Subsidiary under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by Parent or
the Subsidiaries, (E) none of Parent or the Subsidiaries has received
notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any comparable state
law and (F) no property or facility of Parent or the Subsidiaries is
(i) listed or proposed for listing on the National Priorities List
under CERCLA or (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List promulgated
pursuant to CERCLA, or on any comparable list maintained by any state
or local governmental authority.
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<PAGE> 10
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, law relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials,
into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), (ii)
the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and above ground storage tanks, and related piping,
and emissions, discharges, releases or threatened releases therefrom.
(w) There is no strike, labor dispute, slowdown or work
stoppage by the employees of Parent or any Subsidiary which is pending
or, to the knowledge of Parent or any Subsidiary, threatened.
(x) Each of Parent and each Subsidiary carries insurance in
such amounts and covering such risks as it deems reasonable for the
conduct of its business and the value of its properties.
(y) None of Parent or the Subsidiaries has any liability for
any prohibited transaction (within the meaning of Section 4975(c) of
the Code or Part 4 of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (or an accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302
of ERISA) or any complete or partial withdrawal liability (within the
meaning of Section 4201 of ERISA) with respect to any pension, profit
sharing or other plan which is subject to ERISA, to which Parent or any
Subsidiary makes or ever has made a contribution and in which any
employee of Parent or any Subsidiary is or has ever been a participant.
With respect to such plans, each of Parent and each Subsidiary is in
compliance in all respects with all applicable provisions of ERISA, or,
if not in compliance, any such failure or failures to comply could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(z) Parent and each Subsidiary (i) makes and keeps books and
records that are accurate in all material respects and (ii) maintains
internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(aa) None of Parent or the Subsidiaries is an "investment
company", or a company "controlled by" an investment company or
"promoter" or "principal underwriter" for an "investment company," as
such terms are defined in the Investment
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<PAGE> 11
Company Act of 1940, as amended, and the rules and regulations
thereunder, or a "holding company" or a "subsidiary" of a holding
company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(bb) The Notes, the Indenture (including the Guarantees) and
the Registration Rights Agreement will conform in all material respects
to the descriptions thereof in the Final Memorandum.
(cc) No holder of securities of Parent or the Subsidiaries
will be entitled to have such securities registered under the
registration statements required to be filed pursuant to the
Registration Rights Agreement other than as expressly permitted
thereby.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair
saleable value of the assets of each of Parent and the Subsidiaries
(each on a consolidated basis) will exceed the sum of its stated
liabilities and identified contingent liabilities; none of Parent or
any of the Subsidiaries (each on a consolidated basis) is, nor will
Parent or any of the Subsidiaries (each on a consolidated basis) be,
immediately after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, (i) left with unreasonably small capital with
which to carry on its business as it is currently or proposed to be
conducted, (ii) unable to pay its debts (contingent or otherwise) as
they mature or otherwise become due or (iii) otherwise insolvent.
(ee) None of Parent, the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Notes in a manner that would require the
registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Notes or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. No securities of the same class as the
Notes have been issued and sold by any of the Issuers within the
six-month period immediately prior to the date hereof.
(ff) Assuming the accuracy of the representations, warranties
and covenants of the Initial Purchasers in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement
to register any of the Notes under the Act or to qualify the Indenture
under the TIA.
(gg) No securities of Parent or any of the Subsidiaries are of
the same class (within the meaning of Rule 144A as promulgated under
the Act ("Rule 144A")) as the Notes and listed on a national securities
exchange registered under Section 6 of the Exchange Act, or quoted in a
U.S. automated inter-dealer quotation system.
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<PAGE> 12
(hh) None of Parent or the Subsidiaries has taken, nor will
any of them take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization
or manipulation of the price of the Notes in violation of the Act or
the Exchange Act (including, without limitation, Regulation M under the
Exchange Act).
(ii) None of Parent or the Subsidiaries, or any person acting
on any of their behalf (other than the Initial Purchasers or persons
acting on their behalf) has engaged in any directed selling efforts (as
that term is defined in Regulation S) with respect to the Notes;
Parent, the Subsidiaries and their respective Affiliates and any person
acting on any of their behalf (other than the Initial Purchasers or any
Affiliate of the Initial Purchasers) have complied with the offering
restrictions requirement of Regulation S.
(jj) Each of the Preliminary Memorandum and the Final
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Notes, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Act.
(kk) None of Parent or the Subsidiaries nor, to Parent's and
any Subsidiary's knowledge, any officer or director purporting to act
on behalf of any of Parent or any of the Subsidiaries has at any time
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977.
(ll) No forward-looking statement (within the meaning of
Section 27A of the Act and Section 21E of the Exchange Act) contained
in the Preliminary Memorandum or the Final Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than
in good faith.
(mm) All material computer software, firmware or hardware
(whether special or general purpose or other similar or related items
of automated, computerized or software systems) that are used in the
business of Parent or the Subsidiaries are capable of accurately
processing, calculating, manipulating, storing and exchanging date/time
data from, into, and between the twentieth and twenty-first centuries,
including, without limitation, the years 1999 and 2000 and any leap
year calculations, except where the failure could not reasonably be
expected to have a Material Adverse Effect. Parent and the Subsidiaries
have experienced no Material Adverse Effect as a result of the
changeover to the year 2000.
(nn) None of Parent or the Subsidiaries is a party to any
contract, agreement or understanding with any person other than this
agreement that would give rise to a valid claim against the Issuers or
the Initial Purchasers for a brokerage commission, finder's fee or like
payment solely as a result of the offering and sale of the Notes.
(oo) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
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3. Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchasers, and each Initial Purchaser, acting severally
and not jointly, agrees to purchase from the Issuers the principal amount of
Notes set forth opposite its name on Schedule 1 hereto at 97% of their principal
amount. One or more certificates in definitive form for the Notes that each
Initial Purchaser has agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as each Initial Purchaser
requests upon notice to the Issuers, at least 36 hours prior to the Closing Date
shall be delivered by or on behalf of the Issuers to the Initial Purchasers,
against payment by or on behalf of the Initial Purchasers of the purchase price
therefor by wire transfer (same day funds) to such account or accounts as the
Issuers shall specify prior to the Closing Date, or by such means as the parties
hereto shall agree prior to the Closing Date. Such delivery of and payment for
the Notes shall be made at the offices of White & Case LLP, 1155 Avenue of the
Americas, New York, New York 10036 at 10:00 A.M., New York time, on February 9,
2000, or at such other place, time or date as the Initial Purchasers, on the one
hand, and the Issuers, on the other hand, may agree upon, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Issuers will make such certificate or certificates for the Notes available for
inspection and packaging by each Initial Purchaser at the offices of DB in New
York, New York, or at such other place as the Initial Purchasers may designate,
at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. Parent and each of the
Subsidiaries, jointly and severally, covenant and agree with each Initial
Purchaser that:
(a) Parent and the Subsidiaries will not amend or supplement
the Final Memorandum or any amendment or supplement thereto of which
each Initial Purchaser shall not previously have been advised and
furnished a copy for a reasonable period of time prior to the proposed
amendment or supplement and as to which each Initial Purchaser shall
not have consented, which consent shall not be unreasonably withheld.
(b) Parent and the Subsidiaries will promptly, upon the
written request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable
in connection with the resale of the Notes by the Initial Purchasers;
provided, that Parent shall have consented to such amendment or
supplement, such consent not to be unreasonably withheld.
(c) Parent and the Subsidiaries will cooperate with each
Initial Purchaser in arranging for the qualification of the Notes for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as such Initial Purchaser may reasonably designate
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<PAGE> 14
and will continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Notes; provided, however,
that in connection therewith, Parent and the Subsidiaries shall not be
required to qualify as foreign corporations or to execute general
consents to service of process in any jurisdiction or subject
themselves to taxation in excess of a nominal dollar amount in any such
jurisdiction where they are not then so subject.
(d) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes or the Private
Exchange Notes, any event occurs or information becomes known as a
result of which the Final Memorandum as then amended or supplemented
would include any untrue statement of a material fact, or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, Parent and the Subsidiaries
will promptly notify each Initial Purchaser thereof and will prepare,
at the expense of Parent and the Subsidiaries, an amendment or
supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance.
(e) Parent and the Subsidiaries will, without charge, provide
to each Initial Purchaser and to counsel for the Initial Purchasers as
many copies of the Preliminary Memorandum and the Final Memorandum or
any amendment or supplement thereto as the Initial Purchasers may
reasonably request; provided, that if such request is made after the
original printing of the Final Memorandum or any amendment or
supplement thereto, such copies need not be reprinted at the expense of
Parent and the Subsidiaries.
(f) Parent and the Subsidiaries will apply the net proceeds
from the sale of the Notes as set forth under the caption "Use of
Proceeds" in the Final Memorandum.
(g) Until the date that no Notes are outstanding under the
Indenture, Parent and the Subsidiaries will furnish to each Initial
Purchaser, upon its written request, copies of all reports and other
communications (financial or otherwise) furnished by Parent or any
Subsidiary to the Trustee, or the holders of the Notes in such number
of copies as may be reasonably requested by each Initial Purchaser and,
as soon as available, copies of any reports or financial statements
furnished to or filed by Parent or any Subsidiary with the Commission
or any national securities exchange on which any class of securities of
the Parent or any Subsidiary may be listed in such number of copies as
may be reasonably requested by the Initial Purchasers.
(h) None of the Issuers or any of their affiliates has sold,
offered for sale or solicited, or will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any "security" (as
defined in the Act) which could be integrated with the sale of the
Notes in a manner which would require the registration under the Act of
the Notes.
(i) None of Parent, the Subsidiaries or any of their
Affiliates will engage in any form of "general solicitation" or
"general advertising" (as those terms are used in Regulation D under
the Act) in connection with the offering of the Notes or in any
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<PAGE> 15
manner involving a public offering of the Notes within the meaning of
Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding, Parent
and the Subsidiaries will make available, upon request, to any seller
of such Notes the information specified in Rule 144A(d)(4) under the
Act.
(k) Parent and the Subsidiaries will use their respective
reasonable best efforts to permit (i) the Notes to be designated PORTAL
securities in accordance with the rules and regulations adopted by the
NASD relating to trading in the NASD's Portal Market (the "Portal
Market") and (ii) the Notes to be eligible for clearance and settlement
through The Depository Trust Company.
(l) None of the Issuers or any of their affiliates nor any
person acting on its or their behalf will engage, in any directed
selling efforts (as that term is defined in Regulation S) with respect
to the Notes, and the Issuers will comply, and will cause their
affiliates and each person acting on its or their behalf to comply,
with the offering restrictions requirements of Regulation S.
(m) Parent and each Subsidiary agrees that for a period of 180
days from the date of the Final Memorandum, it will not offer for sale,
sell, contract to sell or otherwise dispose of, directly or indirectly,
or file a registration statement for, or announce any offer, sale,
contract for sale of or other disposition of any debt securities issued
or guaranteed by Parent or any of the Subsidiaries (other than the
Notes) without the prior written consent of the Initial Purchasers.
(n) During the period from the Closing date until two years
after the Closing Date, without the prior written consent of the
Initial Purchasers, each of Parent and each Subsidiary agrees not to
resell, and to use its reasonable best efforts to prevent any of its
Affiliates from reselling, any of the Notes that have been reacquired
by them, except for Notes purchased by the Issuers or any of their
Affiliates and resold in a transaction registered under the Act.
(o) In connection with the offering of the Notes, until DB on
behalf of the Initial Purchasers shall have notified the Issuers of the
completion of the resale of the Notes, each Issuer agrees not to, and
to cause its affiliated purchasers (as defined in Regulation M under
the Exchange Act) not to, either alone or with one or more other
persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Notes, or attempt
to induce any person to purchase any Notes; and not to, and to cause
its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent active trading in or of raising the
price of the Notes.
(p) Prior to the Closing Date, Parent and the Subsidiaries
agree not to issue any press release or other communication directly or
indirectly or hold any press conference with respect to Parent or the
Subsidiaries, their condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral
marketing
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<PAGE> 16
communications in the ordinary course of business and consistent with
the past practices of Parent and the Subsidiaries and of which the
Initial Purchasers are notified), without the prior written consent of
the Initial Purchasers, unless in the judgment of the Issuers and
their counsel, and after notification to the Initial Purchasers, such
press release or communication is required by law.
6. Expenses. Parent and the Subsidiaries, jointly and
severally, agree to pay all costs and expenses incident to the performance of
their obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 11 hereof, including all costs and expenses incident to (i) the costs of
printing the Memorandum and any amendment or supplement thereto, and preparing
any "Blue Sky" memoranda, (ii) all arrangements relating to the delivery to each
Initial Purchaser of copies of the Memorandum and any amendment or supplement
thereto, (iii) the fees and disbursements of counsel, accountants and any other
experts or advisors retained by Parent or any Subsidiary, (iv) preparation
(including printing), issuance and delivery to each Initial Purchaser of the
Notes, (v) the qualification of the Notes under state securities and "Blue Sky"
laws, including filing fees and reasonable fees and disbursements of counsel for
the Initial Purchasers relating thereto, (vi) costs and expenses in connection
with any the "roadshow" and any other meetings with prospective investors in the
Notes, (vii) fees and expenses of the Trustee including reasonable fees and
expenses of counsel, (viii) all expenses and listing fees incurred in connection
with the application for quotation of the Notes on the PORTAL Market and (ix)
any fees charged by investment rating agencies for the rating of the Notes. If
the sale of the Notes provided for herein is not consummated because any
condition to the obligations of any Initial Purchaser set forth in Section 7
hereof is not satisfied, because this Agreement is terminated or because of any
failure, refusal or inability on the part of any of Parent and the Subsidiaries
to perform all obligations and satisfy all conditions on their part to be
performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchasers of their obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith), the Parent and the
Subsidiaries jointly and severally agree to promptly reimburse each Initial
Purchaser upon demand for all out-of-pocket expenses (including all reasonable
fees, disbursements and charges of White & Case LLP, counsel for the Initial
Purchasers) that shall have been reasonably incurred by each Initial Purchaser
in connection with the proposed purchase and sale of the Notes. Except as
provided in this Section 6, the Initial Purchasers shall be responsible for
their own fees and expenses, including the fees and expenses of their counsel.
7. Conditions of the Initial Purchaser's Obligations. The
obligation of each Initial Purchaser to purchase and pay for the Notes shall be
subject to the satisfaction or waiver of the following conditions on or prior to
the Closing Date:
(a) The Final Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
Notes in any jurisdiction shall have been issued and no proceedings for
the purpose shall have been commenced or shall be pending or
threatened.
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<PAGE> 17
(b) None of the Initial Purchasers shall have discovered and
disclosed to Parent or any Subsidiary on or prior to the Closing Date
that the Final Memorandum or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel
for the Initial Purchasers, is material or omits to state any fact
which, in the opinion of such counsel is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of the Final Memorandum and the
transactions contemplated thereby, shall be satisfactory in all
material respects to the Initial Purchasers, and Parent and the
Subsidiaries shall have furnished to the Initial Purchasers all
documents and information that they or their counsel may reasonably
request to enable them to pass upon such matters.
(d) On the Closing Date, the Initial Purchasers shall have
received an opinion, dated as of the Closing Date and addressed to the
Initial Purchasers, of Kirkland & Ellis, counsel for Parent and the
Subsidiaries, substantially in the form annexed hereto as Exhibit A.
(e) On the Closing Date, the Initial Purchasers shall have
received the opinion, in form and substance satisfactory to the Initial
Purchasers, dated as of the Closing Date and addressed to the Initial
Purchasers, of White & Case LLP, counsel for the Initial Purchasers,
with respect to certain legal matters relating to this Agreement and
such other related matters as the Initial Purchasers may reasonably
require. In rendering such opinion, White & Case LLP shall have
received and may rely upon such certificates and other documents and
information as it may reasonably request to pass upon such matters.
(f) The Initial Purchasers shall have received from
PricewaterhouseCoopers LLP (auditors of Orius Corp., U.S. Cable , Inc.,
CATV Subscriber Services, Inc., DAS-Co of Idaho, Inc., Copenhagen
Utilities and Construction Inc., Texel Corporation, LISN, Inc. and
Arion, Inc.), Williams, Young & Associates, LLC (auditors of Channel
Communications, Inc.), Milhouse, Martz & Neal, LLP (auditors of Schatz
Underground Cable, Inc.) and BDO Seidman, LLP (auditors of Network
Cabling Services, Inc.), all independent public accountants, comfort
letters dated the date hereof and the Closing Date, in form and
substance satisfactory to counsel for the Initial Purchasers.
(g) The representations and warranties of Parent and each
Subsidiary contained in this Agreement shall be true and correct on and
as of the date hereof and on and as of the Closing Date as if made on
and as of the Closing Date; the statements of Parent's or any
Subsidiary's officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct on and
as of the date made and on and as of the Closing Date; Parent and each
Subsidiary shall have performed in all material respects all covenants
and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date; and,
except as described in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof),
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<PAGE> 18
subsequent to the date of the most recent financial statements in such
Final Memorandum, there shall have been no event or development that,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect.
(h) On the Closing Date, the Initial Purchaser shall have
received copies of good standing certificates for Parent and each
Subsidiary from their respective states of organization.
(i) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(j) Subsequent to the date of the most recent financial
statements in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), the conduct of the business
and operations of Parent and the Subsidiaries shall not have been
interfered with by, fire, flood, hurricane, accident or other calamity
(whether or not insured) or from any strike, labor dispute, slow down
or work stoppage, or by any court or governmental action, order or
decree, and, except as otherwise stated therein, the properties of
Parent or any of the Subsidiaries shall not have sustained any loss or
damage (whether or not insured) as a result of any such occurrence,
except any such interference, loss or damage which could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(k) There shall not have occurred any invalidation of Rule
144A under the Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Act or the Exchange Act
by the Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchasers would
materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Notes contemplated hereby.
(l) The Initial Purchasers shall have received a certificate
from Parent and each Subsidiary, dated the Closing Date, signed by the
two executive officers (or one executive officer and one vice president
or assistant vice president) of each such entity and attested by the
secretary or assistant secretary of each such entity to the effect
that:
(i) Such executive officers have carefully examined
the Final Memorandum, and the Final Memorandum, as of its
date, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, and since the date of the Final
Memorandum, no event has occurred which should have been set
forth in a supplement or amendment to the Final Memorandum so
that the Final Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and
would not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
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<PAGE> 19
(ii) The representations and warranties of such
entity contained in this Agreement are true and correct as of
the Closing Date, and entity has performed in all material
respects all covenants and agreements and satisfied in all
material respects all conditions on its part to be performed
or satisfied hereunder at or prior to the Closing Date.
(iii) Since the date of the most recent financial
statements in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof), except as
described in the Final Memorandum, to their knowledge after
due inquiry, no event or development has occurred, no
information has become known nor does any condition exist
that, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect.
(iv) No proceeding is pending or contemplated for the
liquidation or dissolution of such entity or threatening its
existence.
Each such certificate shall also have attached copies of (i)
all resolutions of the Board of Directors of such entity authorizing
the transactions contemplated by this Agreement, including, without
limitation, approving the offering of the Notes, the execution,
performance and delivery of this Agreement, the Indenture and the
Registration Rights Agreements, (ii) the certificate of incorporation
and by-laws or analogous organizational documents of such entity, and
(iii) the names, offices and specimen signatures of each officer of
such entity that will execute any document delivered in connection with
the transactions contemplated by this Agreement. For the purposes of
the certificate contemplated by this Section 7(1), the following shall
be deemed to be "executive officers" of a particular entity: its
Chairman of the Board, Vice Chairman of the Board, President, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer or
Executive Vice President.
(m) On the Closing Date, the Initial Purchasers shall have
received the Registration Rights Agreement duly executed by Parent and
each Subsidiary and such agreement shall be in full force and effect at
all times from and after the Closing Date.
(n) The Indenture shall have been duly executed and delivered
by Parent, the Subsidiaries and the Trustee, and the Notes shall have
been duly executed and delivered by Parent and the Subsidiaries and
duly authenticated by the Trustee.
(o) The Notes shall have been approved by the NASD for trading
in the PORTAL Market.
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of Parent and the Subsidiaries as they
shall have heretofore reasonably requested from the Issuers.
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<PAGE> 20
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Issuers shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. Each Initial
Purchaser agrees with the Issuers (as to itself only) that (i) it has not and
will not solicit offers for, or offer or sell, the Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act; and (ii) it has and will solicit offers for the
Notes only from, and will offer the Notes only to (A) in the case of offers
inside the United States, persons whom such Initial Purchaser reasonably
believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of this clause (B),
in purchasing such Notes such persons are deemed to have represented and agreed
as provided under the caption "Notice to Investors" contained in the Final
Memorandum.
Each Initial Purchaser represents and warrants (as to itself
only) with respect to offers and sales outside the United States that (i) it has
and will comply with all applicable laws and regulations in each jurisdiction in
which it acquires, offers, sells or delivers Notes or has in its possession or
distributes any Memorandum or any such other material, in all cases at its own
expense; (ii) the Notes have not been and will not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) (A) it has not offered or sold, and,
prior to the expiration of the period of six months from the Closing Date, will
not offer or sell any Notes to persons in the United Kingdom, except to those
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purpose of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (B) it has complied and will
comply with all applicable provisions of the Financial Services Act of 1986,
with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom, and (C) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue of the Notes to a person who is of a kind described
in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996, as amended, or is a person to whom the document may
otherwise lawfully be issued or passed on; and (iv) it has offered the Notes and
will offer and sell the Notes (A) as part of its distribution at any time and
(B) otherwise until 40 days after
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<PAGE> 21
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S and, accordingly, neither it nor any
persons acting on its behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes, and any
such persons have complied and will comply with the offering restrictions
requirement of Regulation S.
Terms used in this Section 8 and not defined in this Agreement
have the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) Parent and the
Subsidiaries jointly and severally agree to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which any Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
Parent or any Subsidiary in Section 2 hereof;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or
supplement thereto; or
(iii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, a material fact
required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, Parent and the
Subsidiaries will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Memorandum or any amendment or supplement thereto in reliance upon and in
conformity with written information concerning the Initial Purchasers furnished
to the Company by the Initial Purchasers through DB specifically for use
therein, which information is set forth in Section 12. The indemnity provided
for in this Section 9 will be in addition to any liability that parent or a
Subsidiary may otherwise have to the indemnified parties. None of Parent or any
Subsidiary shall be liable under this Section 9 for any settlement of any claim
or action effected without its prior written consent, which shall not be
unreasonably withheld.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless Parent and each Subsidiary, its directors, its
officers and each person, if any, who controls Parent or any Subsidiary within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the Parent, a
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<PAGE> 22
Subsidiary or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplement
thereto, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto, or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Initial
Purchaser, furnished to Parent and the Subsidiaries by the Initial Purchasers
through DB specifically for use therein which information is set forth in
Section 12; and subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses incurred by
Parent, any Subsidiary or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. The indemnity provided for in this Section 9 will be in
addition to any liability that the Initial Purchasers may otherwise have to the
indemnified parties. The Initial Purchasers shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld. Parent and the Subsidiaries
shall not, without the prior written consent of the Initial Purchasers, effect
any settlement or compromise of any pending or threatened proceeding in respect
of which any Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by any Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchasers, in form and
substance reasonably satisfactory to the Initial Purchasers, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
-22-
<PAGE> 23
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchasers in the case
of paragraph (a) of this Section 9 or Parent or a Subsidiary in the case of
paragraph (b) of this Section 9, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. All fees and expenses reimbursed pursuant to this paragraph
(c) shall be reimbursed as they are incurred. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld), unless such
indemnified party waived in writing its rights under this Section 9, in which
case the indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by Parent and the
Subsidiaries on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by Parent and the Subsidiaries bear to the
total discounts and commissions received by such Initial Purchaser. The relative
fault
-23-
<PAGE> 24
of the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
Parent and the Subsidiaries on the one hand, or such Initial Purchaser on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. Parent, the Subsidiaries and the Initial Purchasers agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first sentence
of this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Initial Purchaser shall be obligated to make contributions hereunder
that in the aggregate exceed the total discounts, commissions and other
compensation received by such Initial Purchaser under this Agreement, less the
aggregate amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of the untrue or alleged untrue statements or the
omissions or alleged omissions to state a material fact, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls an Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchasers, and each director or officer of Parent
or a Subsidiary and each person, if any, who controls the Parent or any
Subsidiary within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as Parent or such
Subsidiary.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of Parent or
any Subsidiary, their respective officers and any Initial Purchaser set forth in
this Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of Parent or Subsidiary, any of their respective officers or
directors, any Initial Purchaser or any other person referred to in Section 9
hereof and (ii) delivery of and payment for the Notes. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6,
9 and 15 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of each Initial Purchaser by notice to Parent given prior to the
Closing Date in the event that the Parent or any Subsidiary shall have failed,
refused or been unable to perform in all material respects all obligations and
satisfy in all material respects all conditions on their respective parts to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
(i) any of Parent or the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any strike, labor dispute, slow down or
work stoppage or any legal or governmental proceeding, which loss or
interference, in the sole judgment of such Initial Purchaser, has had
or could reasonably be expected to have a Material Adverse Effect, or
there shall have been, in the
-24-
<PAGE> 25
sole judgment of such Initial Purchaser, any event or development that,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect (including without
limitation a change in control of Parent or any of the Subsidiaries),
except in each case as described in the Memorandum (exclusive of any
amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the NASDAQ National Market shall
have been suspended or minimum or maximum prices shall have been
established on any such exchange or market;
(iii) any securities of Parent or any Subsidiary shall have
been downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical ratings organization;
(iv) a banking moratorium shall have been declared by New York
or United States authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of such Initial Purchaser, makes it
impracticable to proceed with the offering or the delivery of the Notes
as contemplated by the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The
statements set forth in the second and third sentences of paragraph 3, the third
sentence of paragraph 6, and in paragraph 7 under the heading "Private
Placement" in the Memorandum (to the extent such statements relate to the
Initial Purchasers) constitute the only information furnished by the Initial
Purchasers to the Company for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered to Deutsche
Bank Securities Inc., 31 West 52nd Street, New York, New York 10019, Attention:
Corporate Finance Department; with a copy to White & Case LLP, 1155 Avenue of
the Americas, New York, NY 10036, Attention: John M. Reiss, Esq.; if sent to the
Parent or any Subsidiary, shall be mailed or delivered c/o Orius Corp., 1401
Forum Way, Suite 400, West Palm Beach, FL 33401, Attn: Chief Financial Officer,
with a copy to Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois
60601, Attention: Dennis M. Myers, or, in each case, to such other address as
may be specified by notice given in accordance with this Section 13.
-25-
<PAGE> 26
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; and one
business day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, each of Parent, the Subsidiaries and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of Parent and the Subsidiaries contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control any
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of any Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
Parent and the Subsidiaries and officers and any person or persons who control
any of Parent and the Subsidiaries within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Notes from any Initial
Purchaser will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-26-
<PAGE> 27
If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between Parent, the Subsidiaries and
the Initial Purchasers.
Very truly yours,
NATG HOLDINGS, LLC
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Secretary
ORIUS CAPITAL CORP.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Secretary
GUARANTORS:
ORIUS CORP.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Secretary
NORTH AMERICAN TEL-COM
GROUP, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Secretary
<PAGE> 28
LISN COMPANY
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title:
LISN, INC.
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title:
ARION SUB, INC.
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title:
CATV SUBSCRIBER SERVICES, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
CABLEMASTERS, CORP.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
<PAGE> 29
CHANNEL COMMUNICATIONS, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
EXCEL CABLE CONSTRUCTION, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
MICH-COM CABLE SERVICES INCORPORATED
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
STATE WIDE CATV, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
U.S. CABLE, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
<PAGE> 30
DAS-CO OF IDAHO, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
NETWORK CABLING SERVICES, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
SCHATZ UNDERGROUND CABLE, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
COPENHAGEN UTILITIES &
CONSTRUCTION INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
TEXEL CORPORATION
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
<PAGE> 31
IRWIN ACQUISITION, L.P. (to be renamed
Irwin Telecom Services, L.P.)
By: SCHATZ UNDERGROUND CABLE
INC., its general partner
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
IRWIN TELECOM HOLDINGS, INC.
By /s/ Rosemarie Mulholland
----------------------------------
Name: Rosemarie Mulholland
Title: Assistant Secretary
<PAGE> 32
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
DEUTSCHE BANK SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
By: DEUTSCHE BANK SECURITIES INC.
By /s/ John C. Moses
----------------------------------
Name: John C. Moses
Title: Managing Director
By /s/ Marla Heller
----------------------------------
Name: Marla Heller
Title: Director
<PAGE> 33
SCHEDULE 1
<TABLE>
<CAPTION>
Principal
Amount of
Initial Purchasers Notes
------------------ ------------
<S> <C>
Deutsche Bank Securities Inc. $97,500,000
Banc of America Securities LLC $52,500,000
Total: $150,000,000
</TABLE>
<PAGE> 34
SCHEDULE 2
Subsidiaries
NATG Holdings, LLC
Orius Capital Corp.
LISN Company
LISN, Inc.
Arion Sub, Inc.
North American Tel-Com Group, Inc.
CATV Subscriber Services, Inc.
Cablemasters, Corp.
Channel Communications, Inc.
Excel Cable Construction, Inc.
Mich-Com Cable Services Incorporated
State Wide CATV, Inc.
U.S. Cable, Inc.
DAS-CO of Idaho, Inc.
Network Cabling Services, Inc.
Schatz Underground Cable, Inc.
Copenhagen Utilities & Construction Inc.
Texel Corporation
Irwin Acquisition, L.P. (to be renamed Irwin Telecom Services, L.P.)
Irwin Telecom Holdings, Inc.
<PAGE> 35
EXHIBIT A
Form of Opinion of Kirkland & Ellis
<PAGE> 1
EXHIBIT 2.1
[EXECUTION COPY]
================================================================================
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
LISN HOLDINGS, INC.,
ORIUS CORP.,
AND
ORIUS MERGER SUB., INC.
================================================================================
November 8, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 1. Authorization; Transactions...........................................................................2
1A. Authorization of Transactions Occurring on or Prior to the Closing Date.........................2
1B. Transactions Occurring on the Closing Date......................................................5
1C. Closing........................................................................................12
1D. Determination of Estimated Orius Investor Value and Estimated LISN
Investor Value.................................................................................12
1E. Post-Closing Adjustments.......................................................................13
1F. Delivery of Securities.........................................................................15
Section 2. Conditions of Obligations of LISN and Each of the LISN Shareholders and the Investors
at the Closing..........................................................................................16
2A. Representations and Warranties; Covenants......................................................16
2B. Amendment of Articles of Incorporation.........................................................16
2C. Bylaws.........................................................................................16
2D. Investor Rights Agreement......................................................................16
2E. Orius Exchange Transaction.....................................................................16
2F. Purchase Transaction...........................................................................17
2G. New Series B Preferred Retained by HIG West....................................................17
2H. Put/Call Shares Retained by Orius Stockholders.................................................17
2I. Retained Shares................................................................................17
2J. Senior Management Agreement....................................................................18
2K. Escrow Agreement...............................................................................18
2L. Litigation.....................................................................................18
2M. Filings........................................................................................18
2N. Third Party Consents and Approvals.............................................................18
2O. Governmental Consents and Approvals............................................................18
2P. Material Adverse Change........................................................................19
2Q. Option Termination Transaction.................................................................19
2R. Opinion of Orius's Counsel.....................................................................19
2S. Opinion of Special Counsel to Orius Stockholders...............................................19
2T. Senior Debt Financing..........................................................................19
2U. Senior Subordinated Debt Financing.............................................................19
2V. Proceedings....................................................................................20
2W. Closing Documents..............................................................................20
2X. Waiver.........................................................................................20
Section 3. Conditions of the Obligations of Orius and the Orius Stockholders at the Closing.....................21
3A. Representations and Warranties; Covenants......................................................21
3B. Put/Call Shares Retained by Orius Stockholders.................................................21
3C. Litigation.....................................................................................21
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
3D. Filings........................................................................................21
3E. Third Party Consents and Approvals.............................................................21
3F. Governmental Consents and Approvals............................................................22
3G. Opinion of LISN's Counsel......................................................................22
3H. Investment Transaction.........................................................................22
3I. HIG Transactions...............................................................................22
3J. Material Adverse Change........................................................................22
3K. Closing Certificates...........................................................................22
3L. Waiver.........................................................................................23
Section 4. Pre-Closing Covenants and Agreements.................................................................23
4A. General........................................................................................23
4B. Maintenance of Business........................................................................23
4C. Third Party Notices and Consents...............................................................23
4D. Governmental Notices and Consents..............................................................23
4E. Operation of Business..........................................................................23
4F. Full Access....................................................................................24
4G. Compliance with Agreements and Laws............................................................25
4H. Payment of Obligations.........................................................................25
4I. Notice of Material Developments................................................................25
4J. Exclusivity....................................................................................25
4K. Tax Matters....................................................................................26
Section 5. Representations and Warranties of Orius..............................................................27
5A. Organization, Corporate Power and Licenses.....................................................27
5B. Capital Stock and Related Matters..............................................................27
5C. Subsidiaries; Investments......................................................................28
5D. Authorization; No Breach. .....................................................................29
5E. Financial Statements...........................................................................29
5F. Absence of Undisclosed Liabilities.............................................................30
5G. Accounts Receivable............................................................................30
5H. Service Warranty; Service Certifications.......................................................30
5I. Service Liability..............................................................................31
5J. No Material Adverse Effect.....................................................................31
5K. Absence of Certain Developments................................................................31
5L. Assets.........................................................................................33
5M. Tax Matters....................................................................................33
5N. Contracts and Commitments......................................................................35
5O. Intellectual Property Rights...................................................................38
5P. Litigation, etc................................................................................39
5Q. Brokerage......................................................................................40
5R. Insurance......................................................................................40
5S. Employees......................................................................................40
5T. ERISA..........................................................................................41
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
5U. Compliance with Laws; Permits; Certain Operations..............................................42
5V. Environmental and Safety Matters...............................................................43
5W. Affiliated Transactions........................................................................44
5X. Suppliers and Customers........................................................................44
5Y. Real Property..................................................................................44
5Z. Regulatory Status. ............................................................................46
5AA. Merger Sub.....................................................................................46
5BB. Disclosure.....................................................................................47
5CC. Closing Date...................................................................................47
Section 6. Representations and Warranties of LISN..............................................................47
6A. Organization, Corporate Power and Licenses.....................................................48
6B. Capital Stock and Related Matters..............................................................48
6C. Subsidiaries; Investments......................................................................49
6D. Authorization; No Breach. .....................................................................49
6E. Financial Statements...........................................................................50
6F. Absence of Undisclosed Liabilities.............................................................50
6G. Accounts Receivable............................................................................51
6H. Service Warranty; Service Certifications.......................................................51
6I. Service Liability..............................................................................51
6J. No Material Adverse Effect.....................................................................51
6K. Absence of Certain Developments................................................................52
6L. Assets.........................................................................................53
6M. Tax Matters....................................................................................54
6N. Contracts and Commitments......................................................................56
6O. Intellectual Property Rights...................................................................59
6P. Litigation, etc................................................................................60
6Q. Brokerage......................................................................................60
6R. Insurance......................................................................................60
6S. Employees......................................................................................61
6T. ERISA..........................................................................................61
6U. Compliance with Laws; Permits; Certain Operations..............................................63
6V. Environmental and Safety Matters...............................................................63
6W. Affiliated Transactions........................................................................64
6X. Suppliers and Customers........................................................................64
6Y. Real Property..................................................................................65
6Z. Regulatory Status. ............................................................................66
6AA. Disclosure.....................................................................................67
6BB. Closing Date...................................................................................67
Section 7. Indemnification and Certain Other Agreements........................................................67
7A. Survival of Representations and Warranties.....................................................67
7B. General Indemnification. ......................................................................68
7C. Right to Offset Indemnity Obligations Against Outstanding Securities. .........................72
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
7D. Defense of Third Party Claims. ................................................................73
7E. Legend on Orius Securities Subject to Indemnification..........................................75
7F. Press Release and Announcements. ..............................................................75
7G. Confidentiality................................................................................76
7H. Further Assurances.............................................................................76
Section 8. Definitions..........................................................................................76
Section 9. Termination..........................................................................................91
9A. Conditions of Termination......................................................................91
9B. Effect of Termination..........................................................................93
Section 10. Miscellaneous..................................................................................93
10A. Fees and Expenses..............................................................................93
10B. Remedies.......................................................................................93
10C. Transfer of Restricted Securities..............................................................94
10D. Consent to Amendments..........................................................................95
10E. Successors and Assigns.........................................................................95
10F. Severability...................................................................................96
10G. Counterparts...................................................................................96
10H. Descriptive Headings; Interpretation...........................................................96
10I. Entire Agreement...............................................................................96
10J. No Third-Party Beneficiaries...................................................................96
10K. Schedules......................................................................................96
10L. Cooperation on Tax Matters.....................................................................97
10M. Schedules and Exhibits.........................................................................97
10N. Governing Law; Jurisdiction and Venue; Service of Process; Waiver of Right to Jury
Trial..........................................................................................97
10O. Notices........................................................................................99
10P. No Strict Construction........................................................................102
</TABLE>
-iv-
<PAGE> 6
EXHIBITS AND SCHEDULES
----------------------
<TABLE>
<CAPTION>
Exhibits:
- --------
<S> <C> <C>
Exhibit A - Articles of Incorporation
Exhibit B(i) - List of LISN Shareholders
Exhibit B(ii) - List of LISN Noteholders
Exhibit B(iii) - List of LISN Optionholders
Exhibit C - Form of Orius Junior Subordinated Note
Exhibit D - List of Investors
Exhibit E - Investment Agreement
Exhibit F - Certificate of Merger
Exhibit G - Note Exchange Agreement
Exhibit H - LISN Transmittal Letter
Exhibit I(iv) - Orius Joinder and Transmittal Agreement (Full Strip)
Exhibit I(v) - Orius Joinder and Transmittal Agreement (Securities Only)
Exhibit J(i) - Orius Joinder and Transmittal Agreement (Cash)
Exhibit J(ii) - Orius Joinder and Transmittal Agreement (Warrants)
Exhibit K - Orius Call Agreement
Exhibit L - Pledge and Voting Agreement
Exhibit M - Purchase Agreement
Exhibit N - Bylaws
Exhibit O - Investor Rights Agreement
Exhibit P - New Incentive Stock and Option Plan and Stock Option Agreement
Exhibit Q - Opinion of Counsel for Orius
Exhibit R - Opinion of Special Counsel to Orius Stockholders (White & Williams)
Exhibit S - Opinion of Special Counsel to Orius Stockholders (Hogan & Hartson)
Exhibit T - Bank Commitment Letter
Exhibit U - Bridge Loan Commitment Letter
Exhibit V - Orius Put Agreement
Exhibit W - Opinion of Counsel for LISN
Exhibit X - Lost Certificate Affidavit and Indemnity
Exhibit Y - Escrow Agreement
Exhibit Z(i) - HIG Put Agreement
Exhibit Z(ii) - HIG Call Agreement
Exhibit Z(iii) - HIG Pledge and Voting Agreement
</TABLE>
Orius Stockholders Schedule
Orius Warrantholders Schedule
Orius Optionholders Schedule
LISN Shareholders Schedule
Orius Bonus Schedule
Disclosure Schedules:
Orius:
Orius Capitalization Schedule
-v-
<PAGE> 7
Orius Investments and Orius Subsidiaries Schedule
Orius Restrictions Schedule
Orius Financial Statements Schedule
Orius Liabilities Schedule
Orius Accounts Receivable Schedule
Orius Service Liability Schedule
Orius Developments Schedule
Orius Assets Schedule
Orius Taxes Schedule
Orius Contracts Schedule
Orius Intellectual Property Schedule
Orius Litigation Schedule
Orius Insurance Schedule
Orius Employees Schedule
Orius Employee Benefits Schedule
Orius Compliance Schedule
Orius Permits Schedule
Orius Environmental Schedule
Orius Affiliated Transactions Schedule
Orius Suppliers and Customers Schedule
Orius Real Property Schedule
Orius Indemnification Schedule
LISN:
LISN Organization, Corporate Power and Licenses Schedule
LISN Capitalization Schedule
LISN Investments and LISN Subsidiaries Schedule
LISN Restrictions Schedule
LISN Financial Statements Schedule
LISN Liabilities Schedule
LISN Accounts Receivable Schedule
LISN Service Liability Schedule
LISN Developments Schedule
LISN Assets Schedule
LISN Taxes Schedule
LISN Contracts Schedule
LISN Intellectual Property Schedule
LISN Litigation Schedule
LISN Insurance Schedule
LISN Employees Schedule
LISN Employee Benefits Schedule
LISN Compliance Schedule
LISN Permits Schedule
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LISN Environmental Schedule
LISN Affiliated Transactions Schedule
LISN Suppliers and Customers Schedule
LISN Real Property Schedule
LISN Indemnification Schedule
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is entered into as of November 8, 1999, by and among Orius Corp., a Florida
corporation ("Orius"), Orius Merger Sub., Inc., an Ohio corporation and a
wholly-owned subsidiary of Orius ("Merger Sub"), and LISN Holdings, Inc., an
Ohio Corporation ("LISN"). Each capitalized term used and not otherwise defined
herein has the meaning given to such term in Section 8 below.
Subject to the terms and conditions set forth herein, the
parties hereto, and certain other Persons described herein, desire to consummate
each of the following: (i) H.I.G. Cable, Inc., a Cayman Islands corporation
("HIG Cable"), desires to sell to LISN, Inc., an Ohio corporation ("Purchaser")
for cash, and Purchaser desires to purchase from HIG for cash, certain shares of
Orius Series A Preferred Stock, par value $.01 per share ("Orius Series A
Preferred") and the Orius Convertible Note (as further described below, the
"Purchase Transaction"); (ii) H.I.G. Cable West, Inc., a Cayman Islands
corporation ("HIG West" and, collectively with HIG Cable, "HIG"), desires to
enter into an agreement with Purchaser (as further described below, the "HIG Put
Agreement") pursuant to which at HIG West's election at a future date HIG West
will be entitled to sell to Purchaser for cash all of its shares of Orius Series
B Preferred Stock, par value $.01 per share ("Orius Series B Preferred"), which
shares constitute all interests in Orius held by HIG other than those which HIG
sells to Purchaser as contemplated by clause (i), and Purchaser desires to enter
into an agreement with HIG West pursuant to which at Purchaser's election HIG
West will be obligated to sell to Purchaser for cash the Orius Series B
Preferred (as further described below, the "HIG Call Agreement"); (iii) holders
of Orius common stock, $.01 par value per share (the "Orius Common Stock"),
desire to exchange certain shares of such common stock for certain newly
authorized junior subordinated notes of Orius (as further described below, the
"Orius Junior Notes") and Orius Series C Participating Preferred Stock, par
value $.01 per share (as further described below, the "Series C Participating
Preferred") and cash; (iv) certain holders of Orius Common Stock desire to enter
into an agreement with Orius (as further described below, collectively, the
"Orius Put Agreements") pursuant to which, at each such holder's election at a
future date, such holder will be entitled to sell to Orius certain shares of
Orius Common Stock for cash, Series C Participating Preferred and Orius Junior
Notes, and Orius desires to enter into an agreement with each such holder (as
defined below, collectively, the "Orius Call Agreements") pursuant to which, at
Orius's election, each such holder will be obligated to sell to Orius such Orius
Common Stock for cash, Series C Participating Preferred and Orius Junior Notes,
as specified therein; (v) certain holders of Orius Common Stock, and the holders
of all outstanding Orius Warrants (each of such Persons listed on the Orius
Warrantholders Schedule hereto, an "Orius Warrantholder", and all of such
Persons collectively, the "Orius Warrantholders"), desire to sell to Orius for
cash, and Orius desires to purchase from such Persons for cash, all of their
shares of Orius Common Stock and Orius Warrants; (vi) Orius desires to acquire
LISN, and LISN desires to be acquired by Orius, by means of a merger of Merger
Sub with and into LISN, with LISN surviving such merger, and with all of LISN's
outstanding common stock (other than the Vanke Shares, which shall remain
outstanding after the LISN Merger), and preferred stock being converted thereby
into shares of Orius Class B Common Stock, par value $.01 per share (the "Orius
Class B Common" and, collectively with the Orius Common Stock, the "Orius
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Common") and Series C Participating Preferred (as further described below, the
"LISN Merger"), with all outstanding options to acquire LISN common stock being
converted thereby into options to acquire Orius Class B Common and Series C
Participating Preferred, and by means of an exchange of Orius Junior Notes for
all outstanding LISN junior subordinated notes, and all accrued and unpaid
interest thereon (as further described below, the "Note Exchange" and,
collectively with the New LISN Note Exchange and the LISN Merger, the "LISN
Merger Transactions"); (vii) Orius desires to terminate all outstanding Orius
employee stock options contemporaneously with the consummation of the foregoing
transactions and make certain cash payments to the holders thereof; and (viii)
Orius and LISN desire to finance the transactions contemplated hereby, including
related fees and expenses, and to refinance all of their respective existing
senior bank debt, through (A) the issuance by certain Subsidiaries of Orius and
LISN of senior debt and senior subordinated debt and (B) the issuance and sale
by LISN to Willis Stein and others (collectively, as further described below,
the "Investors") of New LISN Notes (as further described below, the "Investment
Transaction"). The New LISN Notes issued to the Investors at or prior to the
Closing pursuant to the Investment Transaction will be converted into Orius
Class B Common, Series C Participating Preferred and Orius Junior Notes pursuant
to the LISN Merger (as further described below, the "New LISN Note Exchange").
NOW, THEREFORE, in consideration of the mutual covenants,
agreements and understandings herein contained, the Parties hereby agree as
follows:
Section 1. Authorization; Transactions.
1A. Authorization of Transactions Occurring on or Prior
to the Closing Date.
(i) Prior to the Closing Date, Orius shall authorize and
duly file under the laws of the State of Florida an amended and restated
articles of incorporation of Orius in the form of Exhibit A attached hereto (the
"Articles of Incorporation"), and the Articles of Incorporation shall be in full
force and effect under the laws of the State of Florida as of the Closing.
(ii) Orius shall authorize the issuance, upon consummation
of the LISN Merger, of:
(a) the number of shares of Orius Class B Common, and
the number of shares of Series C Participating Preferred, which shall
be issuable in the aggregate upon the conversion pursuant to the LISN
Merger of 90,275.68 outstanding shares of LISN Class B Common Stock,
par value $.01 per share ("LISN Common"), and 90,879.51 outstanding
shares of LISN Series A Preferred Stock, par value $.01 per share
("LISN Preferred"), with each of the foregoing amounts subject to
adjustment as described below;
(b) options to purchase the number of shares of Orius
Class B Common and the number of shares of Series C Participating
Preferred pursuant to the New Incentive Stock and Option Plan and the
Form of Stock Option Agreement attached hereto as Exhibit P (the
"Converted LISN Employee Options"), which upon consummation of the LISN
Merger shall be issuable in the aggregate upon conversion of the
2,905.55 shares of LISN
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Class A Common Stock which are subject to issuance under those
outstanding options to purchase shares of LISN Common set forth on
Exhibit B(iii) hereto (the "Existing LISN Employee Options");
(c) in exchange for the outstanding LISN 12% Junior
Subordinated Notes, which are in the form originally issued pursuant to
the LISN Recapitalization Agreement and are held by the LISN
Noteholders in the initial principal amounts set forth on Exhibit B(ii)
hereto (collectively, the "LISN Junior Notes"), including all accrued
and unpaid interest thereon, Orius Junior Notes in an aggregate
principal amount equal to the aggregate principal amount of, plus
accrued and unpaid interest on, the LISN Junior Notes exchanged
therefor; and
(d) the number of shares of Orius Class B Common and
shares of Series C Participating Preferred, and Orius Junior Notes in
the initial principal amount, issuable in the aggregate to the
Investors pursuant to the Note Exchange Agreement, in exchange for the
New LISN Notes issued to the Investors at or prior to the Closing
pursuant to the Investment Agreement.
(iii) Orius shall authorize the issuance and delivery to
the Persons listed on the Orius Stockholders Schedule attached hereto (such
Persons, collectively with HIG, the "Orius Stockholders", and each of the Orius
Stockholders individually, an "Orius Stockholder"), the number of shares of
Series C Participating Preferred and Orius Junior Notes in an initial principal
amount, and an amount of cash, which will be issuable hereunder in the aggregate
in exchange for delivery to Orius by such Persons pursuant to the Full Strip
Joinder Agreements of an aggregate of 12,221,939.72 shares of Orius Common
(including in such aggregate amount the 4.5% of such number of shares of Orius
Common Stock which will be delivered but retained by and returned to the holder
thereof following such exchange), the number of shares of Series C Participating
Preferred and Orius Junior Notes in an initial principal amount which will be
issuable hereunder in the aggregate in exchange for delivery to Orius by such
Persons pursuant to the Securities Only Joinder Agreements of an aggregate of
41,443.67 shares of Orius Common Stock (including in such aggregate amount the
9% of such number of shares of Orius Common Stock which will be delivered but
retained by and returned to the holder thereof following such exchange), and the
aggregate amount of cash which will be issuable hereunder in the aggregate in
exchange for delivery to Orius by such Persons pursuant to the Cash Joinder
Agreements of an aggregate of 1,088,467.61 shares of Orius Common Stock;
(iv) Orius shall authorize the delivery to the
Warrantholders of the aggregate amount of cash which will be issuable hereunder
in the aggregate in exchange for delivery to Orius by such Persons pursuant to
the Warrant Joinder Agreements of an aggregate of Orius Warrants exercisable for
an aggregate of 371,853.11 shares of Orius Common Stock;
(v) Orius shall authorize the issuance, pursuant to the
New Incentive Stock and Option Plan and the form of Stock Option
Agreement attached hereto as Exhibit P, an aggregate number of shares
of Orius Common Stock, including shares of Orius Common Stock subject
to issuance upon exercise of options (the "New Orius Options"), equal
to
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5.00% of the Orius Common issued and outstanding upon consummation of
the LISN Merger and the other transactions contemplated by this
Agreement (after giving effect to the consummation of the repurchase of
shares which are subject to the HIG Call Agreement and the HIG Put
Agreement, the repurchase of shares which are subject to Orius Call
Agreements and Orius Put Agreements and the repurchase of the Vanke
Shares, and treating all shares of Orius stock which are held by
Purchaser or any of Orius's other Subsidiaries as not outstanding) as
follows: (x) New Orius Options for shares representing 1.25% of the
Orius Common (calculated as described above) shall be reserved for
grant to employees of Orius and its Subsidiaries which are hired after
the Effective Time, and (y) New Orius Options for shares representing
3.0% of the Orius Common (calculated as described above) shall be
reserved for issuance to current employees of Orius, in each case as
recommended by Orius's chief executive officer and subject to approval
by Orius's board of directors, and (z) Orius Common representing 0.75%
of the Orius Common (calculated as described above) shall be reserved
for issuance to William J. Mercurio ("Mercurio") pursuant to the terms
of the Senior Management Agreement (the "Mercurio Employment and Stock
Agreement") to be executed by Orius and Mercurio at or prior to the
Closing.
(vi) Orius shall authorize and reserve for issuance upon
conversion of the shares of Series C Participating Preferred issuable at the
Closing and the shares of Series C Participating Preferred issuable upon
exercise of the Orius Call Agreements and (without duplication) the Orius Put
Agreements, as well as the shares of Series C Participating Preferred issuable
upon exercise of the Converted LISN Employee Options, the aggregate number of
shares of Orius Series D Preferred and Orius Common, and the aggregate amount of
Orius Junior Notes, issuable upon conversion thereof.
(vii) LISN shall authorize the issuance to the Investors,
pursuant to the Investment Agreement, in exchange for the Investment Amount in
cash, LISN Notes in the form of Exhibit D hereto in an aggregate initial
principal amount equal to the Investment Amount (the "New LISN Notes").
(viii) LISN shall cause the Purchaser, its indirectly held
Subsidiary, to authorize the execution of the HIG Put Agreement in the form of
Exhibit Z(i) hereto (the "HIG Put Agreement") with HIG West, dated as of the
date hereof, pursuant to which at HIG West's election at a future date HIG West
will be entitled to sell to Purchaser for cash all of outstanding shares of
Orius Series B Preferred, as well as the HIG Call Agreement in the form of
Exhibit Z(ii) hereto (the "HIG Call Agreement") pursuant to which at Purchaser's
election HIG West will be obligated to sell to Purchaser for cash the Orius
Series B Preferred, and the performance by Purchaser of its obligations
thereunder.
(ix) LISN's articles of incorporation were amended to
authorize 60,000 shares of Class C Common Stock, par value $.01 per share (the
"LISN Class C Common"), for issuance to Donald J. Vanke as trustee of the Donald
J. Vanke Revocable Electing Small Business Trust (dated December 25, 1998)
("Vanke") in exchange for the 56,746.90 shares of LISN common stock held by
Vanke subject to repurchase by LISN pursuant to Section 2.2(d) of the
Recapitalization Agreement dated as of May 28, 1999 between and among LISN,
LISN, Inc., Vanke, James S.
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Hivnor, Donald L. Sanneman, Willis Stein & Partners II, L.P., Willis Stein &
Partners Dutch, L.P.,and the other parties listed on the signature pages
thereto, as amended, such issuance and exchange to occur prior to the LISN
Merger (the "Vanke Exchange").
1B. Transactions Occurring on the Closing Date.
(i) Investment Transaction. Pursuant to, and on the terms
and subject to the conditions of the Investment Agreement in the form
attached hereto as Exhibit E and dated as of the date hereof, by and
among LISN and the Investors (the "Investment Agreement"), immediately
prior to the Closing LISN shall sell to each Investor, and each
Investor shall purchase from LISN, New LISN Notes in the initial
principal amount set forth opposite such Person's name on Exhibit D
hereto, in each case in exchange for the amount of cash set forth
opposite such Investor's name on the Exhibit D attached hereto, payable
in the manner set forth in the Investment Agreement (the "Investment
Transaction").
(ii) The Vanke Exchange. Prior to the Closing, LISN and
Vanke may consummate the Vanke Exchange.
(iii) The LISN Merger Transactions.
(a) The LISN Merger. At the Closing, and upon
satisfaction of the conditions to closing set forth below, Orius,
Merger Sub and LISN shall execute and file with the Secretary of State
in the State of Ohio the Certificate of Merger attached hereto as
Exhibit F (the "Certificate of Merger"). Upon the filing of such
Certificate of Merger with the Secretary of State of the State of Ohio
(the date and time of such filing, the "Effective Time"), the Merger
Sub shall be merged with and into LISN, the separate corporate
existence of Merger Sub shall cease, and LISN, as the surviving
corporation of such merger (the "LISN Merger"), shall continue to exist
under the corporate name it possesses immediately prior to the
Effective Time. At the Effective Time, (x) the outstanding shares of
LISN Common will convert by operation of law into an aggregate number
of shares of Orius Class B Common equal to the LISN Common Stockholders
Common Share Number and an aggregate number of shares of Series C
Participating Preferred equal to the LISN Common Stockholders Preferred
Share Number, with each outstanding share of LISN Common converting
into a proportionate amount of the LISN Common Stockholders Common
Share Number of shares (or fraction thereof) of Orius Class B Common
and a proportionate amount of the LISN Common Stockholders Preferred
Share Number of shares (or fraction thereof) of Series C Participating
Preferred, (y) the outstanding shares of LISN Preferred will convert by
operation of law into an aggregate number of shares of Series C
Participating Preferred equal to the LISN Preferred Stockholders
Preferred Share Number, with each outstanding share of LISN Preferred
converting into a proportionate amount of the LISN Preferred
Stockholders Preferred Share Number of shares (or fraction thereof) of
Series C Participating Preferred, and (z) the Existing LISN Employee
Options will convert by operation of law into the Converted LISN
Employee Options. For the avoidance of doubt, the parties acknowledge
that if the Vanke Exchange has been consummated prior to the Closing,
then the Vanke Shares will be LISN Class C Common and, notwithstanding
any other provision hereof, will
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not convert into any other security or consideration upon consummation
of the LISN Merger and shall remain outstanding thereafter subject to
repurchase by LISN pursuant to the LISN Recapitalization Agreement. For
the avoidance of doubt, the sum of the LISN Common Stockholders
Preferred Share Number and the LISN Preferred Stockholders Preferred
Share Number issued at the Effective Time shall not exceed the LISN
Shareholders Preferred Share Number.
(b) The Note Exchanges. On the terms and subject to
the conditions set forth in the Note Exchange Agreement in the form
attached hereto as Exhibit G (the "Note Exchange Agreement"), as of the
Effective Time Orius shall issue:
(1) to each of the Persons listed on Exhibit
B(ii) attached hereto (collectively, the "LISN Noteholders" and each
individually a "LISN Noteholder") who is party thereto and delivers to
Orius LISN Junior Notes to Orius in the aggregate initial principal
amount set forth opposite such Person's name on Exhibit B(ii) hereto in
accordance with such Agreement, Orius Junior Notes in an aggregate
principal amount equal to the aggregate principal amount of, plus
accrued and unpaid interest on, the LISN Junior Notes so exchanged,
calculated through the Effective Time (such exchange of LISN Junior
Notes for Orius Junior Notes, the "Junior Note Exchange"), and
(2) against delivery of the New LISN Notes
issued to the Investors pursuant to the Investment Agreement, and to
the holders thereof in exchange therefor, (A) an aggregate number of
shares of Orius Class B Common equal to the quotient determined by
dividing (i) nine percent (9%) of the aggregate principal amount of the
New LISN Notes issued at or prior to the Closing pursuant to the
Investment Agreement by (ii) the Orius Common Value Per Share, (B) an
aggregate number of shares of Series C Participating Preferred equal to
the Investor Preferred Number, and (C) Orius Junior Notes in the
aggregate initial principal amount equal to the Investor Note Amount
(the "New LISN Note Exchange" and, collectively with the Junior Note
Exchange and the LISN Merger, the "LISN Merger Transactions").
(c) Issuance and Delivery of LISN Merger Transactions
Consideration. As of the Effective Time, to each Person holding LISN
Common or LISN Preferred (collectively, the "LISN Shareholders") who
delivers a LISN Transmittal Letter and Agreement in the form attached
hereto as Exhibit H (the "LISN Transmittal Letter") and, in accordance
with the terms and conditions set forth in the instructions thereto,
surrenders to Orius therewith the number of shares of LISN Common and
the number of shares of LISN Preferred set forth opposite such Person's
name on Exhibit B(i) hereto, as well as LISN Junior Notes in the
aggregate initial principal amount to be exchanged by such Person as
set forth opposite such Person's name on Exhibit B(i) hereto pursuant
to the Note Exchange, in each case under the caption "LISN Securities",
Orius shall issue the shares of Orius Class B Common and shares of
Series C Participating Preferred into which such shares of LISN Common
converted in the LISN Merger, the number of shares of Series C
Participating Preferred into which such shares of LISN Preferred
converted in the LISN Merger, and Orius Junior Notes in an aggregate
initial principal amount equal to the aggregate principal amount
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of, plus accrued and unpaid interest on, such LISN Junior Notes so
delivered. At the written request of any such LISN Shareholder that
Orius deliver to such LISN Shareholder prior to the final determination
of Closing LISN Investor Value pursuant to Section 1E below,
certificates for the securities issued to such Person in accordance
with the foregoing, Orius shall (x) promptly deliver to such Person
Orius Junior Notes issued to such Person pursuant to the Note Exchange
Agreement, and (y) certificates representing the shares of Orius Class
B Common and shares of Series C Participating Preferred issued upon
conversion of such shares of LISN Common and LISN Preferred held by
such Person immediately prior to the Effective Time, in amounts
estimated pursuant to Section 1D, but only if such Person has executed
and delivered to Orius a written agreement satisfactory to Orius to
return such certificates to Orius upon final determination of the
Closing LISN Investor Value pursuant to Section 1E if so requested by
Orius in exchange for new certificates representing amounts of
securities adjusted as contemplated by Section 1E. Each certificate
issued pursuant to this subsection in an amount estimated pursuant to
Section 1D shall bear a legend stating that the amount of securities
represented thereby is subject to such adjustment and that such
certificate shall be surrendered to Orius at such time as the amount of
such securities is finally determined in accordance with Section 1E.
Further, by operation of law each outstanding LISN Option shall become
a Converted LISN Employee Option.
(iv) Exchange of Orius Common for "Full Strips". To each of
the Orius Stockholders who has executed and delivered to Orius on or prior to
the date hereof an Orius Joinder and Transmittal Agreement (Full Strip) in the
form attached hereto as Exhibit I(iv) and dated as of the date hereof (each a
"Full Strip Joinder Agreement", and all such Full Strip Joinder Agreements,
collectively, the "Full Strip Joinder Agreements"), and who has delivered to
Orius at or prior to the Closing the certificates, duly endorsed for transfer as
required by such Full Strip Joinder Agreements, representing the number of
outstanding shares of Orius Common set forth opposite such Person's name on the
Orius Stockholders Schedule hereto under the heading "Full Strip Exchange",
Orius shall, at the Closing:
(a) deliver cash in an amount equal to 95% of the
Full Strip Cash Consideration Per Old Common Share, as estimated
pursuant to Section 1D, multiplied by such number of outstanding shares
of Orius Common Stock set forth opposite such Person's name on the
Orius Stockholders Schedule hereto under the heading "Full Strip
Exchange;
(b) issue the number of shares of Series C
Participating Preferred equal to the Full Strip Preferred Consideration
Per Old Common Share multiplied by such number of outstanding shares of
Orius Common Stock set forth opposite such Person's name on the Orius
Stockholders Schedule hereto under the heading "Full Strip Exchange";
(c) issue Orius Junior Notes in an aggregate
principal amount equal to the Full Strip Junior Note Consideration Per
Old Common Share multiplied by such number of outstanding shares of
Orius Common Stock set forth opposite such Person's name on the Orius
Stockholders Schedule hereto under the heading "Full Strip Exchange";
and
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(d) promptly after the determination of Closing Orius
Investor Value and Closing LISN Investor Value pursuant to Section 1E,
Orius shall return to such Orius Stockholder the number of shares of
Orius Common Stock equal to four and one-half percent (4.5%) multiplied
by such number of outstanding shares of Orius Common Stock set forth
opposite such Person's name on the Orius Stockholders Schedule hereto
under the heading "Full Strip Exchange" and originally tendered by such
Orius Stockholder to Orius.
At the Closing, contemporaneously with delivering to each of the Orius
Stockholders the cash consideration described in (a) above, Orius will
deliver to the Escrow Agent pursuant to subsection (ix) below, 5% of
the Full Strip Cash Consideration Per Old Common Share, as estimated
pursuant to Section 1D, multiplied by the number of outstanding shares
of Orius Common Stock set forth opposite such Person's name on the
Orius Stockholders Schedule hereto under the heading "Full Strip
Exchange."
FOR EXAMPLE: If (i) the Orius Common Value Per Share is $10,
the Note Proportion is 35% and the Preferred Stock Proportion
is 55%, and (ii) the number of outstanding shares of Orius
Common Stock set forth opposite the name of an Orius
Stockholder on the Orius Stockholders Schedule hereto under
the heading "Full Strip Exchange" is 100, and such Orius
Stockholder executes and delivers to Orius a Full Strip
Joinder Agreement in respect of such 100 shares, and at the
Closing delivers to Orius certificates representing such 100
shares, endorsed as required under the Joinder Agreement, then
Orius will deliver to such Orius Stockholder at the Closing,
$475 in cash (i.e., 95% of the product of 50% multiplied by
100 shares multiplied by $10 per share) and, after final
determinations pursuant to Section 1E, Orius Junior Notes in
an aggregate initial principal amount equal to $175 (i.e., 35%
multiplied by 50% multiplied by 100 shares multiplied by $10
per share) and 0.275 shares of Series C Participating
Preferred (i.e., 55% multiplied by 50% multiplied by 100
shares multiplied by $10 per share, divided by $1,000). Orius
would return to such Orius Stockholder 4.5 shares of Orius
Common Stock. At the Closing, Orius would also deliver $25 in
cash (i.e., 5% of the product of 50% multiplied by 100 shares
multiplied by $10 per share) to the Escrow Agent pursuant to
subsection (ix) below. If the assumptions set forth in clause
(i) are confirmed pursuant to the procedures described in
Section 1E, upon confirmation thereof the Escrow Agent will
pay to such Orius Stockholder the $25, subject only to the
other restrictions on distribution set forth in the Escrow
Agreement. If, pursuant to the procedures described in Section
1E, it is determined that the Orius Common Value Per share is
$9.90 and the other assumptions stated above are correct, the
Escrow Agent would immediately refund to Orius $5 in respect
of such Orius Stockholder (i.e., the excess of $500, the
aggregate cash paid by Orius to such Orius Stockholder and to
the Escrow Agent in respect of such
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Orius Stockholder, over $495, the total amount of cash to
which such Orius Stockholder is entitled (i.e., 50% multiplied
by 100 shares multiplied by $9.90 per share). Also, upon such
a determination, the number of shares of Series C
Participating Preferred and amount of Orius Junior Notes
issuable to such Orius Stockholder would be recalculated (to
be .27225 share and $173.25 principal amount) and delivered in
lieu of the amounts previously delivered.
(v) Exchange of Orius Common for "Securities Only". To each of
the Orius Stockholders who has executed and delivered to Orius on or prior to
the date hereof an Orius Joinder and Transmittal Agreement (Securities Only) in
the form attached hereto as Exhibit I(v) and dated as of the date hereof (each a
"Securities Only Joinder Agreement", and all such Securities Only Joinder
Agreements, collectively, the "Securities Only Joinder Agreements"), and who has
delivered to Orius at or prior to the Closing the certificates, duly endorsed
for transfer as required by such Securities Only Joinder Agreements,
representing the number of outstanding shares of Orius Common Stock set forth
opposite such Person's name on the Orius Stockholders Schedule hereto under the
heading "Securities Only Exchange", and who has deposited (or for whom a deposit
has been made) with the Escrow Agent, cash in an amount equal to 2.5% of the
value at Closing of the Orius securities to be issued to such Stockholder
pursuant to subparagraphs (a), (b) and (c) below, Orius shall, at the Closing:
(a) issue the number of shares of Series C
Participating Preferred equal to the Securities Only Preferred
Consideration Per Old Common Share multiplied by such number of
outstanding shares of Orius Common Stock set forth opposite such
Person's name on the Orius Stockholders Schedule hereto under the
heading "Securities Only Exchange";
(b) issue Orius Junior Notes in an aggregate
principal amount equal to the Securities Only Junior Note Consideration
Per Old Common Share multiplied by such number of outstanding shares of
Orius Common Stock set forth opposite such Person's name on the Orius
Stockholders Schedule hereto under the heading "Securities Only
Exchange"; and
(c) promptly after the determination of Closing Orius
Investor Value and Closing LISN Investor Value pursuant to Section 1E,
Orius shall return to such Orius Stockholder the number of shares of
Orius Common Stock equal to nine percent (9%) multiplied by such number
of outstanding shares of Orius Common Stock set forth opposite such
Person's name on the Orius Stockholders Schedule hereto under the
heading "Securities Only Exchange" and originally tendered by such
Orius Stockholder to Orius.
FOR EXAMPLE: If (i) the Orius Common Value Per Share as
finally determined is $10, the Note Proportion as finally
determined is 35% and the Preferred Stock Proportion as
finally determined is 55%, and (ii) the number of outstanding
shares of Orius Common Stock set forth opposite the name of an
Orius Stockholder on the Orius Stockholders Schedule hereto
under the heading "Securities Only
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Exchange" is 100, and such Orius Stockholder executes and
delivers to Orius a Securities Only Joinder Agreement in
respect of such 100 shares, and at the Closing delivers to
Orius certificates representing such 100 shares, endorsed as
required under the Joinder Agreement, then Orius will deliver
to such Orius Stockholder at the Closing, Orius Junior Notes
in an aggregate initial principal amount equal to $350 (i.e.,
35% multiplied by 100 shares multiplied by $10 per share) and
0.55 shares of Series C Participating Preferred (i.e., 55%
multiplied by 100 shares multiplied by $10 per share, divided
by $1,000), and Orius will return to such Orius Stockholder 9
shares of Orius Common Stock.
[LANGUAGE TO COME FROM A&S OR W&W RE: ESCROW DEPOSIT]
(vi) Sale of Orius Common Stock and Orius Warrants for
Cash. To each of the Orius Stockholders who has executed and delivered to Orius
on or prior to the date hereof an Orius Joinder and Transmittal Agreement (Cash)
in the form attached hereto as Exhibit J(i) and dated as of the date hereof
(each a "Cash Joinder Agreement", and all such Cash Joinder Agreements,
collectively, the "Cash Joinder Agreements"), and who has delivered to Orius at
or prior to the Closing the certificates, duly endorsed for transfer as required
by such Cash Joinder Agreements, representing the aggregate number of
outstanding shares of Orius Common Stock set forth opposite such Person's name
on the Orius Stockholders Schedule hereto under the heading "Cash Exchange", and
to each of the Orius Warrantholders who has executed and delivered to Orius on
or prior to the date hereof an Orius Joinder and Transmittal Agreement
(Warrants) in the form attached hereto as Exhibit J(ii) and dated as of the date
hereof (each a "Warrant Joinder Agreement", and all such Warrant Joinder
Agreements, collectively, the "Warrant Joinder Agreements"), and who has
delivered to Orius at or prior to the Closing Orius Warrants exercisable for the
aggregate number of shares of Orius Common Stock set forth opposite such
Person's name on the Orius Stockholders Schedule hereto under the heading "Cash
Exchange", Orius shall deliver at the Closing:
(a) for each such share of Orius Common Stock, cash in an
amount equal to 95% of the Orius Common Value Per Share, as estimated
pursuant to Section 1D; and
(b) for each such Orius Warrant, cash in an amount equal
to 95% of the product of (1) the Orius Common Value Per Share, as estimated
pursuant to Section 1D, less the exercise price per share of Orius Common Stock
set forth opposite such person's name on the Orius Stockholders Schedule for
such Orius Warrant, multiplied by (2) the Share Number for such Orius Warrant.
At the Closing, contemporaneously with delivering to each of
such Orius Stockholders and Orius Warrantholders the cash consideration
described in (a) or (b) above, Orius will deliver to the Escrow Agent pursuant
to subsection (xi) below, (y) with respect to each such Orius Stockholder, 5% of
the Orius Common Value Per Share, as estimated pursuant to Section 1D,
multiplied by the number of outstanding shares of Orius Common Stock set forth
opposite such Person's name on the Orius Stockholders Schedule hereto under the
heading "Cash Exchange", and
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(z) with respect to each Orius Warrant held by an Orius Warrantholder, Orius
will deliver to the Escrow Agent pursuant to subsection (xi) below, 5% of the
product of (1) the Orius Common Value Per Share, as estimated pursuant to
Section 1D, less the exercise price per share of Orius Common Stock set forth
opposite such person's name on the Orius Stockholders Schedule for such Orius
Warrant, multiplied by (2) the Share Number for such Orius Warrant.
(vii) Orius Put/Call Transactions. Each of the Orius
Stockholders who has executed and delivered to Orius prior to the Closing a Call
Agreement in the form attached hereto as Exhibit K and dated as of the date
hereof (a "Orius Call Agreement" and each Orius Call Agreement executed by an
Orius Stockholder collectively, the "Orius Call Agreements") with respect to the
number of shares of Orius Common Stock set forth opposite such Person's name on
the Orius Stockholders Schedule hereto under the heading "Orius Put/Call", shall
execute and deliver to Orius at or prior to the Closing a Pledge and Voting
Agreement in the form of Exhibit L hereto and dated as of the date hereof (a
"Pledge and Voting Agreement" and, collectively with all such agreements
executed by Orius Stockholders, including by HIG West in connection with the HIG
Put Agreement and the HIG Call Agreement, the "Pledge and Voting Agreements")
with respect to such number of outstanding shares of Orius Common Stock set
forth opposite such Person's name on the Orius Stockholders Schedule hereto
under the heading "Orius Put/Call", as well as the certificates, duly endorsed
for transfer as required by such Pledge and Voting Agreement.
(viii) Purchase Transaction. Pursuant to, and on the terms
and subject to the conditions of the Purchase Agreement by and between Purchaser
and HIG Cable, which agreement is attached hereto as Exhibit M (the "Purchase
Agreement"), HIG Cable shall deliver to Purchaser the certificates representing
the 10,000 outstanding shares of Orius Series A Preferred, duly endorsed for
transfer or accompanied by duly executed stock powers as required pursuant to
the Purchase Agreement, and the Orius Convertible Note, also endorsed for
transfer as required pursuant to the Purchase Agreement, in exchange for (the
"Purchase Transaction") cash in an amount equal to 95% of the sum of (a) the
product of (y) 3,809,455.35 (i.e., the aggregate number of shares of Orius
Common issuable upon conversion of the Orius Series A Preferred plus the
aggregate number of shares of Orius Common Stock issuable upon conversion of the
Orius Convertible Note), multiplied by (z) the Orius Common Value Per Share, as
estimated pursuant to Section 1D, plus (b) the aggregate of the amount of
dividends and interest which have accrued and are unpaid with respect to such
stock and Orius Convertible Note as of the Closing, and a payment to the Escrow
Agent of cash in an amount equal to 5% of the sum of (a) and (b) immediately
preceding. As provided in the Purchase Agreement, at such time as Orius Common
Value Per Share is finally determined pursuant to Section 1E, the amounts paid
pursuant to the preceding sentence shall be adjusted in the manner set forth in
Schedule 1E. Immediately following the expiration of the exercise periods set
forth in the HIG Call Agreement and the HIG Put Agreement, the Purchaser shall
deliver to Orius, for retirement and cancellation without payment or other
consideration therefor, the certificates representing such 10,000 shares of
Orius Series A Preferred and the Orius Convertible Note.
(ix) HIG Call Agreement. Immediately following the
exercise of the HIG Call Agreement or the HIG Put Agreement, the Purchaser shall
deliver to Orius, for retirement and cancellation without payment or other
consideration therefor, the certificates representing such 7,596.38 shares of
Orius Series B Preferred.
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<PAGE> 20
(x) Termination of Existing Orius Options. Pursuant to
Section 6(k) of the Existing Stock Option Plan and Section 10 of each of the
Existing Option Agreements pursuant to which Orius has granted employee stock
options, effective as of the Effective Time Orius shall terminate each then
outstanding Existing Orius Option to the extent it has not theretofore been
exercised in full. At such time as the Orius Option Spread Value for each
Existing Orius Option has been finally determined pursuant to Section 1E below,
against delivery to Orius of any canceled Existing Orius Option, Orius shall
deliver (A) to the Escrow Agent an amount in cash equal to the Escrow Amount Per
Share multiplied by the Share Number in respect of such option, and (B) to the
holder of such canceled option an aggregate cash amount equal to the excess of
Orius Option Spread Value for such option (as finally determined pursuant to
Section 1E ) over the amount to be delivered to the Escrow Agent in respect of
such option pursuant to clause (A) foregoing. The transactions described in this
subparagraph are collectively referred to herein as the "Option Termination
Transaction."
(xi) Escrow Arrangements. At the Closing, Orius and
Purchaser will deliver to SunTrust Bank, South Florida, N.A. (the "Escrow
Agent"), in its capacity as escrow agent pursuant to the Escrow Agreement in the
form of Exhibit Y hereto (the "Escrow Agreement") dated as of November 8, 1999
by and among H.I.G. Capital Management, Inc., HIG Cable, HIG West, the other
Orius Stockholders, Purchaser, Orius and the Escrow Agent, cash as specified in
subsections (iv), (v), (vi), (viii), and (x) above.
1C. Closing. Unless this Agreement has previously been
terminated in accordance with Section 9 below, the closing of the LISN Merger
Transactions, the Exchange Transaction and the Purchase Transaction (the
"Closing") shall take place at the offices of Kirkland & Ellis, located at 200
East Randolph, Chicago, Illinois, or at such other place as may be mutually
agreeable to each of the Parties, at 10:00 a.m., local time, on December 15,
1999, or, if any of the conditions to Closing set forth in Section 2 and Section
3 below have not been satisfied or waived by the Party entitled to the benefit
thereof on or prior to such date, on the second business day following the
satisfaction or waiver of such conditions (the "Closing Date").
1D. Determination of Estimated Orius Investor Value and
Estimated LISN Investor Value.
(i) Estimated Orius Net Indebtedness. Not more than five
(5) Business Days, but in no event less than two (2) Business Days, before the
Closing Date, Orius shall deliver to LISN a balance sheet of Orius as of the
close of business on the day before the Closing Date prepared in accordance with
GAAP based on Orius's then available financial information and reasonable
estimates of Orius's chief financial officer (the "Estimated Orius Closing
Balance Sheet"), and a certificate of Orius's chief financial officer setting
forth his estimate of Orius's Net Indebtedness as of the close of business on
the day before the Closing Date and supporting detail, including each item of
such Indebtedness, and confirming that the aggregate amount of cash payable to
Orius upon exercise of all Existing Orius Options which, as of the Effective
Time, are outstanding and unexercised (the "Aggregate Orius Option Exercise
Price") is $4,228,402.50. If the LISN Shareholder Representative or the LISN
Investor Representative disagrees with any amount set forth on such certificate,
Orius's chief financial officer and such Representatives will negotiate in good
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<PAGE> 21
faith to resolve their differences, each such amount will be revised to be
mutually acceptable to such persons and the resulting estimate of Orius's Net
Indebtedness shall be deemed to be "Estimated Orius Net Indebtedness".
(ii) Estimated LISN Net Indebtedness. Not more than five (5)
Business Days, but in no event less than two (2) Business Days, before the
Closing Date, LISN shall deliver to the Orius Stockholders Representative a
balance sheet of LISN as of the close of business on the day before the Closing
Date prepared in accordance with GAAP based on LISN's then available financial
information and reasonable estimates of LISN's chief financial officer (the
"Estimated LISN Closing Balance Sheet"), and a certificate of LISN's chief
financial officer setting forth his estimate of LISN's Net Indebtedness as of
the close of business on the day before the Closing Date and supporting detail,
including each item of such Indebtedness. If the Orius Stockholders
Representative disagrees with any amount set forth on such certificate, LISN's
chief financial officer and such Representatives will negotiate in good faith to
resolve their differences, each such amount will be revised to be mutually
acceptable to such persons and the resulting estimate of LISN's Net Indebtedness
shall be deemed to be "Estimated LISN Net Indebtedness".
(iii) Definition of Net Indebtedness. For purposes hereof,
"Net Indebtedness" of any Person means the aggregate amount of such Person's
Indebtedness determined on a consolidated basis in accordance with GAAP,
assuming for such purposes that the full amount thereof shall be repaid on such
date, less the aggregate amount of cash or Cash Equivalents held by such Person
and its Subsidiaries on a consolidated basis, as reflected in its books and
records in accordance with GAAP, in each case determined as of the close of
business on the day before the Closing Date and without giving effect to the
Investment Transaction, the Purchase Transaction, or the transactions
contemplated by any of Orius Put Agreements, Orius Call Agreements, the HIG Put
Agreement and the HIG Call Agreement.
(iv) Definition of Estimated Investor Value. For purposes of
this Agreement:
(a) "Estimated Orius Investor Value" means (i) the
product of 8.42 times $57.55 million (Orius's estimated EBITDA for the
twelve-month period ending December 31, 1999) less (ii) the Estimated
Orius Net Indebtedness, plus (iii) the Aggregate Orius Option Exercise
Price.
(b) "Estimated LISN Investor Value" means the product
of 8.42 times $30.0 million (LISN's estimated EBITDA for the
twelve-month period ending December 31, 1999) less the Estimated LISN
Net Indebtedness
1E. Post-Closing Adjustments.
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<PAGE> 22
(i) Determination of Closing Orius Investor Value and Closing
LISN Investor Value.
(a) Within 10 business days after the Closing Date, Orius will
prepare, and deliver to the Representatives its calculation of Orius's Net
Indebtedness and LISN's Net Indebtedness, the Aggregate Orius Option Exercise
Price, and the resulting Closing Orius Investor Value and Closing
LISN Investor Value (the "Orius Notice"). Orius will make available to the
Representatives and their advisors all records and work papers used in preparing
the materials so delivered to such Representative. If any Representative
disagrees with the computation of Orius's Net Indebtedness or LISN's Net
Indebtedness, or with any other determination, such Representative may, within
five (5) days after receipt of Orius Notice to such Representative, deliver a
notice (an "Objection Notice") to Orius setting forth such Representative's
objection to Orius's calculation which is the subject of the Objection Notice,
and the basis for such objection. Upon receipt of any Objection Notice relating
to Orius's Net Indebtedness from any Representative, Orius will promptly deliver
copies thereof to each other Representative, and upon receipt of any Objection
Notice relating to the LISN Net Indebtedness from the Orius Stockholders
Representative, the LISN Shareholder Representative or the Investor
Representative, Orius will promptly deliver copies thereof to each of the other
of such three Representatives. Orius and the Representatives will use reasonable
efforts to resolve any disagreements as to the computation of Orius's Net
Indebtedness, LISN's Net Indebtedness or any other amount, as applicable, but if
they do not obtain a final resolution within ten (10) days after Orius has
delivered the Objection Notices (if any are so received) in accordance with the
foregoing sentence, Orius and the Representatives will jointly retain either of
Deloitte & Touche LLP or Arthur Andersen (such selected firm, the "Firm") to
resolve any remaining disagreements. Orius and the Representatives will direct
the Firm to render a determination within 10 days of its retention and Orius,
the Representatives and their respective agents will cooperate with the Firm
during its engagement. The Firm will consider only those items and amounts
identified in the Objection Notices which Orius and the Representatives are
unable to resolve. In resolving any disputed item, the Firm may not assign a
value to any item greater than the greatest value for such item claimed by Orius
or any Representative or less than the smallest value for such item claimed by
Orius or any Representative. The Firm's determination will be based solely on
presentations by Orius and the Representatives (i.e., not on independent
review), and in accordance with GAAP. The determination of the Firm will be
conclusive and binding upon Orius, the Representatives, the LISN Shareholders,
the Orius Stockholders and the Investors. The costs and expenses of the Firm
shall be allocated by the Firm, on the basis deemed to be equitable by the Firm,
to Orius or LISN and, for purposes of the adjustments contemplated hereby,
treated as Net Indebtedness of Orius or LISN as of the end of the day
immediately preceding the Closing Date. The amount of Orius's Net Indebtedness
and LISN's Net Indebtedness, as each is finally determined pursuant to this
Section, is referred to herein as the "Final Orius Net Indebtedness" and the
"Final LISN Net Indebtedness," respectively.
(ii) For purposes of this Agreement:
(a) "Closing Orius Investor Value" means (i) the
product of 8.42 times $57.55 million (Orius's estimated EBITDA for the
twelve-month period ending December 31, 1999) less (ii) the Final Orius
Net Indebtedness, plus (iii) the Aggregate Orius Option Exercise Price.
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(b) "Closing LISN Investor Value" means the product
of 8.42 times $30.0 million (LISN's estimated EBITDA for the
twelve-month period ending December 31, 1999) less the Final LISN Net
Indebtedness.
(iii) Adjustments Based Upon Closing LISN Investor Value and
Closing Orius Investor Value. If and to the extent that Closing LISN Investor
Value deviates from Estimated LISN Investor Value, or Closing Orius Investor
Value deviates from Estimated Orius Investor Value, Orius shall deliver notice
thereof (the "Final Consideration Notice") to each of the Representatives,
stating (a) Closing Orius Investor Value, the Orius Common Value Per Share and
Closing LISN Investor Value, as finally determined, (b) the number of shares of
Orius Common, the number of shares of Series C Participating Preferred and the
aggregate initial principal amount of Orius Junior Notes to which each LISN
Shareholder was entitled at the Closing pursuant to this Agreement and the other
agreements contemplated hereby (the "Final LISN Consideration), (c) the number
of shares of Series C Participating Preferred, the aggregate initial principal
amount of Orius Junior Notes and the aggregate amount of cash to which each
Orius Stockholder and each Orius Warrantholder was entitled at the Closing
pursuant to this Agreement and the other agreements contemplated hereby,
including without limitation the HIG Call Agreement and the Purchase Agreement
(the "Final Orius Consideration"), (d) the Orius Option Spread Value in respect
of each Existing Orius Option, (e) if any of the Orius Stockholders or Orius
Warrantholders (or the Escrow Agent, as applicable) has theretofore received
cash, shares of Series C Participating Preferred or Orius Junior Notes, the
amount of any reconciling payment or delivery by Orius to such Orius Stockholder
or Orius Warrantholder (or the Escrow Agent, as applicable) that will be
necessary to ensure that such Orius Stockholder or Orius Warrantholder (or the
Escrow Agent, applicable) has received or will receive cash, shares of Series C
Participating Preferred and Orius Junior Notes in aggregate amounts equal to,
and not more than or less than, such Orius Stockholder's or Orius
Warrantholder's Final Orius Consideration subject to the terms of the Escrow
Agreement, and (f) if any of the LISN Shareholders has theretofore received
shares of Orius Class B Common, shares of Series C Participating Preferred or
Orius Junior Notes, the amount of any reconciling payment or delivery by Orius
or such LISN Shareholder that will be necessary to ensure that such LISN
Shareholder has received or will receive shares of Orius Class B Common, shares
of Series C Participating Preferred and Orius Junior Notes in aggregate amounts
equal to, and not more than or less than, such LISN Shareholder's Final LISN
Consideration. Orius and each of the Orius Stockholders and LISN Shareholders
will, and the Escrow Agent will agree pursuant to the Escrow Agreement to, make
such deliveries and payments promptly, and in any event within five business
days, following receipt of, and in accordance with the instructions set forth
in, the Final Consideration Notice.
1F. Delivery of Securities. Notwithstanding the foregoing
provisions requiring issuance by Orius of securities at the Closing, Orius will
not deliver any certificates or notes representing any securities issued at the
Closing until the amounts so issued are finally determined pursuant to Section
1E above; provided that at the written request of any Orius Stockholder, LISN
Shareholder or Investor to whom Orius has issued securities pursuant to Section
1B at the Closing that Orius deliver to such Person prior to the final
determinations pursuant to Section 1E above certificates for the securities
issued to such Person in accordance with such subsection, Orius shall, upon
receipt from such Person of a written agreement satisfactory to Orius to return
such certificate(s) to Orius upon final determination pursuant to Section 1E if
so requested by Orius in
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<PAGE> 24
exchange for new certificates representing amounts of securities adjusted as
contemplated thereby, certificates representing the shares of Orius Common,
shares of Series C Participating Preferred and Orius Junior Notes issued in
exchange for such shares of Orius Common held by such Person immediately prior
to the Effective Time, in amounts estimated pursuant to Section 1D. Each
certificate issued pursuant to this subsection in an amount estimated pursuant
to Section 1D shall bear the legend set forth in Section 7E as well as a legend
stating that the amount of securities represented thereby is subject to such
adjustment and that such certificate shall be surrendered to Orius at such time
as the amount of such securities is finally determined in accordance with
Section 1E.
Section 2. Conditions of Obligations of LISN and Each of the
LISN Shareholders and the Investors at the Closing. The obligations of each LISN
Shareholder and each Investor who executes the Note Exchange Agreement to
consummate the Note Exchange or the New LISN Note Exchange shall be subject to
the condition that the LISN Merger shall have been, or shall contemporaneously
be, consummated in accordance with the terms of this Agreement. The obligation
of LISN to consummate the LISN Merger at the Closing is subject to the
satisfaction as of the Effective Time of the following conditions:
2A. Representations and Warranties; Covenants. The
representations and warranties contained in Section 5 hereof shall be true and
correct in all material respects at and as of the Closing as though then made
and as though the Closing Date was substituted for the date of this Agreement
throughout such representations and warranties, and Orius and the Orius
Stockholders shall have performed in all material respects all of the covenants
required to be performed by Orius and each of the Orius Stockholders prior to
the Closing.
2B. Amendment of Articles of Incorporation. Orius's Articles
of Incorporation shall have been amended, shall be in full force and effect
under the laws of the State of Florida as of the Closing and shall not have been
further amended or modified.
2C. Bylaws. Orius's Bylaws (the "Bylaws") shall have been
adopted by Orius in the form of Exhibit N attached hereto, shall be in full
force and effect as of the Closing and shall not have been amended or modified.
2D. Investor Rights Agreement. Orius and the Orius Continuing
Stockholders shall have entered into the investor rights agreement in the form
of Exhibit O attached hereto (the "Investor Rights Agreement"), and the Investor
Rights Agreement shall be in full force and effect as of the Closing and shall
not have been amended or modified.
2E. Orius Exchange Transaction. Orius, each of the Orius
Stockholders (other than HIG) shall have executed and delivered to Orius (a) a
Full Strip Joinder Agreement with respect to the number of outstanding shares of
Orius Common Stock set forth opposite its name on the Orius Stockholders
Schedule hereto under the heading "Full Strip Exchange" (except that no such
Person shall be required to execute and deliver a Full Strip Joinder Agreement
if such number is zero), (b) a Securities Only Joinder Agreement with respect to
the number of outstanding shares of Orius Common Stock set forth opposite its
name on the Orius Stockholders Schedule hereto under the
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heading "Securities Only Exchange" (except that no such Person shall be
required to execute and deliver a Securities Only Joinder Agreement if such
number is zero), and (c) a Cash Joinder Agreement with respect to the aggregate
number of outstanding shares of Orius Common Stock set forth opposite such
Person's name on the Orius Stockholders Schedule hereto under the heading "Cash
Exchange" (except that no such Person shall be required to execute and deliver a
Cash Joinder Agreement if such number is zero), and each of the Orius
Warrantholders shall have executed and delivered to Orius Orius Warrants
exercisable to acquire the aggregate number of shares of Orius Common Stock set
forth opposite such Person's name on the Orius Warrantholders Schedule hereto,
and the Joinder Agreements shall be in full force and effect as of the Closing.
The transactions contemplated by each Joinder Agreement shall have been
consummated simultaneously with the closing of the LISN Merger hereunder in
accordance with the terms and conditions of such Joinder Agreement.
2F. Purchase Transaction. HIG Cable shall have entered into
the Purchase Agreement with Purchaser, and the Purchase Agreement shall be in
full force and effect as of the Closing. All of the conditions to the
Purchaser's obligations under the Purchase Agreement shall have been satisfied,
and the Purchase Agreement shall have been consummated simultaneously with the
closing of the LISN Merger hereunder in accordance with the terms and conditions
of the Purchase Agreement.
2G. New Series B Preferred Retained by HIG West. HIG West
shall have (i) executed and delivered to Purchaser the HIG Call Agreement with
respect to all 7,596.38 shares of Orius Series B Preferred, and such agreement
shall be in full force and effect as of the Closing, (ii) pledged to Purchaser,
to secure its obligations under the HIG Call Agreement, all of such shares of
Orius Series B Preferred, and (iii) executed and delivered to Purchaser and
Orius the Pledge and Voting Agreement in the form attached hereto as Exhibit
Z(iii) (the "HIG Pledge and Voting Agreement" with respect to the retained New
Series B Preferred in form and substance satisfactory to the Investor
Representative and its special counsel, and such agreement shall be in full
force and effect as of the Closing. In addition, all of the conditions to the
Purchaser's obligations under the HIG Put Agreement shall have been satisfied,
and all of the conditions to HIG West's obligations under the HIG Call Agreement
shall have been satisfied.
2H. Put/Call Shares Retained by Orius Stockholders. Each of
the Orius Stockholders with a number of shares set forth opposite its name on
the Orius Stockholders Schedule attached hereto under the heading "Orius
Put/Call" (i) shall have executed and delivered to Orius an Orius Call Agreement
in the form attached hereto as Exhibit K with respect to the number of shares of
Orius Common Stock set forth opposite such Person's name on the Orius
Stockholders Schedule attached hereto under the heading "Orius Put/Call", and
such agreement shall be in full force and effect as of the Closing, (ii) shall
have executed and delivered to Orius a Pledge and Voting Agreement with respect
to such retained shares of Orius Common Stock in form and substance satisfactory
to the LISN Shareholder Representative and its special counsel, and such
agreement shall be in full force and effect as of the Closing, and (iii) to
secure its obligations under such Orius Call Agreement, shall have pledged to
Orius and Purchaser, in accordance with such Pledge and Voting Agreement, such
number of shares of Orius Common Stock which are not subject to transfer to
Orius pursuant to a Joinder Agreement.
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<PAGE> 26
2I. Retained Shares. Other than (i) the shares of Orius Common
Stock which are subject to sale to Orius pursuant to an Orius Call Agreement
which is in full force and effect and pledged to Orius pursuant to a Pledge and
Voting Agreement which is in full force and effect, (ii) the shares of Orius
Common Stock and Orius Warrants which are subject to transfer to Orius pursuant
to a Joinder Agreement which is in full force and effect, (iii) the shares of
Orius Series A Preferred and Orius Convertible Note which are subject to sale to
Purchaser pursuant to the Purchase Agreement, (iv) the shares of Orius Series B
Preferred which are subject to sale to Purchaser pursuant to the HIG Call
Agreement which is in full force and effect and pledged to Purchaser pursuant to
a Pledge and Voting Agreement which is in full force and effect, (v) the
Existing Orius Options, and (vi) shares of Orius Common Stock held by each Orius
Stockholder in an aggregate amount which, for any such Person, does not exceed
the amount set forth opposite such Orius Stockholder's name on the Orius
Stockholders Schedule hereto under the heading "Orius Put/Call", no shares of
Orius capital stock shall be outstanding or directly or indirectly issuable upon
exercise or conversion of, or upon exchange for, any outstanding securities or
other rights.
2J. Senior Management Agreement. Each of Mercurio and Orius
shall have executed and delivered the Mercurio Employment and Stock Agreement,
and the Mercurio Employment and Stock Agreement shall be in full force and
effect.
2K. Escrow Agreement. Each of the parties to the Escrow
Agreement shall have executed and delivered the Escrow Agreement, and the Escrow
Agreement shall be in full force and effect.
2L. Litigation. No suit, action or other proceeding shall be
pending before any court or governmental or regulatory official, body or
authority in which it is sought to restrain or prohibit the transactions
contemplated hereby or that could have a Material Adverse Effect (other than any
such suit, action or proceeding brought by any of the Parties against any of the
other Parties), and no injunction, judgment, order, decree or ruling with
respect thereto shall be in effect.
2M. Filings. Orius shall have made all material filings
required to be made by them and shall have obtained all material permits and
other authorizations required to be obtained by them under all applicable laws
(including federal and state securities laws) to consummate the transactions
contemplated by this Agreement in compliance with such laws (other than any
securities law filings required to be made after the Closing, which filings
shall be made promptly after the Closing).
2N. Third Party Consents and Approvals. Orius shall have
received or obtained all consents and approvals necessary for the consummation
of the transactions contemplated by this Agreement and the other agreements
contemplated hereby or that are required in order to prevent a breach of or
default under, a termination or modification of, or acceleration of the terms
of, any contract, agreement or document required to be listed on the attached
Orius Contracts Schedule, except in such cases in which the failure to obtain
any such consent does not or could not reasonably be expected to have a Material
Adverse Effect, but in any event shall have received or obtained consents and
approvals in respect of each of the items listed on the Orius Restrictions
Schedule
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<PAGE> 27
which are marked with an asterisk (*), in each case on terms and conditions
reasonably satisfactory to the LISN Shareholder Representative and its special
counsel.
2O. Governmental Consents and Approvals. The Parties shall
have received or obtained all material governmental and regulatory consents and
approvals that are necessary for the consummation of the transactions
contemplated hereby (and in any event Orius shall have received or obtained each
of such consents and approvals which is marked with an asterisk (*) on the Orius
Restrictions Schedule), in each case on terms and conditions satisfactory to the
LISN Shareholder Representative and the Investor Representative, and the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "Hart-Scott-Rodino Act"), shall have expired or been terminated.
2P. Material Adverse Change. Since June 30, 1999, there shall
have been no material adverse change or development in the business, financial
condition, operating results, assets, operations, business prospects, cash flow,
net worth or customer, supplier or employee relations of Orius and its
Subsidiaries on a consolidated basis which has had or could reasonably be
expected to have a Material Adverse Effect.
2Q. Option Termination Transaction. The Option Termination
Transactions shall have been consummated simultaneously with the closing of the
LISN Merger hereunder, and no options to acquire Orius Common Stock shall have
been exercised or be outstanding or exercisable.
2R. Opinion of Orius's Counsel. Orius and LISN shall have
received from counsel for Orius an opinion with respect to the matters set forth
in Exhibit Q attached hereto, which shall be addressed to Orius and LISN, dated
as of the Closing Date and in form and substance reasonably satisfactory to the
LISN Shareholder Representative and the Investor Representative and their
special counsel, and the lenders to Orius and its Subsidiaries shall be entitled
to rely thereon.
2S. Opinion of Special Counsel to Orius Stockholders. Orius
and LISN shall have received from White and Williams LLP, counsel for certain
Orius Stockholders (as indicated on the Orius Stockholders Schedule hereto) an
opinion with respect to the matters set forth in Exhibit S attached hereto, and
shall have received from Hogan & Hartson, counsel for certain Orius Stockholders
as indicated on the Orius Stockholders Schedule hereto) an opinion with respect
to the matters set forth in Exhibit S attached hereto, each of which shall be
addressed to Orius and LISN, dated as of the Closing Date and in form and
substance reasonably satisfactory to the LISN Shareholder Representative and the
Investor Representative and their special counsel, and the lenders to Orius and
its Subsidiaries shall be entitled to rely thereon.
2T. Senior Debt Financing. NATG Holdings, L.L.C., a Delaware
limited liability company and a wholly-owned Subsidiary of Orius ("NATG") and
LISN, L.L.C., a Delaware limited liability company and a wholly-owned Subsidiary
of LISN ("LISN Sub") shall have entered into with Bankers Trust Company and Bank
of America, N.A. (the "Banks") the definitive agreements contemplated by the
letter agreement by and among NATG, LISN Sub and the Banks dated November 8,
1999 attached as Exhibit T hereto (the "Bank Commitment Letter") and shall have
obtained proceeds from the senior debt financing contemplated thereby (the
"Senior Debt
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Financing") in an aggregate amount not less than $375 million (consisting of a
term loan or loans in an aggregate amount not less than $275 million and a
revolving credit facility in an aggregate amount not less than $100 million on
terms and subject to conditions substantially as set forth in the Bank
Commitment Letter and other usual and customary terms reasonably satisfactory to
the LISN Shareholder Representative and the Investor Representative.
2U. Senior Subordinated Debt Financing. NATG and LISN Sub
shall have entered into with Bankers Trust Corporation and NationsBank, L.L.C.
(the "Bridge Lenders") the definitive agreements contemplated by the letter
agreement between NATG, LISN Sub and the Bridge Lenders dated November 8, 1999
attached as Exhibit U hereto (the "Bridge Loan Commitment Letter") and shall
have obtained proceeds of the subordinated debt financing contemplated thereby
(the "Senior Subordinated Debt Financing") in an aggregate amount not less than
$100 million on terms and subject to conditions substantially as set forth in
the Bridge Loan Commitment Letter and other usual and customary terms reasonably
satisfactory to the LISN Shareholder Representative and the Investor
Representative.
2V. Proceedings. All corporate and other proceedings taken or
required to be taken by Orius, the Orius Stockholders and Merger Sub at or prior
to the Closing in connection with the transactions contemplated hereby and by
the Other Reorganization Agreements shall have been taken and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
LISN Shareholder Representative and the Investor Representative and its
respective special counsel.
2W. Closing Documents. At the Closing, Orius and Merger Sub,
as applicable, shall have delivered to LISN all of the following documents:
(i) a certificate of Orius, dated the Closing Date, stating
that the conditions specified in Section 1 and Sections 2A through 2Q have been
fully satisfied;
(ii) certified copies of the resolutions duly adopted by the
board of directors of Orius and, as applicable, each Orius Subsidiary,
authorizing the execution, delivery and performance of this Agreement and each
of the other agreements contemplated hereby (including without limitation the
Other Reorganization Agreements), the Exchange Transaction, the Orius Put/Call
Transactions, the Option Termination Transaction, the LISN Merger Transactions,
the Senior Debt Financing, the Senior Subordinated Debt Financing, the adoption
of the Articles of Incorporation, amending and restating Orius's Articles of
Incorporation, and the other transactions contemplated hereby and thereby;
(iii) certified copies of the resolutions duly adopted by
Orius's stockholders approving the adoption of the Articles of Incorporation;
(iv) certified copies of the Articles of Incorporation and the
Bylaws, each as in effect at the Closing;
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(v) copies of all consents and approvals required to be
obtained as contemplated by Section 2M or Section 2N, including in respect of
the matters marked with an asterisk (*) on the Orius Restrictions Schedule
(including all blue sky law filings and waivers of all preemptive rights and
rights of first refusal);
(vi) good standing certificates of Orius and each of its
Subsidiaries from its respective jurisdiction of incorporation and each
jurisdiction in which it is qualified to do business as a foreign corporation,
in each case dated as of a recent date prior to the Closing Date; and
(vii) such other documents relating to the transactions
contemplated by this Agreement as the LISN Shareholder Representative or its
special counsel may reasonably request.
2X. Waiver. Any condition specified in Sections 2, 4, 5 and 9
may be waived if consented to in writing by the LISN Shareholder Representative.
Section 3. Conditions of the Obligations of Orius and the
Orius Stockholders at the Closing. The obligations of Orius and of the Orius
Stockholders (other than HIG) to consummate the transactions contemplated by the
Joinder Agreements is subject to the satisfaction as of the Closing of the
following conditions:
3A. Representations and Warranties; Covenants. The
representations and warranties contained in Section 6 shall be true and correct
in all material respects at and as of the Closing as though then made and as
though the Closing Date was substituted for the date of this Agreement
throughout such representations and warranties, and LISN and the LISN
Shareholders shall have performed in all material respects all of the covenants
required to be performed by LISN and the LISN Shareholders hereunder prior to
the Closing.
3B. Put/Call Shares Retained by Orius Stockholders. Each of
the Orius Stockholders listed on the Orius Stockholders Schedule attached hereto
who has executed and delivered to Orius (x) an Orius Call Agreement, (y) an
Orius Put Agreement in the form attached hereto as Exhibit V (an "Orius Put
Agreement" and each Orius Put Agreement executed by an Orius Stockholder, other
than HIG West, collectively, the "Orius Put Agreements") and (z) a Pledge and
Voting Agreement with respect to the number of shares of Orius Common Stock set
forth opposite such Person's name on the Orius Stockholders Schedule attached
hereto under the heading "Orius Put/Call" shall have received from Orius an
irrevocable bank letter of credit, in form and substance reasonably satisfactory
to the Orius Stockholders Representative, and in an aggregate amount equal to
the product of such number of shares of Orius Common Stock which are subject to
each such Orius Stockholders' Orius Put Agreement multiplied by 90% of the Orius
Common Value Per Share.
3C. Litigation. No suit, action or other proceeding shall be
pending before any court or governmental or regulatory official, body or
authority in which it is sought to restrain or prohibit the transactions
contemplated hereby (other than any such suit, action or proceeding brought by
any of the Parties against any of the other Parties), and no injunction,
judgment, order, decree or ruling with respect thereto shall be in effect.
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3D. Filings. LISN shall have made all material filings
required to be made by it and shall have obtained all material permits and other
authorizations required to be obtained by it under all applicable laws
(including federal and state securities laws) to consummate the transactions
contemplated by this Agreement in compliance with such laws (other than any
securities law filings required to be made after the Closing, which filings
shall be made promptly after the Closing).
3E. Third Party Consents and Approvals. LISN shall have
received or obtained all consents and approvals necessary for the consummation
of the transactions contemplated by this Agreement and the other agreements
contemplated hereby or that are required in order to prevent a breach of or
default under, a termination or modification of, or acceleration of the terms
of, any contract, agreement or document required to be listed on the attached
LISN Contracts Schedule, except in such cases in which the failure to obtain any
such consent or could not reasonably be expected to have a Material Adverse
Effect, but in any event shall have received or obtained consents and approvals
in respect of each of the items listed on the LISN Restrictions Schedule which
are marked with an asterisk (*), in each case on terms and conditions reasonably
satisfactory to the Orius Stockholders Representative and its special counsel.
3F. Governmental Consents and Approvals. The Parties shall
have received or obtained all material governmental and regulatory consents and
approvals that are necessary for the consummation of the transactions
contemplated hereby (and in any event LISN shall have received or obtained each
of such consents and approvals which is market with an asterisk (*) on the LISN
Restrictions Schedule), in each case on terms and conditions satisfactory to the
Orius Stockholders Representative, and the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"Hart-Scott-Rodino Act"), shall have expired or been terminated.
3G. Opinion of LISN's Counsel. Orius shall have received from
counsel for LISN an opinion with respect to the matters set forth in Exhibit W
attached hereto, which shall be addressed to Orius and LISN, dated as of the
Closing Date and in form and substance reasonably satisfactory to the Orius
Stockholders Representative and its special counsel, and the lenders to Orius
and its Subsidiaries shall be entitled to rely thereon.
3H. Investment Transaction. The Investment Transaction shall
have been consummated contemporaneously therewith or prior thereto.
3I. HIG Transactions. Purchaser shall have executed and
delivered to HIG Cable the Purchase Agreement and to HIG West the HIG Put
Agreement and the HIG Call Agreement and, assuming that HIG Cable shall have
executed and delivered the Purchase Agreement and satisfied all of its
obligations thereunder to be satisfied at the Closing, and HIG West shall have
executed and delivered the HIG Put Agreement, the HIG Call Agreement and the HIG
Pledge and Voting Agreement and shall have satisfied all of its obligations
thereunder to be satisfied at the Closing, the Purchaser shall have
contemporaneously delivered to HIG West the irrevocable letter of credit
required to be delivered at the Closing pursuant to the HIG Put Agreement.
3J. Material Adverse Change. Since June 30, 1999, there shall
have been no material adverse change or development in the business, financial
condition, operating results, assets,
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operations, business prospects, cash flow, net worth or customer, supplier or
employee relations of LISN which has had or could reasonably expected to have a
Material Adverse Effect.
3K. Closing Certificates.
(i) LISN Certificate. LISN shall have delivered to Orius a
certificate of an officer of LISN dated the Closing Date, stating that the
conditions specified in Section 3A through Section 3F, Section 3H and Section 3J
have been fully satisfied, and that Purchaser shall have executed and delivered
agreements as specified in Section 3I.
(ii) HIG Certificate. HIG and HIG Cable West, Inc. shall have
delivered to Orius a certificate of an officer thereof dated the Closing Date
stating that the conditions specified in Section 3I (to be performed by such
parties) have been fully satisfied.
3L. Waiver. Any condition specified in this Section 3 may be
waived if consented to in writing by Orius and the Orius Stockholders
Representative.
Section 4. Pre-Closing Covenants and Agreements. Each of the
Parties agrees as follows with respect to the period between the date of this
Agreement and the Closing:
4A. General. Each of the Parties shall, and shall cause each
of its Subsidiaries to, use its reasonable best efforts to take all action and
to do all things necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the conditions set forth in Sections 2, 3 and 4
above).
4B. Maintenance of Business. Each of Orius and LISN shall, and
shall cause each of its Subsidiaries to, (i) maintain its assets in good
operating condition and repair (normal wear and tear excepted), (ii) maintain
insurance reasonably comparable to that in effect on the date of its Latest
Balance Sheet, (iii) maintain inventory, supplies and spare parts at customary
operating levels consistent with current practices, and replace in accordance
with past practice any inoperable, worn out or obsolete assets with modern
assets of comparable quality, (iv) maintain its books, accounts and records in
accordance with past custom and practice as used in the preparation of its
Latest Balance Sheet and the financial statements described in Section 5E and
Section 6E, respectively, below, and (v) maintain in full force and effect the
existence of all its Intellectual Property Rights.
4C. Third Party Notices and Consents. Each of Orius and LISN
shall use reasonable best efforts to give required notices to third parties and
obtain any consents and approvals in respect of each item listed on the Orius
Restrictions Schedule or the LISN Restrictions Schedule, which is marked with an
asterisk (*).
4D. Governmental Notices and Consents. Each of the Parties
shall give any notices to, make any filings with, and use reasonable best
efforts to obtain, any authorizations, consents and approvals of governments and
governmental agencies in connection with the matters contemplated by this
Agreement. Without limiting the generality of the foregoing, each of the Parties
shall use reasonable best efforts to obtain an early termination of the waiting
period under
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the Hart-Scott-Rodino Act, and shall make any further filings pursuant thereto
that may be necessary, proper or advisable in connection therewith, and Orius
and LISN shall pay each pay one-half of all filing fees related to any filings
under the Hart-Scott-Rodino Act in connection with the transactions contemplated
hereby.
4E. Operation of Business. Each of Orius and LISN shall, and
shall cause each of its Subsidiaries to, operate its business only in the usual
and ordinary course of business consistent with past practice and use reasonable
best efforts to preserve the goodwill and organization of its business and the
relationships with its customers, suppliers, employees and other Persons having
business relations with it. Without limiting the generality of the foregoing,
prior to the Closing, neither Orius nor LISN shall, and each shall cause its
Subsidiaries not to:
(i) take or omit to take any action that would require
disclosure under Section 5M or Section 6M, respectively, or that would otherwise
result in a breach of any of the representations, warranties or covenants made
by it or the Orius Stockholders or the LISN Shareholders, respectively, in this
Agreement or is any Orius Transmittal Letter or in any LISN Transmittal Letter,
respectively;
(ii) take any action or omit to take any action which act or
omission would reasonably be anticipated to have a Material Adverse Effect;
(iii) (a) enter into any contract out of the ordinary course
of business or restricting in any material respect the conduct of its business,
(b) make any loans or Investments (other than advances to Orius's or LISN's
employees, respectively, in the ordinary course of business consistent with past
custom and practice), (c) increase any officer's or employee's compensation,
incentive arrangements or other benefits, except for increases or bonuses made
in the ordinary course of business consistent with past custom and practice that
are set forth on the Orius Employees Schedule attached hereto or the LISN
Employees Schedule, as the case may be (it being understood, however, that no
bonuses or other extraordinary compensation may be paid (or authorized) prior to
the Closing), (d) redeem, purchase or otherwise acquire directly or indirectly
any of its issued and outstanding capital stock, or any outstanding rights or
securities exercisable or exchangeable for or convertible into its capital
stock, or make any distribution or dividend to any of its shareholders or other
Persons, (e) amend its Articles of Incorporation or bylaws or issue or agree to
issue any capital stock or any rights to acquire, or securities convertible into
or exchangeable for, any of its capital stock, (f) directly or indirectly engage
in any transaction, arrangement or contract with any officer, director,
shareholder or other insider or Affiliate of Orius and LISN, respectively, which
is not in the ordinary course of business consistent with past practice and at
arm's length, (g) execute any guaranty, issue any debt or borrow any money, or
(h) buy or sell any assets out of the ordinary course of business consistent
with past practice; or
(iv) enter into any transaction, arrangement or contract
except on an arm's-length basis in the ordinary course of business consistent
with past custom and practice.
Notwithstanding the foregoing, nothing in this Section 4E shall prohibit Orius
or LISN from taking any action or omitting to take any action as required or as
expressly contemplated by this Agreement.
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4F. Full Access. Each of Orius and LISN shall afford, and
shall cause each of its Subsidiaries to afford, and cause its officers,
directors, employees, attorneys, accountants and other agents to, afford, to the
other and to each other's accounting, legal and other representatives and the
potential lenders proposed by LISN, as well as their respective officers,
employees, affiliates and other agents, full and complete access at all
reasonable times and during normal business hours to other's personnel and to
business, financial, legal, tax, compensation and other data and information
concerning the other's affairs and operations; provided that all communications
by or on behalf of Orius and the Orius Stockholders with any employees of LISN
or any of its Subsidiaries shall be coordinated through Vanke, and all
communications by or on behalf of LISN and the LISN Shareholders with any
employees of Orius or any of its Subsidiaries shall be coordinated through
Mercurio or Robert Agres.
4G. Compliance with Agreements and Laws. Each of Orius and LISN shall,
and shall cause each of its Subsidiaries to, (i) comply with all material
obligations pursuant to any contract or agreement, whether oral or written,
express or implied and (ii) comply with all material applicable laws.
4H. Payment of Obligations. Each of Orius and LISN shall, and shall
cause each of its Subsidiaries to, pay and discharge when payable all Taxes,
assessments and governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same becomes delinquent and
before penalties accrue thereon unless contested in good faith by appropriate
proceedings) and pay and discharge all claims for labor, materials or supplies
in the ordinary course of business consistent with past practice.
4I. Notice of Material Developments. Each Party shall give prompt
written notice to the other Parties of (i) any variances in any of its
representations or warranties contained in Section 5 or 6 below, (ii) any breach
of any covenant hereunder by such Party and (iii) any other material development
affecting the ability of such Party to consummate the transactions contemplated
by this Agreement.
4J. Exclusivity.
(i) Exclusivity in Favor of LISN Shareholders. Orius shall not, and
Orius shall use its reasonable best efforts to ensure that none of the Orius
Stockholders or any of Orius's or any Orius Stockholder's respective Affiliates,
representatives, officers, employees, directors, or agents shall, directly or
indirectly, (i) submit, solicit, initiate, encourage or discuss any proposal or
offer from any Person or enter into any agreement or accept any offer relating
to or consummate any (a) reorganization, liquidation, dissolution or
recapitalization of Orius, (b) merger or consolidation involving Orius, (c)
purchase or sale of any assets or capital stock (or any rights to acquire, or
securities convertible into or exchangeable for, any such capital stock) of
Orius (other than a purchase or sale of assets in the ordinary course of
business consistent with past custom and practice), (d) similar transaction or
business combination involving Orius or its assets or (e) acquisition of other
businesses, whether by the purchase of assets or by the purchase of capital
stock of another Person, except that Orius may continue discussions with respect
to proposed acquisitions, it being understood that Orius will not enter into any
binding obligation with respect thereto without
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first obtaining the prior written consent of LISN (each of the transactions
described in clauses (a) through (e), an "Orius Transaction") or (ii) furnish
any information with respect to, assist or participate in or facilitate in any
other manner any effort or attempt by any Person to do or seek to do any of the
foregoing. Notwithstanding the foregoing, the foregoing shall not limit or
restrict in any way any communications between any of Orius, LISN, the Orius
Stockholders, the LISN Shareholders and the legal, accounting or other
professional advisors or lenders to any of the foregoing for the purpose of
facilitating the transactions contemplated by this Agreement. Orius shall notify
the LISN Shareholders immediately if any Person makes any proposal, offer,
inquiry or contact to Orius or, to Orius's Knowledge, any of the Orius
Stockholders or any of their respective representatives, officers, employees,
directors, or agents with respect to an Orius Transaction.
(ii) Exclusivity in Favor of Orius Stockholders. LISN shall not, and
LISN shall use its reasonable best efforts to ensure that none of the LISN
Shareholders or any of their respective Affiliates, representatives, officers,
employees, directors, or agents shall, directly or indirectly, (i) submit,
solicit, initiate, encourage or discuss any proposal or offer from any Person or
enter into any agreement or accept any offer relating to or consummate any (a)
reorganization, liquidation, dissolution or recapitalization of LISN, (b) merger
or consolidation involving LISN, (c) purchase or sale of any assets or capital
stock (or any rights to acquire, or securities convertible into or exchangeable
for, any such capital stock) of LISN (other than a purchase or sale of assets in
the ordinary course of business consistent with past custom and practice), (d)
similar transaction or business combination involving LISN or its assets or (e)
acquisition of any other businesses, whether by the purchase of assets or by the
purchase of capital stock of another Person, except that LISN may continue
discussions with respect to the proposed acquisitions, it being understood that
LISN will not enter into any binding obligation with respect thereto without
first obtaining the prior written consent of Orius (each of the foregoing
transactions described in clauses (a) through (e), a "LISN Transaction") or (ii)
furnish any information with respect to, assist or participate in or facilitate
in any other manner any effort or attempt by any Person to do or seek to do any
of the foregoing. Notwithstanding the foregoing, the foregoing shall not limit
or restrict in any way any communications between any of Orius, LISN, the Orius
Stockholders, the LISN Shareholders and the legal, accounting or other
professional advisors or lenders to any of the foregoing for the purpose of
facilitating the transactions contemplated by this Agreement. LISN agrees to
notify Orius immediately if any Person makes any proposal, offer, inquiry or
contact to LISN or any of the LISN Shareholders or, to LISN's Knowledge, any of
their respective representatives, officers, employees, directors, or agents with
respect to a LISN Transaction.
4K. Tax Matters.
(i) Without the prior written consent of LISN, Orius shall not, and
shall ensure that none of its Subsidiaries shall, make or change any election,
change an annual accounting period, adopt or change any accounting method, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
or assessment relating to Orius or any of its Subsidiaries, surrender any right
to claim a refund of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to Orius or any of its
Subsidiaries, or take any other similar action, or omit to take any action
relating to the filing of any Tax Return or the payment of any Tax, if such
election, adoption, change, amendment, agreement, settlement, surrender, consent
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or other action or omission would have the effect of increasing the present or
future Tax liability or decreasing any present or future Tax asset of Orius or
any of its Subsidiaries.
(ii) Without the prior written consent of Orius, LISN shall not, and
shall ensure that none of its Subsidiaries shall, make or change any election,
change an annual accounting period, adopt or change any accounting method, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
or assessment relating to LISN or any of its Subsidiaries, surrender any right
to claim a refund of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to LISN or any of its
Subsidiaries, or take any other similar action, or omit to take any action
relating to the filing of any Tax Return or the payment of any Tax, if such
election, adoption, change, amendment, agreement, settlement, surrender, consent
or other action or omission would have the effect of increasing the present or
future Tax liability or decreasing any present or future Tax asset of LISN or
any of its Subsidiaries.
Section 5. Representations and Warranties of Orius. As a material
inducement to LISN, the LISN Shareholders and the Investors to enter into this
Agreement and the agreements contemplated hereby to which such Person is a party
and to consummate the transactions contemplated hereby and by such other
agreements, Orius hereby represents and warrants to LISN, the LISN Shareholders
and the Investors as follows:
5A. Organization, Corporate Power and Licenses. Orius is a corporation
duly organized, validly existing and whose status is active under the laws of
the State of Florida. Orius is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to qualify,
except where the failure to so qualify would not have a Material Adverse Effect.
Orius possesses all requisite corporate power and authority necessary to own and
operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement. The copies of Orius's articles of incorporation
and bylaws which have been furnished to the LISN Shareholders' special counsel
reflect all amendments made thereto at any time prior to the date of this
Agreement and are correct and complete. The Articles of Incorporation attached
hereto as Exhibit A will, as of the Closing Date, reflect all amendments made
thereto and will be correct and complete.
5B. Capital Stock and Related Matters.
(i) As of the date hereof, and without giving effect to any of the
transactions contemplated hereby or by the Other Reorganization Agreements, the
authorized capital stock of Orius consists of 200,000,000 shares of common stock
and 2,000,000 shares of preferred stock, (a) of which 14,703,130.33 shares of
Orius Common Stock are issued and outstanding and are held beneficially and of
record by the Orius Stockholders as set forth on the Orius Capitalization
Schedule attached hereto (to Orius' Knowledge, free and clear of all
Encumbrances, except Encumbrances pursuant to the Orius Stockholders Agreement,
as defined below, and except that 240,531.66 of such shares of outstanding Orius
Common Stock are held in escrow pursuant to earn-out arrangements), 655,199.74
shares of Orius Common Stock are reserved for issuance upon exercise of Existing
Orius Options, 371,853.11 shares of Orius Common Stock are reserved for issuance
upon exercise of Orius Warrants, 3,116,828.42 shares of Orius Common Stock are
reserved for issuance upon conversion
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of the Orius Series A Preferred, 3,252,289.98 shares of Orius Common Stock are
reserved for issuance upon conversion of the Orius Series B Preferred, and
692,626.93 shares of Orius Common Stock are reserved for issuance upon
conversion of the Orius Convertible Note, and (b) of which 10,000 shares of
Series A Preferred Stock and 7,596.38 shares of Orius Series B Preferred are
issued and outstanding and are held beneficially and of record by the Orius
Stockholders as set forth on the Orius Capitalization Schedule attached hereto
(to Orius's Knowledge, free and clear of all encumbrances). Other than the Orius
Convertible Note, the Orius Series A Preferred, the Orius Series B Preferred,
Orius Warrants and the Existing Orius Options, and other than the outstanding
shares of Common Stock described above, Orius does not have and as of the
Closing Date will not have outstanding any stock or securities, or any stock or
securities convertible into or exercisable or exchangeable for any shares of its
capital stock or containing any profit participation features, nor any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities directly or indirectly convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom stock plans, other
than, as of the Closing Date, the Converted LISN Employee Options and New Orius
Options granted pursuant to the New Incentive Stock and Option Plan in
connection with the LISN Merger Transactions. Orius is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any warrants, options or other rights
to acquire its capital stock, other than as expressly provided in this Agreement
and the HIG Redemption Agreement and, as of the Closing, pursuant to the
Articles of Incorporation. As of the date hereof and as of the Closing and
immediately thereafter, all of the outstanding shares of Orius's capital stock
are or shall be validly issued, fully paid and nonassessable. Each of the
Existing Orius Options was issued pursuant to an Existing Option Agreement in
the form previously delivered to LISN and the terms thereof are set forth in
such Existing Option Agreement and the Existing Stock Option Plan.
(ii) Upon consummation of the transactions contemplated hereunder to
occur at the Closing, the authorized capital stock of Orius will consist of
200,000,000 shares of Orius Common Stock, 200,000,000 shares of Orius Class B
Common, 10,000 shares of Orius Series A Preferred, 7,596.38 shares of Orius
Series B Preferred, 200,000,000 shares of Series C Participating Preferred, and
200,000,000 shares of Orius Series D Preferred.
(iii) Prior to the execution and delivery of the Investor Rights
Agreement, except for the Stockholders Agreement dated February 26, 1999, by and
among Orius and the Orius Stockholders party thereto (the "Orius Stockholders
Agreement"), and Orius's Articles of Incorporation, and except as for those
agreements described on the Orius Capitalization Schedule attached hereto (and
identified as included therein in response to this subsection (iii)), there are
no written or, to Orius's Knowledge, oral agreements or understandings between
or among any of the Orius Stockholders or among any other Person which are
binding upon Orius with respect to the voting or transfer of Orius's capital
stock or with respect to any other aspect of Orius's governance.
5C. Subsidiaries; Investments. Except as set forth on the attached
Orius Investments and Orius Subsidiaries Schedule, Orius does not own or hold
the right to acquire any shares of stock or any other security or interest in
any other Person. The attached Orius Investments and Orius Subsidiaries Schedule
correctly sets forth the name of each Subsidiary, the jurisdiction of its
incorporation and the Persons owning the outstanding capital stock of such
Subsidiary. Each
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Subsidiary is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and possesses all requisite corporate power
and authority necessary to own its properties and to carry on its businesses as
now being conducted and as presently proposed to be conducted and is qualified
to do business in every jurisdiction in which its ownership of property or the
conduct of business requires it to qualify, except where the failure to so
qualify would not have a Material Adverse Effect. All of the outstanding shares
of capital stock of each Subsidiary are validly issued, fully paid and
nonassessable, and all such shares are owned by Orius or another Subsidiary free
and clear of any Lien (other than Existing Bank Liens) and are not subject to
any option or right to purchase any such shares. Except as set forth on the
Orius Investments and Orius Subsidiaries Schedule attached hereto, Orius has
never had any Subsidiaries. Except as set forth on the Orius Investments and
Orius Subsidiaries Schedule, Orius does not have any obligation to make any
additional Investments in any Person.
5D. Authorization; No Breach. The execution, delivery and performance
of this Agreement and all of the other agreements and instruments contemplated
hereby to which Orius is a party, and the consummation of the transactions
contemplated hereby and by each of the Other Reorganization Agreements have been
duly authorized by Orius. This Agreement constitutes a valid and binding
obligation of Orius, enforceable in accordance with its terms, and all Other
Reorganization Agreements and instruments contemplated hereby to which Orius is
a party, when executed and delivered by Orius in accordance with the terms
hereof and thereof, shall each constitute a valid and binding obligation of
Orius, enforceable in accordance with their respective terms (except in each
case as limited by applicable bankruptcy, reorganization, insolvency or similar
laws). Except as set forth on the attached Orius Restrictions Schedule, the
execution and delivery by Orius of this Agreement and the Other Reorganization
Agreements and instruments contemplated hereby and thereby to which Orius is a
party, the consummation of the transactions contemplated by this Agreement and
the Other Reorganization Agreements to which Orius is a party and the
fulfillment of and compliance with the respective terms hereof and thereof by
Orius do not and shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under (whether with or
without the passage of time, the giving of notice or both), (iii) result in the
creation of any Lien upon Orius's or any of its Subsidiaries' capital stock or
assets pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of, or (vi) require
any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any third party or any court or administrative
or governmental body or agency pursuant to, Orius's Articles of Incorporation or
bylaws, any of its Subsidiaries' charter or bylaws, or any law, statute, rule or
regulation to which Orius or any of its Subsidiaries is subject, or any
agreement, instrument, order, judgment or decree to which Orius or any of its
Subsidiaries is subject, except in such cases in which the failure to obtain any
such authorization, consent, approval, exemption or to provide such notice or
make such filing could not reasonably be expected to have a Material Adverse
Effect (it being understood and agreed that this exception does not apply to any
representation as to any contract, agreement or document required to be listed
on the attached Orius Contracts Schedule). Neither Orius, any of its
Subsidiaries nor any of the Orius Stockholders is a party to or bound by any
written or, to the Knowledge of Orius, oral agreement or understanding with
respect to an Orius Transaction other than this Agreement and the other
agreements contemplated hereby. Neither Orius nor, to Orius's Knowledge, HIG has
breached any of its respective obligations pursuant to the Exclusivity
Agreement.
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5E. Financial Statements. Attached hereto as the Orius Financial
Statements Schedule are the following financial statements:
(i) the audited consolidated balance sheets of Orius as of December
31, 1998, and the related statements of income and cash flows (or the
equivalent) for the fiscal year then ended; and
(ii) the unaudited consolidated balance sheet of Orius as of August 31,
1999 (the "Orius Latest Balance Sheet"), and the related statements of income
and cash flows (or the equivalent) for the eight-month period then ended.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) when delivered pursuant to Section 5M above is consistent with
the books and records of Orius and its Subsidiaries, fairly presents the
financial condition and operating results of Orius and its Subsidiaries and has
been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby, subject in the case of the unaudited financial
statements to the absence of footnote disclosures and to normal year-end audit
adjustments (none of which footnote disclosures or year-end audit adjustments
would, alone or in the aggregate, be materially adverse to the business,
operations, assets, liabilities, financial condition, operating results, cash
flow or net worth of Orius and its Subsidiaries, taken as a whole).
5F. Absence of Undisclosed Liabilities. Except as set forth on the
attached Orius Liabilities Schedule and other than any Liability which
individually is in an amount less than $50,000 and which collectively with all
other Liabilities arising from the same or similar facts or circumstances is
less than $150,000 in the aggregate, neither Orius nor any of its Subsidiaries
has any Liability arising out of transactions entered into at or prior to the
date hereof, or any action or inaction at or prior to the date hereof, or any
state of facts existing at or prior to the date hereof, other than: (i)
Liabilities set forth on the liabilities side of the Orius Latest Balance Sheet
(including any notes thereto), (ii) Liabilities which have arisen after the date
of the Orius Latest Balance Sheet in the ordinary course of business (none of
which is a Liability resulting from noncompliance with any applicable laws,
breach of contract, breach of warranty (in excess of any warranty reserve
specifically established with respect thereto and included on the Orius Latest
Balance Sheet), tort, infringement, claim or lawsuit) and (iii) other
Liabilities expressly disclosed in the Schedules referred to in this Section 5.
5G. Accounts Receivable. Except as set forth on the attached Orius
Accounts Receivable Schedule, all accounts receivable reflected on the Orius
Latest Balance Sheet and all accounts receivable to be reflected on Orius's and
its Subsidiaries' books and records as of the Closing Date (net of allowances
for doubtful accounts as reflected thereon and as determined in accordance with
GAAP consistently applied) are or shall be valid receivables arising in the
ordinary course of business, and are or shall be current. Except as set forth on
the attached Orius Accounts Receivable Schedule, no Person has any Lien on such
receivables or any part thereof, other than Existing Bank Liens, and no
agreement for deduction, free goods, discount or other deferred price or
quantity adjustment has been made with respect to any such receivables.
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5H. Service Warranty; Service Certifications.
(i) All services rendered by Orius and its Subsidiaries (whether
directly or indirectly through independent contractors) have been in conformity
in all material respects with all applicable contractual commitments and all
express warranties, and neither Orius nor any of its Subsidiaries has nor shall
have any Liability for replacement or repair or for other damages relating to or
arising from any of such services, except for amounts incurred in the ordinary
course of business which are immaterial in the aggregate. Neither Orius nor any
of its Subsidiaries has been notified in writing of any claims for (and Orius
has no Knowledge of any threatened claims for) any extraordinary warranty
obligations relating to any of its products or services.
(ii) Orius and its Subsidiaries hold all material registrations,
accreditations and other certifications required for the conduct of their
respective businesses, except where the failure to hold such registrations,
accreditations and other certifications could not reasonably be expected to have
a Material Adverse Effect (all of such registrations, accreditations and
certifications being referred to herein as "Service Certifications"). Orius and
its Subsidiaries are in compliance with the terms and conditions of all such
Service Certifications and no written (and to Orius's Knowledge, no oral)
notices have been received by Orius or any of its Subsidiaries alleging the
failure to hold any Service Certification.
5I. Service Liability. Except as set forth on the attached Orius
Service Liability Schedule, neither Orius nor any of its Subsidiaries has any
Liability (and, to Orius's Knowledge, there is no reasonable basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any Liability) arising out
of any injury to individuals or property with respect to any services rendered
by Orius or any of its Subsidiaries.
5J. No Material Adverse Effect. Since June 30, 1999, there has
occurred no fact, event or circumstance which has had or would reasonably be
expected to have a Material Adverse Effect.
5K. Absence of Certain Developments. Except as expressly contemplated
by this Agreement or as set forth on the attached Orius Developments Schedule,
since June 30, 1999, neither Orius nor any of its Subsidiaries has:
(i) issued any notes, bonds or other debt securities or any capital
stock or other equity securities or any securities or rights convertible,
exchangeable or exercisable into any capital stock or other equity securities;
(ii) borrowed any amount or incurred or become subject to any material
Liabilities, except current Liabilities incurred in the ordinary course of
business consistent with past practice;
(iii) discharged or satisfied any material Lien or paid any material
obligation or Liability, other than current Liabilities paid in the ordinary
course of business;
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(iv) declared, set aside or made any payment or distribution of cash or
other property to any of Orius's shareholders with respect to such shareholder's
capital stock or other equity securities or purchased, redeemed or otherwise
acquired any shares of its capital stock or other equity securities (including
any warrants, options or other rights to acquire its capital stock or other
equity securities);
(v) mortgaged or pledged any of its properties or assets or subjected
them to any Lien, except for Permitted Encumbrances;
(vi) sold, assigned, transferred, leased, licensed or otherwise
encumbered any of its tangible assets, except in the ordinary course of business
consistent with past practice, or canceled any material debts or claims;
(vii) sold, assigned, transferred, leased, licensed or otherwise
encumbered any material Intellectual Property Rights or other intangible assets,
disclosed any material proprietary confidential information to any Person (other
than as contained in the registration statement filed by Orius's predecessor
with the U.S. Securities and Exchange Commission and other than to LISN and the
LISN Shareholder Representative and other than in the ordinary course of
business consistent with past practice in circumstances in which it has imposed
reasonable confidentiality restrictions), or abandoned or permitted to lapse any
Intellectual Property Rights;
(viii) with respect to any of the 35 most highly compensated employees
of Orius and its Subsidiaries on a consolidated basis, made or granted any bonus
or any wage or salary increase (except as required by pre-existing contracts
described on the attached Orius Contracts Schedule), or, with respect to any
employee or group of employees, made or granted any increase in any employee
benefit plan or arrangement, or amended or terminated any existing employee
benefit plan or arrangement or adopted any new employee benefit plan or
arrangement;
(ix) entered into any employment contract involving gross annual
compensation aggregating $75,000 or more or collective bargaining agreement,
written or oral, or modified the terms of any existing such contract or
agreement.
(x) suffered any extraordinary losses or waived any rights of material
value (whether or not in the ordinary course of business or consistent with past
practice) in excess of $100,000 in the aggregate;
(xi) other than as contemplated by the capital expenditure schedule
delivered to the LISN Shareholder Representative during the course of its due
diligence review of Orius, made capital expenditures or commitments therefor
that aggregate in excess of $100,000;
(xii) delayed or postponed the payment of any accounts payable or any
other liability or obligation or agreed with any party to extend the payment
date of any accounts payable or accelerated the collection of any accounts or
notes receivable;
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(xiii) made any loans or advances to, guarantees for the benefit of, or
any Investments in, any Persons (other than advances to Orius's employees in the
ordinary course of business consistent with past practice) in excess of $25,000;
(xiv) made any charitable contributions or pledges exceeding in the
aggregate $25,000;
(xv) suffered any damage, destruction or casualty loss exceeding in the
aggregate $100,000, whether or not covered by insurance;
(xvi) made any change in any method of accounting or accounting
policies or made any write-down in the value of its inventory that is material
or that is other than in the usual, regular and ordinary course of business
consistent with past practice;
(xvii) made any Investment in any Subsidiary, other than those
Subsidiaries listed on the Orius Investments and Orius Subsidiaries Schedule, or
taken any steps to incorporate any Subsidiary, other than Merger Sub;
(xviii) entered into any agreement or arrangement prohibiting or
restricting it from freely engaging in any business or otherwise restricting the
conduct of its business;
(xix) entered into any contract other than in the ordinary course of
business consistent with past practice, entered into any other material
transaction, whether or not in the ordinary course of business or consistent
with past practice, or materially changed any business practice; or
(xx) agreed, whether orally or in writing, to do any of the foregoing.
5L. Assets. Except as set forth on the attached Orius Assets
Schedule, Orius and its Subsidiaries have good and valid title to, a valid
leasehold interest in, or a valid license to use, the properties and assets,
tangible or intangible, shown on the Orius Latest Balance Sheet or acquired
thereafter, free and clear of all Liens, except for properties and assets
disposed of in the ordinary course of business since the date of the Latest
Balance Sheet and except for Liens disclosed on the Orius Latest Balance Sheet
(including any notes thereto) and Permitted Encumbrances and such assets consist
of all of the material assets and properties necessary for the conduct of its
business as presently conducted.
5M. Tax Matters.
(i) Except as set forth on the attached Orius Taxes Schedule:
(a) Orius and its Subsidiaries have filed all Tax Returns which
it is required to file under applicable laws and regulations, and all such Tax
Returns are complete and correct and have been prepared in compliance with all
applicable laws and regulations;
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(b) Orius and its Subsidiaries have paid all Taxes due and owing
by it (whether or not such Taxes are shown or required to be shown on a Tax
Return) and has withheld and paid over to the appropriate taxing authority all
Taxes which it is required to withhold from amounts paid or owing to any
employee, independent contractor, shareholder, creditor or other third party;
(c) neither Orius nor any of its Subsidiaries has waived any
statute of limitations with respect to any Taxes or agreed to any extension of
time for filing any Tax Return which has not been filed; and neither Orius nor
any of its Subsidiaries has consented to extend to a date later than the date
hereof the period in which any Tax may be assessed or collected by any Taxing
Authority;
(d) the accrual for Taxes on the Orius Latest Balance Sheet would
be adequate to pay all Tax liabilities of Orius and its Subsidiaries if its
current tax year were treated as ending on the date of the Orius Latest Balance
Sheet (excluding any amount recorded which is attributable solely to timing
differences between book and Tax income);
(e) since December 31, 1998, neither Orius nor any of its
Subsidiaries has incurred any liability for Taxes other than in the ordinary
course of business;
(f) the federal income Tax Returns of Orius and its Subsidiaries
have not been audited and are open for all tax years after December 31, 1994;
(g) no foreign, federal, state or local tax audits or
administrative or judicial Tax proceedings are pending or being conducted with
respect to Orius or any of its Subsidiaries;
(h) neither Orius nor any of its Subsidiaries has received from
any foreign, federal, state or local taxing authority (including jurisdictions
where Orius or any of its Subsidiaries has filed Tax Returns) any (i) written
notice indicating an intent to open an audit or other review, (ii) request for
information related to Tax matters or (iii) notice of deficiency or proposed
adjustment for any amount of Tax proposed, asserted or assessed by any taxing
authority against Orius or any of its Subsidiaries;
(i) no written, or to Orius's Knowledge, oral claim has ever been
made against Orius or any of its Subsidiaries by a taxing authority in a
jurisdiction where Orius or any of its Subsidiaries do not file Tax Returns that
Orius or any of its Subsidiaries are or may be subject to Taxes assessed by such
jurisdiction;
(j) neither Orius nor any of its Subsidiaries has been a member
of an Affiliated Group (other than a group the common parent of which was
Orius);
(k) neither Orius nor any of its Subsidiaries is a party to or
bound by any Tax allocation or Tax sharing agreement;
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(l) there are no Liens for Taxes (other than Permitted
Encumbrances) upon the assets of Orius or any of its Subsidiaries; and
(m) neither Orius nor any of its Subsidiaries shall be required
to (i) as a result of a change in method of accounting for a taxable period
ending on or prior to the Closing Date, include any adjustment in taxable income
for any taxable period (or portion thereof) ending after the Closing Date, (ii)
as a result of any "closing agreement," as described in Section 7121 of the Code
(or any corresponding provision of state, local or foreign income Tax law)
executed on or before the Closing Date, include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date, (iii) as a result of any sale
reported on the installment method where such sale occurred on or prior to the
Closing Date, include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date, or (iv) as a result of any prepaid amount received on or prior
to the Closing Date, include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date; and
(ii) Neither Orius nor any of its Subsidiaries:
(a) has made an election under Section 341(f) of the Code;
(b) is presently liable for the Taxes of another Person (other
than any of Orius and its Subsidiaries) (1) under Treas. Reg. ss.1.1502-6 (or
comparable provisions of state, local or foreign law), (2) as a transferee or
successor or (3) by contract or indemnity or otherwise;
(c) is a party to any agreement, contract, arrangement, or plan
that has resulted or would result, separately or in the aggregate, in the
payment of any "excess parachute payment" within the meaning of Section 280G of
the Code (or any corresponding provision of state, local or foreign law); or
(d) is or has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
5N. Contracts and Commitments.
(i) Except as expressly contemplated by this Agreement or as set
forth on the attached Orius Contracts Schedule, the attached Orius Intellectual
Property Schedule, the attached Orius Employees Schedule, or the attached Orius
Employee Benefits Schedule, neither Orius nor any of its Subsidiaries is a party
to or bound by any written or oral:
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(a) pension, profit sharing, stock option, employee stock
purchase or other plan or arrangement providing for deferred or other
compensation to employees or any other employee benefit plan, arrangement or
practice, whether formal or informal;
(b) collective bargaining agreement or any other contract with
any labor union, or severance agreements, programs, policies or arrangements;
(c) management agreement, contract for the employment of any
officer, individual employee or other Person on a full-time, part-time,
consulting or other basis providing annual cash or other compensation in excess
of $75,000 or providing for the payment of any cash or other compensation or
benefits upon the consummation of the transactions contemplated hereby;
(d) contract or agreement requiring the consent of any party
thereto upon a change in control of Orius or such Subsidiary, containing any
provision which would result in a modification of any rights or obligations of
any party thereunder upon a change in control of Orius or such Subsidiary or
which would provide any party any remedy (including rescission or liquidated
damages) in the event of a change in control of Orius or such Subsidiary;
(e) contract under which it has advanced or loaned monies to any
other Person or otherwise agreed to advance, loan or invest any funds (other
than advances to Orius's employees in the ordinary course of business consistent
with past practice);
(f) agreement or indenture relating to borrowed money or other
Indebtedness or the mortgaging, pledging or otherwise placing a Lien on any
material asset or material group of assets of Orius or any of its Subsidiaries
or any letter of credit arrangements;
(g) guaranty of any obligation for borrowed money or otherwise
(other than endorsements made for collection in the ordinary course of
business);
(h) lease or agreement under which Orius or any of its
Subsidiaries is lessee of or holds or operates any property, real or personal,
owned by any other Person, except for any lease of personal property under which
the aggregate annual rental payments do not exceed $25,000 and any lease of real
property under which the aggregate annual rental payments do not exceed $50,000;
(i) lease or agreement under which Orius or any of its
Subsidiaries is lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by Orius or such Subsidiary;
(j) license or royalty agreements;
(k) nondisclosure or confidentiality agreements;
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(l) local service agreements (including cleaning, guard service,
lawn and snow removal) and maintenance agreements (including vehicle and
equipment maintenance agreements) involving annual payments in excess of
$50,000;
(m) contract or group of related contracts with the same party or
group of affiliated parties for the purchase of raw materials, commodities,
supplies, products, equipment or other personal property or for the receipt of
services under which the undelivered balance of such products and services has a
selling price in excess of $150,000;
(n) contract or group of related contracts with the same party or
group of affiliated parties for the sale of raw materials, commodities,
supplies, products or other personal property or for the furnishing of services
under which the undelivered balance of such products or services due from Orius
or any of its Subsidiaries has a selling price in excess of $750,000;
(o) other contract or group of related contracts with the same
party or group of affiliated parties continuing over a period of more than six
months from the date or dates thereof, not terminable by Orius or any of its
Subsidiaries upon 30 days' or less notice without penalty or involving more than
$75,000;
(p) contract or group of related contracts requiring the payment
of any fee, penalty or other amount by Orius or any of its Subsidiaries in the
event of any failure to perform or late performance of such contract or
contracts by Orius or such Subsidiary;
(q) contract relating to the marketing, advertising or promotion
of its products;
(r) warranty agreement with respect to services provided (other
than agreements containing commercially standard terms and conditions) or
indemnity agreement with any supplier under which it is obligated to indemnify
such supplier against product liability claims;
(s) agreements relating to the ownership of or investments in any
business or enterprise, including investments in joint ventures and minority
equity investments;
(t) assignment, indemnification or other agreement with respect
to any intangible property (including any Intellectual Property Rights);
(u) agreement under which it has granted any Person any
registration rights (including demand or piggyback registration rights);
(v) broker, agent, sales representative, distribution agreement
or agreement relating to the export and/or import of any goods or equipment;
(w) power of attorney or other similar agreement or grant of
agency;
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(x) contract or agreement prohibiting it from freely engaging in
any business or competing anywhere in the world; or
(y) other agreement which is material to its operations or
business prospects or involves an annual consideration in excess of $250,000,
whether or not in the ordinary course of business.
(ii) Orius Contracts Schedule lists each currently outstanding bid or
proposal for business submitted by Orius or any of its Subsidiaries in excess of
$1,000,000.
(iii) All of the contracts, agreements and instruments set forth or
required to be set forth on the attached Orius Contracts Schedule are valid,
binding and enforceable against Orius (and, to the Knowledge of Orius, against
the other party or parties thereto) in accordance with their respective terms
(except in each case as limited by applicable bankruptcy, reorganization,
insolvency or similar laws) and, assuming they are enforceable against the other
parties thereto, shall be in full force and effect without penalty in accordance
with their terms upon consummation of the transactions contemplated hereby. Each
of Orius and its Subsidiaries has performed all material obligations required to
be performed by it and is not in default under or in breach of nor in receipt of
any written claim (and to its Knowledge there are no claims) of default or
breach under any contract, agreement or instrument to which Orius or such
Subsidiary is subject; no event has occurred which with the passage of time or
the giving of notice or both would result in a default, breach or event of
noncompliance by Orius or any of its Subsidiaries under any material contract,
agreement or instrument to which Orius or any of its Subsidiaries is subject;
except as set forth on the attached Orius Contracts Schedule, neither Orius nor
or any of its Subsidiaries has any present expectation or intention of not fully
performing on a timely basis all such obligations required to be performed by
Orius or such Subsidiary under any contract, agreement or instrument to which
Orius or such Subsidiary is subject; and neither Orius nor or any of its
Subsidiaries has any Knowledge of any breach or cancellation or anticipated
cancellation by the other parties to any contract, agreement, instrument or
commitment to which it is a party. Neither Orius nor any of its Subsidiaries is
a party to any contract, agreement or commitment the performance of which could
reasonably be expected to have a Material Adverse Effect.
(iv) Orius has made available to LISN Shareholder Representative's
special counsel a true and correct copy of each of the written instruments,
plans, contracts and agreements and an accurate description of each of the oral
arrangements, contracts and agreements which are referred to on the attached
Orius Contracts Schedule, together with all amendments, waivers or other changes
thereto.
5O. Intellectual Property Rights.
(i) The attached Orius Intellectual Property Schedule contains a
complete and accurate list of all (a) patented or registered Intellectual
Property Rights owned or, to Orius's Knowledge, used by Orius or any of its
Subsidiaries, (b) pending patent applications and applications for other
registrations of Intellectual Property Rights filed by or on behalf of Orius or
any of its Subsidiaries, and (c) material unregistered Intellectual Property
Rights owned or used by Orius or
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any of its Subsidiaries. The attached Orius Intellectual Property Schedule also
contains a complete and accurate list of all licenses and other rights granted
by Orius or any of its Subsidiaries to any third party with respect to any
Intellectual Property Rights and all licenses and other rights granted by any
third party to Orius or any of its Subsidiaries with respect to any Intellectual
Property Rights, in each case identifying the subject Intellectual Property
Rights. Each of Orius and its Subsidiaries owns and possesses all right, title
and interest to, or has the right to use pursuant to a valid and enforceable
license, all Intellectual Property Rights necessary for the operation of its
business, free and clear of all Liens other than Existing Bank Liens. Except as
set forth on the attached Orius Intellectual Property Schedule, the loss or
expiration of any Intellectual Property Right or related group of Intellectual
Property Rights owned or used by Orius or any of its Subsidiaries has not had
and would not reasonably be expected to have a Material Adverse Effect, and no
loss or expiration of any Intellectual Property Right is threatened, pending or,
to Orius's Knowledge, reasonably foreseeable. Each of Orius and its Subsidiaries
has taken commercially reasonable steps to maintain and protect the Intellectual
Property Rights which it owns.
(ii) Except as set forth on the attached Orius Intellectual
Property Schedule, (a) there have been no claims made against Orius or any of
its Subsidiaries asserting the invalidity, misuse or unenforceability of any of
the Intellectual Property Rights owned or used by Orius or any of its
Subsidiaries and, to Orius's Knowledge, there is no basis for any such claim,
(b) neither Orius nor any of its Subsidiaries has received any written notices
of, and to Orius's Knowledge neither Orius nor any of its Subsidiaries has
received any unwritten notice of, and has no Knowledge of, any facts which
indicate a likelihood of, any infringement or misappropriation by, or conflict
with, any third party with respect to any Intellectual Property Rights
(including any demand or request that Orius or any of its Subsidiaries license
any rights from a third party), (c) to Orius's Knowledge the conduct of Orius's
and its Subsidiaries' businesses has not infringed, misappropriated or
conflicted with and does not infringe, misappropriate or conflict with any
Intellectual Property Rights of other Persons, and (d) to Orius's Knowledge, the
Intellectual Property Rights owned by or licensed to Orius or any of its
Subsidiaries have not been infringed, misappropriated or conflicted by other
Persons. The transactions contemplated by this Agreement will have no Material
Adverse Effect on Orius's and its Subsidiaries' right, title or interest in and
to the Intellectual Property Rights listed on the Orius Intellectual Property
Schedule, and all of such Intellectual Property Rights shall be owned or
available for use by Orius and its Subsidiaries on terms and conditions
immediately after the Closing which are substantially identical to those in
effect immediately prior to Closing.
5P. Litigation, etc. Except as set forth on the attached Orius
Litigation Schedule, there are no (and, in respect of Orius and NATG, L.L.C. and
their respective corporate predecessors, since inception there have not been
any, and in respect of any of Orius's Subsidiaries, since the date of
acquisition thereof by Orius there have not been any) actions, suits,
proceedings (including any arbitration proceedings), orders, investigations or
claims pending or, to Orius's Knowledge, threatened against or any material
actions, suits, proceedings (including any arbitration proceedings), orders,
investigations or claims affecting Orius or any of its Subsidiaries (or to
Orius's Knowledge, pending or threatened against or any actions, suits,
proceedings (including any arbitration proceedings), orders, investigations or
claims affecting any of the officers, directors or employees of Orius with
respect to its business activities), or pending or threatened by Orius or any of
its Subsidiaries against any Person, at law or in equity, or before or by any
governmental department,
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commission, board, bureau, agency or instrumentality (including any actions,
suits, proceedings or investigations with respect to the transactions
contemplated by this Agreement); neither Orius nor any of its Subsidiaries is
subject to any arbitration proceedings under collective bargaining agreements or
otherwise or any governmental investigations or inquiries; and, to Orius's
Knowledge, there is no basis for any of the foregoing. The foregoing includes,
without limitation, actions pending or threatened involving the prior employment
of any of the 35 most highly compensated employees of Orius and its Subsidiaries
on a consolidated basis, their use in connection with Orius's or any of its
Subsidiaries' businesses of any information or techniques allegedly proprietary
to any of their former employers or their obligations under any agreements with
prior employers. Except as set forth on the attached Orius Litigation Schedule,
Orius is fully insured with respect to each of the matters set forth on the
attached Orius Litigation Schedule, and neither Orius nor any of its
Subsidiaries is subject to any judgment, order or decree of any court or other
governmental agency, and neither Orius nor any of its Subsidiaries has received
any opinion or memorandum or advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability which could have a Material
Adverse Effect.
5Q. Brokerage. Except for Orius's obligations to Deutsche Bank
Securities, Inc. pursuant to the agreement described on the Orius Contracts
Schedule attached hereto, there are and shall be no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement to which Orius or any of its Subsidiaries is a party or to which Orius
or any of its Subsidiaries is subject, it being acknowledged and agreed that any
such brokerage commissions, finder's fees or similar compensation shall be
deemed to be Indebtedness of Orius for purposes of this Agreement.
5R. Insurance. The attached Orius Insurance Schedule contains
a description of each insurance policy maintained by Orius and any of its
Subsidiaries with respect to its and any of its Subsidiaries' properties, assets
and business, together with a statement of the aggregate amount of claims paid
out, and claims pending, under each such insurance policy or other arrangement
through the date hereof. All such policies are in full force and effect as of
the Closing, all premiums due thereon have been paid, and Orius and its
Subsidiaries are otherwise in compliance in all material respects with the terms
and provisions of such policies. Neither Orius nor any of its Subsidiaries is in
default with respect to its obligations under any insurance policy maintained by
it, and neither Orius nor any of its Subsidiaries has received any notice of
cancellation or non-renewal of any such policy or arrangement nor is the
termination of any such policies or arrangements threatened. Neither Orius nor
any of its Subsidiaries has ever been denied insurance coverage, and there is no
claim pending under any policies or arrangements as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or
arrangements. Neither Orius nor any of its Subsidiaries has received any notice
from any of its insurance carriers that any insurance premiums will be increased
in the future or that any insurance coverage presently provided for will not be
available to Orius or any of its Subsidiaries in the future on substantially the
same terms as now in effect and none of such policies or arrangements provides
for any retrospective premium adjustment, experienced-based liability or loss
sharing arrangement affecting Orius or any of its Subsidiaries. A true and
complete list of all outstanding claims for medical expenses in excess of
$10,000 made by or with respect to any single employee of Orius or any of its
Subsidiaries is set forth in the Orius Insurance Schedule. Except as set forth
on the attached Orius Insurance Schedule,
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Orius has no self-insurance or co-insurance programs, and the reserves set forth
on the Orius Latest Balance Sheet are adequate to cover all anticipated
Liabilities with respect to any such self-insurance or co-insurance programs.
5S. Employees. To Orius's Knowledge, no executive or key
employee of Orius or any of its Subsidiaries and no group of employees of Orius
or any of its Subsidiaries has any plans to terminate employment with Orius or
such Subsidiary. Orius has no material labor relations problems (including any
union organization activities, threatened or actual strikes or work stoppages or
material grievances). None of Orius, the Orius Stockholders nor, to Orius's
Knowledge, any of its other employees or consultants are subject to any
noncompete, nondisclosure, confidentiality, employment, consulting or other
agreement or judgment, decree or order of any court or administrative agency,
relating to, affecting or in conflict with the present or proposed business
activities of Orius and its Subsidiaries or such Person's duties to Orius and
its Subsidiaries, except for agreements between Orius and its present and former
employees. Orius has not received any written notice alleging that any violation
of any such agreements has occurred, and to Orius's Knowledge neither Orius nor
any of its Subsidiaries has received any unwritten notice thereof. The Orius
Employees Schedule attached hereto contains a correct and complete list of all
employees and consultants of Orius which have executed and delivered to Orius
any agreement providing for the nondisclosure by such Person of any confidential
information of Orius.
5T. ERISA.
(i) Except as set forth on the attached Orius Employee
Benefits Schedule, Orius does not have any obligation to contribute to (or any
other liability, including current or potential withdrawal liability, with
respect to) any "multi-employer plan" (as defined in Section 3(37) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")).
(ii) Orius does not maintain or have any obligation to
contribute to (or any other liability with respect to) any plan or arrangement,
whether or not terminated, which provides medical, health, life insurance or
other welfare-type benefits for current or future retired or terminated
employees or any dependents of such employees (except for limited continued
medical benefit coverage required to be provided under Section 4980B of the Code
("COBRA") or as required under applicable state law).
(iii) Orius does not maintain, contribute to or have any
actual or potential liability under (or with respect to) any employee plan which
is a "defined benefit plan" (as defined in Section 3(35) of ERISA).
(iv) Except as set forth on the attached Orius Employee
Benefits Schedule, Orius does not maintain, contribute to or have any actual or
potential liability under (or with respect to) any employee plan which is a
"defined contribution plan" (as defined in Section 3(34) of ERISA) (the
"Plans"), whether or not terminated.
(v) Except as set forth on the attached Orius Employee
Benefits Schedule under the heading "Other Plans" (the "Other Plans"), Orius
does not maintain, contribute to or have any
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actual or potential liability under (or with respect to) any plan or arrangement
providing benefits or remuneration to current or former employees or independent
contractors, including any employment contract, bonus or incentive plan, plan
for deferred compensation, employee health or other welfare benefit plan,
severance arrangement or other material policy, program or arrangement, whether
or not terminated. The attached Orius Employee Benefits Schedule sets forth the
aggregate amount of bonuses and other incentive compensation reasonably expected
to be paid by Orius for the fiscal year ending December 31, 1999.
(vi) With respect to the Plans set forth on the attached Orius
Employee Benefits Schedule, all required payments, premiums, contributions,
reimbursements or accruals for all periods ending prior to or as of the Closing
Date shall have been made or properly accrued. None of the Plans has any
material unfunded liabilities which are not reflected on the Latest Balance
Sheet.
(vii) Except as set forth on the attached Orius Employee
Benefits Schedule, the Plans and all related trusts, insurance contracts and
funds have been maintained, funded and administered in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
applicable laws. Except as set forth on the attached Orius Employee Benefits
Schedule, Orius has timely complied with all reporting and disclosure
obligations as they apply to the Plans, and Orius has complied with the
requirements of COBRA. To Orius's Knowledge, none of Orius or any trustee or
administrator of any Plan has engaged in any transaction with respect to the
Plans which would subject Orius or any trustee or administrator of the Plans, or
any party dealing with any such Plan, nor do the transactions contemplated by
this Agreement constitute transactions which would subject any such party, to
either a civil penalty assessed pursuant to Part 502(i) of ERISA, or any other
penalty or excise tax or the tax or penalty on prohibited transactions imposed
by Section 4975 of the Code or any other penalty or excise tax. No actions,
suits or claims with respect to the assets of the Plans (other than routine
claims for benefits) are pending or, to Orius's Knowledge, threatened which
could result in or subject Orius to any liability and there are no circumstances
which would give rise to or be expected to give rise to any such actions, suits
or claims.
(viii) The attached Orius Employee Benefits Schedule sets
forth whether or not a favorable determination letter from the Internal Revenue
Service has been received by Orius with respect to each Plan that it is
qualified under Section 401(a) of the Code (including requirements imposed by
the Tax Reform Act of 1986 and subsequent legislation), and, to Orius's
Knowledge, there are no circumstances which would cause a Plan to lose such
qualified status.
(ix) For purposes of this Section 5T, "Orius" shall be deemed
to include all organizations under common control with Orius pursuant to Section
414 of the Code.
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5U. Compliance with Laws; Permits; Certain Operations. Except
as set forth on the attached Orius Compliance Schedule:
(i) Each of Orius and its Subsidiaries is in material
compliance with and, throughout the immediately preceding 5 year period has
complied in all material respects with, all applicable laws, ordinances, codes,
rules, requirements and regulations of foreign, federal, state and local
governments and all agencies thereof relating to the operation of its business
and the maintenance and operation of its properties and assets. During the five
year period ending on the Closing Date, no written (or, to Orius's Knowledge,
oral) notices have been received by and no claims have been filed against Orius
or any of its Subsidiaries alleging a violation of any such laws, ordinances,
codes, rules, requirements or regulations.
(ii) Each of Orius and its Subsidiaries holds and is in
compliance with all permits, licenses, bonds, approvals, certificates,
registrations, accreditations and other authorizations of all foreign, federal,
state and local governmental agencies required for the conduct of its business
and the ownership of its properties (including as the same relate to
Environmental and Safety Requirements), and the attached Orius Permits Schedule
sets forth a description of all of such material permits, licenses, bonds,
approvals, certificates, registrations, accreditations and other authorizations.
To Orius's Knowledge, no notices have been received by Orius or any of its
Subsidiaries alleging the failure to hold any of the foregoing. All of such
permits, licenses, bonds, approvals, accreditations, certificates, registrations
and authorizations will be available for use by Orius and its Subsidiaries, as
the case may be, immediately after the Closing.
5V. Environmental and Safety Matters.
(i) Except as set forth on the attached Orius Environmental
Schedule:
(a) Each of Orius and its Subsidiaries has complied
in all material respects with and is in material compliance with all
Environmental and Safety Requirements. Neither Orius nor any of its
Subsidiaries have received any written or oral notice, report or
information regarding any actual or alleged violation of Environmental
and Safety Requirements or any liabilities or potential liabilities
relating to it or its facilities arising under Environmental and Safety
Requirements.
(b) Neither this Agreement nor the consummation of
the transactions contemplated hereby will result in any obligations for
site investigation or cleanup, or notification to or consent of any
government agencies or third parties under any Environmental and Safety
Requirements (including any so called "transaction-triggered" or
"responsible property transfer" laws and regulations).
(c) None of the following exists at any property or
facility owned, occupied or operated by Orius or any of its
Subsidiaries:
(1) underground storage tanks;
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(2) asbestos-containing material in any form
or condition;
(3) materials or equipment containing
polychlorinated biphenyls; or
(4) landfills, surface impoundments or other
disposal areas.
(d) Neither Orius nor any of its Subsidiaries has
treated, stored, disposed of, arranged for or permitted the disposal
of, transported, handled or Released any substance (including any
hazardous substance) or owned, occupied or operated any facility or
property (and no such property or facility is contaminated by any such
substance) in a manner that has given or could give rise to any
Liabilities (including any Liability for response costs, corrective
action costs, personal injury, natural resource damages, property
damage or attorneys fees or any investigative, corrective or remedial
obligations) pursuant to CERCLA or any other Environmental and Safety
Requirements.
(e) Neither Orius nor any of its Subsidiaries has,
either expressly or by operation of law, assumed or undertaken any
liability or corrective, investigatory or remedial obligation of any
other Person relating to any Environmental and Safety Requirements.
(f) No Environmental Lien has attached to any
property owned, leased or operated by Orius or any of its Subsidiaries.
5W. Affiliated Transactions. Except as set forth on the
attached Orius Affiliated Transactions Schedule, no officer, director,
shareholder or Affiliate of Orius or any of its Subsidiaries or, to Orius's
Knowledge, any individual related by blood, marriage or adoption to any such
individual or any entity in which any such Person or individual owns any
beneficial interest, is a party to any agreement, contract, commitment or
transaction with Orius or any Subsidiary of Orius or has any material interest
in any material property used by Orius or any of its Subsidiaries (including any
Intellectual Property Rights) involving in any case liabilities or assets with
fair market value of $100,000 or more, or involving payments or payment
obligations aggregating $100,000 in any twelve-month period.
5X. Suppliers and Customers. The Orius Suppliers and Customers
Schedule attached hereto sets forth a list of the top ten customers and
suppliers of Orius by dollar volume of sales and purchases, respectively, for
the fiscal year ended December 31, 1998. Neither Orius nor any of its
Subsidiaries has received any indication from any material supplier to the
effect that, and to Orius's Knowledge, neither Orius nor any of its Subsidiaries
has any reason to believe that, such supplier will stop, materially decrease the
rate of, or materially change the terms (whether related to payment, price or
otherwise) with respect to, supplying materials, products or services to any of
Orius and its Subsidiaries (whether as a result of the consummation of the
transactions contemplated hereby or otherwise). To Orius's Knowledge, neither
Orius nor any of its Subsidiaries has received any indication from any material
customer of Orius to the effect that, and to Orius's Knowledge, neither Orius
nor any of its Subsidiaries has any reason to believe that, such customer will
stop, or
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materially decrease the rate of, buying products of Orius (whether as a result
of the consummation of the transactions contemplated hereby or otherwise).
5Y. Real Property.
(i) The Orius Real Property Schedule sets forth the address
and lists and describes briefly all land, together with all buildings located
thereon, owned by Orius or any of its Subsidiaries (the "Orius Owned Real
Property"). With respect to each such parcel of Orius Owned Real Property and
except as set forth on the Orius Real Property Schedule:
(a) the identified owner has good title to the parcel
of real property, free and clear of any Lien, easement,
covenant, or other restriction as of the Closing Date, except
Permitted Encumbrances;
(b) there are no pending or, to the Knowledge of
Orius, threatened condemnation, expropriation or other eminent
domain proceedings, lawsuits, or administrative actions
relating to the Orius Owned Real Property or other matters
affecting adversely the current use, occupancy, or value
thereof;
(c) the legal description for the parcel contained in
the deed describes such parcel fully and adequately, the
buildings and improvements are located within the boundary
lines of the described parcels of land, are not in violation
of applicable setback requirements, zoning laws, and
ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classifications),
and do not encroach on any easement which may burden the land,
the land does not serve any adjoining property for any purpose
inconsistent with the use of the land, and the property is not
located within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
(d) all facilities have received all approvals of
governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof
and have been operated and maintained in accordance with
applicable laws, rules and regulations;
(e) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to
any party or parties the right of use or occupancy of any
portion of the parcel of Orius Owned Real Property, other than
tenants under any leases disclosed in the Orius Real Property
Schedule who are in possession of space of which they are
entitled;
(f) there are no outstanding options or rights of
first refusal to purchase the parcel of Orius Owned Real
Property, or any portion thereof or interest therein;
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(g) there are no parties (other than Orius) in
possession of the parcel of Orius Owned Real Property, other
than tenants under any leases disclosed in the Orius Real
Property Schedule who are in possession of space of which they
are entitled;
(h) all facilities located on the parcel of Orius
Owned Real Property are supplied with utilities and other
services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer,
and storm sewer, all of which services are adequate in
accordance with all applicable laws, ordinances, rules and
regulations and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefitting the
parcel of Orius Owned Real Property; and
(i) each parcel of Orius Owned Real Property abuts on
and has direct vehicular access to a public road, or has
access to a public road via a permanent, irrevocable,
appurtenant easement benefitting the parcel of real property,
and access to the property is provided by paved public
right-of-way with adequate curb cuts available.
(ii) The Orius Real Property Schedule attached hereto sets
forth a list of all of the leases, subleases and licenses ("Orius Leases") of
real property (the "Orius Leased Real Property"), including the address of the
Orius Leased Real Property, in which Orius or any of its Subsidiaries has a
leasehold, subleasehold or licensed interest, other than any lease which may be
terminated by either party without liability to the other on less than 90 days
notice or involving aggregate annual rentals of less than $50,000, not otherwise
involving any material liability and the termination of which would not have a
Material Adverse Effect. Orius or such Subsidiary holds a valid and existing
leasehold, subleasehold or license interest under each of the Orius Leases. With
respect to each Orius Lease listed on the attached Orius Real Property Schedule,
neither Orius, any of its Subsidiaries, nor, to the Knowledge of Orius, any
other party to the Orius Lease is in breach or default under the Orius Lease,
and no event has occurred or circumstance exists which, with the delivery of
notice, passage of time or both, would constitute such a breach or default or
permit the termination, modification or acceleration of rent under the Orius
Lease, there are no disputes, oral agreements, or forbearance programs in effect
as to such Orius Lease and neither Orius nor any of its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any
interest in the Orius Lease. Except for the Orius Leased Real Property, and the
Orius Owned Real Property, there is no real property which is leased or
otherwise used in Orius's business.
5Z. Regulatory Status. Since its date of incorporation,
neither Orius nor any of its Subsidiaries has been, and as of the Closing Date
shall not be, a "United States real property holding corporation," as defined in
Section 897(c)(2) of the Code and in Section 1.897-2(b) of the Treasury
Regulations issued thereunder. Neither Orius nor any of its Subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined under the
Investment Orius Act of 1940, as amended. Neither Orius nor any of its
Subsidiaries is subject to any law which regulates the incurring of indebtedness
(other than certain corporation law statutes which prohibit a corporation from
incurring indebtedness if doing so would cause such corporation to become
insolvent) by Orius or such Subsidiary,
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including any laws relating to common contract carriers or the sale of
electricity, gas, steam, water or other public utility services.
5AA. Merger Sub.
(i) Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio, has been
formed solely for the purpose of effectuating the transactions contemplated
hereby and has not engaged in any other business actively since its formation in
October 1999. Merger Sub possesses all requisite corporate power and authority
necessary to carry out the transactions contemplated by this Agreement. The
copies of Merger Sub's charter documents and bylaws which have been furnished to
LISN reflect all amendments made thereto at any time prior to the date of this
Agreement and are correct and complete. The execution, delivery and performance
of this Agreement and all of the other agreements and instruments contemplated
hereby to which Merger Sub is a party, and the consummation of the transactions
contemplated hereby have been duly authorized by Merger Sub. This Agreement
constitutes a valid and binding obligation of Merger Sub, enforceable in
accordance with its terms (except in each case as limited by applicable
bankruptcy, reorganization, insolvency or similar laws), and all other
instruments contemplated hereby to which Merger Sub is a party, when executed
and delivered by Merger Sub in accordance with the terms hereof and thereof,
shall each constitute a valid and binding obligation of Merger Sub, enforceable
in accordance with their respective terms (except in each case as limited by
applicable bankruptcy, reorganization, insolvency or similar laws).
(ii) As of the date hereof and after giving effect to the
transactions contemplated hereunder, the authorized capital stock of Merger Sub
consists of 10,000 shares of common stock, all of which are issued and
outstanding and are held beneficially and of record by Orius. As of the date
hereof and as of the Closing and immediately thereafter, all of the outstanding
shares of Merger Sub's capital stock are or shall be validly issued, fully paid
and nonassessable. Except for such shares of outstanding common stock, Merger
Sub does not have and as of the Closing Date will not have outstanding any stock
or securities, or any stock or securities convertible into or exercisable or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor any rights or options to subscribe for or to
purchase its capital stock or any stock or securities directly or indirectly
convertible into or exchangeable for its capital stock or any stock appreciation
rights or phantom stock plans.
5BB. Disclosure. Neither this Agreement nor any of the
Schedules attached hereto nor any of the written statements, certificates or
other items prepared and delivered to LISN, the LISN Shareholders or the
Investors by or on behalf of Orius or the Orius Stockholders upon execution of
any of this Agreement, the Purchase Agreement, the HIG Call Agreement, the HIG
Put Agreement, the Joinder Agreements, the Orius Call Agreements, the Orius Put
Agreements, and the Pledge and Voting Agreements, or any of the agreements
contemplated hereby or to induce the consummation of any of the transactions
contemplated hereby or thereby, when taken together as a whole, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they were made, not misleading. There is no fact which Orius has not
disclosed to the LISN Shareholder Representative
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in writing and of which any of its officers, directors or executive employees is
aware which has had or would reasonably be expected to have a Material Adverse
Effect.
5CC. Closing Date. The representations and warranties of Orius
contained in this Section 5 and elsewhere in this Agreement and all information
contained in any of the Schedules attached hereto or any of the written
statements, certificates or other items prepared and delivered to LISN, the LISN
Shareholders or the Investors by or on behalf of Orius or the Orius Stockholders
upon execution of any of this Agreement, the Purchase Agreement, the HIG Call
Agreement, the HIG Put Agreement, the Joinder Agreements, the Orius Call
Agreements, the Orius Put Agreements, and the Pledge and Voting Agreements, or
any of the agreements contemplated hereby or to induce the consummation of any
of the transactions contemplated hereby or thereby shall be true and correct on
the Closing Date as though then made and as though the Closing Date was
substituted for the date of this Agreement throughout such representations and
warranties, except in any case in which a representation and warranty expressly
refers to a different date, in which case such representation and warranty shall
be true and correct as of such date.
Section 6. Representations and Warranties of LISN. As a
material inducement to Orius and the Orius Stockholders to enter into this
Agreement and the agreements contemplated hereby to which such Person is a party
and to consummate the transactions contemplated hereby and
by such other agreements, LISN hereby represents and warrants to Orius and the
Orius Stockholders as follows:
6A. Organization, Corporate Power and Licenses. LISN is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio, and is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to qualify
(which jurisdictions are listed on the LISN Organization, Corporate Power and
Licenses Schedule attached hereto), except where the failure to so qualify would
not have a Material Adverse Effect. LISN possesses all requisite corporate power
and authority necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement. The copies of LISN's
articles of incorporation and Code of Regulations which have been furnished to
Orius' counsel reflect all amendments made thereto at any time prior to the date
of this Agreement and are correct and complete. The articles of incorporation
furnished to Orius will, as of the Closing Date, reflect all amendments made
thereto and will be correct and complete.
6B. Capital Stock and Related Matters.
(i) As of the date hereof, and without giving effect to any of
the transactions contemplated hereby or by the Other Reorganization Agreements,
the authorized capital stock of LISN consists of 270,000 shares of common stock,
(A) 50,000 of which are designated Class A Common Stock ("Class A Common"), (B)
160,000 of which are designated Class B Common Stock ("Class B Common"), and (C)
60,000 of which are designated Class C Common Stock ("Class C Common"), and
250,000 shares of preferred stock, (A) 200,000 of which are designated Series A
Preferred Stock ("Series A Preferred"), and (B) 50,000 of which are designated
Series B Preferred Stock ("Series B Preferred"). No shares of Class A Common,
147,022.58 shares of Class B
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Common, no shares of Class C Common, 90,879.51 shares of Series A Preferred, and
no shares of Series B Preferred are issued and outstanding and are held
beneficially and of record by the LISN Shareholders as set forth on the LISN
Capitalization Schedule attached hereto (free and clear of all Encumbrances,
except Encumbrances pursuant to the LISN Shareholders Agreement, as defined
below) and 3,398.30 shares of Class A Common are reserved for issuance upon
exercise of Existing LISN Employee Options. Other than the outstanding shares of
LISN Common and LISN Preferred described above, LISN does not have and as of the
Closing Date will not have outstanding any stock or securities, or any stock or
securities convertible into or exercisable or exchangeable for any shares of its
capital stock or containing any profit participation features, nor any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities directly or indirectly convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom stock plans. LISN is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock, other than as expressly
provided in this Agreement and, as of the Closing, pursuant to the articles of
incorporation. As of the date hereof and as of the Closing and immediately
thereafter, all of the outstanding shares of LISN's capital stock are or shall
be validly issued, fully paid and nonassessable. Each of the Existing LISN
Employee Options was issued pursuant to an option agreement in the form
previously delivered to LISN and the terms thereof are set forth in such option
agreement and the Stock Option Plan.
(ii) Prior to the execution and delivery of the Investor
Rights Agreement, except for the Shareholder Agreement dated May 28, 1999, by
and among LISN and the LISN Shareholders a party thereto (the "LISN Shareholders
Agreement") and the Company's articles of incorporation, there are no agreements
or understandings between LISN's shareholders or among any other Person and
binding upon LISN with respect to the voting or transfer of LISN's capital stock
or with respect to any other aspect of LISN's governance.
6C. Subsidiaries; Investments. Except as set forth on the
attached LISN Investments and LISN Subsidiaries Schedule, LISN does not own or
hold the right to acquire any shares of stock or any other security or interest
in any other Person. The attached LISN Investments and LISN Subsidiaries
Schedule correctly sets forth the name of each Subsidiary, the jurisdiction of
its incorporation and the Persons owning the outstanding capital stock of such
Subsidiary. Each Subsidiary is duly organized and validly existing under the
laws of the jurisdiction of its incorporation and possesses all requisite
corporate power and authority necessary to own its properties and to carry on
its businesses as now being conducted and as presently proposed to be conducted
and is qualified to do business in every jurisdiction in which its ownership of
property or the conduct of business requires it to qualify, except where the
failure to so qualify would not have a Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary are validly issued, fully
paid and nonassessable, and all such shares are owned by LISN or another
Subsidiary free and clear of any Lien (other than Existing Bank Liens) and are
not subject to any option or right to purchase any such shares. Except as set
forth on the LISN Investments and LISN Subsidiaries Schedule attached hereto,
LISN has never had any Subsidiaries. Except as set forth on the LISN Investments
and LISN Subsidiaries Schedule, LISN does not have any obligation to make any
additional Investments in any Person.
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6D. Authorization; No Breach. The execution, delivery and
performance of this Agreement and all of the other agreements and instruments
contemplated hereby to which LISN is a party, and the consummation of the
transactions contemplated hereby and by the Other Reorganization Agreements have
been duly authorized by LISN. This Agreement constitutes a valid and binding
obligation of LISN, enforceable in accordance with its terms, and all Other
Reorganization Agreements and instruments contemplated hereby to which LISN is a
party, when executed and delivered by LISN in accordance with the terms hereof
and thereof, shall each constitute a valid and binding obligation of LISN,
enforceable in accordance with their respective terms (except in each case as
limited by applicable bankruptcy, reorganization, insolvency or similar laws).
Except as set forth on the attached LISN Restrictions Schedule, the execution
and delivery by LISN of this Agreement and the Other Reorganization Agreements
and instruments contemplated hereby and thereby to which LISN is a party, the
consummation of the transactions contemplated by this Agreement and the Other
Reorganization Agreements to which LISN is a party and the fulfillment of and
compliance with the respective terms hereof and thereof by LISN do not and shall
not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under (whether with or without the
passage of time, the giving of notice or both), (iii) result in the creation of
any Lien upon LISN's or any of its Subsidiaries' capital stock or assets
pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of, or (vi) require
any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any third party or any court or administrative
or governmental body or agency pursuant to, LISN's articles of incorporation or
Code of Regulations, any of its Subsidiaries' charter or Code of Regulations or
bylaws, or any law, statute, rule or regulation to which LISN or any of its
Subsidiaries is subject, or any agreement, instrument, order, judgment or decree
to which LISN or any of its Subsidiaries is subject, except in such cases in
which the failure to obtain any such authorization, consent, approval, exemption
or to provide such notice or make such filing could not reasonably be expected
to have a Material Adverse Effect (it being understood and agreed that this
exception does not apply to any representation as to any contract, agreement or
document required to be listed on the attached LISN Contracts Schedule). Neither
LISN, any of its Subsidiaries nor any of the LISN Shareholders is a party to or
bound by any written or, to the Knowledge of LISN, oral agreement or
understanding with respect to an LISN Transaction other than this Agreement and
the other agreements contemplated hereby. Neither LISN, nor to LISN's Knowledge,
HIG has breached any of its respective obligations pursuant to the Exclusivity
Agreement.
6E. Financial Statements. Attached hereto as the LISN
Financial Statements Schedule are the following financial statements:
(i) the audited balance sheets of LISN, Inc. as of December
31, 1996, December 31, 1997 and December 31, 1998, and the related statements of
income and cash flows (or the equivalent) for the fiscal years then ended; and
(ii) the unaudited consolidated balance sheet of LISN as of
August 31, 1999 (the "LISN Latest Balance Sheet"), and the related statements of
income and cash flows (or the equivalent) for the eight-month period then ended.
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Each of the foregoing financial statements (including in all cases the notes
thereto, if any) when delivered pursuant to Section 6M above is consistent with
the books and records of LISN and its Subsidiaries, fairly presents the
financial condition and operating results of LISN and its Subsidiaries and has
been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby, subject in the case of the unaudited financial
statements to the absence of footnote disclosures and to normal year-end audit
adjustments (none of which footnote disclosures or year-end audit adjustments
would, alone or in the aggregate, be materially adverse to the business,
operations, assets, liabilities, financial condition, operating results, cash
flow or net worth of LISN and its Subsidiaries, taken as a whole).
6F. Absence of Undisclosed Liabilities. Except as set forth on
the attached LISN Liabilities Schedule and other than any Liability which
individually is in an amount less than $50,000 and which collectively with all
other Liabilities arising from the same or similar facts or circumstances is
less than $150,000 in the aggregate, neither LISN nor any of its Subsidiaries
has any Liability arising out of transactions entered into at or prior to the
date hereof, or any action or inaction at or prior to the date hereof, or any
state of facts existing at or prior to the date hereof, other than: (i)
Liabilities set forth on the liabilities side of the LISN Latest Balance Sheet
(including any notes thereto), (ii) Liabilities which have arisen after the date
of the LISN Latest Balance Sheet in the ordinary course of business (none of
which is a Liability resulting from noncompliance with any applicable laws,
breach of contract, breach of warranty (in excess of any warranty reserve
specifically established with respect thereto and included on the LISN Latest
Balance Sheet), tort, infringement, claim or lawsuit) and (iii) other
Liabilities expressly disclosed in the Schedules referred to in this Section 6.
6G. Accounts Receivable. Except as set forth on the attached
LISN Accounts Receivable Schedule, all accounts receivable reflected on the LISN
Latest Balance Sheet and all accounts receivable to be reflected on LISN's and
its Subsidiaries' books and records as of the Closing Date (net of allowances
for doubtful accounts as reflected thereon and as determined in accordance with
GAAP consistently applied) are or shall be valid receivables arising in the
ordinary course of business, and are or shall be current. Except as set forth on
the attached LISN Accounts Receivable Schedule, no Person has any Lien on such
receivables or any part thereof, other than Existing Bank Liens, and no
agreement for deduction, free goods, discount or other deferred price or
quantity adjustment has been made with respect to any such receivables.
6H. Service Warranty; Service Certifications.
(i) All services rendered by LISN and its Subsidiaries
(whether directly or indirectly through independent contractors) have been in
conformity in all material respects with all applicable contractual commitments
and all express warranties, and neither LISN nor any of its Subsidiaries has nor
shall have any Liability for replacement or repair or for other damages relating
to or arising from any of such services, except for amounts incurred in the
ordinary course of business which are immaterial in the aggregate. Neither LISN
nor any of its Subsidiaries has been notified in writing of any claims for (and
LISN has no Knowledge of any threatened claims for) any extraordinary warranty
obligations relating to any of its products or services.
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(ii) LISN and its Subsidiaries hold all material
registrations, accreditations and other certifications required for the conduct
of their respective businesses, except where the failure to hold such
registrations, accreditations and other certifications could not reasonably be
expected to have a Material Adverse Effect (all of such registrations,
accreditations and certifications being referred to herein as "Service
Certifications"). LISN and its Subsidiaries are in compliance with the terms and
conditions of all such Service Certifications and no written (and to LISN's
Knowledge, no oral) notices have been received by LISN or any of its
Subsidiaries alleging the failure to hold any Service Certification.
6I. Service Liability. Except as set forth on the attached
LISN Service Liability Schedule, neither LISN nor any of its Subsidiaries has
any Liability (and, to LISN's Knowledge, there is no reasonable basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any Liability) arising out
of any injury to individuals or property with respect to any services rendered
by LISN or any of its Subsidiaries.
6J. No Material Adverse Effect. Since June 30, 1999, there has
occurred no fact, event or circumstance which has had or would reasonably be
expected to have a Material Adverse Effect.
6K. Absence of Certain Developments. Except as expressly
contemplated by this Agreement or as set forth on the attached LISN Developments
Schedule, since June 30, 1999, neither LISN nor any of its Subsidiaries has:
(i) issued any notes, bonds or other debt securities or any
capital stock or other equity securities or any securities or rights
convertible, exchangeable or exercisable into any capital stock or other equity
securities;
(ii) borrowed any amount or incurred or become subject to any
material Liabilities, except current Liabilities incurred in the ordinary course
of business consistent with past practice;
(iii) discharged or satisfied any material Lien or paid any
material obligation or Liability, other than current Liabilities paid in the
ordinary course of business;
(iv) declared, set aside or made any payment or distribution
of cash or other property to any of LISN's shareholders with respect to such
shareholder's capital stock or other equity securities or purchased, redeemed or
otherwise acquired any shares of its capital stock or other equity securities
(including any warrants, options or other rights to acquire its capital stock or
other equity securities);
(v) mortgaged or pledged any of its properties or assets or
subjected them to any Lien, except for Permitted Encumbrances;
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(vi) sold, assigned, transferred, leased, licensed or
otherwise encumbered any of its tangible assets, except in the ordinary course
of business consistent with past practice, or canceled any material debts or
claims;
(vii) sold, assigned, transferred, leased, licensed or
otherwise encumbered any material Intellectual Property Rights or other
intangible assets, disclosed any material proprietary confidential information
to any Person (other than to Orius and the Orius Stockholders Representative and
other than in the ordinary course of business consistent with past practice in
circumstances in which it has imposed reasonable confidentiality restrictions),
or abandoned or permitted to lapse any Intellectual Property Rights;
(viii) with respect to any of the 35 most highly compensated
employees of LISN and its Subsidiaries on a consolidated basis, made or granted
any bonus or any wage or salary increase (except as required by pre-existing
contracts described on the attached LISN Contracts Schedule), or, with respect
to any employee or group of employees, made or granted any increase in any
employee benefit plan or arrangement, or amended or terminated any existing
employee benefit plan or arrangement or adopted any new employee benefit plan or
arrangement;
(ix) entered into any employment contract involving gross
annual compensation aggregating $75,000 or more or collective bargaining
agreement, written or oral, or modified the terms of any existing such contract
or agreement.
(x) suffered any extraordinary losses or waived any rights of
material value (whether or not in the ordinary course of business or consistent
with past practice) in excess of $100,000 in the aggregate;
(xi) other than as contemplated by the capital expenditure
schedule delivered to the Orius Stockholders Representative during the course of
its due diligence review of LISN (which schedule is attached to the LISN
Developments Schedule as Exhibit 1), made capital expenditures or commitments
therefor that aggregate in excess of $100,000;
(xii) delayed or postponed the payment of any accounts payable
or any other liability or obligation or agreed with any party to extend the
payment date of any accounts payable or accelerated the collection of any
accounts or notes receivable;
(xiii) made any loans or advances to, guarantees for the
benefit of, or any Investments in, any Persons (other than advances to LISN's
employees in the ordinary course of business consistent with past practice) in
excess of $25,000;
(xiv) made any charitable contributions or pledges exceeding
in the aggregate $25,000;
(xv) suffered any damage, destruction or casualty loss
exceeding in the aggregate $100,000, whether or not covered by insurance;
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(xvi) made any change in any method of accounting or
accounting policies or made any write-down in the value of its inventory that is
material or that is other than in the usual, regular and ordinary course of
business consistent with past practice;
(xvii) made any Investment in any Subsidiary, other than those
Subsidiaries listed on the LISN Investments and LISN Subsidiaries Schedule, or
taken any steps to incorporate any Subsidiary;
(xviii) entered into any agreement or arrangement prohibiting
or restricting it from freely engaging in any business or otherwise restricting
the conduct of its business;
(xix) entered into any contract other than in the ordinary
course of business consistent with past practice, entered into any other
material transaction, whether or not in the ordinary course of business or
consistent with past practice, or materially changed any business practice; or
(xx) agreed, whether orally or in writing, to do any of the
foregoing.
6L. Assets. Except as set forth on the attached LISN Assets
Schedule, LISN and its Subsidiaries have good and valid title to, a valid
leasehold interest in, or a valid license to use, the properties and assets,
tangible or intangible, shown on the LISN Latest Balance Sheet or acquired
thereafter, free and clear of all Liens, except for properties and assets
disposed of in the ordinary course of business since the date of the Latest
Balance Sheet and except for Liens disclosed on the LISN Latest Balance Sheet
(including any notes thereto) and Permitted Encumbrances and such assets consist
of all of the material assets and properties necessary for the conduct of its
business as presently conducted.
6M. Tax Matters.
(i) Except as set forth on the attached LISN Taxes Schedule:
(a) LISN and its Subsidiaries have filed all Tax
Returns which it is required to file under applicable laws and
regulations, and all such Tax Returns are complete and correct and have
been prepared in compliance with all applicable laws and regulations;
(b) LISN and its Subsidiaries have paid all Taxes due
and owing by it (whether or not such Taxes are shown or required to be
shown on a Tax Return) and has withheld and paid over to the
appropriate taxing authority all Taxes which it is required to withhold
from amounts paid or owing to any employee, independent contractor,
shareholder, creditor or other third party;
(c) neither LISN nor any of its Subsidiaries has
waived any statute of limitations with respect to any Taxes or agreed
to any extension of time for filing any Tax Return which has not been
filed; and neither LISN nor any of its Subsidiaries has consented
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to extend to a date later than the date hereof the period in which any
Tax may be assessed or collected by any Taxing Authority;
(d) the accrual for Taxes on the LISN Latest Balance
Sheet would be adequate to pay all Tax liabilities of LISN and its
Subsidiaries if its current tax year were treated as ending on the date
of the LISN Latest Balance Sheet (excluding any amount recorded which
is attributable solely to timing differences between book and Tax
income);
(e) since December 31, 1998, neither LISN nor any of
its Subsidiaries has incurred any liability for Taxes other than in the
ordinary course of business;
(f) the federal income Tax Returns of LISN and its
Subsidiaries have not been audited and are open for all tax years after
December 31, 1996;
(g) no foreign, federal, state or local tax audits or
administrative or judicial Tax proceedings are pending or being
conducted with respect to LISN or any of its Subsidiaries;
(h) neither LISN nor any of its Subsidiaries has
received from any foreign, federal, state or local taxing authority
(including jurisdictions where LISN or any of its Subsidiaries has
filed Tax Returns) any (i) written notice indicating an intent to open
an audit or other review, (ii) request for information related to Tax
matters or (iii) notice of deficiency or proposed adjustment for any
amount of Tax proposed, asserted or assessed by any taxing authority
against LISN or any of its Subsidiaries;
(i) no claim has ever been made by a taxing authority
in a jurisdiction where LISN or any of its Subsidiaries do not file Tax
Returns that LISN or any of its Subsidiaries are or may be subject to
Taxes assessed by such jurisdiction;
(j) neither LISN nor any of its Subsidiaries has been
a member of an Affiliated Group (other than a group the common parent
of which was LISN);
(k) neither LISN nor any of its Subsidiaries is a
party to or bound by any Tax allocation or Tax sharing agreement;
(l) there are no Liens for Taxes (other than
Permitted Encumbrances) upon the assets of LISN or any of its
Subsidiaries; and
(m) neither LISN nor any of its Subsidiaries shall be
required to (i) as a result of a change in method of accounting for a
taxable period ending on or prior to the Closing Date, include any
adjustment in taxable income for any taxable period (or portion
thereof) ending after the Closing Date, (ii) as a result of any
"closing agreement," as described in Section 7121 of the Code (or any
corresponding provision of state, local or foreign income Tax law)
executed on or before the Closing Date, include any item of income in,
or exclude any item of deduction from, taxable income for any taxable
period (or portion
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thereof) ending after the Closing Date, (iii) as a result of any sale
reported on the installment method where such sale occurred on or prior
to the Closing Date, include any item of income in, or exclude any item
of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date, or (iv) as a result of any
prepaid amount received on or prior to the Closing Date, include any
item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the
Closing Date; and
(ii) Neither LISN nor any of its Subsidiaries:
(a) has made an election under Section 341(f) of the
Code;
(b) is presently liable for the Taxes of another
Person (other than any of LISN and its Subsidiaries) (1) under Treas.
Reg. ss.1.1502-6 (or comparable provisions of state, local or foreign
law), (2) as a transferee or successor or (3) by contract or indemnity
or otherwise;
(c) is a party to any agreement, contract,
arrangement, or plan that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute payment"
within the meaning of Section 280G of the Code (or any corresponding
provision of state, local or foreign law); or
(d) is or has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.
6N. Contracts and Commitments.
(i) Except as expressly contemplated by this Agreement or as
set forth on the attached LISN Contracts Schedule, the attached LISN
Intellectual Property Schedule, the attached LISN Employees Schedule, or the
attached LISN Employee Benefits Schedule, neither LISN nor any of its
Subsidiaries is a party to or bound by any written or oral:
(a) pension, profit sharing, stock option, employee
stock purchase or other plan or arrangement providing for deferred or
other compensation to employees or any other employee benefit plan,
arrangement or practice, whether formal or informal;
(b) collective bargaining agreement or any other
contract with any labor union, or severance agreements, programs,
policies or arrangements;
(c) management agreement, contract for the employment
of any officer, individual employee or other Person on a full-time,
part-time, consulting or other basis providing annual cash or other
compensation in excess of $75,000 or providing for the payment of any
cash or other compensation or benefits upon the consummation of the
transactions contemplated hereby;
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(d) contract or agreement requiring the consent of
any party thereto upon a change in control of LISN or such Subsidiary,
containing any provision which would result in a modification of any
rights or obligations of any party thereunder upon a change in control
of LISN or such Subsidiary or which would provide any party any remedy
(including rescission or liquidated damages) in the event of a change
in control of LISN or such Subsidiary;
(e) contract under which it has advanced or loaned
monies to any other Person or otherwise agreed to advance, loan or
invest any funds (other than advances to LISN's employees in the
ordinary course of business consistent with past practice);
(f) agreement or indenture relating to borrowed money
or other Indebtedness or the mortgaging, pledging or otherwise placing
a Lien on any material asset or material group of assets of LISN or any
of its Subsidiaries or any letter of credit arrangements;
(g) guaranty of any obligation for borrowed money or
otherwise (other than endorsements made for collection in the ordinary
course of business);
(h) lease or agreement under which LISN or any of its
Subsidiaries is lessee of or holds or operates any property, real or
personal, owned by any other Person, except for any lease of personal
or real property under which the aggregate annual rental payments do
not exceed $50,000;
(i) lease or agreement under which LISN or any of its
Subsidiaries is lessor of or permits any third party to hold or operate
any property, real or personal, owned or controlled by LISN or such
Subsidiary;
(j) license or royalty agreements;
(k) nondisclosure or confidentiality agreements;
(l) local service agreements (including cleaning,
guard service, lawn and snow removal) and maintenance agreements
(including vehicle and equipment maintenance agreements) involving
annual payments in excess of $50,000;
(m) contract or group of related contracts with the
same party or group of affiliated parties for the purchase of raw
materials, commodities, supplies, products, equipment or other personal
property or for the receipt of services under which the undelivered
balance of such products and services has a selling price in excess of
$150,000;
(n) contract or group of related contracts with the
same party or group of affiliated parties for the sale of raw
materials, commodities, supplies, products or other personal property
or for the furnishing of services under which the undelivered balance
of
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such products or services due from LISN or any of its Subsidiaries has
a selling price in excess of $750,000;
(o) other contract or group of related contracts with
the same party or group of affiliated parties continuing over a period
of more than six months from the date or dates thereof, not terminable
by LISN or any of its Subsidiaries upon 30 days' or less notice without
penalty or involving more than $75,000;
(p) contract or group of related contracts requiring
the payment of any fee, penalty or other amount by LISN or any of its
Subsidiaries in the event of any failure to perform or late performance
of such contract or contracts by LISN or such Subsidiary;
(q) contract relating to the marketing, advertising
or promotion of its products;
(r) warranty agreement with respect to services
provided (other than agreements containing commercially standard terms
and conditions) or indemnity agreement with any supplier under which it
is obligated to indemnify such supplier against product liability
claims;
(s) agreements relating to the ownership of or
investments in any business or enterprise, including investments in
joint ventures and minority equity investments;
(t) assignment, indemnification or other agreement
with respect to any intangible property (including any Intellectual
Property Rights);
(u) agreement under which it has granted any Person
any registration rights (including demand or piggyback registration
rights);
(v) broker, agent, sales representative, distribution
agreement or agreement relating to the export and/or import of any
goods or equipment;
(w) power of attorney or other similar agreement or
grant of agency;
(x) contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world; or
(y) other agreement which is material to its
operations or business prospects or involves an annual consideration in
excess of $250,000, whether or not in the ordinary course of business.
(ii) LISN Contracts Schedule lists each currently outstanding
bid or proposal for business submitted by LISN or any of its Subsidiaries in
excess of $1,000,000.
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(iii) All of the contracts, agreements and instruments set
forth or required to be set forth on the attached LISN Contracts Schedule are
valid, binding and enforceable against LISN (and, to the Knowledge of LISN,
against the other party or parties thereto) in accordance with their respective
terms (except in each case as limited by applicable bankruptcy, reorganization,
insolvency or similar laws) and, assuming they are enforceable against the other
parties thereto, shall be in full force and effect without penalty in accordance
with their terms upon consummation of the transactions contemplated hereby. Each
of LISN and its Subsidiaries has performed all material obligations required to
be performed by it and is not in default under or in breach of nor in receipt of
any written claim (and to its Knowledge there are no claims) of default or
breach under any contract, agreement or instrument to which LISN or such
Subsidiary is subject; no event has occurred which with the passage of time or
the giving of notice or both would result in a default, breach or event of
noncompliance by LISN or any of its Subsidiaries under any material contract,
agreement or instrument to which LISN or any of its Subsidiaries is subject;
except as set forth on the attached LISN Contracts Schedule, neither LISN nor or
any of its Subsidiaries has any present expectation or intention of not fully
performing on a timely basis all such obligations required to be performed by
LISN or such Subsidiary under any contract, agreement or instrument to which
LISN or such Subsidiary is subject; and neither LISN nor or any of its
Subsidiaries has any Knowledge of any breach or cancellation or anticipated
cancellation by the other parties to any contract, agreement, instrument or
commitment to which it is a party. Neither LISN nor any of its Subsidiaries is a
party to any contract, agreement or commitment the performance of which could
reasonably be expected to have a Material Adverse Effect.
(iv) LISN has made available to Orius' Shareholder
Representative's special counsel a true and correct copy of each of the written
instruments, plans, contracts and agreements and an accurate description of each
of the oral arrangements, contracts and agreements which are referred to on the
attached LISN Contracts Schedule, together with all amendments, waivers or other
changes thereto.
6O. Intellectual Property Rights.
(i) The attached LISN Intellectual Property Schedule contains
a complete and accurate list of all (a) patented or registered Intellectual
Property Rights owned or, to LISN's Knowledge, used by LISN or any of its
Subsidiaries, (b) pending patent applications and applications for other
registrations of Intellectual Property Rights filed by or on behalf of LISN or
any of its Subsidiaries, and (c) material unregistered Intellectual Property
Rights owned or used by LISN or any of its Subsidiaries. The attached LISN
Intellectual Property Schedule also contains a complete and accurate list of all
licenses and other rights granted by LISN or any of its Subsidiaries to any
third party with respect to any Intellectual Property Rights and all licenses
and other rights granted by any third party to LISN or any of its Subsidiaries
with respect to any Intellectual Property Rights, in each case identifying the
subject Intellectual Property Rights. Each of LISN and its Subsidiaries owns and
possesses all right, title and interest to, or has the right to use pursuant to
a valid and enforceable license, all Intellectual Property Rights necessary for
the operation of its business, free and clear of all Liens other than Existing
Bank Liens. Except as set forth on the attached LISN Intellectual Property
Schedule, the loss or expiration of any Intellectual Property Right or related
group of Intellectual Property Rights owned or used by LISN or any of its
Subsidiaries has not had
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and would not reasonably be expected to have a Material Adverse Effect, and no
loss or expiration of any Intellectual Property Right is threatened, pending or,
to LISN's Knowledge, reasonably foreseeable. Each of LISN and its Subsidiaries
has taken commercially reasonable steps to maintain and protect the Intellectual
Property Rights which it owns.
(ii) Except as set forth on the attached LISN Intellectual
Property Schedule, (a) there have been no claims made against LISN or any of its
Subsidiaries asserting the invalidity, misuse or unenforceability of any of the
Intellectual Property Rights owned or used by LISN or any of its Subsidiaries
and, to LISN's Knowledge, there is no basis for any such claim, (b) neither LISN
nor any of its Subsidiaries has received any written notices of, and to LISN's
Knowledge neither LISN nor any of its Subsidiaries has received any unwritten
notice of, and has no Knowledge of, any facts which indicate a likelihood of,
any infringement or misappropriation by, or conflict with, any third party with
respect to any Intellectual Property Rights (including any demand or request
that LISN or any of its Subsidiaries license any rights from a third party), (c)
to LISN's Knowledge the conduct of LISN's and its Subsidiaries' businesses has
not infringed, misappropriated or conflicted with and does not infringe,
misappropriate or conflict with any Intellectual Property Rights of other
Persons, and (d) to LISN's Knowledge, the Intellectual Property Rights owned by
or licensed to LISN or any of its Subsidiaries have not been infringed,
misappropriated or conflicted by other Persons. The transactions contemplated by
this Agreement will have no Material Adverse Effect on LISN's and its
Subsidiaries' right, title or interest in and to the Intellectual Property
Rights listed on the LISN Intellectual Property Schedule, and all of such
Intellectual Property Rights shall be owned or available for use by LISN and its
Subsidiaries on terms and conditions immediately after the Closing which are
substantially identical to those in effect prior to Closing.
6P. Litigation, etc. Except as set forth on the attached LISN
Litigation Schedule, there are no, and since the date of acquisition of LISN by
Willis Stein there have not been any, actions, suits, proceedings (including any
arbitration proceedings), orders, investigations or claims pending or, to LISN's
Knowledge, threatened against or any material actions, suits, proceedings
(including any arbitration proceedings), orders, investigations or claims
affecting LISN or any of its Subsidiaries (or to LISN's Knowledge, pending or
threatened against or any actions, suits, proceedings (including any arbitration
proceedings), orders, investigations or claims affecting any of the officers,
directors or employees of LISN with respect to its business activities), or
pending or threatened by LISN or any of its Subsidiaries against any Person, at
law or in equity, or before or by any governmental department, commission,
board, bureau, agency or instrumentality (including any actions, suits,
proceedings or investigations with respect to the transactions contemplated by
this Agreement); neither LISN nor any of its Subsidiaries is subject to any
arbitration proceedings under collective bargaining agreements or otherwise or
any governmental investigations or inquiries; and, to LISN's Knowledge, there is
no basis for any of the foregoing. The foregoing includes, without limitation,
actions pending or threatened involving the prior employment of any of the 35
most highly compensated employees of LISN and its Subsidiaries on a consolidated
basis, their use in connection with LISN's or any of its Subsidiaries'
businesses of any information or techniques allegedly proprietary to any of
their former employers or their obligations under any agreements with prior
employers. Except as set forth on the attached LISN Litigation Schedule, LISN is
fully insured with respect to each of the matters set forth on the attached LISN
Litigation Schedule, and neither LISN nor any of its Subsidiaries is subject to
any judgment, order or decree of any court or other
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governmental agency, and neither LISN nor any of its Subsidiaries has received
any opinion or memorandum or advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability which could have a Material
Adverse Effect.
6Q. Brokerage. Except for the obligations stated on the
attached LISN Contracts Schedule, there are and shall be no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement to which LISN or any of its Subsidiaries is a party or to which LISN
or any of its Subsidiaries is subject, it being acknowledged and agreed that any
such brokerage commissions, finder's fees or similar compensation shall be
deemed to be Indebtedness of LISN for purposes of this Agreement.
6R. Insurance. The attached LISN Insurance Schedule contains a
description of each insurance policy maintained by LISN and any of its
Subsidiaries with respect to its and any of its Subsidiaries' properties, assets
and business, together with a statement of the aggregate amount of claims paid
out, and claims pending, under each such insurance policy or other arrangement
through the date hereof. All such policies are in full force and effect as of
the Closing, all premiums due thereon have been paid, and LISN and its
Subsidiaries are otherwise in compliance in all material respects with the terms
and provisions of such policies. Neither LISN nor any of its Subsidiaries is in
default with respect to its obligations under any insurance policy maintained by
it, and neither LISN nor any of its Subsidiaries has received any notice of
cancellation or non-renewal of any such policy or arrangement nor is the
termination of any such policies or arrangements threatened. Neither LISN nor
any of its Subsidiaries has ever been denied insurance coverage, and there is no
claim pending under any policies or arrangements as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or
arrangements. Neither LISN nor any of its Subsidiaries has received any notice
from any of its insurance carriers that any insurance premiums will be increased
in the future or that any insurance coverage presently provided for will not be
available to LISN or any of its Subsidiaries in the future on substantially the
same terms as now in effect and none of such policies or arrangements provides
for any retrospective premium adjustment, experienced-based liability or loss
sharing arrangement affecting LISN or any of its Subsidiaries. A true and
complete list of all outstanding claims for medical expenses in excess of
$10,000 made by or with respect to any single employee of LISN or any of its
Subsidiaries is set forth in the LISN Insurance Schedule. Except as set forth on
the attached LISN Insurance Schedule, LISN has no self-insurance or co-insurance
programs, and the reserves set forth on the LISN Latest Balance Sheet are
adequate to cover all anticipated Liabilities with respect to any such
self-insurance or co-insurance programs.
6S. Employees. To LISN's Knowledge, no executive or key
employee of LISN or any of its Subsidiaries and no group of employees of LISN or
any of its Subsidiaries has any plans to terminate employment with LISN or such
Subsidiary. LISN has no material labor relations problems (including any union
organization activities, threatened or actual strikes or work stoppages or
material grievances). None of LISN, the LISN Shareholders nor, to LISN's
Knowledge, any of its other employees or consultants are subject to any
noncompete, nondisclosure, confidentiality, employment, consulting or other
agreement or judgment, decree or order of any court or administrative agency,
relating to, affecting or in conflict with the present or proposed business
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activities of LISN and its Subsidiaries or such Person's duties to LISN and its
Subsidiaries, except for agreements between LISN and its present and former
employees. LISN has not received any written notice alleging that any violation
of any such agreements has occurred, and to LISN's Knowledge neither LISN nor
any of its Subsidiaries has received any unwritten notice thereof. The LISN
Employees Schedule attached hereto contains a correct and complete list of all
employees and consultants of LISN which have executed and delivered to LISN any
agreement providing for the nondisclosure by such Person of any confidential
information of LISN.
6T. ERISA.
(i) Except as set forth on the attached LISN Employee Benefits
Schedule, LISN does not have any obligation to contribute to (or any other
liability, including current or potential withdrawal liability, with respect to)
any "multi-employer plan" (as defined in Section 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")).
(ii) LISN does not maintain or have any obligation to
contribute to (or any other liability with respect to) any plan or arrangement,
whether or not terminated, which provides medical, health, life insurance or
other welfare-type benefits for current or future retired or terminated
employees or any dependents of such employees (except for limited continued
medical benefit coverage required to be provided under Section 4980B of the Code
("COBRA") or as required under applicable state law).
(iii) LISN does not maintain, contribute to or have any actual
or potential liability under (or with respect to) any employee plan which is a
"defined benefit plan" (as defined in Section 3(35) of ERISA).
(iv) Except as set forth on the attached LISN Employee
Benefits Schedule, LISN does not maintain, contribute to or have any actual or
potential liability under (or with respect to) any employee plan which is a
"defined contribution plan" (as defined in Section 3(34) of ERISA) (the
"Plans"), whether or not terminated.
(v) Except as set forth on the attached LISN Employee Benefits
Schedule under the heading "Other Plans" (the "Other Plans"), LISN does not
maintain, contribute to or have any actual or potential liability under (or with
respect to) any plan or arrangement providing benefits or remuneration to
current or former employees or independent contractors, including any employment
contract, bonus or incentive plan, plan for deferred compensation, employee
health or other welfare benefit plan, severance arrangement or other material
policy, program or arrangement, whether or not terminated. The attached LISN
Employee Benefits Schedule sets forth the aggregate amount of bonuses and other
incentive compensation reasonably expected to be paid by LISN for the fiscal
year ending December 31, 1999.
(vi) With respect to the Plans set forth on the attached LISN
Employee Benefits Schedule, all required payments, premiums, contributions,
reimbursements or accruals for all periods ending prior to or as of the Closing
Date shall have been made or properly accrued. None of the Plans has any
material unfunded liabilities which are not reflected on the Latest Balance
Sheet.
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(vii) Except as set forth on the attached LISN Employee
Benefits Schedule, the Plans and all related trusts, insurance contracts and
funds have been maintained, funded and administered in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
applicable laws. Except as set forth on the attached LISN Employee Benefits
Schedule, LISN has timely complied with all reporting and disclosure obligations
as they apply to the Plans, and LISN has complied with the requirements of
COBRA. To LISN's Knowledge, none of LISN or any trustee or administrator of any
Plan has engaged in any transaction with respect to the Plans which would
subject LISN or any trustee or administrator of the Plans, or any party dealing
with any such Plan, nor do the transactions contemplated by this Agreement
constitute transactions which would subject any such party, to either a civil
penalty assessed pursuant to Part 502(i) of ERISA, or any other penalty or
excise tax or the tax or penalty on prohibited transactions imposed by Section
4975 of the Code or any other penalty or excise tax. No actions, suits or claims
with respect to the assets of the Plans (other than routine claims for benefits)
are pending or, to LISN's Knowledge, threatened which could result in or subject
LISN to any liability and there are no circumstances which would give rise to or
be expected to give rise to any such actions, suits or claims.
(viii) The attached LISN Employee Benefits Schedule sets forth
whether or not a favorable determination letter from the Internal Revenue
Service has been received by LISN with respect to each Plan that it is qualified
under Section 401(a) of the Code (including requirements imposed by the Tax
Reform Act of 1986 and subsequent legislation), and, to LISN's Knowledge, there
are no circumstances which would cause a Plan to lose such qualified status.
(ix) For purposes of this Section 6T, "LISN" shall be deemed
to include all organizations under common control with LISN pursuant to Section
414 of the Code.
6U. Compliance with Laws; Permits; Certain Operations. Except
as set forth on the attached LISN Compliance Schedule:
(i) Each of LISN and its Subsidiaries is in material
compliance with and, throughout the immediately preceding 5 year period has
complied in all material respects with, all applicable laws, ordinances, codes,
rules, requirements and regulations of foreign, federal, state and local
governments and all agencies thereof relating to the operation of its business
and the maintenance and operation of its properties and assets. During the five
year period ending on the Closing Date, no written (or, to LISN's Knowledge,
oral) notices have been received by and no claims have been filed against LISN
or any of its Subsidiaries alleging a violation of any such laws, ordinances,
codes, rules, requirements or regulations.
(ii) Each of LISN and its Subsidiaries holds and is in
compliance with all permits, licenses, bonds, approvals, certificates,
registrations, accreditations and other authorizations of all foreign, federal,
state and local governmental agencies required for the conduct of its business
and the ownership of its properties (including as the same relate to
Environmental and Safety Requirements), and the attached LISN Permits Schedule
sets forth a description of all of such material permits, licenses, bonds,
approvals, certificates, registrations, accreditations and other authorizations.
To LISN's Knowledge, no notices have been received by LISN or any of its
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Subsidiaries alleging the failure to hold any of the foregoing. All of such
permits, licenses, bonds, approvals, accreditations, certificates, registrations
and authorizations will be available for use by LISN and its Subsidiaries, as
the case may be, immediately after the Closing.
6V. Environmental and Safety Matters.
(i) Except as set forth on the attached LISN Environmental
Schedule:
(a) Each of LISN and its Subsidiaries has complied in
all material respects with and is in material compliance with all
Environmental and Safety Requirements. Neither LISN nor any of its
Subsidiaries have received any written or oral notice, report or
information regarding any actual or alleged violation of Environmental
and Safety Requirements or any liabilities or potential liabilities
relating to it or its facilities arising under Environmental and Safety
Requirements.
(b) Neither this Agreement nor the consummation of
the transactions contemplated hereby will result in any obligations for
site investigation or cleanup, or notification to or consent of any
government agencies or third parties under any Environmental and Safety
Requirements (including any so called "transaction-triggered" or
"responsible property transfer" laws and regulations).
(c) None of the following exists at any property or
facility owned, occupied or operated by LISN or any of its
Subsidiaries:
(1) underground storage tanks;
(2) asbestos-containing material in any
form or condition;
(3) materials or equipment containing
polychlorinated biphenyls; or
(4) landfills, surface impoundments or
other disposal areas.
(d) Neither LISN nor any of its Subsidiaries has
treated, stored, disposed of, arranged for or permitted the disposal
of, transported, handled or Released any substance (including any
hazardous substance) or owned, occupied or operated any facility or
property (and no such property or facility is contaminated by any such
substance) in a manner that has given or could give rise to any
Liabilities (including any Liability for response costs, corrective
action costs, personal injury, natural resource damages, property
damage or attorneys fees or any investigative, corrective or remedial
obligations) pursuant to CERCLA or any other Environmental and Safety
Requirements.
(e) Neither LISN nor any of its Subsidiaries has,
either expressly or by operation of law, assumed or undertaken any
liability or corrective, investigatory or remedial obligation of any
other Person relating to any Environmental and Safety Requirements.
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(f) No Environmental Lien has attached to any
property owned, leased or operated by LISN or any of its Subsidiaries.
6W. Affiliated Transactions. Except as set forth on the
attached LISN Affiliated Transactions Schedule, no officer, director,
shareholder or Affiliate of LISN or any of its Subsidiaries or, to LISN's
Knowledge, any individual related by blood, marriage or adoption to any such
individual or any entity in which any such Person or individual owns any
beneficial interest, is a party to any agreement, contract, commitment or
transaction with LISN or any Subsidiary of LISN or has any material interest in
any material property used by LISN or any of its Subsidiaries (including any
Intellectual Property Rights) involving in any case liabilities or assets with
fair market value of $100,000 or more, or involving payments or payment
obligations aggregating $100,000 in any twelve-month period.
6X. Suppliers and Customers. The LISN Suppliers and Customers
Schedule attached hereto sets forth a list of the top ten customers and
suppliers of LISN by dollar volume of sales and purchases, respectively, for the
fiscal year ended December 31, 1998. Neither LISN nor any of its Subsidiaries
has received any indication from any material supplier to the effect that, and
to LISN's Knowledge, neither LISN nor any of its Subsidiaries has any reason to
believe that, such supplier will stop, materially decrease the rate of, or
materially change the terms (whether related to payment, price or otherwise)
with respect to, supplying materials, products or services to any of LISN and
its Subsidiaries (whether as a result of the consummation of the transactions
contemplated hereby or otherwise). To LISN's Knowledge, neither LISN nor any of
its Subsidiaries has received any indication from any material customer of LISN
to the effect that, and to LISN's Knowledge, neither LISN nor any of its
Subsidiaries has any reason to believe that, such customer will stop, or
materially decrease the rate of, buying products of LISN (whether as a result of
the consummation of the transactions contemplated hereby or otherwise).
6Y. Real Property.
(i) The LISN Real Property Schedule sets forth the address and
lists and describes briefly all land, together with all buildings located
thereon, owned by LISN or any of its Subsidiaries (the "LISN Owned Real
Property"). With respect to each such parcel of LISN Owned Real Property and
except as set forth on the LISN Real Property Schedule:
(a) the identified owner has good and marketable
title to the parcel of real property, free and clear of any
Lien, easement, covenant, or other restriction as of the
Closing Date, except Permitted Encumbrances;
(b) there are no pending or, to the Knowledge of
LISN, threatened condemnation, expropriation or other eminent
domain proceedings, lawsuits, or administrative actions
relating to the LISN Owned Real Property or other matters
affecting adversely the current use, occupancy, or value
thereof;
(c) the legal description for the parcel contained in
the deed describes such parcel fully and adequately, the
buildings and improvements are located within
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the boundary lines of the described parcels of land, are not
in violation of applicable setback requirements, zoning laws,
and ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classifications),
and do not encroach on any easement which may burden the land,
the land does not serve any adjoining property for any purpose
inconsistent with the use of the land, and the property is not
located within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
(d) all facilities have received all approvals of
governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof
and have been operated and maintained in accordance with
applicable laws, rules and regulations;
(e) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to
any party or parties the right of use or occupancy of any
portion of the parcel of LISN Owned Real Property, other than
tenants under any leases disclosed in the LISN Real Property
Schedule who are in possession of space of which they are
entitled;
(f) there are no outstanding options or rights of
first refusal to purchase the parcel of LISN Owned Real
Property, or any portion thereof or interest therein;
(g) there are no parties (other than LISN) in
possession of the parcel of LISN Owned Real Property, other
than tenants under any leases disclosed in the LISN Real
Property Schedule who are in possession of space of which they
are entitled;
(h) all facilities located on the parcel of LISN
Owned Real Property are supplied with utilities and other
services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer,
and storm sewer, all of which services are adequate in
accordance with all applicable laws, ordinances, rules and
regulations and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefitting the
parcel of LISN Owned Real Property; and
(i) each parcel of LISN Owned Real Property abuts on
and has direct vehicular access to a public road, or has
access to a public road via a permanent, irrevocable,
appurtenant easement benefitting the parcel of real property,
and access to the property is provided by paved public
right-of-way with adequate curb cuts available.
(ii) The LISN Real Property Schedule attached hereto sets
forth a list of all of the leases, subleases and licenses ("LISN Leases") of
real property (the "Leased Real Property"), including the address of the LISN
Leased Real Property, in which LISN or any of its Subsidiaries has a leasehold,
subleasehold or licensed interest, other than any lease which may terminated by
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either party without liability to the other on less than 90 days notice or
involving aggregate annual rentals of less than $50,000, not otherwise involving
any material liability and the termination of which would not have a Material
Adverse Effect. LISN or such Subsidiary holds a valid and existing leasehold,
subleasehold or license interest under each of the LISN Leases. With respect to
each LISN Lease listed on the attached LISN Real Property Schedule, neither
LISN, any of its Subsidiaries, nor, to the Knowledge of LISN, any other party to
the LISN Lease is in breach or default under the LISN Lease, and no event has
occurred or circumstance exists which, with the delivery of notice, passage of
time or both, would constitute such a breach or default or permit the
termination, modification, or acceleration of rent under the LISN lease, there
are no disputes, oral agreements, or forbearance programs in effect as to such
LISN Lease and neither LISN nor any of its Subsidiaries has assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in
the LISN Lease. Except for the LISN Leased Real Property, and the LISN Owned
Real Property, there is no real property which is leased or otherwise used in
LISN's business.
6Z. Regulatory Status. Since its date of incorporation,
neither LISN nor any of its Subsidiaries has been, and as of the Closing Date
shall not be, a "United States real property holding corporation," as defined in
Section 897(c)(2) of the Code and in Section 1.897-2(b) of the Treasury
Regulations issued thereunder. Neither LISN nor any of its Subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined under the
Investment Orius Act of 1940, as amended. Neither LISN nor any of its
Subsidiaries is subject to any law which regulates the incurring of Indebtedness
by LISN or such Subsidiary, including any laws relating to common contract
carriers or the sale of electricity, gas, steam, water or other public utility
services.
6AA. Disclosure. Neither this Agreement nor any of the
Schedules attached hereto nor any of the written statements, certificates or
other items prepared and delivered to LISN, the LISN Shareholders or the
Investors by or on behalf of LISN or the LISN Shareholders upon execution of
this Agreement or any of the agreements contemplated hereby or to induce the
consummation of any of the transactions contemplated hereby or thereby, when
taken together as a whole, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they were made, not misleading.
There is no fact which LISN has not disclosed to executive officers of Orius (or
executive officers of its predecessor) in writing and of which any of its
officers, directors or executive employees is aware which has had or would
reasonably be expected to have a Material Adverse Effect.
6BB. Closing Date. The representations and warranties of LISN
contained in this Section 6 and elsewhere in this Agreement and all information
contained in any Exhibit, Schedule or attachment hereto or in any certificate or
other writing delivered by, or on behalf of, LISN to the Orius Stockholders
Representative pursuant to this Agreement shall be true and correct on the
Closing Date as though then made and as though the Closing Date was substituted
for the date of this Agreement throughout such representations and warranties,
except in any case in which a representation and warranty expressly refers to a
different date, in which case such representation and warranty shall be true and
correct as of such date.
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Section 7. Indemnification and Certain Other Agreements.
7A. Survival of Representations and Warranties. The
representations and warranties in this Agreement and the Schedules attached
hereto, or in any of the written statements, certificates or other items
prepared and delivered to LISN, the LISN Shareholders or the Investors by or on
behalf of Orius or the Orius Stockholders, or to Orius or the Orius Stockholders
by or on behalf of LISN or the LISN Shareholders upon execution of this
Agreement or any of the agreements contemplated hereby or to induce the
consummation of any of the transactions contemplated hereby or thereby, hereby
shall survive the Closing as follows:
(i) the representations and warranties in any of Section 5M
and Section 6M (Tax Matters), Section 5T and Section 6T (ERISA) shall terminate
sixty (60) days after the date as of which the applicable statutes of
limitations with respect to the liabilities in question expire (after giving
effect to any extensions or waivers thereof);
(ii) the representation and warranties in Section 5V and
Section 6V (Environmental and Safety Matters) shall terminate on the sixth
anniversary of the Closing Date.
(iii) the representations and warranties in Section 5U and
Section 6U (Compliance with Laws; Permits; Certain Operations) shall terminate
on the fourth anniversary of the Closing Date;
(iv) none of the representations and warranties in any of
Section 5B or Section 6B (Capital Stock and Related Matters), Section 5Q or
Section 6Q (Brokerage), the first and second sentences of Section 5D or Section
6D (Authorization; No Breach), or in any of the Orius Joinder Agreements or the
LISN Transmittal Letters shall terminate; and
(v) all other representations and warranties in this Agreement
and the Schedules attached hereto, or in any of the written statements,
certificates or other items prepared and delivered to LISN, the LISN
Shareholders or the Investors by or on behalf of Orius or the Orius
Stockholders, or to Orius or the Orius Stockholders by or on behalf of LISN or
the LISN Shareholders upon execution of this Agreement or any of the agreements
contemplated hereby or to induce the consummation of any of the transactions
contemplated hereby or thereby, shall terminate upon termination of the eighteen
month period commencing on the Closing Date; provided that any representation or
warranty in respect of which indemnity may be sought under Section 7B, and the
indemnity with respect thereto, shall survive the time at which it would
otherwise terminate pursuant to this Section 7A if written notice of the breach
or potential breach thereof giving rise to such right or potential right of
indemnity shall have been given to the Party against whom such indemnity may be
sought prior to such time. The representations and warranties in this Agreement
and the Schedules and Exhibits attached hereto or in any writing delivered in
connection with this Agreement shall survive for the periods set forth in this
Section 7A and shall in no event be affected by any investigation, inquiry or
examination made for or on behalf of any Party, any Representative or any
Investor, or the knowledge of any officer, director, shareholder, employee,
partner or agent of any of the foregoing or the acceptance by any of the
foregoing of any certificate or opinion hereunder. Without limiting the
foregoing, in no event will any disclosure pursuant to Section 4I
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or otherwise prior to the Closing serve to amend any representation or warranty
for any purpose of this Agreement, except and solely to the extent that the
notifying party (i) promptly upon discovery thereof notifies each other party to
this Agreement in reasonably detail of the facts and circumstances which would
cause the notifying party to be in breach of a representation or warranty as of
the Closing, and (ii) in connection with any dispute relating thereto carries
the burden of proving that such notifying party was not in breach of such
representation and warranty upon execution of this Agreement, in which event the
disclosure thereof in writing prior to the Closing shall, solely for purposes of
Section 7, be deemed to amend the representations and warranties identified in
such notice.
7B. General Indemnification.
(i) Indemnification by the Orius Indemnifying Stockholders.
Subject to the limitations set forth in this Section, the Orius Stockholders
(other than HIG and the Orius Warrantholders) (the "Orius Indemnifying
Stockholders") shall jointly and severally indemnify Orius, the Investors and
the LISN Shareholders and their respective Affiliates, partners, officers,
directors, employees, agents, representatives, successors and permitted assigns
(collectively, the "LISN Parties" and each individually a "LISN Party"), and
save and hold each of them harmless against as and when incurred for any and all
loss, liability, demand, claim, action, cause of action, cost, damage,
deficiency, Tax, penalty, fine or expense, whether or not arising out of third
party claims (including interest, penalties, reasonable attorneys' fees and
expenses and all amounts paid in investigation, defense or settlement of any of
the foregoing) (collectively, "Losses") which any of them may suffer, sustain or
become subject to, as a result of, in connection with, relating or incidental to
or by virtue of: (a) any breach of any representation or warranty of Orius under
this Agreement or any of the Schedules attached hereto, or in any of the written
statements, certificates or other items prepared and delivered to LISN, the LISN
Shareholders or the Investors by or on behalf of Orius or the Orius
Stockholders, upon execution of this Agreement or any of the agreements
contemplated hereby or after the date hereof and at or prior to Closing to
induce the consummation of any of the transactions contemplated hereby or
thereby; (b) any nonfulfillment or breach of any covenant, agreement or other
provision by Orius under this Agreement or any of the Schedules and Exhibits
attached hereto required to be performed or complied with by Orius at or prior
to the Closing (except to the extent waived in writing in accordance with the
terms hereof or thereof, as applicable); (c) any inaccuracy or breach of any
representation or warranty included in any Joinder Agreement, any Orius Call
Agreement or any Orius Put Agreement of which Orius had Knowledge at or prior to
the Closing, or (d) any of the matters set forth on the Orius Indemnification
Schedule attached hereto; provided that the Orius Indemnifying Stockholders
shall not have any liability under clause (a) above (other than with respect to
the representations and warranties contained in Section 5B, Section 5Q, and the
first and second sentences of Section 5D) unless the aggregate of all Losses
relating thereto for which the Orius Stockholders would, but for this proviso,
be liable exceeds $1,500,000 (the "Orius Deductible"), in which event the Orius
Indemnifying Stockholders shall be liable under clause (a) above only to the
extent that the aggregate of all Losses arising thereunder exceeds the Orius
Deductible; provided further that the Orius Indemnifying Stockholders shall not
be liable in respect of any particular Loss under clause (a) above unless the
amount thereof, individually or collectively with all Losses arising from the
same or related events or circumstances, is equal to or greater than $25,000
(the "Orius Basket"), in which event the Orius
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Indemnifying Stockholders will be liable for the full amount of each such Loss
(subject to the Orius Deductible and the Orius Cap); provided further that the
aggregate liability of any Orius Indemnifying Stockholder pursuant to this
Section 7B shall in no event exceed the product of the Orius Common Value Per
Share multiplied by the aggregate number of shares of Orius Common Stock held by
such Person on the date hereof as reflected on the Orius Stockholders Schedule
attached hereto; and provided further that the aggregate liability of the Orius
Indemnifying Stockholders under clause (a) above (other than with respect to the
representations and warranties contained in Section 5B, Section 5Q, and the
first and second sentences of Section 5D) shall in no event exceed $80,000,000
(the "Orius Cap"), it being understood, however, that nothing in this Agreement
(including this Section 7B) shall limit or restrict the right of any of Orius,
the Investors and the LISN Parties to maintain or recover any amounts in
connection with any action or claim based upon fraudulent misrepresentation or
deceit.
(ii) Indemnification by the LISN Shareholders. Subject to the
limitations set forth in this Section, the LISN Shareholders shall jointly and
severally indemnify Orius, the Investors and each of the Orius Stockholders and
their respective Affiliates, partners, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the "Orius
Parties" and each individually an "Orius Party"), and save and hold each of them
harmless against as and when incurred for any Losses which any of them may
suffer, sustain or become subject to, as a result of, in connection with,
relating or incidental to or by virtue of: (a) any breach of any representation
or warranty of LISN under this Agreement or any of the Schedules attached
hereto, or in any of the written statements, certificates or other items
prepared and delivered to Orius or the Orius Stockholders by or on behalf of
LISN or the LISN Shareholders upon execution of this Agreement or any of the
agreements contemplated hereby or after the date hereof and at or prior to
Closing to induce the consummation of any of the transactions contemplated
hereby or thereby; (b) any nonfulfillment or breach of any covenant, agreement
or other provision by LISN under this Agreement or any of the Schedules and
Exhibits attached hereto required to be performed or complied with by LISN at or
prior to the Closing (except to the extent waived in writing in accordance with
the terms hereof or thereof, as applicable); (c) any inaccuracy or breach of any
representation or warranty included in the Note Exchange Agreement of which LISN
had Knowledge at or prior to the Closing; or (d) any of the matters set forth on
the LISN Indemnification Schedule attached hereto; provided that the LISN
Shareholders shall not have any liability under clause (a) above (other than
with respect to the representations and warranties contained in Section 6B,
Section 6Q, and the first and second sentences of Section 6D) unless the
aggregate of all Losses relating thereto for which the LISN Shareholders would,
but for this proviso, be liable exceeds $785,000 (the "LISN Deductible""), in
which event the LISN Shareholders shall be liable under clause (a) above only to
the extent that the aggregate of all Losses arising thereunder exceeds the LISN
Deductible; provided further that the LISN Shareholders shall not be liable in
respect of any particular Loss under clause (a) above unless the amount thereof,
individually or collectively with all Losses arising from the same or related
events or circumstances, is equal to or greater than $25,000 (the "LISN
Basket"), in which event the LISN Shareholders will be liable for the full
amount of each such Loss (subject to the LISN Deductible and the LISN Cap);
provided further that the aggregate liability of any LISN Shareholder pursuant
to this Section 7B shall in no event exceed the product of (x) the number of
shares of LISN Common held by such LISN Shareholder as of the date hereof, as
set forth on the LISN Shareholders Schedule attached hereto, multiplied by (y)
the
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quotient of the Closing LISN Investor Value divided by the aggregate number of
shares of LISN Common outstanding as of the date hereof, as set forth on the
LISN Shareholders Schedule attached hereto; provided further that the aggregate
liability of the LISN Shareholders under clause (a) above (other than with
respect to the representations and warranties contained in Section 6B, Section
6Q, and the first and second sentences of Section 6D) shall in no event exceed
$41,800,000 (the "LISN Cap"), it being understood, however, that nothing in this
Agreement (including this Section 7B) shall limit or restrict the right of any
of Orius, the Investors and the Orius Parties to maintain or recover any amounts
in connection with any action or claim based upon fraudulent misrepresentation
or deceit.
(iii) Exclusive Remedy; Other Matters; Purchase Price
Adjustment.
(a) Exclusive Remedy. Effective upon consummation of
the LISN Merger and the other transactions contemplated by this
Agreement to be consummated contemporaneously therewith or prior
thereto, the sole and exclusive remedy for Losses suffered by Orius,
the Investors, any Orius Party or any LISN Party arising from or
relating to this Agreement or the transactions contemplated hereby,
other than for fraudulent misrepresentation or deceit, shall be
pursuant to this Section 7B.
(b) Payments. For purposes of this Agreement, each
Person entitled to indemnification pursuant to this Section 7 shall be
referred to herein as an "Indemnitee" and each Person obligated to
provide indemnification pursuant to this Section 7 shall be referred to
herein as an "Indemnitor". Subject to Section 7B(iii)(e) below, each
Indemnitor shall pay to each Indemnitee the amount so claimed in
immediately available funds promptly or an adjustment to securities as
contemplated by subsection (e) below after the Indemnitee provides the
Indemnitor with written notice of a claim hereunder unless the
Indemnitor in good faith disputes such claim. If the Indemnitor
disputes such claim in good faith, then promptly after the resolution
of such dispute pursuant to the provisions thereof, the amount finally
determined to be due shall be paid by the Indemnitor to the Indemnitee
in immediately available funds (subject to Section 7B(iii)(e) below).
(c) Insurance and Other Indemnity Recoveries. The
amount of any Loss shall be reduced for purposes of this Section 7B by
the insurance proceeds actually received by the Indemnitee with respect
to such Loss, and by the proceeds actually received by the Indemnitee
pursuant to any other indemnity rights in respect of such Loss, net of
the costs incurred by the Indemnitee in connection with collecting such
proceeds; provided that such proceeds shall be disregarded in any
calculation of Losses for purposes of determining whether Losses are
equal to or greater than the Orius Deductible, LISN Deductible, Orius
Basket or LISN Basket. Orius and LISN will use reasonable efforts to
collect proceeds from insurance policies in respect of, and from
parties obligated under contractual indemnity agreements to indemnify
Orius or LISN, respectively, against, Losses for which the Orius
Indemnifying Stockholders or the LISN Shareholders would otherwise be
liable hereunder; provided that availability of recovery from such
other sources will not be a defense to indemnity obligations under this
Agreement.
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(d) Purchase Price Adjustment. Amounts paid to or on
behalf of the Orius Stockholders, the LISN Shareholders or the
Investors as indemnification shall be treated as adjustments to the
consideration paid in the LISN Merger and the other transactions
contemplated hereby, as applicable.
(e) Consideration Payable to LISN Shareholders and
the Investors. Notwithstanding any other provision hereof,
indemnification payments to LISN Shareholders and Investors pursuant to
this Agreement shall be made solely in Orius Common and Series C
Participating Preferred Stock and shall in no event be payable in cash,
notes or other property. If any LISN Shareholder or Investor is
entitled to an indemnity payment hereunder, each Indemnitor in respect
thereof shall either (x) deliver to such LISN Shareholder such shares
of Orius stock as the LISN Shareholder may request, or (y) pay to Orius
the amount owing to the LISN Shareholder. If an Indemnitor elects to
make payment in accordance with clause (y) foregoing, Orius will, upon
receipt thereof, promptly issue to such LISN Shareholder shares of
Orius Common and Series C Participating Preferred Stock (as directed by
such LISN Shareholder) with Fair Market Value equal to such amount
received by Orius from the Indemnitor.
(f) Indemnity Payments to or on Behalf of Orius.
Notwithstanding the foregoing, if payments are made by or on behalf of
the Orius Indemnifying Stockholders to or on behalf of Orius in respect
of any of the matters described in clauses (a) through (d) of Section
7B(i) (an "Orius Breach") in each case in amounts and in a manner such
that the Losses suffered by the LISN Shareholders and the Investors are
fully compensated as a result thereof, then neither the LISN
Shareholders nor the Investors shall have any right to further
indemnity against the Orius Indemnifying Stockholders in respect of
such Orius Breach. Also, notwithstanding the foregoing, if payments are
made by or on behalf of the LISN Shareholders to or on behalf of Orius
or LISN in respect of any of the matters described in clauses (a)
through (d) of Section 7B(ii) (a "LISN Breach") in each case in amounts
and in a manner such that the Losses suffered by the Orius Stockholders
and the Investors are fully compensated as a result thereof, then
neither the Orius Stockholders nor the Investors shall have any right
to further indemnity against the LISN Shareholders in respect of such
LISN Breach.
7C. Right to Offset Indemnity Obligations Against Outstanding
Securities.
(i) Offset Rights Generally. If any Indemnitor fails to comply
with its obligations pursuant to Section 7B (a "Breaching Indemnitor" and,
collectively with all Indemnitors who have failed to comply with such
obligations in respect of the same Loss, the "Breaching Indemnitors") to make
cash payments to an Indemnitee in an aggregate amount sufficient to reimburse
the Indemnitee for all Losses or adjustments to securities as required pursuant
to Section 7B (the portion of such Losses in respect of which the Indemnitee has
not received cash payment from the Breaching Indemnitor, the "Unreimbursed
Loss"), the Indemnitee may pursue any and all rights and remedies against each
of the Breaching Indemnitors available in law or in equity, subject only to the
limitations set forth in Section 7B above. In addition, and not in limitation of
or in substitution for the foregoing, upon the request of the Indemnitee, Orius
will cancel shares of the Orius Common
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retained by such Breaching Indemnitors upon consummation of the transactions
described in Section 1B(iv), or shares of Series C Participating Preferred
and/or Orius Junior Notes issued to or held by each or any of such Breaching
Indemnitors pursuant to Section 1B(v) or pursuant to any of Orius Put Agreements
or Orius Call Agreements, so long as the aggregate Fair Market Value of such
canceled securities does not exceed the amount of such indemnity obligations,
and reissue to the Indemnitee shares of each class of stock so canceled in the
amount for each such class which was canceled, and/or Orius Junior Notes in the
aggregate principal amount of, plus accrued and unpaid interest on, Orius Junior
Notes so canceled. To effect any such election, the Indemnitee shall deliver to
Orius and each of the Representatives a written notice (a "Cancellation Notice")
(a) identifying the Breaching Indemnitors and stating that such Breaching
Indemnitors have failed to make payments to such Indemnitee in respect of a Loss
in the full amount required pursuant to Section 7B, (b) the amount of such
Unreimbursed Loss, (c) if the Indemnitee desires to cancel any shares of Orius
Common or shares of Series C Participating Preferred in satisfaction of such
Unpaid Loss, such Indemnitee's estimate of the Fair Market Value of one share of
Orius Common and of the Fair Market Value of one share of Series C Participating
Preferred, and (d) the number of shares of Orius Common and shares of Series C
Participating Preferred, and the aggregate principal amount of Orius Junior
Notes which the Indemnitee has elected to cause Orius to cancel in satisfaction
of such Orius Unpaid Loss (the "Canceled Securities"). The Indemnitee may
designate for cancellation from each Breaching Indemnitor (and/or its
transferee) such numbers of shares of Orius Common and/or shares of Series C
Participating Preferred, and/or Orius Junior Notes in such principal amount, as
it may determine in its sole discretion, so long as the aggregate Fair Market
Value of such Canceled Securities does not exceed the aggregate Unreimbursed
Loss at the time of delivery of the applicable Cancellation Notice to the
Representatives. Upon request by any Indemnitee, Orius will provide to such
Indemnitee a list of all certificates representing Orius Common, shares of
Series C Participating Preferred and Orius Junior Notes issued to the Breaching
Indemnitors at the Closing or otherwise held by the Breaching Indemnitors, which
list shall state the name of the Person to whom such securities were issued at
the Closing, the name of the holder of such securities as reflected on Orius's
books and records as of the date of such notice, the amount of each class and
type of such securities then held by each such holder, and the number(s) (or
other identifying characteristics) of the certificates representing such
securities. Upon delivery of a Cancellation Notice by an Indemnitee to Orius and
the Representatives, the securities identified in such notice as Canceled
Securities shall be deemed for all purposes to be canceled and, accordingly,
Orius's books and records shall thereafter reflect that such securities are no
longer outstanding for any purpose, unless within 15 days following the delivery
thereof either the Persons identified in such Cancellation Notice or the
Representative thereof delivers a written notice to each of Orius, the
Representatives and the Indemnitee objecting thereto, in which event such
securities shall not be canceled but shall be held by such Persons, and such
Persons shall (and Orius shall use reasonable efforts to) ensure that no
interest therein will be transferred, pending resolution of the dispute. Each
party to such a dispute shall seek to resolve such dispute expeditiously and in
good faith. If and at such time as any securities are canceled pursuant to this
Section, the holder(s) thereof shall promptly surrender to Orius the
certificates representing such Canceled Securities, duly endorsed for transfer
as requested by Orius, so that new certificates representing any securities
represented thereby which are not so canceled may be issued to the holder
thereof and certificates representing the Canceled Securities may be destroyed
by Orius or reissued to the Indemnitee.
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(ii) Fair Market Value. For purposes of the foregoing, "Fair
Market Value" as to any security means the average of the closing prices of such
security's sales on all domestic securities exchanges or markets on which such
security may at the time be listed or quoted or, if there have been no sales on
any such exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if on any day such
security is not so listed or quoted, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of 21 days consisting of
the day as of which "Fair Market Value" is being determined and the 20
consecutive business days prior to such day; provided that if such security is
listed on any domestic securities exchange the term "business days" as used in
this sentence means business days on which such exchange is open for trading. If
at any time such security is not listed or quoted on any domestic securities
exchange or the domestic over-the-counter market, the "Fair Market Value" shall
be the fair value thereof determined jointly by Orius and the Representatives;
provided that if Orius and the Representatives are unable to agree within 10
days of delivery of a Cancellation Notice, then by a nationally recognized
investment banking firm selected by Orius and the Representatives. The fees and
expenses of such investment banking firm shall be allocated by such firm on an
equitable basis as between the parties to such dispute and paid by such parties
accordingly.
7D. Defense of Third Party Claims. Any Indemnitee in
connection with a third party claim shall notify the Indemnitor of the claim in
writing promptly after receiving written notice of any action, lawsuit,
proceeding, investigation or other claim against it, describing the claim, the
amount thereof (if known and quantifiable) and the basis thereof; provided that
the failure to so notify an Indemnitor shall not relieve the Indemnitor of its
obligations hereunder except to the extent that (and only to the extent that)
such failure shall have caused the damages for which the Indemnitor is obligated
to be greater than such damages would have been had the Indemnitee given the
Indemnitor prompt notice hereunder. Any Indemnitor shall be entitled to
participate in the defense of such action, lawsuit, proceeding, investigation or
other claim giving rise to an Indemnitee's claim for indemnification at such
Indemnitor's expense, and at its option (subject to the limitations set forth
below) shall be entitled to assume the defense thereof by appointing a reputable
counsel reasonably acceptable to the Indemnitee to be the lead counsel in
connection with such defense; provided that,
(i) the Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such purpose; and
(ii) the Indemnitor shall not be entitled to assume control of
such defense and shall pay the fees and expenses of counsel retained by the
Indemnitee if (A) the claim for indemnification relates to or arises in
connection with any criminal proceeding, action, indictment, allegation or
investigation; (B) the Indemnitee reasonably believes an adverse determination
with respect to the action, lawsuit, investigation, proceeding or other claim
giving rise to such claim for indemnification would be materially detrimental to
or injure the Indemnitee's reputation or future business prospects; (C) the
claim seeks an injunction or equitable relief against the Indemnitee; (D) the
Indemnitee has been advised in writing by counsel that a reasonable likelihood
exists of a conflict of interest between the Indemnitor and the Indemnitee; or
(E) upon petition by the Indemnitee, the
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appropriate court rules that the Indemnitor failed or is failing to vigorously
prosecute or defend such claim; and
(iii) if the Indemnitor shall control the defense of any such
claim, the Indemnitor shall obtain the prior written consent of the Indemnitee
before entering into any settlement of a claim or ceasing to defend such claim
if, pursuant to or as a result of such settlement or cessation, injunctive or
other equitable relief will be imposed against the Indemnitee or if such
settlement does not expressly and unconditionally release the Indemnitee from
all liabilities and obligations with respect to such claim, without prejudice.
If the Indemnitee notifies the Indemnitor of a claim in accordance with this
Section 7D, the Indemnitor shall bear all fees and expenses of counsel that are
incurred by or on behalf of the Indemnitee prior to the date on which the
Indemnitor effectively assumes control of defense (the "Control Date"). If the
Indemnitee elects to participate in the defense of such a claim in accordance
with clause (i) foregoing, the Indemnitee shall bear all fees and expenses of
such separate counsel that are incurred after the date on which the Indemnitor
has both (x) verified to the Indemnitee in writing that such Indemnitor shall be
fully responsible (with no reservation of any rights) for all liabilities and
obligations relating to such claim for indemnification and that it shall provide
full indemnification (whether or not otherwise required hereunder) to the
Indemnitee with respect to such action, lawsuit, proceeding, investigation or
other claim giving rise to such claim for indemnification hereunder, and (y)
entered into an agreement with the Indemnitee in form and substance satisfactory
to the Indemnitee under which the Indemnitor unconditionally guarantees the
payment and performance of any liability or obligation which may arise with
respect to such action, lawsuit, proceeding, investigation or facts giving rise
to such claim for indemnification hereunder. The Indemnitee shall fund all fees
and expenses of such separate counsel that are incurred in the defense of such a
claim after the Control Date and before the date on which the Indemnitor has
satisfied the conditions described in clauses (x) and (y) of the immediately
preceding sentence, but the Indemnitor will promptly reimburse the Indemnitee in
full for all of such amounts if the Indemnitor is found to be liable in respect
of any such claim.
7E. Legend on Orius Securities Subject to Indemnification.
(i) In addition to the legends described in Section 10C below,
certificates representing the Orius Common retained by or issued to each Orius
Stockholder as of the Closing as contemplated hereby, and the certificates
representing the shares of Series C Participating Preferred and Orius Junior
Notes issued to each Orius Stockholder pursuant to any of the Joinder
Agreements, Orius Call Agreements and Orius Put Agreements, shall bear a legends
in substantially the form set forth below in this Section 7E. Also, in addition
to the legends described in Section 10C below, certificates representing the
Orius Common, shares of Series C Participating Preferred and Orius Junior Notes
issued to each LISN Shareholder pursuant to the LISN Merger Transactions, shall
bear the following legend:
"The securities represented by this [CERTIFICATE / NOTE]
constitute [LISN MERGER CONSIDERATION / ORIUS EXCHANGE
CONSIDERATION] as defined in the Agreement and Plan of
Reorganization dated as of November 8, 1999, by and
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among the issuer and certain investors (the "Agreement") and
are subject to return to the Company under certain
circumstances pursuant to the terms set forth in the
Agreement. Such provisions will continue to apply to any
holder or transferee of the securities represented by this
[CERTIFICATE][NOTE]. A copy of such Agreement shall be
furnished by the issuer to the holder hereof upon written
request and without charge."
(ii) The certificates representing such securities shall bear
such legend, notwithstanding any transfer thereof, until such time as the
indemnity obligations pursuant to Section 7B hereof with respect to such
securities shall have terminated; provided that Orius shall deliver to such
holder new securities representing such securities and not bearing such legend
and the legends described in Section 10C below, as applicable, (a) upon the
request of the holder of any such securities in connection with the Public Sale
(as defined in the Investor Rights Agreement) of such securities, and the
Company shall provide reasonable and prompt assistance to such holder in
connection with the removal of such legends in order to permit such holder to
deliver certificates without such legends in any such Public Sale, provided that
such holder will permit the Company to replace such legends in the event the
contemplated Public Sale of such securities is not consummated, or (b) at such
time as the holder of the securities represented thereby provides insurance for
the benefit of all Persons entitled indemnity by such holder in amounts and of a
type reasonably satisfactory to the Representative(s) of such Persons who are
subject to such indemnity.
7F. Press Release and Announcements. Unless required by law
(in which case each Party agrees to consult with the other Parties prior to any
such disclosure as to the form and content of such disclosure), no press
releases or other releases of information related to this Agreement or the
transactions contemplated hereby will be issued or released prior to the Closing
without the consent of Orius, the LISN Shareholder Representative and the Orius
Stockholders Representative.
7G. Confidentiality. On behalf of the LISN Shareholders and
the Orius Stockholders, the LISN Shareholder Representative and the Orius
Stockholders Representative acknowledge and agree that all "confidential
information" (as defined in the Confidentiality Agreement) provided to them by
the other is subject to the terms of a Confidentiality Agreement between them
(the "Confidentiality Agreement"), the terms of which are incorporated herein by
reference. If the transactions contemplated hereby are not consummated, the LISN
Shareholder Representative shall cause the return to Orius and keep confidential
all information and materials regarding Orius and the Orius Stockholders
reasonably designated by Orius as confidential (except to the extent (i)
disclosure of such information is required by law, (ii) the information was
previously known to the LISN Shareholders or (iii) the information becomes
publicly known except through the actions or inactions of the LISN
Shareholders), and the Orius Stockholders Representative shall cause the same to
occur with respect to LISN. Effective upon the consummation of the transactions
contemplated hereby, the Confidentiality Agreement shall terminate.
7H. Further Assurances. In case at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement or the transactions contemplated hereby, each of the Parties will take
such further action (including the execution and delivery of such
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further instruments and documents) as any other Party may reasonably request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Section 7 above).
Section 8. Definitions. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Affiliated Group" means any affiliated group as defined in
Code ss.1504 that has filed a consolidated return for federal income tax
purposes (or any similar group under state, local or foreign law) for a period
during which Orius or any of its Subsidiaries was a member..
"Aggregate LISN Preferred Liquidation Value" means the sum of
the LISN Preferred Liquidation Value of each outstanding share of LISN at the
Effective Time (determined without giving effect to the LISN Merger).
"Agreement" has the meaning set forth in the Preamble.
"Articles of Incorporation" has the meaning set forth in
Section 1A.
"Bank" has the meaning set forth in Section 2R.
"Breach Notice" has the meaning set forth in Section 9A.
"Breaching Party" has the meaning set forth in Section 9A.
"Bridge Lender" has the meaning set forth in Section 2S.
"Bylaws" has the meaning set forth in Section 2C.
"Cash Equivalents" means investments having a stated maturity
no greater than three month in (i) direct obligations of the United States or
Canadian government or any agency thereof or obligations guaranteed by the
United States or Canadian government, (ii) certificates of deposit of commercial
banks having combined capital and surplus of at least $1 billion, (iii)
commercial paper with a rating from a nationally recognized credit rating agency
in such agency's highest rating category, or (iv) money market funds of
nationally recognized institutions investing solely in obligations described in
clauses (i), (ii) and (iii) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
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"Closing" has the meaning set forth in Section 1C.
"Closing Date" has the meaning set forth in Section 1C.
"Closing LISN Investor Value" has the meaning set forth in
Section 1D.
"Closing Orius Investor Value" has the meaning set forth in
Section 1D.
"COBRA" has the meaning set forth in Section 5T.
"Code" means the Internal Revenue Code of 1986, as amended,
and any reference to any particular Code section shall be interpreted to include
any revision of or successor to that section regardless of how numbered or
classified.
"Confidentiality Agreement" has the meaning set forth in
Section 7G.
"Effective Time" has the meaning set forth in Section 1B.
"Environmental and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law, in
each case concerning public health and safety, worker health and safety and
pollution or protection of the environment (including, without limitation, all
those relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, Release, threatened Release, control or cleanup of any
hazardous or otherwise regulated materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise,
radiation or radon), each as amended and as now or hereafter in effect.
"Environmental Lien" shall mean any Lien, whether recorded or
unrecorded, in favor of any governmental entity, relating to any liability of
Orius arising under any Environmental and Safety Requirements.
"ERISA" has the meaning set forth in Section 5T.
"Escrow Amount Per Share" means $5,000,000 divided by
22,789,683.77.
"Estimated LISN Closing Balance Sheet" has the meaning set
forth in Section 1D.
"Estimated LISN Net Indebtedness" has the meaning set forth in
Section 1D.
"Estimated Orius Closing Balance Sheet" has the meaning set
forth in Section 1D.
"Estimated Orius Net Indebtedness" has the meaning set forth
in Section 1D.
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"Exclusivity Agreement means the letter agreement dated August
31, 1999 by and among Willis Stein & Partners Management II, L.L.C., LISN,
Orius, and HIG, as amended by letter agreements dated as of September 30, 1999
and October 15, 1999, as further amended from time to time.
"Existing Bank Liens" means Liens securing the obligations in
respect of Indebtedness for borrowed money and the security interests on
equipment held by certain TCI entities with respect to advances made to Orius by
such TCI entities.
"Existing LISN Employee Options" has the meaning set forth in
Section 1A.
"Existing Orius Option" means an option to purchase Orius
Common Stock which is evidenced by an Existing Stock Option Agreement in the
form previously delivered to LISN and granted pursuant to the Existing Stock
Option Plan, is outstanding on the date hereof and held by a person listed on
the Orius Optionholders Schedule hereto, which option is exercisable for up to
the number of shares set forth opposite such person's name at the exercise per
share set forth opposite such person's name on such Exhibit; and "Existing Orius
Options" means all of the Existing Orius Options, collectively.
"Existing Stock Option Agreement" means the Incentive Stock
Option Agreement pursuant to which Orius granted each of the Existing Orius
Options, which agreement is in the form previously delivered by Orius to LISN.
"Existing Stock Option Plan" means the Orius Corp. Stock
Option Plan in the form previously delivered by Orius to LISN.
"Final LISN Consideration" has the meaning set forth in
Section 1E.
"Final LISN Net Indebtedness" has the meaning set forth in
Section 1E.
"Final Orius Consideration" has the meaning set forth in
Section 1E.
"Final Orius Net Indebtedness" has the meaning set forth in
Section 1E.
"Financing Fees and Expenses" means any fees, expenses or
other costs incurred by LISN (including to reimburse Willis Stein for fees,
expenses and costs Willis Stein may incur) in connection with the Senior Debt
Financing or the Senior Subordinated Debt Financing and any fee payable to
Merrill Lynch in connection with the transactions contemplated hereby; provided
that in no event will Financing Fees and Expenses include any fees payable to
Willis Stein.
"Firm" has the meaning set forth in Section 1E.
"401(k) Plan" has the meaning set forth in Section 5T.
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"Full Strip Cash Consideration Per Old Common Share" means
cash in an amount equal to 50% of the Orius Common Value Per Share.
"Full Strip Junior Note Consideration Per Old Common Share"
means (i) the product of (A) Orius Common Value Per Share, multiplied by (B)
50%, multiplied by (C) the Note Proportion.
"Full Strip Preferred Consideration Per Old Common Share"
means (i) the product of (A) Orius Common Value Per Share, multiplied by (B)
50%, multiplied by (C) the Preferred Stock Proportion, divided by (ii) $1,000
(i.e., the Series C Liquidation Value per share of Series C Participating
Preferred, as defined in Exhibit A hereto).
"GAAP" means United States generally accepted accounting
principles.
"Hart-Scott-Rodino Act" has the meaning set forth in Section
2L.
"HIG" has the meaning set forth in the Preamble.
"HIG Cable" means H.I.G. Cable, Inc.
"HIG Pledge and Voting Agreement" has the meaning set forth in
Section 2G.
"HIG Put Agreement" has the meaning set forth in the Preamble.
"HIG Redemption Agreement" means the Redemption Agreement,
dated February 26, 1999, by and among Orius Corp., HIG Cable, Inc. and HIG Cable
West, Inc.
"HIG West" means H.I.G. Cable West, Inc.
"Identified Breach" has the meaning set forth in Section 9A.
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or indebtedness issued in
substitution or exchange for indebtedness for borrowed money, (ii) any
indebtedness evidenced by any note, bond, debenture or other debt security,
(iii) all fees, expenses and other costs incurred in connection with the
marketing, negotiation, documentation or consummation of the transactions
contemplated by this Agreement, including any brokerage or financial advisory
fees (other than the Financing Fees and Expenses) and, in respect of Orius,
including the amounts payable to the Persons and in the amounts set forth on the
"Orius Bonus Schedule", (iv) any commitment by which a Person assures a creditor
against loss (including contingent reimbursement obligations with respect to
letters of credit), (v) any indebtedness guaranteed in any manner by a Person
(including guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets, (viii) any unsatisfied
obligation for "withdrawal liability" to a "multi-
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employer plan" as such terms are defined under ERISA, and (ix) any obligation to
repay deposits or other amounts advanced by and owing to third parties (e.g.,
obligations to repay advances and deposits received from customers; provided
that it is understood and agreed that the $12.7 million of advances to Orius by
various TCI entities and which is outstanding as of the date hereof (as more
fully described on the Orius Accounts Receivable Schedule) is not Indebtedness
for purposes of this Agreement); provided that with respect to LISN,
"Indebtedness" shall include the $7,885,450 payable to Donald J. Vanke on
January 2, 2000, as the purchase price for the Vanke Shares pursuant to Section
2.2(d) of the LISN Recapitalization Agreement, to the extent unpaid, and shall
exclude the LISN Junior Notes and all interest accrued thereon and the New LISN
Notes; and provided that with respect to Orius, "Indebtedness" shall include (1)
fees, expenses and other costs incurred by Orius and its predecessors in
connection with its work on a proposed initial public offering of Orius common
stock, (2) fees, expenses and other costs owing or to become due to Deutsche
Bank, Securities, Inc. and any other financial advisor in connection with the
transactions contemplated by this Agreement, including any such fees, expenses
and other costs incurred by HIG or any Orius Stockholder for which Orius is or
becomes liable, (3) all Liabilities in respect of the litigation matter styled
Roland Harris v. North American Tel-Com Group, Inc., including without
limitation for legal fees and expenses and settlement obligations, (4) the
aggregate amount of dividends that have accrued with respect to shares of Orius
Series A Preferred or Orius Series B Preferred, to the extent unpaid as of the
Effective Time, (5) all interest which has accrued and remains unpaid with
respect to the Orius Convertible Note as of the Effective Time, but shall
exclude the original principal amount of the Orius Convertible Note, (6)
$593,269 (or such other amount if, and only if, another amount is definitively
agreed to prior to the Closing Date) as a working capital adjustment owing to
the former stockholders of Copenhagen Utilities & Construction, Inc.
("Copenhagen") under that certain Stock Exchange Agreement, dated February 20,
1999, by and among NATG Holdings, LLC, Orius Corp. and the shareholders of
Copenhagen, and (7) all Liabilities in respect of the litigation matter
involving William Little, including without limitation for legal fees and
expenses and settlement obligations.
"Indemnitee" has the meaning set forth in Section 7B(iii)(b).
"Indemnitor" has the meaning set forth in Section 7B(iii)(b).
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) internet domain names,
trademarks, service marks, trade dress, trade names, logos and corporate names
and registrations and applications for registration thereof together with all of
the goodwill associated therewith, (iii) copyrights (registered or unregistered)
and copyrightable works and registrations and applications for registration
thereof, (iv) mask works and registrations and applications for registration
thereof, (v) computer software, data, data bases and documentation thereof, (vi)
trade secrets and other confidential information (including ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), (vii) other
intellectual property rights and (viii) copies and tangible embodiments thereof
(in whatever form or medium).
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"Investment" as applied to any Person means (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interests (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"Investment Agreement" has the meaning set forth in Section
1B.
"Investment Amount" means an amount not less than (i)
$97,000,000 minus (ii) the aggregate proceeds to Orius and its Subsidiaries of
the Senior Debt Financing and the Senior Subordinated Debt Financing to the
extent in excess of $375,000,000.
"Investment Transaction" has the meaning set forth in Section
1B.
"Investor Note Amount" means the product of (i) the Note
Proportion multiplied by (ii) the aggregate principal amount of the New LISN
Notes issued at or prior to the Closing pursuant to the Investment Agreement.
"Investor Preferred Amount" means (i) ninety percent (90%) of
the aggregate principal amount of the New LISN Notes issued at or prior to the
Closing pursuant to the Investment Agreement, minus (ii) the Investor Note
Amount.
"Investor Preferred Number" means the quotient determined by
dividing (i) the Investor Preferred Amount, by (ii)$1,000 (i.e., the Series C
Liquidation Value per share of Series C Participating Preferred, as defined in
Exhibit A hereto).
"Investor Representative" means Willis Stein.
"Investor Rights Agreement" has the meaning set forth in
Section 2D.
"Investors" means, collectively, Willis Stein and the other
Persons listed on Exhibit D, as such list may be revised by Willis Stein from
time to time by written notice to Orius at any time prior to the Closing, it
being understood that (i) prior to the Closing LISN may offer New LISN Notes to
the parties to the LISN Holdings, Inc. Shareholders Agreement dated as of May
28, 1999, accordance with the procedures of Section 4 thereof of and if and to
the extent that any LISN Shareholder elects to purchase New LISN Notes in
accordance with such offer Exhibit D shall be revised to reflect such Person as
a purchaser of such New LISN Notes and the principal amounts of notes to be
purchased by Willis Stein and the other Persons identified on such Schedule
shall be reduced accordingly, and (ii) Willis Stein will in any event be an
Investor and will purchase any portion of the Investment Amount of the New LISN
Notes which are not purchased at the Closing by other Investors; and "Investor"
means, individually, any Person listed on Exhibit D as of the Closing, as such
Exhibit may be amended from time as contemplated by the foregoing definition.
"Joinder Agreements" means, collectively, the Full Strip
Joinder Agreements, the Securities Only Joinder Agreements, the Cash Joinder
Agreements and the Warrant Joinder
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Agreements, and "Joinder Agreement" means any Full Strip Joinder Agreement,
Securities Only Joinder Agreement, Cash Joinder Agreement or Warrant Joinder
Agreement.
"Knowledge", as used in respect of any of Orius and its
Subsidiaries, or in respect of any of LISN and its Subsidiaries, for example in
the phrases "to the Knowledge of Orius", "to Orius's Knowledge," "to the
Knowledge of LISN", "to LISN's Knowledge" or phrases of similar import, means
the actual knowledge or awareness of the senior executives, senior officers and
directors of Orius and its Subsidiaries, or of LISN and its Subsidiaries, as
applicable.
"Liability" means any liability, debt, obligation, deficiency,
Tax, penalty, fine, claim, cause of action or other loss, cost or expense of any
kind or nature whatsoever, whether asserted or unasserted, absolute or
contingent, known or unknown, accrued or unaccrued, liquidated or unliquidated,
and whether due or become due and regardless of when asserted.
"Lien" or "Liens" in respect of any Person means any mortgage,
pledge, security interest, encumbrance, lien or charge of any kind (including
any conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against such Person, any filing
or agreement to file a financing statement as debtor under the Uniform
Commercial Code or any similar statute (other than to reflect ownership by a
third party of property leased to such Person under a lease which is not in the
nature of a conditional sale or title retention agreement), or any subordination
arrangement in favor of another Person.
"LISN" has the meaning set forth in the preamble.
"LISN Basket" has the meaning set forth in Section 7B.
"LISN Cap" has the meaning set forth in Section 7B.
"LISN Closing Balance Sheet" has the meaning set forth in
Section 1E.
"LISN Closing Indebtedness" has the meaning set forth in
Section 1E.
"LISN Common" has the meaning set forth in Section 1A.
"LISN Common Stockholders Common Share Number" means the
quotient determined by dividing (i) nine percent (9%) of the Closing LISN
Investor Value by (ii) the Orius Common Value Per Share.
"LISN Common Stockholders Preferred Share Number" means the
excess of the LISN Shareholders Preferred Share Number over the LISN Preferred
Stockholder Preferred Share Number.
"LISN Deductible" has the meaning set forth in Section 7B
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"LISN Junior Note Amount" means the aggregate principal amount
of, plus accrued and unpaid interest on, the LISN Junior Notes outstanding at
the Effective Time, calculated without giving effect to the Note Exchange or the
LISN Merger.
"LISN Junior Notes" has the meaning given such term in Section
1A.
"LISN Leased Real Property" has the meaning given such term in
Section 6Y.
"LISN Leases" has the meaning given such term in Section 6Y.
"LISN Merger" has the meaning set forth in Section 1B.
"LISN Merger Transactions" has the meaning set forth in
Section 1B.
"LISN Owned Real Property" has the meaning given such term in
Section 6Y.
"LISN Party" or "LISN Parties" have the meaning set forth in
Section 8B.
"LISN Preferred" has the meaning set forth in Section 1A.
"LISN Preferred Liquidation Value" with respect to any share
of LISN Preferred means the Series A Preferred Liquidation Value (as defined in
LISN's articles of incorporation as in effect on the date hereof) of such share
of LISN Preferred at the Effective Time (determined without giving effect to the
LISN Merger), plus the aggregate amount of dividends which have accrued on such
share and remain unpaid as of such time.
"LISN Preferred Stockholder Preferred Share Number" means the
product of (i) the LISN Preferred Stockholders Preferred Share Multiplier
multiplied by (ii) the Aggregate LISN Preferred Liquidation Value, divided by
(iii)$1,000 (i.e., the Series C Liquidation Value per share of Series C
Participating Preferred, as defined in Exhibit A hereto).
"LISN Preferred Stockholders Preferred Share Multiplier" means
a fraction:
(i) the numerator of which is the excess of (A) ninety percent
(90%) of Closing LISN Investor Value over (B) the LISN Junior Note
Amount, and
(ii) the denominator of which is the excess of (A) ninety-one
percent (91%) of Closing LISN Investor Value, over (B) the LISN Junior
Note Amount.
"LISN Recapitalization Agreement" means the Recapitalization
Agreement dated as of May 27, 1999 between and among LISN, LISN, Inc., Arion
Sub, Inc., Donald J. Vanke, Donald L. Sanneman, James S. Hivnor, Willis Stein &
Partners II, L.P., Willis Stein & Partners Dutch, L.P. and the other parties
named therein, as amended.
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"LISN Shareholder" or "LISN Shareholders" has the meaning
given such term in Section 1B.
"LISN Shareholder Representative" initially shall be Willis
Stein & Partners II, L.P.
"LISN Shareholders Preferred Share Number" means the quotient
determined by dividing (i) the excess of (A) ninety percent (90%) of Closing
LISN Investor Value, over (B) the LISN Junior Note Amount, by (ii)$1,000 (i.e.,
the Series C Liquidation Value per share of Series C Participating Preferred, as
defined in Exhibit A hereto).
"LISN Sub" has the meaning given such term in Section 2R.
"LISN Transaction" has the meaning set forth in Section 4J.
"LISN Transmittal Letter" has the meaning set forth in Section
1B.
"Loss" or "Losses" has the meaning set forth in Section 7B.
"Material Adverse Effect" means a material and adverse effect
upon the business, operations, assets, liabilities, financial condition,
operating results, cash flow, net worth or employee, customer or supplier
relations, or prospects of Orius or LISN, as the case may be, taken as a whole.
"Merger Agreement" has the meaning set forth in Section 1B.
"Merger Sub" has the meaning set forth in the Preamble.
"NATG" has the meaning set forth in Section 2R.
"New Incentive Stock and Option Plan" means the plan set forth
as Exhibit P hereto.
"New LISN Notes" has the meaning set forth in Section 1A.
"New Stock Option Agreement" has the meaning set forth in
Section .
"Note Exchange" has the meaning set forth in Section 1B.
"Note Exchange Agreement" has the meaning set forth in Section
1B.
"Note Proportion" mean a fraction, (i) the numerator of which
is the LISN Junior Note Amount, and (ii) the denominator of which is the Closing
LISN Investor Value.
"Objection Notice" has the meaning set forth in Section 1E.
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"ordinary course" in respect of a Person means the ordinary
course of business of such Person, consistent with such Person's past custom and
practice, including with respect to quantity, quality and frequency.
"Orius" has the meaning set forth in the preamble.
"Orius Basket" has the meaning set forth in Section 7B.
"Orius Call Agreement" has the meaning given such term in
Section 1B(vi).
"Orius Cap" has the meaning set forth in Section 7B.
"Orius Class B Common" has the meaning set forth in the
Preamble.
"Orius Closing Balance Sheet" has the meaning set forth in
Section 1E.
"Orius Closing Fully-Diluted Common Share Amount" means the
sum, determined immediately prior to the Effective Time, of the following:
(i) the aggregate number of outstanding shares of Orius Common
Stock, plus
(ii) the aggregate number of shares of Orius Common Stock
issuable upon conversion of outstanding shares of Orius Series A
Preferred, plus
(iii) the aggregate number of shares of Orius Common Stock
issuable upon conversion of outstanding shares of Orius Series B
Preferred, plus
(iv) the aggregate number of shares of Orius Common Stock
issuable upon conversion of the Orius Convertible Note, plus
(v) the aggregate number of shares of Orius Common Stock
issuable upon exercise of Orius Warrants, plus
(vi) the aggregate number of shares of Orius Common Stock
issuable upon exercise of the Existing Orius Options, determined
disregarding any restrictions or limitations upon the exercise of such
Options, plus
(vii) all other shares of Orius Common Stock, if any, which
are issuable, directly or indirectly, upon exercise or conversion of,
or in exchange for, any other outstanding rights or securities or any
other rights or securities issuable, directly or indirectly, in respect
of any of the foregoing.
"Orius Closing Indebtedness" has the meaning set forth in
Section 1E.
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"Orius Common" means the Orius Common Stock and the Orius
Class B Common, collectively.
"Orius Common Stock" has the meaning set forth in the
Preamble.
"Orius Common Value Per Share" means the quotient determined
by dividing (i) the Closing Orius Investor Value by (ii) the Orius Closing
Fully-Diluted Common Share Amount.
"Orius Continuing Stockholder" or "Orius Continuing
Stockholders" shall mean the stockholders of Orius who are listed on Exhibit D,
other than the Orius Selling Stockholders.
"Orius Convertible Note" means the $1,000,000 Convertible
Subordinated Promissory Note issued by Orius to H.I.G. Cable, Inc. on February
26, 1999.
"Orius Deductible" has the meaning set forth in Section 7B.
"Orius Indemnifying Stockholders" has the meaning set forth in
Section 7B.
"Orius Junior Notes" means, collectively, the 12% junior
subordinated promissory notes issued by Orius in the form of Exhibit C attached
hereto, dated as of the Closing Date, and issued pursuant to this Agreement,
including pursuant to any Joinder Agreement, pursuant to the LISN Merger or
pursuant to the Investment Agreement, and all junior subordinated promissory
notes in the form of Exhibit C hereto which hereafter are issued upon transfer
of any of any Orius Junior Note or to evidence unpaid interest which has accrued
on any Orius Junior Note; and each such note may be referred to herein as a
"Orius Junior Note".
"Orius Latest Balance Sheet" has the meaning set forth in
Section 5E.
"Orius Leased Real Property" has the meaning given such term
in Section 5Y.
"Orius Leases" has the meaning given such term in Section 5Y.
"Orius Option Spread Value" means, for each Existing Orius
Option, the product of (i) the Share Number for such option multiplied by (ii)
the excess of Orius Common Value Per Share over the exercise price per share of
Orius Common Stock payable to Orius upon exercise of such option, as set forth
opposite the name of the holder of such Existing Orius Option on the Orius
Optionholders Schedule hereto.
"Orius Owned Real Property" has the meaning given such term in
Section 5Y.
"Orius Party" or "Orius Parties" have the meaning set forth in
Section 7B.
"Orius Put Agreement" has the meaning given such term in
Section 3B.
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"Orius Selling Stockholders" means H.I.G. Cable Inc., H.I.G.
Cable West, Inc., Glenn E. Mullen, Thomas M. Strahan, the Jerry R. Wood and
Sabra M. Wood Living Trust, Delores Bonadeo, Joseph Funston, Jon M. Cheverere
and Kitty J. Cheverere.
"Orius Series A Preferred" has the meaning set forth in the
preamble.
"Orius Series B Preferred" has the meaning set forth in the
preamble.
"Orius Stockholder" or "Orius Stockholders" have the meaning
set forth in Section 1A.
"Orius Stockholders Representative" initially shall be William
G. Mullen.
"Orius Transaction" has the meaning set forth in Section 4J.
"Orius Warrant" means a warrant agreement, in the form
previously delivered to LISN, between Orius and a Person listed on the Orius
Warrantholders Schedule hereto, under which such Person is entitled to purchase
from Orius shares of Orius Common Stock at the exercise per share set forth
opposite such person's name on such Exhibit, which agreement is in full force
and effect and exercisable by such Person on the date hereof to acquire up to an
aggregate number of shares of Orius Common Stock which, when combined with the
aggregate number of shares of Orius Common Stock which are issuable upon
exercise of each other Orius Warrant held by such Person, shall not exceed the
amount set forth opposite such Person's name on the Orius Stockholders Schedule
hereto; and "Orius Warrants" means all of Orius Warrants, collectively.
"Other Loss" has the meaning set forth in Section 7B.
"Other Plans" has the meaning set forth in Section 5T.
"Other Reorganization Agreements" shall mean the Joinder
Agreements, the LISN Merger Agreement, the LISN Transmittal Letters, Orius Call
Agreements, Orius Put Agreements, the Note Exchange Agreement, the Investment
Agreement, the Escrow Agreement, the HIG Put Agreement, the HIG Call Agreement,
the Purchase Agreement, the Pledge and Voting Agreements and the Investor Rights
Agreement.
"Party" or "Parties" has the meaning set forth in the
preamble.
"Permitted Encumbrances" shall mean with respect to each
parcel of Orius Owned Real Property or LISN Owned Real Property (i) statutory
liens for current Taxes or other governmental charges not yet due and payable or
the amount or validity of which is being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in
accordance with GAAP; (ii) mechanics', carriers', workers', repairers' and
similar statutory liens arising or incurred in the ordinary course of business
for amounts which are not delinquent and which are not, individually or in the
aggregate, material to Orius's or LISN's business, as applicable; (iii) zoning,
entitlement, building and other land use regulations imposed by governmental
agencies
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having jurisdiction over the Orius Owned Real Property or LISN Owned Real
Property which are not violated by the current use and operation of the Orius
Owned Real Property or LISN Owned Real Property; (iv) covenants, conditions,
restrictions, easements and other similar matters of record affecting title to
the Orius Owned Real Property or LISN Owned Real Property which do not
materially impair the occupancy or use of the Orius Owned Real Property or LISN
Owned Real Property for the purposes for which it is currently used in
connection with Orius's or LISN's business, as applicable; and (v) the Existing
Bank Liens.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Plans" has the meaning set forth in Section 5T.
"Preferred Stock Proportion" means 0.90 minus the Note
Proportion.
"Pro Rata Share" has the meaning set forth in Section 7B.
"Purchase Agreement" has the meaning set forth in Section 1B.
"Purchase Transaction" has the meaning set forth in Section
1B.
"Qualifying Waiver" has the meaning set forth in Section 9A.
"Related Person" has the meaning set forth in Section 9A.
"Release" shall have the meaning set forth in CERCLA.
"Representatives" means at the time of determination thereof,
collectively, the LISN Shareholders Representative, the Investor Representative
and the Orius Stockholders Representative at such time.
"Restricted Securities" means (i) shares of Orius Common and
shares of Series C Participating Preferred issued pursuant to this Agreement or
any of the agreements contemplated hereby, (ii) the shares of Orius Common Stock
held by the Orius Stockholders as of the date hereof and retained by such
Persons through the Closing, (iii) the Orius Junior Notes issued hereunder, and
(iv) any securities issued or exchanged with respect to the securities referred
to in clauses (i), (ii) and (iii) above by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) been distributed
to the public through a broker, dealer or market maker pursuant to Rule 144 (or
any similar provision then in force) under the Securities Act or become eligible
for sale pursuant to Rule 144(k) (or any similar provision then in force) under
the Securities Act or (c) been otherwise transferred and new certificates for
them not bearing the Securities Act legend set
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forth in Section 10C have been delivered by Orius in accordance with Section
10C or Section 7E Whenever any particular securities cease to be Restricted
Securities, the holder thereof shall be entitled to receive from Orius, without
expense, new securities of like tenor not bearing a Securities Act legend of the
character set forth in Section10C.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Securities Only Junior Note Consideration Per Old Common
Share" means (i) the product of (A) Orius Common Value Per Share, multiplied by
(B) the Note Proportion.
"Securities Only Preferred Consideration Per Old Common Share"
means (i) the product of (A) Orius Common Value Per Share, multiplied by (B) the
Preferred Stock Proportion, divided by (ii) $1,000 (i.e., the Series C
Liquidation Value per share of Series C Participating Preferred, as defined in
Exhibit A hereto).
"Senior Debt Financing" has the meaning set forth in Section
2T.
"Senior Subordinated Debt Financing" has the meaning set forth
in Section 2L.
"Series C Participating Preferred" has the meaning set forth
in Section 1A.
"Service Certifications" has the meaning set forth in Section
5H.
"Share Number" for any Orius Warrant or any Existing Orius
Option means the number of shares of Orius Common Stock issuable upon exercise
of such warrant or option as of the Effective Time, which number shall not
exceed (i) in the case of an Orius Warrant, the number set forth opposite the
name of the holder of such Orius Warrant on the Orius Warrantholders Schedule
hereto as the number of shares of Orius Common Stock issuable upon exercise of
such Orius Warrant, less the aggregate number of shares of Orius Common Stock,
if any, issued upon exercise of such Orius Warrant on or after the date hereof
and at or prior to the Effective Time, and (ii) in the case of an Existing Orius
Option, the number set forth opposite the name of the holder of such Existing
Orius Option on the Orius Optionholders Schedule hereto as the number of shares
of Orius Common Stock issuable upon exercise of such Existing Orius Option, less
the aggregate number of shares of Orius Common Stock, if any, issued upon
exercise of such Existing Orius Option on or after the date hereof and at or
prior to the Effective Time.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that
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Person or a combination thereof. For purposes hereof, a Person or Persons shall
be deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control any
managing director or general partner of such limited liability company,
partnership, association or other business entity.
"Tax" or "Taxes" means federal, state, county, local, foreign
or other income, gross receipts, ad valorem, franchise, profits, sales or use,
transfer, registration, excise, utility, environmental, communications, real or
personal property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including
deficiencies, penalties, additions to tax, and interest attributable thereto)
whether disputed or not.
"Tax Return" means any return, information report or filing
with respect to Taxes, including any schedules attached thereto and including
any amendment thereof.
"Third Party Losses" has the meaning set forth in Section 7B.
"Treasury Regulations" means the United States Treasury
Regulations promulgated under the Code, and any reference to any particular
Treasury Regulation section shall be interpreted to include any final or
temporary revision of or successor to that section regardless of how numbered or
classified.
"Unsatisfied Condition" has the meaning set forth in Section
9A.
"Vanke Shares" means (i) prior to the Vanke Exchange, the
56,746.90 shares of LISN common stock held by Donald J. Vanke subject to
repurchase by LISN pursuant to Section 2.2(d) of the LISN Recapitalization
Agreement, and (ii) upon and after the Vanke Exchange, the shares of LISN Class
C Common issued in the Vanke Exchange.
"Willis Stein" means Willis Stein & Partners II, L.P. and
Willis Stein & Partners Dutch, L.P., collectively.
Section 9. Termination.
9A. Conditions of Termination. This Agreement may be
terminated at any time prior to the Closing:
(i) by the mutual written consent of Orius and LISN;
(ii) by the LISN Shareholder Representative or the Investor
Representative if there has been a material misrepresentation, material breach
of warranty or material breach of a covenant by Orius or any Orius Stockholder
in the representations and warranties or covenants set forth in this Agreement
or the Schedules and Exhibits attached hereto, including without limitation in
any Joinder
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Agreement, the Purchase Agreement, the HIG Put Agreement, the HIG Call
Agreement, any of the Orius Put Agreements or any of the Orius Call Agreements,
which in the case of any breach of covenant, has not been cured within ten days
after written notification thereof by the LISN Shareholder Representative or the
Investor Representative to Orius and the Orius Stockholders Representative;
(iii) by Orius and the Orius Stockholders Representative if
there has been a material misrepresentation, material breach of warranty or
material breach of covenant by LISN or the LISN Shareholders in the
representations and warranties or covenants set forth in this Agreement or the
Schedules and Exhibits attached hereto, or by LISN in the Purchase Agreement,
the HIG Put Agreement, the HIG Call Agreement, any of the Orius Put Agreements
or any of the Orius Call Agreements, which in the case of any breach of covenant
has not been cured within ten days after written notification thereof by Orius
and the Orius Stockholders to the LISN Shareholder Representative;
(iv) if as of the expiration of the fifteen day period
commencing on the date hereof, either LISN or the LISN Shareholders
Representative has not received from Orius a written notice, in form and
substance reasonably satisfactory to LISN and the LISN Shareholders
Representative (accompanied by such evidence as to its contents as LISN or the
LISN Shareholders Representative may reasonably request) certifying that as of
such time;
(a) each Orius Stockholder (other than HIG) has
executed and irrevocably delivered to the Orius Stockholders
Representative a Joinder Agreement and/or an Orius Call Agreement,
pursuant to which such Orius Stockholder has agreed to deliver to
Orius, either at the Closing pursuant to such Joinder Agreement or upon
exercise by Orius of its rights pursuant to Orius Call Agreement, each
share of Orius Common Stock set forth opposite its name on the Orius
Stockholders Schedule hereto, and such shares comprise all of the
equity interests that such Orius Stockholder holds or is entitled to in
Orius (other than Existing Orius Options), and each Orius Warrantholder
has executed and irrevocably delivered to Orius a Joinder Agreement
with respect to Orius Warrants exercisable in the aggregate for the
number of shares of Orius Common Stock set forth opposite its name on
the Orius Warrantholders Schedule attached hereto and such Orius
Warrants comprise all of the equity interests that such Orius
Warrantholder holds or is entitled to in Orius, and there are no
outstanding shares of Orius Common Stock and no outstanding Orius
Warrants which are not subject to the terms of such an executed Joinder
Agreement or Orius Call Agreement;
(b) HIG Cable has executed and irrevocably delivered the
Purchase Agreement to Purchaser and HIG West has executed and
irrevocably delivered the HIG Put Agreement and HIG Call Agreement to
Purchaser, and each of such agreements is in full force and effect; and
(c) each Orius Stockholder other than HIG has
delivered to the Orius Stockholders Representative the certificates
representing the shares of Orius Common Stock held by such Person, duly
endorsed as required for delivery to Orius as described in the Joinder
Agreement or Orius Call Agreement executed by such Orius Stockholder
and relating
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to such shares (except to the extent that such Person has executed and
delivered to the Orius Stockholders Representative a lost certificate
affidavit and indemnity in the form of Exhibit X hereto in respect of
such shares), and each of the Orius Stockholders, other than the Orius
Selling Stockholders, has delivered to the Orius Stockholders
Representative a counterpart signature page to the Investor Rights
Agreement;
(v) by the LISN Shareholder Representative, the Investor
Representative or the Orius Stockholders Representative if the transactions
contemplated hereby have not been consummated by December 22, 1999 provided that
neither the Person electing termination pursuant to this Section 9A(iv), or any
Related Person in respect of such Person, is in breach of any of its
representations, warranties, covenants or agreements contained in this Agreement
or the Schedules and Exhibits attached hereto (including without limitation the
Purchase Agreement, a Joinder Agreement, the Put Agreement or the Call
Agreement) which has caused a closing condition to the obligations of LISN set
forth in Section 2 (in the case of a breach by the Orius Stockholders
Representative, Orius or any Orius Stockholder) or of Orius set forth in Section
3 (in the case of any breach by the LISN Shareholder Representative, LISN or any
LISN Shareholder), to be unsatisfied. For purposes of the foregoing, "Related
Person"in respect of the LISN Shareholder Representative or the Investor
Representative means any of the LISN Shareholders and LISN, and in respect of
the Orius Stockholders Representative means any of Orius and the Orius
Stockholders.
Notwithstanding the immediately preceding clause, if a Representative or any of
its Related Persons has unintentionally breached this Agreement and such breach
has prevented the consummation of the transactions contemplated hereby, such
party may terminate this Agreement pursuant to this Section 9(A)(iv) if (i) such
Representative and its Related Persons who are in breach (the "Breaching
Party"), promptly upon becoming aware of such breach, delivers to LISN, Orius
and the other Representatives a written notice (a "Breach Notice") describing in
reasonable detail such breach (the "Identified Breach"), specifying the
condition described above which, because of such breach, will not be satisfied
(the "Unsatisfied Condition"), requesting that the Persons whose obligations are
subject to the Unsatisfied Condition deliver to the Breaching Party a Qualified
Waiver of the Unsatisfied Condition, and confirming that if such Persons deliver
such a waiver and consummate the transactions contemplated hereby such Persons
delivering such waiver shall be entitled to indemnification pursuant to Section
7B above in respect of such Identified Breach, and (ii) such other Persons fail
to deliver to the Breaching Party a Qualifying Waiver (as defined below) within
5 business days after receiving such Breach Notice, the Breaching Party shall
thereafter be permitted to terminate this Agreement pursuant to this Section
9A(iv). For purposes hereof, a "Qualifying Waiver" in respect of a Breach Notice
is an agreement to waive the Unsatisfied Condition described therein to the
extent that it remains unsatisfied solely due to the Identified Breach described
therein.
9B. Effect of Termination. In the event of termination of this
Agreement by either the LISN Shareholder Representative or Orius and the Orius
Stockholders Representative as provided above, this Agreement shall forthwith
become void and of no further force and effect, except that (i) the covenants
and agreements set forth in Section 10S. Section 7F, Section 7G and Section 10N
shall survive such termination until the applicable statute of limitations runs,
(ii) nothing in Section 9A or this Section 9B shall be deemed to release any
Person from any liability for any breach by such Person of the terms and
provisions of this Agreement prior to such
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termination or to impair the right of any Person to compel specific performance
by another Person of its obligations under this Agreement, except that no Person
shall be liable to any other Person for any damages arising out of such breach,
other than for such other Person's out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this Agreement (including fees
and expenses of legal counsel, accountants, investment bankers and other
representatives and consultants) unless such breach was wilful. Notwithstanding
anything herein to the contrary, in the event that the LISN Representative or
the Investor Representative elects to terminate this Agreement pursuant to
Section 9A(iv) above, Orius shall, within three business days of receiving
notice from such Person of the aggregate amount of Bridge Financing Expenses
incurred by LISN and its Affiliates, pay to LISN by wire transfer of immediately
available funds the amount of such Bridge Financing Expenses. For purposes
hereof, "Bridge Financing Expenses" means the aggregate amount of fees and
out-of-pocket expenses paid or owing by LISN pursuant to the Bridge Loan
Commitment Letter.
Section 10. Miscellaneous.
10A. Fees and Expenses. Each Party shall pay all of its own
fees and expenses (including fees and expenses of legal counsel, accountants,
investment bankers and other representatives and consultants) in connection with
this Agreement and the consummation of the transactions contemplated hereby. If
any legal action or other proceeding relating to this Agreement, the agreements
contemplated hereby, the transactions contemplated hereby or thereby or the
enforcement of any provision of this Agreement or the agreements contemplated
hereby is brought against any Party, the prevailing Party in such action or
proceeding shall be entitled to recover all reasonable expenses relating thereto
(including attorneys' fees and expenses) from the Party against which such
action or proceeding is brought in addition to any other relief to which such
prevailing Party may be entitled.
10B. Remedies. The Parties shall have all rights and remedies
set forth in this Agreement and all rights and remedies which the Parties have
been granted at any time under any other agreement or contract executed in
connection with the transactions contemplated hereby and, with respect to any
additional rights the Parties may have against Orius, all of the rights which
the Parties have under applicable law. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter.
10C. Transfer of Restricted Securities.
(i) Restricted Securities are transferable only pursuant to
(a) public offerings registered under the Securities Act, (b) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule is available and (c) subject to the conditions
specified in subparagraph (ii) below, any other legally available means of
transfer.
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(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in clause (a) or (b) of subparagraph
(i) above), the holder thereof shall deliver written notice to Orius describing
in reasonable detail the transfer or proposed transfer, together with an opinion
of Kirkland & Ellis, Akerman, Senterfitt & Eidson, White and Williams LLP or
other counsel which (to Orius's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities delivers
to Orius an opinion of Kirkland & Ellis, Akerman, Senterfitt & Eidson, White and
Williams LLP or such other counsel that no subsequent transfer of such
Restricted Securities shall require registration under the Securities Act, Orius
shall promptly upon such contemplated transfer deliver new certificates or
instruments, as the case may be, for such Restricted Securities which do not
bear the Securities Act legend set forth in Section 10C(v) below. If Orius is
not required to deliver new certificates or instruments, as the case may be, for
such Restricted Securities not bearing such legend, the holder thereof shall not
transfer the same until the prospective transferee has confirmed to Orius in
writing its agreement to be bound by the conditions contained in this Section
10C(ii) and Section 10C(v) below.
(iii) Upon the request of a holder of Restricted Securities,
Orius shall promptly supply to such holder or such holder's prospective
transferees all information regarding Orius required to be delivered in
connection with a transfer pursuant to Rule 144A of the Securities and Exchange
Commission.
(iv) If any Restricted Securities become eligible for sale
pursuant to Rule 144(k), Orius shall, upon the request of the holder of such
Restricted Securities, remove the legend set forth in Section 10C(v) from the
certificates or instruments, as the case may be, representing such Restricted
Securities.
(v) Each certificate or instrument representing Restricted
Securities shall be imprinted with a legend in substantially the following form:
"The Securities represented hereby have not been registered
under the Securities Act of 1933, as amended, or under any
state securities laws. Neither this security nor any portion
hereof or interest herein may be sold, assigned, transferred,
pledged or otherwise disposed of unless the same is registered
under said Act and applicable state securities laws or unless
an exemption from such registration is available and the
issuer hereof (the "Company") will have received evidence of
such exemption reasonably satisfactory to the Company."
10D. Consent to Amendments. This Agreement may be amended, or
any provision of this Agreement may be waived; provided that any such amendment
or waiver shall be binding upon Orius or LISN if and only if set forth in a
writing executed by Orius or LISN, respectively, and referring specifically to
the provision alleged to have
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been amended or waived, any such amendment or waiver shall be binding upon the
Orius Stockholders if and only if set forth in a writing executed by the Orius
Stockholders Representative and referring specifically to the provision alleged
to have been amended or waived, and any such amendment or waiver shall be
binding upon the LISN Shareholders or the Investors if and only if set forth in
a writing executed by the LISN Shareholders Representative and the Investor
Representative and referring specifically to the provision alleged to have been
amended or waived. No course of dealing between or among the Parties shall be
deemed effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any Party under or by reason of this Agreement.
10E. Successors and Assigns.
(i) This Agreement and all covenants and agreements contained
herein and rights, interests or obligations hereunder, by or on behalf of any of
the Parties hereto, shall bind and inure to the benefit of the respective
successors and permitted assigns of the Parties hereto whether so expressed or
not, except that prior to the Closing neither this Agreement nor any of the
covenants and agreements herein or rights, interests or obligations hereunder
may be assigned or delegated by any Orius Stockholder, or assigned or delegated
by Orius, without the prior written consent of LISN and the LISN Shareholder
Representative, prior to the Closing neither this Agreement nor any of the
covenants and agreements herein or rights, interests or obligations hereunder
may be assigned or delegated by any LISN Shareholder, or assigned or delegated
by LISN, without the prior written consent of Orius and the Orius Stockholders
Representative, and after the Closing neither this Agreement nor any of the
covenants and agreements herein or rights, interests or obligations hereunder
may be assigned or delegated by any of such Persons without the prior written
consent of Orius. In connection with any such assignment, the assigning Person
shall cause the prospective assignee to execute and deliver to the Parties a
counterpart to this Agreement, and to each other agreement contemplated hereby
to which such assigning Person is or is contemplated hereby or thereby be a
party, and an acknowledgment by such Person agreeing to be bound by all terms
and provisions hereof and thereof in the same manner and to the same extent as
the assigning party was bound thereby prior to such assignment. Notwithstanding
the foregoing, any Person entitled to indemnity rights pursuant to Section 7 may
assign such Person's rights to indemnification under Section 7 of this Agreement
to any lender to Orius or any of its Subsidiaries as collateral security.
(ii) Orius and its Subsidiaries, and any Orius Stockholder or
LISN Shareholder may assign this Agreement and its rights and obligations
hereunder in connection with a merger or consolidation involving Orius or any of
its Subsidiaries or in connection with a sale of stock or assets of Orius or any
of its Subsidiaries or other disposition of Orius or any of its Subsidiaries.
10F. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application of any
such provision to any Person or circumstance shall be held to be prohibited by,
illegal or unenforceable under applicable law in any respect by a court of
competent jurisdiction, such provision shall be ineffective only to the extent
of such prohibition or illegality or unenforceability, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
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10G. Counterparts. This Agreement may be executed
simultaneously in counterparts (including by means of telecopied signature
pages), any one of which need not contain the signatures of more than one Party,
but all such counterparts taken together shall constitute one and the same
Agreement.
10H. Descriptive Headings; Interpretation. The headings and
captions used in this Agreement and the table of contents to this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized terms used in any Schedule or
Exhibit attached hereto and not otherwise defined therein shall have the
meanings set forth in this Agreement. The use of the word "including" herein
shall mean "including without limitation." The Parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty or covenant. Each reference to "Orius" or
"LISN" herein shall be deemed to be a reference to such Person and its
predecessors, collectively.
10I. Entire Agreement. This Agreement and the agreements and
documents referred to herein contain the entire agreement and understanding
between the Parties with respect to the subject matter hereof and supersede all
prior agreements and understandings whether written or oral, relating to such
subject matter in any way.
10J. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the Parties and their permitted successors and assigns and
nothing herein expressed or implied shall give or be construed to give any
Person, other than the Parties and such permitted successors and assigns, any
legal or equitable rights hereunder.
10K. Schedules. No exceptions to any representations or
warranties disclosed on one Schedule shall constitute an exception to any other
representations or warranties made in this Agreement unless the substance of
such exception is disclosed as provided herein on each such other applicable
Schedule or a specific cross-reference to a disclosure on another Schedule is
made.
10L. Cooperation on Tax Matters. The Parties shall
cooperatefully, as and to the extent reasonably requested by each Party and at
the requesting Party's expense, in connection with any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon any Party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Parties agree (i) to retain all books and records with respect to
Tax matters pertinent to Orius and its Subsidiaries and LISN and its
Subsidiaries relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent notified
by any Party, any extensions thereof) applicable to such taxable periods, and to
abide by all record retention agreements entered into with any taxing authority,
and (ii) to give each Party reasonable written notice prior to transferring,
destroying or discarding any such books and records
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and, if any Party so requests, the LISN Shareholders, Orius or the Orius
Stockholders, as the case may be, shall allow such party to take possession of
such books and records.
10M. Schedules and Exhibits. All Schedules and Exhibits
attached hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein.
10N. Governing Law; Jurisdiction and Venue; Service of
Process; Waiver of Right to Jury Trial.
(i) The law of the State of Florida shall govern all issues
and questions concerning the relative rights and obligations of Orius and the
holders of its equity securities. All other issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
Schedules and Exhibits hereto (including the Joinder Agreements, the Put
Agreements, the Call Agreements, the Note Exchange Agreement, the Purchase
Agreement and the Investment Agreement) shall be governed by, and construed in
accordance with, the laws of the State of Illinois without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Illinois. In furtherance of the
foregoing, the internal law of the State of Illinois shall control the
interpretation and construction of this Agreement (and all Schedules and
Exhibits hereto, including the Joinder Agreements, the Put Agreements (other
than the HIG Put Agreement), the Call Agreements (other than the HIG Call
Agreement), the Note Exchange Agreement, the Purchase Agreement and the
Investment Agreement), even though under that jurisdiction's choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.
(ii) EACH OF THE PARTIES HERETO, AND EACH OF THE ORIUS
STOCKHOLDERS, THE LISN SHAREHOLDERS AND THE INVESTORS, BY EXECUTING ANY OF THE
JOINDER AGREEMENTS, PUT AGREEMENTS, CALL AGREEMENTS, PURCHASE AGREEMENT, NOTE
EXCHANGE AGREEMENT, INVESTMENT AGREEMENT OR LISN TRANSMITTAL LETTER
(COLLECTIVELY, THE "CONSENTING PARTIES", AND EACH INDIVIDUALLY A "CONSENTING
PARTY"), IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
COURTS OF THE NORTHERN DISTRICT OF ILLINOIS, AND THE STATE COURTS OF COOK
COUNTY, ILLINOIS, FOR ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION ANY OF THE JOINDER AGREEMENTS, PUT
AGREEMENTS, CALL AGREEMENTS, PURCHASE AGREEMENT, NOTE EXCHANGE AGREEMENT OR
INVESTMENT AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY ANY OF SUCH
AGREEMENTS, AND AGREES THAT ANY SUCH ACTION, SUIT, OR PROCEEDING MAY BE BROUGHT
ONLY IN SUCH COURTS, PROVIDED THAT THIS SECTION SHALL NOT PREVENT ANY CONSENTING
PARTY FROM SEEKING TO ENFORCE ANY JUDGMENT IN ANY OTHER COURT. EACH OF THE
CONSENTING PARTIES FURTHER WAIVES ANY OBJECTION TO THE LAYING OF VENUE FOR ANY
SUCH SUIT ACTION, OR PROCEEDING IN SUCH COURTS AND
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AGREES NOT TO ASSERT ANY DEFENSE OF LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS IN CONNECTION WITH ANY SUCH SUIT, ACTION OR
PROCEEDING.
(iii) EACH CONSENTING PARTY AGREES TO ACCEPT AND ACKNOWLEDGE
SERVICE OF ANY AND ALL PROCESS THAT MAY BE SERVED, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED BY THE FEDERAL COURTS OF THE NORTHERN DISTRICT OF
ILLINOIS, IN ANY SUIT, ACTION, OR PROCEEDING. EACH CONSENTING PARTY AGREES THAT
ANY SERVICE OF PROCESS UPON IT MAILED BY REGISTERED MAIL, RETURN RECEIPT
REQUESTED, OR BY REPUTABLE OVERNIGHT COURIER SERVICE, TO SUCH CONSENTING PARTY,
OR TO THE REPRESENTATIVE OF SUCH CONSENTING PARTY APPOINTED PURSUANT TO THIS
AGREEMENT, A JOINDER AGREEMENT, A PUT AGREEMENT, A CALL AGREEMENT, THE NOTE
EXCHANGE AGREEMENT OR THE INVESTMENT AGREEMENT, AT THE ADDRESS PROVIDED IN
EXHIBIT D OF THIS AGREEMENT SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON SUCH CONSENTING PARTY IN ANY SUCH SUIT, ACTION, OR PROCEEDING,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE CONSENTING PARTIES TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE
MAILED BY REGISTERED MAIL TO THE COMPANY AT ITS ADDRESS PROVIDED HEREIN, EXCEPT
THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS (UNLESS THE COMPANY IS THE
PARTY SO SERVED AND IS NOT OTHERWISE SERVED). TO THE EXTENT PERMITTED BY LAW, IF
ANY REPRESENTATIVE OR AGENT APPOINTED BY A CONSENTING PARTY REFUSES TO ACCEPT
SERVICE, THE CONSENTING PARTY HEREBY AGREES THAT SERVICE UPON SUCH AGENT,
REPRESENTATIVE OR CONSENTING PARTY BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(iv) EACH CONSENTING PARTY ON BEHALF OF ITSELF, ITS SUCCESSORS
AND ASSIGNS, HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(v) EACH OF THE CONSENTING PARTIES AGREES THAT THIS SECTION
10O IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT
THE OTHER CONSENTING PARTIES WOULD NOT ENTER INTO THIS AGREEMENT OR THE OTHER
AGREEMENTS CONTEMPLATED HEREBY IF THIS SECTION 10O WERE NOT PART OF THIS
AGREEMENT.
10O. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (i) when delivered
personally to the recipient, (ii) one business day after being sent to the
recipient by reputable overnight courier service (charges prepaid), (iii) upon
machine-generated acknowledgment of receipt after transmittal by facsimile if so
acknowledged to
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have been received before 5:00 p.m. on a business day at the location of receipt
and otherwise on the next following business day, provided in each such notice,
demand or other communication is also deposited within 24 hours thereafter with
a reputable overnight courier service (charges prepaid) for delivery to the same
Person, or (iv) five days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to each LISN Shareholder and such
Orius Stockholder at the address indicated on the LISN Transmittal Letter or the
Joinder Agreements executed and delivered by such LISN Shareholder or such Orius
Stockholder, respectively, and to Orius, the Representatives, Orius and LISN, as
the case may be, at the addresses indicated below, or to such other address or
to the attention of such other person as the recipient party has specified by
prior written notice to the sending party.
Orius and Merger Sub (prior to the Closing):
Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, Florida 33401
Attn: Chief Executive Officer
Phone: (561) 687-8300
Facsimile: (561) 687-8080
with a copy to:
(which shall not constitute notice to Orius)
Akerman, Senterfitt & Eidson, P.A.
450 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attn: Donn A. Beloff
Phone: (954) 463-2700
Facsimile: (954) 463-2224
and
H.I.G. Capital Management, Inc.
1001 Brickell Bay Dr. Suite 2708
Miami, FL 33131
Attn: Douglas Berman
Phone: (305) 379-2322
Facsimile: (305) 379-2013
and
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White and Williams LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Attn: M. Melvin Shralow
Phone: (215) 864-6270
Facsimile: (215) 864-7123
Orius and Merger Sub (after the Closing):
Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, Florida 33401
Attn: Chief Executive Officer
Phone: (561) 687-8300
Facsimile: (561) 687-8080
with copies to:
(which shall not constitute notice to Orius)
Willis Stein & Partners II, L.P.
227 West Monroe, Ste. 4300
Chicago, Illinois 60606
Attn: Robert C. Froetscher
Phone: (312) 422-2400
Facsimile: (312) 422- 2424
and:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: John A. Weissenbach
Michael L. Newquist
Phone: (312) 861-2000
Facsimile: (312) 861-2200
Orius Stockholders Representative:
William G. Mullen
c/o Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, Florida 330401
Attn: Chief Executive Officer
Phone: (561) 687-8300
Facsimile: (561) 687-8080
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with a copy to:
(which shall not constitute notice to the Orius Stockholders
Representative)
White and Williams LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Attn: M. Melvin Shralow
Phone: (215) 864-6270
Facsimile: (215) 864-7123
LISN (prior to the Closing):
LISN Holdings, Inc.
1240 Park Avenue
Amherst, Ohio 44001
Attn: Donald J. Vanke
Phone: (440)
Facsimile: (440) 984-2515
with copies to:
(which shall not constitute notice to LISN)
Willis Stein & Partners II, L.P.
227 West Monroe, Ste. 4300
Chicago, Illinois 60606
Attn: Robert C. Froetscher
Phone: (312) 422-2400
Facsimile: (312) 422- 2424
and:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: John A. Weissenbach
Michael L. Newquist
Phone: (312) 861-2000
Facsimile: (312) 861-2200
-102-
<PAGE> 111
LISN Shareholder Representative:
Willis Stein & Partners II, L.P.
227 West Monroe, Ste. 4300
Chicago, Illinois 60606
Attn: Robert C. Froetscher
Phone: (312) 422-2400
Facsimile: (312) 422- 2424
with copy to:
(which shall not constitute notice to the LISN Shareholder
Representative)
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: John A. Weissenbach
Michael L. Newquist
Phone: (312) 861-2000
Facsimile: (312) 861-2200
10P. No Strict Construction. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement.
* * * * *
-103-
<PAGE> 112
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and Plan of Reorganization on the date first written above.
THE COMPANY:
ORIUS CORP.
By: /s/ WILLIAM J. MERCURIO
---------------------------
Its:
---------------------------
MERGER SUB:
ORIUS MERGER SUB, INC.
By: /s/ WILLIAM J. MERCURIO
---------------------------
Its:
---------------------------
LISN:
LISN HOLDINGS, INC.
By: /s/ DONALD J. VANKE
---------------------------
Its: President
---------------------------
[End of Signature Page to Agreement and Plan of Reorganization]
<PAGE> 113
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Michael L. Wallace
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
MICHAEL L. WALLACE
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1947 S. Carolina Ave. NE
------------------------------ --------------------------------
St. Petersburg, FL 33702
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 114
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
DONALD K. VETTER Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ DONALD K. VETTER
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 230 New Ballwin Rd.
------------------------------ --------------------------------
Ballwin, Mo. 63021
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 115
SIGNATURE PAGE TO
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
D. BLAYNE SCHORR Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ D. BLAYNE SCHORR
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1105 W. Edgewood
------------------------------ --------------------------------
Friendswood, TX 77546
------------------------------ --------------------------------
------------------------------ --------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 116
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JOSEPH RUDIN JR. Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JOSEPH RUDIN JR.
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 2199 Oberhelman Rd.
------------------------------ --------------------------------
Foristell, Mo. 63348
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 117
SIGNATURE PAGE TO
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JAMES FRED ROBERTSON
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JAMES FRED ROBERTSON
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 4361 Yorkshire Ct.
------------------------------ --------------------------------
Loganville, GA 30652
------------------------------ --------------------------------
------------------------------ --------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 118
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
WILLIAM GERARD MULLEN TRUST
- ----------------------------------------
Name of Entity
/s/ WILLIAM GERARD MULLEN TRUST
- ----------------------------------------
Signature
Print Name: WILLIAM MULLEN
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: 561-687-8300
-----------------------
Address: 1401 Forum Way
-------------------------------
Suite 400
-------------------------------
West Palm Beach FL 33401
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 119
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
ROBERT M. MULLER
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ ROBERT M. MULLER
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 320 23rd Ave
------------------------------ --------------------------------
Moline IL 61265
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 120
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
DAVID F. MAI
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ DAVID F. MAI
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1189 Cunningham Creek Dr.
------------------------------ --------------------------------
Jacksonville, FL 32259
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 121
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
WILLIAM J. JONES Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ WILLIAM J. JONES
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 4156 S.E. Westfield St.
------------------------------ --------------------------------
Stuart, FL 34997
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 122
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
RODNEY JAMES JOHNSON
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ RODNEY JAMES JOHNSON
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 310 Iron Mounthain
------------------------------ --------------------------------
Lake Oswego Oregon
------------------------------ --------------------------------
97034
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 123
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
P. NICHOLAS JOHNSON
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ P. NICHOLAS JOHNSON
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 14000 Goodall Rd.
------------------------------ --------------------------------
Lake Oswego, Dr 97034
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 124
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
DOUGLAS HOFFMAN
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
// DOUGLAS HOFFMAN
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 401 De Clark St.
------------------------------ --------------------------------
Beaver Dam, WI 53916
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 125
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
RAYMOND L. GALTELLI
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ RAYMOND L. GALTELLI
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 5312 Graycliff Dr.
------------------------------ --------------------------------
Greensboro, NC 27406
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 126
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JEFFERY J. EBERSOLE
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JEFFERY J. EBERSOLE
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: W 4637 Cty Rd. EH
------------------------------ --------------------------------
Elkhart Lake, WI 53020
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 127
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
DENNIS L. DIXON Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ DENNIS L. DIXON
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1867 Tower Place
------------------------------ --------------------------------
Snellville, Georgia 30078
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 128
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Czarnicki Irrevocable Trust
- ----------------------------------------
Name of Entity
John E. Gomolchail
- ----------------------------------------
Signature
Print Name: JOHN E. GOMOLCHAIL
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: 814-864-4550
-----------------------
Address: 3854 Walker Blvd
-------------------------------
Erie PA 16509
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 129
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
BERNARD CZARNECKI
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ BERNARD CZARNECKI
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 12109 W. Lake Rd.
------------------------------ --------------------------------
E. Springfield PA. 16411
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 130
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
KENNETH CHILDRESS
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ KENNETH CHILDRESS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 921 Ferngate Lane
------------------------------ --------------------------------
Creve Coeur, MO 63141
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 131
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
STEVEN E. CASEY Not An Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ STEVEN E. CASEY
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 4138 Pine Crest Trail
------------------------------ --------------------------------
Houston, TX 77059
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 132
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Elizabeth Bonadeo Gift Trust
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name: Larry Bonadeo
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282519
----------------------
Telephone Number: 561-751-0156
-----------------------
Address: 6953 S.W. Cinnamon Ct.
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 133
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Domonic Bonadeo Gift Trust
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name: Larry Bonadeo
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6252820
----------------------
Telephone Number: 561-781-0156
-----------------------
Address: 6983 S.W. Cinnamon Ct.
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 134
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Cassie Bonadeo Gift Trust
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name: Larry Bonadeo
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282521
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6938 S.W. Cinnamon Ct.
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 135
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Anthony Bonadeo Gift Trust
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name: Larry Bonadeo
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282818
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 S.W. Cinnamon Ct.
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 136
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
ANGELO BONADEO GIFT TRUST
- ----------------------------------------
Name of Entity
/s/ LARRY BONADEO TRUSTEE
- ----------------------------------------
Signature
Print Name: LARRY BONADEO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282817
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 S. W. Cinnamon CT
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 137
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Larry Bonadeo
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 6983 S. W. Cinnamon Ct.
------------------------------ --------------------------------
Stuart, FL 34997
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 138
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
FRANK. O. BACK
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ FRANK O. BACK
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1221 Franklin St.
------------------------------ --------------------------------
Bronson, MI 49028
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 139
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
ROBERT M. APGAR
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ ROBERT M. APGAR
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 3902 Majestic Trail
------------------------------ --------------------------------
Houston, TX 77059
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 140
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
GLYNDA J. APGAR
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ GLYNDA J. APGAR
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 3902 Majestic Trail
------------------------------ --------------------------------
Houston TX 77059
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 141
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS WARRANTS
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as applicable, as well as the terms
and agreements above, and makes the representations and warranties set forth
above.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ----------------------------------------
Print Name
- ----------------------------------------
Signature
Address:
------------------------------
------------------------------
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
PNC Bank National Association
- ----------------------------------------
Name of Entity
/s/ JAMES A. FINK
- ----------------------------------------
Signature
Print Name: James A. Fink
-----------------------------
Title: Managing Director
----------------------------------
Taxpayer I.D. No.: 22-1146430
----------------------
Telephone Number: 412-762-8746
-----------------------
Address: One PNC Plaza
-------------------------------
249 Fifth Avenue
-------------------------------
Pittsburgh, PA 15222-2707
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON ORIUS
WARRANT(S) OR BY PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY ORIUS
WARRANT(S) AND DOCUMENTS TRANSMITTED HEREWITH.)
-10-
<PAGE> 142
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS WARRANTS
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as applicable, as well as the terms
and agreements above, and makes the representations and warranties set forth
above.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ----------------------------------------
Print Name
- ----------------------------------------
Signature
Address:
------------------------------
------------------------------
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Merrill Lynch Capital Corporation
- ----------------------------------------
Name of Entity
/s/ CHRISTOPHER K. STOUT
- ----------------------------------------
Signature
Print Name: Christopher K. Stout
-----------------------------
Title: Vice President
----------------------------------
Taxpayer I.D. No.: 13-3176980
----------------------
Telephone Number: (212) 449-0982
-----------------------
Address: World Financial Center
-------------------------------
North Tower
-------------------------------
New York, NY 10281-1329
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON ORIUS
WARRANT(S) OR BY PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY ORIUS
WARRANT(S) AND DOCUMENTS TRANSMITTED HEREWITH.)
-10-
<PAGE> 143
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
MAGNETITE ASSET INVESTORS L.L.C.
- ----------------------------------------
Name of Entity
/s/ Dennis M. Schaney
- ----------------------------------------
Signature
By: Black Rock Financial Management Inc.,
as Managing Member
Print Name: DENNIS M. SCHANEY
-----------------------------
Title: Managing Director
----------------------------------
Taxpayer I.D. No.: 13-4037650
----------------------
Telephone Number: (212) 754-5316
-----------------------
Address: c/o BlackRock Financial Management, Inc.
-------------------------------
345 Park Ave., 29th Floor
-------------------------------
New York, NY 10154
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 144
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
HELLER FINANCIAL, INC.
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name: ROBERT M. REEG
-----------------------------
Title: Assistant Vice President
----------------------------------
Taxpayer I.D. No.: 36-1208070
----------------------
Telephone Number: 312-441-6855
-----------------------
Address: 500 W. Monroe
-------------------------------
Chicago, IL 60661
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 145
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
ANTARES CAPITAL CORPORATE
- ----------------------------------------
Name of Entity
/s/ David K. Swanson
- ----------------------------------------
Signature
Print Name: DAVID K. SWANSON
-----------------------------
Title: Director
----------------------------------
Taxpayer I.D. No.: 36-4088095
----------------------
Telephone Number: 312-697-3955
-----------------------
Address: 311 S. Wacker
-------------------------------
Suite 2725
-------------------------------
Chicago, IL. 60606
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 146
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
THOMAS STRAHAN
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ THOMAS STRAHAN
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1115 Normandy Trace Rd
------------------------------ --------------------------------
Tampa, Fl 33602
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 147
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
JERRY R. WOOD & SABRA M. WOOD TRUSTEES
OF THE JERRY R. WOOD AND SABRA M. WOOD
LOVING TRUST
- ----------------------------------------
Name of Entity
/s/ JERRY R. WOOD
- ----------------------------------------
Signature
Print Name: JERRY R. WOOD
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: 636-978-3578
-----------------------
Address: 1854 Alois Ave.
-------------------------------
O'Fallon, MO
-------------------------------
63366
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 148
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
GLENN E. MULLEN
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ GLENN E. MULLEN
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 601 Circlewood Dr.
------------------------------ --------------------------------
Venice, FL 34293
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 149
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JOSEPH FUNSTON Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JOSEPH FUNSTON
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 22101 Pickford
------------------------------ --------------------------------
Detroit, MI 48219
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 150
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
KITTY J. CHEVERERE Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ KITTY J. CHEVERERE
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 250 Eldorado N221
------------------------------ --------------------------------
Webster TX 77598
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 151
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JON CHEVERERE Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JON CHEVERERE
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 4611 Astible Cir
------------------------------ --------------------------------
Alworth, GA 30102
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 152
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Dolobas Bonadeo Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 23351
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 153
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Zachary Taylor Wilson Child Trust
- ----------------------------------------
Name of Entity
John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard, Trustee
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827342
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 154
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Nathaniel Ryan Wilson Grandchild Trust
- ----------------------------------------
Name of Entity
John R. Beard
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: TRUSTEE
----------------------------------
Taxpayer I.D. No.: 43-6827341
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 155
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Mathis Patrick Wilson Grandchild Trust
- ----------------------------------------
Name of Entity
John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827338
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 156
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
JEREMIAH LEE WILSON GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ JOHN R. BEARD
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: TRUSTEE
----------------------------------
Taxpayer I.D. No.: 43-6827340
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 157
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
FRANKLYN W. WILLIAMS Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ FRANKLYN W. WILLIAMS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 5313 5 Miles Grant Rd
------------------------------ --------------------------------
204K 5Foot FL
------------------------------ --------------------------------
34997
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 158
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Debra J. Stingley Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 159
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Ricky Gene Grandchild Trust
- ----------------------------------------
Name of Entity
John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827343
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 160
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 4541 S.W. Dr.
------------------------------ --------------------------------
Palm City, FL 34990
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 161
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
RANDALL L. ROLL Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ RANDALL L. ROLL
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 606 8th Ave SW
------------------------------ --------------------------------
Conover, NC 28613
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 162
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
THE WILLIAM GERARD MULLEN IRREVOCABLE
FAMILY TRUST
- ----------------------------------------
Name of Entity
John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard, Trustee
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827331
----------------------
Telephone Number: 314-991-3550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 163
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
GARY MORRIS Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ GARY MORRIS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 14999 Calver Rd.
------------------------------ --------------------------------
West Springfield, Pa 16443
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 164
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
RICHARD FOLLETT Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ RICHARD FOLLETT
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1954 Parkside Dr
------------------------------ --------------------------------
Elizabeth, PA 15037
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 165
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
/s/ SEAN PATRICK POWERS
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
SEAN PATRICK POWERS
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ SEAN PATRICK POWERS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1527 SW 1st Ave.
------------------------------ --------------------------------
Boca Raton, FL 33432
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 166
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
KELLY MARIE POWERS Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ KELLY MARIE POWERS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 3179 California Street
------------------------------ --------------------------------
San Francisco, CA 94115
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 167
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
/s/ JOSEPH P. POWERS
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
JOSEPH P. POWERS
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ JOSEPH P. POWERS
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 17763 Crooked Oak Ave
------------------------------ --------------------------------
Boca Raton, FL 33987
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 168
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
/s/ Barbara Ann Powers
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Barbara Ann Powers
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
Barbara Ann Powers
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 17763 Crooked Oak Ave
------------------------------ --------------------------------
Boca Raton, FL 33487
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 169
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-155
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
The Rosemarie Mulholland Irrevocable
Trust Agreement
- ----------------------------------------
Name of Entity
/s/ NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 170
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
ROSEMARIE MULHOLLAND
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ ROSEMARIE MULHOLLAND
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1128 Country Club Dr
------------------------------ --------------------------------
No. Palm Beach, FL
------------------------------ --------------------------------
33408
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Share Identification Rider to Joinder Agreement.
<PAGE> 171
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-152
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
THE MEGAN MULHOLLAND IRREVOCABLE
TRUST AGREEMENT
- ----------------------------------------
Name of Entity
/s/ Norma Mercurio
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 172
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-151
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE /s/
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
The Kara Mulholland Irrevocable
Trust Agreement
- ----------------------------------------
Name of Entity
NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 173
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-156
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
WILLIAM J. MERCURIO, JR.
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ WILLIAM J. MERCURIO, JR.
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 12268 Channel Dr.
------------------------------ --------------------------------
North Palm Beach, FL 33408
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 174
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-164
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
/s/ WILLIAM J. MERCURIO AND DANIELLE MERCURIO
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
WILLIAM J. MERCURIO AND
DANIELLE MERCURIO
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 12268 Channel Dr.
------------------------------ --------------------------------
North Palm Beach, FL 33408
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 175
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
WILLIAM J. MERCURIO
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ WILLIAM J. MERCURIO
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 12268 Channel Dr.
------------------------------ --------------------------------
North Palm Beach, FL 33408
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Bach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
See Attached Share Identification Rider to Joinder Agreement.
<PAGE> 176
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-154
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
The Michelle Mercurio Irrevocable
Trust Agreement
- ----------------------------------------
Name of Entity
NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 177
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-153
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
THE JOHN M. MERCURIO IRREVOCABLE
TRUST AGREEMENT
- ----------------------------------------
Name of Entity
NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Bach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 178
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-138
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Lisa Garrett Moye Irrevocable Trust
- ----------------------------------------
Name of Entity
/s/ J.L. GARRETT
- ----------------------------------------
Signature
Print Name: J.L. GARRETT
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd
-------------------------------
Apopka, FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 179
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-141
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Lisa Garrett Moye
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ Lisa Garrett Moye
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 1006 N. Elm St.
------------------------------ --------------------------------
Greensboro, NC 27401
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 180
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ Robert J. Garrett
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 817 Pink Camelia Ct.
------------------------------ --------------------------------
Apopka, FL. 32712
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 181
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-137
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Rachael L. Garrett Irrevocable Trust
- ----------------------------------------
Name of Entity
/s/ RACHAEL L. GARRETT
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd
-------------------------------
Apopka, FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 182
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-140
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Rachael L. Garrett
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ Rachael L. Garrett
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 183
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-143
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
J. L. Garrett
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ J. L. Garrett
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 602 E. Welch Rd
------------------------------ --------------------------------
Apopka, FL 32712
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 184
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-139
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Elizabeth H. Garrett Irrevocable Trust
- ----------------------------------------
Name of Entity
/s/ ELIZABETH H. GARRETT
- ----------------------------------------
Signature
Print Name: J. L. Garrett
-----------------------------
Title: TRUSTEE
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd
-------------------------------
Apopka, FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 185
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
C-142
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
ELIZABETH A. GARRETT
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
/s/ ELIZABETH A. GARRETT
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address: 817 Pink Camelia Ct
------------------------------ --------------------------------
Apopka FL 32712
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 186
SIGNATURE
JOINDER TO REORGANIZATION AGREEMENT AND TRANSMITTAL OF ORIUS COMMON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
--------------------------------
IF THE UNDERSIGNED IS AN INDIVIDUAL: EXCEPTIONS SCHEDULE
--------------------------------
Not an Accredited Investor
- ---------------------------------------- --------------------------------
Print Name
--------------------------------
--------------------------------
- ---------------------------------------- --------------------------------
Signature
--------------------------------
Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
If the Undersigned is a Corporation,
Partnership or Trust:
Powers Grandchildren's Trust
- ----------------------------------------
Name of Entity
/s/ JOSEPH G. BONNEVIER
- ----------------------------------------
Signature
Print Name: JOSEPH G. BONNEVIER
KATHLEEN M. BONNEVIER
-----------------------------
Title: Trustees
----------------------------------
Taxpayer I.D. No.: 58-6402685
----------------------
Telephone Number: 703-281-6430
-----------------------
Address: 1727 Larkmeade Dr
-------------------------------
Vienna VA 22182
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 187
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------ ------------------------------------
Print Name Print Name
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
BANCBOSTON VENTURES, INC. BANCBOSTON VENTURES, INC.
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ THERESA A. NIBI /s/ THERESA A. NIBI
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Theresa A. Nibi Print Name: Theresa A. Nibi
------------------------- -------------------------
Title: Director Title: Director
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
046013165 046013165
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
617-434-6913 617-434-6913
- ------------------------------------ ------------------------------------
Address: Address:
175 Federal Street, 10th Floor 175 Federal Street, 10th Floor
- ------------------------------------ ------------------------------------
Boston, MA 02110 Boston, MA 02110
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 188
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
CHISHOLM PARTNERS III, L.P. CHISHOLM PARTNERS III, L.P.
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ GREGORY M. BARR /s/ GREGORY M. BARR
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: GREGORY M. BARR Print Name: GREGORY M. BARR
------------------------- -------------------------
Title: Vice President Title: Vice President
Silverado III Corp. Silverado III corp.
General Partner, General Partner,
Silverado III, L.P. Silverado III, L.P.
General Partner, Chisholm General Partner, Chisholm
Partners III, LP Partners III, LP
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 189
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
FLEET EQUITY PARTNERS VI, L.P. FLEET EQUITY PARTNERS VI, L.P.
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ /s/
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: GREGORY M. BARR Print Name: GREGORY M. BARR
------------------------- -------------------------
Title: Vice President Title: Vice President
Fleet Growth Resources II, Inc. Fleet Growth Resources II, Inc.
General Partner General Partner
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 190
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
FLEET VENTURE RESOURCES, INC. FLEET VENTURE RESOURCES, INC.
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ /s/
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: GREGORY M. BARR Print Name: GREGORY M. BARR
------------------------- -------------------------
Title: Vice President Title: Vice President
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 191
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
KENNEDY PLAZA PARTNERS KENNEDY PLAZA PARTNERS
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ GREGORY M. BARR /s/ GREGORY M. BARR
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: GREGORY M. BARR Print Name: GREGORY M. BARR
------------------------- -------------------------
Title: General Partner Title: General Partner
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 192
SIGNATURE
<TABLE>
<CAPTION>
<S> <C>
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
If the Undersigned is an Individual: If the Undersigned is an Individual:
- ------------------------------------ ------------------------------------
Print Name Print Name
- ------------------------------------ ------------------------------------
Signature Signature
If the Undersigned is a Corporation, If the Undersigned is a Corporation,
Partnership or Trust: Partnership or Trust:
INDOSUEZ LISN PARTNERS INDOSUEZ LISN PARTNERS
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ MICHAEL WALSH B. GRABOWSKI /s/ MICHAEL WALSH B. GRABOWSKI
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: MICHAEL WALSH B. GRABOWSKI Print Name: MICHAEL WALSH B. GRABOWSKI
------------------------- -------------------------
Title: Vice Presidents of Indosvez Title: Vice Presidents of Indosuez CM II, Inc.
CM II, Inc., Managing General Partner Managing General Partner
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
</TABLE>
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 193
SIGNATURE
<TABLE>
<CAPTION>
<S> <C>
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
WILLIS STEIN & PARTNERS II, L.P. WILLIS STEIN & PARTNERS II, L.P.
By: Willis Stein & Partners Management By: Willis Stein & Partners Management II, L.P.
II, L.L.C.
Its: General Partner Its: General Partner
By: Willis Stein & Partners II, L.L.C. By: Willis Stein & Partners II, L.L.C
By: /s/ Robert C. Froetscher By: /s/ Robert C. Froetscher
-------------------------------- --------------------------------
Name: Robert C. Froetscher Name: Robert C. Froetscher
Title: Managing Director Title: Managing Director
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
</TABLE>
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 194
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
WILLIS STEIN & PARTNERS DUTCH, L.P. WILLIS STEIN & PARTNERS DUTCH, L.P.
By: Willis Stein & Partners II, L.P. By: Willis Stein & Partners II, L.P.
Its: General Partner Its: General Partner
By: Willis Stein & Partners II, L.L.C. By: Willis Stein & Partners II, L.L.C.
/s/ ROBERT C. FROETSCHER /s/ ROBERT C. FROETSCHER
- ------------------------------------ ------------------------------------
Name: Robert C. Froetscher Name: Robert C. Froetscher
Title: Managing Director Title: Managing Director
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 195
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------ ------------------------------------
Print Name Print Name
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
James S. Hivnor
Electing Small Business
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ J. S. Hivnor /s/ J. S. Hivnor
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: JAMES S. HIVNOR Print Name: JAMES S. HIVNOR
------------------------- -------------------------
Title: TRUSTEE Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
34-7091855 ###-##-####
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
419-625-2538 419-625-2538
- ------------------------------------ ------------------------------------
Address: Address:
1919 Cedar Point Rd 1919 Cedar Point Rd
- ------------------------------------ ------------------------------------
Sandusky OH 44870 Sandusky OH 44870
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE LISN SHARES AND LISN JUNIOR NOTES OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND
DOCUMENTS TRANSMITTED HEREWITH.)
<PAGE> 196
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------ ------------------------------------
Print Name Print Name
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
Donald J. Vanke Electing Donald J. Vanke Electing
Small Business Trust Small Business Trust
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
/s/ DONALD J. VANKE /s/ DONALD J. VANKE
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Donald J. Vanke Print Name: Donald J. Vanke
------------------------- -------------------------
Title: Trustee Title: Trustee
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
34-7091856 34-7091856
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
(440) 846-0855 (440) 846-0855
- ------------------------------------ ------------------------------------
Address: Address:
13792 Peppercreek Dr. 13792 Peppercreek Dr.
- ------------------------------------ ------------------------------------
Strongsville, OH 44136 Strongsville, OH 44136
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 197
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
RICHARD ALMASY RICHARD ALMASY
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ RICHARD ALMASY /s/ RICHARD ALMASY
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 198
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
ROBERT GARDNER
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ ROBERT GARDNER
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 199
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
JAMES GILLAN
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ JAMES GILLAN
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 200
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
DENNIS A. HENDRIX DENNIS A. HENDRIX
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ DENNIS A. HENDRIX /s/ DENNIS A. HENDRIX
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 201
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
Gordon W. Kurtz Gordon W. Kurtz
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ GORDON W. KURTZ /S/ GORDON W. KURTZ
- ------------------------------------ ------------------------------------
SIGNATURE Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 202
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
DONALD L. SANNEMAN
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ DONALD L. SANNEMAN
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 203
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
JAMES R. SHARP JAMES R. SHARP
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ JAMES R. SHARP /s/ JAMES R. SHARP
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 204
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
KEVIN L. SOWELL KEVIN L. SOWELL
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ KEVIN L. SOWELL /s/ KEVIN L. SOWELL
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 205
SIGNATURE
TRANSMITTAL OF LISN SHARES SPECIFIC AGREEMENT TO
EXCHANGE NOTES
SIGN HERE SIGN HERE
The undersigned agrees to all of the The undersigned hereby agrees to
terms above, other than those exchange the LISN Junior Notes (as
exclusively relating to the LISN defined above) pursuant to the Note
Junior Notes, including by making Exchange Agreement.
the representations and warranties
set forth above.
IF THE UNDERSIGNED IS AN INDIVIDUAL: IF THE UNDERSIGNED IS AN INDIVIDUAL:
James Wantuck James Wantuck
- ------------------------------------ ------------------------------------
Print Name Print Name
/s/ James Wantuck /s/ James Wantuck
- ------------------------------------ ------------------------------------
Signature Signature
IF THE UNDERSIGNED IS A CORPORATION, IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST: PARTNERSHIP OR TRUST:
- ------------------------------------ ------------------------------------
Name of Entity Name of Entity
- ------------------------------------ ------------------------------------
Signature Signature
Print Name: Print Name:
------------------------- -------------------------
Title: Title:
------------------------------ ------------------------------
Taxpayer I.D. No.: Taxpayer I.D. No.:
- ------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
- ------------------------------------ ------------------------------------
Address: Address:
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
<PAGE> 1
EXHIBIT 2.2
AMENDMENT NUMBER ONE
THIS AMENDMENT NUMBER ONE (this "Amendment") to the Agreement
and Plan of Reorganization, dated November 8, 1999, by and among Orius Corp., a
Florida corporation ("Orius"), LISN Holdings, Inc., an Ohio corporation
("LISN"), Orius Merger Sub., Inc., an Ohio corporation, and (by joinder) the
other parties named therein (the "Reorganization Agreement") is entered into as
of January 13, 2000, and effective as of November 8, 1999, by and among Orius,
LISN, the Orius Stockholders Representative, the LISN Shareholders
Representative, and the Investor Representative (as such terms are defined in
the Reorganization Agreement).
Each of the undersigned desires to amend the Reorganization
Agreement in certain aspects in order to clarify certain agreements and
understandings among the parties as of the Closing. Capitalized terms used and
not defined herein have the meanings set forth in the Reorganization Agreement.
NOW, THEREFORE, the undersigned hereby amends the
Reorganization Agreement pursuant to Section 10D thereto as follows:
1. Amendment to Reorganization Agreement.
a. Section 1E(i)(a) shall be amended as
follows: the phrase "Within 10 business days
after the Closing Date, Orius will prepare,
and deliver" shall be deleted and replaced
with the phrase "By January 10, 2000, Orius
will prepare and deliver";
b. Section 1A(ii)(a) shall be amended as
follows: the phrase "par value $.01 per
share ("LISN Common")" shall be deleted and
replaced with the phrase "no par value
("LISN Common")";
c. Section 1A(ix) shall be amended as follows:
the phrase "par value $.01 per share (the
"LISN Class C Common")" shall be deleted and
replaced with the phrase "no par value (the
"LISN Class C Common")";
d. Section 1B(iii)(b)(1) shall be amended as
follows: immediately following the phrase
"LISN Junior Notes" and immediately prior to
the phrase "in the aggregate", the phrase
"to Orius" shall be deleted;
e. Section 1B(iii)(c) shall be amended as
follows: immediately following the phrase
"opposite such Person's name on" and
immediately prior to the phrase "hereto
pursuant to the Note Exchange", the phrase
"Exhibit B(i)" shall be deleted and replaced
with the phrase "Exhibit B(ii)";
<PAGE> 2
f. Section 1B(iv) shall be amended as follows:
immediately following the phrase
"outstanding shares of Orius Common" and
immediately prior to the phrase "set forth
opposite" shall be inserted the word
"Stock";
g. Section 1B(v) shall be amended as follows:
the phrase "[Language to come from A&S or
W&W re: escrow deposit]" shall be deleted;
h. Section 1B(vi) shall be amended as follows:
in the penultimate line, the word
"Stockholders" shall be deleted and replaced
with the word "Warrantholders";
i. Section 1B(vi)(b) shall be amended as
follows: in the first paragraph, the phrase
"such person's name on the Orius
Stockholders Schedule" shall be deleted and
replaced with the phrase "such Person's name
on the Orius Warrantholders Schedule"; in
the second paragraph, subsection (z), the
phrase "such person's name on the Orius
Stockholders Schedule" shall be deleted and
replaced with the phrase "such Person's name
on the Orius Warrantholders Schedule";
j. Section 1B(viii) shall be amended as
follows: the phrase "set forth in Schedule
1E." shall be deleted and replaced with the
phrase "set forth in Section 1E.";
k. Section 1B(ix) shall be amended as follows:
the heading "HIG Call Agreement." shall be
deleted and replaced with the heading "HIG
Put/Call Agreement.";
l. Section 1D(i) shall be amended as follows:
the word "persons" shall be deleted and
replaced with the word "Persons";
m. Section 1D(ii) shall be amended as follows:
the word "persons" shall be deleted and
replaced with the word "Persons";
n. Section 1D(iv)(a) shall be amended as
follows: the amount "$57.55" shall be
deleted and replaced with the amount
"$57.57";
o. Section 1E(ii)(a) shall be amended as
follows: the amount "$57.55" shall be
deleted and replaced with the amount
"$57.57";
p. Section 2S shall be amended as follows: the
phrase "Hogan & Hartson" shall be deleted
and replaced with the phrase "Holland &
Knight LLP";
2
<PAGE> 3
q. Section 3B shall be amended as follows: the
phrase "(an "Orius Put Agreement" and each
Orius Put Agreement executed by an Orius
Stockholder," shall be deleted and replaced
with the phrase "(an "Orius Put Agreement"
and all Orius Put Agreements executed by
Orius Stockholders,"; further, in the last
line, the phrase "Orius Stockholders'" shall
be deleted and replaced with the phrase
"Orius Stockholder's";
r. Section 3K(ii) shall be amended as follows:
the phrase "HIG and HIG Cable West, Inc."
shall be deleted and replaced with the
phrase "HIG West and HIG Cable";
s. Section 4E(i) shall be amended as follows:
the phrases "Section 5M" and "Section 6M"
shall be deleted and replaced with the
phrases "Section 5K" and "Section 6K",
respectively;
t. Section 5K shall be amended as follows: the
phrase "issued new stock certificates to any
Orius Stockholder to reflect the number of
shares of Orius Common Stock which such
Orius Stockholder owns as a result of the
10.36091139-for-one stock split which
occurred on September 23, 1999; or" shall be
inserted as Section 5K(xx) of the
Reorganization Agreement; further the phrase
"agreed, whether orally or in writing, to do
any of the foregoing." shall be deleted as
Section 5K(xx) and instead renumbered as
5K(xxi);
u. Section 8 shall be amended as follows:
i. the phrase ""Closing LISN Investor
Value" has the meaning set forth in
Section 1D" shall be deleted and
replaced with the phrase ""Closing
LISN Investor Value" has the meaning
set forth in Section 1E(ii)(b)";
ii. the phrase ""Closing Orius Investor
Value" has the meaning set forth in
Section 1D" shall be deleted and
replaced with the phrase ""Closing
Orius Investor Value" has the
meaning set forth in Section
1E(ii)(a)";
iii. the phrase ""Escrow Amount Per
Share" means $5,000,000 divided by
22,789,683.77" shall be deleted and
replaced with the phrase ""Escrow
Amount Per Share" means $5,000,000
divided by 22,548,209.24";
iv. within the definition of "Existing
Orius Option", the phrase "person
listed on the Orius Optionholders
Schedule hereto,
3
<PAGE> 4
which option is exercisable for up
to the number of shares set forth
opposite such person's name at the
exercise per share set forth
opposite such person's name on such
Exhibit" shall be deleted and
replaced with the phrase "Person
listed on the Orius Optionholders
Schedule hereto, which option is
exercisable for up to the number of
shares set forth opposite such
Person's name at the exercise price
per share set forth opposite such
Person's name on such Schedule";
v. within the definition of
"Indebtedness", the phrase "set
forth on the "Orius Bonus Schedule""
shall be deleted and replaced with
the phrase "set forth on the "Orius
Payment Schedule"";
vi. immediately following the definition
for "New LISN Notes" and immediately
prior to the definition for "Note
Exchange", the phrase ""New Stock
Option Agreement" has the meaning
set forth in Section ." shall be
deleted;
vii. within the definition of "Orius
Continuing Stockholder" or "Orius
Continuing Stockholders", the phrase
"listed on Exhibit D," shall be
deleted and replaced with the phrase
"listed on the Orius Stockholders
Schedule,";
viii. within the definition of "Orius
Warrant", the phrase "exercise per
share set forth opposite such
person's name on such Exhibit" shall
be deleted and replaced with the
phrase "exercise price per share set
forth opposite such Person's name on
such Schedule"; further, the word
"Stockholders" shall be deleted and
replaced with the word
"Warrantholders";
ix. immediately following the definition
for "Purchase Transaction" and
immediately prior to the definition
for "Qualifying Waiver", the phrase
""Purchaser" has the meaning set
forth in the Preamble." shall be
inserted;
x. immediately following the definition
for "Share Number" and immediately
prior to the definition for
"Subsidiary", the phrase ""Stock
Option Agreement" means the
agreement set forth as Exhibit P
hereto." shall be inserted;
v. Section 10N(iii) shall be amended as
follows: the phrase "THE INVESTMENT
AGREEMENT, AT THE ADDRESS PROVIDED IN
EXHIBIT D OF THIS AGREEMENT" shall be
deleted and replaced with the phrase "THE
INVESTMENT AGREEMENT, TO
4
<PAGE> 5
THE ADDRESS PROVIDED IN SUCH PERSON'S ORIUS
JUNIOR NOTE, OR OTHERWISE ON RECORD AT
ORIUS,"; and
w. The "TABLE OF CONTENTS" and the "EXHIBITS
AND SCHEDULES" shall be amended to
correspond with the contents of the
Reorganization Agreement.
2. Continuing Effect. Except as provided in the
foregoing Section 1, this Amendment shall not
constitute an amendment or waiver of any provision of
the Reorganization Agreement, which shall continue
and remain in full force and effect in accordance
with its terms.
3. Counterparts. This Amendment may be executed
simultaneously in counterparts (including by means of
telecopied signature pages), any one of which need
not contain the signatures of more than one Party,
but all such counterparts taken together shall
constitute one and the same Amendment.
4. Governing Law. All questions concerning the
construction, validity and interpretation of this
Amendment shall be governed by and construed in
accordance with the terms and provisions of Section
10N of the Reorganization Agreement.
5. Descriptive Headings. The descriptive headings of
this Amendment are inserted for convenience only and
do not constitute a part of this Amendment.
* * * * *
5
<PAGE> 6
IN WITNESS WHEREOF, this Amendment Number One has been entered
into as of the date first written above, and effective as of November 8, 1999.
ORIUS CORP.
By: /s/ WILLIAM J. MERCURIO
------------------------------
Its:
-----------------------------
LISN HOLDINGS, INC.
By: /s/ DONALD J. VANKE
------------------------------
Its:
-----------------------------
ORIUS STOCKHOLDERS REPRESENTATIVE:
/s/ WILLIAM G. MULLEN
---------------------------------
William G. Mullen
LISN SHAREHOLDERS REPRESENTATIVE:
WILLIS STEIN & PARTNERS II, L.P.
By: Willis Stein & Partners Management II, L.P.
Its: General Partner
By: Willis Stein & Partners Management II, L.L.C.
Its: General Partner
By: /s/ ROBERT C. FROETSCHER
-----------------------------
Name: Robert C. Froetscher
Title: Managing Director
[Signature Page to the Amendment Number One Continues]
<PAGE> 7
INVESTOR REPRESENTATIVE:
WILLIS STEIN & PARTNERS II, L.P.
By: Willis Stein & Partners Management II, L.P.
Its: General Partner
By: Willis Stein & Partners Management II, L.L.C.
Its: General Partner
By: /s/ ROBERT C. FROETSCHER
------------------------------
Name: Robert C. Froetscher
Title: Managing Director
[End of Signature Page to the Amendment Number One]
<PAGE> 1
EXHIBIT 3.1
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ORIUS CORP.
Pursuant to Sections 607.1003 and 607.1007 of the Florida Business
Corporation Act, the Amended and Restated Articles of Incorporation of Orius
Corp., as filed with the Secretary of State of Florida on September 23, 1999,
are hereby amended and restated in their entirety to read as follows:
[STAMP]
ARTICLE ONE
The name of the Corporation is:
ORIUS CORP.
ARTICLE TWO
The principal office and mailing address for the Corporation is 1401
Forum Way, Suite 400, West Palm Beach, Florida 33401. The address of the
registered office of the Corporation is One S.E. 3rd Avenue, 28th Floor, Miami,
Florida 33131, and the name of the registered agent of the Corporation at such
address is American Information Services, Inc.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the Florida Business Corporation Act.
ARTICLE FOUR
A. AUTHORIZED SHARES
The aggregate number of shares which the Corporation is authorized to
have outstanding is 800,017,596.38 shares consisting of:
<PAGE> 2
(1) 10,000 shares of Series A Convertible Preferred Stock, par
value $0.000l per share (the "Series A Preferred");
(2) 7,596.38 shares of Series B Convertible Preferred Stock,
par value $0.0001 per share (the "Series B Preferred");
(3) 200,000,000 shares of Series C Participating Preferred
Stock, par value $0.01 per share (the "Series C Participating Preferred");
(4) 200,000,000 shares of Series D Preferred Stock, par value
$0.01 per share (the "Series D Preferred" and collectively with the Series A
Preferred, the Series B Preferred and the Series C Participating Preferred, the
"Preferred Stock");
(5) 200,000,000 shares of Common Stock, par value $0.01 per
share (the "Common Stock"); and
(6) 200,000,000 shares of Class B Common Stock, par value
$0.01 per share (the "Class B Common").
B. PREFERRED SHARES
There shall be designated four series of Preferred Stock of
the Corporation: Series A Preferred, Series B Preferred, Series C Participating
Preferred and Series D Preferred. The number of shares of Preferred Stock shall
be as set forth in this Article Four. The rights, preferences and limitations of
the Preferred Stock are as set forth below.
1. Series A Preferred.
Section 1. Dividends.
a. Dividends. The holders of the then outstanding shares of
Series A Preferred Stock shall be entitled to receive, out of funds legally
available therefor, cumulative annual dividends when and as may be declared from
time to rime by the Board at an annual rate per share equal to eight percent
(8%) of the original purchase price paid per share of the Series A Preferred
Stock. Such amount shall be compounded annually such that if the dividend is not
paid for such year the unpaid amount shall be added to the original purchase
price paid per share of the Series A Preferred Stock for purposes of calculating
succeeding years' dividends. Such dividends shall be deemed to accrue on the
Series A Preferred Stock and be cumulative, whether or not earned or declared
and whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends. If such cumulative dividends in
respect of any prior or current annual dividend period shall not have been
declared and paid, or if there shall not have been a sum sufficient for the
payment therefor set apart, the deficiency shall first be fully paid before any
dividend or other distribution shall be paid or declared and set apart with
respect to any class of the
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<PAGE> 3
Corporation's capital stock, now or hereafter outstanding. As of the date
hereof, the Series A Preferred Stock shall be deemed to have accrued dividends
in the amount of $630,985. Anything contained herein to the contrary
notwithstanding, any accrued dividends shall be immediately due and payable in
cash, upon the earliest occurrence of any of the following (each a "Series A
Dividend Date"):
(i) A Series A Qualified Public Offering (as hereafter
defined);
(ii) A sale of the Corporation or a sale of all or
substantially all of the Corporation's assets; or
(iii) April 15, 2005.
For purposes of this Section 1, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of capital stock of the Corporation for cash or property,
including any such transfer, purchase or redemption by a subsidiary of the
Corporation. Notwithstanding the foregoing, the Corporation shall not declare or
pay a dividend on the Series A Preferred Stock prior to the Series A Dividend
Date.
b. Dividends in Kind. In the event the Corporation shall make
or issue, or shall fix a record date for the determination of holders of the
Corporation's Common Stock entitled to receive, a dividend or other distribution
with respect to the Common Stock payable in (i) securities of the Corporation
other than shares of Common Stock or (ii) assets, then and in each such event
the holders of Series A Preferred Stock shall receive, at the same time such
distribution is made with respect to Common Stock, the number of securities or
such other assets of the Corporation which they would have received had their
Series A Preferred Stock been converted into Common Stock immediately prior to
the record date for determining holders of Common Stock entitled to receive such
distribution.
Section 2. Liquidation, Dissolution or Winding Up.
a. Treatment at Liquidation, Dissolution or Winding Up. In the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of each share of Series A Preferred Stock
shall be entitled to be paid out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
whether such assets are capital, surplus, or capital earnings, such amount per
share of Series A Preferred Stock as would have been payable had each such share
been converted into Common Stock immediately prior to such event of liquidation,
dissolution or winding up pursuant to the provisions of Section 4 (the "Series A
Liquidation Amount") and the holders of the Series A Preferred Stock shall be
treated as if they had converted the Series A Preferred Stock into Common Stock.
b. Distribution in Cash. The Series A Liquidation Amount shall
in all events be paid in cash. Whenever a distribution provided for in this
Section 2 is payable in property other than
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<PAGE> 4
cash, the value of such distribution shall be the fair market value of such
property as determined in good faith by the Board.
Section 3. Voting Power. Except as otherwise expressly
provided in Section 6 hereof, or as required by law, the holder of each share of
Series A Preferred Stock shall be entitled to vote on all matters and shall be
entitled to that number of votes equal to the largest number of whole shares of
Common Stock into which a share of such holder's shares of Series A Preferred
Stock could be converted, pursuant to the provisions of Section 4 hereof, at the
record date for the determination of shareholders entitled to vote on such
matter or, if no such record date is established, at the date such vote is taken
or any written consent of shareholders is solicited. Except as otherwise
expressly provided herein or as required by law, the holders of shares of Series
A Preferred, Series B Preferred, Series C Participating Preferred and Common
Stock shall vote together as a single class on all matters.
Section 4. Conversion Rights for the Series A Preferred Stock.
The holders of the Series A Preferred Stock shall have following rights with
respect to the conversion of the Series A Preferred Stock into shares of Common
Stock:
a. General. Subject to and in compliance with the provisions
of this Section 4, all but not less than all of the shares of the Series A
Preferred Stock may, at the option of the holder, be converted at any time into
fully paid and non-assessable shares of Common Stock. As of the date hereof,
the number of shares of Common Stock to which a holder of each share of Series A
Preferred Stock shall be entitled upon conversion is 30.08257, which number is
derived by dividing $450.00 by $14.958828 (the "Series A Applicable Conversion
Value"), which Series A Applicable Conversion Value shall be adjusted from time
to time in accordance with this Section 4.
b. Adjustments to Series A Applicable Conversion Values.
(i) (A) Upon Sale of Common Stock. If the Corporation
shall, while there are any shares of Series A Preferred Stock outstanding, issue
or sell (or in accordance with Section 4(b)(i)(B) is deemed to have issued or
sold) shares of its Common Stock without consideration or at a price per share
less than the Series A Applicable Conversion Value, then in each such case such
Series A Applicable Conversion Value for the Series A Preferred Stock, upon each
such issuance or sale, except as herein after provided, shall be lowered so as
to be equal to an amount determined by multiplying the Series A Applicable
Conversion Value at such time by a fraction:
(1) the numerator of which shall be (a) the number
of shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, plus (b) the number of shares of Common Stock
which the net aggregate consideration, if any, received by the Corporation for
the total number of such additional shares of Common Stock so issued would
purchase at the Series A Applicable Conversion Value in effect immediately prior
to such issuance, and
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<PAGE> 5
(2) the denominator of which shall be (a) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus (b) the number of such additional shares
of Common Stock so issued.
(B) Upon Issuance of Warrants, Options and Rights to
Common Stock.
(1) For the purposes of this Section 4(b)(i), the
issuance of any warrants, options, subscriptions, or purchase rights with
respect to shares of Common Stock and the issuance of any securities convertible
into or exchangeable for shares of Common Stock (or the issuance of any
warrants, options or any rights with respect to such convertible or exchangeable
securities) shall be deemed an issuance of such Common Stock at such time if the
Series A Net Consideration Per Share (as hereinafter determined) which may be
received by the Corporation for such Common Stock shall be less than the Series
A Applicable Conversion Value at such time. Any obligation, agreement, or
undertaking to issue warrants, options, subscriptions, or purchase rights at any
time in the future shall be deemed to be an issuance at the time such
obligation, agreement or undertaking is made or arises. No adjustment of the
Series A Applicable Conversion Value shall be made under this Section 4(b)(i)
upon the issuance of any shares of Common Stock which are issued pursuant to the
exercise of any warrants, options, subscriptions, or purchase rights or pursuant
to the exercise of any conversion or exchange rights in any convertible
securities if any adjustment shall previously have been made or deemed not
required hereunder, upon the issuance of any such warrants, options, or
subscription or purchase rights or upon the issuance of any convertible
securities (or upon the issuance of any warrants, options or any rights
therefor) as provided above.
Should the Series A Net Consideration Per Share of any such warrants, options,
subscriptions or purchase rights or convertible securities be decreased from
time to time, then, upon the effectiveness of each such change, the Series A
Applicable Conversion Value shall be adjusted to such Series A Applicable
Conversion Value as would have obtained (1) had the adjustments made upon the
issuance of such warrants, options, rights, or convertible securities been made
upon the basis of the decreased Series A Net Consideration Per Share of such
securities, and (2) had adjustments made to the Series A Applicable Conversion
Value since the date of issuance of such securities been made to the Series A
Applicable Conversion Value as adjusted pursuant to (1) above.
(2) For Purposes of this paragraph, the "Series A Net
Consideration Per Share" which may be received by the Corporation shall be
determined as follows:
I. The "Series A Net Consideration Per Share"
shall mean the amount equal to the total amount of consideration, if
any, received by the Corporation for the issuance of such warrants,
options, subscriptions, or other purchase rights or convertible or
exchangeable securities, plus the minimum amount of consideration, if
any, payable to the Corporation upon exercise or conversion thereof,
divided by the aggregate number of shares of Common Stock that would
be issued if all such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities were
exercised, exchanged, or converted.
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<PAGE> 6
II. The "Series A Net Consideration Per Share" which
may be received by the Corporation shall be determined in each instance as of
the date of issuance of warrants, options, subscriptions, or other purchase
rights or convertible or exchangeable securities without giving effect to any
possible future upward price adjustments or rate adjustments which may be
applicable with respect to such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities.
(C) Stock Dividends. In the event the Corporation shall
make or issue a dividend or other distribution payable in Common Stock or
securities of the Corporation convertible into or otherwise exchangeable for the
Common Stock of the Corporation, then such Common Stock or other securities
issued in payment of such dividend shall be deemed to have been issued without
consideration (except for dividends payable in shares of Common Stock payable
pro rata to holders of Series A Preferred Stock and to holders of any other
class of stock).
(D) Consideration Other than Cash. For purposes of this
Section 4(b) if a part or all of the consideration received by the Corporation
in connection with the issuance of shares of the Common Stock or the issuance of
any of the securities described in this Section 4(b) consists of property other
than cash, such consideration shall be deemed to have a fair market value as is
reasonably determined in good faith by the board.
(E) Exceptions. This Section 4(b)(i) shall not apply under
any of the circumstances which would constitute an Extraordinary Common Stock
Event (as hereinafter defined in Section 4(b)(ii)). Further, the provisions of
this Section 4(b) shall not apply to (i) shares issued upon conversion of the
Series A Preferred Stock, (ii) the issuance of any Common Stock pursuant to the
exercise of the options (and the shares issuable upon exercise thereof) to
purchase up to an aggregate of 140,000 shares of Common Stock (excluding options
outstanding on the date hereof) issued to employees of the Corporation, or
(iii) the issuance of warrants to the Corporation's lenders in connection with
that certain Warrant Agreement among the Corporation, Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Bank, National
Association, and certain other holders party thereto, dated as of February 26,
1999. The number of shares in this Section (E) shall be proportionately adjusted
to reflect any stock dividend, stock split or other form of recapitalization
occurring after the date hereof.
(ii) Upon Extraordinary Common Stock Event. Upon the happening
of an Extraordinary Common Stock Event (as hereinafter defined), the
Series A Applicable Conversion Value for the Series A Preferred Stock shall,
simultaneously with the happening of such Extraordinary Common Stock Event, be
adjusted by multiplying the then effective Series A Applicable Conversion Value
with respect to the Series A Preferred Stock by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such Extraordinary Common Stock Event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after
such Extraordinary Common Stock Event, and the product so obtained shall
thereafter be the Series A Applicable Conversion Value. The
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<PAGE> 7
Series A Applicable Conversion Value for the Series A Preferred Stock shall be
readjusted in the same manner upon the happening of any successive Extraordinary
Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock or on any class or
series of preferred stock, unless made pro rata to holders of
Preferred Stock, (ii) a subdivision of outstanding shares of
Common Stock into a greater number of shares of Common Stock,
or (iii) a combination of outstanding shares of the Common
Stock into a smaller number of shares of Common Stock.
c. Dividends. In the event the Corporation shall make or
issue, or shall fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution with respect to the
Common Stock payable in (i) securities of the Corporation other than shares of
Common Stock or (ii) assets, then and in each such event the holders of Series A
Preferred Stock shall receive, at the same time such distribution is made with
respect to Common Stock, the number of securities or such other assets of the
Corporation which they would have received had their Series A Preferred Stock
been converted into Common Stock immediately prior to the date of such
distribution.
d. Capital Reorganization or Reclassification. If the Common
Stock issuable upon the conversion of the Series A Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
elsewhere in this Section 4 or by a Reorganization), then and in each such
event, the holder of each share of Series A Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such capital reorganization,
reclassification or other change by holders of the number of shares of Common
Stock into which such shares of Series A Preferred Stock might have been
converted immediately prior to such capital reorganization, reclassification or
other change.
e. Capital Reorganization, Merger or Sale of Assets. If at any
time or from time to time there shall be a capital reorganization of the Common
Stock (other than a subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 4) or a merger or consolidation of
the Corporation with or into another corporation, or the sale of all or
substantially all of the Corporation's properties and assets to any other
person, or any transaction or series of related transactions in which more than
fifty percent (50%) of the outstanding voting securities of the Corporation (on
an as-converted basis) is sold or assigned (any of which events is herein
referred to as a "Reorganization"), then as a part of such Reorganization,
provision shall be made so that the holders of the Series A Preferred Stock
shall thereafter be entitled to receive upon conversion of the Series A
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation, or of the successor corporation resulting from such
Reorganization, to which such holder would have been entitled if such holder had
converted its shares of Series A
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<PAGE> 8
Preferred Stock immediately prior to such Reorganization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4 with respect to the rights of the holders of the Series A
Preferred Stock after the Reorganization, to the end that the provisions of this
Section 4 (including adjustment of the Series A Applicable Conversion Value then
in effect and the number of shares issuable upon conversion of the Series A
Preferred Stock) shall be applicable after that event in as nearly equivalent a
manner as may be practicable.
f. Certificate as to Adjustments; Notice by Corporation. In
each case of an adjustment or readjustment of the Applicable Conversion Rate,
the Corporation at its expense will furnish each holder of Series A Preferred
Stock with a certificate, executed by the president and chief financial officer
(or in the absence of a person designated as the chief financial officer, by the
treasurer) showing such adjustment or readjustment, and stating in detail the
facts upon which such adjustment or readjustment is based.
g. Exercise of Conversion Privilege. To exercise its
conversion privilege, a holder of Series A Preferred Stock shall surrender the
certificate or certificates representing the shares being converted to the
Corporation at its principal office, and shall give written notice to the
Corporation at that office that such holder elects to convert such shares. Such
notice shall also state the name or names (with address or addresses) in which
the certificate or certificates for shares of Common Stock issuable upon such
conversion shall be issued. The certificate or certificates for shares of Series
A Preferred Stock surrendered for conversion shall be accompanied by proper
assignment thereof to the Corporation or in blank. The date when such written
notice is received by the Corporation, together with the certificate or
certificates representing the shares of Series A Preferred Stock being
converted, shall be the "Series A Conversion Date." As promptly as practicable
after the Series A Conversion Date, the Corporation shall issue and shall
deliver to the holder of the shares of Series A Preferred Stock being converted,
or on its written order, such certificate or certificates as it may request for
the number of whole shares of Common Stock issuable upon the conversion of such
shares of Series A Preferred Stock in accordance with the provisions of this
Section 4, and cash, as provided in Section 4(h), in respect of any fraction of
a share of Common Stock issuable upon such conversion. Such conversion shall be
deemed to have been effected immediately prior to the close of business on the
Series A Conversion Date, and at such time the rights of the holder as holder of
the converted shares of Series A Preferred Stock shall cease and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares of Common Stock represented
thereby. The Corporation shall pay any taxes payable with respect to the
issuance of Common Stock upon conversion of the Series A Preferred Stock, other
than any taxes payable with respect to income by the holders thereof.
h. Cash in Lieu of Fractional Shares. The Corporation may, if
it so elects, issue fractional shares of Common Stock or scrip representing
fractional shares upon the conversion of shares of Series A Preferred Stock. If
the Corporation does not elect to issue fractional shares, the Corporation shall
pay to the holder of the shares of Series A Preferred Stock which were converted
a cash adjustment in respect of such fractional shares in an amount equal to the
same fraction of the market price per share of the Common Stock (as determined
in a reasonable manner prescribed by
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<PAGE> 9
the Board) at the close of business on the Series A Conversion Date. The
determination as to whether or not any fractional shares are issuable shall be
based upon the total number of shares of Series A Preferred Stock being
converted at any one time by any holder thereof, not upon each share of Series A
Preferred Stock being converted.
i. Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series A Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock, and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Corporation shall take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
Section 5. No Reissuance of Series A Preferred Stock. No share or
shares of Series A Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may from time to time
take such appropriate corporate action as may be necessary to reduce the
authorized number of shares accordingly.
Section 6. Redemption.
a. Optional Redemption Upon Series A Qualified Public
Offering. Effective upon the closing of a Series A Qualified Public Offering,
the Corporation may require the holders of the Series A Preferred Stock to
convert their Series A Preferred Stock into Common Stock by sending notice
thereof, together with a calculation of the Series A Applicable Conversion
Value, at least ten business days prior to the closing of the Series A
Qualified Public Offering, to all holders of Series A Preferred Stock. The
mandatory conversion shall be effective as of the closing date of the Series A
Qualified Public Offering and on and after such date the certificates
representing the Series A Preferred Stock shall only represent the right to
receive the Conversion Shares. For purposes hereof, the term "Series A
Qualified Public Offering" shall mean an underwritten public offering pursuant
to an effective registration statement under the Securities Act, covering the
offer and sale of Common Stock for the account of the Corporation in which the
aggregate net proceeds to the Corporation equal at least $25,000,000 and in
which the price per share of Common Stock is at least two and one half (2.5)
times the then Series A Applicable Conversion Value of the Series A Preferred
Stock. Nothing contained in Section 6(a) shall (i) in any way restrict or
prohibit the holders of the Series A Preferred Stock from exercising their
conversion rights pursuant to Section 4 hereof prior to the effective date of
the redemption to be effected hereunder; provided, however, that any such
conversion under Section 6(a) may be subject to the closing of the Series A
Qualified Public Offering.
b. Optional Redemption by a Holder Following Default.
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<PAGE> 10
(i) In the event there is an Event of Default under the
Subscription Agreement and the applicable cure period, if any, has expired (a
"Default"), then the holders of at least fifty-one percent (51%) of the then
outstanding shares of Series A Preferred Stock may request the Corporation to
redeem any or all of the shares of Series A Preferred Stock then held by such
holders at the price equal to the greater of (i) the original purchase price of
the Series A Preferred Stock (as adjusted to reflect any stock split, stock
dividend or other form of recapitalization), together with all accrued and
unpaid dividends (whether or not declared) thereon to be calculated and paid
through and including the date of redemption or (ii) fair market value thereof,
as of the date of such proposed redemption, as determined, at the Corporation's
sole expense, by a nationally recognized investment banking firm (mutually
acceptable to both the Corporation and the holders), taking into account, in
valuing such Shares, all relevant facts and circumstances; provided, however,
that there shall be no discount to reflect the fact that the Shares represent a
minority interest in the Corporation (the Holder Redemption Price"). Such
request (the "Default Redemption Request") shall be submitted to the Corporation
in writing within thirty (30) days after the Corporation notifies all of the
holders of the Series A Preferred Stock in writing of the Default. No cure of
such Default during such thirty (30) day period shall vitiate such Default
Redemption Request and the failure to make such a Default Redemption Request
within such thirty (30) day period shall not result in the waiver of such
remedy.
(ii) Upon receipt of a Default Redemption Request, the
Corporation shall promptly give notice thereof (the "Default Redemption Notice")
to each holder of Series A Preferred Stock. Such Default Redemption Notice shall
specify the number of shares of Series A Preferred Stock covered by the Default
Redemption Request and the Holder Redemption Price to be paid with respect
thereto. Any holder of Series A Preferred Stock who wishes to join in the
Default Redemption Request may do so by so advising the Corporation in writing
within 15 days after receipt of the Default Redemption Notice specified in the
preceding sentence. No holder of Series A Preferred Stock shall be required to
participate in such redemption. The Corporation shall redeem all shares of
Series A Preferred Stock covered by the Default Redemption Request (including
those held by holders who have requested a redemption following receipt of the
Default Redemption Notice) at a closing to be held not more than thirty (30)
days after the date of the Default Redemption Request. At the closing, the
Corporation shall pay for the shares of Series A Preferred Stock so redeemed in
an amount equal to the Holder Redemption Price, payable in cash.
c. Optional Redemption by Holders. At the election of the
holders of at least fifty-one percent (51%) of the then outstanding shares of
Series A Preferred Stock, the Corporation shall, to the extent it may do so
under applicable law, redeem pro rata from all holders of Series A Preferred
Stock on April 15, 2005 the Shares of Series A Preferred Stock outstanding on
the date of such redemption (the "Final Redemption Date"). The Corporation shall
give the holders of the Series A Preferred Stock at least ninety (90) days'
notice of the Final Redemption Date (the "Final Redemption Notice"). In the
event that the Corporation does not provide the Final Redemption Notice, the
option of the holders of the Series A Preferred Stock to require the Corporation
to redeem the remaining shares of Series A Preferred Stock on the Final
Redemption Date shall be extended beyond the Final Redemption Date to a date
which is ninety (90) days from the date that the Corporation elects to mail the
Final Redemption Notice. In the event shares of
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<PAGE> 11
Series A Preferred Stock scheduled for redemption are not redeemed because of a
prohibition under applicable law, such shares shall be redeemed as soon as such
prohibition no longer exists. The redemption price for each share of Series A
Preferred Stock redeemed pursuant to this Section 6(c) shall be equal to the
Holder Redemption Price.
In the event that the holders of the Series A Preferred Stock do not
elect to have the Series A Preferred Stock redeemed pursuant to this Section
6(c), the shares of Series A Preferred Stock shall remain outstanding and
subject to the rights and preferences contained herein.
d. Redemption Notice. If an election is made pursuant to
Section 6(c) hereof, written notice of such election shall be mailed, postage
prepaid, to the Corporation, not later than sixty (60) days before the date
fixed for each redemption pursuant to Section 6(c) or, in the event the
Corporation does not provide the Final Redemption Notice pursuant to Section
6(c) hereof, not later than sixty (60) days before the date that the Final
Redemption Date has been extended as provided in Section 6(c) (each of the dates
fixed for redemption and the extended redemption date is hereinafter referred to
as a "Redemption Date"). If such election is made and appropriate notice is
given, then, at least forty-five (45) days before the Redemption Date, written
notice (hereinafter referred to as the "Redemption Notice") shall be mailed by
the Corporation, postage prepaid, to each holder of record of Series A Preferred
Stock at its address shown on the records of the Corporation; provided, however,
that the Corporation's failure to give such Redemption Notice shall in no way
affect its obligation to redeem the shares of Series A Preferred Stock or the
obligation of the holders to redeem their shares of Series A Preferred Stock as
provided in Section 6(c) hereof. The Redemption Notice shall contain (i) the
number of shares of Series A Preferred Stock held by the holder and the total
number of shares of Series A Preferred Stock held by all holders subject to
redemption as of such Redemption Date; and (ii) the Redemption Date and the
applicable Holder Redemption Price. Any holder of Series A Preferred Stock who
wishes to do so may, by giving notice to the Corporation prior to the Redemption
Date, convert into Common Stock any or all of the shares of Series A Preferred
Stock held by him and scheduled for redemption on such Redemption Date.
e. Surrender of Certificates. Each holder of shares of Series
A Preferred Stock to be redeemed under this Section 6 shall surrender the
certificate or certificates representing such shares to the Corporation at the
place designated in the Redemption Notice, and thereupon the Corporation
Redemption Price or Holder Redemption Price, as the case may be, for such shares
as set forth in this Section 6 shall be paid to the order of the person whose
name appears on such certificate or certificates. Irrespective of whether the
certificates therefor shall have been surrendered, all shares of Series A
Preferred Stock which are the subject of a Redemption Notice shall be deemed to
have been redeemed and shall be canceled effective as of the Redemption Date,
unless the Corporation shall default in the payment of the applicable Redemption
Price.
f. Sale of the Corporation. In lieu of the redemption
obligations of the Corporation as set forth herein, the Corporation may instead
retain a nationally recognized investment banking firm (or other mutually
acceptable party) to sell the Corporation, provided that
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the Corporation acts expeditiously and in good faith and the sale of the
Corporation is consummated no later than 180 days after the required date of
redemption.
Section 7. Restrictions and Limitations.
a. Corporate Securities Action. Except as expressly provided
herein or as otherwise required by law, so long as any shares of Series A
Preferred Stock remain outstanding, the Corporation shall not, and shall not
permit any subsidiary (which shall mean any corporation, association or other
business entity which the Corporation and/or any of its other subsidiaries
directly or indirectly owns at the time more than fifty percent (50%) of the
outstanding voting shares of such corporation or trust, other than directors'
qualifying shares) to, without the approval by vote or written consent by the
holders of at least a majority of the then outstanding shares of the
Corporation's Series B Preferred Stock and the Series A Preferred Stock, voting
as a separate class:
(i) redeem, purchase or otherwise acquire for value (or pay
into or set aside for a sinking fund for such purpose), or declare and pay or
set aside funds for the payment of any dividend with respect to, any share or
shares of capital stock, except as required or permitted hereunder or under the
terms of Section 4.2 of the Subscription Agreement;
(ii) authorize or issue, or obligate itself to authorize or
issue, additional shares of Series A Preferred Stock;
(iii) authorize or issue, or obligate itself to authorize or
issue, any equity security senior to or on parity with the Series A Preferred
Stock as to liquidation preferences, dividend rights, or voting rights;
(iv) merge or consolidate with any other corporation or sell,
assign, lease or otherwise dispose of or voluntarily part with the control of
(whether in one transaction or in a series of transactions) all, or
substantially all, of its assets (whether now owned or hereinafter acquired), or
consent to any liquidation, dissolution or winding up of the Corporation, or
permit any subsidiary to do any of the foregoing, except for (A) any
wholly-owned subsidiary may merge into or consolidate with or transfer assets
to any other wholly-owned subsidiary, and (B) any wholly-owned subsidiary may
merge into or transfer assets to the Corporation; or
(v) amend, restate, modify or alter the by-laws of the
Corporation in any way which adversely affects the rights of the holders of the
Series A Preferred Stock.
b. Amendments to Charter. The Corporation shall not amend its
Articles of Incorporation without the approval, by vote or written consent, by
the holders of at least a majority of the then outstanding shares of Series A
Preferred Stock, if such amendment would amend any of the rights, preferences,
privileges of or limitations provided for herein for the benefit of any shares
of Series A Preferred Stock. Without limiting the generality of the preceding
sentence, the Corporation shall not amend its Articles of Incorporation without
the approval by the holders of
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at least a majority of the then outstanding shares of Series A Preferred Stock
if such amendment would:
(i) change the relative seniority rights of the holders of
Series A Preferred Stock as to the payment of dividends in relation to the
holders of any other capital stock of the Corporation, or create any other class
or series of capital stock entitled to seniority as to the payment of dividends
in relation to the holders of Series A Preferred Stock;
(ii) reduce the amount payable to the holders of Series A
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, or change the relative seniority of the
liquidation preferences of the holders of Series A Preferred Stock to the rights
upon liquidation of the holders of other capital stock of the Corporation, or
change the dividend rights of the holders of Series A Preferred Stock;
(iii) cancel or modify the conversion rights of the holders of
Series A Preferred Stock provided for in Section 4 herein;
(iv) cancel or modify the redemption rights of the holders of
the Series A Preferred Stock provided for in Section 6 herein; or
(v) cancel or modify the rights of the holders of the Series A
Preferred Stock provided for in this Section 7.
Section 8. No Dilution or Impairment. The Corporation shall not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of the Series A Preferred Stock set forth
herein, but shall at all times in good faith assist in the carrying out of all
such terms in the taking of all such actions as may be necessary or appropriate
in order to protect the rights of the holders of the Series A Preferred Stock
against dilution or other impairment. Without limiting the generality of the
foregoing, the Corporation (a) shall not increase the par value of any shares
of stock receivable on the conversion of the Series A Preferred Stock above the
amount payable therefor on such conversion, (b) shall take all such action as
may be necessary or appropriate in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of stock on the conversion
of all Series A Preferred Stock from time to time outstanding, and (c) shall not
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Corporation (if the Corporation is not the
surviving person), unless such other person shall expressly assume in writing
and will be bound by all of the terms of the Series A Preferred Stock set forth
herein.
Section 9. Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
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otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
a. any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger of the Corporation, or any transfer of all or substantially all of
the assets of the Corporation to any other corporation, or any other entity or
person, or
b. any voluntary or involuntary dissolution, liquidation or
winding up of the Corporation,
then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Series A Preferred Stock a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or right,
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, merger, dissolution, liquidation or winding up is
expected to become effective, and (iii) the time, if any, that is to be fixed,
as to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, merger, dissolution, liquidation
or winding up. Such notice shall be mailed at least ten (10) business days prior
to the date specified in such notice on which such action is to be taken.
II. Series B Preferred.
Section 1. Dividends.
a. Dividends. The holders of the then outstanding shares of Series B
Preferred Stock shall be entitled to receive, out of funds legally available
therefor, cumulative annual dividends when and as may be declared from time to
time by the Board of Directors of the Corporation at an annual rate per share
equal to eight percent (8%) of the original purchase price paid per share of the
Series B Preferred Stock. Such amount shall be compounded annually such that if
the dividend is not paid for such year the unpaid amount shall be added to the
original purchase price paid per share of the Series B Preferred Stock for
purposes of calculating succeeding years' dividends. Such dividends shall be
deemed to accrue on the Series B Preferred Stock and be cumulative, whether or
not earned or declared and whether or not there are profits, surplus or other
funds of the Corporation legally available for the payment of dividends. If such
cumulative dividends in respect of any prior or current annual dividend period
shall not have been declared and paid, or if there shall not have been a sum
sufficient for the payment therefor set apart, the deficiency shall first be
fully paid before any dividend or other distribution shall be paid or declared
and set apart with respect to any class of the Corporation's capital stock, now
or hereafter outstanding. As of the date hereof, the Series B Preferred Stock
shall be deemed to have accrued dividends in the amount of $479,389. Anything
contained herein to the contrary notwithstanding, any accrued dividends shall be
immediately due and payable in cash, upon the earliest occurrence of any of the
following (each a "Series B Dividend Date"):
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(i) A Series B Qualified Public Offering (as hereafter
defined);
(ii) A sale of the Corporation or a sale of all or
substantially all of the Corporation's assets; or
(iii) April 15,2005.
For purposes of this Section 1, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of capital stock of the Corporation for cash or property,
including any such transfer, purchase or redemption by a subsidiary of the
Corporation. Notwithstanding the foregoing, the Corporation shall not declare
or pay a dividend on the Series B Preferred Stock prior to the Series B Dividend
Date.
b. Dividends in Kind. In the event the Corporation shall make or issue,
or shall fix a record date for the determination of holders of the Corporation's
Common Stock entitled to receive, a dividend or other distribution with respect
to the Common Stock payable in (i) securities of the Corporation other than
shares of Common Stock or (ii) assets, then and in each such event the holders
of Series B Preferred Stock shall receive, at the same time such distribution is
made with respect to Common Stock, the number of securities or such other assets
of the Corporation which they would have received had their Series B Preferred
Stock been converted into Common Stock immediately prior to the record date for
determining holders of Common Stock entitled to receive such distribution.
Section 2. Liquidation, Dissolution or Winding Up.
a. Treatment at Liquidation, Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of each share of Series B Preferred Stock
shall be entitled to be paid out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
whether such assets are capital, surplus, or capital earnings, such amount per
share of Series B Preferred Stock as would have been payable had each such share
been converted into Common Stock immediately prior to such event of liquidation,
dissolution or winding up pursuant to the provisions of Section 4 (the "Series B
Liquidation Amount") and the holders of the Series B Preferred Stock shall be
treated as if they had converted the Series B Preferred Stock into Common Stock.
b. Distribution in Cash. The Series B Liquidation Amount shall in all
events be paid in cash. Whenever a distribution provided for in this Section 2
is payable in property other than cash, the value of such distribution shall be
the fair market value of such property as determined in good faith by the Board.
Section 3. Voting Power. Except as otherwise expressly provided in
Section 6 hereof, or as required by law, the holder of each share of Series B
Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the largest number of
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whole shares of Common Stock into which a share of such holder's shares of
Series B Preferred Stock could be converted, pursuant to the provisions of
Section 4 hereof and assuming a Series B Applicable Conversion Value of $35.00,
at the record date for the determination of shareholders entitled to vote on
such matter or, if no such record date is established, at the date such vote is
taken or any written consent of shareholders is solicited. Except as otherwise
expressly provided herein or as required by law, the holders of shares of
Series B Preferred, Series A Preferred, Series C Participating Preferred and
Common Stock shall vote together as a single class on all matters.
Section 4. Conversion Rights for the Series B Preferred Stock. The
holders of the Series B Preferred Stock shall have following rights with respect
to the conversion of the Series B Preferred Stock into shares of Common Stock:
a. General. Subject to and in compliance with the provisions of this
Section 4, all but not less than all of the shares of the Series B Preferred
Stock may, at the option of the holder, be converted at any time into fully paid
and non-assessable shares of Common Stock. As of the date hereof, the number of
shares of Common Stock to which a holder of each share of Series B Preferred
Stock shall be entitled upon conversion is 41.3223, which number is derived by
dividing $1000.00 by $24.20 (the "Series B Applicable Conversion Value"), which
Series B Applicable Conversion Value shall be adjusted from time to time in
accordance with this Section 4.
b. Adjustments to Series B Applicable Conversion Values.
(i) (A) Upon Sale of Common Stock. If the Corporation shall, while
there are any shares of Series B Preferred Stock outstanding, issue or sell (or
in accordance with Section 4(b)(i)(B) is deemed to have issued or sold) shares
of its Common Stock without consideration or at a price per share less than the
Series B Applicable Conversion Value, then in each such case such Series B
Applicable Conversion Value for the Series B Preferred Stock upon each such
issuance or sale, except as hereinafter provided, shall be lowered so as to be
equal to an amount determined by multiplying the Series B Applicable Conversion
Value at such time by a fraction:
(1) the numerator of which shall be (a) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, plus (b) the number of shares of Common Stock
which the net aggregate consideration, if any, received by the Corporation for
the total number of such additional shares of Common Stock so issued would
purchase at the Series B Applicable Conversion Value in effect immediately prior
to such issuance, and
(2) the denominator of which shall be (a) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus (b) the number of such additional shares
of Common Stock so issued.
(B) Upon Issuance of Warrants, Options and Rights to Common
Stock.
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(1) For the purposes of this Section 4(b)(i), the issuance
of any warrants, options, subscriptions, or purchase rights with respect to
shares of Common Stock and the issuance of any securities convertible into or
exchangeable for shares of Common Stock (or the issuance of any warrants,
options or any rights with respect to such convertible or exchangeable
securities) shall be deemed an issuance of such Common Stock at such time if
the Series B Net Consideration Per Share (as hereinafter determined) which may
be received by the Corporation for such Common Stock shall be less than the
Series B Applicable Conversion Value at such time. Any obligation, agreement,
or undertaking to issue warrants, options, subscriptions, or purchase rights at
any time in the future shall be deemed to be an issuance at the time such
obligation, agreement or undertaking is made or arises. No adjustment of the
Series B Applicable Conversion Value shall be made under this Section 4(b)(i)
upon the issuance of any shares of Common Stock which are issued pursuant to
the exercise of any warrants, options, subscriptions, or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any
convertible securities if any adjustment shall previously have been made or
deemed not required hereunder, upon the issuance of any such warrants, options,
or subscription or purchase rights or upon the issuance of any convertible
securities (or upon the issuance of any warrants, options or any rights
therefor) as provided above.
Should the Series B Net Consideration Per Share of any such warrants, options,
subscriptions or purchase rights or convertible securities be decreased from
time to time, then, upon the effectiveness of each such change, the Series B
Applicable Conversion Value shall be adjusted to such Series B Applicable
Conversion Value as would have obtained (1) had the adjustments made upon the
issuance of such warrants, options, rights, or convertible securities been made
upon the basis of the decreased Series B Net Consideration Per Share of such
securities, and (2) had adjustments made to the Series B Applicable Conversion
Value since the date of issuance of such securities been made to the Series B
Applicable Conversion Value as adjusted pursuant to (1) above.
(2) For purposes of this paragraph, the "Series B Net
Consideration Per Share" which may be received by the Corporation shall be
determined as follows:
I. The "Series B Net Consideration Per Share" shall mean
the amount equal to the total amount of consideration, if any, received by the
Corporation for the issuance of such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities, plus the minimum
amount of consideration, if any, payable to the Corporation upon exercise or
conversion thereof, divided by the aggregate number of shares of Common Stock
that would be issued if all such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities were exercised,
exchanged, or converted.
II. The "Series B Net Consideration Per Share" which may
be received by the Corporation shall be determined in each instance as of the
date of issuance of warrants, options, subscriptions, or other purchase rights
or convertible or exchangeable securities without giving effect to any possible
future upward price adjustments or rate adjustments which may be applicable with
respect to such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities.
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(C) Stock Dividends. In the event the Corporation shall
make or issue a dividend or other distribution payable in Common Stock or
securities of the Corporation convertible into or otherwise exchangeable for the
Common Stock of the Corporation, then such Common Stock or other securities
issued in payment of such dividend shall be deemed to have been issued without
consideration (except for dividends payable in shares of Common Stock payable
pro rata to holders of Series B Preferred Stock and to holders of any other
class of stock).
(D) Consideration Other than Cash. For purposes of this
Section 4(b), if a part or all of the consideration received by the
Corporation in connection with the issuance of shares of the Common Stock or the
issuance of any of the securities described in this Section 4(b) consists of
property other than cash, such consideration shall be deemed to have a fair
market value as is reasonably determined in good faith by the Board.
(E) Exceptions. This Section 4(b)(i) shall not apply under
any of the circumstances which would constitute an Extraordinary Common Stock
Event (as hereinafter defined in Section 4(b)(ii)). Further, the provisions of
this Section 4(b) shall not apply to (i) shares issued upon conversion of the
Series B Preferred Stock, (ii) the issuance of any Common Stock pursuant to the
exercise of the options (and the shares issuable upon exercise thereof) to
purchase up to an aggregate of 140,000 shares of Common Stock (excluding options
outstanding on the date hereof) issued to employees of the Corporation, or (iii)
the issuance of warrants to the Corporation's lenders in connection with that
certain Warrant Agreement among the Corporation, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, PNC Bank, National Association, and
certain other holders party thereto, dated as of February 26, 1999. The number
of shares in this Section (E) shall be proportionately adjusted to reflect any
stock dividend, stock split or other form of recapitalization occurring after
the date hereof.
(ii) Upon Extraordinary Common Stock Event. Upon the
happening of an Extraordinary Common Stock Event, the Series B Applicable
Conversion Value for the Series B Preferred Stock shall, simultaneously with the
happening of such Extraordinary Common Stock Event, be adjusted by multiplying
the then effective Series B Applicable Conversion Value with respect to the
Series B Preferred Stock by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall
thereafter be the Series B Applicable Conversion Value. The Series B Applicable
Conversion Value for the Series B Preferred Stock shall be readjusted in the
same manner upon the happening of any successive Extraordinary Common Stock
Event or Events.
(iii) Failure to Effectuate Series B Qualified Public Offering
by March 1, 2002. In the event the Corporation has not effected a Series B
Qualified Public Offering by March 1, 2002, and it has not sold substantially
all of its assets or stock by such date, the Series B Applicable Conversion
Value shall be deemed to have been, as of the date hereof, $35.00, and any
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adjustments to the Series B Applicable Conversion Value made after the date
hereof shall be made to such number.
c. Dividends. In the event the Corporation shall make or
issue, or shall fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution with respect to the
Common Stock payable in (i) securities of the Corporation other than shares of
Common Stock or (ii) assets, then and in each such event the holders of Series B
Preferred Stock shall receive, at the same time such distribution is made with
respect to Common Stock, the number of securities or such other assets of the
Corporation which they would have received had their Series B Preferred Stock
been converted into Common Stock immediately prior to the date of such
distribution.
d. Capital Reorganization or Reclassification. If the Common
Stock issuable upon the conversion of the Series B Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
elsewhere in this Section 4 or by a Reorganization), then and in each such
event, the holder of each share of Series B Preferred Stock shall have the
right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such capital
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such capital reorganization,
reclassification or other change.
e. Capital Reorganization, Merger or Sale of Assets. If at
any time or from time to time there shall be a capital reorganization of the
Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section 4) or a
Reorganization, then as a part of such Reorganization, provision shall be made
so that the holders of the Series B Preferred Stock shall thereafter be entitled
to receive upon conversion of the Series B Preferred Stock, the number of shares
of stock or other securities or property of the Corporation, or of the successor
corporation resulting from such Reorganization, to which such holder would have
been entitled if such holder had converted its shares of Series B Preferred
Stock immediately prior to such Reorganization. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4
with respect to the rights of the holders of the Series B Preferred Stock after
the Reorganization, to the end that the provisions of this Section 4 (including
adjustment of the Series B Applicable Conversion Value then in effect and the
number of shares issuable upon conversion of the Series B Preferred Stock) shall
be applicable after that event in as nearly equivalent a manner as may be
practicable.
f. Certificate as to Adjustments; Notice by Corporation. In
each case of an adjustment or readjustment of the Applicable Conversion Rate,
the Corporation at its expense will furnish each holder of Series B Preferred
Stock with a certificate, executed by the president and chief financial officer
(or in the absence of a person designated as the chief financial officer, by
the treasurer) showing such adjustment or readjustment, and stating in detail
the facts upon which such adjustment or readjustment is based.
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g. Exercise of Conversion Privilege. To exercise its
conversion privilege, a holder of Series B Preferred Stock shall surrender the
certificate or certificates representing the shares being converted to the
Corporation at its principal office, and shall give written notice to the
Corporation at that office that such holder elects to convert such shares. Such
notice shall also state the name or names (with address or addresses) in which
the certificate or certificates for shares of Common Stock issuable upon such
conversion shall be issued. The certificate or certificates for shares of Series
B Preferred Stock surrendered for conversion shall be accompanied by proper
assignment thereof to the Corporation or in blank. The date when such written
notice is received by the Corporation, together with the certificate or
certificates representing the shares of Series B Preferred Stock being
converted, shall be the "Series B Conversion Date." As promptly as practicable
after the Series B Conversion Date, the Corporation shall issue and shall
deliver to the holder of the shares of Series B Preferred Stock being converted,
or on its written order, such certificate or certificates as it may request for
the number of whole shares of Common Stock issuable upon the conversion of such
shares of Series B Preferred Stock in accordance with the provisions of this
Section 4, and cash, as provided in Section 4(h), in respect of any fraction of
a share of Common Stock issuable upon such conversion. Such conversion shall be
deemed to have been effected immediately prior to the close of business on the
Series B Conversion Date, and at such time the rights of the holder as holder of
the converted shares of Series B Preferred Stock shall cease and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares of Common Stock represented
thereby. The Corporation shall pay any taxes payable with respect to the
issuance of Common Stock upon conversion of the Series B Preferred Stock, other
than any taxes payable with respect to income by the holders thereof.
h. Cash in Lieu of Fractional Shares. The Corporation may, if
it so elects, issue fractional shares of Common Stock or scrip representing
fractional shares upon the conversion of shares of Series B Preferred Stock. If
the Corporation does not elect to issue fractional shares, the Corporation shall
pay to the holder of the shares of Series B Preferred Stock which were converted
a cash adjustment in respect of such fractional shares in an amount equal to the
same fraction of the market price per share of the Common Stock (as determined
in a reasonable manner prescribed by the Board) at the close of business on the
Series B Conversion Date. The determination as to whether or not any fractional
shares are issuable shall be based upon the total number of shares of Series B
Preferred Stock being converted at any one time by any holder thereof, not upon
each share of Series B Preferred Stock being converted.
i. Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series B Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock, and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series B
Preferred Stock, the Corporation shall take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
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Section 5. No Reissuance of Series B Preferred Stock. No share or
shares of Series B Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may from time to
time take such appropriate corporate action as may be necessary to reduce the
authorized number of shares accordingly.
Section 6. Redemption.
a. Optional Redemption Upon Series B Qualified Public Offering.
Effective upon the closing of a Series B Qualified Public Offering, the
Corporation may require the holders of the Series B Preferred Stock to convert
their Series B Preferred Stock into Common Stock by sending notice thereof,
together with a calculation of the Series B Applicable Conversion Value, at
least ten business days prior to the closing of the Series B Qualified Public
Offering, to all holders of Series B Preferred Stock. The mandatory conversion
shall be effective as of the closing date of the Series B Qualified Public
Offering and on and after such date the certificates representing the Series B
Preferred Stock shall only represent the right to receive the Conversion
Shares. For purposes hereof, the term "Series B Qualified Public Offering"
shall mean an underwritten public offering pursuant to an effective
registration statement under the Securities Act, covering the offer and sale of
Common Stock for the account of the Corporation in which the aggregate net
proceeds to the Corporation equal at least $25,000,000 and in which the price
per share of Common Stock is at least two and one half (2.5) times the then
Series B Applicable Conversion Value of the Series B Preferred Stock. Nothing
contained in Section 6(a) shall (i) in any way restrict or prohibit the holders
of the Series B Preferred Stock from exercising their conversion rights
pursuant to Section 4 hereof prior to the effective date of the redemption to
be effected hereunder; provided, however, that any such conversion under
Section 6(a) may be subject to the closing of the Series B Qualified Public
Offering.
b. Optional Redemption by a Holder Following Default.
(i) In the event there is a Default, then the holders of at
least fifty-one percent (51%) of the then outstanding shares of Series B
Preferred Stock may request the Corporation to redeem any or all of the shares
of Series B Preferred Stock then held by such holders at the price equal to the
greater of (i) the original purchase price of the Series B Preferred Stock (as
adjusted to reflect any stock split, stock dividend or other form of
recapitalization), together with all accrued and unpaid dividends (whether or
not declared) thereon to be calculated and paid through and including the date
of redemption or (ii) fair market value thereof, as of the date of such
proposed redemption, as determined, at the Corporation's sole expense, by a
nationally recognized investment banking firm (mutually acceptable to both the
Corporation and the holders), taking into account, in valuing such Shares, all
relevant facts and circumstances; provided, however, that there shall be no
discount to reflect the fact that the Shares represent a minority interest in
the Corporation (the "Holder Redemption Price"). Such request (the "Default
Redemption Request") shall be submitted to the Corporation in writing within
thirty (30) days after the Corporation notifies all of the holders of the
Series B Preferred Stock in writing of the Default. No cure of such Default
during such thirty
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(30) day period shall vitiate such Default Redemption Request and the failure to
make such a Default Redemption Request within such thirty (30) day period shall
not result in the waiver of such remedy.
(ii) Upon receipt of a Default Redemption Request, the
Corporation shall promptly give notice thereof (the "Default Redemption Notice")
to each holder of Series B Preferred Stock. Such Default Redemption Notice shall
specify the number of shares of Series B Preferred Stock covered by the Default
Redemption Request and the Holder Redemption Price to be paid with respect
thereto. Any holder of Series B Preferred Stock who wishes to join in the
Default Redemption Request may do so by so advising the Corporation in writing
within 15 days after receipt of the Default Redemption Notice specified in the
preceding sentence. No holder of Series B Preferred Stock shall be required to
participate in such redemption. The Corporation shall redeem all shares of
Series B Preferred Stock covered by the Default Redemption Request (including
those held by holders who have requested a redemption following receipt of
the Default Redemption Notice) at a closing to be held not more than thirty (30)
days after the date of the Default Redemption Request. At the closing, the
Corporation shall pay for the shares of Series B Preferred Stock so redeemed in
an amount equal to the Holder Redemption Price, payable in cash.
c. Optional Redemption by Holders. At the election of the holders of at
least fifty-one percent (51%) of the then outstanding shares of Series B
Preferred Stock, the Corporation shall, to the extent it may do so under
applicable law, redeem pro rata from all holders of Series A Preferred Stock on
April 15, 2005 the Shares of Series B Preferred Stock outstanding on the date of
such redemption (the "Final Redemption Date"). The Corporation shall give the
holders of the Series B Preferred Stock at least ninety (90) days' notice of the
Final Redemption Date (the "Final Redemption Notice"). In the event that the
Corporation does not provide the Final Redemption Notice, the option of the
holders of the Series B Preferred Stock to require the Corporation to redeem the
remaining shares of Series B Preferred Stock on the Final Redemption Date shall
be extended beyond the Final Redemption Date to a date which is ninety (90) days
from the date that the Corporation elects to mail the Final Redemption Notice.
In the event shares of Series B Preferred Stock scheduled for redemption are not
redeemed because of a prohibition under applicable law, such shares shall be
redeemed as soon as such prohibition no longer exists. The redemption price for
each share of Series B Preferred Stock redeemed pursuant to this Section 6(c)
shall be equal to the Holder Redemption Price.
In the event that the holders of the Series B Preferred Stock do not
elect to have the Series B Preferred Stock redeemed pursuant to this Section
6(c), the shares of Series B Preferred Stock shall remain outstanding and
subject to the rights and preferences contained herein.
d. Redemption Notice. If an election is made pursuant to Section 6(c)
hereof, written notice of such election shall be mailed, postage prepaid, to the
Corporation, not later than sixty (60) days before the date fixed for each
redemption pursuant to Section 6(c) or, in the event the Corporation does not
provide the Final Redemption Notice pursuant to Section 6(c) hereof, not later
than sixty (60) days before the date that the Final Redemption Date has been
extended as provided in Section 6(c) (each of the dates fixed for redemption and
the extended redemption date is hereinafter referred to as a "Redemption
Date"). If such election is made and appropriate notice is
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given, then, at least forty-five (45) days before the Redemption Date, written
notice (hereinafter referred to as the "Redemption Notice") shall be mailed by
the Corporation, postage prepaid, to each holder of record of Series B Preferred
Stock at its address shown on the records of the Corporation; provided, however,
that the Corporation's failure to give such Redemption Notice shall in no way
affect its obligation to redeem the shares of Series B Preferred Stock or the
obligation of the holders to redeem their shares of Series B Preferred Stock as
provided in Section 6(c) hereof. The Redemption Notice shall contain (i) the
number of shares of Series B Preferred Stock held by the holder and the total
number of shares of Series B Preferred Stock held by all holders subject to
redemption as of such Redemption Date; and (ii) the Redemption Date and the
applicable Holder Redemption Price. Any holder of Series B Preferred Stock who
wishes to do so may, by giving notice to the Corporation prior to the Redemption
Date, convert into Common Stock any or all of the shares of Series B Preferred
Stock held by him and scheduled for redemption on such Redemption Date.
e. Surrender of Certificates. Each holder of shares of Series B
Preferred Stock to be redeemed under this Section 6 shall surrender the
certificate or certificates representing such shares to the Corporation at the
place designated in the Redemption Notice, and thereupon the Corporation
Redemption Price or Holder Redemption Price, as the case may be, for such shares
as set forth in this Section 6 shall be paid to the order of the person whose
name appears on such certificate or certificates. Irrespective of whether the
certificates therefor shall have been surrendered, all shares of Series B
Preferred Stock which are the subject of a Redemption Notice shall be deemed to
have been redeemed and shall be canceled effective as of the Redemption Date,
unless the Corporation shall default in the payment of the applicable Redemption
Price.
f. Sale of the Corporation. In lieu of the redemption obligations of
the Corporation as set forth herein, the Corporation may instead retain a
nationally recognized investment banking firm (or other mutually acceptable
party) to sell the Corporation, provided that the Corporation acts expeditiously
and in good faith and the sale of the Corporation is consummated no later than
180 days after the required date of redemption.
Section 7. Restrictions and Limitations.
a. Corporate Securities Action. Except as expressly provided herein or
as otherwise required by law, so long as any shares of Series B Preferred Stock
remain outstanding, the Corporation shall not, and shall not permit any
subsidiary (which shall mean any corporation, association or other business
entity which the Corporation and/or any of its other subsidiaries directly or
indirectly owns at the time more than fifty percent (50%) of the outstanding
voting shares of such corporation or trust, other than directors' qualifying
shares) to, without the approval by vote or written consent by the holders of at
least a majority of the then outstanding shares of the Corporation's Series A
Preferred Stock and the Series B Preferred Stock, voting as a separate class:
(i) redeem, purchase or otherwise acquire for value (or pay
into or set aside for a sinking fund for such purpose), or declare and pay or
set aside funds for the payment of
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<PAGE> 24
any dividend with respect to, any share or shares of capital stock, except as
required or permitted hereunder or under the terms of Section 4.2 of the
Subscription Agreement;
(ii) authorize or issue, or obligate itself to authorize or
issue, additional shares of Series B Preferred Stock;
(iii) authorize or issue, or obligate itself to authorize or
issue, any equity security senior to or on parity with the Series B Preferred
Stock as to liquidation preferences, dividend rights, or voting rights;
(iv) merge or consolidate with any other corporation or sell,
assign, lease or otherwise dispose of or voluntarily part with the control of
(whether in one transaction or in a series of transactions) all, of
substantially all, of its assets (whether now owned or hereinafter acquired), or
consent to any liquidation, dissolution or winding up of the Corporation, or
permit any subsidiary to do any of the foregoing, except for (A) any
wholly-owned subsidiary may merge into or consolidate with or transfer assets to
any other wholly-owned subsidiary, and (B) any wholly-owned subsidiary may merge
into or transfer assets to the Corporation; or
(v) amend, restate, modify or alter the by-Laws of the
Corporation in any way which adversely affects the rights of the holders of the
Series B Preferred Stock.
b. Amendments to Charter. The Corporation shall not amend its Articles
of Incorporation without the approval, by vote or written consent, by the
holders of at least a majority of the then outstanding shares of Series B
Preferred Stock, if such amendment would amend any of the rights, preferences,
privileges of or limitations provided for herein for the benefit of any shares
of Series B Preferred Stock. Without limiting the generality of the preceding
sentence, the Corporation shall not amend its Articles of Incorporation without
the approval by the holders of at least a majority of the then outstanding
shares of Series B Preferred Stock if such amendment would:
(i) change the relative seniority rights of the holders of
Series B Preferred Stock as to the payment of dividends in relation to the
holders of any other capital stock of the Corporation, or create any other class
or series of capital stock entitled to seniority as to the payment of dividends
in relation to the holders of Series B Preferred Stock;
(ii) reduce the amount payable to the holders of Series B
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, or change the relative seniority of the
liquidation preferences of the holders of Series B Preferred Stock to the rights
upon liquidation of the holders of other capital stock of the Corporation, or
change the dividend rights of the holders of Series B Preferred Stock;
(iii) cancel or modify the conversion rights of the holders of
Series B Preferred Stock provided for in Section 4 herein;
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<PAGE> 25
(iv) cancel or modify the redemption rights of the holders of
the Series B Preferred Stock provided for in Section 6 herein; or
(v) cancel or modify the rights of the holders of the Series
B Preferred Stock provided for in this Section 7.
Section 8. No Dilution or impairment. The Corporation shall not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of the Series B Preferred Stock set forth
herein, but shall at all times in good faith assist in the carrying out of all
such terms in the taking of all such actions as may be necessary or appropriate
in order to protect the rights of the holders of the Series B Preferred Stock
against dilution or other impairment. Without limiting the generality of the
foregoing, the Corporation (a) shall not increase the par value of any shares of
stock receivable on the conversion of the Series B Preferred Stock above the
amount payable therefor on such conversion, (b) shall take all such action as
may be necessary or appropriate in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of stock on the conversion
of all Series B Preferred Stock from time to time outstanding, and (c) shall
not consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Corporation (if the Corporation is not the
surviving person), unless such other person shall expressly assume in writing
and will be bound by all of the terms of the Series B Preferred Stock set forth
herein.
Section 9. Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
a. any capital reorganization of the Corporation, any reclassification
or recapitalization of the capital stock of the Corporation, any merger of the
Corporation, or any transfer of all or substantially all of the assets of the
Corporation to any other corporation, or any other entity or person, or
b. any voluntary or involuntary dissolution, liquidation or winding up
of the Corporation,
then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Series B Preferred Stock a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or right,
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, merger, dissolution, liquidation or winding up is
expected to become effective, and (iii) the time, if any, that is to be fixed,
as to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other
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<PAGE> 26
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, merger, dissolution, liquidation or winding up. Such
notice shall be mailed at least ten (10) business days prior to the date
specified in such notice on which such action is to be taken.
III. Series C Participating Preferred.
Section 1. Dividends.
a. General Obligation in Respect of Preferential Dividends. When and as
declared by the Board and to the extent permitted under the Florida Business
Corporation Act, the Corporation shall pay preferential dividends in cash to the
holders of the Series C Preferred as provided in this Section 1. Dividends on
each share of the Series C Participating Preferred (a Series C Participating
Preferred Share") shall accrue on a daily basis at the rate of 12% per annum of
the sum of the Series C Liquidation Value thereof plus all accumulated and
unpaid dividends thereon from and including the date of issuance of such Series
C Participating Preferred Share to and including the first to occur of (i) the
date on which the Series C Liquidation Value of such Series C Participating
Preferred Share (plus all accrued and unpaid dividends thereon) is paid to the
holder thereof in connection with the liquidation of the Corporation or the
redemption of such Series C Participating Preferred Share by the Corporation or
otherwise (but excluding any amounts paid pursuant to paragraph (d)
below), (ii) the date on which such Series C Participating Preferred Share is
converted into shares of Series C Conversion Stock hereunder or (iii) the date
on which such Series C Participating Preferred Share is otherwise acquired by
the Corporation. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends, and such dividends
shall be cumulative such that all accrued and unpaid dividends shall be fully
paid or declared with funds irrevocably set apart for payment before any
dividends, distributions, redemptions or other payments may be made with respect
to any Junior Securities. The date on which the Corporation initially issues any
Series C Participating Preferred Share shall be deemed to be its "date of
issuance" regardless of the number of times transfer of such Series C
Participating Preferred Share is made on the stock records maintained by or for
the Corporation and regardless of the number of certificates which may be issued
to evidence such Series C Participating Preferred Share.
b. Dividend Reference Dates. To the extent not paid on March 31, June
30, September 30 and December 31 of each year, beginning December 31, 1999 (the
"Dividend Reference Dates"), all dividends which have accrued on each Series C
Participating Preferred Share outstanding during the three-month period (or
other period in the case of the initial Dividend Reference Date) ending upon
each such Dividend Reference Date shall be accumulated and shall remain
accumulated dividends with respect to such Series C Participating Preferred
Share until paid to the holder thereof.
c. Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Series C Participating Preferred,
such payment shall be distributed pro rata among the
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<PAGE> 27
holders thereof based upon the aggregate accrued but unpaid dividends on the
Series C Participating Preferred Shares held by each such holder.
d. Participating Dividends. In the event that the Corporation declares
or pays any dividends upon the Common Stock (whether payable in cash, securities
or other property) other than dividends payable solely in shares of Common
Stock, the Corporation shall also declare and pay to the holders of the Series C
Participating Preferred at the same time that it declares and pays such
dividends to the holders of the Common Stock, the dividends which would have
been declared and paid with respect to the Common Stock issuable upon conversion
of the Series C Participating Preferred had all of the outstanding Series C
Participating Preferred been converted immediately prior to the record date for
such dividend, or if no record date is fixed, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
Section 2. Liquidation.
Upon any liquidation, dissolution or winding up of the Corporation
(whether voluntary or involuntary), each holder of Series C Participating
Preferred shall be entitled to be paid, (i) before any distribution or payment
is made upon any Junior Securities an amount in cash equal to the aggregate
Series C Liquidation Value of all Series C Participating Preferred Shares held
by such holder (plus all accrued and unpaid dividends thereon), and (ii) an
amount in cash equal to its ratable share on a per share basis of all
distributions to the holders of Common Stock which would have been payable with
respect to the Common Stock issuable upon conversion of the Series C
Participating Preferred had all of the outstanding Series C Participating
Preferred been converted immediately prior to such liquidation, dissolution or
winding up of the Corporation. If upon any such liquidation, dissolution or
winding up of the Corporation the Corporation's assets to be distributed among
the holders of the Series C Participating Preferred are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to be
paid under this Section 2, then the entire assets available to be distributed to
the Corporation's stockholders shall be distributed pro rata among such holders
based upon the aggregate Series C Liquidation Value (plus all accrued and unpaid
dividends) of the Series C Participating Preferred held by each such holder. Not
less than 60 days prior to the payment date stated therein, the Corporation
shall mail written notice of any such liquidation, dissolution or winding up to
each record holder of Series C Participating Preferred, setting forth in
reasonable detail the amount of proceeds to be paid with respect to each share
of Series C Preferred Stock and the Common Stock in connection with such
liquidation, dissolution or winding up.
Section 3. Priority of Series C Participating Preferred on Dividends
and Redemptions.
So long as any Series C Participating Preferred remains outstanding,
without the prior written consent of the holders of a majority of the
outstanding shares of Series C Participating Preferred, the Corporation shall
not, nor shall it permit any Subsidiary to, redeem, purchase or otherwise
acquire directly or indirectly any Junior Securities, nor shall the Corporation
directly or indirectly pay or declare any dividend or make any distribution upon
any Junior Securities, if at the
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<PAGE> 28
time of or immediately after any such redemption, purchase, acquisition,
dividend or distribution the Corporation has failed to pay the full amount of
dividends accrued on the Series C Participating Preferred or the Corporation has
failed to make any redemption of the Series C Participating Preferred required
hereunder; provided that the Corporation may repurchase shares of Common Stock
from present or former employees of the Corporation and its Subsidiaries in
accordance with the arrangements and agreements which have been approved by the
Board.
Section 4. Redemptions.
a. Scheduled Redemptions. The Corporation shall redeem all of the
outstanding Series C Participating Preferred Shares on December 31, 2019 (the
"Scheduled Redemption Date"), at a price per Series C Participating Preferred
Share equal to the Series C Redemption Price. For purposes hereof, the "Series C
Redemption Price" of any Series C Participating Preferred Share at any time
shall mean the aggregate amount to which the holder of such share would be
entitled pursuant to Section 2 above if the Corporation were liquidated at such
time.
b. Redemption Payments. For each Series C Participating Preferred Share
which is to be redeemed hereunder, the Corporation shall be obligated on the
Scheduled Redemption Date to pay to the holder thereof (upon surrender by such
holder at the Corporation's principal office of the certificate representing
such Series C Participating Preferred Share) an amount in immediately available
funds equal to the Series C Redemption Price of such Series C Participating
Preferred Share. If the funds of the Corporation legally available for
redemption of Series C Participating Preferred Shares on the Scheduled
Redemption Date are insufficient to redeem the total number of Series C
Participating Preferred Shares to be redeemed on such date, those funds which
are legally available shall be used to redeem the maximum possible number
of Series C Participating Preferred Shares pro rata among the holders of the
Series C Participating Preferred Shares to be redeemed, first based upon the
aggregate Series C Liquidation Value of such Series C Participating Preferred
Shares held by each such holder (plus all accrued and unpaid dividends thereon),
and after such time as distributions have been paid in such amounts, then based
upon holdings of Series C Participating Preferred. At any time thereafter when
additional funds of the Corporation are legally available for the redemption of
Series C Participating Preferred Shares, such funds shall immediately be used to
redeem the balance of the Series C Participating Preferred Shares which the
Corporation has become obligated to redeem on the Scheduled Redemption Date but
which it has not redeemed.
c. Notice of Redemption. Except as otherwise provided herein, the
Corporation shall mail written notice of each redemption of any Series C
Participating Preferred to each record holder thereof not more than 60 nor less
than 30 days prior to the date on which such redemption is to be made. In case
fewer than the total number of Series C Participating Preferred Shares
represented by any certificate are redeemed, a new certificate representing the
number of unredeemed Series C Participating Preferred Shares shall be issued to
the holder thereof without cost to such holder within five business days after
surrender of the certificate representing the redeemed Series C Participating
Preferred Shares.
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d. Determination of the Number of Each Holder's Series C Participating
Preferred Shares to be Redeemed. Except as otherwise provided herein, the number
of Series C Participating Preferred Shares to be redeemed from each holder
thereof in redemptions hereunder shall be the number of Series C Participating
Preferred Shares determined by multiplying the total number of Series C
Participating Preferred Shares to be redeemed times a fraction, the numerator of
which shall be the total number of Series C Participating Preferred Shares then
held by such holder and the denominator of which shall be the total number of
Series C Participating Preferred Shares then outstanding.
e. Dividends After Scheduled Redemption Date. No Series C Participating
Preferred Share shall be entitled to any dividends accruing after the date on
which the Series C Redemption Price of such Series C Participating Preferred
Share is paid to the holder of such Series C Participating Preferred Share. On
such date, all rights of the holder of such Series C Participating Preferred
Share to receive dividends or other payments shall cease.
f. Redeemed or Otherwise Acquired Series C Participating Preferred
Shares. Any Series C Participating Preferred Shares which are redeemed or
otherwise acquired by the Corporation shall be canceled and retired to
authorized but unissued shares and shall not be reissued, sold or transferred.
Section 5. Voting Rights.
Except as otherwise required by applicable law, each holder of Series C
Participating Preferred Shares shall be entitled to vote, together with the
holders of Series A Preferred, Series B Preferred, Series D Preferred and the
Common Stock as a single class, on all matters to be voted upon by the
shareholders of the Corporation, and in each such vote shall be entitled to that
number of votes (including fractions thereof) equal to the quotient determined
by dividing the aggregate Series C Liquidation Value of the shares so held by
the Common Stock Value Per Share (as defined in the Reorganization Agreement),
except as otherwise required by applicable law.
Section 6. Conversion.
a. Conversion Procedure.
(i) If an IPO is proposed to occur, the Corporation shall
give written notice of such IPO, describing in reasonable detail the material
terms and date of consummation thereof to each holder of Series C Participating
Preferred not more than 45 days nor less than 20 days prior to the consummation
of such IPO and the Corporation shall give each holder of Series C Participating
Preferred prompt written notice of any material change in the terms or timing of
such transaction. The holder or holders of a majority of the Series C
Participating Preferred then outstanding may cause each holder of Series C
Participating Preferred to convert all or any portion of the Series C
Participating Preferred (including any fraction of a Series C Participating
Preferred Share) held by such holder into shares of Class B Common (or, if no
shares of Class B Common are then outstanding, Common Stock) and shares of Class
D Preferred, with the shares of Series C
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Participating Preferred held by each holder converting into (A) the number of
shares of Series D Preferred (or fraction thereof) with Series D Liquidation
Value equal to the aggregate Series C Liquidation Value of, plus the aggregate
amount of accrued and unpaid dividends on, such shares of Series C Participating
Preferred so converted, and (B) the number of shares of Class B Common (or, if
no shares of Class B Common are then outstanding, Common Stock) computed by
dividing the aggregate Series C Liquidation Value of the Series C Participating
Preferred Shares to be converted by such holder by the Conversion Price set
forth in paragraph (b) below then in effect.
(ii) Except as otherwise provided herein, each conversion of
Series C Participating Preferred shall be deemed to have been effected as of the
close of business on the date on which the certificate or certificates
representing the Series C Participating Preferred to be converted have been
surrendered for conversion at the principal office of the Corporation. At the
time any such conversion has been effected, the rights of the holder of the
Series C Participating Preferred Shares converted as a holder of Series C
Participating Preferred shall cease and the Person or Persons in whose name or
names any certificate or certificates for shares constituting Series C
Conversion Stock are to be issued upon such conversion shall be deemed to have
become the holder or holders of record of the shares constituting Series C
Conversion Stock represented thereby.
(iii) The conversion of any Series C Participating Preferred
Shares may, at the election of the holder thereof, be conditioned upon the
consummation of the IPO in which case such conversion shall not be deemed to be
effective until such IPO has been consummated.
(iv) As soon as possible after a conversion has been effected
(but in any event within five business days in the case of subparagraph (A)
below), the Corporation shall deliver to the converting holder:
(A) a certificate or certificates representing the
number of shares constituting Series C Conversion Stock issuable by reason of
such conversion in such name or names and such denomination or denominations as
the converting holder has specified; and
(B) a certificate representing any Series C
Participating Preferred Shares which were represented by the certificate or
certificates delivered to the Corporation in connection with such conversion but
which were not converted.
(vi) The issuance of certificates for shares constituting
Series C Conversion Stock upon conversion of Series C Participating Preferred
shall be made without charge to the holders of such Series C Participating
Preferred for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
shares constituting Series C Conversion Stock. Upon conversion of each Series C
Participating Preferred Share, the Corporation shall take all such actions as
are necessary in order to insure that the Series C Conversion Stock issuable
with respect to such conversion shall be validly issued, fully paid and
nonassessable, free and clear of all taxes, liens, charges and encumbrances with
respect to the issuance thereof.
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<PAGE> 31
(vii) The Corporation shall not close its books against the
transfer of Series C Participating Preferred or of Series C Conversion Stock
issued or issuable upon conversion of Series C Participating Preferred in any
manner which interferes with the timely conversion of Series C Participating
Preferred. The Corporation shall assist and cooperate with any holder of Series
C Participating Preferred Shares required to make any governmental filings or
obtain any governmental approval prior to or in connection with any conversion
of Series C Participating Preferred Shares hereunder (including, without
limitation, making any filings required to be made by the Corporation).
(viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares constituting Series C
Conversion Stock, solely for the purpose of issuance upon the conversion of the
Series C Participating Preferred, such number of shares constituting Series C
Conversion Stock issuable upon the conversion of all outstanding Series C
Participating Preferred. All shares constituting Series C Conversion Stock which
are so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares
constituting Series C Conversion Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares constituting Series C Conversion Stock may
be listed (except for official notice of issuance which shall be immediately
delivered by the Corporation upon each such issuance). The Corporation shall not
take any action which would cause the number of authorized but unissued shares
constituting Series C Conversion Stock to be less than the number of such shares
required to be reserved hereunder for issuance upon conversion of the Series C
Participating Preferred.
(b) Conversion Price. The initial Conversion Price shall be equal to
the product of (i) 100 multiplied by (ii) the Orius Common Value Per Share (as
defined in the Reorganization Agreement), multiplied by (iii) the Preferred
Stock Proportion (as defined in the Reorganization Agreement). If the
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision shall be proportionately reduced, and if
the Corporation at any time combines (by reverse stock split or otherwise) one
or more classes of its outstanding shares of Common Stock into a smaller number
of shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
IV. Series D Preferred.
Section 1. Dividends.
a. General Obligation. When and as declared by the Corporation's Board
of Directors and to the extent permitted under the Florida Business Corporation
Act, the Corporation shall pay preferential dividends in cash to the holders of
the Series D Preferred as provided in this Section 1. Dividends on each share of
the Series D Preferred (a "Series D Preferred Share") shall accrue on a daily
basis at the rate of 12% per annum of the sum of the Series D Liquidation Value
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thereof plus all accumulated and unpaid dividends thereon from and including the
date of issuance of such Series D Preferred Share to and including the first to
occur of (i) the date on which the Series D Liquidation Value of such Series D
Preferred Share (plus all accrued and unpaid dividends thereon) is paid to the
holder thereof in connection with the liquidation of the Corporation or the
redemption of such Series D Preferred Share by the Corporation, or (ii) the date
on which such Series D Preferred Share is otherwise acquired by the
Corporation. Such dividends shall accrue whether or not they have been declared
and whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends, and such dividends shall be
cumulative such that all accrued and unpaid dividends shall be fully paid or
declared with funds irrevocably set apart for payment before any dividends,
distributions, redemptions or other payments may be made with respect to any
Junior Securities. The date on which the Corporation initially issues any Series
D Preferred Share shall be deemed to be its "date of issuance" regardless of the
number of times transfer of such Series D Preferred Share is made on the stock
records maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such Series D Preferred Share.
b. Dividend Reference Dates. To the extent not paid on the Dividend
Reference Dates, beginning December 31, 1999, all dividends which have accrued
on each Series D Preferred Share outstanding during the three-month period (or
other period in the case of the initial Dividend Reference Date) ending upon
each such Dividend Reference Date shall be accumulated and shall remain
accumulated dividends with respect to such Series D Preferred Share until paid
to the holder thereof.
c. Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Series D Preferred, such payment
shall be distributed pro rata among the holders thereof based upon the aggregate
accrued but unpaid dividends on the Series D Preferred Shares held by each such
holder.
Section 2. Liquidation.
Upon any liquidation, dissolution or winding up of the Corporation
(whether voluntary or involuntary), each holder of Series D Preferred shall be
entitled to be paid, before any distribution or payment is made upon any Junior
Securities an amount in cash equal to the aggregate Series D Liquidation Value
of all Series D Preferred Shares held by such holder (plus all accrued and
unpaid dividends thereon), and the holders of Series D Preferred shall not be
entitled to any further payment. If upon any such liquidation, dissolution or
winding up of the Corporation the Corporation's assets to be distributed among
the holders of the Series D Preferred are insufficient to permit payment to such
holders of the aggregate amount which they are entitled to be paid under this
Section 2, then the entire assets available to be distributed to the
Corporation's stockholders shall be distributed pro rata among such holders
based upon the aggregate Series D Liquidation Value (plus all accrued and unpaid
dividends) of the Series D Preferred held by each such holder. Not less than 60
days prior to the payment date stated therein, the Corporation shall mail
written notice of any such liquidation, dissolution or winding up to each record
holder of Series D Preferred, setting
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forth in reasonable detail the amount of proceeds to be paid with respect to
each share of Series D Preferred and the Common Stock in connection with such
liquidation, dissolution or winding up.
Section 3. Priority of Series D Preferred on Dividends and Redemptions.
So long as any Series D Preferred Shares remain outstanding, without
the prior written consent of the holders of a majority of the outstanding shares
of Series D Preferred, the Corporation shall not, nor shall it permit any
Subsidiary to, redeem, purchase or otherwise acquire directly or indirectly any
Junior Securities, nor shall the Corporation directly or indirectly pay or
declare any dividend or make any distribution upon any Junior Securities, if at
the time of or immediately after any such redemption, purchase, acquisition,
dividend or distribution the Corporation has failed to pay the full amount of
dividends accrued on the Series D Preferred or the Corporation has failed to
make any redemption of the Series D Preferred required hereunder; provided that
the Corporation may repurchase shares of Common Stock from present or former
employees of the Corporation and its Subsidiaries in accordance with the
arrangements and agreements which have been approved by the Board.
Section 4. Redemptions.
a. Scheduled Redemptions. The Corporation shall redeem all of the
outstanding Series D Preferred Shares on the Scheduled Redemption Date, at
a price per Series D Preferred Share equal to the Series D Liquidation Value
thereof (plus all accrued and unpaid dividends thereon), payable in cash.
b. Optional Redemptions. The Corporation may, to the extent it may do
so under applicable law, redeem all of the outstanding Series D Preferred Shares
at any time and from time to time after the date of initial issuance thereof
and, if so requested by the holders of a majority of the outstanding Series D
Preferred Shares, shall be obligated to redeem all outstanding Series D
Preferred Shares or such lesser amount or proportion thereof as such holders may
request at any time or from time to time. Upon any such redemption, the
Corporation shall pay a price per Series D Preferred Share equal to the Series D
Liquidation Value thereof (plus all accrued and unpaid dividends thereon);
provided that the Corporation (i) shall pay the purchase price in any such
redemption in Common Stock of the Corporation if the payment of cash or other
funds in any such redemption is prohibited by, or would otherwise violate the
terms of any agreement or instrument evidencing, securing or relating to any
indebtedness of the Corporation or any of its direct or indirect subsidiaries in
excess of $5,000,000 in the aggregate, and (ii) so long as clause (i) above is
not applicable, may unless the holders of a majority of the outstanding Series D
Preferred otherwise object, elect to pay the purchase price in any such
redemption in Common Stock of the Corporation. In such event, the Corporation
shall issue to each holder of Series D Preferred Shares which are subject to
redemption a number of shares of Common Stock with fair market value equal to
the Series D Liquidation Value thereof (plus all accrued and unpaid dividends
thereon). If any such redemption of Series D Preferred is consummated
contemporaneously with a public offering by the Corporation of shares of its
Common Stock, the fair market value of the Common Stock will be conclusively
presumed for the purposes hereof to be equal to price per share at which the
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Corporation sells such shares [(net of underwriting discounts)], and otherwise
shall be determined by the Board in good faith; provided that if the holders of
a majority of the outstanding Series D Preferred Shares object to the valuation
so determined by the Board, such fair market value shall be determined by
agreement between the Board and such holders. If such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Corporation and the holders
of a majority of the outstanding Series D Preferred Shares.
c. Redemption Payments. For each Series D Preferred Share which is to
be redeemed hereunder, the Corporation shall be obligated on the Scheduled
Redemption Date to pay to the holder thereof (upon surrender by such holder at
the Corporation's principal office of the certificate representing such Series D
Preferred Share) an amount in immediately available funds equal to the Series D
Liquidation Value of such Series D Preferred Share (plus all accrued and unpaid
dividends thereon). If the funds of the Corporation legally available for
redemption of Series D Preferred Shares on the Scheduled Redemption Date are
insufficient to redeem the total number of Series D Preferred Shares to be
redeemed on such date, those funds which are legally available shall be used to
redeem the maximum possible number of Series D Preferred Shares pro rata among
the holders of the Series D Preferred Shares to be redeemed based upon the
aggregate Series D Liquidation Value of such Series D Preferred Shares held by
each such holder (plus all accrued and unpaid dividends thereon). At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of Series D Preferred Shares, such funds shall immediately be
used to redeem the balance of the Series D Preferred Shares which the
Corporation has become obligated to redeem on the Scheduled Redemption Date but
which it has not redeemed.
d. Notice of Redemption. Except as otherwise provided herein, the
Corporation shall mail written notice of each redemption of any Series D
Preferred to each record holder thereof not more than 60 nor less than 30 days
prior to the date on which such redemption is to be made. To request redemption
of all or any portion of the outstanding Series D Preferred Shares, the holders
of a majority of the outstanding Series D Preferred Shares shall deliver written
notice to the Corporation, not more than 60 nor less than 30 days prior to the
date on which such redemption is to be made, specifying the amount or portion of
the outstanding Series D Preferred Shares which shall be subject to such
redemption. Upon receipt of such notice, the Corporation shall immediately mail
written notice of such redemption to each record holder of Series D Preferred.
The Corporation or the holders of a majority of the outstanding shares of Series
C Participating Preferred may deliver notice pursuant to this subsection prior
to the actual issuance of Series D Preferred upon conversion of Series C
Participating Preferred, which notice may be subject to the subsequent
conversion of the Series C Participating Preferred. The holders of a majority of
the outstanding Series D Preferred may waive the foregoing notice periods. In
case fewer than the total number of Series D Preferred Shares represented by any
certificate are redeemed, a new certificate representing the number of
unredeemed Series D Preferred Shares shall be issued to the holder thereof
without cost to such holder within five business days after surrender of the
certificate representing the redeemed Series D Preferred Shares.
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e. Determination of the Number of Each Holder's Series D Preferred
Shares to be Redeemed. Except as otherwise provided herein, the number of Series
D Preferred Shares to be redeemed from each holder thereof in redemptions
hereunder shall be the number of Series D Preferred Shares determined by
multiplying the total number of Series D Preferred Shares to be redeemed times a
fraction, the numerator of which shall be the total number of Series D Preferred
Shares then held by such holder and the denominator of which shall be the total
number of Series D Preferred Shares then outstanding.
f. Dividends After Scheduled Redemption Date. No Series D Preferred
Share shall be entitled to any dividends accruing after the date on which the
Series D Liquidation Value of such Series D Preferred Share (plus all accrued
and unpaid dividends thereon) is paid to the holder of such Series D Preferred
Share. On such date, all rights of the holder of such Series D Preferred Share
shall cease, and such Series D Preferred Share shall no longer be deemed to be
issued and outstanding.
g. Redeemed or Otherwise Acquired Series D Preferred Shares. Any
Series D Preferred Shares which are redeemed or otherwise acquired by the
Corporation shall be canceled and retired to authorized but unissued shares and
shall not be reissued, sold or transferred.
Section 5. Voting Rights.
Except as otherwise required by applicable law, each holder of Series D
Preferred Shares shall be entitled to vote, together with the holders of Series
A Preferred, Series B Preferred, Series C Participating Preferred, Common Stock,
and Class B Common as a single class, on all matters to be voted upon by the
shareholders of the Corporation, and in each such vote shall be entitled to that
number of votes (including fractions thereof) equal to the quotient determined
by dividing the aggregate Series D Liquidation Value of the shares so held by
the Orius Common Value Per Share (as defined in the Reorganization Agreement),
except as otherwise required by applicable law.
C. COMMON SHARES
There shall be designated two classes of common stock of the
Corporation: Common Stock and Class B Common. Shares of common stock of the
Corporation outstanding on the date hereof and prior to the consummation of the
transactions contemplated in the Reorganization Agreement shall be designated
Common Stock. The number of shares of common stock shall be as set forth in this
Article Four. The rights, preferences and limitations of the Common Stock and
Class B Common are as set forth below.
Section I. Voting Rights.
Except as otherwise required by applicable law, the Common Stock, the
Class B Common and the Preferred Stock shall vote together as a single class on
all matters to be voted on
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by the stockholders of the Corporation, with the holders of Common Stock
entitled to one vote per share and the holders of Class B Common entitled to ten
votes per share.
Section 2. Dividends.
As and when dividends are declared or paid with respect to shares of
Common Stock or Class B Common, whether in cash, property or securities of the
Corporation, the holders of Common Stock and the holders of Class B Common shall
be entitled to receive such dividends ratably on a per share basis, treating the
Common Stock and the Class B Common as a single class for such purposes. The
right of the holders of Common Stock and the right of the holders of Class B
Common to receive dividends are subject to the provisions of the Preferred
Stock; provided that if dividends are declared or paid in shares of Common or
Class B Common, the dividends payable in shares of Common Stock shall be payable
to holders of Common Stock and the dividends payable in shares of Class B Common
shall be payable to holders of Class B Common.
Section 3. Liquidation.
Subject to the provisions of the Preferred Stock, the holders of the
Common Stock and the holders of the Class B Common shall be entitled to
participate ratably on a per share basis in all distributions to the holders of
Common Stock or to the holders of Class B Common in any liquidation, dissolution
or winding up of the Corporation, basis, treating the Common Stock and the Class
B Common as a single class for such purposes.
Section 4. Conversion of Class B Common.
At such time as (i) all shares of Common Stock which, as contemplated
pursuant to the Reorganization Agreement, are subject to repurchase by the
Corporation pursuant to any call agreement entered into with the Corporation
dated on or prior to the date of the original issuance of the Series C
Participating Preferred, have been repurchased by the Corporation and are no
longer outstanding, and (ii) all outstanding shares of Series B Preferred
have been redeemed or purchased by the Corporation or any of its Subsidiaries
and are no longer outstanding, each outstanding share of Class B Common shall
automatically convert into one share of Common Stock.
ARTICLE FIVE
DEFINITIONS
"Board" means the board of directors of the Corporation.
"Corporation" means Orius Corp., a Florida corporation.
"IPO" means the initial public offering and sale of Common Stock
pursuant to an effective registration statement under the Securities Act.
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"Junior Securities" means any capital stock or other equity securities
of the Corporation, except for the Preferred Stock.
"Person" means an individual, a partnership, a corporation, a limited
liability company, a limited liability, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Reorganization Agreement" means the Agreement and Plan of
Reorganization dated as of November 8, 1999 among the Corporation, LISN
Holdings, Inc. and Orius Merger Sub, Inc., as amended from time to time
thereafter in accordance with its terms.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Series C Conversion Stock" means the shares of Class B Common (or, if
no shares of Class B Common are then outstanding, Common Stock) and shares of
Class D Preferred issuable upon conversion of the Series C Participating
Preferred; provided that if there is a change such that the securities issuable
upon conversion of the Series C Participating Preferred are issued by an entity
other than the Corporation or there is a change in the types or classes of
securities so issuable, then the term "Series C Conversion Stock" shall mean one
share of each security issuable upon conversion of the Series C Participating
Preferred if such security is issuable in shares, or shall mean the smallest
unit in which such security is issuable if such security is not issuable in
shares.
"Series C Liquidation Value" of any Series C Participating Preferred
Share as of any particular date shall be equal to one thousand dollars ($1,000).
"Series D Liquidation Value" of any Series D Preferred Share as of any
particular date shall be equal to one thousand dollars ($1,000).
"Subscription Agreement" means that certain subscription agreement,
dated as of February 26, 1999, by and among North American Tel-Com Group, Inc.,
HIG Cable, Inc., HIG Cable West, Inc. and Orius Corp.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company,
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partnership, association or other business entity gains or losses or shall be or
control the managing general partner of such limited liability company,
partnership, association or other business entity.
ARTICLE SIX
The Corporation is to have perpetual existence.
ARTICLE SEVEN
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly authorized to
make, alter or repeal the by-laws of the Corporation.
ARTICLE EIGHT
Meetings of stockholders may be held within or without the State of
Florida, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Florida at such place or places as
maybe designated from time to time by the board of directors or in the by-laws
of the Corporation. Election of directors need not be by written ballot unless
the by-laws of the Corporation so provide.
ARTICLE NINE
To the fullest extent permitted by the Florida Business Corporation Act
as the same exists or may hereafter be amended, a director of this Corporation
shall not be liable to the Corporation or its stockholders for monetary damages
for a breach of fiduciary duty as a director. Any repeal or modification of this
ARTICLE NINE shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
ARTICLE TEN
The Corporation expressly elects not to be governed by Florida Statutes
Section 607.0901, as amended, concerning affiliated transactions.
ARTICLE ELEVEN
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these articles of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Florida, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
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IN WITNESS WHEREOF, the undersigned has executed these Second Amended
and Restated Articles of Incorporation this 14th day of December, 1999.
ORIUS CORP.
By: /s/ WILLIAM J. MERCURIO
----------------------------------
William J. Mercurio
Title: Chief Executive Officer
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
ORIUS CORP.
ARTICLE I. MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders of
the Corporation for the election of directors and the transaction of other
business shall be held on such date, at such time and in such place as shall be
determined by the board of directors. If any annual meeting is not held, by
oversight or otherwise, a special meeting shall be held as soon as practical,
and any business transacted or election held at that meeting shall be as valid
as if transacted or held at the annual meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose shall be held when called by the president or the board of
directors, or when demanded in writing by the holders of not less than ten
percent (unless a greater percentage not to exceed fifty percent is required by
the certificate of incorporation) of all the shares entitled to vote at the
meeting. Such demand must be delivered to the Corporation's secretary. A meeting
demanded by stockholders shall be called for a date not less than ten nor more
than sixty days after the request is made, unless the stockholders requesting
the meeting designate a later date. The secretary shall issue the call for the
meeting, unless the president, the board of directors, or stockholders
requesting the meeting designate another person to do so. The stockholders at a
special meeting may transact only business that is related to the purposes
stated in the notice of the special meeting.
SECTION 3. PLACE. Meetings of stockholders may be held either within or
outside the State of Delaware.
SECTION 4. NOTICE. A written notice of each meeting of stockholders,
stating the place, day, and time of the meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered to each stockholder of record entitled to vote at the meeting, not
less than ten nor more than sixty days before the date set for the meeting,
either personally or by first-class mail, by or at the direction of the
president, the secretary, or the officer or other persons calling the meeting.
If mailed, the notice shall be considered delivered when it is deposited in the
United States mail, postage prepaid, addressed to the stockholder at his address
as it appears on the records of the Corporation.
<PAGE> 2
SECTION 5. WAIVERS OF NOTICE. Whenever any notice is required to be
given to any stockholder of the Corporation under these bylaws, the certificate
of incorporation, or the Delaware General Corporation Law, a written waiver of
notice, signed anytime by the person entitled to notice shall be equivalent to
giving notice. Attendance by a stockholder entitled to vote at a meeting, in
person or by proxy, shall constitute a waiver of (a) notice of the meeting,
except when the stockholder attends a meeting solely for the purpose, expressed
at the beginning of the meeting, of objecting to the transaction of any business
because the meeting is not lawfully called or convened, and (b) an objection to
consideration of a particular matter at the meeting that is not within the
purpose of the meeting unless the stockholders object to considering the matter
when it is presented.
SECTION 6. RECORD DATE. For the purpose of determining the stockholders
for any purpose, the board of directors may either require the stock transfer
books to be closed for up to seventy days or fix a record date, which shall be
not more than sixty nor less than ten days before the date on which the action
requiring the determination is to be taken. For the purpose of determining the
stockholders entitled to consent to corporate action in writing without a
meeting, however, a record date shall not precede the date upon which the
resolution fixing the record date is adopted or be more than ten days
thereafter. If the transfer books are not closed and no record date is set by
the board of directors, the record date shall be determined as follows: For
determining stockholders entitled to demand a special meeting, the record date
is the date the first such demand is delivered to the Corporation; For
determining stockholders entitled to a share dividend, the record date is the
date the board of directors authorizes the dividend; If no prior action is
required by the board of directors pursuant to the Delaware General Corporation
Law, the record date for determining stockholders entitled to take action
without a meeting is the date the first signed written consent is delivered to
the Corporation; If prior action is required by the board of directors pursuant
to the Delaware General Corporation Law, the record date for determining
stockholders entitled to take action without a meeting is at the close of
business on the day that the board of directors adopts a resolution taking such
prior action; and For determining stockholders entitled to notice of and to vote
at an annual or special stockholders meeting the record date is as of the close
of business on the day before the first notice is delivered to the stockholders.
When a determination of the stockholders entitled to vote at any meeting has
been made, that determination shall apply to any adjournment of the meeting,
unless the board of directors fixes a new record date. The board of directors
shall fix a new record date if the meeting is adjourned to a date more than 120
days after the date fixed for the original meeting.
SECTION 7. STOCKHOLDER'S LIST FOR MEETING. A complete alphabetical list
of the names of the stockholders entitled to receive notice of and to vote at
the meeting shall be prepared by the secretary or other authorized agent having
charge of the stock transfer book. The list shall be arranged by voting group
and include each stockholder's address, and the number, series, and class of
shares held. The list must
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be made available at least ten days before and throughout each meeting of
stockholders, or such shorter time as exists between the record date and the
meeting. The list must be made available at the Corporation's principal office,
registered agent's office, transfer agent's office or at a place identified in
the meeting notice in the city where the meeting will be held. Any stockholder,
his agent or attorney, upon written demand and at his own expense may inspect
the list during regular business hours. The list shall be available at the
meeting and any stockholder, his agent or attorney is entitled to inspect the
list at any time during the meeting or its adjournment.
If the requirements of this section have not been substantially
complied with, the meeting, on the demand of any stockholder in person or by
proxy, shall be adjourned until the requirements of this section are met. If no
demand for adjournment is made, failure to comply with the requirements of this
section does not affect the validity of any action taken at the meeting.
SECTION 8. STOCKHOLDER QUORUM AND VOTING. A majority of the shares
entitled to vote, represented in person or by proxy, constitutes a quorum at a
meeting of stockholders. If a quorum is present, the affirmative vote of a
majority of the shares entitled to vote on the matter is the act of the
stockholders unless otherwise provided by law. A stockholder may vote either in
person or by proxy executed in writing by the stockholder or his duly authorized
attorney-in-fact. After a quorum has been established at a stockholders'
meeting, a withdrawal of stockholders that reduces the number of stockholders
entitled to vote at the meeting below the number required for a quorum does not
affect the validity of an adjournment of the meeting or an action taken at the
meeting prior to the stockholders' withdrawal.
Authorized but unissued shares including those redeemed or otherwise
reacquired by the corporation, and shares of stock of this Corporation owned by
another corporation the majority of the voting stock of which is owned or
controlled by this Corporation, directly or indirectly, at any meeting shall not
be counted in determining the total number of outstanding shares at any time.
The chairman of the board, the president, any vice president, the secretary, and
the treasurer of a corporate stockholder are presumed to possess, in that order,
authority to vote shares standing in the name of a corporate stockholder,
absent a bylaw or other instrument of the corporate stockholder designating some
other officer, agent, or proxy to vote the shares. Shares held by an
administrator, executor, guardian, or conservator may be voted by him without a
transfer of the shares into his name. A trustee may vote shares standing in his
name, but no trustee may vote shares that are not transferred into his name. If
he is authorized to do so by an appropriate order of the court by which he was
appointed, a receiver may vote shares standing in his name or held by or under
his control, without transferring the shares into his name. A stockholder whose
shares are pledged may vote the shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee or his nominee shall be
entitled to vote the shares unless the instrument creating the pledge provides
otherwise.
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ARTICLE II. DIRECTORS
SECTION 1. FUNCTION. The business of this Corporation shall be managed
and its corporate powers exercised by the board of directors.
SECTION 2. NUMBER. The Corporation shall have at least one (1) director
at all times. The number of directors may be increased or diminished from time
to time by action of the board of directors or stockholders, but no decrease
shall have the effect of shortening the term of any incumbent director, unless
the stockholders remove the director.
SECTION 3. QUALIFICATION. Each member of the board of directors must be
a natural person who is eighteen years of age or older. A director need not be a
resident of Delaware or a stockholder of the Corporation.
SECTION 4. ELECTION AND TERM. The persons named in the certificate of
incorporation as members of the initial board of directors shall hold office
until the first annual meeting of stockholders and until their successors have
been elected and qualified or until their earlier resignation, removal from
office, or death. At the first annual meeting of stockholders and at each annual
meeting thereafter the stockholders shall elect directors to hold office until
the next succeeding annual meeting. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualifies or
until his earlier resignation, removal from office, or death.
SECTION 5. COMPENSATION. The board of directors has authority to fix
the compensation of the directors, as directors and as officers.
SECTION 6. DUTIES OF DIRECTORS. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he serves, in good faith, in a manner he reasonably believes to be in the
best interests of the Corporation.
SECTION 7. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of the board of directors or a committee of the board of
directors when corporate action is taken is presumed to have assented to the
action unless he votes against it or expressly abstains from voting on the
action taken, or, he objects at the beginning of the meeting to the holding of
the meeting or transacting specific business at the meeting.
SECTION 8. VACANCIES. Unless filled by the stockholders, any vacancy
occurring in the board OF directors, including any vacancy created because of an
increase in the number of directors, may be filled by the affirmative vote of a
majority of the remaining directors, even if the number of remaining directors
does not constitute a quorum of the board of directors. A director elected to
fill a vacancy shall hold office only until the next election of directors by
the stockholders.
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<PAGE> 5
SECTION 9. REMOVAL OR RESIGNATION OF DIRECTORS. At a meeting of
stockholders called for that purpose, the stockholders, by a vote of the
holders of a majority of the shares entitled to vote at an election of
directors, may remove any director, or the entire board of directors, with or
without cause, and fill any vacancy or vacancies created by the removal.
A director may resign at any time by delivering written notice to the
board of directors or its chairman or the corporation. A resignation is
effective when the notice is delivered unless the notice specifies later
effective date. If a resignation is made effective at a later date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provided that the successor does not take office until the effective
date.
SECTION 10. QUORUM AND VOTING. A majority of the board of directors
constitutes a quorum for the transaction of business. The act of the majority of
the directors at a meeting at which a quorum is present is the act of the board
of directors.
SECTION 11. PLACE OF MEETINGS. Regular and special meetings by the
board of directors may be held within or outside the State of Delaware.
SECTION 12. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without notice, other than this bylaw, immediately after
and at the same place as the annual meeting of stockholders. The board of
directors may provide, by resolution, the time and place for the holding of
additional regular meetings without notice other than the resolution.
SECTION 13. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any directors.
SECTION 14. NOTICE OF MEETINGS. Written notice of the time and place of
special meetings of the board of directors shall be given to each director by
either personal delivery or by first class United States mail, telegram, or
cablegram at least two days before the meeting. Notice of a meeting of the board
of directors need not be given to any director who signs a waiver of notice
either before or after the meeting. Attendance of a director at a meeting
constitutes a waiver of notice of the meeting and all objections to the time and
place of the meeting, or the manner in which it has been called or convened,
except when the director states, at the beginning of the meeting, or promptly
upon arrival at the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of notice of the
meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the board of directors to another time and place.
Notice of any adjourned meeting shall be given to the directors who were not
present at the time of
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the adjournment and, unless the time and place of the adjourned meeting are
announced at the time of the adjournment, to the other directors.
ARTICLE III. OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall consist of a
president, a secretary, and a treasurer, and may include one or more vice
presidents, one or more assistant secretaries, and one or more assistant
treasurers. The officers shall be elected initially by the board of directors at
the organizational meeting of board of directors and thereafter at the first
meeting of the board following the annual meeting of the stockholders in each
year. The board from time to time may elect or appoint other officers, assistant
officers, and agents, who shall have the authority and perform the duties
prescribed by the board. An elected or duly appointed officer may, in turn,
appoint one or more officers or assistant officers, unless the board of
directors disapproves or rejects the appointment. All officers shall hold office
until their successors have been appointed and have qualified or until their
earlier resignation, removal from office, or death. One person may
simultaneously hold any two or more offices. The failure to elect a president,
secretary, or treasurer shall not affect the existence of the Corporation.
SECTION 2. PRESIDENT. The president, subject to the directions of the
board of directors, is responsible for the general and active management of the
business and affairs of the Corporation, has the power to sign certificates of
stock, bonds, deeds, and contracts for the Corporation, and shall preside at all
meetings of the stockholders.
SECTION 3. VICE PRESIDENTS. Each vice president has the power to sign
bonds, deeds, and contracts for the Corporation and shall have the other powers
and perform the other duties prescribed by the board of directors or the
president. Unless the board otherwise provides, if the president is absent or
unable to act, the vice president who has served in that capacity for the
longest time and who is present and able to act shall perform all the duties and
may exercise any of the powers of the president. Any vice president may sign,
with the secretary or assistant secretary, certificates for stock of the
Corporation.
SECTION 4. SECRETARY. The secretary shall have the power to sign
contracts and other instruments for the Corporation and shall (a) keep the
minutes of the proceedings of the stockholders and the board of directors in one
or more books provided for that purpose, (b) see that all notices are duly given
in accordance with the provisions of these bylaws or as required by law, (c)
maintain custody of the corporate records and the corporate seal, attest the
signatures of officers who execute documents on behalf of the Corporation,
authenticate records of the Corporation, and assure that the seal is affixed to
all documents of which execution on behalf of the Corporation under its seal is
duly authorized, (d) keep a register of the post office address of each
stockholder that shall be furnished to the secretary by the stockholder, (e)
sign with the
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president, or a vice president, certificates for shares of stock of the
Corporation, the issuance of which have been authorized by resolution of the
board of directors, (f) have general charge of the stock transfer books of the
Corporation, and (g) in general perform all duties incident to the office of
secretary and other duties as from time to time may be prescribed by the
president or the board of directors.
SECTION 5. TREASURER. The treasurer shall (a) have charge and custody
of and be responsible for all funds and securities of the Corporation, (b)
receive and give receipts for monies due and payable to the Corporation from any
source whatsoever, and deposit monies in the name of the Corporation in the
banks, trust companies, or other depositaries as shall be selected by the board
of directors, and (c) in general perform all the duties incident to the office
of treasurer and other duties as from time to time may be assigned to him by the
president or the board of directors. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his duties in the sum
and with the surety or sureties that the board of directors determines.
SECTION 6. REMOVAL OF OFFICERS. An officer or agent elected or
appointed by the board of directors or appointed by another officer may be
removed by the board whenever in its judgment the removal of the officer or
agent will serve the best interests of the Corporation. Any officer or assistant
officer, if appointed by another officer, may likewise be removed by such
officer. Removal shall be without prejudice to any contract rights of the person
removed. The appointment of any person as an officer, agent, or employee of
the Corporation does not create any contract rights. The board of directors may
fill a vacancy, however occurring, in any office.
An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date, its board of directors may fill the pending vacancy before the
effective date if the board of directors provides that the successor does not
take office until the effective date. An officer's resignation does not affect
the officer's contract rights, if any, with the corporation.
SECTION 7. SALARIES. The board of directors from time to time shall fix
the salaries of the officers, and no officer shall be prevented from receiving
his salary merely because he is also a director of the Corporation.
ARTICLE IV. INDEMNIFICATION
Any person, his heirs, or personal representative, made, or threatened
to be made, a party to any threatened, pending, or completed action or
proceeding, whether civil, criminal, administrative, or investigative, because
he is or was a director, officer, employee, or agent of this Corporation or
serves or served any other corporation or other enterprise in any capacity at
the request of this Corporation, shall be
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indemnified by this Corporation, and this Corporation may advance his related
expenses to the full extent permitted by Delaware law. In discharging his duty,
any director, officer, employee, or agent, when acting in good faith, may rely
upon information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented by (1)
one or more officers or employees of the Corporation whom the director, officer,
employee, or agent reasonably believes to be reliable and competent in the
matters presented, (2) counsel, public accountants, or other persons as to
matters that the director, officer, employee, or agent believes to be within
that person's professional or expert competence, or (3) in the case of a
director, a committee of the board of directors upon which he does not serve,
duly designated according to law, as to matters within its designated authority,
if the director reasonably believes that the committee is competent. The
foregoing right of indemnification or reimbursement shall not be exclusive of
other rights to which the person, his heirs, or personal representatives may be
entitled. The Corporation may, upon the affirmative vote of a majority of its
board of directors, purchase insurance for the purpose of indemnifying these
persons. The insurance may be for the benefit of all directors, officers, or
employees.
ARTICLE V. STOCK CERTIFICATES
SECTION 1. ISSUANCE. Shares may but need not be represented by
certificates. The board of directors may authorize the issuance of some or all
of the shares of the Corporation of any or all of its classes or series without
certificates. If certificates are to be issued, the share must first be fully
paid.
SECTION 2. FORM. Certificates evidencing shares in this Corporation
shall be signed by the president or a vice president and the secretary,
assistant secretary or any other officer authorized by the board of directors,
and may be sealed with the seal of this Corporation or a facsimile of the seal.
Unless the Corporation's stock is registered pursuant to every applicable
securities law, each certificate shall bear an appropriate legend restricting
the transfer of the shares evidenced by that certificate.
SECTION 3. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Corporation may
issue a new certificate in the place of any certificate previously issued if the
stockholder of record (a) makes proof in affidavit form that the certificate has
been lost, destroyed, or wrongfully taken, (b) requests the issue of a new
certificate before the Corporation has notice that the certificate has been
acquired by the purchaser for value in good faith and without notice of any
adverse claim, (c) if requested by the Corporation, gives bond in the form that
the Corporation directs, to indemnify the Corporation, the transfer agent, and
the registrar against any claim that may be made concerning the alleged loss,
destruction, or theft of a certificate, and (d) satisfies any other reasonable
requirements imposed by the Corporation.
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SECTION 4. RESTRICTIVE LEGEND. Every certificate evidencing shares that
are restricted as to sale, disposition, or other transfer shall bear a legend
summarizing the restriction or stating that the Corporation will furnish to any
stockholder, upon request and without charge, a full statement of the
restriction.
ARTICLE VI. DIVIDENDS
The board of directors from time to time may declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law.
ARTICLE VII. SEAL
The corporate seal shall have the name of the Corporation and the word
"seal" inscribed on it, and may be a facsimile, engraved, printed, or an
impression seal.
ARTICLE VIII. AMENDMENT
These bylaws may be repealed or amended, and additional bylaws may be
adopted, by either a vote of a majority of the full board of directors or by
vote of the holders of a majority of the issued and outstanding shares entitled
to vote, but the board of directors may not amend or repeal any bylaw adopted by
the stockholders if the stockholders specifically provide that the bylaw is not
subject to amendment or repeal by the directors. In order to be effective, any
amendment approved hereby must be in writing and attached to these Bylaws.
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EXHIBIT 3.3
CERTIFICATE OF FORMATION
OF
NATG HOLDINGS, LLC
I, the undersigned, pursuant to the Delaware Limited Liability Company
Act, as amended, hereby adopt the following Certificate of Formation for a
limited liability company:
ARTICLE I - NAME
The name of the limited liability company is NATG HOLDINGS, LLC.
ARTICLE II - RESIDENT AGENT AND OFFICE
The name and business address of the resident agent and resident office
of the Company is:
The Corporation Trust Company
1209 Orange Street
Wilmington, New Castle County, DE 19801
ARTICLE III - DURATION
The duration of the Company is perpetual.
ARTICLE IV - PURPOSE
The Company is organized to carry on all lawful business permitted by
Delaware law and to perform all acts in furtherance thereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation of NATG HOLDINGS, LLC as of the 8th day of February, 1999.
/s/ WILLIAM B. SHERMAN
--------------------------------------
William B. Sherman, Attorney-in-Fact
<PAGE> 1
EXHIBIT 3.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NATG HOLDINGS, LLC
A DELAWARE LIMITED LIABILITY COMPANY
------------------------------------
ARTICLE I
INITIAL DATE, PARTIES AND AUTHORIZATION
OF THIS AGREEMENT; PERPETUAL LIFE
SECTION 1.01 INITIAL DATE; INITIAL PARTIES
This Amended and Restated Agreement ("Agreement") is first made as of February
18, 1999, and agreed to by NATG Holdings, LLC (the "Company") and Orius Corp., a
Delaware corporation (the "Initial Member"), the sole Member of the Company on
such date.
SECTION 1.02 SUBSEQUENT PARTIES; ASSENT AS A PRECONDITION TO BECOMING
A MEMBER OR TO OBTAINING RIGHTS TO BECOME A MEMBER
(a) No Person may become a Member of the Company without first assenting
to and signing this Agreement. Any act by the Company to offer or
provide Member status, or reflect that status in the Company's
Required Records, automatically includes the condition that the Person
becoming a Member first assent to and sign this Agreement.
(b) If (i) the Company offers, makes, or signs a Contribution Agreement,
Warrant (and a related Warrant Agreement, if any), Option or any other
agreement that permits or requires a Person to make a Capital
Contribution and become a Member, and (ii) the other party to the
Contribution Agreement, Warrant (and related Warrant Agreement, if
any), Option or other agreement is not already a Member and has not
already assented to and signed this Agreement, then the Company's
action automatically includes the condition that the other party
assent to and sign this Agreement before that Person actually makes a
Capital Contribution or becomes a Member.
(c) The Company is obligated not to accept a Capital Contribution from, or
accord Member status to, any Person who has not first assented to and
signed this Agreement. The Company's acceptance of a Capital
Contribution from a Person
<PAGE> 2
who has not signed this Agreement does not waive that Person's
obligation to sign this Agreement.
(d) No Transfer of a Membership Unit is effective unless the transferee
has assented to and signed this Agreement; provided, however, that for
purposes of this Section 1.02(d) "Transfer" shall not include a
mortgage or the grant of a security interest and no mortgagee or
holder of a security interest shall be required to assent to or sign
this Agreement. Any such mortgagee or holder of such a security
interest shall be permitted to record such interest.
SECTION 1.03 AUTHORIZATION OF THIS AGREEMENT
This Agreement is made under the Delaware Limited Liability Company Act (the
"LLC Act"), as the same may be amended from time to time.
SECTION 1.04 PERPETUAL LIFE
The Company will have perpetual life unless the Company is dissolved as
hereinafter provided, and will not terminate or be dissolved upon the death,
retirement, resignation, expulsion, Bankruptcy or dissolution of a Member or
the occurrence of any other event which terminates the continued membership of
a Member in the Company.
ARTICLE II
DEFINITIONS
SECTION 2.01 DEFINITIONS
For purposes of this Agreement, in addition to terms defined in other
provisions of this Agreement and unless the language or context clearly
indicates that a different meaning is intended, the words, terms and phrases
defined in this Section have the following meanings:
(a) "Act of the Members" has the meaning stated in Section 10.01.
(b) "Agreement" means this Limited Liability Company Agreement, as amended
or amended and restated from time to time under Section 15.06.
(c) "Bankruptcy" means the occurrence of any of the events set forth in
Sections 18-304(a)(1) through (6) of the LLC Act as now or in the
future constituted.
(d) "Capital Contribution" means, with respect to each Member, the total
amount of money and the fair market value of any property (other than
money) that such Member has contributed or agreed to contribute, as
the context requires, to the capital of the Company, as provided in
this Agreement. Any reference to the
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Capital Contribution of a Member will include the Capital Contribution
of a predecessor holder of the Membership Interest of such Member.
(e) "Certificate of Formation" means the Company's Certificate of Formation
filed with the Delaware Secretary of State on February 8,1999, pursuant
to Section 18-201 of the LLC Act, and all amendments thereto.
(f) "Code" means the Internal Revenue Code of 1986, as amended, and any
successor to that Code.
(g) "Contribution Agreement" means an agreement between a Person and the
Company, other than a Warrant and/or related Warrant Agreement or
Option, under which:
(i) the Person agrees to make a Capital Contribution in the
future to the Company, and
(ii) the Company agrees that, at the time specified for the Capital
Contribution in the future, the Company will, subject to
Section 1.02(c), accept the Capital Contribution, reflect the
Capital Contribution in the Required Records, issue to the
Person a specified number of Membership Units, and accord the
Person status as a Member (if the Person is not already a
Member).
(h) "Core Business" means any business or activities permitted under the
LLC Act.
(i) "Default Rule" means a rule stated in the LLC Act: (i) which
structures, defines, or regulates the finances, governance,
operations, or other aspects of a limited liability company organized
under the LLC Act, and (ii) which applies except to the extent it is
negated or modified through the provisions of a limited liability
company's Certificate of Formation, Certificate of Conversion or
Limited Liability Company Agreement.
(j) "Disinterested" means, with respect to a Member and with respect to a
particular transaction or other undertaking, a Member who (i) is not a
party to that undertaking, (ii) has no material financial interest in
any organization that is a party to that undertaking, and (iii) is not
related by blood or marriage to any Person who either is a party to
that undertaking or has a material financial interest in any
organization that is a party to that undertaking.
(k) "Financial Rights" means the rights of a Member to share in the
profits and losses of the Company and to receive distributions.
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(l) "Fiscal Year" means the annual period upon which the Company keeps its
books and records and which, until further act of the Members, will be
the calendar year.
(m) "GAAP" means generally accepted accounting principles applied
consistently with past financial reporting practices of the Company.
(n) "Initial Member" means Orius Corp. a Delaware corporation and its
successors and assigns.
(o) "LLC Act" means the Delaware Limited Liability Company Act, as the
same may be amended from time to time.
(p) "Member" means a Person who owns at least one (1) Membership Unit and
whose ownership of one (1) or more Membership Units is set forth on
Schedule A attached hereto and made a part hereof.
(q) "Membership Interest" means a Member's entire ownership interest in
the Company, as represented by the Member's Membership Units.
(r) "Membership Units" means all the Membership Units of the Company.
(s) "Option" means an agreement by the Company to issue Membership Units
to a Person, at such Person's option, for a consideration and upon
terms and conditions provided in the Option.
(t) "Person" includes a natural Person, domestic or foreign limited
liability company, corporation, partnership, limited partnership,
joint venture, association, business trust, estate, trust, enterprise
and any other legal or commercial entity.
(u) "Required Records" means those records specified in Section 11.01.
(v) "Termination of the Company" means the dissolution of the Company as
provided in Article XII and the provisions of the LLC Act relating to
dissolution and termination of a limited liability company that are
not inconsistent with the provisions of this Agreement.
(w) "Transfer" means a transfer, assignment, conveyance, sale, lease,
mortgage, grant of a security interest, delivery of a deed,
encumbrance or gift.
(x) "Warrant" means an instrument issued by the Company and pursuant to
which the Company agrees to issue Membership Units to the grantee of
the Warrant, on the terms and conditions provided in the Warrant
and/or a related Warrant Agreement.
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(y) "Warrant Agreement" means an agreement between the Company and the
grantee of a Warrant, relating to the terms and conditions (in
addition to those provided in the Warrant) pursuant to which the
Warrant may be exercised, Membership Units will be issued and such
other matters as to which the Company and the grantee of the Warrant
may wish to agree.
(z) "Working Capital" means, with respect to the Company, the current
assets (excluding cash) less current liabilities as of the respective
balance sheet measurement date(s), the composition of current assets
and current liabilities to be determined in accordance with GAAP.
ARTICLE III
BACKGROUND OF THIS AGREEMENT
SECTION 3.01 NATURE OF THE COMPANY
The Company is organized in the State of Delaware, will be qualified to do
business in the states where the laws of such state require such qualification,
and will be engaged in the Core Business and any other business its Members
unanimously agree to pursue. As of the initial date of this Agreement, the
Company's principal place of business is located at 1401 Forum Way, West Palm
Beach, FL, and may be moved to any other location as the Members may determine.
SECTION 3.02 INTENT OF THIS AGREEMENT
The Members intend this Agreement to control, to the extent stated or fairly
implied, the business and affairs of the Company, including the Company's
governance structure and the Company's dissolution, winding up and termination.
ARTICLE IV
RELATIONSHIP OF THIS AGREEMENT
TO THE DEFAULT RULES AND THE CERTIFICATE OF FORMATION
SECTION 4.01 RELATIONSHIP OF THIS AGREEMENT TO THE DEFAULT RULES
Regardless of whether this Agreement specifically refers to particular Default
Rules: (a) if any provision of this Agreement conflicts with a Default Rule,
the provision of this Agreement controls and the Default Rule is modified or
negated accordingly, and b) if it is necessary to construe a Default Rule as
modified or negated in order to effectuate any provision of this Agreement, the
Default Rule is modified or negated accordingly.
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SECTION 4.02 RELATIONSHIP BETWEEN THIS AGREEMENT, THE CERTIFICATE OF
FORMATION OR THE LLC ACT
If a provision of this Agreement differs from or conflicts with a provision of
the Certificate of Formation or the LLC Act, then to the extent allowed by law
this Agreement will govern.
SECTION 4.03 MEMBERS
On the date of execution of this Agreement by the Company and the Initial
Member, the Initial Member is the sole Member and the owner of all issued
Membership Units. So long as the Initial Member is the sole Member, references
herein to "Member" will be deemed references to the Initial Member.
ARTICLE V
CAPITAL STRUCTURE: MEMBERSHIP AND CONTRIBUTIONS
SECTION 5.01 MEMBERSHIP UNITS
(a) All ownership rights in the Company, of every nature and kind
whatsoever, are incorporated in and represented by Membership Units,
as recorded in the Required Records. Each Membership Unit:
(i) has equal rights with every other Membership Unit to
participate in the governance of the Company and in matters
subject to a vote of the Members has one vote; and
(ii) each Membership Unit has equal Financial Rights with every
other Membership Unit.
(b) The Company will issue certificates of Membership Units.
SECTION 5.02 ISSUANCE OF MEMBERSHIP UNITS BY THE COMPANY
(a) Except as provided in this Agreement, the Members will determine when
and for what consideration the Company will issue Membership Units.
For each Member, the Required Records will state the value and nature
of the contribution received by the Company and the number of
Membership Units received in return by the Member.
(b) The Initial Member, its contribution to the Company and its Membership
Interest on the date of this Agreement, including the number of
Membership Units, are set forth on Schedule A. The issuance of
additional Membership
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Units will be reflected in the Required Records and may also be
reflected in amendments to Schedule A.
(c) No Member has the right to make additional contributions or obtain
additional Membership Units, except as may be provided in a
Contribution Agreement, Warrant (and related Warrant Agreement, if
any) or Option, or unanimously agreed by the Members.
(d) No Member has any preemptive rights to acquire any additional
Membership Units, but each Member's Membership Interest and Membership
Units will be diluted pro rata upon the issuance of any additional
Membership Units.
SECTION 5.03 NO RIGHT OF COMPANY TO REQUIRE ADDITIONAL CONTRIBUTIONS
The Company has no right to require any Member to make additional
contributions; provided that this Section does not release any Member from any
obligation or promise of future performance that the Company accepted as a
contribution.
SECTION 5.04 NO RIGHTS OF DISASSOCIATION, TERMINATION, REDEMPTION OR
RETURN OF CONTRIBUTION
No Member has a right to disassociate from the Company, terminate his, her or
its Membership Interest, have his, her or its Membership Units redeemed or have
his, her or its contribution returned prior to the Termination of the Company.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.01 ALLOCATION OF PROFITS AND LOSSES
(a) Profits and losses are allocated each Fiscal Year according to the
number of Membership Units owned.
(b) For any Membership Unit not owned by the same Person for the entire
Fiscal Year, the allocation will be prorated
SECTION 6.02 NO RIGHT TO INTERIM DISTRIBUTIONS
(a) Subject to Section 6.02(b), no Member has a right to any distribution,
including, without limitation, capital or assets of the Company, prior
to the Termination of the Company.
(b) The Company may, however, if directed by act of the Members at any
time and from time to time, make interim distributions to the Members.
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SECTION 6.03 ALLOCATION OF INTERIM DISTRIBUTIONS
Interim distributions, if made, will be allocated according to the number of
Membership Units owned. For any Membership Unit not owned by the same Person for
the entire Fiscal Year, the allocation will be prorated.
SECTION 6.04 DISTRIBUTIONS TO SECURED PARTY
If any Membership Units are subject to a mortgage or other security interest and
the Member who has granted such interest is in default under the documents
granting such interest, and such default shall not have been cured, all
distributions otherwise payable to such Member with respect to such Membership
Units shall be paid to the holder of such mortgage or other security interest.
ARTICLE VII
TAX MATTERS
SECTION 7.01 TAX CHARACTERIZATION
The Initial Member acknowledges that for so long as the Company has only one
Member, the Company will be disregarded as an entity for federal and Delaware
state tax purposes and for the tax purposes of any other state in which the
Company is qualified to do business and which permits such tax treatment. All
provisions of this Agreement and the Certificate of Formation are to be
construed so as to preserve that tax status.
ARTICLE VIII
GOVERNANCE
The Company will be managed by its Members and by vote of the Members as
provided in this Agreement.
ARTICLE IX
OFFICERS; LIMITATIONS ON AUTHORITY
SECTION 9.01 OFFICERS OF THE COMPANY
(a) The Members may, from time to time, appoint individuals to act as
officers of the Company, including a President, one or more Vice
Presidents, a Treasurer, one or more Assistant Treasurers, a Secretary
and one or more Assistant Secretaries, subject to their removal by the
Members with or without cause. The same individual may be appointed to
more than one office. Officers may or may not be Members, as
determined by the Members.
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<PAGE> 9
(b) Officers will have such responsibilities and authority, and receive
such compensation, as may be prescribed from time to time by the
Members, and will report to the Members; provided, however that:
(i) If appointed, the President will have the responsibility and
authority to conduct the day-to-day business affairs of the
Company, consistent with the provisions of this Agreement and
subject to the provisions of Section 9.02 and any other
restrictions that the Members may choose to impose.
(ii) If appointed, the Secretary will attend all meetings of the
Members and record the proceedings of such meetings in books
to be kept for such purpose as part of the Required Records.
The Secretary will give, or cause to be given, notice of all
meetings of Members, have custody of the Required Records,
have such other responsibilities as may be prescribed from
time to time by the President and report to the President. In
the absence of a Secretary, the President will perform the
responsibilities and exercise the authority of the Secretary.
(iii) If appointed, the Treasurer will have the custody of the
Company funds, will keep or cause to be kept full and
accurate accounts of receipts and disbursements in books
belonging to the Company as part of the Required Records, and
will deposit or cause to be deposited all moneys and other
valuable effects in the name and to the credit of the Company
in such depositories as may be designated by the President or
the Members. The Treasurer will disburse or cause to be
disbursed funds of the Company as may be ordered by the
President or the Members, taking proper vouchers for such
disbursements, and will render to the Members at their
regular meetings or when a Member so requires, an account of
all of his or her transactions as Treasurer and of the
financial condition of the Company. In the absence of a
Treasurer, the President will perform the responsibilities
and exercise the authority of the Treasurer.
SECTION 9.02 ACTIONS REQUIRING MEMBER APPROVAL
The President, if appointed, will not have authority or power to take any
actions required by any provisions of this Agreement to be taken or first
approved by an act of the Members. In addition to such other provisions, the
President has no authority or power to take any of the following actions unless
first approved by an act of the Members:
(a) Establish the general business practices and policies of the Company.
(b) Borrow money, or incur any other debts or obligations (including
capitalized leases), whether fixed or contingent.
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(c) Grant any mortgage, pledge, or other lien on, or security interest in,
any property or asset of the Company, or guarantee the payment or
performance of the obligations of or act as surety for any other
Person.
(d) Change the amount of, amend, modify or change the material terms of,
extend the time for the payment of, or retire, discharge or refinance
any borrowing, indebtedness or obligation of the Company, or change
the amount or value of, modify or change the nature or type of, or
make any other material modifications or changes with respect to, any
security granted or collateral given for any Company borrowing,
indebtedness or obligation; or amend, modify or change the material
terms of any agreement, instrument or document with respect to any
such security or collateral.
(e) Take any action or enter into any agreement providing for the merger,
consolidation, conversion, liquidation or dissolution of the Company
with, or into, any other legal entity, or for any transaction
involving the registration with the Securities and Exchange Commission
of any securities, either debt or equity, of the Company.
(f) Sell or otherwise transfer any of the property or assets of the
Company.
(g) Grant any Membership Interests or issue any Membership Units, except
pursuant to a Contribution Agreement, Option, Warrant or Warrant
Agreement approved by the Members, or enter into or cause the Company
to enter into or grant any Contribution Agreement, Option, Warrant or
Warrant Agreement.
(h) Change the purpose for which the Company has been formed from those
described in the definition of the Core Business in Section 2.01(i).
(i) Take any action outside the ordinary course of the Core Business.
(j) Engage in any activity inconsistent with the purposes of the Company.
SECTION 9.03 OTHER PROVISIONS LIMITING AUTHORITY OF OFFICERS
When a provision of this Agreement other than the provisions of this Article IX
states a procedure for taking particular actions or accomplishing specified
results, including, but not limited to, acts of the Members, that provision
states the sole method for taking that action or accomplishing that result.
10
<PAGE> 11
ARTICLE X
ACTS OF MEMBERS AND MEMBER MEETINGS
SECTION 10.01 ACTS OF MEMBERS
Except to the extent that the LLC Act, the Certificate of Formation or a
provision of this Agreement specifically requires a vote or other action by
greater than by a majority of the Membership Units, or by the vote or action of
a majority of the Members owning Membership Units other than those owned by
specified Members, an "act of the Members" includes all acts, votes,
determinations, designations, approvals, consents, elections or advice of
Members referred to or required in any provision of this Agreement and made by
either:
(a) a majority vote of the Membership Units present at a properly called
meeting of the Members, when a quorum is present, or
(b) written action without a meeting, as provided in Section 10.09.
SECTION 10.02 REQUIRED ANNUAL MEETING
The Members will meet at least annually.
SECTION 10.03 REGULAR AND SPECIAL MEETINGS
(a) A special meeting of the Members may be called for any purpose or
purposes at any time by one or more Members owning at least 20%
percent of the Membership Units of the Company entitled to vote.
(b) For any special meeting, the Member or Members making the demand will,
at the expense of the Company, call the meeting by giving the notice
described in Section 10.04.
SECTION 10.04 NOTICE OF MEETINGS
Written notice of each meeting of the Members, stating the date, time and
place, and in the case of a special meeting, the purpose or purposes, must be
given to every Member at least five (5) days and not more than sixty (60) days
prior to the meeting. The business transacted at a special meeting of Members
is limited to the purposes stated in the notice of the meeting.
11
<PAGE> 12
SECTION 10.05 LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENTS
(a) Each meeting of the Members will be held at the Company's principal
place of business or at some other suitable location, as designated by
the Members calling the meeting. Members may participate in meetings
telephonically if all other Members in attendance can hear such Member
and such Member can hear all other Members.
(b) The Members in attendance at the meeting will elect a chair of the
meeting by a majority of the Membership Units entitled to vote.
(c) Any meeting of the Members may be adjourned from time to time to
another date and time and, subject to Section 10.05, to another place.
If at the time of adjournment the Member chairing the meeting
announces the date, time, and place at which the meeting will be
reconvened, it is not necessary to give any further notice of the
reconvening.
SECTION 10.06 WAIVER OF NOTICE
(a) A Member may waive notice of the date, time, place, and purpose or
purposes of a meeting of Members. A waiver may be made before, at, or
after the meeting, in writing, orally, or by attendance.
(b) Attendance by a Member at a meeting is a waiver of notice of that
meeting, unless the Member objects at the beginning of the meeting to
the transaction of business because the meeting is not properly called
or convened, or objects before a vote on an item of business because
the item may not properly be considered at that meeting and does not
participate in the consideration of the item at that meeting.
SECTION 10.07 PROXIES
(a) A Member may cast or authorize the casting of a vote by filing a
written appointment of a revocable proxy with all of the other Members
entitled to vote at or before the meeting at which the appointment is
to be effective. The Member may sign or authorize the written
appointment by any means authorized for the giving of notice in this
Agreement. Any copy, facsimile or other reproduction of the original
of either the writing or the transmission may be used in lieu of the
original, if it is a complete and legible reproduction of the entire
original.
(b) A member may not grant or appoint an irrevocable proxy.
12
<PAGE> 13
SECTION 10.08 QUORUM
For any meeting of the Members, a quorum consists of a majority of the
Membership Units entitled to vote.
SECTION 10.09 ACTION WITHOUT A MEETING
Any action required or permitted to be taken at a meeting of the Members may be
taken without a meeting by written action signed by the Members who own the
number of Membership Units equal to the number of Units that would be required
to take the same action at a meeting of the Members at which all Members were
present. The written action is effective when signed by Members owning the
required number of Units, unless a different effective time is provided in the
written action. When written action is taken by less than all Members, the
Company will notify all Members of the text of the action and its effective
date within ten (10) days following the date on which the last signature is
affixed to the written action. Failure to provide the notice does not
invalidate the written action, but Members not receiving such notice will not
be bound by the written action until received by them.
ARTICLE XI
REQUIRED RECORDS
SECTION 11.01 CONTENTS AND LOCATION OF REQUIRED RECORDS
The Company will maintain, and the Members, or the President if appointed, will
cause the Company to maintain, at its principal place of business, or at some
other location in the contiguous United States chosen by the Members, the
following records:
(a) A book or books containing certified copies of the Certificate of
Formation and all amendments thereto, a fully executed copy of this
Agreement and all amendments thereto, the original minutes of all
meetings of Members, written actions in lieu of meetings of Members
and all documents attached to or referred to in such minutes and
written actions.
(b) Records of all Members, including their names, addresses, phone and
fax numbers, e-mail addresses (if any), and the number of Membership
Units owned.
(c) Financial books and records showing all Capital Contributions made by
Members, all permitted assignments of Financial Rights and
terminations of such assignments, all permitted mortgages or other
grants of security interests in Membership Units and the financial
transactions of the Company, whether related to the Core Business or
otherwise; provided that books and records relating to the Core
Business will be separately maintained.
13
<PAGE> 14
(d) All interim and Fiscal Year end financial statements of the Company,
whether audited or unaudited, and whether prepared by the Treasurer or
employees of the Company or by the independent public accountants
retained by the Company, including balance sheets and profit and loss
statements, with notes and recommendations of the Company's
accountants.
(e) All federal, state and local income, sales and other tax returns and
reports of the Company.
(f) Fully executed copies of all significant agreements, contracts,
correspondence and other documents relating to the Company and to the
Core Business.
(g) Copies of all relevant correspondence, memoranda and other
communications between the Company, the President and any of the
Members.
(h) Copies of all other documents required by law to be maintained by the
Company, or which are material to the Company and the Members.
SECTION 11.02 ACCESS TO REQUIRED RECORDS
Any Member may inspect and review the Required Records and may, at the Member's
expense, have the Company make copies of any portion or all of the Required
Records.
ARTICLE XII
DISSOLUTION
SECTION 12.01 DISSOLUTION OF THE COMPANY
The Company will be dissolved, its assets disposed of at either public or
private sale as determined by an act of the Members, and its affairs wound up
as soon as practicable on the first to occur of (a) an election by all of the
Members to discontinue the Core Business of the Company and/or to dissolve the
Company, or (b) as may be provided by applicable law or court order.
SECTION 12.02 DISTRIBUTIONS ON DISSOLUTION
Upon any such dissolution, the assets and funds of the Company available for
distribution to Members after payment of, or the appropriate provision for the
payment of, all debts and liabilities of the Company and the allocation of all
gains and losses on the disposition of assets or the settlement of liabilities,
including debts and liabilities to Members (and the expenses of dissolution and
a reasonable reserve for such expenses in the event that any interim
distributions are made), will, to the extent that the same are sufficient
therefor, be paid.
14
<PAGE> 15
ARTICLE XIII
INDEMNIFICATION
To the greatest extent not inconsistent with the laws and public policies of
Delaware, the Company will indemnify, as a matter of right, any Member, any
Member's representative, officers, directors, shareholders, employees and
agents and any officer of the Company (all of whom are hereinafter referred to
as the indemnified "individual") made a party to any action or proceeding
because such Member or individual is or was a Member or an officer,
representative, director, shareholder, employee or agent of a Member or any
officer of the Company, against all liability incurred by such Member or
individual in connection with any such action or proceeding.
ARTICLE XIV
NOTICES
All notices, consents, approvals and other communications required or permitted
to be given or made hereunder (a "notice") will be in writing and will be
delivered (a) personally (if to a corporation, to an officer; if to a
partnership, to a partner; if to a limited liability company to a member or
manager), (b) by private overnight courier, (c) by facsimile transmission, or
(d) by registered or certified mail, sent to the recipient's address or
facsimile telephone number and attention of the individual as set forth on the
Required Records, or to the registered agent of a recipient in the recipient's
state of incorporation or formation, or such other address or facsimile
telephone number or individual as may be specified by notice. All notices will
be deemed to have been given on (i) the date of receipt if delivered personally
or by private overnight courier, (ii) the date of transmission with confirmation
of successful transmission by the sender's equipment if transmitted by facsimile
transmission, or (iii) the third day following posting if transmitted by
registered or certified mail.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01 COMPLETE AGREEMENT
This Agreement and the Certificate of Formation constitute the complete and
exclusive statement of the agreements among the Members and between the Members
and the Company with respect to the Core Business and subject matter described
herein. This Agreement and the Certificate of Formation replace and supersede
all prior agreements and negotiations by and among the Members and between the
Members and the Company.
15
<PAGE> 16
SECTION 15.02 ASSIGNMENT; BINDING EFFECT
This Agreement and the rights, obligations and duties of any party to this
Agreement may not be assigned by such party without the prior written consent
of all Members, except as such assignment may be incidental to transfers of
Financial Rights. An assignment of a Membership Unit shall entitle the assignee
to receive all of the economic rights and interests to which the assignor was
entitled, to the extent assigned. All of the terms and conditions of this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective personal representatives, heirs, executors,
administrators, and permitted successors and assigns.
SECTION 15.03 GOVERNING LAW
This Agreement will be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without regard to conflict of laws
principles.
SECTION 15.04 COURT JURISDICTION
The parties hereto agree and consent to the exclusive jurisdiction of the
Circuit Court in the County of Palm Beach, Florida and the United States
District Court for the Southern District of Florida for all purposes of this
Agreement.
SECTION 15.05 MULTIPLE COUNTERPARTS
This Agreement may be executed in several counterparts, each of which will be
deemed an original, but all of which will constitute one and the same
instrument.
SECTION 15.06 AMENDMENTS
To be effective, any amendment to this Agreement must be approved by an act of
the Members reflecting approval by Members owning eighty-five percent (85%)
percent of the Membership Units; provided, however, that any amendment that
terminates, amends or creates any rights or obligations of any Members must be
approved by all of the Members. All amendments to this Agreement must be in
writing and signed by the Company and all of the Members.
16
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date first above written.
Witnesses: NATG HOLDINGS, LLC
By: Orius Corp.
/s/ JO ANN ROBERTS Initial Member
- ----------------------------------
Print Name: Jo Ann Roberts By: /s/ WILLIAM J. MERCURIO
----------------------- ------------------------------
Name: William J. Mercurio
/s/ LYDIA PAULO Title: President
- ---------------------------------
Print Name: Lydia Paulo
---------------------
ORIUS CORP
/s/ JO ANN ROBERTS
- ----------------------------------
Print Name: Jo Ann Roberts By: /s/ WILLIAM J. MERCURIO
----------------------- ------------------------------
Name: William J. Mercurio
Title: President
/s/ LYDIA PAULO
- ---------------------------------
Print Name: Lydia Paulo
---------------------
17
<PAGE> 18
SCHEDULE A
MEMBERS
MEMBER CONTRIBUTION MEMBERSHIP UNITS
Orius Corp. $100 100
<PAGE> 1
EXHIBIT 3.5
CERTIFICATE OF INCORPORATION
OF
ORIUS CAPITAL CORP.
ARTICLE ONE
-----------
The name of the corporation is Orius Capital Corp.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of
New Castle, Delaware 19801. The name of its registered agent at such address is
The Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to bc conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority
to issue is One Thousand (1,000) shares of Common Stock, with a par value of
$0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Adriana S.C. Hyun Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
</TABLE>
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
<PAGE> 2
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the corporation is expressly authorized to
make, alter or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation in the manner now
or hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
accordingly have hereunto set my hand this 27th day of January, 2000.
/s/ ADRIANA S. C. HYUN
-------------------------------------
Adriana S. C. Hyun, Sole Incorporator
-2-
<PAGE> 1
EXHIBIT 3.6
BY-LAWS
OF
ORIUS CAPITAL CORP.
A Delaware Corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The registered office of the corporation
in the State of Delaware shall be located at Corporation Trust Center, 1209
Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The
name of the corporation's registered agent at such address shall be The
Corporation Trust Company. The registered office and/or registered agent of the
corporation may be changed from time to time by action of the board of
directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year within one hundred twenty (120) days after
the close of the immediately preceding fiscal year of the corporation for the
purpose of electing directors and conducting such other proper business as may
come before the meeting. The date, time and place of the annual meeting shall be
determined by the president of the corporation; provided, that if the president
does not act, the board of directors shall determine the date, time and place of
such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than a majority of the votes at the meeting.
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special
<PAGE> 2
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
executive office of the corporation.
Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or represented by proxy at
the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
-2-
<PAGE> 3
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of common stock held
by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing the dates of
signature of the stockholders who signed the consent or consents, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the state of Delaware, or the corporation's principal place of business, or an
officer or agent of the corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested provided, however, that no consent or consents
delivered by certified or registered mail shall be deemed delivered until such
consent or consents are actually received at the registered office. All consents
properly delivered in accordance with this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered to the corporation as required by this section, written
consents signed by the holders of a sufficient number of shares to take such
corporate action are so recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing. Any action taken
pursuant to such written consent or consents of the stockholders shall have the
same force and effect as if taken by the stockholders at a meeting thereof.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
-3-
<PAGE> 4
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the holders of any class or series are entitled to elect one or more
directors by the provisions of the corporation's certificate of incorporation,
the provisions of this section shall apply, in respect to the removal without
cause of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Any director may resign at any time upon written
notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this by-law
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president or any director on at least 24 hours notice to each
director, either personally, by telephone, by mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the
-4-
<PAGE> 5
directors of the corporation, which to the extent provided in such resolution or
these by-laws shall have and may exercise the powers of the board of directors
in the management and affairs of the corporation except as otherwise limited by
law. The board of directors may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by
the certificate of incorporation, any action required or permitted to be taken
at any meeting of the board of directors, or of any committee thereof, may be
taken without a meeting if all members of the board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the board or committee.
-5-
<PAGE> 6
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more
vice-presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person except that neither the
chairman of the board nor the president shall also hold the office of secretary.
In its discretion, the board of directors may choose not to fill any office for
any period as it may deem advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any meeting
of the board of directors. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall, subject to the powers of
the board of directors, have general charge of the business, affairs and
property of the corporation, and control over its officers, agents and
employees; and shall see that all orders and resolutions of the board of
directors are carried into effect. The president shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation. The
president shall have such other powers and perform such other duties as may be
prescribed by the board of directors or as may be provided in these by-laws.
Section 7. Vice-Presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the board of
directors shall, in the absence or disability of the president, act with all of
the powers and be subject to all the restrictions of the president. The vice-
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presidents shall also perform such other duties and have such other powers as
the board of directors, the president or these by-laws may, from time to time,
prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the president or these
by-laws may, from time to time, prescribe; and shall have custody of the
corporate seal of the corporation. The secretary, or an assistant secretary,
shall have authority to affix the corporate seal to any instrument requiring it
and when so affixed, it may be attested by his or her signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his or her signature. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors, the
president, or secretary may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such
disbursements have been duly authorized, taking proper vouchers for such
disbursements; and shall render to the president and the board of directors, at
its regular meeting or when the board of directors so requires, an account of
the corporation; shall have such powers and perform such duties as the board of
directors, the president or these by-laws may, from time to time, prescribe. If
required by the board of directors, the treasurer shall give the corporation a
bond (which shall be rendered every six years) in such sums and with such surety
or sureties as shall be satisfactory to the board of directors for the faithful
performance of the duties of the office of treasurer and for the restoration to
the corporation, in case of death, resignation, retirement, or removal from
office, of all books, papers, vouchers, money, and other property of whatever
kind in the possession or under the control of the treasurer belonging to the
corporation. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors, shall in
the absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. The assistant treasurers shall perform such other
duties and have such other powers as the board of directors, the president or
treasurer may, from time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
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Section 14. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Nature of Indemnity. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent which it is empowered to
do so by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended against all expense, liability and loss
(including attorneys' fees actually and reasonably incurred by such person in
connection with such proceeding) and such indemnification shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, except as provided in Section 2 hereof, the corporation shall indemnify
any such person seeking indemnification in connection with a proceeding
initiated by such person only if such proceeding was authorized by the board of
directors of the corporation. The right to indemnification conferred in this
Article V shall be a contract right and, subject to Sections 2 and 5 hereof,
shall include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition. The
corporation may, by action of its board of directors, provide indemnification to
employees and agents of the corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 30 days, the right to indemnification or advances as granted by
this Article V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a
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defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware, nor an actual determination by
the corporation (including its board of directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the corporation or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred by him
or her in any such capacity, whether or not the corporation would have the power
to indemnify such person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
corporation in advance of such proceeding's final disposition unless otherwise
determined by the board of directors in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation. Such expenses incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board of
directors deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
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Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was
a director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice-president and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by such holder in the
corporation. If such a certificate is countersigned (1) by a transfer agent or
an assistant transfer agent other than the corporation or its employee or (2) by
a registrar, other than the corporation or its employee, the signature of any
such president, vice-president, secretary, or assistant secretary may be
facsimiles. In case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such certificate or certificates
shall cease to be such officer or officers of the corporation whether because of
death, resignation or otherwise before such certificate or certificates have
been delivered by the corporation, such certificate or certificates may
nevertheless be issued and delivered as though the person or persons who signed
such certificate or certificates or whose facsimile signature or signatures have
been used thereon had not ceased to be such officer or officers of the
corporation. All certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. Shares of stock of the corporation
shall only be transferred on the books of the corporation by the holder of
record thereof or by such holder's attorney duly authorized in writing, upon
surrender to the corporation of the certificate or certificates for such shares
endorsed by the appropriate person or persons, with such evidence of the
authenticity of such endorsement, transfer, authorization, and other matters
as the corporation may reasonably require, and
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accompanied by all necessary stock transfer stamps. In that event, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate or certificates, and record the transaction
on its books. The board of directors may appoint a bank or trust company
organized under the laws of the United States or any state thereof to act as its
transfer agent or registrar, or both in connection with the transfer of any
class or series of securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board of
directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be the close of business on the next
day preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
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fixed by the board of directors and prior action by the board of directors is
required by statute, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the board of directors adopts the resolution
taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner.
Section 7. Subscriptions for Stock: Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
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Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer
or officers, or any agent or agents, of the corporation to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. No loans shall be made by the corporation to its
officers or directors, and no loans shall be made by the corporation secured by
its shares. No loans shall be made or contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by resolution of the board of directors. Such authority may be general or
confined to specific instances.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation held by the corporation shall be voted by the president,
unless the board of directors specifically confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.
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Section 9. Section Headings. Section headings in these by-laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these by-laws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these by-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.
ARTICLE VIII
AMENDMENTS
These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.
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EXHIBIT 3.7
[STAMP] [STAMP]
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
NORTH AMERICAN TEL-COM GROUP, INC.
In accordance with Section 607.1007 of the Florida Statutes, the
Amended and Restated Articles of Incorporation of NORTH AMERICAN TEL-COM
GROUP, INC., a Florida corporation (the "Corporation"), are hereby amended and
restated (such amended and restated Articles of Incorporation to be referred to
herein as the "Articles of Incorporation") to read in their entirety as follows:
ARTICLE I - NAME
The name of the Corporation is NORTH AMERICAN TEL-COM GROUP, INC.
ARTICLE II - ADDRESS
The mailing addresses and principal place of business for the
Corporation is 2240 Palm Beach Lakes Boulevard, West Palm Beach, Florida 33409.
ARTICLE III - DURATION
The duration of the Corporation shall be perpetual.
ARTICLE IV - PURPOSE
The Corporation is organized to engage in any activity or business
permitted under the laws of the United States and the State of Florida.
ARTICLE V - REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation is 2240 Palm
Beach Lakes Boulevard, West Palm Beach, Florida 33409, and the name of the
registered agent of the Corporation at such address is William J. Mercurio.
ARTICLE VI - CAPITAL STOCK
A. Authorized Capital Stock
The total number of shares of capital stock of the Corporation which
the Corporation shall have the authority to issue is 100,000,000, consisting of
(i) 98,000,000 shares of common stock, each of which have a par value of $.01
per share ("Common Stock"), including 10,000,000 shares of Class A Common Stock
("Class A Common Stock") and 20,000,000 shares of Class B Common Stock ("Class B
Common Stock") and 68,000,000 shares of undesignated common stock ("Common
Stock"), and (ii) 2,000,000 shares of Preferred Stock, each of which shall have
a par value of $.01 per share ("Preferred Stock") and 100,000 shares of which
are hereby designated as "Series
<PAGE> 2
A Convertible Preferred Stock." The rights, privileges, vote, liquidation
preference, convertibility, dividend and redemption provisions for the Series A
Convertible Preferred Stock are set forth on Exhibit A attached hereto.
B. Provisions Relating to the Common Stock. The Common Stock shall be
subject to the express terms of the Preferred Stock and any class or series
thereof. The powers, preferences and rights of the Class A Common Stock, the
Class B Common Stock and the Common Stock, and the qualifications, limitations
and restrictions thereof, shall in all respects be identical, except as
otherwise required by law or as expressly provided in the agreement among the
stockholders of the Corporation in the agreement among the stockholders of the
Corporation dated as of March 31, 1998.
1. Voting Rights. Except as otherwise required by law or as
may be provided by the resolutions of the Board authorizing the issuance of any
class or series of the Preferred Stock, as hereinafter provided, all rights to
vote and all voting power shall be vested exclusively in the holders of the
Common Stock. The holders of shares of Class A Common Stock and Class B Common
Stock shall have the following voting rights:
a. The holders of Class A Common Stock shall be entitled to one
vote for each share of Class A Common Stock held, provided,
however, that in no event shall the Class A Common Stock, in the
aggregate, be entitled to more than 20% of the total number of
votes allocable to all issued and outstanding voting shares of
capital stock of the Corporation. In the event that the total
number of issued and outstanding shares of Class A Common Stock
shall be greater than 20% of all votes entitled to be cast by
holders of issued and outstanding shares of capital stock of the
Corporation, each share of Class A Common Stock shall be entitled
to that number of votes equal to a fraction, the numerator of which
shall be 20% of the total number of votes entitled to be cast by
holders of shares of capital stock of the Corporation and the
denominator of which shall be the total number of shares of Class A
Common Stock then issued and outstanding.
b. The holders of Class B Common Stock shall be entitled to
one vote for each share of Class B Common Stock held.
2. Dividends. Subject to the rights of the holders of the
Preferred Stock, the holders of the Common Stock shall be entitled to receive
when, as and if declared by the Board, out of funds legally available therefor,
dividends and other distributions payable in cash, property, stock (including
shares of any class or series of the Corporation, whether or not shares of such
class or series are already outstanding) or otherwise.
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3. Conversion.
a. Mandatory Conversion. Immediately prior to the earliest to occur of (i)
the acquisition by the Corporation (whether by acquisition of all of the
outstanding shares of such operating company or substantially all of the assets
of such operating company ) of the third operating company acquired by the
Corporation after the date hereof; (ii) the effective date of the Corporation's
initial public offering of Common Stock; or (iii) the conversion of the
Corporation's Series A Convertible Preferred Stock into Common Stock (the
"Conversion Date"); then each share of Class B Common Stock then issued and
outstanding shall thereupon be converted automatically as of such Conversion
Date into one fully paid and nonassessable share of Common Stock (without class
designation), as may be proportionately adjusted by the Board of Directors for
the dilutive effects of additional issuances of Common Stock, and will have one
vote per share (a "Mandatory Conversion"); and each share of Class A common
Stock shall be converted into one fully paid and nonassessable share of Common
Stock (without class designation), as may be proportionately adjusted by the
Board of Directors for the dilutive effects of additional issuances of Common
Stock; provided however, that upon the Mandatory Conversion, the shares of
Common Stock issuable upon the conversion of the Class A Common Stock will
represent no more than 20% of the outstanding voting shares of the Corporation.
Notice of such Mandatory Conversion shall be given by the Corporation as soon as
practicable, but no later than the next meeting of shareholders of the
Corporation, by means of written notice to all holders of Class A and Class B
Common Stock, and the Secretary of the Corporation shall be instrued to and
shall promptly request that each holder of Class A and Class B Common Stock
promptly deliver, and each such holder shall promptly deliver, the certificate
or certificates representing each share of such Class A and Class B Common Stock
to the Corporation or the Transfer Agent. If so required by the Corporation or
the Transfer Agent, any certificate for shares surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory to the
Corporation or the Transfer Agent, duly executed by the holder of such shares or
the duly authorized representative of such holder, together with funds for the
payment of any transfer tax required pursuant to paragraph (e) of this
Subsection 3.
b. Issuance of Certificates Representing Common Stock; Effectiveness of
Conversion. As promptly as practicable following the surrender for conversion of
a certificate representing shares of Class A and Class B Common Stock in the
manner provided in paragraph (a) of this Subsection 3, as applicable, any
required instruments of transfer and the payment in cash of any amount required
by the provisions of paragraph (e) of the Subsection 3, the Corporation shall
issue and deliver
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or cause to be issued and delivered to such holder or such holder's nominee or
nominees, a certificate or certificates representing the number of shares of
Common Stock issued upon such conversion in such name or names as such holder
may direct. Mandatory Conversions shall be deemed to have been affected on the
Conversion Date on which the condition set forth in paragraph (a) of this
Subsection 3 is determined by the Board to have occurred. Upon the date the
conversion is deemed effected, all rights of the holder of such shares of Class
A or Class B Common Stock so converted, as the holder of such shares, shall
cease, and the person or persons in whose name or names the certificate or
certificates representing the shares of Class A or Class B Common Stock are
issued shall be treated for all purposes as having become the record holder or
holders of such shares of Common Stock on that date; provided, however, that if
any surrender and payment pursuant to a Mandatory Conversion occurs on any date
when the stock transfer books of the Corporation shall be closed, the person or
persons in whose name or names the certificate or certificates representing
shares of Common Stock are issued shall be deemed the record holder or holders
thereof for all purposes on the next succeeding day on which the stock transfer
books are open.
c. Adjustments. No adjustments in respect of dividends shall be made upon
the Mandatory Conversion of any shares of Class A or Class B Common Stock;
provided, however, that if a share of Class A or Class B Common Stock shall be
converted subsequent to the record date for the payment of a dividend or other
distribution on Class A or Class B Common Stock but prior to such payment, then
the registered holder of such share of Class A or Class B Common Stock at the
close of business on such record date shall be entitled to receive the dividend
or other distribution payable on such share of Class A or Class B Common Stock
on such date notwithstanding the Mandatory Conversion thereof or the
Corporation's default in payment of the dividend due on such date.
d. Availability of Common Stock for Conversion; Registration. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of issuance upon
conversion of the outstanding shares of Class A Common, Class B Common and
Series A Convertible Preferred Stock, such number of shares of Common Stock that
shall be issuable upon the conversion of all such shares of Class A Common,
Class B Common and Series A Convertible Preferred Stock then outstanding. If any
shares of Common Stock require registration with or approval of any governmental
authority under any federal or state law before such shares shall be issued upon
conversion, the Corporation shall cause such shares to be duly registered or
approved, as the case may be. All shares of Common Stock that shall be issued
upon conversion of the fully paid and nonassessable
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<PAGE> 5
shares of Class A Common, Class B Common or Series A Convertible Preferred
Stock shall, upon issue, be fully paid and nonassessable.
e. Charges, Payment of Taxes upon Conversion. The issuance of
certificates for shares of Common Stock issuable upon the Mandatory
Conversion shall be made without charge to the converting holder; provided,
however, that if any certificate is to be issued in a name other than that
of the record holder of the shares being converted, the Corporation shall
not be required to issue or deliver any such certificate unless and until
the person requesting the issuance thereof shall have paid to the
Corporation the amount of any tax that may be payable with respect to any
transfer involved in the issuance and delivery of such certificate or has
established to the satisfaction of the Corporation that such tax has been
paid.
4. Splits or Combinations. If the Corporation shall in any manner split,
subdivide or combine the outstanding shares of Class A Common Stock or Class B
Common Stock, then the outstanding shares of the other such class of Common
Stock shall be proportionately split, subdivided or combined in the same manner
and on the same basis as the outstanding shares of the class that has been
split, subdivided or combined.
5. Mergers and Consolidations. In the event of a merger, consolidation or
combination of the Corporation with another entity (whether or not the
Corporation is the surviving entity), the holders of Class A Common Stock and
Class B Common Stock shall be entitled to receive the same per share
consideration in that transaction, except that any common stock that holders of
Class A Common Stock are entitled to receive in any such event may differ as to
voting rights and otherwise to the extent and only the extent that the Class A
Common Stock and the Class B Common Stock differ as set forth in this Section B.
6. Liquidating Distributions. Upon any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, and after the
holders of the Preferred Stock shall have been paid in full the amounts to
which they shall be entitled, if any, or a sum sufficient for such payment in
full shall have been set aside, the remaining net assets of the Corporation, if
any, shall be divided among to the holders of Class A Common Stock and Class B
Common Stock pro rata based on the number of each class then outstanding,
provided, however, that in no event shall the holders of the Class A Common
Stock receive more than 20% of the remaining net assets and the holders of the
Class B Common Stock receive less than 80% of the remaining net assets.
7. Sales and Repurchases. The Board shall have the power to cause the
Corporation to issue and sell shares of Class A or Class B Common Stock to such
individuals, partnerships, joint ventures, limited liability companies,
associations, corporations, trusts or other legal entities (collectively,
"persons") and for such
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<PAGE> 6
consideration as the Board shall from time to time in its discretion determine,
whether or not greater consideration could be received upon the issue or sale
of the same number of shares of the other class of Common Stock, and as
otherwise permitted by law. The Board shall have the power to cause the
Corporation to purchase, out of funds legally available therefor, shares of
either class of Common Stock from such persons and for such consideration as
the Board shall from time to time in its discretion determine, whether or not
less consideration could be paid upon the purchase of the same number of shares
of the other class of Common Stock, and as otherwise permitted by law.
C. Provisions Relating to Preferred Stock. Shares of Preferred Stock
may be issued from time to time in one or more series. The Board of Directors
is authorized to fix the number of shares in each series, the designation
thereof and the relative rights, preferences and limitations of each series
including, but not limited to: (a) the dividend rate; (b) redeemable features,
if any; (c) rights upon liquidation; (d) whether or not the shares of such
series shall be subject to a purchase, retirement or sinking fund provision;
(e) whether or not the shares of such series shall be convertible into or
exchangeable for shares of any other class and, if so, the rate of conversion
or exchange; (f) restrictions, if any, upon the payment of dividends on Common
Stock; (g) restrictions, if any, upon the creation of indebtedness; (h) voting
powers, if any, of the shares of each series; and (i) such other rights,
preferences and limitations as shall not be inconsistent with the laws of the
State of Florida.
The holders of the Preferred Stock shall be entitled to dividends
thereon at the rate established by the Board of Directors. All remaining
profits which the Board of Directors may determine to apply in payment of
dividends shall be distributed among the holders of Common Stock exclusively.
Upon dissolution, whether voluntary or involuntary, the holders of Preferred
Stock shall first be entitled to receive, out of the net assets of the
Corporation, the liquidating value established by the Board of Directors, of
their shares plus unpaid accumulated dividends and any other distributions
declared thereon.
D. Share Reclassification. Immediately upon the filing hereof, each
then outstanding share of the Corporation's Common Stock (the "Existing Common
Stock") shall, automatically and without any action by the holder, be
reclassified and converted into 194,633 validly issued, fully paid and
nonassessable shares of Class A Common Stock. Each certificate that theretofore
represented shares of Existing Common Stock shall thereafter represent the
number of shares of Class A Common Stock into which the shares of Existing
Common Stock represented by such certificate were reclassified and converted
hereby; provided, however, that each person holding of record a stock
certificate or certificates that represented shares of Existing Common Stock
shall receive, upon surrender of each such certificate or certificates, a new
certificate or certificates evidencing and representing the number of shares of
Class A Common Stock to which such person is entitled. Upon consummation of the
reclassification of the Existing Common Stock of the Corporation provided for
in this Section D (the "Reclassification"), the holders of the Class A Common
Stock of the Corporation shall
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<PAGE> 7
have all rights accorded them by law and these Articles of Incorporation. The
issuance of certificates representing shares of Class A Common Stock issuable
upon the Reclassification shall be made without charge to the holders of
Existing Common Stock; provided, however, that if any certificate is to be
issued in a name other than that of the record holder of the shares of Existing
Common Stock being reclassified pursuant to and Reclassification, the
Corporation shall not be required to issue or deliver any such certificate
unless and until the person requesting the issuance thereof shall have paid to
the Corporation the amount of any tax that may be payable with respect to any
transfer involved in the issuance and delivery of such certificate or has
established to the satisfaction of the Corporation that such tax has been paid.
If so required by the Corporation or the Transfer Agent, any certificate for
shares of Existing Common Stock surrendered in connection with the
Reclassification shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation or the Transfer Age, duly executed by the holder
of such shares or the duly authorized representative of such holder, together
with funds for payment of any transfer tax required as set forth above. As
promptly as practicable following the surrender of a certificate representing
shares of Class A Common Stock in the foregoing manner, any required instruments
of transfer and the payment in cash of any amount for the payment of any
transfer tax, the Corporation shall issue and deliver or cause to be issued and
delivered to such holder or such holder's nominee or nominees, a certificate or
certificates representing the number of shares of Class A Common Stock issued
upon the Reclassification to which such holder is entitled, in such name or
names as such holder may direct.
ARTICLE VII - BOARD OF DIRECTORS
The number of directors shall be determined by the Board of Directors
in accordance with the Bylaws of the Corporation and shall consist of not less
than 5, nor more than 11 members. A director shall hold office until the annual
meeting for the year in which his terms expires and until his successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office in accordance with the
Bylaws of the Corporation.
ARTICLE VIII - CONTROL- SHARE ACQUISITIONS
The Corporation elects not to be governed by Florida Statute Section
607.0902, as amended, relating to control-share acquisitions (the "Control-Share
Act"). The Corporation is expressly authorized to the fullest extent
permitted by the Control-Share Act to redeem control shares acquired in a
control-share acquisition at the fair value thereof pursuant to procedures
adopted by the Board of Directors.
ARTICLE IX - AFFILIATED TRANSACTIONS
The Corporation elects not to be governed by Florida Statutes Section
607.0901, as amended, concerning affiliated transactions.
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<PAGE> 8
ARTICLE X - DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such exemption from liability or
limitation thereof is not permitted under the Florida Business Corporation Act
as currently in effect or as the same may hereafter be amended. No amendment,
modification or repeal of this Article X (including any amendment or repeal of
this Article X made by virtue of any change in the Florida Business Corporation
Act after the date hereof) shall adversely affect any right or protection of a
director that exists at the time of such amendment, modification or repeal on
account of any action taken or any failure to act by such director prior to such
time.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation this 31st day of March, 1998.
/s/ WILLIAM J. MERCURIO
-------------------------------------
William J. Mercurio
President and Chief Executive Officer
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<PAGE> 9
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF NORTH AMERICAN TEL-COM GROUP, INC.
The undersigned, William J. Mercurio, President and Chief Executive
Officer of NORTH AMERICAN TEL-COM GROUP, INC., a Florida corporation (the
"Corporation"), does hereby certify as follows:
1. In accordance with Section 607.1003 of the Florida Statutes, the
Board of Directors of the Corporation recommended by written
consent on March 27, 1998, that the shareholders of the
Corporation approve, and shareholders having unanimously
approved by written consent on March 27, 1998, the number of
votes cast by the shareholders being sufficient for such
approval, in accordance with Sections 607.1003 and 607.1006 of
the Florida Statutes, the amendment and restatement of the
Corporation's Articles of Incorporation as attached hereto.
2. The undersigned officer of the Corporation has been duly
authorized to submit these Amended and Restated Articles of
Incorporation of the Corporation to the Department of State of
Florida for filing in accordance with Section 607.1007 of the
Florida Statutes.
NORTH AMERICAN TEL-COM GROUP, INC.
By: /s/ WILLIAM J. MERCURIO
-----------------------------
William J. Mercurio
President and Chief Executive Officer
<PAGE> 10
Exhibit A
NORTH AMERICAN TEL-COM GROUP, INC.
DESCRIPTION OF SERIES A PREFERRED STOCK
1. Designation. The 100,000 shares of Series A Convertible Preferred
Stock, par value $.01 per share (the "Preferred Stock"), shall have the
following rights, terms and privileges (terms used herein and not otherwise
defined shall have the meanings set forth in the Purchase Agreement (as
referred to below)):
2. Dividends.
(a) Dividends. The holders of the then outstanding shares of
Preferred Stock shall be entitled to receive, out of funds legally available
therefor, cumulative annual dividends when as may be declared from time to time
by the Board of Directors of the Company at an annual rate per share equal to
eight percent (8%) of the original purchase price paid per share of the
Preferred Stock. Such amount shall be compounded annually such that if the
dividend is not paid for such year the unpaid amount shall be added to the
original purchase price paid per share of the Preferred Stock for purposes of
calculating succeeding years' dividends. Such dividends shall be deemed to
accrue on the Preferred Stock and be cumulative, whether or not earned or
declared and whether or not there are profits, surplus or other funds of the
Company legally available for the payment of dividends. If such cumulative
dividends in respect of any prior or current annual dividend period shall not
have been declared and paid, or there shall not have been a sum sufficient for
the payment therefor set apart, the deficiency shall first be fully paid before
any dividend or other distribution shall be paid or declared and set apart with
respect to any class of the Company's capital stock, now or hereafter
outstanding. Anything contained herein to the contrary notwithstanding, the
accrued dividends shall be immediately due and payable in cash, upon the
earliest occurrence of any of the following (each a "Dividend Date"):
(1) A Public Offering (as hereafter defined);
(2) A sale of the Company or a sale of all or substantially
all of the Company's assets; or
(3) April 15, 2005.
For purposes of this Section 2, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of capital stock of the Company for cash or property,
including any such transfer, purchase or redemption by a subsidiary of the
Company. Notwithstanding the foregoing, the Company shall not declare or pay a
dividend on the Preferred Stock prior to the Dividend Date.
(b) Dividends in Kind. In the event the Company shall make or
issue, or shall fix a record date for the determination of holders of common
stock entitled to receive, a dividend or other distribution with respect to the
common stock payable in (i) securities of the Company other than shares of
common stock or (ii) assets, then and in each such event the holders of
<PAGE> 11
Preferred Stock shall receive, at the same time such distribution is made with
respect to common stock, the number of securities or such other assets of the
Company which they would have received had their Preferred Stock been converted
into common stock immediately prior to the record date for determining holders
of common stock entitled to receive such distribution.
3. Liquidation, Dissolution or Winding Up
a. Treatment at Liquidation, Dissolution or Winding Up.
In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of each share of
Preferred Stock shall be entitled to be paid out of the assets of the Company
available for distribution to holders of the Company's capital stock of all
classes, whether such assets are capital, surplus, or capital earnings, such
amount per share of Preferred Stock as would have been payable had each such
share been converted into common stock immediately prior to such event of
liquidation, dissolution or winding up pursuant to the provisions of Section 5
(the "Liquidation Amount") and the holders of the Preferred Stock shall be
treated as if they had converted the Preferred Stock into common stock.
b. Distributions in Cash. The Liquidation Amount shall in all events be
paid in cash. Whenever a distribution provided for in this Section 3 is payable
in property other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the Company's
Board of Directors.
4. Voting Power. Except as otherwise expressly provided in Section 8
hereof, or as required by law, each holder of Preferred Stock shall be entitled
to vote on all matters and shall be entitled to that number of votes equal to
the largest number of whole shares of common stock into which such holder's
shares of Preferred Stock, could be converted, pursuant to the provisions of
Section 5 hereof, at the record date for the determination of shareholders
entitled to vote on such matter or, if no such record date is established, at
the date such vote is taken or any written consent of shareholders is
solicited. Except as otherwise expressly provided herein or as required by law,
the holders of shares of Preferred Stock and common stock shall vote together
as a single class on all matters.
5. Conversion Rights for the Preferred Stock. The holders of the Preferred
Stock shall have following rights with respect to the conversion of the
Preferred Stock into shares of Common Stock:
(a) General. Subject to and in compliance with the provisions of this
Section 5, all but not less than all of the shares of the Preferred Stock may,
at the option of the holder, be converted at any time into fully-paid and
non-assessable shares of Common Stock; provided, however, that the conversion
must be done simultaneously with the conversion of the Note. The number of
shares of Common Stock to which a holder of Preferred Stock shall be entitled
upon conversion shall be the product obtained by multiplying the Applicable
Conversion Rate (determined as provided in Section 5(b)) by 100,000 (i.e., the
number of shares of Preferred Stock being converted).
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<PAGE> 12
(b) Applicable Conversion Rate. The conversion rate in effect at any
time (the "Applicable Conversion Rate") shall be the quotient obtained by
dividing $114.34688 by the Applicable Conversion Value, calculated as provided
in Section 5(c).
(c) Applicable Conversion Value. The Applicable Conversion Value
shall be $5.00, except that such amount shall be adjusted from time to time in
accordance with this Section 5.
(d) Adjustments to Applicable Conversion Values.
(i) (A) Fiscal Year 1999 Adjustment. If the EBITDA of Mich-Com
Cable Services Incorporated, a Michigan corporation, Cablemasters Corp., a
Pennsylvania corporation, Excel Cable Construction, a Florida corporation
and Kenya Corporation, a Kansas corporation (the "Acquired Corporations")
for the twelve months ended December 31, 1999 is less that $10,215,000
(i.e., 80% of the 1999 budget), then the Applicable Conversion Rate shall
be increased to a number that causes the holders of the Preferred Stock to
increase the number of shares of the common stock of the Company on a
fully diluted basis they would receive upon conversion of the Preferred
Stock by ten percent (10%) of the Company's fully diluted number of shares
(e.g., from 23.5% of the common stock to 33.5% of the common stock). If
the EBITDA of the Acquired Corporations for the twelve months ended
December 31, 1999 is less than $11,492,000 (i.e., 90% of the 1999 budget),
but greater than $10,215,000, then the Applicable Conversion Rate shall be
increased to a number that causes the holders of the Preferred Stock to
increase the number of shares of common stock of the Company on a fully
diluted basis they would receive upon conversion of the Preferred Stock by
a pro rated portion of ten percent (10%) equal to the percentage by which
the Acquired Corporation's EBITDA as a percentage of the 1999 budget was
less than 90% of the 1999 budget (for example, if the EBITDA is 83% of the
1999 budget, then 83% is 7% less than 90% and the holder shall be entitled
to receive 23.5% plus 7% of the common stock upon such conversion). The
adjustment in this Section 5(d)(i)(A) shall be computed based upon the
audited financial statements of the Company for fiscal 1999 and shall be
effective upon delivery of calculation of the foregoing by the Company's
independent accountants, in the absence of computational error. The term
"EBITDA" shall mean the Acquired Corporations' earnings before interest,
taxes, depreciation, amortization (excluding extraordinary gains and
losses, and any earnings or losses of any businesses or assets acquired
after the date hereof), and prior to any deduction for non-cash charges
relating to stock grants, any of the Company's corporate overhead charges
or any management fees, all calculated based upon generally accepted
accounting principles, consistently applied.
(B) Upon Sale of Common Stock. If the Company shall, while there
are any shares of Preferred Stock outstanding, issue or sell (or in
accordance with Section 5(d)(i)(C) below is deemed to have issued or sold)
shares of its common stock without consideration or at a price per share
less than the Applicable Conversion Value in effect immediately prior to
such issuance or sale, then in each such case such Applicable Conversion
Value for the Preferred Stock, upon each such issuance or sale, except as
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<PAGE> 13
hereinafter provided, shall be lowered so as to be equal to an amount
determined by multiplying the Applicable Conversion Value by a fraction:
(1) the numerator of which shall be (a) the number of shares of
common stock outstanding immediately prior to the issuance of such
additional shares of common stock, plus (b) the number of shares of common
stock which the net aggregate consideration, if any, received by the
Company for the total number of such additional shares of common stock so
issued would purchase at the Applicable Conversion Value in effect
immediately prior to such issuance, and
(2) the denominator of which shall be (a) the number of shares
of common stock outstanding immediately prior to the issuance of such
additional shares of common stock plus (b) the number of such additional
shares of common stock so issued.
(C) Upon Issuance of Warrants, Options and Rights to Common Stock.
(1) For the purposes of this Section 5(d)(i), the issuance of
any warrants, options, subscriptions, or purchase rights with respect to
shares of common stock and the issuance of any securities convertible into
or exchangeable for shares of common stock (or the issuance of any
warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance of such common stock
at such time if the Net Consideration Per Share (as hereinafter determined)
which may be received by the Company for such common stock shall be less
than the Applicable Conversion Value at the time of such issuance. Any
obligation, agreement, or undertaking to issue warrants, options,
subscriptions, or purchase rights at any time in the future shall be deemed
to be an issuance at the time such obligation, agreement or undertaking is
made or arises. No adjustment of the Applicable Conversion Value shall be
made under this Section 5(d)(i) upon the issuance of any shares of common
stock which are issued pursuant to the exercise of any warrants, options,
subscriptions, or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities if any
adjustment shall previously have been made or deemed not required
hereunder, upon the issuance of any such warrants, options, or subscription
or purchase rights or upon the issuance of any convertible securities (or
upon the issuance of any warrants, options or any rights therefor) as
provided above.
Should the Net Consideration Per Share of any such warrants, options,
subscriptions, or purchase rights or convertible securities be decreased
from time to time, then, upon the effectiveness of each such change, the
Applicable Conversion Value shall be adjusted to such Applicable Conversion
Value as would have obtained (1) had the adjustments made upon the issuance
of such warrants, options, rights, or convertible securities been made upon
the basis of the decreased Net Consideration per share of such securities,
and (2) had adjustments made to the Applicable Conversion Value since the
date of issuance of such securities been made to the Applicable Conversion
Value as adjusted pursuant to (1) above.
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<PAGE> 14
(2) For purposes of this paragraph, the "Net
Consideration Per Share" which may be received by the Company shall be
determined as follows:
(i) The "Net Consideration Per Share" shall mean the
amount equal to the total amount of consideration, if any, received by
the Company for the issuance of such warrants, options, subscriptions,
or other purchase rights or convertible or exchangeable securities, plus
the minimum amount of consideration, if any, payable to the Company upon
exercise or conversion thereof, divided by the aggregate number of
shares of common stock that would be issued if all such warrants,
options, subscriptions, or other purchase rights or convertible or
exchangeable securities were exercised, exchanged, or converted.
(ii) The "Net Consideration Per Share" which may be
received by the Company shall be determined in each instance as of the
date of issuance of warrants, options, subscriptions, or other purchase
rights or convertible or exchangeable securities without giving effect
to any possible future upward price adjustments or rate adjustments
which may be applicable with respect to such warrants, options,
subscriptions, or other purchase rights or convertible or exchangeable
securities.
(D) Stock Dividends. In the event the Company shall make or issue a
dividend or other distribution payable in common stock or securities of the
Company convertible into or otherwise exchangeable for the common stock of the
Company, then such common stock or other securities issued in payment of such
dividend shall be deemed to have been issued without consideration (except for
dividends payable in shares of common stock payable pro rata to holders of
Preferred Stock and to holders of any other class of stock).
(E) Consideration Other than Cash. For purposes of this Section
5(d), if a part or all of the consideration received by the Company in
connection with the issuance of shares of the common stock or the issuance of
any of the securities described in this Section 5(d) consists of property other
than cash, such consideration shall be deemed to have a fair market value as is
reasonably determined in good faith by the Board of Directors of the Company.
(F) Shares Issued Pursuant to Additional Acquisitions. For the
purposes of the calculation of adjustments to the Applicable Conversion Rate or
Value pursuant to this Section 5(d), until such time that the Company has
issued 1.8 million shares of common stock or common stock equivalents (beyond
those outstanding on the date hereof) pursuant to the acquisitions of other
companies from independent third parties, upon the issuance of any additional
shares hereafter (and only until such 1.8 million additional shares are issued)
the Applicable Conversion Rate or Value shall be adjusted so that the holders
of the Preferred Stock will continue to have the right to convert the Preferred
Stock into the same percentage of the Company's common stock as
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<PAGE> 15
if such issuance of common stock had not occurred, and therefore the
holder of the Preferred Stock shall not be diluted by the issuance of
such additional common stock or common stock equivalents.
(G) Exceptions. This Section 5(d)(i) shall not apply under
any of the circumstances which would constitute an Extraordinary Common
Stock Event (as hereinafter defined in Section 5(d)(ii)). Further, the
provisions of this Section 5(d) shall not apply to (i) shares issued
upon conversion of the Preferred Stock shares issues upon conversion of
a Note, or (ii) the issuance of any common stock pursuant to the
exercise of the options (and the shares issuable upon exercise thereof)
to purchase up to an aggregate of 500,000 shares of common stock
(including options outstanding on the date hereof) issued to employees
of the Company, as provided in Section 8.7 of that certain Securities
Purchase Agreement, dated as of March 31, 1998 (the "Purchase
Agreement"). The number of shares in this Section (G) shall be
proportionately adjusted to reflect any stock dividend, stock split or
other form of recapitalization occurring after the date hereof.
(ii) Upon Extraordinary Common Stock Event. Upon the happening of
an Extraordinary Common Stock Event (as hereinafter defined), the Application
Conversion Value for the Preferred Stock shall, simultaneously with the
happening of such Extraordinary Common Stock Event, be adjusted by multiplying
the then effective Applicable Conversion Value with respect to the Preferred
Stock by a fraction, the numerator of which shall be the number of shares of
common stock outstanding immediately prior to such Extraordinary Common Stock
Event and the denominator of which shall be the number of shares of common stock
outstanding immediately after such Extraordinary Common Stock Event, and the
products so obtained shall thereafter be the Applicable Conversion Value. The
Applicable Conversion Value for the Preferred Stock shall be readjusted in the
same manner upon the happening of any successive Extraordinary Common Stock
Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue
of additional shares of common stock as a dividend or other
distribution on outstanding common stock or on any class or series of
preferred stock, unless made pro rata to holders of Preferred Stock,
(ii) a subdivision of outstanding shares of common stock into a greater
number of shares of common stock, or (iii) a combination of outstanding
shares of the common stock into a smaller number of shares of common
stock.
(e) Dividends. In the event the Company shall make or issue, or shall
fix a record date for the determination of holders of common stock entitled to
receive, a dividend or other distribution with respect to the common stock
payable in (i) securities of the Company other than shares of common stock or
(ii) assets, then and in each such event the holders of Preferred Stock shall
receive, at the same time such distribution is made with respect to common
stock, the number of securities or such other assets of the Company which they
would have received had their Preferred Stock been converted into common stock
immediately prior to the date of such distribution.
(f) Capital Reorganization or Reclassification. If the common stock
issuable upon the conversion of the Preferred Stock shall be changed into the
same or different number of
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shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares or stock dividend provided for elsewhere in this Section 5 or by a
Reorganization), then and in each such event, the holder of each share of
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such capital reorganization, reclassification or other change by holders of
the number of shares of Common Stock into which such shares of Preferred Stock
might have been converted immediately prior to such capital reorganization,
reclassification or other change.
(g) Capital Reorganization, Merger or Sale of Assets. If at any time
or from time to time there shall be a capital reorganization of the common stock
(other than a subdivision, combination, reclassification or exchange of shares
provided for elsewhere in this Section 5) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's properties and assets to any other person, or any
transaction or series of related transactions in which more than fifty percent
(50%) of the outstanding voting securities of the Company (on an as converted
basis) is sold or assigned (any of which events is herein referred to as a
"Reorganization"), then as a part of such Reorganization, provision shall be
made so that the holders of the Preferred Stock shall thereafter be entitled to
receive upon conversion of the Preferred Stock, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such Reorganization, to which such holder would have been
entitled if such holder had converted its shares of Preferred Stock immediately
prior to such Reorganization. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 5 with respect to the
rights of the holders of the Preferred Stock after the Reorganization, to the
end that the provisions of this Section 5 (including adjustment of the
Applicable Conversion Value then in effect and the number of shares issuable
upon conversion of the Preferred Stock) shall be applicable after that event in
as nearly equivalent a manner as may be practicable.
(h) Certificate as to Adjustments; Notice by Company. In each case of
an adjustment or readjustment of the Applicable Conversion Rate, the Company at
its expense will furnish each holder of Preferred Stock with a certificate,
executed by the president and chief financial officer (or in the absence of a
person designated as the chief financial officer, by the treasurer) showing such
adjustment or readjustment, and stating in detail the facts upon which such
adjustment or readjustment is based.
(i) Exercise of Conversion Privilege. To exercise its conversion
privilege, a holder of Preferred Stock shall surrender the certificate or
certificates representing the shares being converted to the Company at its
principal office, and shall give written notice to the Company at that office
that such holder elects to convert such shares. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall be
issued. The certificate or certificates for shares of Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Company or in blank. The date when such written notice is received by the
Company, together with the certificate or certificates representing the shares
of Preferred Stock being converted, shall be the "Conversion Date." As promptly
as practicable after the Conversion Date, the Company shall issue and shall
deliver to the holder of the shares of Preferred Stock
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being converted, or on its written order, such certificate or certificates as it
may request for the number of whole shares of common stock issuable upon the
conversion of such shares of Preferred Stock in accordance with the provisions
of this Section 5, and cash, as provided in Section 5(j), in respect of any
fraction of a share of Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been effected immediately prior to the close
of business on the Conversion Date, and at such time the rights of the holder as
holder of the converted shares of Preferred Stock shall cease and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares of Common Stock represented
thereby. The Company shall pay any taxes payable with respect to the issuance of
Common Stock upon conversion of the Preferred Stock, other than any taxes
payable with respect to income by the holders thereof.
(j) Cash in Lieu of Fractional Shares. The Company may, if it so
elects, issue fractional shares of Common stock or scrip representing fractional
shares upon the conversion of shares of Preferred Stock. If the Company does
not elect to issue fractional shares, the Company shall pay to the holder of the
shares of Preferred Stock which were converted a cash adjustment in respect of
such fractional shares in an amount equal to the same fraction of the market
price per share of the Common Stock (as determined in a reasonable manner
prescribed by the Board of Directors) at the close of business on the
Conversion Date. The determination as to whether or not any fractional shares
are issuable shall be based upon the total number of shares of Preferred Stock
being converted at any one time by any holder thereof, not upon each share of
Preferred Stock being converted.
(l) Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of the
Preferred Stock, such number of its shares of Common stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of the
Preferred Stock, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Preferred Stock, the Company shall take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
6. No Reissuance of Preferred Stock. No share or shares of Preferred
Stock acquired by the Company by reason of redemption, purchase, conversion or
otherwise shall be reissued, and all such shares shall be canceled, retired and
eliminated from the shares which the Company shall be authorized to issue. The
Company may from time to time take such appropriate corporate action as may be
necessary to reduce the authorized number of shares of the Preferred Stock
accordingly.
7. Redemption
(a) Optional Redemption Upon Qualified Public Offering. Effective
upon the closing of a Qualified Public Offering (as hereinafter defined), the
Company may require the holders of the Preferred Stock to convert their
Preferred Stock into Common Stock and EBITDA
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Options (as hereinafter defined) by sending notice thereof, together with a
calculation of the Applicable Conversion Value, at least ten business days
prior to the closing of the Qualified Public Offering, to all holders of
Preferred Stock. The mandatory conversion shall be effective as of the closing
date of the Qualified Public Offering and on and after such date the
certificates representing the Preferred Stock shall only represent the right to
receive the Conversion Shares and EBITDA Options. For purposes hereof, the
term "Qualified Public Offering" shall mean an underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), covering the offer and sale of common
stock for the account of the Company in which the aggregate net proceeds to the
Company equal at least $25,000,000 and in which the price per share of common
stock is at least two and one half (2.5) times the then Applicable Conversion
Value of the Preferred Stock.
"EBITDA Options" shall mean one or more option agreements to be executed
prior to a Qualified Public Offering by the Company in favor of the holders of
the Preferred Stock granting them the right to acquire the additional shares of
the Company's common stock that they may otherwise have received in the amounts
and on the terms and conditions as set forth in Section 5(d)(i)(A) had the
Preferred Stock not been redeemed by the Company, with an exercise price equal
to $.01 per share of common stock.
Nothing contained in Section 7(a) shall (i) in any way restrict or prohibit the
holders of the Preferred Stock from exercising their conversion
rights pursuant to Section 5 hereof prior to the effective date of the
redemption to be effected hereunder; provided, however, that any such
conversion under Section 7(a) may be subject to the closing of the Qualified
Public Offering.
(b) Optional Redemption by the Holder Following Default.
(i) In the event there is an Event of Default under the Purchase
Agreement and the applicable cure period, if any, has expired (a "Default"),
then the holders of at least fifty-one percent (51%) of the then outstanding
shares of Preferred Stock may request the Company to redeem any or all of the
shares of Preferred Stock then held by such holders at the price equal to the
greater of (i) the original purchase price of the Preferred Stock (as adjusted
to reflect any stock split, stock dividend or other form of recapitalization),
together with all accrued and unpaid dividends (whether or not declared)
thereon to be calculated and paid through and including the date of redemption
or (ii) fair market value thereof, as of the date of such proposed redemption,
as determined, at the Company's sole expense, by a nationally recognized
investment banking firm (mutually acceptable to both the Company and the
Holders), taking into account, in valuing such Shares, all relevant facts and
circumstances; provided, however, that there shall be valuing such Shares, all
relevant facts and circumstances; provided, however,
that there shall be no discount to reflect the fact that the Shares represent a
minority interest in the Company (the "Holder Redemption Price"). Such request
(the "Default Redemption Request") shall be submitted to the Company in writing
within thirty (30) days after the Company notifies all of the holders of the
Preferred Stock in writing of the Default. No cure of such Default during such
thirty (30) day period shall vitiate such Default Redemption request and the
failure to make such a Default Redemption Request within such thirty (30) day
period shall not result in the waiver of such remedy.
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(ii) Upon receipt of a Default Redemption Request, the Company shall
promptly give notice thereof (the "Default Redemption Notice") to each holder of
Preferred Stock. Such Default Redemption Notice shall specify the number of
shares of Preferred Stock covered by the Default Redemption Request and the
Holder Redemption Price to be paid with respect thereto. Any holder of
Preferred Stock who wishes to join in the Default Redemption Request may do so
by so advising the Company in writing within 15 days after receipt of the
Default Redemption Notice specified in the preceding sentence. No holder of
Preferred Stock shall be required to participate in such redemption. The
Company shall redeem all shares of Preferred Stock covered by the Default
Redemption Request (including those held by holders who have requested a
redemption following receipt of the Default Redemption Notice) at a closing to
be held not more than thirty (30) days after the date of the Default Redemption
Request. At the closing, the Company shall pay for the shares of Preferred
Stock so redeemed in an amount equal to the Holder Redemption Price, payable in
cash.
(c) Optional Redemption by Holders. At the election of the holders of at
least fifty-one percent (51%) of the then outstanding shares of Preferred
Stock, the Company shall, to the extent it may do so under applicable law,
redeem pro rata from all holders of Preferred Stock on April 15, 2005 the
shares of Preferred Stock outstanding on the date of such redemption (the
"Final Redemption Date"). The Company shall give the holders of the Preferred
Stock at least ninety (90) days' notice of the Final Redemption Date (the
"Final Redemption Notice"). In the event that the Company does not provide the
Final Redemption Notice, the option of the holders of the Preferred Stock to
require the Company to redeem the remaining shares of Preferred Stock on the
Final Redemption Date shall be extended beyond the Final Redemption Date to a
date which is ninety (90) days from the date that the Company elects to mail
the Final Redemption Notice. In the event shares of Preferred Stock scheduled
for redemption are not redeemed because of a prohibition under applicable law,
such shares shall be redeemed as soon as such prohibition no longer exists. The
redemption price for each share of Preferred Stock redeemed pursuant to this
Section 7(c) shall be equal to the Holder Redemption Price.
In the event that the holders of the Preferred Stock do not elect to have
the Preferred Stock redeemed pursuant to this Section 7(c), the shares of
Preferred Stock shall remain outstanding and subject to the rights and
preferences contained herein.
(d) Redemption Notice. If an election is made pursuant to Section 7(c)
hereof, written notice of such election shall be mailed, postage prepaid, to
the Company, not later than sixty (60) days before the date fixed for each
redemption pursuant to Section 7(c) or, in the event the Company does not
provide the Final Redemption Notice pursuant to Section 7(c) hereof, not later
than sixty (60) days before the date that the Final Redemption Date has been
extended as provided in Section 7(c) (each of the dates fixed for redemption
and the extended redemption date is hereinafter referred to as a "Redemption
Date"). If such election is made and appropriate notice is given, then, at
least forty-five (45) days before the Redemption Date, written notice
(hereinafter referred to as the "Redemption Notice") shall be mailed by the
Company, postage prepaid, to each holder of record of Preferred Stock at its
address shown on the records of the Company; provided, however, that the
Company's failure to give such Redemption Notice shall in no way affect its
obligation to redeem the shares of Preferred Stock or the obligation of the
holders to redeem their shares of Preferred Stock as provided in Section 7(c)
hereof. The
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Redemption Notice shall contain (i) the number of shares of Preferred Stock
held by the holder and the total number of shares of Preferred Stock held by
all holders subject to redemption as of such Redemption Date; and (ii) the
Redemption Date and the applicable Holder Redemption Price. Any holder of
Preferred Stock who wishes to do so may, by giving notice to the Company prior
to the Redemption Date, convert into common stock any or all of the shares of
Preferred Stock held by him and scheduled for redemption on such Redemption
Date.
(e) Surrender of Certificates. Each holder of shares of Preferred Stock
to be redeemed under this Section 7 shall surrender the certificate or
certificates representing such shares to the Company at the place designated in
the Redemption Notice, and thereupon the Company Redemption Price or Holder
Redemption Price, as the case may be, for such shares as set forth in this
Section 7 shall be paid to the order of the person whose name appears on such
certificate or certificates. Irrespective of whether the certificates therefor
shall have been surrendered, all shares of Preferred Stock which are the subject
of a Redemption Notice shall be deemed to have been redeemed and shall be
canceled effective as of the Redemption Date, unless the Company shall default
in the payment of the applicable Redemption Price.
(f) Sale of the Company. In lieu of the redemption obligations of the
Company as set forth herein, the Company may instead retain a nationally
recognized investment banking firm (or other mutually acceptable party) to sell
the Company, provided that the Company acts expeditiously and in good faith and
the sale of the Company is consummated no later than 180 days after the required
date of redemption.
8. Restrictions and Limitations.
(a) Corporate Securities Action. Except as expressly provided herein or
as required by law, so long as any shares of Preferred Stock remain outstanding,
the Company shall not, and shall not permit any subsidiary (which shall mean any
corporation, association or other business entity which the Company and/or any
of its other subsidiaries directly or indirectly owns at the time more than
fifty percent (50%) of the outstanding voting shares of such corporation or
trust, other than directors' qualifying shares) to, without the approval by vote
or written consent by the holders of at least a majority of the then outstanding
shares of Preferred Stock, voting as a separate class:
(i) redeem, purchase or otherwise acquire for value (or pay into or
set aside for a sinking fund for such purpose), or declare and pay or set aside
funds for the payment of any dividend with respect to, any share or shares of
capital stock, except as required or permitted hereunder or under the terms of
Section 4.2 of the Purchase Agreement;
(ii) authorize or issue, or obligate itself to authorize or issue,
additional shares of Preferred Stock;
(iii) authorize or issue, or obligate itself to authorize or issue,
any equity security senior to or on parity with the Preferred Stock as to
liquidation preferences, dividend rights, or voting rights;
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(iv) merger or consolidate with any other corporation or
sell, assign, lease or otherwise dispose of or voluntarily part with the
control of (whether in one transaction or in a series of transactions) all, or
substantially all, of its assets (whether now owned or hereinafter acquired),
or consent to any liquidation, dissolution or winding up of the Company, or
permit any subsidiary to do any of the foregoing, except for (A) any
wholly-owned subsidiary may merge into or consolidate with or transfer assets
to any other wholly-owned subsidiary, and (B) any wholly-owned subsidiary may
merge into or transfer assets to the Company; or
(v) amend, restate, modify or alter the by-laws of the
Company in any way which adversely affects the rights of the holders of the
Preferred Stock.
(b) Amendments to Charter. The Company shall not amend its Articles
of Incorporation without the approval, by vote or written consent, by the
holders of at least a majority of the then outstanding shares of Preferred
Stock, if such amendment would amend any of the rights, preferences, privileges
of or limitations provided for herein for the benefit of any shares of
Preferred Stock. Without limiting the generality of the preceding sentence, the
Company shall not amend its Articles of Incorporation without the approval by
the holders of at least a majority of the then outstanding shares of Preferred
Stock if such amendment would:
(i) change the relative seniority rights of the holders of
Preferred Stock as to the payments of dividends in relation to the holders of
any other capital stock of the Company, or create any other class or series of
capital stock entitled to seniority as to the payment of dividends in relation
to the holders of Preferred Stock;
(ii) reduce the amount payable to the holders of Preferred
Stock upon the voluntary or involuntary liquidation, dissolution or winding up
the Company, or change the relative seniority of the liquidation preferences
of the holders of Preferred Stock to the rights upon liquidation of the holders
of other capital stock of the Company, or change the dividend rights of the
holders of Preferred Stock;
(iii) cancel or modify the conversion rights of the holders
of Preferred Stock provided for in Section 5 herein;
(iv) cancel or modify the redemption rights of the holders
of the Preferred Stock provided for in Section 7 herein; or
(v) cancel or modify the rights of the holders of the
Preferred Stock provided for in this Section 8.
9. No Dilution or Impairment. The Company shall not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Preferred Stock set forth herein, but shall at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of the holders of the Preferred Stock against dilution or
other impairment. Without limiting the generality of the
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foregoing, the Company (a) shall not increase the par value of any shares of
stock receivable on the conversion of the Preferred Stock above the amount
payable therefor on such conversion, (b) shall take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock on the conversion of all
Preferred Stock from time to time outstanding, and (c) shall not consolidate
with or merge into any other person or permit any such person to consolidate
with or merge into the Company (if the Company is not the surviving person),
unless such other person shall expressly assume in writing and will be bound by
all of the terms of the Preferred Stock set forth herein.
10. Notices of Record Date. In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or property,
or to receive any other right, or
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
merger of the Company, or any transfer of all or substantially all of the
assets of the Company to any other corporation, or any other entity or person,
or
(b) any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then and in each such event the Company shall mail or cause to be mailed to each
holder of Preferred Stock a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right
and a description of such dividend, distribution or right, (ii) the date on
which any such reorganization, reclassification, recapitalization, transfer,
merger, dissolution, liquidation or winding up is expected to become effective
and (iii) the time, if any, that is to be fixed, as to when the holders of
record of common stock (or other securities) shall be entitled to exchange their
shares of common (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, merger, dissolution, liquidation or winding up. Such notice shall be
mailed at least ten (10) business days prior to the date specified in such
notice on which such action is to be taken.
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EXHIBIT 3.8
BYLAWS
OF
NORTH AMERICAN TEL-COM GROUP, INC.
ARTICLE I. MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of
the Corporation for the election of directors and the transaction of other
business shall be held on such date, at such time and in such place as shall be
determined by the board of directors. If any annual meeting is not held, by
oversight or otherwise, a special meeting shall be held as soon as practical,
and any business transacted or election held at that meeting shall be as valid
as if transacted or held at the annual meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders for
any purpose shall be held when called by the president or the board of
directors, or when demanded in writing by the holders of not less than ten
percent (unless a greater percentage not to exceed fifty percent is required by
the articles of incorporation) of all the shares entitled to vote at the
meeting. Such demand must be delivered to the Corporation's secretary. A meeting
demanded by shareholders shall be called for a date not less than ten nor more
than sixty days after the request is made, unless the shareholders requesting
the meeting designate a later date. The secretary shall issue the call for the
meeting, unless the president, the board of directors, or shareholders
requesting the meeting designate another person to do so. The shareholders at a
special meeting may transact only business that is related to the purposes
stated in the notice of the special meeting.
SECTION 3. PLACE. Meetings of shareholders may be held either within or
outside the State of Florida.
SECTION 4. NOTICE. A written notice of each meeting of shareholders,
stating the place, day, and time of the meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered to each shareholder of record entitled to vote at the meeting, not
less than ten nor more than sixty days before the date set for the meeting,
either personally or by first-class mail, by or at the direction of the
president, the secretary, or the officer or other persons calling the meeting.
If mailed, the notice shall be considered delivered when it is deposited in the
United States mail, postage prepaid, addressed to the shareholder at his address
as it appears on the records of the Corporation.
<PAGE> 2
SECTION 5. WAIVERS OF NOTICE. Whenever any notice is required to be
given to any shareholder of the Corporation under these bylaws, the articles of
incorporation, or the Florida Business Corporation Act, a written waiver of
notice, signed anytime by the person entitled to notice shall be equivalent to
giving notice. Attendance by a shareholder entitled to vote at a meeting, in
person or by proxy, shall constitute a waiver of (a) notice of the meeting,
except when the shareholder attends a meeting solely for the purpose, expressed
at the beginning of the meeting, of objecting to the transaction of any business
because the meeting is not lawfully called or convened, and (b) an objection to
consideration of a particular matter at the meeting that is not within the
purpose of the meeting unless the shareholders object to considering the matter
when it is presented.
SECTION 6. RECORD DATE. For the purpose of determining the shareholders
for any purpose, the board of directors may either require the stock transfer
books to be closed for up to seventy days or fix a record date, which shall be
not more than seventy days before the date on which the action requiring the
determination is to be taken. However, a record date shall not precede the date
upon which the resolution fixing the record date is adopted. If the transfer
books are not closed and no record date is set by the board of directors, the
record date shall be determined as follows: For determining shareholders
entitled to demand a special meeting, the record date is the date the first such
demand is delivered to the Corporation; For determining shareholders entitled to
a share dividend, the record date is the date the board of directors authorizes
the dividend; If no prior action is required by the board of directors pursuant
to the Florida Business Corporation Act, the record date for determining
shareholders entitled to take action without a meeting is the date the first
signed written consent is delivered to the Corporation; If prior action is
required by the board of directors pursuant to the Florida Business Corporation
Act, the record date for determining shareholders entitled to take action
without a meeting is at the close of business on the day that the board of
directors adopts a resolution taking such prior action; and For determining
shareholders entitled to notice of and to vote at an annual or special
shareholders meeting the record date is as of the close of business on the day
before the first notice is delivered to the shareholders. When a determination
of the shareholders entitled to vote at any meeting has been made, that
determination shall apply to any adjournment of the meeting, unless the board of
directors fixes a new record date. The board of directors shall fix a new record
date if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.
SECTION 7. SHAREHOLDER'S LIST FOR MEETING. A complete alphabetical
list of the names of the shareholders entitled to receive notice of and to vote
at the meeting shall be prepared by the secretary or other authorized agent
having charge of the stock transfer book. The list shall be arranged by voting
group and include each shareholder's address, and the number, series, and class
of shares held. The list must be made available at least ten days before and
throughout each meeting of shareholders, or such shorter time as exists between
the record date and the meeting. The list must
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be made available at the Corporation's principal office, registered agent's
office, transfer agent's office or at a place identified in the meeting notice
in the city where the meeting will be held. Any shareholder, his agent or
attorney, upon written demand and at his own expense may inspect the list during
regular business hours. The list shall be available at the meeting and any
shareholder, his agent or attorney is entitled to inspect the list at any time
during the meeting or its adjournment.
If the requirements of this section have not been substantially
complied with, the meeting, on the demand of any shareholder in person or by
proxy, shall be adjourned until the requirements of this section are met. If no
demand for adjournment is made, failure to comply with the requirements of this
section does not affect the validity of any action taken at the meeting.
SECTION 8. SHAREHOLDER QUORUM AND VOTING. A majority of the shares
entitled to vote, represented in person or by proxy, constitutes a quorum at a
meeting of shareholders. If a quorum is present, the affirmative vote of a
majority of the shares entitled to vote on the matter is the act of the
shareholders unless otherwise provided by law. A shareholder may vote either in
person or by proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact. After a quorum has been established at a shareholders'
meeting, a withdrawal of shareholders that reduces the number of shareholders
entitled to vote at the meeting below the number required for a quorum does not
affect the validity of an adjournment of the meeting or an action taken at the
meeting prior to the shareholders' withdrawal.
Authorized but unissued shares including those redeemed or otherwise
reacquired by the corporation, and shares of stock of this Corporation owned by
another corporation the majority of the voting stock of which is owned or
controlled by this Corporation, directly or indirectly, at any meeting shall not
be counted in determining the total number of outstanding shares at any time.
The chairman of the board, the president, any vice president, the secretary, and
the treasurer of a corporate shareholder are presumed to possess, in that order,
authority to vote shares standing in the name of a corporate shareholder, absent
a bylaw or other instrument of the corporate shareholder designating some other
officer, agent, or proxy to vote the shares. Shares held by an administrator,
executor, guardian, or conservator may be voted by him without a transfer of the
shares into his name. A trustee may vote shares standing in his name, but no
trustee may vote shares that are not transferred into his name. If he is
authorized to do so by an appropriate order of the court by which he was
appointed, a receiver may vote shares standing in his name or held by or under
his control, without transferring the shares into his name. A shareholder whose
shares are pledged may vote the shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee or his nominee shall be
entitled to vote the shares unless the instrument creating the pledge provides
otherwise.
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ARTICLE II. DIRECTORS
SECTION 1. FUNCTION. The business of this Corporation shall be managed
and its corporate powers exercised by the board of directors.
SECTION 2. NUMBER. The Corporation shall have at least one (1) director
at all times. The number of directors may be increased or diminished from time
to time by action of the board of directors or shareholders, but no decrease
shall have the effect of shortening the term of any incumbent director, unless
the shareholders remove the director.
SECTION 3. QUALIFICATION. Each member of the board of directors must be
a natural person who is eighteen years of age or older. A director need not be a
resident of Florida or a shareholder of the Corporation.
SECTION 4. ELECTION AND TERM. The persons named in the articles of
incorporation as members of the initial board of directors shall hold office
until the first annual meeting of shareholders and until their successors have
been elected and qualified or until their earlier resignation, removal from
office, or death. At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors to hold office until
the next succeeding annual meeting. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualifies or
until his earlier resignation, removal from office, or death.
SECTION 5. COMPENSATION. The board of directors has authority to fix
the compensation of the directors, as directors and as officers.
SECTION 6. DUTIES OF DIRECTORS. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he serves, in good faith, in a manner he reasonably believes to be in the
best interests of the Corporation.
SECTION 7. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of the board of directors or a committee of the board of
directors when corporate action is taken is presumed to have assented to the
action unless he votes against it or expressly abstains from voting on the
action taken, or, he objects at the beginning of the meeting to the holding of
the meeting or transacting specific business at the meeting.
SECTION 8. VACANCIES. Unless filled by the shareholders, any vacancy
occurring in the board of directors, including any vacancy created because of an
increase in the number of directors, may be filled by the affirmative vote of a
majority of the remaining directors, even if the number of remaining directors
does not constitute a quorum of the board of directors. A director elected to
fill a vacancy shall hold office only until the next election of directors by
the shareholders.
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SECTION 9. REMOVAL OR RESIGNATION OF DIRECTORS. At a meeting of
shareholders called for that purpose, the shareholders, by a vote of the
holders of a majority of the shares entitled to vote at an election of
directors, may remove any director, or the entire board of directors, with or
without cause, and fill any vacancy or vacancies created by the removal.
A director may resign at any time by delivering written notice to the
board of directors or its chairman or the corporation. A resignation is
effective when the notice is delivered unless the notice specifies later
effective date. If a resignation is made effective at a later date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provided that the successor does not take office until the effective
date.
SECTION 10. QUORUM AND VOTING. A majority of the board of directors
constitutes a quorum for the transaction of business. The act of the majority of
the directors at a meeting at which a quorum is present is the act of the board
of directors.
SECTION 11. PLACE OF MEETINGS. Regular and special meetings by the
board of directors may be held within or outside the State of Florida.
SECTION 12. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without notice, other than this bylaw, immediately after
and at the same place as the annual meeting of shareholders. The board of
directors may provide, by resolution, the time and place for the holding of
additional regular meetings without notice other than the resolution.
SECTION 13. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any directors.
SECTION 14. NOTICE OF MEETINGS. Written notice of the time and place of
special meetings of the board of directors shall be given to each director by
either personal delivery or by first class United States mail, telegram, or
cablegram at least two days before the meeting. Notice of a meeting of the board
of directors need not be given to any director who signs a waiver of notice
either before or after the meeting. Attendance of a director at a meeting
constitutes a waiver of notice of the meeting and all objections to the time and
place of the meeting, or the manner in which it has been called or convened,
except when the director states, at the beginning of the meeting, or promptly
upon arrival at the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of notice of the
meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the board of directors to another time and place.
Notice of any adjourned meeting shall be given to the directors who were not
present at the time of
5
<PAGE> 6
the adjournment and, unless the time and place of the adjourned meeting are
announced at the time of the adjournment, to the other directors.
ARTICLE III. OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall consist of a
president, a secretary, and a treasurer, and may include one or more vice
presidents, one or more assistant secretaries, and one or more assistant
treasurers. The officers shall be elected initially by the board of directors at
the organizational meeting of board of directors and thereafter at the first
meeting of the board following the annual meeting of the shareholders in each
year. The board from time to time may elect or appoint other officers, assistant
officers, and agents, who shall have the authority and perform the duties
prescribed by the board. An elected or duly appointed officer may, in turn,
appoint one or more officers or assistant officers, unless the board of
directors disapproves or rejects the appointment. All officers shall hold office
until their successors have been appointed and have qualified or until their
earlier resignation, removal from office, or death. One person may
simultaneously hold any two or more offices. The failure to elect a president,
secretary, or treasurer shall not affect the existence of the Corporation.
SECTION 2. PRESIDENT. The president, subject to the directions of the
board of directors, is responsible for the general and active management of the
business and affairs of the Corporation, has the power to sign certificates of
stock, bonds, deeds, and contracts for the Corporation, and shall preside at all
meetings of the shareholders.
SECTION 3. VICE PRESIDENTS. Each vice president has the power to sign
bonds, deeds, and contracts for the Corporation and shall have the other powers
and perform the other duties prescribed by the board of directors or the
president. Unless the board otherwise provides, if the president is absent or
unable to act, the vice president who has served in that capacity for the
longest time and who is present and able to act shall perform all the duties and
may exercise any of the powers of the president. Any vice president may sign,
with the secretary or assistant secretary, certificates for stock of the
Corporation.
SECTION 4. SECRETARY. The secretary shall have the power to sign
contracts and other instruments for the Corporation and shall (a) keep the
minutes of the proceedings of the shareholders and the board of directors in one
or more books provided for that purpose, (b) see that all notices are duly given
in accordance with the provisions of these bylaws or as required by law, (c)
maintain custody of the corporate records and the corporate seal, attest the
signatures of officers who execute documents on behalf of the Corporation,
authenticate records of the Corporation, and assure that the seal is affixed to
all documents of which execution on behalf of the Corporation under its seal is
duly authorized, (d) keep a register of the post office address of each
shareholder that shall be furnished to the secretary by the shareholder, (e)
sign with
6
<PAGE> 7
the president, or a vice president, certificates for shares of stock of the
Corporation, the issuance of which have been authorized by resolution of the
board of directors, (f) have general charge of the stock transfer books of the
Corporation, and (g) in general perform all duties incident to the office of
secretary and other duties as from time to time may be prescribed by the
president or the board of directors.
SECTION 5. TREASURER. The treasurer shall (a) have charge and custody
of and be responsible for all funds and securities of the Corporation, (b)
receive and give receipts for monies due and payable to the Corporation from any
source whatsoever, and deposit monies in the name of the Corporation in the
banks, trust companies, or other depositaries as shall be selected by the board
of directors, and (c) in general perform all the duties incident to the office
of treasurer and other duties as from time to time may be assigned to him by the
president or the board of directors. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his duties in the sum
and with the surety or sureties that the board of directors determines.
SECTION 6. REMOVAL OF OFFICERS. An officer or agent elected or
appointed by the board of directors or appointed by another officer may be
removed by the board whenever in its judgment the removal of the officer or
agent will serve the best interests of the Corporation. Any officer or
assistant officer, if appointed by another officer, may likewise be removed by
such officer. Removal shall be without prejudice to any contract rights of the
person removed. The appointment of any person as an officer, agent, or employee
of the Corporation does not create any contract rights. The board of directors
may fill a vacancy, however occurring, in any office.
An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date, its board of directors may fill the pending vacancy before the
effective date if the board of directors provides that the successor does not
take office until the effective date. An officer's resignation does not affect
the officer's contract rights, if any, with the corporation.
SECTION 7. SALARIES. The board of directors from time to time shall fix
the salaries of the officers, and no officer shall be prevented from receiving
his salary merely because he is also a director of the Corporation.
ARTICLE IV. INDEMNIFICATION
Any person, his heirs, or personal representative, made, or threatened
to be made, a party to any threatened, pending, or completed action or
proceeding, whether civil, criminal, administrative, or investigative, because
he is or was a director, officer, employee, or agent of this Corporation or
serves or served any other corporation or other enterprise in any capacity
at the request of this Corporation, shall be
7
<PAGE> 8
indemnified by this Corporation, and this Corporation may advance his related
expenses to the full extent permitted by Florida law. In discharging his duty,
any director, officer, employee, or agent, when acting in good faith, may rely
upon information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented by (1)
one or more officers or employees of the Corporation whom the director, officer,
employee, or agent reasonably believes to be reliable and competent in the
matters presented, (2) counsel, public accountants, or other persons as to
matters that the director, officer, employee, or agent believes to be within
that person's professional or expert competence, or (3) in the case of a
director, a committee of the board of directors upon which he does not serve,
duly designated according to law, as to matters within its designated authority,
if the director reasonably believes that the committee is competent. The
foregoing right of indemnification or reimbursement shall not be exclusive of
other rights to which the person, his heirs, or personal representatives may be
entitled. The Corporation may, upon the affirmative vote of a majority of its
board of directors, purchase insurance for the purpose of indemnifying these
persons. The insurance may be for the benefit of all directors, officers, or
employees.
ARTICLE V. STOCK CERTIFICATES
SECTION 1. ISSUANCE. Shares may but need not be represented by
certificates. The board of directors may authorize the issuance of some or all
of the shares of the Corporation of any or all of its classes or series without
certificates. If certificates are to be issued, the share must first be fully
paid.
SECTION 2. FORM. Certificates evidencing shares in this Corporation
shall be signed by the president or a vice president and the secretary,
assistant secretary or any other officer authorized by the board of directors,
and may be sealed with the seal of this Corporation or a facsimile of the seal.
Unless the Corporation's stock is registered pursuant to every applicable
securities law, each certificate shall bear an appropriate legend restricting
the transfer of the shares evidenced by that certificate.
SECTION 3. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Corporation may
issue a new certificate in the place of any certificate previously issued if the
shareholder of record (a) makes proof in affidavit form that the certificate has
been lost, destroyed, or wrongfully taken, (b) requests the issue of a new
certificate before the Corporation has notice that the certificate has been
acquired by the purchaser for value in good faith and without notice of any
adverse claim, (c) if requested by the Corporation, gives bond in the form that
the Corporation directs, to indemnify the Corporation, the transfer agent, and
the registrar against any claim that may be made concerning the alleged loss,
destruction, or theft of a certificate, and (d) satisfies any other reasonable
requirements imposed by the Corporation.
8
<PAGE> 9
SECTION 4. RESTRICTIVE LEGEND. Every certificate evidencing shares that
are restricted as to sale, disposition, or other transfer shall bear a legend
summarizing the restriction or stating that the Corporation will furnish to any
shareholder, upon request and without charge, a full statement of the
restriction.
ARTICLE VI. DIVIDENDS
The board of directors from time to time may declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law.
ARTICLE VII. SEAL
The corporate seal shall have the name of the Corporation and the word
"seal" inscribed on it, and may be a facsimile, engraved, printed, or an
impression seal.
ARTICLE VIII. AMENDMENT
These bylaws may be repealed or amended, and additional bylaws may be
adopted, by either a vote of a majority of the full board of directors or by
vote of the holders of a majority of the issued and outstanding shares entitled
to vote, but the board of directors may not amend or repeal any bylaw adopted by
the shareholders if the shareholders specifically provide that the bylaw is not
subject to amendment or repeal by the directors. In order to be effective, any
amendment approved hereby must be in writing and attached to these Bylaws.
9
<PAGE> 1
EXHIBIT 3.9
ARTICLES OF INCORPORATION
OF
CATV SUBSCRIBER SERVICES, INC.
We, the undersigned natural persons of the age of eighteen (18) years
or more, do hereby make and acknowledge these Articles of Incorporation for the
purpose of forming a business corporation under the laws of the State of North
Carolina.
1. The name of this corporation is CATV SUBSCRIBER SERVICES, INC.
2. The period of duration of this corporation shall be perpetual.
3. The purposes for which this corporation is formed are as follows:
(a) To promote, market and sell to the general public, by media
advertising and in any other lawful manner, the services offered by
companies engaged in the CATV business and generally to engage in the
business of promoting and marketing products and services to and for
CATV system owners.
(b) To engage in and carry on any other lawful activity, including
(but not limited to) constructing, manufacturing, raising or otherwise
producing, and repairing, servicing, storing, or otherwise caring for
any type of structure, commodity, or livestock whatsoever; processing,
selling, brokering, factoring, distributing, lending, or borrowing
against any kind or type of property, whether real or personal,
tangible or intangible; extracting and processing natural resources;
transporting freight or passengers by land, sea, or air; collecting and
disseminating information for advertisement through any medium
whatsoever; performing personal services of any nature; and entering
into or serving in any type of management, investigative, advisory,
promotional, protective, insurance, guarantyship, suretyship, fiduciary
or representative capacity or relationship for any persons or
corporations.
(c) To exercise any and all corporate powers which it now or hereafter
may lawfully exercise under the laws of the State of North Carolina in
the State of
<PAGE> 2
North Carolina, in any and all other states, territories, districts,
colonies, possessions, or dependencies of the United States of America,
and in any and all foreign countries.
4. This corporation shall have authority to issue 1,000 shares of
common stock with a par value of $100.00 per share.
5. The minimum amount of consideration to be received by this
corporation for its shares before it shall commence the transaction of business
shall be $500.00 in cash or property of equivalent value.
6. The address of the initial registered office of this corporation is
610 Pasteur Drive, Greensboro, Guilford County, North Carolina, and the name of
the initial registered agent of the corporation located at that address is
Raymond L. Galtelli.
7. The number of directors constituting the initial Board of Directors
of this corporation shall be three (3), and the name and address of the persons
who are to serve as directors of the corporation until their successors are duly
elected and qualified are:
Raymond L. Galtelli
3116 Yanceyville Road
Greensboro, North Carolina
Josephine R. Galtelli
3116 Yanceyville Road
Greensboro, North Carolina
W. Erwin Fuller, Jr.
1610 Independence Road
Greensboro, North Carolina
8. The name and address of the persons incorporating this corporation
are:
Raymond L. Galtelli
3116 Yanceyville Road
Greensboro, North Carolina
Josephine R. Galtelli
3116 Yanceyville Road
Greensboro, North Carolina
-2-
<PAGE> 3
IN WITNESS WHEREOF, we have hereunto set our hands and seals on this,
the 30th day of December, 1971.
RAYMOND L. GALTELLI
-------------------------(SEAL)
RAYMOND L. GALTELLI
JOSEPHINE R. GALTELLI
-------------------------(SEAL)
JOSEPHINE R. GALTELLI
NORTH CAROLINA
GUILFORD COUNTY
I, SUE S. BEARD, a Notary Public of the above state and county, do
hereby certify that RAYMOND L. GALTELLI and JOSEPHINE R. GALTELLI personally
appeared before me this day and acknowledged the execution of the foregoing
Articles of Incorporation.
Witness my hand and notarial seal, the 30th day of December, 1971.
SUE S. BEARD
-------------------
Notary Public
My Commission Expires:
February 15, 1976
- ----------------------
<PAGE> 4
[STAMP]
ARTICLES OF AMENDMENT
TO
THE CHARTER OF
CATV SUBSCRIBER SERVICES, INC.
The undersigned corporation hereby executes these Articles of Amendment
for the purpose of amending its Charter:
1. The name of the corporation is CATV Subscriber Services, Inc.
2. The following amendment to the Charter of the Corporation was adopted
by its shareholders on the 25th day of September, 1981, in the manner
prescribed by law by the deletion of Article 4 of the Articles of Incorporation
and the substitution thereof of a new Article 4 which shall read as follows:
4.
The aggregate number of shares which the corporation shall have
authority to issue is ten thousand (10,000). The par value of each share
of stock shall be Ten Dollars ($10.00) per share. There shall be one class
of shares, the designation of such shares and the par value thereof is as
follows:
<TABLE>
<CAPTION>
Class Number of Shares Par Value/Per Share
----- ---------------- -------------------
<S> <C> <C>
Common 10,000 $10.00
</TABLE>
There are no preferences or limitations with respect to the above
class of shares.
3. The number of the shares of the Corporation outstanding at the time
of the adoption of the resolution set forth in paragraph 2 above was 157; and
the number of shares entitled to vote thereon was 157.
4. The designation and number of outstanding shares of each class entitled
to vote on such amendment as a class were as follows:
<TABLE>
<CAPTION>
Class Number of Shares
----- ----------------
<S> <C>
Common 157
</TABLE>
<PAGE> 5
5. The number of shares which voted for such amendment was 157; and
the number of shares which voted against such amendment was 0 shares. Voting
within each class entitled to vote as a class was as follows:
<TABLE>
<CAPTION>
Number of Shares Voted
----------------------
Class For Against
------ --- -------
<C> <C> <C>
Common 157 0
</TABLE>
6. Simultaneously with the change of par value authorized by the
shareholders, the shareholders authorized an exchange of shares of common stock
of the Corporation, such authorization providing that ten shares of the new
common stock with a par value of Ten Dollars ($10.00) per share be exchanged for
every one existing share of common stock of the Corporation having a par value
of One Hundred Dollars ($100.00) per share.
7. The change in the capitalization of the Corporation is made and
will be effected in the following manner:
<TABLE>
<CAPTION>
Before Amendments After Amendments
----------------- ----------------
Number of Stated Number of Stated
Shares Capital Shares Capital
--------- ------- --------- -------
<S> <C> <C>
Common
Stock 157 $15,700 1,570 $15,700
</TABLE>
8. The amendments herein effected do not give rise to dissenter's
rights to payment for the reason that the only effects of such amendments were
(a) to change the par value of the shares of common stock of the Corporation,
and (b) to change proportionately the number of outstanding shares of common
stock of the Corporation, such modifications being made with the express
approval of all Shareholders of the Corporation.
IN WITNESS WHEREOF, these Articles of Amendment are signed by the
President and Secretary of the Corporation this 28th day of September, 1981.
CATV SUBSCRIBER SERVICES, INC.
/s/ [ILLEGIBLE]
-----------------------------
President
/s/ JOSEPHINE R. GALTELLI
------------------------------
Secretary
<PAGE> 6
NORTH CAROLINA
GUILFORD COUNTY
I, Susan J. Sizemore , Notary Public,
-------------------
hereby certify that on this 28th day of September, 1981,
---- ---------
personally appeared before me Raymond L. Galtelli and Josephine
R. Galtelli, each of whom being by me first duly sworn, declared
that he/she signed the foregoing document in the capacity indicated,
that he/she was authorized so to sign, and that the statements therein
contained are true.
SUSAN J. SIZEMORE
-------------------
Notary Public
[NOTARY STAMP]
My Commission Expires:
April 29, 1985
- ----------------------
<PAGE> 1
EXHIBIT 3.10
BY - LAWS
OF
CATV SUBSCRIBER SERVICES, INC.
ARTICLE I.
OFFICES
Section 1. Principal Office. The principal office of the corporation
shall be located at 610 Pasteur Drive, Greensboro, North Carolina.
Section 2. Registered Office. The registered office of the corporation
required by law to be maintained in the State of North Carolina may be, but need
not be, identical with the principal office.
Section 3. Other Offices. The corporation may have offices at such
other places, either within or without the State of North Carolina, as the Board
of Directors may from time to time determine, or as the affairs of the
corporation may require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of shareholders shall be
held at the principal office of the corporation, or at such other place, either
within or without the State of North Carolina, as shall be designated in the
notice of the meeting or agreed upon by a majority of the shareholders entitled
to vote thereat.
Section 2. Annual Meetings. The annual meeting of shareholders shall
be held at 3:00 o'clock p.m. on the first Friday in March of each year for the
purpose of electing directors of the corporation and for the transaction of such
other business as may be properly brought before the meeting. If the day fixed
for the annual meeting shall be a legal holiday, such meeting shall be held on
the next succeeding business day.
Section 3. Substitute Annual Meeting. If the annual meeting shall not
be held on the day designated by these By-Laws, a substitute annual meeting may
be called in accordance with the provisions of Section 4 of this ARTICLE II. A
meeting so called shall be designated and treated for all purposes as the annual
meeting.
<PAGE> 2
Section 4. Special Meetings. Special meetings of the shareholders may
be called at any time by the President, Secretary or Board of Directors of the
corporation, or by any shareholder pursuant to the written request of the
holders of not less than one-tenth of all the shares entitled to vote at the
meeting.
Section 5. Notice of Meetings. Written or printed notice stating the
time and place of the meeting shall be delivered not less than ten nor more than
fifty days before the date of any shareholders' meeting, either personally or by
mail, by or at the direction of the President, the Secretary, or other person
calling the meeting, to each shareholder of record entitled to vote at such
meeting; provided that such notice must be given not less than twenty days
before the date of any meeting at which a merger or consolidation is to be
considered. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his address
as it appears on the record of shareholders of the corporation with postage
thereon prepaid.
In the case of an annual or substitute annual meeting, the notice of
meeting need not specifically state the business to be transacted thereat unless
such a statement is expressly required by the provisions of the North Carolina
Business Corporation Act.
In the case of a special meeting, the notice of meeting shall
specifically state the purpose or purposes for which the meeting is called.
When a meeting is adjourned for thirty days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting. When a
meeting is adjourned for less than thirty days in any one adjournment, it is not
necessary to give any notice of the adjourned meeting other than by announcement
at the meeting at which the adjournment is taken.
Section 6. Voting Lists. At least ten days before each meeting of
shareholders the Secretary of the corporation shall prepare an alphabetical list
of the shareholders entitled to vote at such meeting or any adjournment thereof
with the address of and number of shares held by each, which list shall be kept
on file at the registered office of the corporation for a period of ten days
prior to such meeting, and shall be subject to inspection by any shareholder at
any time during usual business hours. This list shall also be produced and kept
open at the time and place of the meeting and shall be subject to inspection by
any shareholder during the whole time of the meeting.
<PAGE> 3
Section 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders, except that at a substitute
annual meeting of shareholders the number of shares there represented either in
person or by proxy, even though less than a majority, shall constitute a quorum
for the purpose of such meeting.
The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
In the absence of a quorum at the opening of a meeting of
shareholders, such meeting may be adjourned from time to time by a vote of the
majority of the shares voting on the motion to adjourn; and at any adjourned
meeting at which a quorum is present, any business may be transacted which might
have been transacted at the original meeting.
Section 8. Proxies. Shares may be voted either in person or by one or
more agents authorized by a written proxy executed by the shareholder or by his
duly authorized attorney in fact. A proxy is not valid after the expiration of
eleven months from the date of its execution, unless the person executing it
specifies therein the length of time for which it is to continue in force, or
limits its use to a particular meeting, but no proxy shall be valid after ten
years from the date of its execution.
Section 9. Voting of Shares. Subject to the provisions of Section 4 of
ARTICLE III, each outstanding share entitled to vote shall be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders.
Except in the election of directors as governed by the provisions of
Section 3 of ARTICLE III, the vote of a majority of the shares voted on any
matter at a meeting of shareholders at which a quorum was initially present
shall be the act of the shareholders on that matter, unless the vote of a
greater number is required by law or by the Charter or By-Laws of this
corporation.
Shares of its own stock owned by the corporation, directly or
indirectly, through a subsidiary corporation or otherwise, or held directly or
indirectly in a fiduciary capacity by it or by a subsidiary corporation, shall
not be voted at any meeting and shall not be counted in determining the total
number of outstanding shares at a given time.
<PAGE> 4
Section 10. Informal Action by Shareholders. Any action which may be
taken at a meeting of the shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the persons who would be entitled to vote upon such action at a meeting, and
filed with the Secretary of the corporation to be kept in the corporate minute
book.
ARTICLE III.
DIRECTORS
Section 1. General Powers. The business and affairs of the corporation
shall be managed by the Board of Directors or by such Executive Committee as the
Board may establish pursuant to these By-Laws.
Section 2. Number, Term and Qualifications. The number of directors of
the corporation shall be three (3). Each director shall hold office until his
death, resignation, retirement, removal, disqualification, or his successor
shall have been elected and qualified. Directors need not be residents of the
State of North Carolina or shareholders of the corporation.
Section 3. Election of Directors. Except as provided in Section 6 of
this ARTICLE III, the directors shall be elected at the annual meeting of
shareholders; and those persons who receive the highest number of votes shall be
deemed to have been elected. If any shareholder so demands, election of
directors shall be by ballot.
Section 4. Cumulative Voting. Every shareholder entitled to vote at an
election of directors shall have the right to vote the number of shares standing
of record in his name for as many persons as there are directors to be elected
and for whose election he has a right to vote, or to cumulate his vote by giving
one candidate as many votes as the number of such directors multiplied by the
number of his shares shall equal, or by distributing such votes on the same
principle among any number of such candidates. This right of cumulative voting
shall not be exercised unless some shareholder or proxy holder announces in open
meeting, before the voting for the directors starts, his intention so to vote
cumulatively; and if such announcement is made, the chair shall declare that all
shares entitled to vote have the right to vote cumulatively and shall thereupon
grant a recess of not less than one nor more than four hours, as he shall
determine, or of such other period of time as is then unanimously agreed upon by
the shareholders entitled to vote who are present or represented at the meeting.
<PAGE> 5
Section 5. Removal. Any director may be removed at any time with or
without cause by a vote of shareholders holding a majority of the shares
entitled to vote at an election of directors. However, unless the entire Board
is removed, an individual director may not be removed if the number of shares
voting against the removal would be sufficient to elect a director if such
shares could be voted cumulatively at an annual election. If any directors are
so removed, new directors may be elected at the same meeting.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by a majority of the remaining directors, though less than a
quorum, or by the sole remaining director. A director elected to fill a vacancy
shall be elected for the unexpired term of his predecessor in office. Any
directorship to be filled by reason of an increase in the authorized number of
directors shall be filled only by election at an annual meeting or at a special
meeting of shareholders called for that purpose. The shareholders may elect a
director at any time to fill any vacancy not filled by the directors.
Section 7. Chairman of Board. There may be a Chairman of the Board of
Directors elected by the directors from their number at any meeting of the
Board. The Chairman shall preside at all meetings of the Board of Directors and
perform such other duties as may be directed by the Board.
Section 8. Compensation. The Board of Directors may compensate
directors for their services as such and may provide for the payment of any or
all expenses incurred by directors in attending regular and special meetings of
the Board.
ARTICLE IV.
MEETINGS OF DIRECTORS
Section 1. Regular Meetings. A regular meeting of the Board of
Directors shall be held immediately after, and at the same place as, the annual
meeting of shareholders. In addition, the Board of Directors may provide, by
resolution, the time and place, either within or without the State of North
Carolina, for the holding of additional regular meetings.
Section 2. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President or any three
directors. Such meetings may be held either within or without the State of North
Carolina as fixed by the person or persons calling any such meeting.
Section 3. Notice of Meetings. Regular meetings of the Board of
Directors may be held without notice.
<PAGE> 6
The person or persons calling a special meeting of the Board of
Directors shall, at least two days before the meeting, give notice thereof by
any usual means of communication. Such notice need not specify the purpose for
which the meeting is called.
Section 4. Waiver of Notice. Any director may waive notice of any
meeting. Attendance by a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 5. Quorum. A majority of the number of directors fixed by
these By-Laws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 6. Manner of Acting. Except as otherwise provided in these
By-Laws, the act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 7. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his contrary vote is recorded or his dissent is otherwise entered in the minutes
of the meeting or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 8. Informal Action by Directors. Action taken by a majority of
the directors without a meeting is nevertheless Board action if written consent
to the action is signed by all the directors and filed with the minutes of the
proceedings of the Board, whether done before or after the action so taken.
ARTICLE V.
EXECUTIVE COMMITTEE
Section 1. Creation. The Board of Directors, by resolution adopted by
a majority of the number of directors fixed by these By-Laws, may designate
three or more directors to constitute an Executive Committee, which Committee,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the management of the corporation,
except that the Executive Committee shall not have any authority to alter or
amend the By-Laws.
<PAGE> 7
Section 2. Vacancy. Any vacancy occurring in an Executive
Committee shall be filled by a majority of the number of directors fixed by
these By-Laws at a regular or special meeting of the Board of Directors.
Section 3. Removal. Any member of an Executive Committee may be
removed at any time with or without cause by a majority of the number of
directors fixed by these By-Laws.
Section 4. Minutes. The Executive Committee shall keep regular minutes
of its proceedings and report the same to the Board when required.
Section 5. Responsibility of Directors. The designation of an
Executive Committee and the delegation thereto of authority shall not operate to
relieve the Board of Directors, or any member thereof, of any responsibility or
liability imposed upon it or him by law.
If action taken by an Executive Committee is not thereafter formally
considered by the Board, a director may dissent from such action by filing his
written objection with the Secretary with reasonable promptness after learning
of such action.
ARTICLE VI.
OFFICERS
Section 1. Officers of the Corporation. The officers of the
corporation shall consist of a President, a Secretary, a Treasurer, and such
Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers
as the Board of Directors may from time to time elect. Any two or more offices
may be held by the same person, except the offices of President and Secretary,
but no officer may act in more than one capacity where action of two or more
officers is required.
Section 2. Election and Term. The officers of the corporation shall be
elected by the Board of Directors. Such election may be held at any regular or
special meeting of the Board. Each officer shall hold office until his death,
resignation, retirement, removal, disqualification, or his successor is elected
and qualified.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board whenever in its judgment the best
interests of the corporation will be served thereby; but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
<PAGE> 8
Section 4. Compensation. The compensation of all officers for serving
as officers of the corporation shall be fixed by the Board of Directors.
Section 5. Bonds. The Board of Directors may by resolution require any
officer, agent, or employee of the corporation to give bond to the corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of his respective office or position, and to comply with such other conditions
as may from time to time be required by the Board of Directors.
Section 6. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of shareholders. He
shall sign, with the Secretary, an Assistant Secretary, or with any other proper
officer authorized by the Board of Directors, certificates for shares of the
corporation and any deeds, mortgages, bonds, contracts, or other instruments
which may be lawfully executed on behalf of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be delegated by the Board of
Directors or these By-Laws to some other officer or agent of the corporation;
and, in general, he shall perform all duties incident to the office of President
and such other duties as may be prescribed by the Board of Directors from time
to time.
Section 7. Vice Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice Presidents in the
order of their length of service as Vice Presidents, unless otherwise determined
by the Board of Directors, shall perform the duties of the President, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the President. Any Vice President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the corporation; and shall
perform such other duties as from time to time may be assigned to him by the
President or Board of Directors.
Section 8. Secretary. The Secretary shall: (a) keep the minutes of the
meetings of shareholders, of the Board of Directors and of all Executive
Committees in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of
the corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, or a Vice President, certificates for shares of the
corporation, the issuance of
<PAGE> 9
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the corporation; (g) keep or
cause to be kept in the State of North Carolina at the corporations's registered
office or principal place of business a record of the corporation's
shareholders, giving the names and addresses of all shareholders and the number
and class of shares held by each, and prepare or cause to be prepared voting
lists prior to each meeting of shareholders as required by law; and (h) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors.
Section 9. Assistant Secretaries. In the absence of the Secretary or
in the event of his death, inability or refusal to act, the Assistant
Secretaries in the order of their length of service as Assistant Secretary,
unless otherwise determined by the Board of Directors, shall perform the duties
of the Secretary, and when so acting shall have all the powers of and be subject
to all the restrictions upon the Secretary. They shall perform such other duties
as may be assigned to them by the Secretary, by the President, or by the Board
of Directors. Any Assistant Secretary may sign, with the President or a Vice
President, certificates for shares of the corporation.
Section 10. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation in
such depositories as shall be selected in accordance with the provisions of
Section 4 of ARTICLE VII of these By-Laws; (b) prepare, or cause to be prepared,
a true statement of the corporation's assets and liabilities as of the close of
each fiscal year, all in reasonable detail, which statement shall be made and
filed at the corporation's registered office or principal place of business in
the State of North Carolina within four months after the end of such fiscal year
and thereat kept available for a period of at least ten years; and (c) in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors, or by these By-Laws.
Section 11. Assistant Treasurers. In the absence of the Treasurer or
in the event of his death, inability or refusal to act, the Assistant Treasurers
in the order of their length of service as Assistant Treasurer, unless otherwise
determined by the Board of Directors, shall perform the duties of the Treasurer,
and when so acting shall have all the powers of and be subject to all the
restrictions upon the Treasurer. They shall perform such other duties as may be
assigned to them by the Treasurer, by the President, or by the Board of
Directors.
<PAGE> 10
ARTICLE VII.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instruments in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. Checks and Drafts. All checks, drafts or other orders for
the payment of money issued in the name of the corporation shall be signed by
such officer or officers, agent or agents of the corporation and in such manner
as shall from time to time be determined by resolution of the Board of
Directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such depositories as the Board of Directors shall direct.
ARTICLE VIII.
CERTIFICATES FOR SHARES AND TRANSFER OF SHARES
Section 1. Certificates for Shares. Certificates representing shares
of the corporation shall be issued, in such form as the Board of Directors shall
determine, to every shareholder for the fully paid shares owned by him.
Certificates shall be signed by the President or a Vice President and the
Secretary, an Assistant Secretary, Treasurer or an Assistant Treasurer. All
certificates shall be consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented thereby are issued,
with the number and class of shares and date of issue, shall be entered on the
stock transfer books of the corporation.
Section 2. Transfer of Shares. Transfer of shares shall be made only
on the stock transfer books of the corporation only upon surrender of the
certificates for the shares sought to be transferred by the record holder
thereof or by his duly authorized agent, transferee or legal representative. All
certificates surrendered for transfer shall be cancelled before new certificates
for the transferred shares shall be issued.
<PAGE> 11
Section 3. Lost Certificates. The Board of Directors may authorize the
issuance of a new share certificate in place of a certificate claimed to have
been lost or destroyed, upon receipt of an affidavit of such fact from the
person claiming the loss or destruction. When authorizing such issuance of a new
certificate, the Board may require the claimant to give the corporation a bond
in such sum as it may direct to indemnify the corporation against loss from any
claim that may be made with respect to the certificate claimed to have been lost
or destroyed; or the Board may, by resolution, reciting that the circumstances
justify such action, authorize the issuance of the new certificate without
requiring such a bond.
Section 4. Closing Transfer Books and Fixing Record Date. The purpose
of determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any case, fifty days.
If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as the record date for any such determination of
shareholders, such record date in any case to be not more than fifty days and,
in case of a meeting of shareholders, not less than ten days immediately
preceding the date on which the particular action, requiring such determination
of shareholders, is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof except where the determination has been
made through the closing of the stock transfer books and the stated period of
closing has expired.
<PAGE> 12
Section 5. Holder of Record. The corporation may treat as absolute
owner of shares the person in whose name the shares stand of record on its books
just as if that person had full competency, capacity and authority to exercise
all rights of ownership irrespective of any knowledge or notice to the contrary
or any description indicating a representative, pledge or other fiduciary
relation or any reference to any other instrument or to the rights of any other
person appearing upon its record or upon the share certificate except that any
person furnishing to the corporation proof of his appointment as a fiduciary
shall be treated as if he were a holder of record of its shares.
Section 6. Treasury Shares. Treasury shares of the corporation shall
consist of such shares as have been issued and thereafter acquired but not
cancelled by the corporation. Treasury shares shall not carry voting or dividend
rights.
ARTICLE IX.
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may from time to time
declare, and the corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares, pursuant to law and subject to the provisions
of its Charter.
Section 2. Seal. The corporate seal of the corporation shall consist
of two concentric circles between which is the name of the corporation and in
the center of which is inscribed SEAL; and such seal, as impressed on the margin
hereof, is hereby adopted as the corporate seal of the corporation.
Section 3. Waiver of Notice. Whenever any notice is required to be
given to any shareholder or director by law or by the Charter or By-Laws of the
corporation, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be equivalent to the giving of such notice.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
fixed by the Board of Directors.
Section 5. Amendments. Except as otherwise provided herein, these
By-Laws may be amended or repealed and new By-Laws may be adopted by the
affirmative vote of a majority of the Directors then holding office at any
regular or special meeting of the Board of Directors.
<PAGE> 13
The Board of Directors shall have no power to adopt a By-Law: (1)
requiring more than a majority of the voting shares for a quorum at a meeting of
shareholders or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; (2)
providing for the management of the corporation otherwise than by the Board of
Directors or its Executive Committee; (3) increasing or decreasing the number of
directors; (4) classifying and staggering the election of directors.
Any By-Law adopted or amended by the shareholders shall not be altered
or repealed by the Board of Directors or Executive Committee.
Adopted January 7, 1972
<PAGE> 1
EXHIBIT 3.11
<TABLE>
<CAPTION>
<S> <C>
OSCO204 (Rev. 81) PLEASE INDICATE (CHECK ONE) TYPE CORPORATION
ARTICLES OF INCORPORATION X DOMESTIC BUSINESS CORPORATION
(PREPARE IN TRIPLICATE) ---
DOMESTIC BUSINESS CORPORATION FEE
--- A CLOSE CORPORATION - COMPLETE BACK $75.00
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE -- CORPORATION BUREAU --- DOMESTIC PROFESSIONAL CORPORATION
308 NORTH OFFICE BUILDING, HARRISBURG, PA 17120 ENTER BOARD LICENSE NO.
- ------------------------------------------------------------------------------------------------------------------------------
010 NAME OF CORPORATION (MUST CONTAIN A CORPORATE INDICATOR UNLESS EXEMPT UNDER 15 P.S. 2908 8)
CableMasters Corp.
- ------------------------------------------------------------------------------------------------------------------------------
011 ADDRESS OF REGISTERED OFFICE IN PENNSYLVANIA (P.O. BOX NUMBER NOT ACCEPTABLE)
4018 Zuck Road
- ------------------------------------------------------------------------------------------------------------------------------
012 CITY 033 COUNTY 013 STATE 064 ZIP CODE
Erie Erie Pennsylvania 16506
- ------------------------------------------------------------------------------------------------------------------------------
050 EXPLAIN THE PURPOSE OR PURPOSES OF THE CORPORATION
The installation of cable television lines and transmission
facilities and the unlimited power to engage in and to do any lawful
act concerning any or all lawful business for which corporations may
be organized under the Business Corporation Law.
(ATTACH 8 1/4 x 11 SHEET IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
The Aggregate Number of Shares, Classes of Shares and Par Value of Shares Which the Corporation Shall have Authority to Issue:
040 Number and Class of Shares 041 Stated Par Value Per 042 Total Authorized Capital 031 Term of Existence
1,000 common stock Share If Any $1.00 $1,000 Perpetual
- ------------------------------------------------------------------------------------------------------------------------------
The Name and Address of Each Incorporator, and the Number and Class of Shares Subscribed to by each Incorporator
061,062
060 Name 063,064 Address (Street, City, State, Zip Code) Number & Class of Shares
- ------------------------------------------------------------------------------------------------------------------------------
Robert G. Dwyer 120 West 10th Street, Erie, Pa. 16501 100 shares common
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
(ATTACH 8 1/4 x 11 SHEET IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
IN TESTIMONY WHEREOF, THE INCORPORATOR(S) HAS (HAVE) SIGNED AND SEALED THE ARTICLES OF INCORPORATION
THIS 28th DAY OF September 1983
----- --------- --
/s/ ROBERT G. DWYER
------------------------ ---------------------------
Robert G. Dwyer
------------------------ ---------------------------
- ------------------------------------------------------------------------------------------------------------------------------
010 FILED 002 CODE 003 REV BOX SEQUENTIAL NO. 100 MICROFILM NUMBER
SEP 30 1983 A.b
--------------- 42995 8358 812
REVIEWED BY --------------------------------------------------------------------------------------
DA 004 SICC AMOUNT 001 CORPORATION NUMBER
---------------
DATE APPROVED
WILLIAM R. DAVIS SEP 30 1983 $75.00 783190
-----------------------------------------------------------------------------------------------------
DATE REJECTED CERTIFY TO INPUT BY LOG IN LOG IN (REFILE)
X REV.
--------------- ---
MAILED BY DATE X L A I ------------------------------------------------------------
Secretary of the Commonwealth --- VERIFIED BY LOG OUT LOG OUT (REFILE)
Department of State OTHER
Commonwealth of Pennsylvania ---
</TABLE>
<PAGE> 2
=================================
APPLICANT'S ACC'T NO. Filed this _______ day of _______
MAR 1 1985, 19
---------------------------------
DSCB: BCL-307 (Rev. 8-72) Commonwealth of Pennsylvania
85160615 Department of State
==================
FILING FEE: $48 (Line for numbering)
AB-2 /s/ WILLIAM R. DAVIS
Secretary of the Commonwealth
=================================
(Box for Certification)
STATEMENT OF COMMONWEALTH OF PENNSYLVANIA
CHANGE OF REGISTERED DEPARTMENT OF STATE
OFFICE--DOMESTIC CORPORATION BUREAU
BUSINESS CORPORATION
- --------------------------------------------------------------------------------
In compliance with the requirements of section 307 of the Business
Corporation Law, act of May 5, 1933 (P. L. 364)(15 P.S. Section 1307) the
undersigned corporation, desiring to effect a change in registered office, does
hereby certify that:
1. The name of the corporation is:
CABLEMASTERS CORP.
- --------------------------------------------------------------------------------
2. The address of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
4018 Zuck Road
- --------------------------------------------------------------------------------
(NUMBER) (STREET)
Erie Pennsylvania 16506
- --------------------------------------------------------------------------------
(CITY) (ZIP CODE)
- --------------------------------------------------------------------------------
3. The address to which the registered office in this Commonwealth is to be
changed is:
12109 West Lake Road
- --------------------------------------------------------------------------------
(NUMBER) (STREET)
East Springfield Pennsylvania 16411
- --------------------------------------------------------------------------------
(CITY) (ZIP CODE)
4. Such change was authorized by resolution duly adopted by at least a
majority of the members of the board of directors of the corporation.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this statement
to be signed by a duly authorized officer, and its corporate seal, duly
attested by another such officer, to be hereunto affixed, this 19th day of
December, 1984.
CABLEMASTERS CORP.
-------------------------------------
(NAME OF CORPORATION)
By /s/ [ILLEGIBLE]
-------------------------------------
(SIGNATURE)
President
-------------------------------------
(TITLE PRESIDENT, VICE PRESIDENT, ETC)
Attest:
/s/ [ILLEGIBLE]
- ------------------------------------------
(SIGNATURE)
Secretary
- ------------------------------------------
(TITLE SECRETARY, ASSISTANT SECRETARY, ETC)
[CORPORATE SEAL]
<PAGE> 1
EXHIBIT 3.12
BYLAWS
OF
CABLEMASTERS CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1.01. REGISTERED OFFICE ....................................................-1-
Section 1.02. OTHER OFFICES ........................................................-1-
Section 1.03. FISCAL YEAR ..........................................................-1-
Section 2.01. MANNER OF GIVING NOTICE ..............................................-1-
Section 2.02. NOTICE OF MEETINGS OF BOARD OF DIRECTORS .............................-1-
Section 2.03. NOTICE OF MEETINGS OF SHAREHOLDER ....................................-2-
Section 2.04. WAIVER OF NOTICE .....................................................-3-
Section 2.05. MODIFICATION OF PROPOSAL CONTAINED IN NOTICE .........................-3-
Section 2.06. EXCEPTION TO REQUIREMENT OF NOTICE ...................................-3-
Section 2.07. USE OF CONFERENCE TELEPHONE AND SIMILAR EQUIPMENT ....................-4-
Section 3.01. ......................................................................-4-
Section 3.02. PLACE OF MEETING .....................................................-4-
Section 3.03. MEETINGS .............................................................-4-
Section 3.04. QUORUM AND ADJOURNMENT ...............................................-5-
Section 3.05. ACTION BY SHAREHOLDERS ...............................................-6-
Section 3.06. ORGANIZATION .........................................................-7-
Section 3.07. VOTING RIGHTS OF SHAREHOLDERS ........................................-7-
Section 3.08. VOTING AND OTHER ACTION BY PROXY .....................................-7-
Section 3.09. NO VOTING BY THIS CORPORATION ........................................-8-
Section 3.10. DETERMINATION OF SHAREHOLDERS OF RECORD ..............................-8-
Section 3.11. VOTING LISTS .........................................................-9-
Section 3.12. JUDGES OF ELECTION ...................................................-9-
Section 3.13. CONSENT OF SHAREHOLDERS IN LIEU OF MEETING ..........................-10-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 4.01. POWERS; PERSONAL LIABILITY ..........................................-10-
Section 4.02. QUALIFICATION AND SELECTION OF DIRECTORS ............................-12-
Section 4.03. NUMBER AND TERM OF OFFICE ...........................................-13-
Section 4.04. VACANCIES ...........................................................-13-
Section 4.05. REMOVAL OF DIRECTORS ................................................-13-
Section 4.06. PLACE OF MEETINGS ...................................................-14-
Section 4.07. ORGANIZATION OF MEETINGS ............................................-14-
Section 4.08. REGULAR MEETINGS ....................................................-14-
Section 4.09. SPECIAL MEETINGS ....................................................-14-
Section 4.10. QUORUM OF AND ACTION BY DIRECTORS ...................................-14-
Section 4.11. EXECUTIVE AND OTHER COMMITTEES ......................................-15-
Section 4.12. COMPENSATION ........................................................-16-
Section 5.01. OFFICERS GENERALLY ..................................................-16-
Section 5.02. ELECTION AND TERM OF OFFICE .........................................-17-
Section 5.03. SUBORDINATE OFFICERS, COMMITTEES AND AGENTS .........................-17-
Section 5.04. REMOVAL OF OFFICERS AND AGENTS ......................................-17-
Section 5.05. VACANCIES ...........................................................-17-
Section 5.06. AUTHORITY ...........................................................-17-
Section 5.07. THE CHAIRMAN AND VICE CHAIRMAN OF THE BOARD .........................-17-
Section 5.08. THE PRESIDENT .......................................................-18-
Section 5.09. THE SECRETARY .......................................................-18-
Section 5.10. THE TREASURER .......................................................-18-
Section 5.11. SALARIES ............................................................-19-
Section 5.12. DISALLOWED COMPENSATION .............................................-19-
Section 6.01. SHARE CERTIFICATES ..................................................-19-
Section 6.02. ISSUANCE ............................................................-19-
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 6.03. TRANSFER ............................................................-20-
Section 6.04. RECORD HOLDER OF SHARES .............................................-20-
Section 6.05. LOST, DESTROYED OR MUTILATED CERTIFICATES ...........................-20-
Section 7.01. SCOPE OF INDEMNIFICATION ............................................-22-
Section 7.02. PROCEEDINGS INITIATED BY INDEMNIFIED REPRESENTATIVES ................-22-
Section 7.03. ADVANCING EXPENSES ..................................................-22-
Section 7.04. SECURING OF INDEMNIFICATION OBLIGATIONS .............................-22-
Section 7.05. PAYMENT OF INDEMNIFICATION ..........................................-23-
Section 7.06. ARBITRATION .........................................................-23-
Section 7.07. CONTRIBUTION ........................................................-24-
Section 7.08. MANDATORY INDEMNIFICATION OF DIRECTORS, OFFICERS, ETC. ..............-24-
Section 7.09. CONTRACT RIGHTS; AMENDMENT OR REPEAL ................................-24-
Section 7.10. SCOPE OF ARTICLE ....................................................-24-
Section 7.11. RELIANCE OF PROVISIONS ..............................................-24-
Section 7.12. INTERPRETATION ......................................................-25-
Section 8.01. SEAL ................................................................-25-
Section 8.02. CHECKS ..............................................................-25-
Section 8.03. CONTRACTS ...........................................................-25-
Section 8.04. INTERESTED DIRECTORS OR OFFICERS; QUORUM ............................-25-
Section 8.05. DEPOSITS ............................................................-26-
Section 8.06. CORPORATE RECORDS ...................................................-26-
Section 8.07. FINANCIAL REPORTS ...................................................-27-
Section 8.08. AMENDMENT OF BYLAWS .................................................-27-
</TABLE>
<PAGE> 5
ARTICLE I
OFFICES AND FISCAL YEAR
Section 1.01. REGISTERED OFFICE. The registered office of the
corporation in the Commonwealth of Pennsylvania shall be at 12109 West Lake
Road, East Springfield PA 16411, unless otherwise established by an amendment of
the articles of incorporation or by the board of directors and a record of such
change is filed with The Department of State as provided by law.
Section 1.02. OTHER OFFICES. The corporation may also have
offices at such other places, both within and without the Commonwealth of
Pennsylvania, as the board of directors may from time to time designate or as
the business of the corporation may require.
Section 1.03 FISCAL YEAR. The fiscal year of the corporation
shall end on the 31st of December in each year.
ARTICLE II
NOTICE, WAIVERS AND MEETINGS GENERALLY
Section 2.01. MANNER OF GIVING NOTICE. Whenever written notice
is required to be given to any person under the provisions of the Business
Corporation Law, articles of incorporation, or these bylaws, it may be given to
the person either personally or by sending a copy thereof by first class or
overnight mail, postage prepaid, or by telegram (with messenger service
specified), telex or TWX (with answerback received) or courier service, charges
prepaid, or by telecopier, to the address (or to the telex, TWX, telecopier or
telephone number) of the person appearing on the books of the corporation for
the purpose of notice. If the notice is sent by mail, telegraph or courier
service, it shall be deemed to have been given to the person entitled thereto
when deposited in the United States mail or with a telegraph office or courier
service for delivery to that person or, in the case of telex or TWX, when
dispatched or, in the case of telecopier, when received. A notice of meeting
shall specify the place, day and hour of the meeting and any other information
required by any other provision of the Business Corporation Law, the articles of
incorporation or these bylaws.
Section 2.02. NOTICE OF MEETING OF BOARD OF DIRECTORS. Notice
of regular meetings of the board of directors
-1-
<PAGE> 6
need not be given. Notice of every special meeting of the board of directors
shall be given to each director by telephone or in writing at least 24 hours (in
the case of notice by telephone, telex, TWX or telecopier) or 48 hours (in the
case of notice by telegraph, courier service or overnight mail) or five days (in
the case of notice by first class mail) before the time at which the meeting is
to be held. Every such notice shall state the time and place of the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the board of directors need be specified in a notice of a
meeting.
Section 2.03. NOTICE OF MEETINGS OF SHAREHOLDERS.
(a) General rule. Written notice of every meeting of the
shareholders shall be given by, or at the direction of, the secretary or other
authorized person to each shareholder of record entitled to vote at the meeting
at least:
(1) ten days prior to the day named for a meeting
called to consider a fundamental change under 15 Pa.C.S. Chapter 19
regarding amendments of articles of incorporation, mergers,
consolidations, share exchanges, sale of assets, divisions,
conversions, liquidations and dissolution; or
(2) five days prior to the day named for the meeting
in any other case.
If the secretary or other authorized person neglects or refuses to give notice
of a meeting, the person or persons calling the meeting may do so. In the case
of a special meeting of shareholders, the notice shall specify the general
nature or the business to be transacted.
(b) Notice of action by shareholders on bylaws. In the case of
a meeting of shareholders that has as its purpose or one of its purposes, action
on the bylaws, written notice shall be given to each shareholder that the
purpose, or one of the purposes, of the meeting is to consider the adoption,
amendment, or repeal of the bylaws. There shall be included in, or enclosed
with, the notice a copy of the proposed amendment or a summary of the changes to
be effected thereby.
(c) Adjourned shareholder meetings. When a meeting of
shareholders is adjourned, it shall not be necessary to give any notice of the
adjourned meeting or of the business to be transacted at an adjourned meeting,
other than by announcement at the meeting at which the adjournment is taken,
unless the board of directors fixes a new record date for the adjourned meeting.
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Section 2.04. WAIVER OF NOTICE.
(a) Written waiver. Whenever any written notice is required to
be given under the provisions of the Business Corporation Law, the articles of
incorporation or these bylaws, a waiver thereof in writing, signed by the person
or persons entitled to the notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of the notice. Except as
otherwise required by this subsection, neither the business to be transacted at,
nor the purpose of, a meeting need be specified in the waiver of notice of the
meeting. In the case of a special meeting of shareholders, the waiver of notice
shall specify the general nature of the business to be transacted.
(b) Waiver by attendance. Attendance of a person at any
meeting shall constitute a waiver of notice of the meeting except where a person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting was not lawfully
called or convened.
Section 2.05. MODIFICATION OF PROPOSAL CONTAINED IN NOTICE.
Whenever the language of a proposed resolution is included in a written notice
of a meeting required to be given under the provisions of the Business
Corporation Law, the articles of incorporation or these bylaws, the meeting
considering the resolution may without further notice adopt it with such
clarifying or other amendments as do not enlarge its original purpose.
Section 2.06. EXCEPTION TO REQUIREMENT OF NOTICE.
(a) General rule. Whenever any notice or communication is
required to be given to any person under the provisions of the Business
Corporation Law, the articles of incorporation, or these bylaws or by the terms
of any agreement or other instrument or as a condition precedent to taking any
corporate action, and communication with that person is then unlawful, the
giving of the notice or communication to that person shall not be required and
there shall be no duty to apply for a license or other permission to do so.
(b) Shareholders without forwarding addresses. Notice or other
communications shall not be required to be sent to any shareholder with whom the
corporation has been unable to communicate for more than 24 consecutive months
because communications to the shareholder are returned unclaimed or the
shareholder has otherwise failed to provide the corporation with a current
address. Whenever the shareholder provides the corporation with a current
address, the corporation shall
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commence sending notices and other communications to the shareholder in the same
manner as to other shareholders.
Section 2.07. USE OF CONFERENCE TELEPHONE AND SIMILAR
EQUIPMENT. One or more persons may participate in a meeting of the board of
directors or of the shareholders of the corporation by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation a meeting
pursuant to this section shall constitute presence in person at the meeting.
ARTICLE III
SHAREHOLDERS
Section 3.01. THIS SECTION INTENTIONALLY LEFT BLANK.
Section 3.02. PLACE OF MEETING. Meetings of the shareholders
may be held either within or without the Commonwealth of Pennsylvania. All
meetings of the shareholders of the corporation shall be held at the registered
office of the corporation unless another place is designated by the board of
directors in the notice of a meeting.
Section 3.03. MEETINGS.
(a) ANNUAL MEETING. At least one meeting of the shareholders
shall be held in each calendar year for the purpose of electing a board of
directors and transacting such other business as may properly be brought before
the meeting. There may also be such other regularly scheduled meetings as the
board of directors may from time to time designate. Both the annual and other
regular meetings shall be held on such date and at such time as the board of
directors shall designate. If the annual or other regular meeting is not called
and held within six months after the designated time, any shareholder may call
the meeting at any time thereafter.
(b) SPECIAL MEETINGS.
(1) Call of special meetings. Special meetings of the
shareholders may be called at any time:
(i) by the board of directors; or
(ii) unless otherwise provided in the
articles of incorporation, by shareholders entitles cast at
least 20% of the votes that all shareholders are entitled to
cast at the particular meeting.
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(2) Fixing of time for meeting. At any time, upon
written request of any person who has called a special meeting, it
shall be the duty of the secretary to fix the time of the meeting which
shall be held not more than 60 days after the receipt of the request.
If the secretary neglects or refuses to fix the time of the meeting,
the person or persons calling the meeting may do so.
Section 3.04. QUORUM AND ADJOURNMENT.
(a) General rule. A meeting of shareholders of the corporation
duly called shall not be organized for the transaction of business unless a
quorum is present. The presence of shareholders entitled to cast at least a
majority of the votes that all shareholders are entitled to cast on a particular
matter to be acted upon at the meeting shall constitute a quorum for the
purposes of consideration and action on the matter. Shares of the corporation
owned, directly or indirectly, by it and controlled, directly or indirectly, by
the board of directors of this corporation, as such, shall not be counted in
determining the total number of outstanding shares for quorum purposes at any
given time.
(b) Withdrawal of a quorum. The shareholders present at a duly
organized meeting can continue to do business until adjournment notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
(c) Adjournment for lack of quorum. If a meeting cannot be
organized because a quorum has not attended, those present may, except as
provided in the Business Corporation Law, adjourn the meeting to such time and
place as they may determine.
(d) Adjournments generally. Any meeting at which directors are
to be elected shall be adjourned only from day to day, or for such longer
periods not exceeding 15 days each as the shareholders present and entitled to
vote shall direct, until the directors have been elected. Any other regular or
special meeting may be adjourned for such period as the shareholders present and
entitled to vote shall direct.
(e) Electing directors at adjourned meeting. Those
shareholders entitled to vote who attend a meeting called for the election of
directors that has been previously adjourned for lack of a quorum, although less
than a quorum as fixed in this section or in these bylaws, shall nevertheless
constitute a quorum for the purpose of electing directors.
(f) Other action in absence of quorum. Those shareholders
entitled to vote who attend a meeting of shareholders that has been previously
adjourned for one or more periods aggregating at least 15 days because of an
absence of a
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quorum, although less than a quorum as fixed in this section or in these bylaws,
shall nevertheless constitute a quorum for the purpose of acting upon any matter
set forth in the notice of the meeting if the notice states that those
shareholders who attend the adjourned meeting shall nevertheless constitute a
quorum for the purpose of acting upon the matter.
Section 3.05. ACTION BY SHAREHOLDERS.
(a) General rule. Except as otherwise provided in the Business
Corporation Law, the articles of incorporation or these bylaws, whenever any
corporate action is to be taken by vote of the shareholders of the corporation,
it shall be authorized by a majority of the votes cast at a duly organized
meeting of shareholders by the holders of shares entitled to vote thereon.
(b) Interested shareholders. Any transaction authorized under
15 Pa.C.S. Section 1921 et. seq. (relating to merger, consolidation, share
exchanges, and sale of assets) between the corporation or a subsidiary thereof
and a shareholder of this corporation, or any transaction authorized under 15
Pa.C.S. Section 1971 et. seq. (relating to voluntary dissolution and winding
up) in which a shareholder is treated differently from other shareholders of the
same class (other than any dissenting shareholders under 15 Pa. C.S. Section
1571 et. seq.), shall require the affirmative vote of the shareholders entitled
to cast at least a majority of the votes that all shareholders other than the
interested shareholder are entitled to cast with respect to the transaction,
without counting the vote of the interested shareholder. For the purposes of the
preceding sentence, an interested shareholder shall include the shareholder who
is a party to the transaction or who is treated differently from other
shareholders.
(c) Exceptions. Subsection (b) shall not apply to a
transaction:
(1) that has been approved by a majority vote of the
board of directors without counting the vote of directors who:
(i) are directors or officers of, or have a
material equity interest in, the interested shareholder; or
(ii) were nominated for election as a
director by the interested shareholder, and first elected as a
director, within 24 months of the date of the vote on the
proposed transaction; or
(2) in which the consideration to be received by the
shareholders for shares of any class of which shares are
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owned by the interested shareholder is not less than the highest
amount paid by the interested shareholder in acquiring shares of the
same class.
(d) Additional approvals. The approvals required by this
section 3.05 shall be in addition to, and not in lieu of, any other approval
required by the Business Corporation Law, the articles of incorporation, or
these bylaws, or otherwise.
Section 3.06. ORGANIZATION. At every meeting of the
shareholders, the chairman of the board, if there be one, or, in the case of
vacancy in office or absence of the chairman of the board, one of the following
officers present in the order stated the vice chairman of the board, if there be
one, the president, the vice presidents in their order of rank and seniority, or
a person chosen by vote of the shareholders present, shall act as chairman of
the meeting. The secretary or, in the absence of the secretary, an assistant
secretary, or in the absence of both the secretary and assistant secretary, a
person appointed by the chairman of the meeting, shall act as secretary.
Section 3.07. VOTING RIGHTS OF SHAREHOLDERS.
(a) General rule. Unless otherwise provided in the articles,
every shareholder of the corporation shall be entitled to one vote for every
share standing in the name of the shareholder on the books of the corporation.
(b) Cumulative voting. In each election of directors the
shareholders are not entitled to cumulative voting.
Section 3.08. VOTING AND OTHER ACTION BY PROXY.
(a) General rule.
(1) Every shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person to act for him
by proxy.
(2) The presence of, vote by, or other action at a
meeting of shareholders by, or the expression of consent or dissent to
corporate action in writing by, a proxy of a shareholder, shall
constitute the presence of, vote by, or action by, or written consent
or dissent of the shareholder.
(b) Minimum requirements. Every proxy shall be executed in
writing by the shareholder or by the duly authorized attorney-in-fact of the
shareholder and filed with the secretary of the corporation. A proxy shall be
revocable at will, notwithstanding any other agreement or any provision in the
proxy to the contrary, but the revocation of a proxy shall not be
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effective until written notice thereof has been given to the secretary of the
corporation. An unrevoked proxy shall not be valid after three years from the
date of its execution unless a longer time is expressly provided therein. A
proxy shall not be revoked by the death or incapacity of the maker unless,
before the vote is counted or the authority is exercised, written notice of the
death or incapacity is given to the secretary of the corporation.
Section 3.09. NO VOTING BY THIS CORPORATION. Shares of this
corporation owned, directly or indirectly, by it and controlled, directly or
indirectly, by the board of directors of this corporation, as such, shall not be
voted at any meeting and shall not be counted in determining the total number of
outstanding shares for voting purposes at any given time.
Section 3.10. DETERMINATION OF SHAREHOLDERS OF RECORD.
(a) Fixing record date. The board of directors may
fix a time prior to the date of any meeting of shareholders as a
record date for the determination of the shareholders entitled to
notice of, or to vote at, the meeting, which time, except in the case
of an adjourned meeting, shall be not more than 90 days prior to the
date of the meeting of shareholders. Only shareholders of record on the
date fixed shall be so entitled notwithstanding any transfer of shares
on the books of the corporation after any record date fixed as provided
in this subsection. The board of directors may similarly fix a record
date for the determination of shareholders of record for any other
purpose. When a determination of shareholders of record has been made
as provided in this section for purposes of a meeting, the
determination shall apply to any adjournment thereof unless the board
fixes a new record date for the adjourned meeting.
(b) Determination when a record date is not fixed. If
a record date is not fixed:
(1) The record date for determining
shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the date
next preceding the day on which notice is given or, if notice
is waived, at the close of business on the day immediately
preceding the day on which the meeting is held.
(2) The record date for determining
shareholders entitled to express consent or dissent to
corporate action in writing without a meeting, when prior
action by the board of directors is not necessary shall be the
close of business on the day on which the first written
consent or dissent is filed with the secretary of the
corporation.
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(3) The record date for determining
shareholders for any other purpose shall be at the close of
business on the day on which the board of directors adopts the
resolution relating thereto.
Section 3.11. VOTING LISTS.
(a) General rule. The officer or agent having charge of the
transfer books for shares of the corporation shall make a complete list of the
shareholders entitled to vote at any meeting of shareholders, arranged in
alphabetical order, with the address of and the number of shares held by each.
The list shall be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during the whole time
of the meeting for the purposes thereof.
(b) Effect of list. Failure to comply with the requirements of
this section shall not affect the validity of any action taken at a meeting
prior to a demand at the meeting by any shareholder entitled to vote thereat to
examine the list. The original share register or transfer book, or a duplicate
thereof kept in this Commonwealth, shall be prima facie evidence as to who are
the shareholders entitled to examine the list or share register or transfer book
or to vote at any meeting of shareholders.
Section 3.12. JUDGES OF ELECTION.
(a) Appointment. In advance of any meeting of shareholders of
the corporation, the board of directors may appoint judges of election, who need
not be shareholders, to act at the meeting or any adjournment thereof. If judges
of election are not so appointed, the presiding officer of the meeting may, and
on the request of any shareholder shall, appoint judges of election at the
meeting. The number of judges shall be one or three. A person who is a candidate
for office to be filled at the meeting shall not act as a judge.
(b) Vancancies. In case any person appointed as a judge fails
to appear or fails or refuses to act, the vacancy be filled by appointment made
by the board of directors in advance of the convening of the meeting or at the
meeting by the presiding officer thereof.
(c) Duties. The judges of election shall (1) determine the
number of shares outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, (2) receive votes or ballots, (3) hear and
determine all challenges and questions in any way arising in connection with the
right to vote, (4) count and tabulate all votes, (5) determine the results and
(6) do such acts as may be proper to conduct the election
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vote with fairness to all shareholders. The judges of election shall perform
their duties impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three judges of election, the
decision, act or certificate of a majority shall be effective in all respects as
the decision, act or certificate of all.
(d) Report. On request of the presiding officer of the
meeting, or of any shareholder, the judges of election shall make a report in
writing of any challenge or question or matter determined by them, and execute a
certificate of any fact found by them. Any report or certificate made by them
shall be prima facie evidence of the facts stated therein.
Section 3.13. CONSENT OF SHAREHOLDERS IN LIEU OF MEETING.
(a) Unanimous written consent. Any action required or
permitted to be taken at a meeting of the shareholders or of a class of
shareholders may be taken without a meeting if, prior or subsequent to the
action, a consent or consents thereto by all of the shareholders who would be
entitled to vote at a meeting for such purpose shall be filed with the secretary
of the corporation.
(b) Partial written consent. Any action required or permitted
to be taken at a meeting of the shareholders or of a class of shareholders may
be taken without a meeting upon the written consent of shareholders who would
have been entitled to cast the minimum number of votes that would be necessary
to authorize the action at a meeting at which all shareholders entitled to vote
thereon were present and voting. The consents shall be filed with the secretary
of the corporation. The action shall not become effective until after at least
ten days written notice of the action has been given to each shareholder
entitled to vote thereon who has not consented thereto.
ARTICLE IV
BOARD OF DIRECTORS
Section 4.01. POWERS; PERSONAL LIABILITY.
(a) General rule. Unless otherwise provided by statute all
powers vested by law in the corporation shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of, the board of directors.
(b) Standard of care; justifiable reliance. A director shall
stand in a fiduciary relation to the corporation and shall perform his or her
duties as a director, including
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duties as a member of any committee of the board upon which the director may
serve, in good faith, in a manner the director reasonably believes to be in the
best interests of the corporation and with such care, including reasonable
inquiry, skill and diligence, as a person of ordinary prudence would use under
similar circumstances. In performing his or her duties, a director shall be
entitled to rely in good faith on information, opinions, reports or statements,
including financial statements and other financial data, in each case prepared
or presented by any of the following:
(1) One or more officers or employees of the
corporation whom the director reasonably believes to be reliable and
competent in the matters presented.
(2) Counsel, public accountants or other persons as
to matters which the director reasonably believes to be within the
professional or expert competence of such person.
(3) A committee of the board upon which the director
does not serve, duly designated in accordance with law, as to matters
within its designated authority, which committee the director
reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if the director
has knowledge concerning the matter in question that would cause his or her
reliance to be unwarranted.
(c) Consideration of factors. In discharging the duties of
their respective positions, the board of directors, committees of the board and
individual directors may, in considering the best interests of the corporation,
consider the effects of any action upon employees, upon suppliers and customers
of the corporation and upon communities in which offices or other establishments
of the corporation are located, and all other pertinent factors. The
consideration of those factors shall not constitute a violation of subsection
(b).
(d) Presumption. Absent breach of fiduciary duty, lack of good
faith or self-dealing, actions taken as a director or any failure to take any
action shall be presumed to be in the best interests of the corporation.
(e) Personal liability of directors.
(1) A director shall not be personally liable, as
such, for monetary damages for any action taken, or any failure to take
any action, unless:
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(i) the director has breached or failed to
perform the duties of his or her office under this section;
and
(ii) the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness,
(2) The provisions of paragraph (1) shall not apply
to:
(i) the responsibility or liability of a
director pursuant to any criminal statute; or
(ii) the liability of a director for the
payment of taxes pursuant to local, State or Federal law.
(f) Notation of dissent. A director who is present at a
meeting of the board of directors, or of a committee of the board, at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless his or her dissent is entered in the minutes of the
meeting or unless the director files a written dissent to the action with the
secretary of the meeting before the adjournment thereof or transmits the dissent
in writing to the secretary of the corporation immediately after the adjournment
of the meeting. The right to dissent shall not apply to a director who voted in
favor of the action. Nothing in this section shall bar a director from asserting
that minutes of the meeting incorrectly omitted his or her dissent if, promptly
upon receipt of a copy of such minutes, the director notifies the secretary in
writing of the asserted omission or inaccuracy.
Section 4.02. QUALIFICATION AND SELECTION OF DIRECTORS.
(a) Qualifications. Each director of the corporation shall be
a natural person of full age and, unless otherwise required by law, need not be
a resident of the Commonwealth of Pennsylvania.
(b) Election of directors. Except as otherwise provided in
these bylaws, directors of the corporation shall be elected by the shareholders.
In elections for directors, voting need not be by ballot, except upon demand
made by a shareholder entitled to vote at the election and before the voting
begins. The candidates receiving the highest number of votes from each class or
group of classes, if any, entitled to elect directors separately up to the
number of directors to be elected by the class or group of classes shall be
elected. If at any meeting of shareholders, directors of more than one class are
to be elected, each class of directors shall be elected in a separate election.
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Section 4.03. NUMBER AND TERM OF OFFICE.
(a) Number. The board of directors shall consist of one or
more members. The number of directors shall be fixed from time to time by the
vote of a majority of the whole board of directors or of the shareholders.
(b) Term of office. Each director shall hold office for a term
of one year and until his or her successor has been selected and qualified or
until his or her earlier death, resignation or removal. A decrease in the number
of directors shall not have the effect of shortening the term of any incumbent
director.
(c) Resignation. Any director may resign at any time upon
written notice to the corporation. The resignation shall be effective upon
receipt thereof by the corporation or at such subsequent time as shall be
specified in the notice of resignation.
Section 4.04. VACANCIES.
(a) General rule. Vacancies in the board of directors,
including vacancies resulting from an increase in the number of directors, may
be filled by a majority vote of the remaining members of the board though less
than a quorum, or by a sole remaining director, and each person so selected
shall be a director to serve for the balance of the unexpired term, and until a
successor has been selected and qualified or until his or her earlier death;
resignation or removal.
(b) Action by resigned directors. When one or more directors
resign from the board effective at a future date, the directors then in office,
including those who have so resigned, shall have power by the applicable vote to
fill the vacancies, the vote thereon to take effect when the resignations become
effective.
Section 4.05. REMOVAL OF DIRECTORS.
(a) Removal by the shareholders. The entire board of
directors, or any class of the board, or any individual director may be removed
from office without assigning any cause by the vote of shareholders, or of the
holders of a class or series of shares, entitled to elect directors, or the
class of directors. In case the board or a class of the board or any one or more
directors are so removed, new directors may be elected at the same meeting. The
board of directors may be removed at any time with or without cause by the
unanimous vote or consent of shareholders entitled to vote thereon.
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(b) Removal by the board. The board of directors may declare
vacant the office of a director who has been judicially declared of unsound mind
or who has been convicted of an offense punishable by imprisonment for a term of
more than one year or if, within 60 days after notice of his or her selection,
the director does not accept the office either in writing or by attending a
meeting of the board of directors and fulfill such other requirements of
qualification as these bylaws may specify.
(c) Removal of directors elected by cumulative voting. If the
shareholders are entitled to vote cumulatively in electing a board or a class of
the board, an individual director shall not be removed (unless the entire board
or class of the board is removed) from the board if sufficient votes are cast
against the resolution for his or her removal which, if cumulatively voted at an
annual or other regular election of directors, would be sufficient to elect the
director to the board or to the class.
Section 4.06. PLACE OF MEETINGS. Meetings of the board of
directors may be held at such place within or without the Commonwealth of
Pennsylvania as the board of directors may from time to time appoint or as may
be designated in the notice of the meeting;
Section 4.07. ORGANIZATION OF MEETINGS. At every meeting of
the board of directors, the chairman of the board, if there be one, or, in the
case of a vacancy in the office or absence of the chairman of the board, one of
the following officers present in the order stated: the vice chairman of the
board, if there be one, the president, the vice presidents in their order of
rank and seniority, or a person chosen by a majority of the directors present,
shall act as chairman of the meeting. The secretary or, in the absence of the
secretary, the assistant secretaries in their order of rank and seniority, or,
in the absence of the secretary and the assistant secretaries, any person
appointed by the chairman of the meeting, shall act as secretary.
Section 4.08. REGULAR MEETINGS. Regular meetings the board of
directors shall be held at such time and place as shall be designated from time
to time by resolution of the board of directors.
Section 4.09. SPECIAL MEETINGS. Special meetings the board of
directors shall be held whenever called by the chairman or by two or more of the
directors.
Section 4.10. QUORUM OF AND ACTION BY DIRECTORS.
(a) General rule. A majority of the directors in office of
the corporation shall be necessary to constitute a quorum for the transaction of
business and the acts of a majority
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of the directors present and voting at a meeting at which a quorum is present
shall be the acts of the board of directors.
(b) Action by written consent. Any action required or
permitted to be taken at a meeting of the directors may be taken without a
meeting if, prior or subsequent to the action, a consent or consents thereto by
all of the directors in office is filed with the secretary of the corporation.
Section 4.11. EXECUTIVE AND OTHER COMMITTEES.
(a) Establishment and powers. The board of directors may, by
resolution adopted by a majority of the directors in office, establish one or
more committees to consist of one or more directors of the corporation. Any
committee, to the extent provided in the resolution of the board of directors,
shall have and may exercise all of the powers and authority of the board of
directors except that a committee shall not have any power or authority as to
the following:
(1) The submission to shareholders of any action
requiring approval of shareholders under the Business Corporation Law.
(2) The creation or filling of vacancies in the board
of directors.
(3) The adoption, amendment or repeal of these
bylaws.
(4) The amendment or repeal of any resolution of the
board that by its terms is amendable or repealable only by the board.
(5) Action on matters committed by a resolution of
the board of directors to another committee of the board.
(b) Alternate committee members. The board may designate one
or more directors as alternate members of any committee who may replace any
absent or disqualified member at any meeting of the committee or for the
purposes of any written action by the committee. In the absence or
disqualification of a member and alternate member or members of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
director to act at the meeting in the place of the absent or disqualified
member.
(c) Term. Each committee of the board shall serve at the
pleasure of the board.
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(d) Committee action. The term "board of directors" or
"board," when used in any provision of these bylaws relating to the organization
or procedures of or the manner of taking action by the board of directors, shall
be construed to include and refer to any executive or other committee of the
board. Any provision of these bylaws relating or referring to action to be taken
by the board of directors or the procedure required therefor shall be satisfied
by the taking of corresponding action by a committee of the board of directors
to the extent authority to take the action has been delegated to the committee
pursuant to these bylaws.
Section 4.12. Compensation. The board of directors shall have
the authority to fix the compensation of directors for their services as
directors and a director may be a salaried officer of the corporation.
ARTICLE V
OFFICERS
Section 5.01. OFFICERS GENERALLY.
(a) Number, qualification and designation. The officers of the
corporation shall be a president, a secretary, and a treasurer. The corporation
may also have such other officers and assistant officers as authorized by the
board of directors from time to time in accordance with the provisions of
Section 5.03. Officers may but need not be directors or shareholders of the
corporation. The president and secretary shall be natural persons of full age.
The treasurer may be a corporation, but if a natural person, shall be of full
age. The board of directors may elect from among the members of the board a
chairman of the board and a vice chairman of the board who shall be officers of
the corporation. Any number of offices may be held by the same person.
(b) Resignations. Any officer may resign at any time upon
written notice to the corporation. The resignation shall be effective upon
receipt thereof by the corporation or at such subsequent time as may be
specified in the notice of resignation.
(c) Bonding. The corporation may secure the fidelity of any or
all of its officers by bond or otherwise.
(d) Standard of care. Except as otherwise provided in the
articles, an officer shall perform his or her duties as an officer in good
faith, in a manner he or she reasonably believes to be in the best interests of
the corporation and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar
circumstances. A person who so performs his or her duties shall
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not be liable by reason of having been an officer of the corporation.
Section 5.02. ELECTION AND TERM OF OFFICE. The officers of the
corporation, except those elected by delegated authority pursuant to Section
5.03, shall be elected annually by the board of directors, and each such officer
shall hold office for a term of one year and until his or her successor has been
selected and qualified or until his or her earlier death, resignation or
removal.
Section 5.03. SUBORDINATE OFFICERS, COMMITTEES AND AGENTS. The
board of directors may from time to time elect such other officers and appoint
such committees, employees or other agents as the business of the corporation
may require, including one or more assistant secretaries, and one or more
assistant treasurers, each of whom shall hold office for such period, have such
authority, and perform such duties as are provided in these bylaws or as the
board of directors may from time to time determine. The board of directors may
delegate to any officer or committee the power to elect subordinate officers and
to retain or appoint employees or other agents, or committees thereof and to
prescribe the authority and duties of such subordinate officers, committees,
employees or other agents.
Section 5.04. REMOVAL OF OFFICERS AND AGENTS. Any officer or
agent of the corporation may be removed by the board of directors with or
without cause. The removal shall be without prejudice to the contract rights,
if any, of any person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
Section 5.05. VACANCIES. A vacancy in any office because of
death, resignation, removal, disqualification, or any other cause, shall be
filled by the board of directors or by the officer or committee to which the
power to fill such office has been delegated pursuant to Section 5.03, as the
case may be, and if the office is one for which these bylaws prescribe a term,
shall be filled for the unexpired portion of the term.
Section 5.06. AUTHORITY. All officers of the corporation, as
between themselves and the corporation, shall have such authority and perform
such duties in the management of the corporation as may be provided by or
pursuant to resolution or orders of the board of directors or in the absence of
controlling provisions in the resolutions or orders of the board of directors,
as may be determined by or pursuant to these bylaws.
Section 5.07. THE CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The
chairman of the board or in the absence of the chairman, the vice chairman of
the board, shall preside at all
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meetings of the board of directors and of the shareholders and shall perform
such other duties as from time to time may be requested by the board of
directors. If no chairman is elected by the board, the president shall act as
chairman.
Section 5.08. THE PRESIDENT. The president shall be the chief
executive officer of the corporation and shall have general supervision over
the business and operations of the corporation, subject however, to the control
of the board of directors. The president shall sign, execute, and acknowledge,
in the name of the corporation, deeds, mortgages, contracts or other
instruments authorized by the board of directors, except in cases where the
signing and execution thereof shall be expressly delegated by the board of
directors, by statute or by these bylaws, to some other officer or agent of the
corporation. In general, the president shall perform all duties incident to the
office of president and such other duties as from time to time may be assigned
by the board of directors.
Section 5.09. THE SECRETARY. The secretary or an assistant
secretary shall attend all meetings of the shareholders and of the board of
directors and shall record all votes of the shareholders and of the directors
and the minutes of the meetings of the shareholders and of the board of
directors and of committees of the board in a book or books to be kept for that
purpose. The secretary shall see that notices are given and records and reports
properly kept and filed by the corporation as required by law and shall be the
custodian of the seal of the corporation and see that it is affixed to all
documents to be executed on behalf of the corporation under its seal. In
general, the secretary shall perform all duties incident to the office of
secretary, and such other duties as may from time to time be assigned by the
board of directors or the president.
Section 5.10. THE TREASURER. The treasurer or an assistant
treasurer shall have or provide for the custody of the funds or other property
of the corporation and shall collect and receive or provide for the collection
and receipt of moneys earned by or in any manner due to or received by the
corporation. The treasurer shall deposit all funds in his or her custody as
treasurer in such banks or other places of deposit as the board of directors
may from time to time designate and shall, whenever so required by the board of
directors, render an account showing all transactions as treasurer and the
financial condition of the corporation. In general, the treasurer shall perform
all duties incident to the office of treasurer, and such other duties as may
from time to time be assigned by the board of directors or the president.
Section 5.11. SALARIES. The salaries of the officers elected
by the board of directors shall be fixed from time to time by the board of
directors or by such officer as may be
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designated by resolution of the board. The salaries or other compensation of any
other officers, employees and other agents shall be fixed from time to time by
the officer or committee to which the power to elect such officers or to retain
or appoint such employees or other agents has been delegated pursuant to Section
5.03. No officer shall be prevented from receiving such salary or other
compensation by reason of the fact that the officer is also a director of the
corporation.
Section 5.12. DISALLOWED COMPENSATION. Any payments made to an
officer or employee of the corporation such as a salary, commission, bonus,
interest, rent, travel or entertainment expense incurred by him or her, which
shall be disallowed in whole or in part as a deductible expense by the Internal
Revenue Service, shall be reimbursed by such officer or employee to the
corporation to the full extent of such disallowance. It shall be the duty of the
directors, as a board, to enforce payment of each such amount disallowed. In
lieu of payment by the officer or employee, subject to the determination of the
directors, proportionate amounts may be withheld from future compensation
payments until the amount owed to the corporation has been recovered.
ARTICLE VI
CERTIFICATES OF STOCK, TRANSFER, ETC.
Section 6.01. SHARE CERTIFICATES. Certificates for shares of
the corporation shall be in such form as approved by the board of directors, and
shall state that the corporation is incorporated under the laws of the
Commonwealth of Pennsylvania the name of the person to whom issued, and the
number and class of shares and the designation of the series (if any) that the
certificate represents. The share register or transfer books and blank share
certificates shall be kept by the secretary or by any transfer agent or
registrar designated by the board of directors for that purpose.
Section 6.02. ISSUANCE. The share certificates of the
corporation shall be numbered and registered in the share register or transfer
books or the corporation as they are issued. They shall be signed by the
president or a vice president and by the secretary or an assistant secretary,
and shall bear the corporate seal, which may be a facsimile, engraved or
printed. Where such certificate is signed by a transfer agent or a registrar
the signature of any corporate officer upon such certificate may be a
facsimile, engraved or printed. In case any officer who has signed, or whose
facsimile signature has been placed upon, any share certificate shall have
ceased to be such officer because of death, resignation or otherwise, before
the certificate is issued, it may be issued with the same effect as if the
officer had not ceased to be such at the date of its
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issue. The provisions of this Section 6.02 shall be subject to any inconsistent
or contrary agreement at the time between the corporation and any transfer agent
or registrar.
Section 6.03. TRANSFER. Transfers of shares shall be made on
the share register or transfer books of the corporation upon surrender of the
certificate therefor, endorsed by the person named in the certificate or by an
attorney lawfully constituted in writing. No transfer shall be made inconsistent
with the provisions of the Pennsylvania Business Corporation Law of 1988, 15
Pa.C.S.A. sections 2901 et seq., or the Uniform Commercial Code, 13 Pa.C.S.
8101. et seq., and its amendments and supplements, or any other Law.
Section 6.04. RECORD HOLDER OF SHARES. The corporation shall
be entitled to treat the person in whose name any share or shares of the
corporation stand on the books of the corporation as the absolute owner thereof,
and shall not be bound to recognize any equitable or other claim to, or interest
in, such share or shares on the part of any other person.
Section 6.05. LOST, DESTROYED OR MUTILATED CERTIFICATES. The
holder of any shares of the corporation shall immediately notify the corporation
of any loss, destruction or mutilation of the certificate therefor, and the
board of directors may, in its discretion, cause a new certificate or
certificates to be issued to such holder, in case of mutilation of the
certificate, upon the surrender of the mutilated certificate or, in case of loss
or destruction of the certificate, upon satisfactory proof of such loss or
destruction and, if the board of directors shall so determine, the deposit of a
bond in such form and in such sum, and with such surety or sureties, as it may
direct.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND
OTHER AUTHORIZED REPRESENTATIVES
Section 7.01. SCOPE OF INDEMNIFICATION.
(a) General Rule. The corporation shall indemnify an
indemnified representative against any liability incurred in connection with any
proceeding in which the indemnified representative may be involved as a party or
otherwise by reason of the fact that such person is or was serving in an
indemnified capacity, including, without limitation, liabilities resulting from
any actual or alleged breach or neglect of duty, error, misstatement or
misleading statement, negligence, gross negligence or act giving rise to strict
or products liability, except:
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(1) where such indemnification is expressly
prohibited by applicable law;
(2) where the conduct of the indemnified
representative has been finally determined pursuant to Section 7.06 or
otherwise:
(i) to constitute willful misconduct or
recklessness within the meaning of 15 Pa. C.S. 513(b) and
1746(b) and 42 Pa.C.S. 8365(b) or any superseding provision
of law sufficient in the circumstances to bar indemnification
against liabilities arising from the conduct; or
(ii) to be based upon or attributable to the
receipt by the indemnified representative from the corporation
of a personal benefit to which the indemnified representative
is not legally entitled; or
(3) to the extent such indemnification has been
finally determined in a final adjudication pursuant to Section 7.06 to
be otherwise unlawful.
(b) Partial payment. If an indemnified representative is
entitled to indemnification in respect of a portion, but not all, of any
liabilities to which such person may be subject, the corporation shall indemnify
such indemnified representative to the maximum extent for such portion of the
liabilities.
(c) Presumption. The termination of a proceeding by
judgment, order, settlement or conviction or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that the indemnified
representative is not entitled to indemnification.
(d) Definitions. For purposes of this Article:
(1) "indemnified capacity" means any and all past,
present and future service by an indemnified representative in one or
more capacities as a director, officer, employee or agent of the
corporation, or, at the request of the corporation, as a director,
officer, employee, agent, fiduciary or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other
entity or enterprise;
(2) "indemnified representative" means any and all
directors and officers of the corporation and any other person
designated as an indemnified representative by the board of directors
of the corporation (which may, but may not, include any person serving
at the request of the corporation, as a director, officer, employee,
agent,
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fiduciary or trustee of any other corporation, partnership, joint
venture, trust, employee benefit plan or other entity or enterprise);
(3) "liability" means any damage, judgment, amount
paid in settlement, fine, penalty, punitive damages, excise tax
assessed with respect to an employee benefit plan, or cost or expense,
of any nature (including, without limitation, attorneys' fees and
disbursements); and
(4) "proceeding" means any threatened, pending or
completed action, suit, appeal or other proceeding of any nature,
whether civil, criminal, administrative or investigative, whether
formal or informal, and whether brought by or in the right of the
corporation, a class of its security holders or otherwise.
Section 7.02. PROCEEDINGS INITIATED BY INDEMNIFIED
REPRESENTATIVES. Notwithstanding any other provision of this Article, the
corporation shall not indemnify under this Article an indemnified representative
for any liability incurred in a proceeding initiated (which shall not be deemed
to include counter-claims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification unless such
initiation of or participation in the proceeding is authorized, either before or
after its commencement, by the affirmative vote of a majority of the directors
in office. This section does not apply to a reimbursement of expenses incurred
in successfully prosecuting or defending an arbitration under Section 7.06 or
otherwise successfully prosecuting or defending the rights of an indemnified
representative granted by or pursuant to this Article.
Section 7.03. ADVANCING EXPENSES. The corporation shall pay
the expenses (including attorneys' fees and disbursements) incurred in good
faith by an indemnified representative in advance of the final disposition of a
proceeding described in Section 7.01 or in advance of the initiation of or
participation in a proceeding which is authorized pursuant to Section 7.02 upon
receipt of an undertaking by or on behalf of the indemnified representative to
repay the amount if it is ultimately determined pursuant to Section 7.06, or
otherwise, that such person is not entitled to be indemnified by the corporation
pursuant to this Article. The financial ability of an indemnified representative
to repay an advance shall not be a prerequisite to the making of such advance.
Section 7.04. SECURING OF INDEMNIFICATION OBLIGATIONS. To
further effect, satisfy or secure the indemnification obligations provided
herein or otherwise, the corporation may maintain insurance, obtain a letter of
credit, act as
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self-insurer, create a reserve, trust, escrow, cash collateral or other fund or
account, enter into indemnification agreements, pledge or grant a security
interest in any assets or properties of the corporation, or use any other
mechanism or arrangement whatsoever in such amounts, at such costs, and upon
such other terms and conditions as the board of directors shall deem
appropriate. Absent fraud, the determination of the board of directors with
respect to such amounts, costs, terms and conditions shall be conclusive against
all security holders, officers and directors and shall not be subject to
voidability.
Section 7.05. PAYMENT OF INDEMNIFICATION. An indemnified
representative shall be entitled to indemnification within 30 days after a
written request for indemnification has been delivered to the secretary of the
corporation.
Section 7.06. ARBITRATION.
(a) General rule. Any dispute related to the right to
indemnification, contribution or advancement of expenses as provided under this
Article, except with respect to indemnification for liabilities arising under
the Securities Act of 1933 that the corporation has undertaken to submit to a
court for adjudication, shall be decided only by arbitration in the metropolitan
area in which the principal executive offices of the corporation are located at
the time, in accordance with the commercial arbitration rules then in effect of
the American Arbitration Association, before a panel of three arbitrators, one
of whom shall be selected by the corporation, the second of whom shall be
selected by the indemnified representative and third of whom shall be selected
by the other two arbitrators. In the absence of the American Arbitration
Association, or if for any reason arbitration under the arbitration rules of the
American Arbitration Association cannot be initiated, or if one of the parties
fails or refuses to select an arbitrator or if the arbitrators selected by the
corporation and the indemnified representative cannot agree on the selection of
the third arbitrator within 30 days after such time as the corporation and the
indemnified representative have each been notified of the selection of the
other's arbitrator, the necessary arbitrator or arbitrators shall be selected by
the presiding judge of the court of general jurisdiction in such metropolitan
area.
(b) Burden of proof. The party or parties challenging the
right of an indemnified representative to the benefits of this Article shall
have the burden of proof.
(c) Expenses. The corporation shall reimburse an indemnified
representative for the expenses (including attorneys fees and disbursements)
incurred successfully prosecuting or defending such arbitration.
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(d) Effect. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of competent jurisdiction,
except that the corporation shall be entitled to interpose as a defense in any
such judicial enforcement proceeding any prior final judicial determination
adverse to the indemnified representative under Section 7.01 (a) (2) in a
proceeding not directly involving indemnification under this Article. This
arbitration provision shall be specifically enforceable.
Section 7.07. CONTRIBUTION. If the indemnification provided
for in this Article or otherwise is unavailable for any reason in respect of any
liability or portion thereof, the corporation shall contribute to the
liabilities to which the indemnified representative may be subject in such
proportion as is appropriate to reflect the intent of this Article or otherwise
Section 7.08. MANDATORY INDEMNIFICATION OF DIRECTORS,
OFFICERS, ETC. To the extent that an authorized representative of the
corporation has been successful on the merits or otherwise in defense of any
action or proceeding referred to in 15 Pa.C.S. 1741 or 1742 or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by such person in connection therewith.
Section 7.09. CONTRACT RIGHTS; AMENDMENT OR REPEAL. All rights
under this Article shall be deemed a contract between the corporation and the
indemnified representative pursuant to which the corporation and each
indemnified representative intend to be legally bound. Any repeal, amendment or
modification hereof shall be prospective only and shall not affect any rights or
obligations then existing.
Section 7.10. SCOPE OF ARTICLE. The rights granted by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification, contribution or advancement of expenses may be entitled under
any statute, agreement, vote of shareholders or disinterested directors or
otherwise both as to action in an indemnified capacity and as to action in any
other capacity. The indemnification, contribution and advancement of expenses
provided by or granted pursuant to this Article shall continue as to a person
who has ceased to be an indemnified representative in respect of matters arising
prior to such time, and shall inure to the benefit of the heirs, executors,
administrators and personal representatives of such a person.
Section 7.11. RELIANCE OF PROVISIONS. Each person who shall
act as an indemnified representative of the corporation
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shall be deemed to be doing so in reliance upon the rights provided in this
Article.
Section 7.12. INTERPRETATION. The provisions of this Article
are intended to constitute bylaws authorized by 15 Pa.C.S. 513 and 1746 and 42
Pa.C.S. 8365.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. SEAL. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its organization and the words
"Corporate Seal, Pennsylvania".
Section 8.02. CHECKS. All checks, notes, bills of exchange or
other orders in writing shall be signed by such person or persons as the board
of directors or as any person authorized by resolution of the board of directors
may from time to time designate.
Section 8.03. CONTRACTS.
(a) General rule. Excepts as otherwise provided in the
Business Corporation Law in the case of transactions that require action by the
shareholders, the board of directors may authorize any officer or agent to enter
into any contract or to execute or deliver any instrument on behalf of the
corporation, and such authority may be general or confined to specific
instances.
(b) Statutory form of execution of instruments. Any note,
mortgage, evidence of indebtedness, contract or other document, or any
assignment or endorsement thereof, executed or entered into between the
corporation and any other person, when signed by one or more officers or agents
having actual or apparent authority to sign it, or by the president or vice
president and secretary or assistant secretary or treasurer or assistant
treasurer of the corporation, shall be held to have been properly executed for
and on behalf of the corporation, without prejudice to the rights of the
corporation against any person who shall have executed the instrument in excess
of his or her actual authority.
Section 8.04. INTERESTED DIRECTORS OR OFFICERS; QUORUM.
(a) General rule. A contract or transaction between the
corporation and one or more of its directors or officers or between the
corporation and another corporation, partnership, joint venture, trust or other
enterprise in which one or more of its directors or officers are directors or
officers or have a
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financial or other interest, shall not be void or voidable solely for that
reason, or solely because the director or officer is present at or participates
in the meeting of the board of directors that authorizes the contract or
transaction, or solely because his, her or their votes are counted for that
purpose, if:
(1) the material facts as to the relationship or
interest and as to the contract or transaction are disclosed or are
known to the board of directors and the board authorizes the contract
or transaction by the affirmative votes of a majority of the
disinterested directors even though the disinterested directors are
less than a quorum;
(2) the material facts as to his or her relationship
or interest and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon and the contract or
transaction is specifically approved in good faith by vote of those
shareholders; or
(3) the contract or transaction is fair as to the
corporation as of the time it is authorized, approved or ratified by
the board of directors or the shareholders.
(b) Quorum Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board which authorizes
a contract or transaction specified in subsection (a).
Section 8.05. DEPOSITS. All funds of the corporation shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as the board of directors may approve or
designate, and all such funds shall be withdrawn only upon checks signed by such
one or more officers or employees as the board of directors shall from time to
time determine.
Section 8.06. CORPORATE RECORDS.
(a) Required records. The corporation shall keep complete and
accurate books and records of account, minutes of the proceedings of the
incorporators, shareholders and directors and a share register giving the names
and addresses of all shareholders and the number and class of shares held by
each. The share register shall be kept at either the registered office of the
corporation in the Commonwealth of Pennsylvania or at its principal place of
business wherever situated or at the office of its registrar or transfer agent.
Any books, minutes or other records may be in written form or any other form
capable of being converted into written form within a reasonable time.
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(b) Right of inspection. Every shareholder shall, upon written
verified demand stating the purpose thereof, have a right to examine, in person
or by agent or attorney, during the usual hours for business for any proper
purpose, the share register, books and records of account, and records of the
proceedings of the incorporators, shareholders and directors and to make copies
or extracts therefrom. A proper purpose shall mean a purpose reasonably related
to the interest of the person as a shareholder. In every instance where an
attorney or other agent is the person who seeks the right of inspection, the
demand shall be accompanied by a verified power of attorney or other writing
that authorizes the attorney or other agent to so act on behalf of the
shareholder. The demand shall be directed to the corporation at its registered
office in the Commonwealth of Pennsylvania or at its principal place of business
wherever situated.
Section 8.07. FINANCIAL REPORTS. Unless otherwise agreed
between the corporation and a shareholder, the corporation shall furnish to its
shareholders annual financial statements, including at least a balance sheet as
of the end of each fiscal year and a statement of income and expenses for the
fiscal year. The financial statements shall be prepared on the basis of
generally accepted accounting principals, if the corporation prepares financial
statements for the fiscal year on that basis for any purpose, and may be
consolidated statements of the corporation and one or more of its subsidiaries.
The financial statements shall be mailed by the corporation to each of its
shareholders entitled thereto within 120 days after the close of each fiscal
year and, after the mailing and upon written request, shall be mailed by the
corporation to any shareholder or beneficial owner entitled thereto to whom a
copy of the most recent annual financial statements has not previously been
mailed. Statements that are audited or reviewed by a public accountant shall be
accompanied by the report of the accountant. In other cases, each copy shall be
accompanied by a statement of the person in charge of the financial records of
the corporation:
(1) Stating his or her reasonable belief as to
whether or not the financial statements were prepared in accordance
with generally accepted accounting principles and, if not, describing
the basis of presentation.
(2) Describing any material respects in which the
financial statements were not prepared on a basis consistent with those
prepared for the previous year.
Section 8.08. AMENDMENT OF BYLAWS. These bylaws may be amended
or repealed, or new bylaws may be adopted, either (i) by vote of the
shareholders at any duly organized annual or special meeting of shareholders, or
(ii) with respect to those matters that are not by statute committed expressly
to the
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shareholders and regardless of whether the shareholders have previously adopted
or approved the bylaw being amended or repealed, by vote of a majority of the
board of directors of the corporation in office at any regular or special
meeting of directors, subject to the power of the shareholders to change such
action. Any change in these bylaws shall take effect when adopted unless
otherwise provided in the resolution effecting the change. See Section 2.03(b)
(relating to notice of action by shareholders on bylaws).
* * * * * * * * *
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EXHIBIT 3.13
ARTICLES OF INCORPORATION
I, the undersigned sole incorporator, hereby form and establish a
corporation FOR profit under the laws of the State of Kansas.
FIRST. The name of the corporation is Kenya Corporation.
SECOND. The address of its principal place of business and registered
office in this state is RFD #1 Box 39, Cedarpoint, Chase County, Kansas 66843,
and the name of its resident agent at such address is Marie Holtsclaw.
THIRD. This corporation is organized FOR profit and the nature of its
business is area cable TV construction which is generally defined as
constructing poles, hanging cables and TV antenna systems in towns and local
residences. This corporation shall also be empowered to do any lawful act or
activity for which corporations may be organized under the Kansas Corporation
Code.
FOURTH. The total amount of authorized capital of this corporation is
$300,000.00 which shall be divided into 3,000 shares of common stock with a par
value of $100.00 each share.
FIFTH. The name and address of the incorporator is:
Jeffery J. Ebersole, 1827 Windsor Drive, Newton,
Harvey County, Kansas 67114.
Said incorporator shall serve as director of this corporation until his
successor, if any, is elected and qualifies.
SIXTH. The corporation is to have perpetual existence.
SEVENTH. The number of directors of this corporation shall be as
determined by the by-laws.
EIGHTH.
A. LIABILITY OF STOCKHOLDERS.
The private property of stockholders or members of this corporation
shall not be subject to payment of the debts of the corporation.
B. MANAGEMENT.
The management of all the affairs, and the interest of the corporation
shall be vested in the Director or Board of Directors, so constituted and
elected as provided by the by-laws of this corporation.
C. COMPOSITION WITH CREDITORS: SETTLEMENT OF DISPUTES:
REORGANIZATION.
Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them or between this corporation
and its stockholders or any class of them, any court of competent jurisdiction
within the state of Kansas, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this corporation under the provisions of
K.S.A. 17-6901 or on the application of trustees in dissolution or of any
receiver or receivers appointed for this corporation under the provisions of
K.S.A. 17-6808 may
<PAGE> 2
order a meeting of the creditors or class of creditors, or of the stockholders
or class of stockholders of this corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement and the said
reorganization, if sanctioned by the court to which the said application has
been made, shall be binding on all the creditors or class of creditors, or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
D. RESTRICTING SALES OF STOCKS BY OWNER.
No stockholder shall sell his stock or any part thereof to any person
not already a stockholder in the corporation, unless the proposed seller shall
first give the corporation or other stockholders an opportunity to purchase
same. Any unissued stock of said corporation shall be first offered to existing
stockholders in proportion to their ownership interest.
E. DIRECTORS MUST BE STOCKHOLDERS.
All directors to be eligible for election as such, must be the owners
of at least one (1) share of stock in this corporation.
F. VOTING POWER.
Each stockholder shall, at every meeting of the stockholders, be
entitled to one vote in person or by proxy for each share of the capital stock
held by such stockholder.
G. BY-LAWS.
The incorporator, or stockholders, shall have the power to adopt
original by-laws of this corporation, and upon the failure to do so, the power
shall be vested in the Director or Board of Directors of such corporation. The
power to amend, alter or repeal the by-laws of this corporation, shall be vested
in the Director, or Board of Directors, subject to the power of the stockholders
to amend, alter or repeal the by-laws, provided, however, that notice of any
such action by the Director, or Board of Directors shall be given to each
stockholder having voting rights, within ten days after the date of such change
by the Board.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name this 31st day
of December, 1980.
/s/ JEFFREY J. EBERSOLE
---------------------------------
Jeffrey J. Ebersole
STATE OF NEBRASKA, COUNTY OF SARPY, SS:
Personally appeared before me, a notary public in and for Sarpy County,
Nebraska, the above named Jeffery J. Ebersole, who is personally known to me to
be the same person who executed the foregoing instrument of writing and duly
acknowledged the execution of the same.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal, this 31st day of December, 1980.
/s/ DONNA L. ALM
---------------------------------
Notary Public
[SEAL]
<PAGE> 3
CERTIFICATE OF AMENDMENT
OF THE ARTICLES OF INCORPORATION
KENYA CORPORATION
2027 01 07-02-1998 08:24:06
[ILLEGIBLE]
53 CORPORATION CHANGE
$20.00
Pursuant to Section 17-6602 of the Kansas Corporation Code (the
"Code"), the Articles of Incorporation of Kenya Corporation (the "Corporation")
are hereby amended according to this Certificate of Amendment:
FIRST: The first article of the Articles of Incorporation is amended in
its entirety to read as follows:
FIRST. The name of the corporation is Channel Communications,
Inc.
SECOND: Subparagraphs D and E of the eighth article of the Articles of
Incorporation are deleted in their entirety.
THIRD: The foregoing amendments were duly authorized and approved by
the Corporation's Board of Directors and sole stockholder in accordance with
Section 17-6602 of the Code, on the 30th day of April, 1998.
IN WITNESS WHEREOF, the undersigned officers of the Corporation have
executed this instrument this 30th day of April, 1998.
'98 JUN 26 PM 2 24
FILED
SECRETARY OF STATE
Attest: KANSAS
/s/ ROSEMARIE MULHOLLAND By: /s/ WILLIAM J. MERCURIO
- ------------------------ -----------------------
Rosemarie Mulholland William J. Mercurio
Assistant Secretary Vice President
<PAGE> 4
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing document was executed before me this 30th day of April,
1998 by William J. Mercurio, Vice President of Kenya Corporation, who is
personally known to me.
[SEAL]
/s/ RUTH ANN DARLING
----------------------------
Notary Public
State of Florida
My Commission Expires: March 16, 2001
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing document was executed before me this 30th day of April,
1998 by Rosemarie Mulholland, Assistant Secretary of Kenya Corporation, who is
personally known to me.
[SEAL]
/s/ RUTH ANN DARLING
----------------------------
Notary Public
State of Florida
My Commission Expires: March 16, 2001
<PAGE> 1
EXHIBIT 3.14
BY-LAWS
OF
CHANNEL COMMUNICATIONS, INC.
0.01. The date of the annual shareholders meeting shall be on the first
Wednesday in February, beginning with the year 1982, pursuant to Section 2.01 of
the By-Laws.
0.02. Required notice of shareholders meeting, stating the date, place and
hour of the meeting, and in case of special meeting, the purpose or purposes for
which the meeting is called shall be delivered not less than three (3) days nor
more than fifty (50) days before the date of the meeting, either personally or
by mail, by or at the direction of the President, Secretary or the officer or
person calling the meeting, to each shareholder of record entitled to vote at
such meeting.
0.03. The authorized number of directors shall be not less than one (1).
0.04. The required notice of director's meetings shall be:
(a) Not less than twenty-four (24) hours if by mail; and,
(b) Not less than twenty-four (24) hours if by telegram or by
personal delivery.
0.05. There shall be one authorized Vice President.
<PAGE> 2
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Kansas, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation required
by the Kansas Business Corporation Law to be maintained in the State of Kansas
may be, but need not be, identical with the principal office in the State of
Kansas, and the address of the registered office may be changed from time to
time by the Board of Directors or by the registered agent. The business office
of the registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders shall be held
at the date and hour in each year set forth in Section 0.01, or at such other
time and date within thirty days before or after said date as may be fixed by or
under the authority of the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday in the
State of Kansas, such meeting shall be held on the next succeeding business day.
If the election of directors shall not be held on the day designated herein, or
fixed as herein provided, for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as conveniently may
be.
2.02. Special Meeting. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or the Board of Directors or by the person designated in the
written request of the holders of not less than one-tenth of all shares of the
corporation entitled to vote at the meeting.
2.03. Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Kansas, as the place of meeting for any
annual meeting or for any special meeting called by the Board of Directors. A
waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or
<PAGE> 3
without the State of Kansas, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal business office of the corporation in the State
of Kansas or such other suitable place in the county of such principal office as
may be designated by the person calling such meeting, but any meeting may be
adjourned to reconvene at any place designated by vote of a majority of the
shares represented thereat.
2.04. Notice of Meeting. Written notice stating the place, day and hour of
the meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than the number of days set
forth in Section 0.02 (unless a longer period is required by law or the articles
of incorporation) nor more than fifty days before the date of the meeting,
either personally or by mail, by or at the direction of the President, or the
Secretary, or other officer or persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressed to
the shareholder at his address as it appears on the stock record books of the
corporation, with postage thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record Date. For the purpose
of determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any
case, fifty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than fifty
days and, in case of a meeting of shareholders, not less than ten days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the close of business on the date on which notice of the
meeting is mailed or on the date on which the resolution of the Board of
Directors
<PAGE> 4
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall be applied to any adjournment thereof
except where the determination has been made through the closing of the stock
transfer books and the stated period of closing has expired.
2.06. Voting Records. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each meeting of
shareholders, make a complete record of the shareholders entitled to vote at
such meeting, or any adjournment thereof, with the address of and the number of
shares held by each. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes of the meeting. The
original stock transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or to vote at any
meeting of shareholders. Failure to comply with the requirements of this section
shall not affect the validity of any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum
is present, the affirmative vote of the majority of the shares represented at
the meeting and entitled to vote on the subject matter shall be the act of the
shareholders unless the vote of a greater number or voting by classes is
required by law or the articles of incorporation. Though less than a quorum of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
2.08. Conduct of Meetings. The President, and in his absence, a
Vice-President in the order provided under Section 4.05, and in their absence,
any person chosen by the shareholders present shall call the meeting of the
shareholders to order and shall act as chairman of the meeting, and the
Secretary of the corporation shall act as secretary of all meetings of the
shareholders, but in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
<PAGE> 5
2.09. Proxies. At all meetings of shareholders, a shareholder entitled to
vote may vote in person or by proxy appointed in writing by the shareholder or
by his duly authorized attorney in fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any time before it is
voted, either by written notice filed with the Secretary or the acting secretary
of the meeting or by oral notice given by the shareholder to the presiding
officer during the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation. No Proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy. The Board of Directors shall have the power and authority to make rules
establishing presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be entitled to one
vote upon each matter submitted to a vote at a meeting of shareholders, except
to the extent that the voting rights of the shares of any class or classes are
enlarged, limited, or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of another
corporation may be voted either in person or by proxy, by the president of
such corporation or any other officer appointed by such president. A proxy
executed by any principal officer of such other corporation or assistant
thereto shall be conclusive evidence of the signer's authority to act, in
the absence of express notice to this corporation, given in writing to the
Secretary of this corporation, of the designation of some other person by
the board of directors or the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by an
administrator, executor, guardian, conservator, trustee in bankruptcy,
receiver, or assignee for creditors may be voted by him, either in person
or by proxy, without a transfer of such shares into his name, provided that
there is filed with the Secretary before or at the time of meeting proper
evidence of his incumbency and the
<PAGE> 6
number of shares held. Shares standing in the name of a fiduciary may be
voted by him, either in person or by proxy. A proxy executed by a
fiduciary, shall be conclusive evidence of the signer's authority to act,
in the absence of express notice to this corporation, given in writing to
the Secretary of this corporation, that such manner of voting is expressly
prohibited or otherwise directed by the document creating the fiduciary
relationship.
(c) Pledgees. A shareholder whose shares are pledged shall be entitled
to vote such shares until the shares have been transferred into the name of
the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares, nor
shares held by another corporation if a majority of the shares entitled to
vote for the election of directors of such other corporation is held by
this corporation, shall be voted at any meeting or counted in determining
the total number of outstanding shares entitled to vote, but shares of its
own issue held by this corporation in a fiduciary capacity, or held by such
other corporation in a fiduciary capacity, may be voted and shall be
counted in determining the total number of outstanding shares entitled to
vote.
(e) Minors. Shares held by a minor may be voted by such minor in
person or by proxy and no such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of the corporation has
received written notice or has actual knowledge that such shareholder is a
minor.
(f) Incompetents and Spendthrifts. Shares held by an incompetent or
spendthrift may be voted by such incompetent or spendthrift in person or by
proxy and no such vote shall be subject to disaffirmance or avoidance,
unless prior to such vote the Secretary of the corporation has actual
knowledge that such shareholder has been adjudicated an incompetent or
spendthrift or actual knowledge of filing of judicial proceedings for
appointment of a guardian.
<PAGE> 7
(g) Joint Tenants. Shares registered in the names of two or more
individuals who are named in the registration as joint tenants may be voted
in person or by proxy signed by any one or more of such individuals if
either (i) no other such individual or his legal representative is present
and claims the right to participate in the voting of such shares or prior
to the vote files with the Secretary of the corporation a contrary written
voting authorization or direction or written denial of authority of the
individual present or signing the proxy proposed to be voted or (ii) all
such other individuals are deceased and the Secretary of the corporation
has no actual knowledge that the survivor has been adjudicated not to be
the successor to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any notice whatever is
required to be given to any shareholder of the corporation under the articles of
incorporation or by-laws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice; provided that such waiver in respect to any matter of which notice
is required under any provision of the Kansas Business Corporation Law, shall
contain the same information as would have been required to be included in such
notice, except the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action required or permitted
by the articles of incorporation or by-laws or any provision of law to be taken
at a meeting of the shareholders, may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of directors
of the corporation shall be as provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected, or until his prior death, resignation or removal. A director may be
<PAGE> 8
removed from office by affirmative vote of a majority of the outstanding shares
entitled to vote for the election of such director, taken at a meeting of
shareholders called for that purpose. A director may resign at any time by
filing his written resignation with the Secretary of the corporation. Directors
need not be residents of the State of Kansas or shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the Board of Directors shall
be held without other notice than this by-law immediately after the annual
meeting of shareholders, and each adjourned session thereof. The place of such
regular meeting shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Kansas, for the holding of
additional regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the President, Secretary or any two directors.
The President or Secretary calling any special meeting of the Board of Directors
may fix any place, either within or without the State of Kansas, as the place
for holding any special meeting of the Board of Directors called by them, and if
no other place is fixed the place of meeting shall be the principal business
office of the corporation in the State of Kansas.
3.05. Notice; Waiver. Notice of each meeting of the Board of Directors
(unless otherwise provided in or pursuant to Section 3.03) shall be given by
written notice delivered personally or mailed or given by telegram to each
director at his business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case not less than
that number of hours prior thereto as set forth in Section 0.04. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Whenever any notice whatever is required to be given to any
director of the corporation under the articles of incorporation or by-laws or
any provision of law, a waiver thereof in writing, signed at any time, whether
before or after the time of meeting, by the director entitled to such notice,
shall be deemed equivalent to the giving of such notice. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except
<PAGE> 9
where a director attends a meeting and objects thereat to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
3.06. Quorum. Except as otherwise provided by law or by the articles of
incorporation or these by-laws, a majority of the number of directors as
provided in Section 0.03 shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but a majority of the
directors present (though less than such quorum) may adjourn the meeting from
time to time without further notice.
3.07. Manner of Acting. The act of the majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors, unless the act of a greater number is required by law or by the
articles of incorporation or these by-laws.
3.08. Conduct of Meetings. The President, and in his absence, a
Vice-President, in the order provided under Section 4.06, and in their absence,
any director chosen by the directors present, shall call meetings of the Board
of Directors to order and shall act as chairman of the meeting. The Secretary of
the corporation shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding officer may
appoint any Assistant Secretary or any director or other person present to act
as secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled
until the next succeeding annual election by the affirmative vote of a majority
of the directors then in office, though less than a quorum of the Board of
Directors; provided, that in case of a vacancy created by the removal of a
director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors, by affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors, officers or otherwise or
may delegate such authority to an appropriate committee. The Board of Directors
also shall have authority to provide for or to delegate authority to an
appropriate
<PAGE> 10
committee to provide for reasonable pensions, disability or death benefits, and
other benefits or payments, to directors, officers and employees and to their
estates, families, dependents or beneficiaries on account of prior services
rendered by such directors, officers and employees to the corporation.
3.11. Presumption of Assent. A director of the corporation who is present
at a meeting of the Board of Directors or a committee thereof of which he is a
member at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
3.12. Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of the number of directors as provided in Section
0.03 may designate one or more committees, each committee to consist of three or
more directors elected by the Board of Directors, which to the extent provided
in said resolution as initially adopted, and as thereafter supplemented or
amended by further resolution adopted by a like vote, shall have and may
exercise, when the Board of Directors is not in session, the powers of the Board
of Directors in the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies in the Board of Directors or committees
created pursuant to this section. The Board of Directors may elect one or more
of its members as alternate members of any such committee who may take the place
of any absent member or members at any meeting of such committee, upon request
by the President or upon request by the chairman of such meeting. Each such
committee shall fix its own rules governing the conduct of its activities and
shall make such reports to the Board of Directors of its activities as the Board
of Directors may request.
3.13. Unanimous Consent without Meeting. Any action required or permitted
by the articles of incorporation or by-laws or any provision of law to be taken
by the Board of Directors at a meeting or by resolution may be taken without
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors then in office.
<PAGE> 11
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall be a
President, the number of Vice-Presidents as provided in Section 0.05, a
Secretary, and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person, except the offices of President and Secretary
and the offices of President and Vice-President.
4.02. Election and Term of Office. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently may
be. Each officer shall hold office until his successor shall have been duly
elected or until his prior death, resignation or removal.
4.03. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.
4.04. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term.
4.05. President. The President shall be the principal executive officer of
the corporation and, subject to the control of the Board of Directors, shall in
general supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of the shareholders
and of the Board of Directors. He shall have authority, subject to such rules as
may be prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he shall deem necessary, to prescribe their
powers, duties and compensation, and to delegate authority to them. Such agents
and employees shall hold office at the discretion of the President. He shall
have authority to sign, execute and acknowledge, on behalf of the corporation,
all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and
all other
<PAGE> 12
documents or instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law or the Board of
Directors, he may authorize any Vice-President or other officer or agent of the
corporation to sign, execute and acknowledge such documents or instruments in
his place and stead. In general he shall perform all duties incident to the
office of President and such other duties as may be prescribed by the Board of
Directors from time to time.
4.06. The Vice-Presidents. In the absence of the President, or in the event
of his death, inability or refusal to act, or in the event for any reason it
shall be impracticable for the President to act personally, the Vice-President
(or in the event there be more than one Vice-President, the Vice-Presidents in
the order designated by the Board of Directors, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice-President may sign, with
the Secretary or Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties and have such authority as from
time to time may be delegated or assigned to him by the President or by the
Board of Directors. The execution of any instrument of the corporation by any
Vice-President shall be conclusive evidence, as to third parties, of his
authority to act in the stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep the minutes of the
meetings of the shareholders and of the Board of Directors in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all documents the execution of which on behalf
of the corporation under its seal is duly authorized; (d) keep or arrange for
the keeping of a register of the post office address of each shareholder which
shall be furnished to the secretary by such shareholder; (e) sign with the
President, or a Vice-President, certificates for shares of the corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
corporation; and (g) in general perform all duties incident to the office of
Secretary and have such other duties and exercise such authority as from time to
time may be delegated or assigned to him by the President or by the Board of
Directors.
<PAGE> 13
4.08. The Treasurer. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the corporation; (b) receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositaries as shall be selected in accordance
with the provisions of Section 5.04; and (c) in general perform all of the
duties incident to the office of Treasurer and have such other duties and
exercise such other authority as from time to time may be delegated or assigned
to him by the President or by the Board of Directors. If required by the Board
of Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
shall determine.
4.09. Assistant Secretaries and Assistant Treasurers. There shall be such
number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors may from time to time authorize. The Assistant Secretaries may sign
with the President or the Vice-President certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by the
President or the Board of Directors.
4.10. Other Assistants and Acting Officers. The Board of Directors shall
have the power to appoint any person to act as assistant to any officer, or as
agent for the corporation in his stead, or to perform the duties of such officer
whenever for any reason it is impracticable for such officer to act personally,
and such assistant or acting officer or other agent so appointed by the Board of
Directors shall have the power to perform all the duties of the office to which
he is so appointed to be assistant, or as to which he is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors.
4.11. Salaries. The salaries of the principal officers all be fixed from
time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
<PAGE> 14
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS: SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the President or one of the Vice-Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer; the Secretary or
an Assistant Secretary, when necessary or required, shall affix the corporate
seal thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of the
signing officer or officers.
5.02. Loans. No indebtedness for borrowed money shall be contracted on
behalf of the corporation and no evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a resolution of the
Board of Directors. Such authorization may be general or confined to specific
instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
or under the authority of a resolution of the Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositaries as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation. Subject always to the
specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he be present, or in his
absence by any Vice-President of this corporation who may be present, and (b)
whenever, in the
<PAGE> 15
judgment of the President, or in his absence, of any Vice-President, it is
desirable for this corporation to execute a proxy or written consent in respect
to any shares or other securities issued by any other corporation and owned by
this corporation, such proxy or consent shall be executed in the name of this
corporation by the President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Directors, affixation of
corporate seal or countersignature or attestation by another officer. Any person
or persons designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares or
other securities issued by such other corporation and owned by this corporation
the same as such shares or other securities might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares of the
corporation shall be in such form, consistent with law, as shall be determined
by the Board of Directors. Such certificates shall be signed by the President or
a Vice-President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the corporation on any
certificates for shares may be a facsimile. The signatures of the President or
Vice-president and the Secretary or Assistant Secretary upon a certificate may
be facsimiles if the certificate is manually signed on behalf of a transfer
agent, or a registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. In case any officer, who has signed or
whose facsimile signature has been placed upon any certificate for shares, shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issue.
<PAGE> 16
6.04. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corporation with a
request to register for transfer, the corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into adverse claims
or has discharged any such duty. The corporation may require reasonable
assurance that said endorsements are genuine and effective and compliance with
such other regulations as may be prescribed by or under the authority of the
Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost Destroyed or Stolen Certificates. Where the owner claims that
his certificate for shares has been lost, destroyed or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired by a bona fide
purchaser, and (b) files with the corporation a sufficient indemnity bond, and
(c) satisfies such other reasonable requirements as may be prescribed by or
under the authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the corporation may be issued
for such consideration as shall be fixed from time to time by the Board of
Directors, provided that any shares having a par value shall not be issued for a
consideration less than the par value thereof. The consideration to be paid for
shares may be paid in whole or in part, in money, in other property, tangible or
intangible, or in labor or services actually performed for the corporation. When
payment of the consideration for which shares are to be issued shall have been
received by the corporation, such shares shall be deemed to be fully paid and
nonassessable by the corporation. No certificate shall be issued for any share
until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the statutes of the
<PAGE> 17
State of Kansas as it may deem expedient concerning the issue, transfer and
registration of certificates representing shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal."
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered, amended or repealed
and new by-laws may be adopted by the shareholders by affirmative vote of not
less than a majority of the shares present or represented at any annual or
special meeting of the shareholders at which a quorum is in attendance.
8.02. By Directors. These by-laws may also be altered, amended or repealed
and new by-laws may be adopted by the Board of Directors by affirmative vote of
a majority of the number of directors present at any meeting at which a quorum
is in attendance; but no by-law adopted by the shareholders (shall be amended or
repealed by the Board of Directors if the by-law so adopted so provides.
8.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
by-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action, shall be given
the same effect as though the by-laws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
<PAGE> 1
EXHIBIT 3.15
[STAMP]
ARTICLES OF INCORPORATION
OF
EXCELL CABLE CONSTRUCTION, INC.
The undersigned, for the purpose of forming a corporation pursuant to
and in conformity with the Florida General Corporation Act, hereby adopts the
following Articles of Incorporation:
ARTICLE I
The name of this corporation is Excell Cable Construction, Inc.
ARTICLE II
The term for which this corporation shall exist shall be perpetual.
The date and time of the commencement of corporate existence shall be at such
time as at least $100.00 has been received by it as consideration for the
issuance of shares.
ARTICLE III
The general purposes for which this corporation is organized are:
1. To develop, manufacture, assemble, fabricate, import, lease,
purchase, or otherwise acquire, invest in, hold, use, license the use of,
install, handle, maintain, service or repair, sell, pledge, mortgage, exchange,
export, distribute, lease, assign, and otherwise dispose of, and generally to
trade and deal in and with, as principal or agent, as contractor,
sub-contractor, or otherwise, in cable television equipment and systems; and to
do each and every act or acts, thing or things, necessary or incident to,
growing out of or connected with the usual conduct of such business or any part
or parts thereof for the accomplishment of any such purpose.
2. To manufacture, process, buy and sell, both at wholesale and
retail, export and import, and generally to trade and deal in and with goods,
commodities, wares and merchandise of every kind, nature and description.
3. To acquire, by purchase, lease, or otherwise, lands and interests in
lands, and to own, hold, improve, develop and manage any real estate so
acquired and to erect, or cause to be erected, on any lands owned, held or
occupied by the corporation, buildings or other structures with their
appurtenances, and to manage, operate, lease, rebuild, enlarge, alter, improve
any buildings or other structures now or hereafter erected on any lands so
owned, held or occupied, and to encumber or dispose of any lands or interests
in lands, and any buildings or other structures, and any stores, shops, suites,
rooms or part of any buildings or other structures, at any time owned or held by
the corporation.
4. To acquire, by purchase, lease, manufacture or otherwise any
personal property deemed necessary or useful in the equipment, furnishing,
improvement, development or management of any property, real or personal, at
any time owned, held or occupied by the corporation and to invest, trade, and
deal in any personal property deemed beneficial to the corporation, and to
encumber or dispose of any personal property at any time owned by or held by
the corporation.
5. To guarantee, purchase, hold, vote, sell, assign, transfer,
mortgage, pledge or otherwise dispose of shares of the capital stock of, or any
bonds, securities or evidence of indebtedness created by any other corporation
or corporations
<PAGE> 2
organized under the laws of this State or any other state, country, nation or
government, and while the owner thereof to exercise all the rights, powers and
privileges of ownership; to receive, collect and dispose of dividends,
interests or other income on any such securities held by it, and do any and all
acts and things tending to increase the value of said corporation; to issue
bonds, debentures, or obligations of this corporation from time to time and
secure the same by pledge, mortgage or deed of trust of or upon any part of
such securities or other property held or owned by the company and to sell or
pledge such bonds for proper corporate purposes and in the promotion of its
corporation business; to purchase, receive, hold and dispose of any securities
of any person or corporation, whether such securities shall be bonds,
mortgages, debentures, notes, shares of capital stock or otherwise, and in
respect to any such securities, to exercise any and all rights and privileges
of ownership thereof, and generally to act as investment brokers, agents or
principals. To borrow and lend money either with or without security, and
negotiate loans; to draw, accept, endorse, buy and sell promissory notes, bonds,
stocks, debentures, coupons and other securities; to issue on commission,
subscribe for, take, acquire, hold, sell, exchange and deal in shares, stocks,
bonds, obligations and securities of any government, authority, or company; to
form, promote, subsidize and assist companies, syndicates or partnerships of
all kinds, and to finance and refinance the same. To carry on and undertake
the business untertaking, transaction or operation commonly carried on or
undertaken by capitalists, promoters, financiers, concessionaries, contractors,
brokers and commission merchants and any other incidental business which may
seem to the corporation convenient to carry on in connection with the above, or
calculated directly or indirectly to enhance the value of or render profitable
any of the corporation's property or rights.
6. To acquire, and pay for, in cash or otherwise, stocks or bonds of
this corporation, the good will, rights, assets and property, and to undertake
or assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
7. To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of this corporation.
8. To purchase, hold, sell and transfer the shares of its own capital
stock provided it shall not use its funds or property for the purchase of its
own shares of capital stock when such use would cause any impairment of its
capital; and provided further that shares to its own capital stock belonging to
it shall not be voted upon directly or indirectly.
9. To have one or more offices to carry on all or any of its operations
and businesses and without restriction or limit as to amounts; to purchase or
otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of
real and personal property of every class and description in any of the states,
districts, territories, or colonies of the United States and in any and all
foreign countries, subject to the laws of such state, district, territory,
colony or country.
10. To enter into partnership or into any arrangement for sharing of
profits, union of interest, cooperation, joint-adventure, reciprocal concession
or otherwise, with any person, persons or corporations, carrying on or engaged
in or about to carry on or engage in any business or transactions
<PAGE> 3
which the corporation is authorized to carry on or engage in, or any business
or transaction capable of being conducted so as directly or indirectly to
benefit the corporation; and to lend money to, guarantee the contracts of, or
otherwise assist any such person, persons or corporations, and to take or
otherwise acquire shares and securities of any such corporation and to sell,
hold, reissue, with or without guarantee, or otherwise deal with same.
11. To, in general, carry on and transact any business in connection
with or auxiliary to the foregoing, to have and exercise all of the powers
conferred by the laws of Florida upon corporations, and to do any or all of the
things hereinabove set forth to the same extent as natural persons might or
could do.
The foregoing clauses shall be construed both as objects and powers;
and it is hereby expressly provided that the foregoing enumeration of specific
powers shall not be held to limit or restrict in any manner the powers of this
corporation; and the above and foregoing businesses enumerated are intended as
illustrative and not restrictive, and this corporation shall have the power to
handle such business or businesses, either in its own behalf or as agent or
broker for others, and shall further engage in any and all like and kindred
businesses, which may be necessary or profitable in conjunction with the
businesses above enumerated, and generally shall have and exercise all powers,
privileges and immunities of businesses of like kind and nature incorporated
under the laws of the State of Florida, and shall enjoy the privilege and
immunities pertaining to incorporators under the laws of the State of Florida.
ARTICLE IV
The aggregate number of shares which this corporation is authorized to
issue is 5,000. Such shares shall be of a common class and shall have a par
value of $1.00.
Said stock may be issued for such consideration having a value not
less than the par value of the shares issued therefor as is determined from
time to time by the Board of Directors; however, neither promissory notes nor
future services shall constitute payment or part payment for the issuance of
shares of stock of this corporation.
ARTICLE V
The street address of the initial registered office of this
corporation is 4215 Southpoint Boulevard, Suite 100, Jacksonville, Florida
32216, and the name of its initial registered agent at such address is Michael
N. Schneider.
This corporation shall have branch offices and places of business in
the State of Florida and any other state, territory, district or possession of
the United States, and in any foreign country or countries, as may be
determined from time to time by its Board of Directors.
ARTICLE VI
This corporation shall have 1 director initially. The number of
directors may be either increased or diminished from time to time by the bylaws
but shall never be less than one. The name and address of the initial director
of this corporation is:
David Mai
3 Windemere Drive
Sicklerville, New Jersey 08081
<PAGE> 4
Any one or more of the directors or officers may be removed either with or
without cause at any time by the shareholders voting a majority of the common
stock of the corporation issued and outstanding and entitled to vote, at any
meeting of shareholders called expressly for that purpose. If the office of any
director, one or more, becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office, or otherwise, the
shareholders shall, at a special meeting called for that purpose, by a majority
vote of all of the shareholders holding the common stock of the corporation
issued and outstanding and entitled to vote, choose a successor or successors
who shall hold office for the unexpired term in respect of which such vacancies
occurred.
ARTICLE VII
The name and address of the incorporator is:
Michael N. Schneider
4215 Southpoint Boulevard, Suite 100
Jacksonville, Florida 32216
ARTICLE VIII
The power to adopt, alter, amend or repeal bylaws shall be vested in the
Board of Directors and the shareholders; provided, however, that any bylaws
adopted by the shareholders may not be altered, amended or repealed by the Board
of Directors.
ARTICLE IX
Each shareholder of the corporation shall have the right to purchase,
subscribe for, or receive a right or rights to purchase or subscribe for, at the
price at which it is offered to others, a pro rata portion of:
(1) Any stock of any class that the corporation may issue or sell, whether
or not exchangeable for any stock of the corporation of any class or classes,
and whether or not of unissued shares authorized by the Articles of
Incorporation as originally filed or by any amendment thereof or out of shares
of stock of the corporation acquired by it after the issuance thereof, and
whether issued for cash, labor done, personal property, or real property or
leases thereof; or
(2) Any obligation that the corporation may issue or sell which is
convertible into or exchangeable for any stock of the corporation of any class
or classes, or to which is attached or pertinent any warrant or warrants or
other instrument or instruments conferring on the holder the right to subscribe
for or purchase from the corporation any shares of its stock of any class or
classes.
ARTICLE X
No contract or other transaction between the corporation and one or more of
its directors or any other corporation, firm, association, or entity in which
one or more of its directors or officers are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves, or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves, or ratifies the
contract or transaction
<PAGE> 5
by a vote or consent sufficient for the purpose without counting the votes or
consents of such interested directors; or
(2) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the Board, a committee, or the
shareholders.
ARTICLE XI
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XII
This corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendments hereto, and any
right conferred upon the shareholders is subject to this reservation.
Executed by the undersigned, this 11th day of February, 1988.
/s/ MICHAEL N. SCHNEIDER
----------------------------------
Michael N. Schneider, Incorporator
STATE OF FLORIDA
COUNTY OF DUVAL
Before me, a notary public authorized to take acknowledgments in the
State and County set forth above, personally appeared Michael N. Schneider,
known to me and known by me to be the person who executed the foregoing Articles
of Incorporation, and acknowledged before me that he executed those Articles of
Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the State and County aforesaid, this 11th day of February, 1988.
/s/ [ILLEGIBLE]
-------------------------------
Notary Public, State of Florida
My commission expires:
[NOTARY SEAL]
<PAGE> 6
[FILED STAMP]
CERTIFICATE
DESIGNATING REGISTERED AGENT AND PLACE OF BUSINESS FOR THE SERVICE OF PROCESS
WITHIN THIS STATE
Pursuant to Section 48.091, Florida Statutes, the following is submitted:
That Excell Cable Construction, Inc., desiring to organize under the laws
of the State of Florida with its registered office, as indicated in the Articles
of Incorporation, in the City of Jacksonville, County of Duval, State of
Florida, has named Michael N. Schneider, 100 National Financial Building, 4215
Southpoint Blvd., Jacksonville, County of Duval, State of Florida, as its agent
to accept service of process within the State of Florida.
[ILLEGIBLE]
------------
Incorporator
ACKNOWLEDGMENT
Having been named to accept service of process for the above-named
corporation, at the place designated in this Certificate, I hereby accept such
appointment and agree to act in this capacity, and agree to comply with the
provisions of law relating to keeping said office open.
[ILLEGIBLE]
----------------
Registered Agent
<PAGE> 7
[FILED STAMP]
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
OF EXCELL CABLE CONSTRUCTION, INC.
Pursuant to the provisions of Section 607.187 of the Florida Statutes, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation, pursuant to a consent meeting of the shareholders and
directors held February 13, 1988:
Article I is deleted in its entirety and the following substituted in lieu
thereof:
The name of this corporation is Excel Cable Construction, Inc.
In all other respects, except as specifically changed and modified in these
Articles of Amendment to the Articles of Incorporation, all of the provisions
contained in the Articles of Incorporation of Antartic Imaging, Inc. shall be
and remain the same.
Executed by the undersigned this [ILLEGIBLE] day of March, 1988.
EXCELL CABLE CONSTRUCTION,
INC.
By: /s/ [ILLEGIBLE]
--------------------------
Its President
Attest: /s/ [ILLEGIBLE]
--------------------------
Its Secretary
STATE OF FLORIDA
COUNTY OF DUVAL
Before me, a notary public authorized to take acknowledgements in the State
and County set forth above, personally appeared DAVID MAI as President and as
Secretary of EXCELL CABLE CONSTRUCTION, INC., respectively, and known to me and
known by me to be the person who executed the foregoing Amendment to the
Articles of Incorporation, and acknowledged before me that he executed that
Amendment to the Articles of Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the State and County aforesaid, this [ILLEGIBLE] day of March, 1988.
/s/ [ILLEGIBLE]
-------------------------------
Notary Public, State of Florida
My commission expires:
[STAMP]
<PAGE> 1
EXHIBIT 3.16
BYLAWS
OF
EXCEL CABLE CONSTRUCTION, INC.
OFFICES
1. The principal office shall be located in Jacksonville, State of
Florida. The Corporation may also have offices at such other places as the
Board of Directors may from time to time designate or the business of the
Corporation may require.
SEAL
2. The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization, and the word "SEAL".
STOCKHOLDERS MEETINGS
3. All meetings of the stockholders shall be held at the principal office
of the Corporation or at such other place, either within or without the State
of Florida, as from time to time may be determined by the Board of Directors
and specified in the notice of such meeting.
4. Commencing with the year next succeeding the year in which these Bylaws
are adopted by the Corporation, the annual meeting of the stockholders of the
Corporation shall be held each calendar year at on the
3rd Monday in February. If such designated date is a legal holiday, the annual
meeting shall be held at the same time on the next succeeding day not a legal
holiday. The business to be transacted at such meeting shall be the election of
directors and such other business as shall be properly brought before the
meeting.
5. If the election of directors shall not be held on the day here
designated for any annual meeting, or at any adjournment of such meeting, the
Board of Directors shall call a special meeting of the stockholders as soon as
conveniently possible thereafter. At such meeting, the election of directors
shall take place, and such election and any other business transacted thereat
shall have the same force and effect as at an annual meeting duly called and
held.
6. No change in the time or place for a meeting for the election of
directors shall be made within 7 days preceding the day on which the election
is to be held. Written notice of any such change shall be given each
stockholder at least 10 days before the election is held, in the manner
provided in Section 9 hereof.
<PAGE> 2
7. In the event the annual meeting is not held at the time provided in
Section 4, and if the Board of Directors shall not call a special meeting as
described in Section 5 above within three (3) months after the date prescribed
for the annual meeting, then any stockholder may call such meeting, and at such
meeting the stockholders may elect the directors and transact other business
with the same force and effect as at an annual meeting duly called and held.
8. Special meetings of the stockholders may be called at any time by the
President, Vice-President, at least one-half of the Directors then serving in
such capacity, or by the holders of at least 50% of the stock entitled to vote
at such meeting. At any time upon the written request of any person or persons
entitled to call a special meeting, it shall be the duty of the Secretary to
send out notices of such meeting to be held within or without the State of
Florida and at such time, but not less than 10 days nor more than 75 days after
receipt of the request, as may be fixed by the Board of Directors. If the Board
of Directors shall fail to fix a time or place within 30 days after receipt of
the request, the meeting shall be held at the offices of the Corporation at such
time as shall be fixed by the Secretary within the above limits.
9. Each stockholder of record entitled to vote at any meeting shall be
given in person, or by mail, or by prepaid telegram, written or printed notice
of the purpose or purposes, and the time and place within or without the State
of Florida of every meeting of stockholders. Such notice shall be delivered not
less than 10 days nor more than 60 days before the meeting. If mailed or
telegraphed, it should be directed to the stockholder's address as it appears on
the stock book unless the stockholder shall have requested of the Secretary in
writing that notice intended for him be mailed to some other address, in which
case the notice shall be transmitted to the address so designated. The time when
any notice shall be mailed, postage prepaid or delivered to the telegraph
company shall be deemed the time of the giving of such notice. No publication of
the notice of meeting shall be required. A stockholder may waive the notice of
meeting by attendance, either in person or by proxy, at the meeting, or by so
stating in writing, either before or after such meeting. Attendance at a meeting
for the express purpose of objecting that the meeting was not lawfully called or
convened shall not, however, constitute a waiver of notice. Except where
otherwise required by law, notice need not be given of any adjourned meeting of
the stockholders.
10. Except as otherwise provided by law, a quorum at all meetings of
stockholders shall consist of the holders of record of a majority of the shares
entitled to vote thereat, present in person or by proxy. If, however, such
majority shall not be present or represented at any such meeting, the
stockholders entitled to vote thereat, present, in person or by proxy, shall
have power to adjourn the meeting from time to time without notice other than an
announcement at the meeting, until the requisite amount of voting stock shall be
present. At any such adjourned meeting, at which the requisite amount of voting
shall be represented, any business may be transacted which might be transacted
at the meeting as originally notified.
<PAGE> 3
11. (a) In order to determine the holders of record of the Corporation's
stock who are entitled to notice of meetings, to vote at a meeting or
adjournment thereof, and to receive payment of any dividend, or to make a
determination of the stockholders of record for any other proper purpose, the
Board of Directors of the Corporation may order that the Stock Transfer Books
be closed for a period not to exceed 60 days. If a purpose of such closing is
to determine who is entitled to notice of a meeting and to vote at such
meeting, the Stock Transfer Books shall be closed for at least 15 days
preceding such meeting.
(b) In lieu of closing the Stock Transfer Books, the Board of
Directors may fix a date as of the record date for such determination of
stockholders. Such date shall be no more than 60 days prior to the date of the
action which requires such determination, nor, in the case of a stockholders'
meeting, shall it be less than 15 days in advance of such meeting.
(c) If the Stock Transfer Books are not closed and no record is
fixed for such determination of the stockholders of record, the date of which
notice of the meeting is mailed, or on which the resolution of the Board of
Directors declaring a dividend is adopted, as the case may be, shall be the
record date for such determination of stockholders.
(d) When a determination of stockholders entitled to vote at any
meeting has been made as provided in this section, such determination shall
apply to any adjournment of such meeting, except when the determination has
been made by the closing of the Stock Transfer Books and the stated period of
closing has expired.
12. (a) Meetings of the stockholders shall be presided over by the
President, or if he is not present, by a Vice-President, or if neither the
President nor a Vice-President is present, by a Chairman to be chosen by a
majority of the stockholders entitled to vote at the meeting who are present in
person or by proxy. The Secretary of the Corporation, or in the absence of the
Secretary, an Assistant Secretary, shall act as Secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose a person to act as Secretary of the meeting.
(b) The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous
annual meeting.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Miscellaneous business.
<PAGE> 4
13. (a) Except as otherwise provided in the Articles of Incorporation,
the Bylaws or the laws of the State of Florida, at every meeting of the
stockholders, each stockholder of the Corporation entitled to vote at such
meeting shall have, as to each matter submitted to a vote, one vote in person
or by proxy for each share of stock having voting rights registered in his name
on the books of the Corporation. A stockholder may vote his shares by a proxy
appointed by a written instrument signed by the stockholder or his duly
authorized attorney-in-fact and delivered to the Secretary of the meeting. No
proxy shall be valid after 11 months from the date of its execution.
(b) A majority of those shares entitled to vote and represented at
the meeting, a quorum being present, shall be the act of the meeting.
(c) At all elections of Directors, the voting shall be by written
ballot unless this requirement is unanimously waived by those shares entitled
to vote and represented at the meeting.
(d) Notwithstanding anything herein otherwise provided, when
stockholders who hold 80% of the stock having the right to vote at any meeting
shall be present at any meeting however called or notified and shall sign a
written consent thereto on the record of the meeting, the acts of such meeting
shall be as valid as if otherwise called and notified as hereinabove provided.
14. (a) The Corporation shall keep the books and records and permit
inspection as provided in F.S.A. 608.39. A complete list of the stockholders of
the Corporation entitled to vote at the ensuing meeting, arranged in
alphabetical order, and showing the address of, and number of shares owned by
each stockholder, shall be prepared by the Secretary, or other officer of the
Corporation having charge of the Stock Transfer Books, which list shall be
produced at the meeting and shall be subject to inspection by any stockholder
at any time during the meeting.
(b) The original Stock Transfer Books shall be prima facie evidence
as to who are the stockholders entitled to examine such list or to vote at any
meeting of the stockholders.
(c) Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting of the stockholders.
DIRECTORS
15. (a) The property, affairs and business of the Corporation shall be
managed by a Board of Directors of [ILLEGIBLE] persons. Except as hereinafter
provided, directors shall be elected at the annual meeting of the stockholders
and each director shall serve for one year and until his successor shall be
elected and qualified.
<PAGE> 5
(b) The number of directors may be increased or decreased from time to
time by an amendment to these Bylaws. Any increased number of directors shall be
elected by the stockholders at the next regular annual meeting or at a special
meeting called for that purpose. The number of directors shall never be less
than the minimum nor more than the maximum number of directors as provided in
the Articles of Incorporation.
(c) Directors need not be stockholder of the Corporation.
(d) A majority of the directors in office shall be necessary to
constitute a quorum for the transaction of business. Members of the Board of
Directors shall be deemed present at a meeting of such Board of Directors if a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other is used. If, at any
meeting of the Board of Directors, there shall be less than a quorum present, a
majority of those present may adjourn the meeting, without further notice, from
time to time until a quorum shall have been obtained. In case there are
vacancies on the Board of Directors, other than vacancies created by the
removal of a director or directors by the stockholder or by an increase in the
number of directors, the remaining directors, although less than a quorum, may
by a majority vote, elect a successor or successors for the unexpired term or
terms.
16. Meetings of the Board of Directors may be held either within or
without the State of Florida. Regular meetings of the Board of Directors shall
be held at such times as are fixed from time to time by resolution of the
Board. Special meetings may be held at any time upon call of the President,
Vice-President or 50% or more of the directors, upon written or telegraphic
notice deposited in the U.S. mail or delivered to the telegraph company at
least 5 days prior to the day of the meeting. A meeting of the Board of
Directors may be held without notice immediately following the annual meeting
of the stockholders. Notice need not be given of regular meetings of the Board
of Directors held at the time fixed by resolution of the Board of Directors nor
need notice be given of adjourned meetings. Meetings may be held at any time
without notice if all the directors are present or if, before the meeting,
those not present waive such notice in writing. Notice of a meeting of the
Board of Directors need not state the purpose of, nor the business to be
transacted at such meeting.
17. At any meeting of the stockholder, any director or directors may be
removed from office, without assignment of any reason therefor, by a majority
vote of those shares entitled to vote and represented at the meeting. When any
director or directors are removed, new directors may be elected at the same
meeting of the stockholders for the unexpired term of the director or directors
removed. If the stockholders fail to elect persons to fill the unexpired term or
terms of the director or directors removed, such unexpired term or terms shall
be considered vacancies on the Board to be filled by the remaining directors.
<PAGE> 6
18. (a) The Corporation shall indemnify each of its directors and
officers, whether or not then in office (and his executor, administrator and
heirs), against all reasonable expenses actually and necessarily incurred by him
in connection with the defense of any litigation to which he may have been made
a party because he is or was a director or officer of the Corporation. He shall
have no right to reimbursement, however, in relation to matters as to which he
has been adjudged liable to the Corporation for negligence or misconduct in the
performance of his duties. The right to indemnity for expenses will also apply
to the expenses of suits which are compromised or settled if the court having
jurisdiction of the matter shall approve such settlement.
(b) The foregoing right of indemnification shall be in addition to and
not exclusive of, all other rights to which such director or office may be
entitled including, without limiting the generality of the foregoing, all rights
of indemnification and rights to payment of expenses as provided in F.S.A.
Section 608.13 (14) (15) and (16) and the Board of Directors may authorize the
purchase and maintenance of insurance to the extent as provided in F.S.A.
Section 608.13(17).
19. Compensation and reimbursement for reasonable expenses of Directors
may be paid if authorized by resolution of the Board of Directors. Any Director
receiving compensation under this provision shall not be barred from serving the
Corporation in any other capacity and receiving reasonable compensation for such
other services.
20. (a) The Board of Directors by a resolution or resolutions adopted
by a majority of the members of the whole Board, may appoint an Executive
Committee and such other committees as it may deem appropriate. Each such
committee shall consist of members of the Board of Directors or officers of the
Corporation provided that the Executive Committee shall be at least two in
number and all of the members of such Committee shall be members of the Board of
Directors. The Executive Committee shall have and may exercise any and all
powers of the Board of Directors in the management of the business and affairs
of this Corporation and each other committee shall have and exercise such powers
as shall be conferred and/or authorized by the resolution constituting it. A
majority of any such committee may determine its action and may fix the time and
place of its meetings, unless provided otherwise by the Board of Directors. The
Board of Directors shall have the power at any time, to fill vacancies in, to
change the size of membership of, and to discharge any such committee.
(b) Each such committee shall keep a written record of its acts and
proceedings and shall submit such record to the Board of Directors at each
regular meeting thereof and at such other times as requested by the Board of
Directors. Failure to submit such record, or failure of the Board to approve
any action indicated therein will not, however, invalidate such action to the
extent it has been carried out by the Corporation prior to the time the record
of such action was, or should have been submitted to the Board of Directors as
herein provided.
<PAGE> 7
(b) The Vice-Presidents, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence or
disability of the President. Each Vice-President shall have such other duties
as are assigned to him from time to time by the Board of Directors.
(c) The Secretary, and the Treasurer shall perform such duties as are
incident to their offices, or are properly required of them by the Board of
Directors, or are assigned to them by the Articles of Incorporation or these
Bylaws. The Assistant Secretaries, in the order of their seniority, shall, in
the absence of the Secretary, perform the duties and exercise the powers of the
Secretary, and shall perform such other duties as may be assigned by the Board
of Directors.
(d) Other subordinate officers appointed by the Board of Directors
shall exercise such powers and perform such duties as may be delegated to them
by the resolutions appointing them, or by subsequent resolutions adopted from
time to time.
(e) In case of the absence or disability of any officer of the
Corporation and of any person hereby authorized to act in his place during such
period of absence or disability, the Board of Directors may from time to time
delegate the powers and duties of such officer to any other officer, or any
director, or any other person whom it may select.
(f) The Board of Directors, by resolution, may require any or all of
the officers of the Corporation to give bonds in favor of the Corporation, with
sufficient surety or sureties, and in such amounts as the Board of Directors may
fix, conditioned for the faithful performance of the duties of their respective
offices.
27. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors. No officer shall be ineligible to receive such salary by
reason of the fact that he is also a Director of the Corporation and receiving
compensation therefor.
28. (a) The interest of each stockholder of the Corporation shall be
evidenced by certificates for shares of stock, certifying the number of shares
represented thereby and in such form not inconsistent with the Articles of
Incorporation as the Board of Directors may from time to time prescribe.
(b) The certificate of stock shall be signed by the President or a
Vice-President and by the Secretary or an Assistant Secretary or the Treasurer,
and sealed with the seal of the Corporation. Such seal may be a facsimile,
engraved or printed. Where any certificate is manually signed by a transfer
agent or a transfer clerk or by a registrar the signatures of the President,
Vice-President, Secretary, Assistant Secretary, or Treasurer upon such
certificate may be facsimiles, engraved or printed. In case any officer who has
signed or whose facsimile signature has been placed upon any certificate shall
have ceased to be such before the certificate is issued, it may be issued by the
Corporation with the same effect as if such officer had not ceased to be such at
the time of its issue.
<PAGE> 8
(c) During the intervals between meetings of the Board of
Directors, the Executive Committee, if appointed hereunder, may have and shall
exercise all the powers of the Board of Directors in the management of the
affairs, business and property of the Corporation, in such manner as the
Executive Committee shall deem for the best interests of the Corporation in all
cases in which specific directions shall not have been given by the Board of
Directors. The Executive Committee shall not have power to fill vacancies in
said Committee or in the Board of Directors or to make or amend the Bylaws of
the Corporation.
21. Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to determine whether
any, and if so, what part, of the funds legally available for the payment of
dividends shall be declared in dividends and paid to the stockholders of the
Corporation. The Board of Directors may fix a sum which may be set aside or
reserved over and above the paid-in capital of the Corporation for working
capital or as a reserve for any proper purpose, and from time to time may
increase, diminish and vary such fund in the Board's absolute judgment and
discretion.
OFFICERS
22. The officers of the Corporation shall be a President, one or more
Vice-Presidents, a Treasurer, a Secretary, and one or more Assistant
Secretaries. In addition, there may be such subordinate officers as the Board
of Directors may deem necessary. And person may hold more than one office.
23. The principal officers shall be chosen annually by the Board of
Directors at the first meeting of the Board following the stockholders' annual
meeting, or as soon thereafter as is conveniently possible. Subordinate
officers may be elected from time to time. Each officer shall serve until his
successor shall have been chosen and qualified, or until his death, resignation
or removal.
24. Any officer may be removed from office, with or without cause, at
any time by the affirmative vote of a majority of the Board of Directors then in
office. Such removal shall not prejudice the contract rights, if any, of the
person so removed.
25. Any vacancy in an office from any cause may be filled for the
unexpired portion of the term by the Board of Directors.
26. (a) The President shall preside at all meetings of the stockholders
and the Board of Directors. He shall have general supervision of the affairs of
the Corporation, shall sign or countersign all certificates, contracts or other
instruments of the Corporation as authorized by the Board of Directors, shall
make reports to the Board of Directors and stockholders, and shall perform such
other duties as are incident to his office or are properly required of him by
the Board of Directors.
<PAGE> 9
29. The shares of stock of the Corporation shall be transferrable only on
the books of the Corporation by the holder thereof in person or by his
attorney, upon surrender for cancellation of the certificate or certificates,
with an assignment and power of transfer endorsed thereon or attached thereto
duly executed, and with such proof of authenticity of the signature as the
Corporation or its agent may reasonably require.
30. No certificate for shares of stock in the Corporation shall be issued
in place of any certificate alleged to have been lost, stolen or destroyed,
except upon production to the Corporation or its agents of satisfactory
evidence of such loss, theft or destruction, and upon delivery to the
Corporation of a bond of indemnity in such amount and upon such terms and
secured by such security as the Board of Directors in its discretion may
require.
31. The Board of Directors may appoint one or more transfer agents or
transfer clerks and one or more registrars, and may require all certificates
for shares to bear the signature or signatures of any of them.
CORPORATE ACTIONS
32. The Board of Directors shall select banks, trust companies, or other
depositories in which all funds of the Corporation not otherwise employed
shall, from time to time, be deposited to the credit of the Corporation.
33. Unless otherwise ordered by the Board of Directors, the President
shall have full power and authority on behalf of the Corporation to attend and
to act and to vote at any meeting of security holders of other corporations in
which Corporation may hold securities. At such meeting, the President shall
possess and may exercise any and all rights and powers incident to the ownership
of such securities which the Corporation might have possessed and exercised if
it had been present. The Board of Directors may, from time to time, confer like
powers upon any other person or persons.
34. All checks, drafts, notes, bonds, deeds, contracts, mortgages and
other instrument shall be signed by such officer or officers or any other
person or persons as may be designated from time to time by resolution of the
Board of Directors.
FISCAL YEAR
35. The fiscal year of the Corporation shall be as determined by the
Board of Directors.
<PAGE> 10
AMENDMENTS AND EFFECTS OF BYLAWS
36. The Board of Directors shall have authority to adopt or amend
bylaws not consistent with bylaws adopted by the stockholders. All bylaws for
the government of the corporation shall be subordinate only to the certificate
of incorporation and the laws of the United States and State of Florida.
AGREEMENTS AS TO CONDUCT OF CERTAIN AFFAIRS
OF CORPORATION
37. (a) The stockholders of this corporation may enter into a written
agreement, embodied in the articles of incorporation or bylaws of the
corporation, or in a side agreement in writing and signed by all the parties
thereto, relating to any phase of the affairs of the corporation, including, but
not limited to, the following:
(1) Management of the business of the corporation.
(2) Declaration and payment of dividends or division of profits.
(3) Who shall be officers or directors, or both, of the corporation.
(4) Restrictions on transfer of stock.
(5) Voting requirements, including the requirements of unanimous voting
of stockholders or directors.
(6) Employment of stockholders by the corporation.
(7) Arbitration of issues as to which the stockholders are deadlocked
in voting power or as to which the directors are deadlocked and the stockholders
are unable to break the deadlock.
(b) No written agreement to which stockholders of this corporation have
actually assented, whether embodied in the charter or bylaws of the corporation
or in any side agreement in writing signed by all the parties thereto, and which
relate to any phase of the affairs of the corporation, whether to the management
of its business or division of its profits or otherwise, shall be invalid as
between the parties thereto, on the ground that it is an attempt by the parties
thereto to treat the corporation as if it were a partnership or to arrange their
relationships in a manner that would be appropriate only between partners.
CONDUCT OF BUSINESS WITHOUT MEETINGS
38. Any action of the stockholders, directors or committee may be taken
without a meeting if consent in writing, setting forth the action so taken,
shall be signed by all persons who would be entitled to vote on such action at a
meeting and filed with the secretary of the corporation as part of the
proceedings of the stockholders, directors or committees as the case may be.
<PAGE> 11
EXCESS COMPENSATION OF OFFICERS
39. Any payments made to an officer of the corporation, such as
salary, commission, bonus, interest, rent, entertainment expense incurred by
him, or any fringe benefit, which shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be reimbursable by
such officer of the corporation to the full extent of such disallowance. It
shall be the duty of the Board of Directors to enforce payment of each such
amount disallowed. In lieu of payment by such officer, subject to determination
by the Board of Directors, proportionate amounts may be withheld from such
officer's future compensation payments until the amount owed to this
corporation has been recovered.
<PAGE> 1
EXHIBIT 3.17
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MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
- --------------------------------------------------------------------------------
(FOR BUREAU USE ONLY) Date Received
JAN 27 1988
[FILING STAMP]
EFFECTIVE DATE:
CORPORATION IDENTIFICATION NUMBER 376-167
- --------------------------------------------------------------------------------
ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Articles:
ARTICLE I
The name of the corporation is:
CABLE DESTRUCTERS, INC.
ARTICLE II
The purpose or purposes for which the corporation is organized is to engage in
any activity within the purposes for which corporations may be organized under
the Business Corporation Act of Michigan.
ARTICLE III
The total authorized capital stock is:
1. Common Shares 50,000 Par Value Per Share $1.00
Preferred Shares ____ Par Value Per Share $ ___
and/or shares without par value follows:
2. Common Shares ______________ Stated Value Per Share $ _______
Preferred Shares ___________ Stated Value Per Share $ _______
3. A statement of all or any relative rights, preferences and limitations of
the shares of each class is as follows:
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 2
ARTICLE IV
1. The address of the registered office is:
26400 Lahser #202 Southfield, Michigan 48034
(Street Address) (City,) (State) (Zip)
2. The mailing address of the registered office if different than above:
Michigan
3. The name of the resident agent at the registered office is: Allan Cohen
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Allan Cohen 26400 Lahser Southfield, Michigan 48034
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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ARTICLE VI (OPTIONAL. DELETE IF NOT APPLICABLE)
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them,
a court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement and the reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the creditors, or class of
creditors, or on all the shareholders or class of shareholders and also on this
corporation.
ARTICLE VII (OPTIONAL. DELETE IF NOT APPLICABLE)
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so taken,
is signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
<PAGE> 3
Use space below for additional Articles or for continuation of previous
Articles. Please identify any Article being continued or added. Attach
additional pages if needed.
I (We), the incorporator(s), sign my (our) name(s) this 26 day of January 1988.
/s/ ALLEN COHEN
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
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GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 4
<TABLE>
<S> <C>
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS Name of person or organization
INDICATE IN THE BOX BELOW. Include name, street and number remitting fees
(or P.O. box), city, state and ZIP code.
COHEN, LEFF & COMPANY, P.C. Preparer's name and business
26400 LAHSER #202 SC. 48034 telephone number
SOUTHFIELD, MI (313) 350-2330
</TABLE>
INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended. The articles of incorporation cannot be filed until this form, or
a comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to the provisions of Act 284, P.A. of
1972, by one or more persons for the purpose of forming a domestic profit
corporation.
4. Article I - The corporate name of a domestic profit corporation is required
to contain one of the following words or abbreviations: "Corporation",
"Company", "Incorporated", "Limited", "Corp.", "Co.", "Inc.", or "Ltd.".
5. Article II - State, in general terms, the character of the particular
business to be carried on. Under section 202(b) of the Act, it is
sufficient to state substantially, alone or without specifically enumerated
purposes, that the corporation may engage in any activity within the
purposes for which corporations may be organized under the Act. The Act
requires, however, that educational corporations state their specific
purposes.
6. Article III (2) - The Act requires the incorporators of a domestic
corporation having shares without par value to submit in writing the amount
of consideration proposed to be receive for each share which shall be
allocated to stated capital. Such stated value may be indicated either in
item 2 of article III or in a written statement accompanying the articles
of incorporation.
7. Article IV - A post office box may not be designated as the address of the
registered office.
8. Article V - The Act requires one or more incorporators. The address(es)
should include a street number an name (or other designation), city and
state.
9. The duration of the corporation should be stated in the articles only if
the duration is not perpetual.
10. This document is effective on the date approved and filed by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated as an additional article.
11. The articles must be signed in ink by each incorporator. The names of the
incorporators as set out in article V should correspond with the
signatures.
<TABLE>
<S> <C>
12. FEES: Filing fee......................................................... $10.00
Franchise fee - 1/2 mill (.0005) on each dollar of authorized
capital stock, with a minimum franchise fee of..................... $25.00
Total minimum fees (Make remittance payable to State of Michigan)... $35.00
</TABLE>
13. Mail form and fee to:
Michigan Department of Commerce, Corporation and Securities Bureau,
Corporation Division, P O Box 30054, Lansing, MI 48909. Telephone:
(517) 334-6302
<PAGE> 5
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MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
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(FOR BUREAU USE ONLY) Date Received
JAN 30 1990
[FILING STAMP]
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CERTIFICATE OF CHANGE OF REGISTERED OFFICE AND/OR CHANGE OF RESIDENT AGENT
FOR USE BY DOMESTIC AND FOREIGN CORPORATIONS
(Please read information and instructions on reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:
- -------------------------------------------------------------------------------
1. The name of the corporation:
Cable Destructers, Inc.
2. The corporation identification number (CID) assigned by the Bureau is:
376-167
3. a. The address of the registered office as currently on file with the Bureau
is:
26400 Lahser #202 Southfield Michigan 48034
---------------------- ----------------, ----------------
(Street Address) (City) (Zip Code)
b. The mailing address of the above registered office, if different, is:
---------------------- ----------------, Michigan ----------------
(P.O. Box) (City) (Zip Code)
c. The name of the resident agent as currently on file with the Bureau is:
Allan Cohen
--------------------------------
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COMPLETE THE APPROPRIATE ITEMS FOR ANY INFORMATION THAT HAS CHANGED
- -------------------------------------------------------------------------------
4. The address of the registered office is changed to:
35550 Pleasant Valley Rd. Farmington Hills 48333
------------------------- ----------------, Michigan ----------------
(Street Address) (City) (Zip Code)
The mailing address of the above registered office, if different, is:
P.O. Box 438 Farmington Hills 48332
---------------------- ----------------, Michigan ----------------
(P.O. Box) (City) (Zip Code)
5. The name of the successor resident agent is: Larry Sovel-Bonadeo
--------------------------------
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- -------------------------------------------------------------------------------
6. The corporation further states that the address of its registered
office and the address of its resident agent, as changed, are identical.
7. a. The above changes were authorized by resolution duly adopted by its
board of directors or trustees, except when this form is being filed
by the resident agent of a profit corporation to change the address
of the registered office.
b. A copy of this statement has been mailed to the corporation.
Signed this 25th day of January, 1990
By /s/ LARRY SOVEL-BONADEO
-------------------------------------------
(Signature)
Larry Sovel-Bonadeo, President
--------------------------------------------
(Type of Print Name) (Type or Print Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 6
<TABLE>
<S> <C>
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS Name of person or organization
INDICATED IN THE BOX BELOW. Include name, street and remitting fees
number (or P.O. box), city, state and ZIP code. Cable Destructers, Inc.
----------------------------
----------------------------
- ------------------------------- Preparer's name and business
Cable Destructers, Inc. telephone number:
P.O. Box 438 Duane E. Foster, CPA
Farmington Hills, MI 48332-0438 ----------------------------
- ------------------------------- (313) 471-7888
----------------------------
</TABLE>
INFORMATION AND INSTRUCTIONS
1. The certificate of change of registered office and/or change of resident
agent cannot be filed until this form, or a comparable document, is
submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy will
be prepared for the records of the Corporation and Securities Bureau. The
original copy will be returned to the address appearing in the box above as
evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to section 242 of the Act by domestic
and foreign corporations for the purpose of changing their registered office
or resident agent, or both.
4. Item 2 - Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 3 - The address of the registered office and the name of the resident
agent must be the same as are designated in the articles of incorporation or
subsequent change filed with the Bureau.
6. Item 4 - A post office box may not be designated as the address of the
registered office. The resident agent can change the registered office by
filing this form only if this is a profit corporation.
7. This certificate must be signed in ink by the president, vice-president,
chairperson, vice-chairperson, secretary or assistant secretary of the
corporation. (Profit corporations only): If only the registered office
address is changed, it may be signed by the resident agent without addressing
Item 5 or Item 7(a).
8. FEES: (Make remittance payable to State of Michigan)....................$5.00
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
6546 Mercantile Way
Lansing, Michigan 48909
Telephone: (517) 334-6302
<PAGE> 7
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
- --------------------------------------------------------------------------------
(FOR BUREAU USE ONLY) DATE RECEIVED
MAR 01 1991
[FILING STAMP]
EXPIRATION DATE: December 31, 1996
- --------------------------------------------------------------------------------
CERTIFICATION OF ASSUMED NAME
FOR USE BY CORPORATIONS AND LIMITED PARTNERSHIPS
(PLEASE READ INSTRUCTIONS AND PAPER REDUCTION ACT NOTICE ON REVERSE SIDE)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or limited
partnership in item one below executes the following Certificate:
1. The true name of the corporation or limited partnership is:
Cable Destructers, Inc.
2. The identification number assigned by the Bureau is: 376-167
3. The location of the corporate registered office in Michigan or the office
at which the limited partnership records are maintained is:
35550 Pleasant Valley Road Farmington Hills, MI 48333
--------------------------------------------------------------------
(Street Address) (City) (State) (ZIP Code)
4. The assumed name under which business is to be transacted is:
Dobso Metal Retrievers Co., Ltd.
Signed this 28th day of February, 1991
By /s/ LARRY SOVEL-BONADEO
-----------------------------------------------
Larry Sovel-Bonadeo President
-----------------------------------------------
(Type or Print Name) (Type or Print Title)
-----------------------------------------------
(Limited Partnership Only--Indicate Name of
General Partner if a corporation or other
entity)
<PAGE> 8
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS
INDICATED IN THE BOX BELOW. Include name, street and number
(or P.O. box), city, state and ZIP code.
- ------------------------
Donald B. Sovel
P.O. Box 328037
Farmington, MI 48332
- ------------------------
Name of person or organization remitting fees:
Donald B. Sovel
- ------------------------
- ------------------------
Preparer's name and business telephone number:
Donald B. Sovel
- ------------------------
(313) 477-9188
- ------------------------
- --------------------------------------------------------------------------------
INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended, Act 162, P.A. of 1982, and Act 213, P.A. of 1982. The certificate
of assumed name cannot be filed until this form, or a comparable document,
is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This certificate is to be used by a corporation or limited partnership
desiring to transact business under an assumed name other than the true
name of the corporation or limited partnership.
4. The certificate shall be effective for a period expiring on December 31
of the fifth full calendar year following the year in which it was filed,
unless a certificate of termination is filed.
5. The same name may be assumed by two or more corporations participating
together in any partnership or joint venture; similarly, the same name may
be assumed by two or more limited partnerships participating together in
any partnership or joint venture.
6. Item 1--The true name of a corporation is that contained in its most recent
articles of incorporation (as amended or restated) or certificate of
authority. For limited partnerships, it is the name contained in its most
recent certificate of limited partnership (as amended or restated) or
application for registration. If a name was placed in item 1(b) of the
application for registration, enter that name. Otherwise, enter the name
from item 1(a).
7. Item 2--Enter the identification number previously assigned by the
Bureau. If this number is unknown, leave it blank.
8. Item 3--If a foreign limited partnership, this address must be that shown
in item 6 of the application for registration to transact business in
Michigan.
9. If a corporation, this certificate must be signed in ink by the President,
Vice-President, Chairperson, or Vice-Chairperson. If a limited partnership,
it must be signed in ink by at least one General Partner.
10. FEES: Filing fee (Make remittance payable to State of Michigan).... $10.00
11. Mail form and fee to:
Michigan Department of Commerce, Corporation and Securities Bureau,
Corporation Division, P.O. Box 30054, Lansing, MI 48909,
Telephone: (517) 373-0493
- --------------------------------------------------------------------------------
<PAGE> 9
NOTICE OF FILING OF DOCUMENT
The enclosed document has been filed by the Corporation and Securities Bureau,
Michigan Department of Commerce. A microfilm copy of the document has been
prepared for the Bureau's files. THE ENCLOSED ORIGINAL DOCUMENT SHOULD BE
RETAINED FOR YOUR RECORDS AS PROOF OF FILING.
NO ADDITIONAL FEES ARE DUE
Each corporation or limited partnership is assigned an identification number as
indicated on the document. Please make reference to this number in any future
correspondence or filing with this office.
If checked, the following item(s) apply to this filing and should be noted:
[ ] The Certificate must reflect the registered office and/or resident agent
on record prior to the filing of this change. We have adjusted the
Certificate accordingly.
[ ] Adjustments made within this document were made pursuant to telephone
authorization.
[ ] The Act requires only one originally executed copy of a document to be
submitted for filing. We return the duplicate copies herewith.
[ ] Fees remitted are in excess in the amount of _______________ and a refund
of this excess has been ordered. The State refund warrant will be
forthcoming in the near future.
[ ] A mailing address for the registered office of a foreign corporation is
not required under Michigan law. The registered office mailing address
indicated on the Certificate will be placed on record for informational
purposes only and will not be used for mailings originating from this
office.
[ ] Pursuant to Section 1021 (2), Act 284, P.A. of 1972, as amended, (MCL
450.2021) a foreign corporation that is the survivor of a merger must
file a certificate attesting to the occurrence of the merger, issued by
the office where the merger is filed, within 30 days after the merger
becomes effective. The filing fee for this certificate is $10.00. If
the merger changes the name of the survivor, the nature of the business
in Michigan, or its authorized capital stock, the enclosed Amended
Application should also be filed with this office. The filing fee for the
Amended Application is $10.00. Remittances should be made payable to the
State of Michigan.
[ X ] The address of the registered office in Item 3 has been adjusted to agree
with our records. If the resident agent and/or the registered office has
been changed, complete the enclosed C&S-520 and return to this office
with $5.00 fee made payable to the State of Michigan.
Michigan Department of Commerce, Corporation and Securities Bureau, Corporation
Division, P.O. Box 30054, Lansing, Michigan 48909. Telephone: (517) 334-6302.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 10
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
- --------------------------------------------------------------------------------
(FOR BUREAU USE ONLY) Date Received
JUN 05 1991
[FILING STAMP]
- --------------------------------------------------------------------------------
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), or Act 162, Public Acts of 1982, as amended (nonprofit
corporations), the undersigned corporation executes the following Certificate:
1. The present name of the corporation is: CABLE DESTRUCTORS, INC.
2. The corporation identification number (CID) assigned by the Bureau is:
376-167
3. The location of its registered office is:
35550 Pleasant Valley Road Farmington Hills, Michigan 48331
- ----------------------------------------------------- --------
(Street Address) (City) (Zip Code)
4. Article I of the Articles of Incorporation is hereby amended to read as
follows:
Article I
The name of the corporation is Mich-Com Cable Services/Cable
Destructors, Co.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 11
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS OR
TRUSTEES; OTHERWISE, COMPLETE SECTION (b)
a. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the ____ day of _____________, 19___, in accordance with
the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the board of directors or
trustees.
Signed this _______ day of ________________________, 19_____.
- -------------------------------- ----------------------------------
- -------------------------------- ----------------------------------
- -------------------------------- ----------------------------------
- -------------------------------- ----------------------------------
(Signatures of all incorporators; type or print name under each signature)
b. [ X ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the 22nd day of, March, 1991. The amendment: (check one
of the following)
[ X ] was duly adopted in accordance with Section 611(2) of the Act by the
vote of the shareholders if a profit corporation, or by the vote of
the shareholders or members if a nonprofit corporation, or by the
vote of the directors if a nonprofit corporation organized on a
nonstock directorship basis. The necessary votes were cast in favor
of the amendment.
[ ] was duly adopted by the written consent of all the directors pursuant
to Section 525 of the Act and the corporation is a nonprofit
corporation organized on a nonstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required by
statute in accordance with Section 407(1) and (2) of the Act.
Written notice to shareholders or members who have not consented in
writing has been given. (Note: Written consent by less than all of
the shareholders or members is permitted only if such provision
appears in the Articles of Incorporation.)
[ ] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407(3) of the
Act.
Signed this 22nd day of March, 1991
By: /s/ LARRY SOVEL-BONADEO
-----------------------------------------------------------
(Signature)
Larry Sovel-Bonadeo President
------------------------------------------------------------
(Type or Print Name) (Type or Print Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 12
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS
INDICATED IN THE BOX BELOW. Include name, street and number
(or P.O. box), city, state and ZIP code.
- ------------------------
Duane E. Foster
23917 Cass
Farmington, MI 48335
- ------------------------
Name of person or organization
remitting fees:
Cable Destructors, Inc.
- ------------------------
- ------------------------
Preparer's name and business
telephone number:
Duane Foster
- ------------------------
(313) 471-7888
- ------------------------
- -------------------------------------------------------------------------------
INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended, Act 162, P.A. of 1982, as amended. The amendment cannot be filed
until this form, or a comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to the provisions of section 631 of
the Act for the purpose of amending the articles of incorporation of a
domestic profit or nonprofit corporation. Do not use this form for restated
articles. A nonprofit corporation is one incorporated to carry out any
lawful purpose or purposes not involving pecuniary profit or gain for its
directors, officers, shareholders, or members. A nonprofit corporation
organized on a nonstock directorship basis, as authorized by Section 302 of
the Act, may or may not have members, but if it has members, the members
are not entitled to vote.
4. Item 2--Enter the identification number previously assigned by the
Bureau. If this number is unknown, leave it blank.
5. Item 4--The entire article being amended must be set forth in its entirety.
However, if the article being amended is divided into separately
identifiable sections, only the sections being amended need be included.
6. This document is effective on the date approved and filed by the Bureau.
A later effective date, no more than 90 days after the date of delivery,
may be stated.
7. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by all of the
incorporators listed in Article V of the Articles of Incorporation. If the
amendment is otherwise adopted, item 5(b) must be completed and signed in
ink by the president, vice-president, chairperson, or vice-chairperson of
the corporation.
8. FEES: Filing fee (Make remittance payable to State of Michigan)........
....... $10.00
Franchise fee for profit corporations (payable only if authorized
capital stock has increased) -- 1/2 mill (.0005) of each dollar of
increase over highest previous authorized capital stock.
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909
Telephone: (517) 373-0493
- -------------------------------------------------------------------------------
<PAGE> 13
NOTICE OF FILING OF DOCUMENT
The enclosed document has been filed by the Corporation and Securities Bureau,
Michigan Department of Commerce. A microfilm copy of the document has been
prepared for the Bureau's files. THE ENCLOSED ORIGINAL DOCUMENT SHOULD BE
RETAINED FOR YOUR RECORDS AS PROOF OF FILING.
NO ADDITIONAL FEES ARE DUE
Each corporation or limited partnership is assigned an identification number as
indicated on the document. Please make reference to this number in any future
correspondence or filing with this office.
If checked, the following item(s) apply to this filing and should be noted:
[ ] The Certificate must reflect the registered office and/or resident agent
on record prior to the filing of this change. We have adjusted the
Certificate accordingly.
[ X ] Adjustments made within this document were made pursuant to telephone
authorization.
[ ] The Act requires only one originally executed copy of a document to be
submitted for filing. We return the duplicate copies herewith.
[ ] Fees remitted are in excess in the amount of _______________ and a refund
of this excess has been ordered. The State refund warrant will be
forthcoming in the near future.
[ ] A mailing address for the registered office of a foreign corporation is
not required under Michigan law. The registered office mailing address
indicated on the Certificate will be placed on record for informational
purposes only and will not be used for mailings originating from this
office.
[ ] Pursuant to Section 1021(2), Act 284, P.A. of 1972, as amended, (MCL
450.2021) a foreign corporation that is the survivor of a merger must
file a certificate attesting to the occurrence of the merger, issued by
the office where the merger is filed, within 30 days after the merger
becomes effective. The filing fee for this certificate is $10.00. If
the merger changes the name of the survivor, the nature of the business
in Michigan, or its authorized capital stock, the enclosed Amended
Application should also be filed with this office. The filing fee for the
Amended Application is $10.00. Remittances should be made payable to the
State of Michigan.
[ ]
Michigan Department of Commerce, Corporation and Securities Bureau, Corporation
Division, P.O. Box 30054, Lansing, Michigan 48909. Telephone: (517) 334-6302.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 14
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
- --------------------------------------------------------------------------------
(FOR BUREAU USE ONLY) DATE RECEIVED
AUG 30 1993
[FILING STAMP]
EXPIRATION DATE: December 31, 1998
- --------------------------------------------------------------------------------
CERTIFICATION OF ASSUMED NAME
FOR USE BY CORPORATION AND LIMITED PARTNERSHIPS
(Please read information and instructions on reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972. (profit
corporations), Act 162, Public Acts of 1982 (nonprofit corporations), or Act
213, Public Acts of 1982 (limited partnerships), the corporation or limited
partnership in item one below executes the following Certificate:
1. The true name of the corporation or limited partnership is:
MICH-COM CABLE SERVICES/CABLE DESTRUCTORS, CO.
2. The identification number assigned by the Bureau is: 376-167
3. The location of the corporate registered office or the office at which the
limited partnership records are maintained is:
26400 Lahser #202 Southfield, MI 48034
--------------------------------------------------------------------
(Street Address) (City) (State) (ZIP Code)
4. The assumed name under which business is to be transacted is:
FUSION & FIBER OPTICAL SERVICES, LTD.
Signed this 26 day of August, 1993
By /s/ ALLAN COHEN
------------------------------------------------
(Signature)
Allan Cohen Agent
-----------------------------------------------
(Type or Print Name) (Type or Print Title)
-----------------------------------------------
(Limited Partnerships Only -- indicate Name of
General Partner if a corporation or other
entity)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 15
DOCUMENT WILL BE RETURNED TO NAME Name of person or
AND MAILING ADDRESS INDICATED organization remitting
IN THE BOX BELOW. Include name, street and number fees:
(or P.O. box),city, state and ZIP code.
--------------------------
- -------------------------------------------------
COHEN, LEFF & CO., P.C. --------------------------
26400 LASHER STE [ILLEGIBLE] Preparer's name and
SOUTHFIELD, MICHIGAN [ILLEGIBLE] business telephone number:
- -------------------------------------------------
A. Cohen
--------------------------
(313) 350-2330
--------------------------
INFORMATION AND INSTRUCTIONS
1. In order to file an assumed name with this agency this form, or a
comparable document, must be submitted. This certificate of assumed name
is to be used by a corporation or limited partnership desiring to transact
business under an assumed name other than the true name of the corporation
or limited partnership.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of the filing.
Since this document must be microfilmed, it is important that the filing
be legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. The certificate shall be effective for a period expiring on December 31 of
the fifth full calendar year following the year in which it was filed,
unless a certificate of termination is filed.
4. The same name may be assumed by two or more limited partnerships
participating together in any partnership or joint venture. The same name
may be assumed by two or more corporations, or by one or more corporations
and one or more limited partnerships or other enterprises, in the case of
corporations and other enterprises participating together in a
partnership or joint venture. Each participant corporation shall file a
certificate under this section.
5. Item 1 - For domestic corporations and limited partnerships, the true name
is the name contained in its current articles of incorporation
or certificate of limited partnership (as amended or restated.) For
foreign corporations and limited partnerships the true name is that name
under which it obtained its authority to transact business or conduct
affairs in Michigan.
6. Item 2 - Enter the identification number previously assigned by the
Bureau. If this number is unknown, leave it blank.
7. Item 3 - If a foreign limited partnership, this address must be that shown
in item 6 of the application for registration to transact business in
Michigan.
8. If a corporation, this certificate must be signed in ink by an authorized
officer or agent of the corporation. If a limited partnership, it must be
signed in ink by at least one general partner.
9. FEES: (Make remittance payable to State of Michigan).........$10.00
10. Mail form and fee to:
Michigan Department of Commerce, Corporation and Securities Bureau,
Corporation Division, P.O. Box 30054, 6546 Mercantile Way, Lansing, MI
48909, Telephone: (517) 334-6302
<PAGE> 16
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
- --------------------------------------------------------------------------------
(FOR BUREAU USE ONLY) Date Received
APR 27 1994
[FILING STAMP] MAY 12 1994
- --------------------------------------------------------------------------------
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read information and instructions on last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Mich-Com Cable Services/Cable
Destructors, Co.
2. The corporation identification number (CID) assigned by the Bureau is:
376-167
3. The location of its registered office is:
26400 Lahser Suite 202 Southfield, Michigan 48034
- ----------------------------------------------- ----------
(Street Address) (City) (Zip Code)
4. Article 1 of the Articles of Incorporation is hereby amended to read as
follows:
Change Corporation Name to:
Mich-Com Cable Services Incorporated
Article 4 NO: 1
address of registered office is,
24724 Farmbrook Rd. Suite 200
Southfield, Michigan 48034
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 17
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS OR
TRUSTEES; OTHERWISE, COMPLETE SECTION (b)
a. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the ____ day of _____________, 19___, in accordance with
the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the board of directors or
trustees.
Signed this ____ day of _____________________, 19__.
- -------------------------------- -------------------------------
(Signature) (Signature)
- -------------------------------- -------------------------------
(Type or Print Name) (Type or Print Name)
- -------------------------------- -------------------------------
(Signature) (Signature)
- -------------------------------- -------------------------------
(Type or Print Name) (Type or Print Name)
b. [ X ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the 25th day of, April, 1994. The amendment: (check one
of the following)
[ X ] was duly adopted in accordance with Section 611(2) of the Act by the
vote of the shareholders if a profit corporation, or by the vote of
the shareholders or members if a nonprofit corporation, or by the
vote of the directors if a nonprofit corporation organized on a
nonstock directorship basis. The necessary votes were cast in favor
of the amendment.
[ ] was duly adopted by the written consent of all the directors pursuant
to Section 525 of the Act and the corporation is a nonprofit
corporation organized on a nonstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required by
statute in accordance with Section 407(1) and (2) of the Act if a
nonprofit corporation, and Section 407(1) of the Act if a profit
corporation. Written notice to shareholders or members who have not
consented in writing has been given. (Note: Written consent by less
than all of the shareholders or members is permitted only if such
provision appears in the Articles of Incorporation.)
[ ] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407(3) of the Act
if a non-profit corporation, and Section 407(2) of the Act if a
profit corporation.
Signed this 25th day of April, 1994
By: /S/ LARRY BONADEO
--------------------------------------------------------------
(Only signature of President, Vice President, Chairperson and
Vice-Chairperson)
Larry Bonadeo President
-------------------------------------------------------------
(Type or Print Name) (Type or Print Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 18
<TABLE>
<S> <C>
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS Name of person or organization
INDICATED IN THE BOX BELOW. Include name, street and number remitting fees:
(or P.O. box), city, state and ZIP code.
Mich-Com Cable Services/
----------------------------
- -------------------------------------------------------- Cable Destructors, Co.
----------------------------
Preparer's name and business
Mich Com Cable Services telephone number:
P.O. Box 392 Larry Bonadeo
----------------------------
Farmington, Michigan 48332 (313) 353-7677
----------------------------
- --------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
INFORMATION AND INSTRUCTIONS
1. The amendment cannot be filed until this form, or a comparable document, is
submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy will
be prepared for the records of the Corporation and Securities Bureau. The
original copy will be returned to the address appearing in the box above as
evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to the provisions of section 631 of the
Act for the purpose of amending the articles of incorporation of a domestic
profit or nonprofit corporation. Do not use this form for restated articles.
A nonprofit corporation is one incorporated to carry out any lawful purpose
or purposes not involving pecuniary profit or gain for its directors,
officers, shareholders, or members. A nonprofit corporation formed on a
nonstock directorship basis, as authorized by Section 302 of the Act, may or
may not have members, but if it has members, the members are not entitled to
vote.
4. Item 2 -- Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 4 -- The article being amended must be set forth in its entirety.
However, if the article being amended is divided into separately identifiable
sections, only the sections being amended need be included.
6. This document is effective on the date approved and filed by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may be
stated.
7. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by a majority of the
incorporators if more than one listed in Article V of the Articles of
Incorporation if a profit corporation, and all the incorporators if a
non-profit corporation. If the amendment is otherwise adopted, item 5(b) must
be completed and signed in ink by the president, vice-president, chairperson
or vice-chairperson of the corporation.
8. FEE: (Make remittance payable to the State of Michigan.
Include corporation name and CID Number on check or money order)..$10.00
Franchise fee for profit corporations (payable only if authorized shares
have increased):
each additional 20,000 authorized shares or portion thereof.......$30.00
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
6546 Mercantile Way
Lansing, MI 48909
Telephone:(517) 334-6302
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE> 1
EXHIBIT 3.18
TABLE OF CONTENTS
BYLAWS OF
MICH-COM CABLE SERVICES
a Michigan corporation
<TABLE>
<S> <C> <C>
SHAREHOLDERS MEETINGS
1.1 Annual Meeting 1
1.2 Special Meetings 1
1.3 Order of Business 1
1.4 Notice of Meetings 2
1.5 Adjournments 2
1.6 Waiver of Notice 2
1.7 Attendance at Meeting 2
1.8 Electronic Participation 2
1.9 Quorum 3
1.10 Record Dates 3
(A) Voting 3
(B) Consent Resolutions 3
(C) Distributions and Other Actions 3
1.11 Inspections of List of Shareholders 4
1.12 Inspectors of Election 4
1.13 Voting Rights 5
1.14 Voting by Shareholder Corporation 5
1.15 Voting of Securities Owned by the Corporation 5
1.16 Pledged Shares 5
1.17 Action by Unanimous Written Consent 6
1.18 Action by Written Consent 6
SHAREHOLDER INSPECTION OF BOOKS OF STOCK BOOKS AND RECORDS; REPORTS TO SHAREHOLDERS
2.1 Books of Account and Stock Books 6
2.2 Financial Statements 7
2.3 Examination of Stock Books and Records 7
CAPITAL STOCK
3.1 Certificates 7
3.2 Transfer 7
3.3 Lost, Destroyed, or Stolen Certificates 8
3.4 Registered Shareholder 8
3.5 Lien for Shareholder Indebtedness 8
3.6 Consideration for Shares 8
3.7 Transfer Agent and Registrar 9
3.8 Nominees 9
3.9 Regulations 9
BOARD OF DIRECTORS
4.1 Number and Term of Office 9
4.2 Removal or Resignation 10
4.3 Vacancies 10
4.4 Organizational Meeting 10
4.5 Regular Meetings 10
4.6 Special Meetings 11
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
4.7 Waiver of Notice 11
4.8 Purpose 11
4.9 Electronic Participation 11
4.10 Quorum 11
4.11 Appointment of Committees 12
4.12 Powers of Committees 12
4.13 Action by Unanimous Written Consent 12
4.14 Election of Officers 13
4.15 Compensation 13
4.16 Payments to be Reimbursed 13
4.17 Elimination of Certain Liability of Directors 13
DIVIDENDS AND DISTRIBUTIONS
5.1 Dividends 14
TRANSACTIONS WITH THE CORPORATION; LOANS TO DIRECTORS,
OFFICERS OR EMPLOYEES
6.1 Interested Transactions 14
6.2 Loans to Directors, Officers, or Employees 15
OFFICERS
7.1 Chairman of the Board 15
7.2 Vice Chairman of the Board 15
7.3 President 16
7.4 Vice Presidents 16
7.5 Secretary 16
7.6 Treasurer 16
7.7 Removal or Resignation of Officers and Agents 16
EXECUTION OF INSTRUMENTS
8.1 Money Instruments 17
8.2 Other Instruments 17
BOOKS AND RECORDS
9.1 Maintenance of Books and Records 17
9.2 Reliance on Books and Records 18
INDEMNIFICATION
10.1 Right to Indemnification 18
10.2 Non-Exclusivity of Rights 19
10.3 Indemnification of Employees and Agents of the Corporation 19
10.4 Insurance 19
CORPORATE SEAL
11.1 Seal 20
FISCAL YEAR
12.1 Fiscal Year 20
AMENDMENTS
13.1 Amendments 20
</TABLE>
<PAGE> 3
BYLAWS
OF
MICH-COM CABLE SERVICES
a Michigan corporation
ARTICLE 1
SHAREHOLDERS MEETINGS
1.1 Annual Meeting. The Annual Meeting of the shareholders shall
be held each year after the expiration of the fiscal year of
the Corporation at such time and place as shall be determined
by the Board of Directors, for the purpose of election
Directors and of transacting such other business as may
properly be brought before the meeting.
1.2 Special Meetings. A Special Meeting of the shareholders may be
called to be held at such time and place as may be designated
by the Chairman of the Board, a majority of the Board of
Directors, or not less than an aggregate of ten percent (10%)
of the outstanding shares of stock of the Corporation entitled
to vote at the meeting.
1.3 Order of Business. At all Annual and Special meetings of the
shareholders, the following order of business, unless
otherwise determined by the Chairman of the meeting, shall be
observed as far as practicable and consistent with the
purposes of the meeting:
(A) Call of the meeting to order.
(B) Roll call.
(C) Presentation of proof of delivery or mailing of the
notice of the meeting.
(D) Presentation of proxies.
(E) Determination that quorum is present.
(F) Reading and approval of the minutes of the previous
meeting.
(G) Reports, if any, of officers.
(H) Election of directors, if the meeting is an
annual meeting or a meeting called for that purpose.
(I) Consideration of the specific purpose or purposes,
other than the election of directors, for which the
meeting has been called, if the meeting is a special
meeting.
<PAGE> 4
(J) Transaction of such other business as may properly come
before the meeting.
(K) Adjournment.
1.4 Notice of Meetings. Written notice of the time, place and
purposes of every meeting of the shareholders of this
Corporation shall be given either personally or by mail not
less than ten (10) nor more than sixty (60) days before said
meeting upon each shareholder of record of the Corporation
entitled to vote at such meeting. A notice that is mailed
shall be deemed to be given when deposited in the United
States Mail, with postage fully prepaid, addressed to the
shareholder as his address appears on the records of the
Corporation.
1.5 Adjournments. Any meeting of shareholders, annual or special,
may adjourn from time to time to reconvene at the same or some
other place, and notice need not be given of any such
adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business
which might have been transacted at the original meeting. If
after the adjournment of a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the
meeting.
1.6 Waiver of Notice. Notice of the time, place and purpose of any
meeting of the shareholders of this Corporation may be waived
by telegram, radiogram, cablegram, telecopier, or other
writing either before or after such meeting has been held.
1.7 Attendance at Meeting. A shareholder's attendance at a
meeting constitutes a waiver of objection to:
(A) lack of notice or defective notice of the meeting,
unless the shareholder at the beginning of the meeting
objects to the holding of the meeting or transacting
business at the meeting; and
(B) consideration of a particular matter at the meeting that
is not within the purposes described in the meeting
notice, unless the shareholder objects to considering
the matter when it is presented.
1.8 Electronic Participation. A shareholder shall be deemed to be
present in person at a meeting of shareholders if such
shareholder participates in a meeting of shareholders by a
conference telephone or by other
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similar communications equipment through which all persons
participating in the meeting may communicate with each other
and all participants are advised of the communications
equipment and the names of the participants in the conference
are divulged to all participants.
1.9 Quorum. At every meeting of the shareholders, the holders of
record of a majority of the outstanding shares of stock of the
Corporation entitled to vote at such meeting, whether present
in person or represented by proxy, shall constitute a quorum.
If less than a quorum shall be present at any meeting of
shareholders, those holders of record of outstanding shares of
stock of the Corporation entitled to vote at such meeting,
present in person or represented by proxy, may adjourn the
meeting from time to time without further notice other than by
announcement at the meeting, until a quorum shall have been
obtained, at which time any business may be transacted which
might have been transacted at the meeting as first convened,
had there been a quorum.
1.10 Record Dates
(A) Voting. For the purpose of determining shareholders
entitled to notice of and to vote at a meeting of
shareholders or an adjournment of a meeting, the Board
of Directors may fix a record date (concurrent with or
subsequent to the date of the Board's resolution
adopting said record date), which shall not be more than
sixty (60) nor less than ten (10) days before the date
of the meeting.
(B) Consent Resolutions. For the purpose of determining
shareholders entitled to express consent to or to
dissent from a proposal without a meeting, the Board of
Directors may fix a record date (concurrent with or
subsequent to the date of the Board's resolution
adopting said record date), which shall not be more than
ten (10) days after the Board's resolution.
(C) Distributions and Other Actions. For the purpose of
determining shareholders entitled to receive payment of
a share dividend or distribution, or allotment of a
right, or for the purpose of any other action, the Board
of Directors may fix a record date (concurrent with or
subsequent to the date of the Board's resolution
adopting said record date), which shall not be more than
sixty (60) days before the payment of the share dividend
or distribution, or allotment of right or other
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<PAGE> 6
action.
Nothing in this Paragraph shall affect the rights of a
shareholder and his transferee or transferor as between
themselves.
1.11 Inspection of List of Shareholders. The officer or agent
having charge of the stock transfer books for shares of the
Corporation shall make and certify a complete list of the
shareholders entitled to vote at a shareholders meeting or
any adjournment thereof. The list shall:
(A) Be arranged alphabetically within each class and series,
with the address of and the number of shares held by
each shareholder.
(B) Be produced at the time and place of the meeting.
(C) Be subject to inspection by any shareholder during the
whole time of the meeting.
(D) Be prima facie evidence as to who are the shareholders
entitled to examine the list or to vote at the meeting.
1.12 Inspectors of Election. The Board, in advance of a
shareholders meeting, may appoint one or more inspectors to
act at the meeting or any adjournment thereof. If inspectors
are not so appointed, the person presiding at a shareholders
meeting may, and on request of a shareholder entitled to vote
thereat shall, appoint one (1) or more inspectors. In case a
person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board in advance of the
meeting or at the meeting by the person presiding thereat.
The inspectors shall determine the number of shares
outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine challenges and
questions arising in connection with the right to vote, count
and tabulate votes, ballots or consents, determine the result,
and do such acts as are proper to conduct the election or vote
with fairness to all shareholders. On request of the person
presiding at the meeting or a shareholder entitled to vote
thereat, the inspectors shall make and execute a written
report to the person presiding at the meeting of any of the
facts found by them and matters determined by them.
1.13. Voting Rights. Except as otherwise provided by statute
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<PAGE> 7
or in the Articles of Incorporation, each outstanding share of
stock is entitled to one (1) vote on each matter submitted to
a vote. A vote may be cast either orally or in writing as
determined by the Chairman of the meeting.
Except as otherwise required by the Articles of Incorporation,
these Bylaws, or the laws of the State of Michigan, if an
action other than the election of Directors is to be taken by
vote of the shareholders, it shall be authorized by a majority
of the votes cast by the holders of shares entitled to vote on
the action. Directors shall be elected by a plurality of the
votes cast at an election.
1.14. Vote by Shareholder Corporation. Shares standing in the name
of another domestic or foreign corporation may be voted by an
officer or agent, or by proxy appointed by an officer or agent
or by some other person, who by action of its board or
pursuant to its bylaws shall be appointed to vote the shares.
1.15. Voting of Securities Owned by the Corporation. Subject always
to the specific directions of the Board of Directors, any
shares or other securities issued by any other company and
owned or controlled by the Corporation may be voted at any
meeting of security holders of such other company by the
President of the Corporation or by proxy appointed by him, or
in the absence of the President and his proxy by the Treasurer
of the Corporation, or by proxy appointed by him, or in the
absence of the President and Treasurer, by the Secretary of
the Corporation, or by proxy appointed by him. Such proxy or
consent in respect to any shares or other securities issued by
any other company and owned by the Corporation, shall be
executed in the name of the Corporation by the President, the
Treasurer or the Secretary of the Corporation without
necessity of any authorization by the Board of Directors,
affixation or corporate seal or countersignature or
attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies
of the Corporation shall have the full right, power and
authority to vote the shares or other securities issued by
such other company and owned by the Corporation the same as
such shares or other securities might be voted by the
Corporation.
1.16 Pledged Shares. A shareholder whose shares are pledged is
entitled to vote the shares until they have been transferred
into the name of the pledgee, or a nominee of the pledgee.
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1.17 Action by Unanimous Written Consent. Any action required or
permitted to be taken at an Annual or Special Meeting of
shareholders may be taken without a meeting, without prior
notice and without a vote, if before or after the action, all
the shareholders entitled to vote consent in writing.
1.18 Action by Written Consent. Provided the Articles of
Incorporation so allow, any action required or permitted by
the Michigan Business Corporation Act to be taken at an Annual
or Special Meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if consents
in writing, setting forth the action so taken, are signed by
the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize
or take the action at a meeting at which all shares entitled
to vote on the action were present and voted. The written
consents shall bear the date of signature of each shareholder
who signs the consent. No written consents shall be effective
to take the corporate action referred to unless, within sixty
(60) days after the record date for determining shareholders
entitled to express consent to or to dissent from a proposal
without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to
the Corporation. Delivery shall be to the Corporation's
registered office, its principal place of business, or an
officer or agent of the Corporation having custody of the
minutes of the proceedings of its shareholders. Delivery made
to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. Prompt
notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to
shareholders who have not consented in writing.
ARTICLE 2
SHAREHOLDER INSPECTION OF BOOKS OF
STOCK BOOKS AND RECORDS; REPORTS TO SHAREHOLDERS
2.1 Books of Account and Stock Books. The Corporation shall keep
books and records of account and minutes of the proceedings of
the shareholders, board and executive committee, if any. The
Corporation shall keep at its registered office, or at the
office of its transfer agent in or outside this state, records
containing the names and addresses of all shareholders, the
number, class and series of shares held by each and the dates
when they respectively became holders of record. Any of the
books, records or minutes may be in written form or in any
other form capable of being converted into written form within
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<PAGE> 9
a reasonable time. The Corporation shall convert into written
form without charge any record not in written form unless
requested otherwise by a person entitled to inspect the
record.
2.2 Financial Statements. Within four months of the end of its
fiscal year, the Corporation shall mail to each shareholder
its balance sheet as of the end of the preceding fiscal year;
its statement of income for the fiscal year; and, if prepared
by the Corporation, its statement of source and application of
funds for the fiscal year. The same shall be furnished to any
shareholder at any time upon written request from such
shareholder.
2.3 Examination of Stock Books and Records. Any shareholder of
record, in person or by attorney or other agent, shall have
the right during the usual hours of business to inspect for
any proper purpose the Corporation's stock ledger, a list of
its shareholders, and its other books and records, if the
shareholder gives the Corporation written demand describing
with reasonable particularity his or her purpose and the
records he or she desires to inspect, and the records sought
are directly connected with the purpose. A proper purpose
shall mean a purpose reasonably related to such person's
interest as a shareholder. The demand shall be delivered to
the Corporation at its registered office in Michigan or at its
principal place of business. In every instance where an
attorney or other agent shall be the person who seeks to
inspect, the demand shall be accompanied by a power of
attorney or other writing which authorizes the attorney or
other agent to act on behalf of the Shareholder. A holder of a
voting trust certificate representing shares of the
Corporation is deemed a shareholder for the purpose of this
Paragraph.
ARTICLE 3
CAPITAL STOCK
3.1 Certificates. Every shareholder of this Corporation shall be
entitled to a certificate of his shares signed by the Chairman
of the Board, Vice-Chairman of the Board, President or Vice
President certifying the number and class of shares, and
designation of the series, if any, represented by such
certificate; provided that where such certificate is signed by
a transfer agent acting on behalf of the Corporation, and by a
registrar, the signature of any such officer may be facsimile.
3.2 Transfer. Except as otherwise provided by a written agreement
between the Corporation and a shareholder,
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<PAGE> 10
shares shall be transferable only on the books of the
Corporation by the person named in the certificate, or by
attorney lawfully constituted in writing, and upon surrender
of the certificates therefor. A record shall be made of every
such transfer and issue. Whenever any transfer is made for
collateral security and not absolutely, the fact shall be so
expressed in the entry of such transfer.
3.3 Lost, Destroyed, or Stolen Certificates. Where the owner
claims that his certificate for shares has been lost,
destroyed, or wrongfully taken, a new certificate shall be
issued in place thereof if the owner (a) so requests before
the Corporation has notice that such shares have been acquired
by a bona fide purchaser, and (b) files with the Corporation a
sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as the Board of Directors may
prescribe.
3.4 Registered Shareholder. The Corporation shall be entitled to
treat the person in whose name any share of stock is
registered as the owner of it for purposes of dividends and
other distributions or for any recapitalization, merger,
reorganization, sale of assets, or liquidation and for the
purpose of votes, approvals, and consents by shareholders, and
for the purpose of notices to shareholders and for all other
purposes whatever, and shall not be bound to recognize any
equitable or other claim to or interest in the shares by any
other person, whether or not the Corporation shall have notice
of it, except as expressly required by the laws of the State
of Michigan or Paragraph 3.8.
3.5 Lien for Shareholder Indebtedness. The Corporation shall have
a lien upon the capital stock of any holder thereof who is
indebted to the Corporation in any way and shall have the
right to cancel the holder's right in such amount of the
capital stock as is equivalent to such indebtedness in payment
and satisfaction thereof and the discharge of such lien.
Further, the Corporation shall have the right to not accept
any transfer of capital stock by the holder thereof which will
impair the security of its lien for the balance of the
indebtedness then owing by such holder to the Corporation.
3.6 Consideration for Shares. Shares of stock may be issued for
consideration consisting of any tangible or intangible
property or benefit to the Corporation, including but not
limited to cash, promissory notes, services performed, or
contracts for services to be performed.
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3.7 Transfer Agent and Registrar. The Board of Directors may
appoint a transfer agent and a registrar of transfer, and may
require all certificates of shares to bear the signature of
such transfer agent and of such registrar of transfers.
3.8 Nominees. The Board of Directors may establish a procedure
by which the beneficial owner of shares that are registered in
the name of a nominee is recognized by the Corporation as the
shareholder. The procedure established may determine the
extent of this recognition. The procedure may set forth any of
the following:
(A) The types of nominees to which it applies.
(B) The rights or privileges that the Corporation recognizes
in a beneficial owner.
(C) The manner in which the procedure is selected by the
nominee.
(D) The information that must be provided when the procedure
is selected.
(E) The period for which selection of the procedure is
effective.
(F) Other aspects of the rights and duties created.
3.9 Regulations. The Board of Directors shall have power and
authority to make such rules and regulations as the Board
shall deem expedient regulating the issue, transfer and
registration of certificates for share of the Corporation.
ARTICLE 4
BOARD OF DIRECTORS
4.1 Number and Term of Office. The business, property and
affairs of the Corporation shall be managed by or under the
direction of the Board of Directors. The Board of Directors
shall consist of one (1) or more members, the number thereof
to be determined initially by the Incorporator(s), and
thereafter from time to time by a resolution adopted by a
majority of the shareholders. Directors need not be
shareholders. The first Board of Directors shall hold office
until the first Annual Meeting of shareholders. At each
Annual Meeting of shareholders, the shareholders shall elect
directors to hold office until the succeeding Annual Meeting.
The shareholders or Board of Directors may designate one or
more directors as an "independent director". A director
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shall hold office for the term for which he is elected and
until his successor is elected and qualified, or until his
resignation or removal.
4.2 Removal or Resignation. Except as otherwise provided in the
Articles of Incorporation, any director of the entire Board of
Directors may be removed, with or without cause, by the
holders of a majority of the shares then entitled to vote at
an election of directors. Any director may resign at any time
by giving written notice to the Board of Directors, the
Chairman of the Board, if any, or the President or Secretary
of the Corporation. Unless a later date is specified in such
written notice, a resignation shall take effect upon delivery
thereof to the Board of Directors or the designated officer.
It shall not be necessary for a resignation to be accepted
before it becomes effective.
4.3 Vacancies. Except otherwise provided in the Articles of
Incorporation, a vacancy occurring in the Board (including a
vacancy resulting from an increase in the number of directors)
may be filled by the shareholders or by the affirmative vote
of a majority of the remaining directors though less than a
quorum of the Board. Except as otherwise provided in the
Articles of Incorporation if the holders of any class or
classes of stock or series are entitled to elect one (1) or
more directors to the exclusion of other shareholders,
vacancies of that class or classes or series may be filled by
the holders of shares of that class or classes of shares, or
series. A vacancy that will occur at a specific date, by
reason of a resignation effective at a later date, may be
filled before the vacancy occurs but the newly elected or
appointed director may not take office until the vacancy
occurs.
4.4 Organizational Meeting. At the place of holding the Annual
Meeting of shareholders and immediately following the same,
the Board of Directors as constituted upon final adjournment
of such Annual Meeting shall convene without notice for the
purpose of electing officers and transacting any other
business properly brought before it; provided, that the
organizational meeting in any year may be held at a different
time and place than that herein provided by consent of a
majority of the Directors of such new Board.
4.5 Regular Meetings. Regular Meetings of the Board of Directors
shall be held at such time and place as the Board of Directors
shall from time to time determine by resolution of the Board
of Directors or by Waiver of Notice and Consent. No notice of
Regular Meetings of the
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Board shall be required:
4.6 Special Meetings. Special Meetings of the Board of Directors
may be called by the Chairman of the Board, or if that
position is not filled, by the President, or a majority of the
Directors in office at that time of the call, whenever in his
or their judgment it may be necessary, by giving reasonable
notice, either personally or by mail, telegram, or telecopier,
of the time and place of such meeting. A notice that is mailed
shall be deemed to be given when deposited in the United
States mail with postage fully prepaid, addressed to such
director as his address appears on the records of the
Corporation. Any action taken at any such meeting shall not be
invalidated for want of notice if such notice shall be waived
as herein provided. A telecopied notice shall be deemed to be
given when it is transmitted by telecopier to the director's
home or place of business.
4.7 Waiver of Notice. Notice of the time and place of any meeting
of the Board of Directors may be waived in writing or by
telegram, radiogram, cablegram, or telecopier, either before
or after such meeting has been held.
A director's attendance at or participation in a Board
meeting constitutes a waiver of notice of the meeting,
unless at the beginning of the meeting (or upon the
director's arrival) the director objects to the meeting or
transacting of business at the meeting and does not
thereafter vote for or assent to any action taken at the
meeting.
4.8 Purpose. Neither the business to be transacted nor the purpose
of a Regular or Special Meeting need be specified in the
notice or waiver of notice of the meeting.
4.9 Electronic Participation. A member of the Board of a committee
designated by the Board may participate in a meeting by means
of a conference telephone or similar communications equipment
through which all persons participating in the meeting can
communicate with each other. Participation in a meeting
pursuant to this Paragraph constitutes presence in person at
the meeting.
4.10 Quorum. A majority of the directors in office or of the
members of a committee of the Board shall constitute a quorum
for the transaction of business, unless the Board resolution
establishing the committee provides for a larger or smaller
number. If there shall be less than a quorum present at any
meeting of the Board of Directors, a majority of the directors
present may adjourn the
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meeting from time to time without notice other than
announcement at the meeting until a quorum shall be present,
at which time any business may be transacted which might have
been transacted at the meeting as first convened had there
been a quorum present. The acts or a majority of the directors
of committee members present at any meeting at which a quorum
is present shall be the acts of the Board or of the committee,
unless the vote of a larger number is required by the Board
resolution establishing the committee.
4.11 Appointment of Committees. The Board may designate one
(1) or more committees, each committee to consist of one (1)
or more of the directors of the Corporation. The Board may
designate one (1) or more directors as alternate members of a
committee, who may replace an absent or disqualified member at
a meeting of the committee. In the absence or disqualification
of a member of a committee, the members thereof present at a
meeting and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint another member of
the Board to act at the meeting in place of such an absent or
disqualified member. A committee, and each member thereof,
shall serve at the pleasure of the Board.
4.12 Powers of Committees. A committee to the extent provided in
the resolution of the Board, may exercise all powers and
authority of the Board in management of the business and
affairs of the Corporation. However, such a committee does not
have power or authority to do any of the following:
(A) Amend the Articles of Incorporation.
(B) Adopt an agreement of merger or consolidation.
(C) Recommend to shareholders the sale, lease or exchange of
all or substantially all of the Corporation's property
and assets.
(D) Recommend to shareholders a dissolution of the
Corporation or a revocation of a dissolution.
(E) Amend the Bylaws of the Corporation.
(F) Fill vacancies in the Board of Directors.
4.13 Action by Unanimous Written Consent. Action required or
permitted to be taken under authorization voted at a meeting
of the Board or a committee of the Board, may be taken without
a meeting if, before or after the action,
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of law;
(C) For a violation of Section 551 (1) of the Michigan
Business Corporation Act;
(D) For any transaction from which the director derived an
improper personal benefit; and
(E) For any acts or omissions occurring before the date this
Article is filed by the Michigan Department of Commerce.
If the Michigan Business Corporation Act is hereafter amended
to further eliminate or limit the liability of a director,
then a director of the Corporation (in addition to the
circumstances in which a director is not personally liable as
set forth in the preceding paragraph) shall not be liable to
the Corporation or its shareholders to the fullest extent
permitted by the Michigan Business Corporation Act, as so
amended. Any repeal or modification of this Article by the
shareholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing
at the time of such repeal or modification.
ARTICLE 5
DIVIDENDS AND DISTRIBUTIONS
5.1 Dividends. The Board of Directors may authorize and the
Corporation may pay dividends or make other distributions,
except when the distribution would be contrary to the laws of
the State of Michigan or any restriction contained in the
Articles of Incorporation.
ARTICLE 6
TRANSACTIONS WITH THE CORPORATION;
LOANS TO DIRECTORS, OFFICERS OR EMPLOYEES
6.1 Interested Transactions. A transaction in which a director or
officer is determined to have an interest shall not, because
of the interest, be enjoined, set aside, or give rise to an
award of damages or other sanctions, in a proceeding by a
shareholder or by or in the right of the Corporation, if the
person interested in the transaction establishes any of the
following:
(A) The transaction was fair to the Corporation at the time
entered into.
(B) The material facts of the transaction and the
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all members of the Board then in office or of the committee
consent to the action in writing. The written consents shall
be filed with the minutes of the proceedings of the Board or
the committee. The consent has the same effect as a vote of
the Board or committee for all purposes.
4.14 Election of Officers. The Board of Directors shall select a
President, a Secretary and a Treasurer and may elect a
Chairman and Vice Chairman of the Board. None of said
officers, except the Chairman and Vice Chairman of the Board,
need be a director. The Board of Directors shall have the
power to appoint such other officers and agents as the Board
may deem necessary for the transaction of the business of the
Corporation, including the power to appoint one or more Vice
Presidents and one or more attorneys-in-fact to convey or deal
with corporate real estate.
4.15 Compensation. Reasonable compensation of directors and
officers may be fixed by the Board.
4.16 Payments to be Reimbursed. Any payment made to an officer or
employee or any expense reimbursed on his behalf, which shall
be disallowed in whole or in part as a deductible expense by
the Internal Revenue Service, shall be reimbursed by such
officer or employee to the Corporation to the full extent of
such disallowance. The Board of Directors shall enforce
payment of each such amount disallowed. In lieu of payment by
the officer or employee, subject to the determination of the
directors, proportionate amounts may be withheld from his
future compensation payments until the amount owed to the
Corporation has been recovered. Notwithstanding the foregoing,
if the payment made or expense reimbursed shall have been to
an officer or employee who is a stockholder of the
Corporation, then the amount of such payment or reimbursed
expense shall be considered a dividend to such stockholder not
subject to reimbursement to the Corporation.
4.17 Elimination of Certain Liability of Directors. A director of
the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for
breach of fiduciary duty as a director, except for liability:
(A) For any breach of the director's duty of loyalty to the
Corporation or its shareholders;
(B) For acts or omissions not in good faith or that involve
intentional misconduct or knowing violation
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director's or officer's interest were disclosed or known
to the Board, a committee of the Board, or the
independent director(s), and the Board, committee, or
independent director(s) authorized, approved, or
ratified the transaction.
(C) The material facts of the transaction and the director's
or officer's interest were disclosed or known to the
shareholders entitled to vote and they authorized,
approved, or ratified the transaction.
6.2 Loans to Directors, Officers, or Employees. The Corporation
may lend money to, or guarantee an obligation of, or otherwise
assist an officer or employee of the Corporation or of its
subsidiary, including an officer or employee who is a director
of the Corporation or its subsidiary, when, in the judgment of
the Board, the loan, guaranty or assistance may reasonably be
expected to benefit the Corporation, or is pursuant to a plan
authorizing loans, guarantees, or assistance, which plan the
Board has reasonably determined will benefit the Corporation.
The loan, guaranty or assistance may be with or without
interest, and may be unsecured or secured in such manner as
the Board approves, including without limitation, a pledge of
shares of stock of the Corporation. Nothing in this Paragraph
shall be deemed to deny, limit or restrict the powers of
guaranty or warranty of the Corporation at common law or under
any statute.
ARTICLE 7
OFFICERS
7.1 Chairman of the Board. The Chairman of the Board shall be
selected by and from the membership of the Board of Directors.
The Chairman of the Board, if such office is filled, shall be
the chief executive officer of the Corporation and shall
preside at all meetings of the shareholders and the Board of
Directors at which he is present. He shall see that all
orders and resolutions of the Board are carried into effect,
and he shall have the general powers of supervision and
management usually vested in the chief executive officer of a
corporation.
7.2 Vice Chairman of the Board. There may be a Vice Chairman of
the Board, selected by and from the membership of the Board of
Directors. The Vice Chairman shall perform such duties as may
be assigned by the Chairman. In the absence, disability or
death of the Chairman, pending return of the Chairman or the
election a successor, the Vice Chairman shall perform all the
duties and exercise all of the power and authority of the
15
<PAGE> 18
fullest extent authorized by the Michigan Business Corporation
Act (MBCA), as it exists or may be amended (but, in the case
of any such amendment, only to the extent that the amendment
permits the Corporation to provide broader indemnification
rights than the MBCA permitted the Corporation to provide
before the amendment), against all expenses, liability, and
loss (including attorney fees, judgments, fines, ERISA excise
taxes, or penalties and amounts to be paid in settlement)
reasonably incurred by the person in connection therewith, and
the indemnification shall continue for a person who has ceased
to be a director or officer and shall inure to the benefit of
his or her heirs, executors and administrators; provided,
however, that except as provided in section 10.2 of these
Bylaws with respect to proceeding seeking to enforce rights
to indemnification, the Corporation shall indemnify any such
person seeking indemnification in connection with a
proceeding, or part thereof, initiated by the person only if
the proceeding, or part thereof, was authorized by the Board
of Directors of the Corporation. To the extent authorized by
the MBCA, the Corporation may, but shall not be required to,
pay expenses incurred in defending a proceeding in advance of
its final disposition. The right to indemnification conferred
in this article shall be a contract right.
10.2 Non-Exclusivity of Rights. The right to indemnification
conferred in this article shall not be exclusive of any other
right that any person may have or acquire under any statute,
provision of the articles of incorporation, bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise.
10.3 Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to
indemnification and to payment by the Corporation, for
expenses incurred in defending any proceeding before its final
disposition, to any employee or agent of the Corporation to
the fullest extent of the provisions of this article with
respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
10.4 Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer,
employee, or agent of the Corporation or of another
corporation, partnership, joint venture, trust, or other
enterprise against any expense, liability, or loss, whether or
not the Corporation would have the power to indemnify the
person against the
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<PAGE> 19
the State of Michigan in a place that the Board shall
determine.
9.2 Reliance on Books and Records. In discharging his or her
duties, a director or an officer of the Corporation, when
acting in good faith, may rely on information, opinions,
reports, or statements, including financial statements and
other financial data, if prepared or presented by any of the
following:
(A) One or more directors, officers, or employees of the
Corporation, or of a business organization under joint
control or common control, whom the director or officer
reasonably believes to be reliable and competent in the
matters presented.
(B) Legal counsel, public accountants, engineers, or other
persons as to matters the director or officer reasonably
believes are within the person's professional or expert
competence.
(C) A committee of the Board of which he or she is not a
member if the director or officer reasonably believes
the committee merits confidence.
A director or officer is not entitled to rely on the
information set forth above if he or she has knowledge
concerning the matter in question that makes reliance
otherwise permitted unwarranted.
ARTICLE 10
INDEMNIFICATION
10.1 Right to Indemnification. Each person who was or is a party to
or is threatened to be made a party to or is involved in any
action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, formal or informal
(hereinafter referred to as a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the
Corporation or, while serving as a director or officer of the
Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise,
whether for profit or not, including service with respect to
employee benefit plans, whether the basis of the proceeding is
alleged action in an official capacity as a director, officer,
employee, or agent or in any other capacity while serving as a
director or officer, shall be indemnified and held harmless by
the corporation to the
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<PAGE> 20
expenses, liability, or loss under the MBCA.
ARTICLE 11
CORPORATE SEAL
11.1 Seal. The Board of Directors may adopt a corporate seal.
ARTICLE 12
FISCAL YEAR
12.1 Fiscal year. The fiscal year of the Corporation shall
end on such date as the Board of Directors shall specify.
ARTICLE 13
AMENDMENTS
13.1 Amendments. Only the shareholders may amend or repeal these
Bylaws or adopt new bylaws.
APPROVED BY:
/s/ LARRY SOVEL-BONADEO
----------------------------------------------
Larry Sovel-Bonadeo
20
<PAGE> 1
EXHIBIT 3.19
ARTICLES OF INCORPORATION
OF
STATE WIDE CATV, INC.
The undersigned natural person(s), of the age of 21 or more, acting to form
a corporation under the corporate laws of the state of Florida do hereby certify
the following:
FIRST: The name of the corporation shall be Burn-Techs, Inc.
SECOND. The address of the initial registered office of the corporation is
1947 S. Carolina Ave NE, St Petersburg, FL 33702, County of Pinellas.
The name of the registered agent located at said address is Michael
Lloyd Wallace.
THIRD: The principal address of the corporation is 1947 S. Carolina Avenue
NE, St. Petersburg, Fl 33702.
FOURTH: The purpose for which this corporation is organized shall be to engage
in any lawful act or activity for which corporations may be organized
under the Florida Business Corporation Act.
FIFTH: The total authorized stock of this corporation is divided into 500
shares at no par value.
SIXTH: The number of directors constituting the initial board of directors is
one, and the name(s) and address(es) who will serve as director(s)
until the first annual meeting of shareholders or until their
successors are as follows:
Michael Wallace 1947 S. Carolina Avenue NE, St. Petersburg, FL 33702
SEVENTH: The duration of the corporation is perpetual.
EIGHT: This is a Close Corporation.
NINTH: The name(s) and address(es) of the person(s) who are to act as
Incorporator(s) are as follows:
Kimberly Andras c/o The Company Corporation, 1313 N. Market Street
Suite 34l0; Wilmington, DE 19801
We (I), the undersigned, being all the Incorporators of the corporation
Identified above, declare that we have examined the foregoing this 13th day of
August, 1996.
/s/ KIMBERLY ANDRAS
----------------------------------------
County of New Castle
State of Delaware
THE FOREGOING instrument was acknowledged and sworn to before me this 13th day
of August, 1996 by Kimberly Andras,
SUSAN M GRIFFIN
NOTARY PUBLIC-DELAWARE /s/ SUSAN M. GRIFFIN
Appointed October 6, 1994 -----------------------------------
Term 2 Years Notary Public
This document was prepared by Kimberly Andras, 1313 N. Market Street, Suite
3410; Wilmington DE 19801 (302) 575-0440
<PAGE> 2
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF PROCESS
WITHIN FLORIDA, NAMING AGENT UPON PROCESS MAY BE SERVED.
In compliance with Section 43.091, Florida Statutes, the following is
submitted:
First, this BURN-TECHS INC. desiring to organize under the laws of the
State of Florida with its principal place of business located in the city of St.
PETERSBURG, FL., State of Florida, has named MICHAEL LLOYD WALLACE located at
1947 S. CAROLINA AVE N.E., ST. PETERSBURG, FL 33702 as its agent for service of
process within Florida.
Having been named to accept service of process for the above stated
corporation, at the place designated in this Certificate, I hereby agree to act
in this capacity, and I further agree to comply with the provisions of all
statutes relative to the proper and complete performance of my duties.
/s/ MICHAEL L. WALLACE
----------------------------------------
Michael L. Wallace
8-5-96
----------------------------------------
Date
<PAGE> 3
ARTICLES OF MERGER
(Profit Corporations)
The following articles of merger are submitted in accordance with the Florida
Business Corporation Act, pursuant to section 607.1105, F.S.
FIRST: The name and jurisdiction of the SURVIVING corporation is:
<TABLE>
<CAPTION>
<S> <C>
Name Jurisdiction
- ---- ------------
BURN-TECHS, INC. a Florida corporation
- ------------------------------------ ----------------------------------------
</TABLE>
SECOND: The name and jurisdiction of each MERGING corporation is:
-------
<TABLE>
<CAPTION>
<S> <C>
Name Jurisdiction
- ---- ------------
STATE WIDE CATV, INC. a New York corporation
- ------------------------------------ ----------------------------------------
- ------------------------------------ ----------------------------------------
- ------------------------------------ ----------------------------------------
- ------------------------------------ ----------------------------------------
- ------------------------------------ ----------------------------------------
</TABLE>
THIRD: The Plan of Merger is attached.
FOURTH: The merger shall become effective on the date the Articles of Merger are
filed with the Florida Department of State
OR / / (Enter a specific date. NOTE: An effective date cannot be
- ----------------- prior to the date of filing or more than 90 days in the
future.)
FIFTH: Adoption of Merger by SURVIVING corporation - (COMPLETE ONLY ONE
STATEMENT) The Plan of Merger was adopted by the shareholders of the surviving
corporation on 1/11/2000.
The Plan of Merger was adopted by the board of directors of the surviving
corporation on ________________________ and shareholder approval was not
required.
SIXTH: Adoption of Merger by MERGING corporation(s) (COMPLETE ONLY ONE
STATEMENT) The Plan of Merger was adopted by the shareholders of the merging
corporation(s) on 1/11/2000.
The Plan of Merger was adopted by the board of directors of the merging
corporation(s) on _____________________ and shareholder approval was not
required.
(Attach additional sheets if necessary)
<PAGE> 4
SEVENTH: SIGNATURES FOR EACH CORPORATION
<TABLE>
<CAPTION>
<S> <C> <C>
Name of Corporation Signature Typed or Printed Name of Individual & Title
- ---------------------- ------------------ -------------------------------------------
BURN-TECHS, INC. Michael L. Wallace MICHAEL WALLACE, PRESIDENT
- ---------------------- ------------------ -------------------------------------------
STATE WIDE CATV, INC. Michael L. Wallace MICHAEL WALLACE, PRESIDENT
- ---------------------- ------------------ -------------------------------------------
- ---------------------- ------------------ -------------------------------------------
- ---------------------- ------------------ -------------------------------------------
- ---------------------- ------------------ -------------------------------------------
</TABLE>
PLAN OF MERGER
(NON SUBSIDIARIES)
<PAGE> 5
EXHIBIT A
PLAN OF MERGER
This Plan of Merger (this "Plan") has been adopted as of the 11th day of
January, 2000 by the Boards of Directors and sole Shareholder of each of State
Wide CATV, Inc., a New York corporation ("State Wide") and Burn-Techs, Inc., a
Florida corporation ("Burn-Techs").
RECITALS
The Boards of Directors of each of State Wide and Burn-Techs have
determined that it is advisable and in the best interests of each corporation
that State Wide be merged (the "Merger") with and into Burn-Techs on the terms
and subject to the conditions set forth herein. The sole Shareholder of each of
State Wide and Burn-Techs has approved the Merger in accordance with the Florida
Business Corporation Act and the New York Business Corporation Law.
ARTICLE I
THE MERGER
At the Effective Time (as defined in Article VI hereof), State Wide shall
be merged with and into Burn-Techs in accordance with the Florida Business
Corporation Act and the New York Business Corporation Law, and the separate
existence of State Wide shall cease and Burn-Techs shall thereafter continue as
the surviving corporation (the "Surviving Corporation") under the laws of the
State of Florida.
ARTICLE II
SHARES VOTED
The following are the designation and number of shares voted for the Merger
for each of the corporations:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -------------------------------------------------------------------------
Corporation Designation of Number of Number of
Shares Shares Shares Voted
Outstanding
- -------------------------------------------------------------------------
State-Wide CATV, Inc. Common 10 10
- -------------------------------------------------------------------------
Burn-Techs, Inc. Common 100 100
- -------------------------------------------------------------------------
</TABLE>
<PAGE> 6
ARTICLE III
THE SURVIVING CORPORATION
a. At the Effective Time, the Articles of Incorporation of Burn-Techs as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation; provided, however, that the First
Article of the Articles of Incorporation of the Surviving Corporation, shall be
amended to read as follows:
"FIRST: The name of the corporation shall be State Wide CATV, Inc."
b. At the Effective Time, the Bylaws of Burn-Techs, as in effect
immediately prior to the Effective time, shall be the Bylaws of the Surviving
Corporation, until thereafter altered, amended or repealed.
c. At the Effective Time, the officers and directors of Burn-Techs, Inc.
shall be the officers and directors of the Surviving Corporation until their
successors are elected and qualified.
ARTICLE IV
MANNER AND BASIS OF CONVERTING SHARES
At the Effective Time, each share of common stock, with $1.00 par value, of
State Wide, which shall be issued and outstanding, shall by virtue of the Merger
and without any action on the part of the holder thereof, be converted into the
right to receive one share of the common stock, no par value, of the Surviving
Corporation upon surrender of any certificate therefor.
ARTICLE V
EFFECT OF MERGER
At the Effective Time, all property, rights, privileges, powers and
franchises of State Wide shall vest in the Surviving Corporation, and all
liabilities and obligations of State Wide shall become liabilities and
obligations of the Surviving Corporation.
ARTICLE VI
EFFECTIVE TIME
As used in this Agreement, the term "Effective Time" shall mean both the
time of filing of the Articles of Incorporation with the Secretary of State of
Florida and the time of the filing of the Certificate of Merger with the
Secretary of State of New York, which filings shall be effectuated by the
officers of State Wide and Burn-Techs in coordination with one another, as such
officers deem to be necessary or appropriate.
<PAGE> 7
ARTICLE VII
AMENDMENT, MODIFICATION, AND TERMINATION
The Board of Directors of either State Wide or Burn-Techs may amend, terminate
and/or abandon the Merger at any time prior to the Effective Time.
<PAGE> 1
EXHIBIT 3.20
BYLAWS OF STATE WIDE CATV, INC.
ARTICLE I
CORPORATE OFFICE
The office and principal place of business of the corporation shall be located
at 1947 S. Carolina Avenue, NE, St. Petersburg, FL 33702.
ARTICLE II
SHAREHOLDERS
Section One. Annual Meeting.
(a) An annual meeting of shareholders shall be held in each year on the third
Friday in December at 9:00 a.m., unless such day should fall on a legal holiday,
in which event the meeting shall be held at the same hour on the next succeeding
business day that is not a legal holiday. Annual meetings shall be held at the
principal office of the corporation or at such other place within the State of
Florida as may be determined by the board of directors and designated in the
notice of such meeting.
(b) If, in any year, the election of directors is not held at the annual meeting
of shareholders or at any adjournment of such meeting, the board of directors
shall call a special meeting of shareholders as soon afterwards as reasonably
possible for the purpose of holding such election and transacting such other
business as may properly be brought before the meeting. In the event the board
of directors fails to call a special meeting within two months after the date
prescribed for the annual meeting, any shareholder may call a meeting, and at
the meeting the shareholders may elect directors and transact all other business
properly brought before the meeting.
(c) No change in the time or place of a meeting for the election of directors
may be made within 10 days of the date for which such meeting is scheduled, and
written notice of any change in the date of such a meeting must be given to each
shareholder of record at least 10 days prior to the date for which any such
meeting is rescheduled.
(d) Any shareholders' meeting, annual or special, may be adjourned from time to
time by the affirmative vote of a majority of the shares represented at such
meeting either in person or by proxy. An adjournment may be voted regardless of
whether a quorum is present. When a shareholders' meeting is adjourned for 10
days or more, notice of the adjourned meeting must be given as in the case of an
original meeting. When a meeting is adjourned for less than 10 days, no notice
of the time and place of the adjourned meeting need be given other than by
announcement at the meeting at which the adjournment is voted.
Section Two. Special Meetings. Special meetings of shareholders may be called
for any purpose. Such meetings may be called at any time
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<PAGE> 2
by the president, the board of directors, or by the holders of not less than ten
percent of all the outstanding shares of the corporation. On the written request
of any person or persons entitled to call a special meeting, the secretary shall
inform the board of directors as to such call, and the board shall fix a time
and place for the meeting. If the board fails to fix such a time and place, the
meeting shall be held at the principal office of the corporation at a time fixed
by the secretary.
Section Three. Action by Shareholders by Written Consent.
(a) Any action required or permitted by law to be taken at a meeting of
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, is dated and
signed by the approving shareholders having the requisite number of votes of
each voting group entitled to vote having not less than the minimum number of
votes with respect to each voting group that would be necessary to authorize or
take such action at a meeting at which all voting groups and shares entitled to
vote were present and voted.
(b) Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing or
who are not entitled to vote on the action. Such notice shall fairly summarize
the material features of the action so authorized and, if the action is a
merger, consolidation, or sale or exchange of assets, for which dissenters'
rights are provided by law, shall contain a clear statement of the right of
dissenting shareholders to be paid the fair value of their shares on compliance
with the applicable statutory provisions.
Section Four. Notice of Meetings. Written or printed notice stating the place,
day, and hour of the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than 10
nor more than 60 days before the date of the meeting, either personally or by
first-class mail, by or at the direction of the president, secretary, or the
officer or persons calling the meeting, to each shareholder of record entitled
to vote at the meeting. If the notice is mailed at least 30 days before the date
of the meeting, it may be done by a class of United States mail other than first
class. If mailed, such notice shall be deemed to have been delivered when
deposited in the United States mail, postage prepaid, addressed to the
shareholder to receive it at his or her address as it then appears on the
records of the corporation.
Section Five. Waiver of Notice. A shareholder may waive notice of any annual or
special meeting by signing a written notice of waiver either before or after the
date of such meeting.
Section Six. Record Date.
(a) For the purpose of determining shareholders entitled to notice of or to vote
at any meeting of shareholders, or demand a special
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<PAGE> 3
meeting, or in order to make a determination of shareholders for any other
proper purpose, the board of directors may fix the record date which may not
precede the date on which the resolution fixing the record date is adopted nor
may it be more than 70 days before the meeting or action requiring a
determination of shareholders.
(b) If not otherwise provided and no prior action is required by the board of
directors, the record date for determining shareholders entitled to demand a
special meeting is the date the first shareholder delivers his or her demand to
the corporation. If prior action is required by the board of directors, the
record date for determining shareholders entitled to take action without a
meeting is at the close of business on the day on which the board of directors
adopts the resolution taking such prior action.
(c) If not otherwise provided, the record date for determining shareholders
entitled to notice of and to vote at annual or special shareholders' meeting is
the close of business on the day before the first notice is delivered to
shareholders.
(d) A determination of shareholders entitled to notice of or to vote at any
meeting of shareholders is effective for any adjournment of the meeting unless
the board of directors fixes a new record date.
Section Seven. Quorum. The presence, at any shareholders' meeting, in person or
by proxy, of persons entitled to vote a majority of the shares of the
corporation then outstanding shall constitute a quorum for the transaction of
business. In determining whether quorum requirements for a meeting have been
met, any share that has been enjoined from voting or that for any reason cannot
be lawfully voted shall not be counted.
Section Eight. Proxies. Every person entitled to vote at a shareholders' meeting
of the corporation, or entitled to execute written consent authorizing action in
lieu of a meeting, may do so either in person or by proxy executed in writing by
the shareholder or by his or her duly authorized attorney-in-fact. No proxy
shall be valid after 11 months from the date of its execution unless otherwise
provided in the proxy.
Section Nine. Voting. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. The affirmative vote of the majority of shares represented at a
meeting at which a quorum is present shall be the act of the shareholders unless
the vote of a greater number or a vote by classes is required by the articles of
incorporation, these bylaws, or the laws of the State of Florida.
Section Ten. Voting Record.
(a) At least ten days before each meeting of shareholders, the secretary or
other officer of the corporation having charge of the
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<PAGE> 4
transfer books shall compile a complete list, in alphabetical order, of the
names and addresses of shareholders entitled to vote at such meeting, arranged
by voting group with the number and class and series, if any, of shares held by
each. The list shall be kept on file at the registered office of the corporation
and shall be subject to inspection by any shareholder during the ten days
immediately prior to such meeting, during usual business hours. The list shall
also be produced and kept open at the time and place of the meeting, and shall
be subject to the inspection of any shareholder or his or her agent or attorney
during the meeting or any adjournment.
(b) The shareholders' list shall be prima facie evidence of the identity of the
shareholders entitled to examine the shareholder's list or to vote at any
meeting of shareholders.
(c) Failure to comply with the requirements of this section shall not affect the
validity of any action taken at a meeting of shareholders. However, if the
requirements of this section have not been substantially complied with or if the
corporation refuses to allow a shareholder or his or her agent or attorney to
inspect the shareholders' list before or at the meeting, the meeting shall be
adjourned until the requirements are complied with, on the demand of any
shareholder in person or by proxy.
Section Eleven. Order of Business. The order of business at the annual meeting
of shareholders and, insofar as possible, at all other meetings of shareholders,
shall be as follows,
(a) Call to order.
(b) Proof of notice of meeting.
(c) Reading and disposing of any unapproved minutes.
(d) Reports of officers.
(e) Reports of committees.
(f) Election of directors.
(g) Disposition of unfinished business.
(h) Disposition of new business.
(i) Adjournment.
ARTICLE III
BOARD OF DIRECTORS
Section One. General Powers. Subject to the limitations of the articles of
incorporation, these bylaws, and the Florida Business Corporation Act concerning
corporate action that must be authorized or approved by the shareholders of the
corporation, all corporate powers shall be exercised by or under the authority
of the board of directors, and the business and affairs of the corporation shall
be managed under the direction of the board of directors.
Section Two. Number, Tenure, Qualifications, and Election. The board of
directors shall consist of not less than one person who need not be a
shareholder of the corporation. The number of directors may be increased or
decreased from time to time by
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<PAGE> 5
amendment to these bylaws. Directors of the corporation shall be elected at the
annual meeting of shareholders, or at a meeting held in lieu of the annual
meeting as provided in Article II, Section One, Paragraph (b), above, and shall
serve until the next succeeding annual meeting and until their successors have
been elected and qualified.
Section Three. Meetings.
(a) The board of directors shall hold an organizational meeting immediately
following each annual meeting of shareholders. Additionally, regular meetings of
the board of directors shall be held at such times as shall be fixed from time
to time by resolution of the board.
(b) Special meetings of the board may be called at any time by the president,
or, if the president is absent or is unable or refuses to act, by any
vice-president or by any two members of the board.
(c) Notice need not be given of regular meetings of the board, nor need notice
be given of adjourned meetings. Notice of special meetings shall be in writing,
delivered in person or by first-class mail or telegram or cablegram at least
two days prior to the date of the meeting. Neither the business to be transacted
nor the purpose of any such meeting need be specified in the notice. Attendance
of a director at a meeting shall constitute a waiver of notice and a waiver of
all objection to the place, time, and manner of calling the same, except where
the director states, at the beginning of the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
(d) Members of the board may participate in a meeting of the board by means of a
conference telephone or similar communications equipment by which all persons
participating can hear each other at the same time, and participation by such
means shall constitute presence in person at a meeting.
Section Four. Quorum and Voting. A majority of directors in office shall
constitute a quorum for the transaction of business, and the acts of a majority
of directors present at a meeting at which a quorum is present shall constitute
the acts of the board of directors. If, at any meeting of the board of
directors, less than a quorum is present, a majority of those present may
adjourn the meeting, from time to time, until a quorum is present. In the event
vacancies exist on the board of directors, other than vacancies created by the
removal of a director or directors by the shareholders or by an increase in the
number of directors, the remaining directors, although less than a quorum, may
elect a successor or successors for the unexpired term or terms by majority
vote.
Section Five. Vacancies.
(a) A vacancy in the board of directors shall exist on the
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<PAGE> 6
happening of any of the following events: (1) A director dies, resigns, or is
removed from office; (2) The authorized number of directors is increased without
the simultaneous election of a director or directors to fill the newly
authorized position. (3) The shareholders at any annual, regular, or special
meeting at which directors are to be elected, elect less than the number of
directors authorized to be elected at that meeting. (4) The board of directors
declares vacant the office of a director who has been adjudicated of unsound
mind or has been finally convicted of a felony, or who, within 10 days after
notice of his or her election to the board, neither accepts the office in
writing nor attends a meeting of the board of directors.
A reduction in the authorized number of directors does not remove any director
from office prior to the expiration of his or her term of office.
(b) A vacancy in the board of directors, except a vacancy occurring by the
removal of a director, may be filled by the vote of a majority of the remaining
directors, even though less than a quorum is present. Each director so elected
shall hold office for the unexpired term of his or her predecessor in office.
Any directorship that is to be filled as a result of an increase in the number
of directors must be filled by election at an annual or special meeting of
shareholders called for that purpose).
Section Six. Removal.
(a) At any regular meeting of shareholders, or at any special meeting called for
such purpose, any director or directors may be removed from office, with or
without cause, by majority vote.
(b) New directors may be elected by the shareholders for the unexpired terms of
directors removed from office at the same meetings at which such removals are
voted. If the shareholders fail to elect persons to fill the unexpired terms of
removed directors, such terms shall be considered vacancies to be filled by the
remaining directors as provided in Section Five, above.
Section Seven. Compensation. Directors who are not employed as officers of the
corporation or including directors also serving the corporation in another
capacity and receiving separate compensation shall be entitled to receive from
the corporation as compensation for their services as directors such reasonable
compensation as the board may from time to time determine, and shall also be
entitled to reimbursements for any reasonable expenses incurred in attending
meetings of directors.
Section Eight. Indemnification. The corporation shall indemnify any person who
was or is a party or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding whether civil, criminal,
administrative, or investigative, by reason of the fact that he or she is or was
a
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<PAGE> 7
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of any other corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlements, actually
and reasonably incurred by him or her in connection with such action, suit, or
proceeding, including any appeal of such action, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such conduct was unlawful.
However, no indemnification shall be provided in any action or suit by or in the
right of the corporation to procure a judgment in its favor, with respect to any
claim, issue, or matter as to which such person is adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the
corporation. Indemnification under this section shall be made by the corporation
only as authorized in the specific case on a determination by a majority of
disinterested directors, that such individual met the applicable standard of
conduct set forth above. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or on a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
meet the applicable standard of conduct. Indemnification shall continue as to a
person who has ceased to be a director or officer, and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
Section Nine. Committees.
(a) The board of directors may, by resolution adopted by a majority of the full
board, designate two or more directors to constitute an executive committee
which, to the extent provided in such resolution, shall have and may exercise
all of the authority of the board of directors in the management of the
corporation, except that such committee shall have no authority to (1) approve
or recommend to shareholders actions or proposals required by law to be approved
by the shareholders; (2) fill vacancies on the board of directors or any
committee; (3) adopt, amend, or repeal these bylaws; (4) authorize or approve
the reacquisition of shares, unless pursuant to a general formula or method
specified by the board of directors; or (5) authorize or approve the issuance or
sale or contract for the sale of shares, or determine the designation and
relative rights, preferences, and limitations of a voting group except where the
board of directors authorizes a committee to do so within limits specifically
prescribed by the board. The board of directors shall have power at any time to
fill vacancies in, to change the size or membership of, and to discharge any
such committee.
(b) Any such executive committee shall keep a written record of its proceedings
and shall submit such record to the whole board at each regular meeting and at
such other times as may be requested by
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<PAGE> 8
the board. However, failure to submit the record, or failure of the board to
approve any action indicated in the record shall not invalidate such action to
the extent it has been carried out by the corporation prior to the time the
record was or should have been submitted to the board as provided.
ARTICLE IV
OFFICERS
Section One. Enumeration of Offices. The corporation shall have as officers a
president, a vice-president, a secretary, and a treasurer. The board of
directors, in its discretion, may appoint a chairman of the board, one or more
additional vice-presidents, one or more assistant secretaries, one or more
assistant treasurers, and such other officers as the business of the corporation
may require.
Section Two. Election and Term of Office. The principal officers of the
corporation shall be elected by the board of directors at its organizational
meeting immediately following the annual meeting of shareholders, or as soon
afterward as is reasonably possible. Subordinate officers may be elected from
time to time as the board may see fit. Each officer shall hold office until his
or her successor is elected and qualified, or until his or her resignation,
death, or removal.
Section Three. Removal. Any officer may be removed from office at any time, with
or without cause, on the affirmative vote of a majority of the board of
directors. Removal shall be without prejudice to any contract rights of the
officer removed.
Section Four. Vacancies. Vacancies in offices, however occasioned, may be filled
by election by the board of directors at any time for the unexpired terms of
such offices.
Section Five. President; Powers and Duties. Subject to any supervisory duties
that may be given by the board of directors to any chairman of the board, the
president shall be the principle executive officer of the corporation. Subject
to the control of the board of directors, the president shall supervise and
direct generally all the business and affairs of the corporation. The president
shall preside at all meetings of shareholders at which he or she is present. In
the absence of the chairman of the board, or if there is no such chairman, the
president shall preside at all meetings of the board of directors at which he or
she is present. The president may sign, with the secretary or any other officer
of the corporation so authorized by the board of directors, certificates for
shares of the corporation, and any deeds, mortgages, bonds, contracts, or other
instruments that the board of directors has authorized for execution, except
when the signing and execution has been expressly delegated by the board of
directors or these bylaws to some other officer or agent of the corporation or
is required by law to be otherwise signed or executed. The
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<PAGE> 9
president shall also make reports to the board of directors and shareholders and
in general shall perform all duties incident to the office of president and such
other duties as may be prescribed from time to time by the board of directors.
Section Six. Vice-President; Powers and Duties. In the absence or the president
of the corporation or in the event of his or her death or inability or refusal
to act, the vice-president shall perform the duties of the president and, when
so acting, shall act with all of the powers of and be subject to all the
restrictions on the president. In the event more than one vice-president is
elected, the vice-presidents shall serve in the capacity of the president in the
order designated at the time of their election, or, in the absence of any such
designation, in the order of their election. Any vice-president may sign share
certificates with the secretary or an assistant secretary. The vice-president or
vice-presidents shall also perform such other duties as may be assigned, from
time to time, by the president or the board of directors.
Section Seven. Treasurer; Powers and Duties. The treasurer of the corporation
shall have the following powers and duties:
(a) To be custodian and take charge of and be responsible for all funds and
securities of the corporation;
(b) To receive and give receipts for money due and paid to the corporation from
any source;
(c) To deposit all such monies paid to the corporation in the name of the
corporation in such banks, trust companies, or other depositories as shall be
selected in accordance with the provisions of these bylaws;
(d) To perform all of the duties incidental to the office of treasurer and such
other duties as may be assigned to the treasurer, from time to time, by the
president or the board of directors;
(e) To give a bond for faithful discharge of his or her duties when required to
do so by the board of directors.
Section Eight. Secretary; Powers and Duties. The secretary of the corporation
shall have the following powers and duties:
(a) To keep the minutes for the meetings of shareholders and of the board of
directors, in one or more books provided for that purpose;
(b) To see that all notices are duly given, in accordance with these bylaws or
as required by law;
(c) To be custodian of the corporate records and the seal of the corporation;
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<PAGE> 10
(d) To see that the seal of the corporation is affixed to all documents duly
authorized for execution under seal on behalf of the corporation;
(e) To keep a register of the post office address of each shareholder whose
address shall be furnished to the secretary by the shareholder;
(f) To sign with the president, or a vice-president, certificates for corporate
shares the issuance of which have been authorized by resolution of the board of
directors;
(g) To have general charge of the stock transfer books of the corporation; and
(h) To perform all duties incidental to the office of secretary and such other
duties as may be assigned to the secretary, from time to time, by the president
or the board of directors.
Section Nine. Subordinate Officers. Other subordinate officers, including
without limitation an assistant treasurer or treasurers and an assistant
secretary or secretaries may be appointed by the board of directors from time to
time, and shall exercise such powers and perform such duties as may be delegated
to them by the resolutions appointing them, or by subsequent resolutions adopted
by the board of directors from time to time.
Section Ten. Absence or Disability of Officers. In the case of the absence or
disability of any officer of the corporation and of any person authorized to act
in his or her place during such absence or disability, the board of directors
may by resolution delegate the powers and duties of such officer to any other
officer, or to any director, or to any other person whom it may select.
Section Eleven. Salaries. The salaries of all officers of the corporation shall
be fixed from time to time by the board of directors. No officer shall be
disqualified from receiving a salary by reason of also being a director of the
corporation and receiving compensation for being a director.
ARTICLE V
STOCK CERTIFICATES
Section One. Form. The shares of the corporation shall be represented by
certificates signed by the president or a vice-president, and by the secretary
or an assistant secretary. If a certificate is manually signed on behalf of a
transfer agent or registrar other than the corporation itself or an employee of
the corporation, any other signatures or counter-signatures on the certificate
may be facsimiles. Each share certificate shall also state:
(a) The name of the corporation;
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(b) That the corporation is organized under the laws of the State of Florida;
(c) The name of the person or persons to whom issued;
(d) The number and class of shares, and the designation of the series, if any,
which the certificate represents; and
Each certificate shall also set forth or fairly summarize on the front or back
of each certificate, or shall state that the corporation will furnish to any
stockholder on request and without charge, a full statement of the designations,
preferences, limitations, and relative rights of the shares of each class and
the variations in rights, preferences, and limitations determined for each
series (and the authority of the board of directors to determine variations for
future series) authorized to be issued. Any certificate representing shares that
are restricted as to the sale, disposition, or other transfer of such shares,
shall also state that such shares are restricted as to transfer, and shall set
forth or fairly summarize on the certificate, or shall state that the
corporation will furnish to any stockholder on request and without charge, a
full statement of such restrictions.
Section Two. Subscriptions for Stock. Unless otherwise provided in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series, as the case may be. In case of default in the payment
of any installment or call when such payment is due, the corporation may proceed
to collect the amount due in the same manner as any debt due the corporation.
Section Three. Transfers. Transfer of shares of the corporation shall be made in
the manner specified in the Florida Uniform Commercial Code. The corporation
shall maintain stock transfer books, and any transfer shall be registered on
them only on request and surrender of the stock certificate representing the
transferred shares, duly endorsed. Additionally, the board of directors may
appoint one or more transfer agents or transfer clerks and one or more
registrars as custodians of the transfer books, and may require all transfers to
be made with and all share certificates to bear the signatures of any of them.
The corporation shall have the absolute right to recognize as the owner of any
shares of stock issued by it, for all proper corporate purposes, including the
voting of such shares and the issuance and payment of dividends on such shares,
the person or persons in whose name the certificate representing such shares
stands on its books. However, if a transfer of shares is made solely for the
purpose of furnishing collateral security, and if that fact is made known to the
secretary of the corporation, or to the corporation's transfer
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<PAGE> 12
agent or transfer clerk, the record entry of such transfer shall state the
limited nature.
Section Four. Lost, Destroyed and Stolen Certificates. No certificate for shares
of stock in the corporation shall be issued in place of any certificate alleged
to have been lost, destroyed, stolen, or mutilated except on production of such
evidence and provision of such indemnity to the corporation as the board of
directors may prescribe.
ARTICLE VI
CORPORATE ACTIONS
Section One. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section Two. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer, director, or other employee of
the corporation, or of a subsidiary, whenever, in the judgment of the board of
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty, or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. No loans shall be made or contracted on behalf of the
corporation, and no evidences of indebtedness shall be issued in its name,
unless authorized by resolution of the board of directors. Such authority may be
general or confined to specific instances.
Section Three. Checks, Drafts, or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation, and all notes and other
evidence of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the board of
directors.
Section Four. Bank Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies, or other depositaries as the board of directors may
select.
Section Five. Voting Securities Held by the Corporation. Unless otherwise
ordered by the board of directors, the president, or any vice president and the
secretary or an assistant secretary of the corporation shall have authority to
vote, represent, and exercise on behalf of the corporation all rights incidental
to any and all shares of any other corporation standing in the name of the
corporation. Such authority may be exercised by the designated officers in
person or by proxy.
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ARTICLE VII
MISCELLANEOUS
Section One. Reports to shareholders. The board of directors shall cause an
annual report to be sent to the shareholders of the corporation, not later than
four months after the close of the fiscal year of the corporation. Such report
shall include a balance sheet as of the close of the fiscal year of the
corporation and an income statement for the year ending on the closing date.
Financial statements shall be prepared from and in accordance with the books of
the corporation, in conformity with generally accepted accounting principles
applied on a consistent basis, and shall be certified by an independent
certified public accountant.
Section Two. Inspection of Corporate Records. Any person who has been a holder
of record of shares or of voting trust certificates for shares of the
corporation for at least six months immediately preceding his or her demand, or
is the holder of record of, or the holder of record of voting trust certificates
for, at least five percent of the outstanding shares of any class or series of
the corporation, shall have the right, for any proper purpose, at any reasonable
time, on written demand stating that purpose, to examine and make copies from
the relevant books and records of accounts, minutes, and record of shareholders
of the corporation.
On the written request of any shareholder, the corporation shall mail to that
shareholder, a balance sheet as of the close of its latest fiscal year and a
profit and loss statement for that fiscal year. If such request is received by
the corporation before such financial statements are available for its latest
fiscal year, the corporation shall mail the financial statements as soon as they
become available, and in any event within four months after the close of its
latest fiscal year. Additionally, balance sheets and profit and loss statements
shall be filed in the registered office of the corporation in Florida, and shall
be kept for at least five years, and shall be subject to inspection during
business hours by any shareholder or holder of voting trust certificates, in
person or by agent.
Section Three. Fiscal Year. The fiscal year of the corporation shall be the
calendar year.
Section Four. Corporate Seal. The board of directors shall adopt an official
seal for the corporation, which shall be circular in form and be inscribed with
the name of the corporation, the state of incorporation, and the words
"Corporate Seal."
ARTICLE VIII
AMENDMENTS.
These bylaws may be altered, amended, or repealed by a majority vote of the
board of directors.
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Executed by the corporation undersigned as the first directors of the
corporation.
Name of Director Signature
Michael Wallace /s/ MICHAEL WALLACE 9-11-90
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<PAGE> 1
EXHIBIT 3.21
ARTICLES OF INCORPORATION
of
U.S. CABLE, INC.
of
Appleton, Outagamie County, Wisconsin
KNOW ALL MEN BY THESE PRESENTS, that I, C. J. Mullen an adult resident of
the State of Wisconsin, desiring to form a corporation under Chapter 180 of the
Laws of the State of Wisconsin, do hereby make, sign and acknowledge the
following Articles of Incorporation:
ARTICLE I
The name of this corporation shall be U. S. CABLE, INC. and its location
shall be in the City of Appleton, Outagamie County, Wisconsin, and its
[ILLEGIBLE] office address shall be 1506 North Ballard Road, Appleton,
Wisconsin.
ARTICLE II
The period of existence of this corporation shall be perpetual.
ARTICLE III
This corporation may engage in any lawful activity within the purposes for
which corporations may be organized under Chapter 180, Statutes of the State of
Wisconsin.
ARTICLE IV
The aggregate number of shares which the corporation shall have authority
to issue shall be 1250 shares, all of which shall be without nominal or par
value.
<PAGE> 1
EXHIBIT 3.22
RESTATED
BY-LAWS OF
U.S. CABLE, INC.
- --------------------------------------------------------------------------------
(A WISCONSIN CORPORATION)
Adopted at the Annual Meeting of
Shareholders of said corporation
December 19, 1974.
-----------------------------------------
Carlton G. Busch, Secretary
1972 REVISED BY-LAWS
STATE BAR OF WISCONSIN
<PAGE> 2
BY-LAWS
OF
U. S. CABLE, INC.
-------------------------------
(a Wisconsin corporation)
INTRODUCTION -
VARIABLE REFERENCES
0.01. Date of annual shareholders' meeting (See Section 2.01):
2:00 P.M. Third Friday December 1975
- --------- ------- -------- ------------ --
(Hour) (Week) (Day) (Month) (First year)
*
0.02. Required notice of shareholders' meeting (See Section 2.04):
not less than ten (10) days.
0.03. Authorized number of directors (See Section 3.01):
Seven (7)*****
*Adopted at Annual Meeting of Shareholders 12/16/77
**Adopted at Annual Meeting of Shareholders 12/19/85
***Adopted at Annual Meeting of Shareholders 12/18/86
****Adopted at Annual Meeting of Shareholders 12/14/88
*****Adopted at Annual Meeting of Shareholders 12/13/89
-----
*
(b) not less than 48 hours if by telegram or personal delivery.
--
*
0.05. Authorized number of Vice-Presidents (See Section 4.01):
Two (2)
-------
*
* These spaces are reserved for official notation of future amendments to these
sections.
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<PAGE> 3
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation
required by the Wisconsin Business Corporation Law to be maintained in the State
of Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin, and the address of the registered office may be changed
from time to time by the Board of Directors or by the registered agent. The
business office of the registered agent of the corporation shall be identical
to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders shall be
held at the date and hour in each year set forth in Section 0.01, or at such
other time and date within thirty days before or after said date as may be fixed
by or under the authority of the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday in the
State of Wisconsin, such meeting shall be held on the next succeeding business
day. If the election of directors shall not be held on the day designated
herein, or fixed as herein provided, for any annual meeting of the shareholders,
or at any adjournment thereof, the Board of Directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as
conveniently may be.
2.02. Special Meeting. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or the Board of Directors or by the person designated in the
written request of the holders of not less than one-tenth of all shares of the
corporation entitled to vote at the meeting.
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2.03. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Wisconsin, as the place of meeting
for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the State of
Wisconsin, as the place for the holding of such meeting. If no designation is
made, or if a special meeting be otherwise called, the place of meeting shall be
the principal business office of the corporation in the State of Wisconsin or
such other suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting may be adjourned
to reconvene at any place designated by vote of a majority of the shares
represented thereat.
2.04. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than the number of
days set forth in Section 0.02 (unless a longer period is required by law or the
articles of incorporation) nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the President,
or the Secretary, or other officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the stock record
books of the corporation, with postage thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, fifty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be
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closed for at least ten days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. If the
stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
close of business on the date on which notice of the meeting is mailed or on the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof except where the
determination has been made through the closing of the stock transfer books and
the stated period of closing has expired.
2.06. Voting Records. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each meeting of
shareholders, make a complete record of the shareholders entitled to vote at
such meeting, or any adjournment thereof, with the address of and the number of
shares held by each. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes of the meeting. The
original stock transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or to vote at any
meeting of shareholders. Failure to comply with the requirements of this section
shall not affect the validity of any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum
is present, the affirmative vote of the majority of the shares represented at
the meeting and entitled to vote on the subject matter shall
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be the act of the shareholders unless the vote of a greater number or voting by
classes is required by law or the articles of incorporation. Though less than a
quorum of the outstanding shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
2.08. Conduct of Meetings. The President, and in his absence, a
Vice-President in the order provided under Section 4.06, and in their absence,
any person chosen by the shareholders present shall call the meeting of the
shareholders to order and shall act as chairman of the meeting, and the
Secretary of the corporation shall act as secretary of all meetings of the
shareholders, but, in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder entitled
to vote may vote in person or by proxy appointed in writing by the shareholder
or by his duly authorized attorney in fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any time before it is
voted, either by written notice filed with the Secretary or the acting secretary
of the meeting or by oral notice given by the shareholder to the presiding
officer during the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy. The Board of Directors shall have the power and authority to make rules
establishing presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders,
except to the extent that the voting rights of the shares of any class or
classes are enlarged, limited or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
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<PAGE> 7
(a) Other Corporations. Shares standing in the name of another
corporation may be voted either in person or by proxy, by the
president of such corporation or any other officer appointed by such
president. A proxy executed by any principal officer of such other
corporation or assistant thereto shall be conclusive evidence of the
signer's authority to act, in the absence of express notice to this
corporation, given in writing to the Secretary of this corporation, of
the designation of some other person by the board of directors or the
by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by an
administrator, executor, guardian, conservator, trustee in bankruptcy,
receiver, or assignee for creditors may be voted by him, either in
person or by proxy, without a transfer of such shares into his name,
provided that there is filed with the Secretary before or at the time
of meeting proper evidence of his incumbency and the number of shares
held. Shares standing in the name of a fiduciary may be voted by him,
either in person or by proxy. A proxy executed by a fiduciary, shall
be conclusive evidence of the signer's authority to act, in the
absence of express notice to this corporation, given in writing to the
Secretary of this corporation, that such manner of voting is expressly
prohibited or otherwise directed by the document creating the
fiduciary relationship.
(c) Pledgees. A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares, nor
shares held by another corporation if a majority of the shares
entitled to vote for the election of directors of such other
corporation is held by this corporation, shall be voted at any meeting
or counted in determining the total number of outstanding shares
entitled to vote, but shares of its own issue held by this corporation
in a fiduciary capacity, or held by such other corporation in a
fiduciary capacity, may be voted and shall be counted in determining
the total number of outstanding shares entitled to vote.
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(e) Minors. Shares held by a minor may be voted by such minor in
person or by proxy and no such vote shall be subject to disaffirmance
or avoidance, unless prior to such vote the Secretary of the
corporation has received written notice or has actual knowledge that
such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held by an incompetent
or spendthrift may be voted by such incompetent or spendthrift in
person or by proxy and no such vote shall be subject to disaffirmance
or avoidance, unless prior to such vote the Secretary of the
corporation has actual knowledge that such shareholder has been
adjudicated an incompetent or spendthrift or actual knowledge of
filing of judicial proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two or more
individuals who are named in the registration as joint tenants may be
voted in person or by proxy signed by any one or more of such
individuals if either (i) no other such individual or his legal
representative is present and claims the right to participate in the
voting of such shares or prior to the vote files with the Secretary
of the corporation a contrary written voting authorization or
direction or written denial of authority of the individual present or
signing the proxy proposed to be voted or (ii) all such other
individuals are deceased and the Secretary of the corporation has no
actual knowledge that the survivor has been adjudicated not to be the
successor to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any notice whatever
is required to be given to any shareholder of the corporation under the articles
of incorporation or by-laws or any provision of law, a waiver thereof in
writing, signed at any time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice; provided that such waiver in respect to any matter of which notice
is required under any provision of the Wisconsin
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Business Corporation Law, shall contain the same information as would have been
required to be included in such notice, except the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law
to be taken at a meeting of the shareholders, may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of
directors of the corporation shall be as provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall hold office until
the next annual meeting of shareholders and until his successor shall have been
elected, or until his prior death, resignation or removal. A director may be
removed from office by affirmative vote of a majority of the outstanding shares
entitled to vote for the election of such director, taken at a meeting of
shareholders called for that purpose. A director may resign at any time by
filing his written resignation with the Secretary of the corporation. Directors
need not be residents of the State of Wisconsin or shareholders of the
corporation.
3.03. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this by-law immediately after the annual
meeting of shareholders, and each adjourned session thereof. The place of such
regular meeting shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Wisconsin, for the holding
of additional regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, Secretary or any two
directors. The President or
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Secretary calling any special meeting of the Board of Directors may fix any
place, either within or without the State of Wisconsin, as the place for holding
any special meeting of the Board of Directors called by them, and if no other
place is fixed the place of meeting shall be the principal business office of
the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the Board of Directors
(unless otherwise provided in or pursuant to Section 3.03) shall be given by
written notice delivered personally or mailed or given by telegram to each
director at his business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case not less than
that number of hours prior thereto as set forth in Section 0.04. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Whenever any notice whatever is required to be given to any
director of the corporation under the articles of incorporation or by-laws or
any provision of law, a waiver thereof in writing, signed at any time, whether
before or after the time of meeting, by the director entitled to such notice,
shall be deemed equivalent to the giving of such notice. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting and objects thereat to the transaction
of any business because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.06. Quorum. Except as otherwise provided by law or by the articles
of incorporation or these by-laws, a majority of the number of directors as
provided in Section 0.03 shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but a majority of the
directors present (though less than such quorum) may adjourn the meeting from
time to time without further notice.
3.07. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless
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the act of a greater number is required by law or by the articles of
incorporation or these by-laws.
3.08. Conduct of Meetings. The President, and in his absence, a
Vice-President in the order provided under Section 4.06, and in their absence,
any director chosen by the directors present, shall call meetings of the Board
of Directors to order and shall act as chairman of the meeting. The Secretary of
the corporation shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding officer may
appoint any Assistant Secretary or any director or other person present to act
as secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a quorum of the Board
of Directors; provided, that in case of a vacancy created by the removal of a
director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors, by affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the corporation.
3.11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors or a committee thereof of which
he is a member at which action on any corporate matter is taken shall be
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presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
3.12. Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of the number of directors as provided in Section
0.03 may designate one or more committees, each committee to consist of three or
more directors elected by the Board of Directors, which to the extent provided
in said resolution as initially adopted, and as thereafter supplemented or
amended by further resolution adopted by a like vote, shall have and may
exercise, when the Board of Directors is not in session, the powers of the Board
of Directors in the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies in the Board of Directors or committees
created pursuant to this section. The Board of Directors may elect one or more
of its members as alternate members of any such committee who may take the place
of any absent member or members at any meeting of such committee, upon request
by the President or upon request by the chairman of such meeting. Each such
committee shall fix its own rules governing the conduct of its activities and
shall make such reports to the Board of Directors of its activities as the Board
of Directors may request.
3.13. Unanimous Consent without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law to
be taken by the Board of Directors at a meeting or by resolution may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors then in office.
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ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall be
a *President, the number of Vice-Presidents as provided in Section 0.05, a
Secretary, and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person, except the offices of President and Secretary
and the offices of President and Vice-President.
*Chairman of the Board, a [12/16/77]
4.02. Election and Term of Office. The officers of the corporation to
be elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently may
be. Each officer shall hold office until his successor shall have been duly
elected or until his prior death, resignation or removal.
4.03. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.
4.04. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term.
Section 4A Chairman of the Board
The Chairman of the Board shall, when present, preside at all meetings of the
shareholders and of the Board of Directors. He shall perform such other duties
as may be prescribed by the Board of DirectorS from time to time.
[ILLEGIBLE] [12/16/77]
He shall have authority, subject to such rules as may be prescribed by the Board
of Directors, to appoint such agents and employes of the corporation as he shall
deem necessary,
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to prescribe their powers, duties and compensation, and to delegate authority
to them. Such agents and employes shall hold office at the discretion of the
President. He shall have authority to sign, execute and acknowledge, on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates, contracts,
leases, reports and all other documents or instruments necessary or proper to be
executed in the course of the corporation's regular business, or which shall be
authorized by resolution of the Board of Directors; and, except as otherwise
provided by law or the Board of Directors, he may authorize any Vice-President
or other officer or agent of the corporation to sign, execute and acknowledge
such documents or instruments in his place and stead. In general he shall
perform all duties incident to the office of President and such other duties as
may be prescribed by the Board of Directors from time to time.
4.06. The Vice-Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, or in the event for any reason
it shall be impracticable for the President to act personally, the
Vice-President (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice-President
may sign, with the Secretary or Assistant Secretary, certificates for shares of
the corporation; and shall perform such other duties and have such authority as
from time to time may be delegated or assigned to him by the President or by
the Board of Directors. The execution of any instrument of the corporation by
any Vice-President shall be conclusive evidence, as to third parties, of his
authority to act in the stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep the minutes of the
meetings of the shareholders and of the Board of Directors in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is
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affixed to all documents the execution of which on behalf of the corporation
under its seal is duly authorized; (d) keep or arrange for the keeping of a
register of the post office address of each shareholder which shall be furnished
to the Secretary by such shareholder; (e) sign with the President, or a
Vice-President, certificates for shares of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary and have such
other duties and exercise such authority as from time to time may be delegated
or assigned to him by the President or by the Board of Directors.
4.08. The Treasurer. The Treasury shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation in
such banks, trust companies or other depositaries as shall be selected in
accordance with the provisions of Section 5.04; and (c) in general perform all
of the duties incident to the office of Treasurer and have such other duties and
exercise such other authority as from time to time may be delegated or assigned
to him by the President or by the Board of Directors. If required by the Board
of Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
shall determine.
4.09. Assistant Secretaries and Assistant Treasurers. There shall be
such number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors may from time to time authorize. The Assistant Secretaries may sign
with the President or a Vice-President certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary
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or the Treasurer, respectively, or by the President or the Board of Directors.
4.10. Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint any person to act as assistant to any officer,
or as agent for the corporation in his stead, or to perform the duties of such
officer whenever for any reason it is impracticable for such officer to act
personally, and such assistant or acting officer or other agent so appointed by
the Board of Directors shall have the power to perform all the duties of the
office to which he is so appointed to be assistant, or as to which he is so
appointed to act, except as such power may be otherwise defined or restricted by
the Board of Directors.
4.11. Salaries. The salaries of the principal officers shall be fixed
from time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the President or one of the Vice-Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer; the Secretary or
an Assistant Secretary, when necessary or required, shall affix the corporate
seal thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of the
signing officer or officers.
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5.02. Loans. No indebtedness for borrowed money shall be contracted on
behalf of the corporation and no evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a resolution of the
Board of Directors. Such authorization may be general or confined to specific
instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
or under the authority of a resolution of the Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositaries as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he be present, or in his
absence by any Vice-President of this corporation who may be present, and (b)
whenever, in the judgment of the President, or in his absence, of any
Vice-President, it is desirable for this corporation to execute a proxy or
written consent in respect to any shares or other securities issued by any other
corporation and owned by this corporation, such proxy or consent shall be
executed in the name of this corporation by the President or one of the
Vice-Presidents of this corporation, without necessity of any authorization by
the Board of Directors, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons designated in the manner
above stated as the proxy or proxies of this corporation shall have full right,
power and authority to vote the shares or other securities issued by such other
corporation and owned by this corporation the same as such shares or other
securities might be voted by this corporation.
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ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares of the
corporation shall be in such form, consistent with law, as shall be determined
by the Board of Directors. Such certificates shall be signed by the President or
a Vice-President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the corporation on
any certificates for shares may be a facsimile. The signatures of the President
or Vice-President and the Secretary or Assistant Secretary upon a certificate
may be facsimiles if the certificate is manually signed on behalf of a
transfer agent, or a registrar, other than the corporation itself or an employee
of the corporation.
6.03. Signature by Former Officers. In case any officer, who has
signed or whose facsimile signature has been placed upon any certificate for
shares, shall have ceased to be such officer before such certificate is issued,
it may be issued by the corporation with the same effect as if he were such
officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a certificate
for shares for registration of transfer the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corporation with a
request to register for transfer, the corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer
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if (a) there were on or with the certificate the necessary endorsements, and (b)
the corporation had no duty to inquire into adverse claims or has discharged any
such duty. The corporation may require reasonable assurance that said
endorsements are genuine and effective and compliance with such other
regulations as may be prescribed by or under the authority of the Board of
Directors.
6.05. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner claims
that his certificate for shares has been lost, destroyed or wrongfully taken, a
new certificate shall be issued in place thereof if the owner (a) so requests
before the corporation has notice that such shares have been acquired by a bona
fide purchaser, and (b) files with the corporation a sufficient indemnity bond,
and (c) satisfies such other reasonable requirements as may be prescribed by or
under the authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the corporation may be
issued for such consideration as shall be fixed from time to time by the Board
of Directors, provided that any shares having a par value shall not be issued
for a consideration less than the par value thereof. The consideration to be
paid for shares may be paid in whole or in part, in money, in other property,
tangible or intangible, or in labor or services actually performed for the
corporation. When payment of the consideration for which shares are to be issued
shall have been received by the corporation, such shares shall be deemed to be
fully paid and nonassessable by the corporation. No certificate shall be issued
for any share until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the power
and authority to make all such further rules and regulations not inconsistent
with the statutes of the State of Wisconsin as it may deem expedient concerning
the issue, transfer and registration of certificates representing shares of the
corporation.
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ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the name of the
corporation and the state of incorporation and the words, "Corporate Seal."
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered, amended or
repealed and new by-laws may be adopted by the shareholders by affirmative vote
of not less than a majority of the shares present or represented at any annual
or special meeting of the shareholders at which a quorum is in attendance.
8.02. By Directors. These by-laws may also be altered, amended or
repealed and new by-laws may be adopted by the Board of Directors by affirmative
vote of a majority of the number of directors present at any meeting at which a
quorum is in attendance; but no by-law adopted by the shareholders shall be
amended or repealed by the Board of Directors if the by-law so adopted so
provides.
8.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
by-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action, shall be given
the same effect as though the by-laws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
ARTICLE IX. FISCAL YEAR
9.01. The fiscal year of the corporation shall begin on the first day
of October and end on the 30th day of September in each year.
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ARTICLE X
INDEMNIFICATION OF DIRECTORS AND OFFICERS
10.01. Indemnification of officers and directors.
(a) The corporation shall, in accordance with the provisions of
Section 180.044 of the Wisconsin statutes, indemnify a director or
officer of the corporation, to the extent that he or she has been
successful on the merits or otherwise in the defense of a proceeding,
for all reasonable expenses incurred in the proceeding if he or she
was a party because he or she is a director or officer of the
corporation.
(b) In cases not included under Section 10.01(a), the corporation
shall, in accordance with Section 180.044 of the Wisconsin Statutes,
indemnify a director or officer of the corporation against liability
incurred by such director or officer in a proceeding to which such
director or officer was a party because he or she is a director or
officer of the corporation, unless liability was incurred because the
director or officer breached or failed to perform a duty he or she
owes to the corporation and the breach or failure to perform
constitutes any of the following:
(1) A willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in which
the director or officer has a material conflict of interest.
(2) A violation of criminal law, unless the director or
officer had reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her conduct was
unlawful.
(3) A transaction from which the director or officer
derived improper personal profit.
(4) Willful misconduct.
(c) Pursuant to Section 180.044 of the Wisconsin Statutes, the
determination of whether indemnification is required under this
Article X shall be made under Section 180.046 of the Wisconsin
Statutes.
10.02. Allowance of expenses as incurred. The corporation may, in
accordance with Section 180.047 of the Wisconsin Statutes, make allowance for
reasonable expenses of a director or officer of the corporation as such expenses
are incurred.
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10.03. Additional rights to indemnification and allowance expenses.
The corporation may, in accordance with Section 180.049 of the Wisconsin
Statutes, grant additional rights to indemnification and allowance of expenses.
10.04. Indemnification and allowance of expenses of employees and
agents. The corporation may, in accordance with Section 180.056 of the
Wisconsin Statutes, indemnify and allow reasonable expenses of an employee or
agent of the corporation who is not a director or officer of the corporation to
the extent provided by the articles of incorporation or bylaws, by general or
specific action of the board of directors or by contract.
10.05. Insurance. As provided in Section 180.058 of the Wisconsin
Statutes, the corporation may purchase and maintain insurance on behalf of an
individual who is an employee, agent, director or officer of the corporation
against liability asserted against or incurred by the individual in his or her
capacity as an employee, agent, director or officer of the corporation or
arising from his or her status as an employee, agent, director or officer of the
corporation, regardless of whether the corporation is required or authorized to
indemnify or allow expenses to the individual against the same liability under
this Article X.
10.06. Definitions. Terms used in this Article X and which are
specifically defined in the Wisconsin Business Corporation Law as amended
(including, without limitation, the terms defined under Section 180.042 of the
Wisconsin Statutes) shall have, for purposes of this Article X, the meanings
assigned to them under the Wisconsin Business Corporation Law as amended.
10.07. Intent. This Article X is intended to authorize indemnification
in accordance with the Wisconsin Business Corporation Law as amended and shall
be construed and applied to carry out such intent.
Added to Bylaws by resolution
adopted by Unanimous Consent of
Directors dated 8/19/87.
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EXHIBIT 3.23
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF DAS-CO OF IDAHO, INC.
******
The undersigned, DAS-CO OF IDAHO, INC. an Idaho corporation, pursuant to
resolution duly adopted by its Board of Directors on March 28, 1995, hereby
amends and restates its articles of incorporation, in their entirety, to (1)
modify the capital structure and provide for the exchange of shares, (2) deny
preemptive rights, (3) prevent cumulative voting of shares, (4) provide for
indemnification and limited liability of directors, (5) allow transactions with
interested parties under certain conditions, (6) provide for future
modifications of the bylaws and the articles of incorporation, and (7) modify
the corporate purpose; as follows:
ARTICLE I
NAME OF CORPORATION
The name of this corporation is DAS-CO OF IDAHO, INC.
ARTICLE II
DURATION OF CORPORATION
The duration of this corporation shall be perpetual.
ARTICLE III
CORPORATE PURPOSE
The purposes for which the corporation is organized are to place
underground utility cables and lines, to engage in any activity necessary or
convenient to operating such business, to carry on any other lawful trade for
which corporations may be organized under the Idaho Business Corporations Act,
and to exercise all powers granted to a corporation formed under that Act,
including any amendments thereto or successor statute that may be hereinafter
enacted.
[IDAHO SECRETARY OF STATE STAMP]
<PAGE> 2
ARTICLE IV
CAPITALIZATION
The aggregate number of shares this corporation shall have the
authority to issue shall be:
(a) 10,000 shares of non-assessable voting common stock having a
par value of $1.00 per share; and
(b) 90,000 shares of non-assessable nonvoting common stock having
a par value of $1.00 per share.
Each share of voting common stock and each share of nonvoting common
stock shall be identical in interest. Neither voting nor nonvoting shares shall
have any preferential or superior rights; provided, however, that a voting share
shall entitle the holder thereof to vote in accordance with the provisions of
the Idaho Code. The voting and nonvoting shares shall constitute one class of
shares as defined in Sections 1361(b)(1)(D) and 2701(a)(2)(B) of the Internal
Revenue Code. Notwithstanding the above, each holder of nonvoting common stock
shall nonetheless have one vote per share standing in the name of such holder on
the relevant record date (and a fractional vote for any fractional share)
concerning any amendment to articles of incorporation if the amendment would
have any of the effects or cause any of the changes described by Idaho Code
Section 30-1-60 or otherwise effect a reduction of or limitation upon any other
preference or right accorded to the holder of such stock as such.
ARTICLE V
NO PREEMPTIVE RIGHTS
The owners of shares of voting and nonvoting common stock of the
corporation shall not be entitled to preemptive rights to subscribe for or
purchase any part of new or additional issues of stock or securities
convertible into stock of any class whatsoever whether now or hereafter
authorized and whether issued for cash, property, services, by the way of
dividend or otherwise.
ARTICLE VI
NO CUMULATIVE VOTING
No shareholder who shall be entitled to vote on any matter that
properly comes before a shareholder including election for directors shall be
entitled to accumulate his votes.
<PAGE> 3
ARTICLE VII
AMENDMENT OF ARTICLES OF INCORPORATION
The corporation reserves the right to amend, alter, change or repeal
any provisions contained in its articles of incorporation in any manner now or
hereafter prescribed or permitted by statute. All rights of shareholders of
the corporation are granted subject to this reservation.
ARTICLE VIII
REGISTERED OFFICE
The name and address of the registered agent of the corporation is
Jerry N. Dancer, 8749 E. Karcher Road, Nampa, Idaho 83651.
ARTICLE IX
BOARD OF DIRECTORS
There shall be at least one director of this corporation, but not more
than seven. The actual number may be set from time to time by the board of
directors.
ARTICLE X
AMENDMENT OF BYLAWS
The Board of Directors is expressly authorized to alter, amend or
repeal the bylaws of the corporation and to adopt new bylaws, subject to repeal
or change by majority vote of the shareholders. Nothing herein shall deny the
concurrent power of the shareholders to adopt, alter, amend or repeal the
bylaws.
ARTICLE XI
LIMITATION ON DIRECTOR LIABILITY
To the fullest extent permitted by Idaho law and subject to the bylaws
of this corporation, a director of this corporation shall not be liable to the
corporation or its shareholders for monetary damages for his or her conduct as
a director. Any amendment to or repeal of this Article shall not adversely
affect any right of a director of this corporation hereunder with respect to
any acts or omissions of the director occurring prior to amendment or repeal.
<PAGE> 4
ARTICLE XII
INDEMNIFICATION
To the fullest extent permitted by its bylaws and Idaho law, this
corporation is authorized to indemnify any of its officers, directors, employees
and agents. The Board of Directors shall be entitled to determine the terms of
indemnification, including advance of expenses, and to give effect thereto
through the adoption of bylaws, approval of agreements, or by any other manner
approved by the Board of Directors. Any amendment to or repeal of this Article
shall not adversely affect any right of an individual with respect to any right
to indemnification arising prior to such amendment or repeal.
ARTICLE XIII
TRANSACTIONS WITH INTERESTED PARTIES
The corporation may enter into contracts and otherwise transact any
business with its directors, officers, and shareholders, and with any entity in
which they may have an interest adverse to the corporation, as freely as though
such adverse interest does not exist, even though the vote, action or presence
of such director, officer or shareholder may be necessary to obligate the
corporation upon such contracts or transactions.
In the absence of fraud, and with the notice required by the following
paragraph, no such contract or transaction shall be avoided and no such
director, officer or shareholder shall be held liable to account to the
corporation, by reason of such adverse interest or by reason of any fiduciary
relationship to the corporation, for any profit or benefit realized by him
through any such contract or transaction.
Directors and officers of the corporation shall notify the Board of
Directors, at the meeting at which such contract or transaction is authorized or
confirmed, of the nature of their adverse interest. A general notice that a
director or officer of the corporation is interested in any entity shall be
sufficient disclosure of such adverse interest. No notice shall be required if
all directors have actual knowledge of the adverse interest.
The undersigned, president and secretary of DAS-CO of Idaho, Inc., hereby
certify that the above Amended and Restated Articles of Incorporation were
adopted by resolution of the board of directors, and were approved by the
shareholders on March 1, 1995, as follows:
<TABLE>
<CAPTION>
No. of shares No. of shares Voting Voting
outstanding: entitled to vote: for: against:
- ------------- ----------------- ------ --------
<S> <C> <C> <C>
3800 3800 3800 0
</TABLE>
<PAGE> 5
IN WITNESS WHEREOF, we hereunto set our hands this 28th day of March,
1995.
DAS-CO OF IDAHO, INC.
By /s/ JERRY N. DANCER
--------------------------------
Jerry N. Dancer, President
ATTEST:
By /s/ LOIS E. DANCER
-----------------------
Lois E. Dancer, Secretary
VERIFICATION
STATE OF IDAHO )
)ss.
County of Ada )
I, Kathleen A. Rockne, a notary public, do hereby certify that on this
28th day of March, 1995, personally appeared before me LOIS E. DANCER, who,
being by me first duly sworn, declared that she is the Secretary of DAS-CO OF
IDAHO, INC., that she signed the foregoing document as Secretary of the
corporation, and that the statements therein contained are true.
[STAMP] /s/ KATHLEEN A. ROCKNE
-------------------------------
NOTARY PUBLIC, State of Idaho
Residing at Boise, Idaho
My Commission Expires: 2/7/2000
<PAGE> 1
EXHIBIT 3.24
BY-LAWS
OF
DAS-CO OF IDAHO, INC.
ARTICLE I
MEETING OF SHAREHOLDERS
1. The annual meeting of the shareholders of the corporation shall be held
at its principal place of business in Eagle, Idaho, or at such other place to be
designated by the Board of Directors, at 10:00 o'clock in the forenoon of the
second Monday of March in each year, beginning with the year 1971, unless such
day be a legal holiday in which event said meeting shall be held on the next
succeeding day not a legal holiday. At such meeting there shall be elected the
Board of Directors for the ensuing year and the shareholders shall transact such
other business as may come before them.
2. At least fifteen days prior to said annual meeting the Secretary shall
send a notice thereof to each shareholder of record on said date at his address
as the same appears on the stock book of the company, and if no such address
appears, at his last known address or place of residence. In case of refusal of
the Secretary to send such notice the same may be sent by any shareholder of the
company, at least ten days prior to the said annual meeting.
3. Special meetings of the shareholders shall be held at the same place as
the annual meetings unless a different place of meeting shall be designated
therefor by the Board of Directors. Such meetings may be called at any time by
the President and two directors, or the holders of the majority of the shares of
capital stock issued and outstanding. The Secretary shall send notices thereof
to each shareholder of the company at least ten days prior to such meeting and
such notice shall state the time and place of the meeting and the object
thereof. No business other than as
<PAGE> 2
stated in the notice to the shareholders shall be transacted at a special
meeting, except with the consent of the owners of two-thirds of the outstanding
stock of the corporation present in person or by proxy at said meeting.
4. A majority of the stock issued and outstanding represented in person or
by proxy shall constitute a quorum for the transaction of business at any
meeting of the shareholders.
5. Each shareholder shall be entitled to one vote for each share of stock
standing of record in his name on the books of the corporation for a period of
ten days immediately preceding the date of such meeting whether represented in
person or by proxy.
6. All proxies must be in writing and filed with the Secretary of the
corporation prior to the holder thereof being entitled to vote in any
shareholder's meeting or to participate in the business to be transacted
thereat.
7. The following order of business shall be observed at all annual and
special meetings of the shareholders so far as practicable:
1. Calling the roll
2. Reading and correction of minutes of previous meeting
3. Reports of officers
4. Reports of committees
5. Election of directors
6. Unfinished business
7. New business
ARTICLE II
CAPITAL STOCK
1. Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary and be attested by
the corporate seal.
2. All certificates shall be consecutively numbered. The name of the person
owning the shares represented thereby with the
<PAGE> 3
number of such shares and the date of issue shall be entered in the corporation
books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered for cancellation and new certificates issued to the purchaser or
assignee. No such transfer or assignment shall be recognized until transfer
thereof has been made on the books of the corporation, and no such transfer or
assignment shall be recognized until after the Board of Directors has first
declined to purchase such stock for not less than the selling price thereof. The
Directors shall have authority to purchase such shares out of corporation funds.
4. Shares of stock shall only be transferred on the books of the
corporation at the request of the holder thereof personally or by his attorney.
5. Any shareholder claiming a certificate of stock has been lost or
destroyed shall make an affidavit of such fact, reciting the circumstances
attending such loss or destruction and shall advertise the same in a newspaper,
for such length of time as the Board of Directors may require and shall furnish
the Board of Directors with proof of publication thereby by the affidavit of the
publisher of the newspaper, and the Board of Directors may further require of
such person a bond or indemnity in such amount as said board may determine;
whereupon the Board of Directors may further by resolution duly entered or
record, order to be issued a new certificate of the same tenor and effect, as
the one alleged to be lost or destroyed, and shall cause proper notation to be
made upon the records of the corporation of the circumstances of the issuance of
such new certificate.
<PAGE> 4
ARTICLE III
DIRECTORS
1. A board of three directors shall be chosen annually by the shareholders
at their annual meeting to manage the affairs of the company. Their terms of
office shall be for one year or until their successors are elected and
qualified.
2. Vacancies in the Board of Directors by reason of death, resignation, or
other causes, shall be filled by the remaining directors choosing a director to
fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held on the 9th day
of March, of each year at the office of the company in Eagle, Ada County, Idaho,
or at such other time and place as the Board of Directors shall by resolution
appoint. Special meetings may be called by the President or any two directors
giving three (3) days notice thereof. The Secretary shall give notice of special
meetings by mailing to the post office address of each of the directors. A
majority of the directors shall constitute a quorum.
4. The Board of Directors shall have the general management and control of
the business and the affairs of the corporation and shall exercise all the
powers that may be exercised or performed by the corporation under the laws of
the State of Idaho, the Articles of Incorporation and the By-Laws. Each director
shall receive $_______ for his attendance at each meeting, and such expenses as
authorized by the Board. Any payments made to an officer of the corporation such
as a salary, commission, bonus, interest, or rent or entertainment expense
incurred by him, which shall be disallowed in whole or in part as deductible
expense by the Internal Revenue Service, shall be reimbursed by such officer to
the corporation to the full extent of such disallowance. It shall be the duty of
the Directors, as a Board, to enforce payment of each amount disallowed. In lieu
of payment by the officer, subject to the determination of the Directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
<PAGE> 5
5. A director may be removed with or without cause at any time by a vote of
the shareholders owning not less than two-thirds of all the issued and
outstanding stock of the corporation.
ARTICLE IV
OFFICERS
1. The officers of the corporation shall consist of a President, a
Vice-president, a Secretary and a Treasurer, and such other officers as shall
from time to time be appointed by the Board of Directors. The office of
Secretary and Treasurer may be held by one person.
2. The President shall preside at all meetings of the Board of Directors
and shareholders and shall have general charge of and control over the affairs
of the corporation subject to the Board of Directors.
3. The Vice-president shall perform such duties as may be assigned to him
by the Board of Directors. In case of the death, disability or absence of the
President, the Vice-president shall perform and be vested with all the duties
and powers of the President.
4. The Secretary shall keep a record of the minutes of the proceedings of
the meetings of the shareholders and of the Board of Directors and shall give
notice of such meetings, as required by these By-laws. She shall have custody of
the books, records and papers of the corporation except such as shall be in
charge of the Treasurer or of some other person authorized to have custody and
possession thereof by the Board of Directors.
5. The Treasurer shall keep the accounts of the monies of the corporation
received or disbursed and shall deposit all monies and valuables in the name of
and to the creditor of the corporation and in such banks and depositaries as the
Board of Directors shall designate.
<PAGE> 6
6. The salaries of all officers shall be fixed by the Board of Directors
and may be changed from time to time by a majority vote of the Board.
7. Each of such officers shall serve a term of one year or until the next
annual election, or until their successors are elected and qualified.
8. Officers of the corporation other than the Board of Directors shall be
elected at the next meeting of the Board of Directors following the annual
meeting of the stockholders. Any vacancy caused by death, resignation or
inability to act of any officers of the corporation, may be filled by the Board
of Directors, to hold office until the next regular election of officers.
ARTICLE V
SEAL
1. The corporate seal of this company shall be a circular seal with the
name of the corporation around the border and the words "corporate seal" shall
be in the center.
ARTICLE VI
AMENDMENTS
1. These By-laws may be added to, amended or repealed by majority vote of
the shareholders present in person or by proxy at any annual meeting, or at any
special meeting called for that purpose.
2. The Board of Directors by two-thirds vote of the members thereof may
adopt additional By-laws but shall not alter or repeal any By-laws by the
shareholders of the company adopted.
WE, the undersigned, being all of the members of the Board of Directors of
DAS-CO, INC., do hereby certify that the foregoing are the true, full and
correct By-laws of said corporation duly and
<PAGE> 7
regularly adopted by an unanimous vote of the owners of all the allotted stock
of the said DAS-CO, INC., at a meeting of the shareholders of this corporation
held on the 9th day of February, 1970, at the office of Ambrose, Fitzgerald and
Longeteig, Attorneys at Law, Meridian, Ada County, Idaho, at which meeting all
of the shareholders were present in person and voted for the adoption of said
By-laws.
/s/ [ILLEGIBLE]
----------------------------------------
/s/ [ILLEGIBLE]
----------------------------------------
/s/ [ILLEGIBLE]
----------------------------------------
ATTEST:
/s/ LOIS DANCER
- ----------------------------------
Secretary
STATE OF IDAHO )
: ss.
County of Ada )
I, Lois E. Dancer, do hereby certify that I am the duly elected, qualified
and acting Secretary of DAS-CO, INC., an Idaho corporation; that as such officer
I have in my possession and custody the books and records of said corporation,
including the Articles of Incorporation and By-laws of DAS-CO, INC.; that the
foregoing instrument marked "BY-LAWS OF DAS-CO, INC." is a true copy of the
By-laws of Das-co, Inc.
I FURTHER CERTIFY that said By-laws have not be changed, amended or revised
and that the same and whole thereof are now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the seal of the said corporation, at Meridian, Ada County, Idaho, this 9th
day of February, 1970.
/s/ LOIS DANCER
----------------------------------------
Lois Dancer
<PAGE> 8
SUBSCRIBED AND SWORN to before me this 9th day of February, 1970.
(SEAL) /s/ JOHN O. FITZGERALD
----------------------------------------
Notary Public for Idaho
Residence: Meridian, Idaho
<PAGE> 1
EXHIBIT 3.25
[STAMPED]
ARTICLES OF INCORPORATION
OF
NETWORK CABLING SERVICES, INC.
We, the undersigned natural persons of the age of twenty-one years or
more, at least two of whom are citizens of the State of Texas, acting as
incorporators of a corporation under the Texas Business Corporation Act, do
hereby adopt the following Articles of Incorporation for such corporation:
ARTICLE I.
The name of the corporation is JAR INSTRUMENTS, INC.
ARTICLE II.
The period of its duration is perpetual.
ARTICLE III.
The purposes for which the corporation is organized are:
1. The transaction of any or all lawful business for which a
corporation may be incorporated under the Texas Business
Corporation Act.
2. To buy, sell and deal in real property, personal property and
services, subject to Part 4, Texas Miscellaneous Corporation Laws
Act.
ARTICLE IV.
The aggregate number of shares which the corporation shall have
authority to issue is 10,000 shares of the par value of $1.00 each.
ARTICLE V.
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of $1,000.00, consisting
of money, labor done, or property actually received.
ARTICLE VI.
The street address of its initial registered office is 501 Moody
National Bank Building, Galveston, Texas and the name of its initial registered
agent of such address is Wilbur H. Dunten.
<PAGE> 2
ARTICLE VII.
The number of directors constituting the initial Board of Directors is
three (3) and the names and addresses of the persons who are to serve as
directors until the first annual meeting of the shareholders or until the
successors are elected and qualified are:
Robert M. Apgar
5505 Thornwood Circle
Dickinson, Texas 77539
Christopher D. Rhoads
3915 Liggio
Dickinson, Texas 77539
Glynda J. Apgar
5505 Thornwood Circle
Dickinson, Texas 77539
ARTICLE VIII.
The names and addresses of the Incorporators are:
Robert M. Apgar
5505 Thornwood Circle
Dickinson, Texas 77539
Christopher D. Rhoads
3915 Liggio
Dickinson, Texas 77539
Glynda J. Apgar
5505 Thornwood Circle
Dickinson, Texas 77539
In witness whereof, we have hereunto set our hands this 10th day of
----
April, 1981.
/s/ ROBERT M. APGAR
--------------------------------
ROBERT M. APGAR
/s/ CHRISTOPHER D. RHOADS
--------------------------------
CHRISTOPHER D. RHOADS
/s/ GLYNDA J. APGAR
--------------------------------
GLYNDA J. APGAR
<PAGE> 3
THE STATE OF TEXAS )
)
COUNTY OF GALVESTON )
I, the undersigned Notary Public in and for said county do hereby
certify that on this day personally appeared before me, ROBERT M. APGAR,
CHRISTOPHER D. RHOADS and GLYNDA J. APGAR, who each being by me first duly
sworn, severally declared to me that they are the persons who signed the
foregoing instrument as incorporators and that the statements therein contained
are true.
SUBSCRIBED AND SWORN TO BEFORE ME on the 10 day of April, 1981.
----
/s/ [ILLEGIBLE]
-----------------------------------
NOTARY PUBLIC in and for
Galveston County, Texas
<PAGE> 4
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF TEXAS
AUG 19 1983
CLERK II U
CORPORATIONS SECTION
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business Corporation
Act, the undersigned corporation adopts the following Articles of Amendment to
its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is JAR INSTRUMENTS, INC.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders of the corporation on August 5, 1983.
The amendment alters or changes Article I of the original Articles of
Incorporation and the full text of each provision added is as follows:
The new name of the corporation is JAR INDUSTRIES, INC.
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such adoption
was 1650; and the number of shares entitled to vote thereon was 1500.
ARTICLE FOUR
The number of shares voted for such amendment was 1500; and the number of shares
voted against such amendment was 0.
<PAGE> 5
ARTICLE FIVE
The manner in which such amendment effects a change in the amount of stated
capital, and the amount of stated capital as changed by such amendment, are as
follows:
No change in capital.
Dated August 10, 1983
JAR INDUSTRIES, INC.
---------------------------------
By /s/ ROBERT M. APGAR
---------------------------------
President
---------------------------------
And /s/ GLYNDA J. APGAR
---------------------------------
Secretary
---------------------------------
STATE OF TEXAS
COUNTY OF GALVESTON.
Before me, a notary public, on this day personally appeared Robert M. Apgar
and Glynda J. Apgar, known to me to be the person whose name is subscribed to
the foregoing document and, being by me first duly sworn, declared that the
statements therein contained are true and correct.
Given under my hand and seal of office this 10th day of August, A.D., 1983.
/s/ ALYCEN E. BRAY
---------------------------------
Notary Public, State of Texas
My commission expires:
July 17, 1984
---------------------------------
<PAGE> 6
FILED
In the Office of the
Secretary of State of Texas
JUL 27 1990
Corporations Section
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH
BY A PROFIT CORPORATION
1. The name of the corporation is JAR INDUSTRIES, INC
--------------------------------------------
---------------------------------------------------------------------------
2. The address, including street and number, of its present registered office
as shown in the records of the Secretary of State of Texas before filing
this statement is 501 MOODY NATIONAL BANK BLDG., GALVESTON, TX
----------------------------------------------------------
---------------------------------------------------------------------------
3. The address, including street and number, to which its registered office is
to be changed is 1919 SEALY, GALVESTON, TX 77550
-----------------------------------------------------------
---------------------------------------------------------------------------
(Give new address or state "no change")
4. The name of its present registered agent, as shown in the records of the
Secretary of State of the State of Texas, before filing this statement is
WILBUR H. DUNTEN
---------------------------------------------------------------------------
---------------------------------------------------------------------------
5. The name of its new registered agent is DAVID P. WALKER
----------------------------------
---------------------------------------------------------------------------
(Give new name or state "no change")
6. The address of its registered office and the address of the office of its
registered agent, as changed, will be identical.
7. Such change was authorized by: (Check One)
A. The Board of Directors.
- ---
X B. An officer of the corporation so authorized by the Board of Directors.
- ---
/s/ ROBERT M. APGAR, PRESIDENT
-------------------------------
An authorized Officer
<PAGE> 7
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF TEXAS
AUG 09 1990
CORPORATIONS SECTION
ASSUMED NAME CERTIFICATE
FOR AN INCORPORATED BUSINESS OR PROFESSION
1. THE NAME OF THE INCORPORATED BUSINESS OR PROFESSION AS STATED IN ITS
ARTICLES OF INCORPORATION OR COMPARABLE DOCUMENT IS JAR INDUSTRIES, INC.
------------------------
2. THE ASSUMED NAME UNDER WHICH THE BUSINESS OR PROFESSIONAL SERVICE IS TO BE
CONDUCTED OR RENDERED IS NETWORK CABLING SERVICES
--------------------------------------------------
3. THE STATE, COUNTRY, OR OTHER JURISDICTION UNDER THE LAWS OF WHICH IT WAS
INCORPORATED OR ASSOCIATED IS TEXAS, AND THE ADDRESS OF ITS REGISTERED OR
------
SIMILAR OFFICE IN THAT JURISDICTION IS 16910 TEXAS AVE. WEBSTER, TX 77598
-------------------------------------
4. THE PERIOD, NOT TO EXCEED TEN YEARS, DURING WHICH THE ASSUMED NAME WILL BE
USED IS 6/90 - 6/00
--------------------------------------------------------------------
5. THE CORPORATION IS A (CIRCLE ONE): (BUSINESS CORPORATION), NON-PROFIT
CORPORATION, PROFESSIONAL CORPORATION, PROFESSIONAL ASSOCIATION OR SOME
OTHER TYPE OF INCORPORATED BUSINESS, PROFESSIONAL OR OTHER ASSOCIATION
(SPECIFY)
------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
6. IF THE CORPORATION IS REQUIRED TO MAINTAIN A REGISTERED OFFICE IN TEXAS, THE
ADDRESS OF THE REGISTERED OFFICE IS 1919 SEALY AVE., GALVESTON, TX 77550
----------------------------------------
AND THE NAME OF ITS REGISTERED AGENT AT SUCH ADDRESS IS DAVID P. WALKER
--------------------
THE ADDRESS OF THE PRINCIPAL OFFICE (IF NOT THE SAME AS THE REGISTERED
OFFICE) IS 1919 SEALY AVE. GALVESTON, TX 77550
----------------------------------------------------------------
7. IF THE CORPORATION IS NOT REQUIRED TO OR DOES NOT MAINTAIN A REGISTERED
OFFICE IN TEXAS, THE OFFICE ADDRESS IN TEXAS IS____________________________
AND IF THE CORPORATION IS NOT INCORPORATED, ORGANIZED OR ASSOCIATED UNDER
THE LAWS OF TEXAS, THE ADDRESS OF ITS PLACE OF BUSINESS IN TEXAS
IS____________________________________________________ AND ITS OFFICE
ADDRESS ELSEWHERE IS
------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
8. THE COUNTY OR COUNTIES WHERE BUSINESS OR PROFESSIONAL SERVICES ARE BEING OR
ARE TO BE CONDUCTED OR RENDERED UNDER SUCH ASSUMED NAME ARE [IF APPLICABLE,
USE THE DESIGNATION "ALL"]: ALL
------------------------------------------------
---------------------------------------------------------------------------
/s/ ROBERT M. APGAR, PRESIDENT
-------------------------------
SIGNATURE OF OFFICER, REPRESENTATIVE
OR ATTORNEY-IN-FACT OF THE CORPORATION
BEFORE ME ON THIS 5TH DAY OF JULY, 1990, PERSONALLY APPEARED ROBERT M. APGAR
--- ---------- ------------------
AND ACKNOWLEDGED TO ME THE THAT __HE EXECUTED THE FOREGOING CERTIFICATE
FOR THE PURPOSES THEREIN EXPRESSED.
/s/ BLAYNE SCHORR
[SEAL] --------------------------
NOTARY PUBLIC HARRIS COUNTY
--------------------
NOTE: A CERTIFICATE EXECUTED AND ACKNOWLEDGED BY AN ATTORNEY-IN-FACT SHALL
INCLUDE A STATEMENT THAT THE ATTORNEY-IN-FACT HAS BEEN DULY AUTHORIZED IN
WRITING BY HIS OR HER PRINCIPAL TO EXECUTE AND ACKNOWLEDGE THE SAME.
<PAGE> 8
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF TEXAS
MAR 23 1995
CORPORATIONS SECTION
AMENDED
ARTICLES OF INCORPORATION
OF
NETWORK CABLING SERVICES, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
ARTICLE ONE
The name of the corporation is JAR INDUSTRIES, INC.
ARTICLE TWO
1. The following amendment to the Articles of Incorporation was adopted
by the shareholders of the corporation on March 16, 1995:
2. These amendments are in addition to the Amended Articles of
Incorporation filed August 19, 1983 and the full text of the provisions added
read as follows:
"ARTICLE SIX
No shareholder shall have any preemptive right to acquire any
additional, unissued, or treasury shares of the corporation of any class now or
hereafter authorized or held."
"ARTICLE SEVEN
No shareholder shall have the right to cumulate their votes at any
election of directors."
3. The following amendment alters Article VI of the Articles of
Incorporation filed April 16, 1981 which is amended to read:
"VI
The street address of the registered office is 12616 Fuqua Street,
Houston, Texas and the name of its registered agent at such address is Robert M.
Apgar."
ARTICLE THREE
The number of shares of the corporation outstanding at the time of the
adoption was 2,000; and the number of shares entitled to vote on the amendment
was 2,000.
1
<PAGE> 9
ARTICLE FOUR
The number of shares that voted for the amendments were 1750; and the
number of shares that voted against the amendments were 250.
Dated: March 16, 1995 /s/ ROBERT M. APGAR
------------------------------
By: Robert M. Apgar,
Its President
2
<PAGE> 10
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF TEXAS
OCT 16 1997
ARTICLES OF AMENDMENT
TO THE CLERK II U
CORPORATIONS SECTION
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business Corporation
Act, the undersigned corporation adopts the following articles of amendment to
its articles of incorporation:
ARTICLE ONE
The name of the corporation is JAR INDUSTRIES, INC.
ARTICLE TWO
The following amendment to the articles of incorporation was adopted by
the shareholders of the corporation on August 29, 1997.
The amendment alters or changes article I of the original or amended
articles of incorporation and the full text of each provision altered is as
follows:
The new name of the corporation is NETWORK CABLING SERVICES, INC.
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such
adoption was 1,900; and the number of shares entitled to vote there was 1,900.
ARTICLE FOUR
The number of shares voted for such amendment was 1,900; and the number
of shares voted against such amendment was 0.
ARTICLE FIVE
The manner in which any exchange, reclassification or cancellation of
issued shares provided for in the amendment shall be affected, is as follows:
No change in capital.
Dated: September 4, 1997
JAR Industries, Inc.
By /s/ JASON B. LUSSIER
---------------------------------
Jason B. Lussier, Vice President
1
<PAGE> 1
EXHIBIT 3.26
BY-LAWS
OF
NETWORK CABLING SERVICES, INC.
ARTICLE I -- OFFICES
1. REGISTERED OFFICE AND AGENT
The registered office of the corporation shall be maintained at
12616 FUQUA STREET
HOUSTON, TX 77034
AGENT: ROBERT M. APGAR
in the State of Texas. The registered office or the registered agent, or both,
may be changed by resolution of the board of directors, upon filing the
statement required by law.
2. PRINCIPAL OFFICE
The principal office of the corporation shall be at
12616 FUQUA
HOUSTON TX 77034
provided that the board of directors shall have power to change the location of
the principal office in its discretion.
3. OTHER OFFICES
The corporation may also maintain other offices at such places within or
without the State of Texas as the board of directors may from time to time
appoint or as the business of the corporation may require.
ARTICLE II -- SHAREHOLDERS
1. PLACE OF MEETING
All meetings of shareholders, both regular and special, shall be held
either at the registered office of the corporation in Texas or at such other
places, either within or without the state, as shall be designated in the notice
of the meeting.
2. ANNUAL MEETING
The annual meeting of shareholders for the election of directors and for
the transaction of all other business which may come before the meeting shall be
held on the 1st day
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<PAGE> 2
of December in each year (if not a legal holiday and, if a legal holiday, then
on the next business day following) at the hour specified in the notice of
meeting.
If the election of directors shall not be held on the day above designated
for the annual meeting, the board of directors shall cause the election to be
held as soon thereafter as conveniently may be at a special meeting of the
shareholders called for the purpose of holding such election.
The annual meeting of shareholders may be held for any other purpose in
addition to the election of directors which may be specified in a notice of such
meeting. The meeting may be called by resolution of the board of directors or by
a writing filed with the secretary signed either by a majority of the directors
or by shareholders owning a majority in amount of the entire capital stock of
the corporation issued and outstanding and entitled to vote at any such meeting.
3. NOTICE OF SHAREHOLDERS' MEETING
A written or printed notice stating the place, day and hour of the meeting,
and in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be delivered not less than ten (10) nor more than fifty (50)
days before the date of the meeting, either personally or by mail, by or at the
direction of the president, secretary or the officer or person calling the
meeting, to each shareholder of record. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the share transfer books of the
corporation, with postage thereon prepaid.
4. VOTING OF SHARES
Each outstanding share, regardless of class, shall be entitled to one vote
on each matter submitted to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or classes are limited
or denied by the Articles of Incorporation or by law.
Treasury shares, shares of its own stock owned by another corporation the
majority of the voting stock of which is owned or controlled by this
corporation, and shares of its own stock held by this corporation in a fiduciary
capacity shall not be voted, directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding shares at any
given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or by his duly authorized attorney in-fact. No proxy shall be
valid after eleven (11) months from the date of its execution unless otherwise
provided in the proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain irrevocable for a
period of more than eleven (11) months.
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<PAGE> 3
At each election for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected and
for whose election he has a right to vote, or unless prohibited by the articles
of incorporation, to cumulate his votes by giving one candidate as many votes as
the number of such directors multiplied by the number of his shares shall equal,
or by distributing such votes on the same principal among any number of such
candidates. Any shareholder who intends to cumulate his votes as herein
authorized shall give written notice of such intention to the secretary of the
corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes.
5. CLOSING TRANSFER BOOKS AND FIXING RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the board of directors may provide
that the share transfer books shall be closed for a stated period not exceeding
fifty (50) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer books, the by-laws
or in the absence of an applicable by-law the board of directors, may fix in
advance a date as the record date for any such determination of shareholders,
not later than fifty (50) days and, in case of a meeting of shareholders, not
earlier than ten (10) days prior to the date on which the particular action,
requiring such determination of shareholders is to be taken. If the share
transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the board
of directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, except where the determination has been made through the closing of
share transfer books and the stated period of closing has expired.
6. QUORUM OF SHAREHOLDERS
Unless otherwise provided in the articles of incorporation, the holders of
a majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders, but in no event shall a
quorum consist of the holders of less than one-third (1/3) of the shares
entitled to vote and thus represented at such meeting. The vote of the holders
of a majority of the shares entitled to vote and thus represented at a meeting
at
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<PAGE> 4
which a quorum is present shall be the act of the shareholders' meeting, unless
the vote of a greater number is required by law, the articles of incorporation
or the by-laws.
7. VOTING LISTS
The officer or agent having charge of the share transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shall be kept on file at the registered
office of the corporation and shall be subject to inspection by any shareholder
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The original
share transfer books shall be prima-facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
ARTICLE III -- DIRECTORS
1. BOARD OF DIRECTORS
The business and affairs of the corporation shall be managed by a board of
directors. Directors need not be residents of the State of Texas or shareholders
in the corporation.
2. NUMBER AND ELECTION OF DIRECTORS
The number of directors shall be two provided that the number may be
increased or decreased from time to time by an amendment to these by-laws, but
no decrease shall have the effect of shortening the term of any incumbent
director. At each annual election the shareholders shall elect directors to hold
office until the next succeeding annual meeting.
3. VACANCIES
Any vacancy occurring in the board of directors may be filled by the
affirmative vote of the remaining directors, though less than a quorum of the
board. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an annual
meeting or at a special meeting of shareholders called for that purpose.
4. QUORUM OF DIRECTORS
A majority of the board of directors shall constitute a
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<PAGE> 5
quorum for the transaction of business. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors.
5. ANNUAL MEETING OF DIRECTORS
Within thirty days after each annual meeting of shareholders the board of
directors elected at such meeting shall hold an annual meeting at which they
shall elect officers and transact such other business as shall come before the
meeting.
6. REGULAR MEETING OF DIRECTORS
A regular meeting of the board of directors may be held at such time as
shall be determined from time to time by resolution of the board of directors.
7. SPECIAL MEETINGS OF DIRECTORS
The secretary shall call a special meeting of the board of directors
whenever requested to do so by the president or by two directors. Such special
meeting shall be held at the time specified in the notice of meeting.
8. PLACE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special) shall
be held either at the principal office of the corporation or at such other
place, either within or without the State of Texas, as shall be specified in the
notice of meeting.
9. NOTICE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special) shall
be held upon five (5) days' written notice stating the date, place and hour of
meeting delivered to each director either personally or by mail or at the
direction of the president or the secretary or the officer or person calling the
meeting.
In any case where all of the directors execute a waiver of notice of the
time and place of meeting, no notice thereof shall be required, and any such
meeting (whether annual, regular or special) shall be held at the time and at
the place (either within or without the State of Texas) specified in the waiver
of notice. Attendance of a director at any meeting shall constitute a waiver of
notice of such meeting, except where the directors attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any annual,
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
by-laws 5
<PAGE> 6
10. COMPENSATION
Directors, as such, shall not receive any stated salary for their services,
but by resolution of the board of directors a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each annual, regular or
special meeting of the board, provided, that nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV -- OFFICERS
1. OFFICERS ELECTION
The officers of the corporation shall consist of a president, one or more
vice-presidents, a secretary, and a treasurer. All such officers shall be
elected at the annual meeting of the board of directors provided for in Article
III, Section 5. If any office is not filled at such annual meeting, it may be
filled at any subsequent regular or special meeting of the board. The board of
directors at such annual meeting, or at any subsequent regular or special
meeting may also elect or appoint such other officers and assistant officers and
agents as may be deemed necessary. Any two or more offices may be held by the
same person, except the offices of president and secretary.
All officers and assistant officers shall be elected to serve until the
next annual meeting of directors (following the next annual meeting of
shareholders) or until their successors are elected; provided, that any officer
or assistant officer elected or appointed by the board of directors may be
removed with or without cause at any regular or special meeting of the board
whenever in the judgment of the board of directors the best interests of the
corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any agent appointed
shall serve for such term, not longer than the next annual meeting of the board
of directors, as shall be specified, subject to like right of removal by the
board of directors.
2. VACANCIES
If any office becomes vacant for any reason, the vacancy may be filled by
the board of directors.
3. POWER OF OFFICERS
Each officer shall have, subject to these by-laws, in addition to the
duties and powers specifically set forth herein, such powers and duties as are
commonly incident to his office and such duties and powers as the board of
directors shall from time to time designate. All officers shall perform their
duties
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<PAGE> 7
subject to the directions and under the supervision of the board of directors.
The president may secure the fidelity of any and all officers by bond or
otherwise.
4. PRESIDENT
The president shall be the chief executive officer of the corporation. He
shall preside at all meetings of the directors and shareholders. He shall see
that all orders and resolutions of the board are carried out, subject however,
to the right of the directors to delegate specific powers, except such as may be
by statute exclusively conferred on the president, to any other officers of the
corporation.
He or any vice-president shall execute bonds, mortgages and other
instruments requiring a seal, in the name of the corporation, and, when
authorized by the board, he or any vice-president may affix the seal to any
instrument requiring the same, and the seal when so affixed shall be attested by
the signature of either the secretary or an assistant secretary. He or any
vice-president shall sign certificates of stock.
The President shall be ex-officio a member of all standing committees.
He shall submit a report of the operations of the corporation for the year
to the directors at their meeting next preceding the annual meeting of the
shareholders and to the shareholders at their annual meeting.
5. VICE-PRESIDENTS
The vice-president shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president, and they shall
perform such other duties as the board of directors shall prescribe.
6. THE SECRETARY AND ASSISTANT SECRETARIES
The secretary shall attend all meeting of the board and all meetings of the
shareholders and shall record all votes and the minutes of all proceedings and
shall perform like duties for the standing committees when required. He shall
give or cause to be given notice of all meetings of the shareholders and all
meetings of the board of directors and shall perform such other duties as may be
prescribed by the board. He shall keep in safe custody the seal of the
corporation, and when authorized by the board, affix the same to any instrument
requiring it, and when so affixed, it shall be attested by his signature or by
the signature of an assistant secretary.
The assistant secretary shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary, and they
shall perform such other duties as the board of directors shall prescribe.
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<PAGE> 8
In the absence of the secretary or an assistant secretary, the minutes of
all meetings of the board and shareholders shall be recorded by such person as
shall be designated by the president or by the board of directors.
7. THE TREASURER AND ASSISTANT TREASURERS
The treasurer shall have the custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
The treasurer shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements. He shall keep and maintain the corporation's books of account and
shall render to the president and directors an account of all of his
transactions as treasurer and of the financial condition of the corporation and
exhibit his books, records and accounts to the president or directors at any
time. He shall disburse funds for capital expenditures as authorized by the
board of directors and in accordance with the orders of the president, and
present to the president for his attention any requests for disbursing funds if
in the judgment of the treasurer any such request is not properly authorized. He
shall perform such other duties as may be directed by the board of directors or
by the president.
If required by the board of directors, he shall give the corporation a bond
in such sum and with such surety or sureties as shall be satisfactory to the
board for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
The assistant treasurers in the order of their seniority shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer, and they shall perform such other duties as the board
of directors shall prescribe.
ARTICLE V - CERTIFICATES OF STOCK: TRANSFER, ETC.
-------------------------------------------------
1. CERTIFICATES OF STOCK
The certificates for shares of stock of the corporation shall be numbered
and shall be entered in the corporation as they are issued. They shall exhibit
the holder's name and number of shares and shall be signed by the president or a
vice-president and the secretary or an assistant secretary and shall be sealed
by-laws 8
<PAGE> 9
with the seal of the corporation or a facsimile thereof. If the corporation has
a transfer agent or a registrar, other than the corporation itself or an
employee of the corporation, the signatures of any such officer may be
facsimile. In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before said certificate or
certificates shall have been issued, such certificate may nevertheless be issued
by the corporation with the same effect as though the person or persons who
signed such certificates or whose facsimile signature or signatures shall have
been used thereon had been such officer or officers at the date of its issuance.
Certificates shall be in such form as shall in conformity to law be prescribed
from time to time by the board of directors.
The corporation may appoint from time to time transfer agents and
registrars, who shall perform their duties under the supervision of the
secretary.
2. TRANSFERS OF SHARES
Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
3. REGISTERED SHAREHOLDERS
The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
4. LOST CERTIFICATE
The board of directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost. When
authorizing such issue of a new certificate or certificates, the board of
directors in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate or
certificates or his legal representative to advertise the same in such manner as
it shall require or to give the corporation a bond with surety and in form
satisfactory to the corporation (which bond shall also name the corporation's
transfer agents and registrars, if any, as obligees) in such sum as it may
direct as indemnity against any claim that may be made against the corporation
or other obligees with respect to the certificate alleged to have been
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<PAGE> 10
lost or destroyed, or to advertise and also give such bond.
ARTICLE VI-- DIVIDEND
---------------------
1. DECLARATION
The board of directors may declare at any annual, regular or special
meeting of the board and the corporation may pay, dividends on the outstanding
shares in cash, property or in the shares of the corporation to the extent
permitted by, and subject to the provisions of, the laws of the State of Texas.
2. RESERVES
Before payment of any dividend there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the directors from
time to time in their absolute discretion think proper as a reserve fund to meet
contingencies or for equalizing dividends or for repairing or maintaining any
property of the corporation or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may
abolish any such reserve in the manner in which it was created.
ARTICLE VII-- MISCELLANEOUS
---------------------------
1. INFORMAL ACTION
Any action required to be taken or which may be taken at a meeting of the
shareholders, directors or members of the executive committee, may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the shareholders, directors, or members of the
executive committee, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a unanimous vote of the shareholders, directors, or members of the executive
committee, as the case may be, at a meeting of said body.
2. SEAL
The corporate seal shall be circular in form and shall contain the name of
the corporation, the year of its incorporation and the words "TEXAS," and
"CORPORATE SEAL" or an image of the Lone Star. The seal may be used by causing
it or a facsimile to be impressed or affixed or in any other manner reproduced.
The corporate seal may be altered by order of the board of directors at any
time.
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3. CHECKS
All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.
4. FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of OCTOBER in
each and every year.
5. DIRECTORS' ANNUAL STATEMENT
The board of directors shall present at each annual meeting of shareholders
a full and clear statement of the business and condition of the corporation.
6. CLOSE CORPORATIONS: MANAGEMENT BY SHAREHOLDERS
If the articles of incorporation of the corporation and each certificate
representing its issued and outstanding shares states that the business and
affairs of the corporation shall be managed by the shareholders of the
corporation rather than by a board of directors, then, whenever the context so
requires the shareholders of the corporation shall be deemed the directors of
the corporation for purposes of applying any provision of these by-laws.
7. AMENDMENTS
These by-laws may be altered, amended or repealed in whole or in part by
the affirmative vote of the holders of a majority of the shares outstanding and
entitled to vote, but such power may be delegated by the shareholders to the
board of directors.
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<PAGE> 1
EXHIBIT 3.27
ARTICLES OF INCORPORATION
OF
SCHATZ UNDERGROUND CABLE, INC.
The undersigned natural person of the age of eighteen years or more for the
purpose of forming a corporation under The General and Business Corporation Law
of Missouri adopt the following Articles of Incorporation:
ARTICLE ONE
The name of the Corporation is: Schatz Underground Cable, Inc.
ARTICLE TWO
The address, including street and number, if any, of the corporation's
initial registered office in this state is: 20 South Church Street, P.O. Box
547, Union, Missouri 63084, and the name of its initial agent at such address
is: David L. Baylard.
ARTICLE THREE
The aggregate number, class and par value, if any, of shares which the
corporation shall have authority to issue shall be:
NUMBER OF SHARES
AUTHORIZED CLASS PAR VALUE
---------------- ------- ----------
30,000 Common $1.00
The preferences, qualifications, limitation, restrictions, and the special
or relative rights, including convertible rights, if any, in respect of the
shares of each class are as follows: None.
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder to
acquire additional shares is limited or denied.
Each holder of Common Stock of this corporation shall have
<PAGE> 2
the first right (subject to reasonable adjustment to avoid the issue of
fractional shares) to purchase shares of Common Stock of this corporation that
may hereafter from time to time be issued (whether or not presently authorized),
including treasury shares of the corporation, in the ratio that the number of
shares of Common Stock he holds at the time of the issue bears to the total
number of shares of Common Stock outstanding. This right shall be deemed waived
by any holder of Common Stock who does not exercise it and pay for the stock
preempted within thirty days of receipt of a notice in writing from the
corporation inviting him to exercise the right.
ARTICLE FIVE
The name and place of residence of each incorporator is: David L. Baylard,
1163 Albany, St. Louis, Missouri 63119.
ARTICLE SIX
The number of directors to constitute the first board of directors is two
(2). Thereafter the number of directors shall be fixed by, or in the manner
provided in the bylaws. Any changes in the number will be reported to the
Secretary of State within thirty calendar days of such change.
ARTICLE SEVEN
The duration of the Corporation is perpetual.
ARTICLE EIGHT
The Corporation is formed for the following purposes:
To manufacture, buy, sell, deal in, and to engage in, conduct, and carry on
the business of manufacturing, buying, selling and
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<PAGE> 3
dealing in goods, wares, and merchandise of every class and description;
To carry on and conduct a general wholesale and retail mercantile business;
To lease or buy stores, storerooms, warehouses, branch offices and any
other type of business space convenient or suitable for effectuating the
purposes of the corporation in Missouri or in any other state;
To enter into contracts or agreements in any form whatsoever with
manufacturers, distributors or wholesalers of goods, wares and merchandise
granting to this corporation exclusive or non-exclusive rights of
representation, distribution, sale or other handling of the products of said
manufacturer, wholesaler, or distributor in any territory of the United States;
To buy, lease, contract for, invest in or otherwise acquire any real or
personal property, or any interest therein, or all or any part of the good will,
rights, franchises, property and business of any person, entity, partnership,
association or corporation, to pay for the same in cash or in stock of any
class, bonds, or other obligations of the corporation or otherwise, to hold,
utilize and in any manner dispose of the whole or any part of the rights and
property so acquired, to assume in connection therewith any liabilities of any
such person, entity, partnership, association or corporation, and conduct in any
lawful manner the whole or any part of the business thus acquired;
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<PAGE> 4
To sell, lease, exchange, convey, mortgage, pledge, transfer, assign and
deliver, and otherwise dispose of, all or any part of the property, assets and
effects of the corporation, and receive in payment therefor cash or stocks,
bonds, notes, debentures, or other securities or evidences of indebtedness or
obligations of any individual, firm, corporation, company, association, trust or
organization, on such terms and conditions as the Board of Directors of the
corporation shall determine, subject to limitations, restrictions or
requirements imposed by law;
To act as principal, agent, broker, dealer, factor, jobber, commission
merchant or in any representative capacity in transacting any business
authorized herein;
To manufacture, buy, sell, exchange, mortgage, encumber, improve, develop,
manage, control, assign, transfer, convey, lease, pledge, or otherwise acquire,
hold, own, alienate or dispose of, property of any kind whatsoever, real,
personal or mixed, wheresoever situated or any interest therein;
To construct, improve, rebuild, alter, decorate, maintain, manage, control,
lease, encumber, or otherwise to acquire, hold and dispose of and deal in any
and all kinds of improvements upon land belonging to this company, or upon other
land;
To enter into any lawful arrangements for profit sharing, reciprocal
concession or cooperation, with any corporation, association, partnership,
syndicate, entity, person or governmental, municipal or public authority,
domestic or foreign, in the carrying on of any business which the corporation is
authorized
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<PAGE> 5
to carry on or any business or transactions deemed necessary, convenient or
incidental to carrying out any of the purposes of the corporation;
To lease, purchase, manufacture, or otherwise acquire and to own, hold,
mortgage, pledge, assign, transfer, or otherwise dispose of, and generally to
deal in and use building materials, tools, equipment, furniture, fixtures and
supplies incident to or useful in connection with the purchase, sale, ownership,
construction, maintenance, and management of real estate, buildings and other
structures;
To acquire, hold, sell, use, assign, lease, grant licenses in respect of,
mortgage, or otherwise dispose of letters patent of the United States or of any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of the corporation;
To purchase, insofar as the name may be done without impairing the stated
capital of the corporation, and to hold, pledge, and reissue shares of its own
capital stock, but such shares so acquired and held shall not be entitled to
vote, either directly or indirectly, nor to receive dividends;
To purchase, or in any manner acquire, to own and hold, receive and dispose
of the income from, to guarantee, sell, assign, transfer, mortgage, pledge, or
otherwise dispose of, and to exercise all of the rights of individual natural
persons with respect to any bonds, securities and evidences of indebtedness
-5-
<PAGE> 6
of, or shares of stock in any corporation or joint stock company of any state,
territory or country, and while the owner of said stock, to exercise all of the
rights, powers and privileges of ownership, including the right to vote thereon;
To purchase, incorporate and/or cause to be merged, consolidated,
reorganized or liquidated, and to promote, take charge of and aid, in any way
permitted by law, and incorporation, merger, consolidation or liquidation of any
corporation, association or entity;
To borrow or raise moneys for any of the purposes of the corporation and
from time to time, without limit as to amount, to draw, make, accept, endorse,
execute and issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures convertible or non-convertible, and other negotiable or
non-negotiable instruments and evidences of indebtedness, and to secure the
payment thereof and of the interest thereon by mortgage on, or pledge,
conveyance or assignment in trust of the whole or any part of the assets of the
corporation, real personal or mixed, including contract rights, whether at the
time owned or thereafter acquired, and to sell, pledge or otherwise dispose of
such securities or other obligations of the corporation for its corporate
purposes;
To enter into, make, perform, and carry out contracts of every sort and
kind, for any lawful purpose, with any person, firm, association or corporation,
whether public, private or municipal
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<PAGE> 7
or body politic, and with the Government of the United States or any state,
territory or colony thereof, or any foreign government;
To conduct business in all other states, the District of Columbia, the
territories, possessions and dependencies of the United States and in any or all
foreign countries, to have one or more offices out of the State of Missouri, and
to hold, purchase, lease, let mortgage and convey real and personal property out
of said state as well as therein;
To do any and everything necessary or convenient for the accomplishment of
any of the purposes or the attainment of any of the objects or the furtherance
of any of the powers hereinabove enumerated, either for itself or as agent for
any person, firm or corporation, either alone or in association with other
corporations, or with any firm or individual; to engage in any other lawful
business or operation deemed advantageous or desirable, and to do any and
everything incidental to, growing out of, or germane to any of the foregoing
purposes or objects, and to have and exercise all of the powers and rights
conferred by the laws of the State of Missouri upon corporations formed under
the Act hereinabove referred to, and all acts amendatory thereof and
supplemental thereto, it being expressly provided that the foregoing clauses
shall be construed both as objects and powers and shall be in furtherance and
not in limitation of the powers conferred by the laws of the State of Missouri
and that the foregoing enumeration of specific powers shall not be held to alter
or restrict in any manner the general powers of this corporation;
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<PAGE> 8
The objects and purposes specified in the foregoing clauses of this Article
VIII shall, except where otherwise expressed, be in no way limited or restricted
by reference to or inference from the terms of any other clause of this or any
other Article of this Certificate of Incorporation, and shall be construed as
powers as well as objects and purposes.
No holder of shares of any class of stock authorized or issued pursuant
hereto shall have any preemptive or preferential right of subscription to any
shares of any class of stock of this corporation, either now or hereafter
authorized, or to any obligations convertible into stock of any class of this
corporation, issued or sold, nor any right of subscription to any thereof, other
than such, if any, as the Board of Directors in its discretion may from time to
time determine, and at such prices as the Board of Directors may from time to
time fix pursuant to the authority conferred by these Articles.
The Corporation and its officers shall have power to make gifts, donations,
or contributions to religious, charitable, civic, and other similar
organizations.
To pay for any property, rights, or interests acquired by the corporations
in money or other property, rights, or interests, or by assigning, issuing, or
delivering in exchange therefor its own stock, bonds, debentures, notes,
certificates of indebtedness, or other obligations, secured or unsecured, and
however evidenced, convertible into stock or not so convertible, upon any terms,
and in any lawful manner.
-8-
<PAGE> 9
To install, manufacture, buy, and sell, at retail or wholesale, use,
distribute, and otherwise deal in wire, cable, strands, and rods of all kinds,
insulated or otherwise, however used, for underground, external, internal, or
submarine use; to manufacture, sell, buy, use, and otherwise deal in all kinds
of materials for insulating, covering, and protecting wire and cable of any
character, or metal, textile fabric, or other products of vegetable or mineral
substance; to manufacture, buy, sell, lease, operate, and otherwise deal in
machinery or appliances for the manufacture and installation of wire and cable
or insulating materials of any and all kinds, or products or supplies of any
nature or kind used in said business.
To purchase, lease, locate, or otherwise acquire, to prospect and explore
for, and to own, hold, option, sell, exchange, lease, mortgage, or otherwise
dispose of and deal in lands, real estate, water rights, and claims and
interests therein, in any part of the world, and to develop, improve, and work
the same; to conduct operations of every kind and by any method now known or
hereafter devised.
To purchase, lease, or otherwise acquire, and to own, hold, sell, exchange,
lease, mortgage, or otherwise dispose of, and deal in and operate plants for
reducing, milling, concentrating, smelting, converting, refining, preparing for
market, or otherwise treating oils, ores, minerals, matter, and bullion.
To carry on as principals, agents, commission merchants, consignees, or in
any capacity whatever, the business of installing wires and cables for
television, telephone, telegraph, radio, and
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<PAGE> 10
other means of communication, and all other powers and authorities granted by
Chapter 351, Revised Statutes of Missouri, 1978.
ARTICLE NINE
The directors shall have power, without the assent or vote of the
stockholders, to make, amend, alter and repeal the by-laws of the corporation;
to fix the times for the declaration and payment of dividends; to fix and vary
the amount to be reserved as working capital; to authorize and cause to be
executed mortgages and liens upon all the property of the corporation, or any
part thereof.
The directors shall also have power, with the consent in writing of 75% of
the holders of the voting stock issued and outstanding, or upon the affirmative
vote of the holders of 75% of the stock issued and outstanding having voting
power, to sell, lease, or exchange all of its property and assets, including its
good will and its corporate franchises, upon such terms and conditions as the
Board of Directors deem expedient and for the best interests of the corporation.
This shall not waive any rights of dissenting shareholders under the statutes of
the State of Missouri.
ARTICLE TEN
Any person, upon becoming the owner or holder of any shares of stock or
other securities issued by this corporation, does thereby consent and agree that
all rights, powers, privileges, obligations, or restrictions pertaining to such
person or such securities in any way may be altered, amended, restricted,
enlarged or repealed by legislative enactments of the State of
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<PAGE> 11
shall apply also in respect of any amount paid in compromise of any such action,
suit, proceeding or claim asserted against such director or officer (including
expenses, counsel fees and costs reasonably incurred in connection therewith),
provided the Board of Directors shall have first approved such proposed
compromise settlement and determined that the officer or director involved was
not guilty of negligence or misconduct; but in taking such action any director
involved shall not be qualified to vote thereon, and if for this reason a quorum
of the Board cannot be obtained to vote on such matter it shall be determined by
a committee of three persons appointed by the shareholders at a duly called
special meeting or at a regular meeting. In determining whether or not a
director or officer was guilty of negligence or misconduct in relation to any
such matter, the Board of Directors or committee appointed by the Shareholders,
as the case shall be, may rely conclusively upon an opinion of independent legal
counsel selected by such Board of Directors or committee. The right to
indemnification herein provided shall not be exclusive of any other rights to
which such director or officer may be lawfully entitled.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed this
16th day of July, 1982.
/s/ DAVID L. BAYLARD
---------------------------
DAVID L. BAYLARD
STATE OF MISSOURI )
) SS:
COUNTY OF FRANKLIN )
I, SANDRA L. YENZER, a notary public do hereby certify
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<PAGE> 12
Missouri or of the United States hereinafter adopted which have references to or
affect corporations, such securities, or such persons in any way; and that the
corporation reserves the right to transact any business of the corporation, to
alter, amend or repeal these Articles of Incorporation, or to do any other act
or things as authorized, permitted or allowed by such legislative enactments.
ARTICLE ELEVEN
The private property of the shareholders of the corporation shall not be
subject to the payment of corporate debts, except to the extent of any unpaid
balances of subscriptions for shares.
ARTICLE TWELVE
Each director or officer, or former director or officer of this
corporation, and his legal representatives, shall be indemnified by the
corporation against liabilities, expenses, counsel fees and costs reasonably
incurred by him or his estate in connection with, or arising out of, any action,
suit, proceeding or claim in which he is made a party by reason of his being, or
having been, such director or officer; and any person who, at the request of
this corporation, served as director or officer of any other corporation in
which this corporation owned corporate stock, and his legal representatives,
shall in like manner be indemnified by this corporation; provided that in
neither case shall the corporation indemnify such director or officer with
respect to any matters as to which he shall finally be adjudged in any such
action, suit or proceeding, to have been liable for negligence or misconduct in
the performance of his duties as such director or officer. The indemnification
herein provided for, however,
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<PAGE> 13
that on the 16th day of July, 1982, personally appeared before me, DAVID L.
BAYLARD, who being by me first duly sworn, declare that he is the person who
signed the foregoing document as incorporator and that the statements therein
contained are true.
/s/ SANDRA LEFENZER
----------------------------
NOTARY PUBLIC
My Commission Expires:
10-11-85
- ----------------------
[FILED STAMP]
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<PAGE> 14
STATE OF MISSOURI
[STAMP] Rebecca McDowell Cook, Secretary of State
P.O. BOX 778, Jefferson City, MO 65102
Corporation Division
Statement of Change of Registered Agent and/or
Registered Office
By A Foreign or Domestic For Profit or Nonprofit Corporation
- --------------------------------------------------------------------------------
Instructions
1. This form is to be used by either a for profit or nonprofit
corporation to change either or both the name of its registered agent
and/or the address of its existing registered agent
2. There is a $10.00 fee for filing this statement. It must be filed in
DUPLICATE.
3. P.O. Box may only be used in conjunction with a physical street
address.
4. Agent and address must be in the state of Missouri.
5. The corporation may not at as its own agent.
- --------------------------------------------------------------------------------
Charter No. 00243286
-------------------------
(1) The name of the corporation is: Schatz Underground Cable, Inc.
----------------------------------------
(2) The address, including street and number, of its PRESENT registered office
(before change) is: 376 Hwy 100 East Villa Ridge, Mo. 63089
------------------------------------------------------
Address City/State/Zip
(3) The address, including street and number, of its registered office is
hereby CHANGED TO:
829 Park Lamar Dr. Villa Rd
-------------------------------------------------------------------------
Address (P.O. Box may only be used in conjunction City/State/Zip
with a physical street address)
(4) The name of its PRESENT registered agent (before change) is: Larry Schatz
--------------
(5) The name of the NEW registered agent is: Gerard Salisbury
---------------------------------
Authorized signature of NEW registered agent must appear below:
/s/ GERARD SALISBURY
-------------------------------------------------------------------------
(May attach separate originally executed written consent
to this form in lieu of this signature)
(6) The address of its registered office and the address of the office of its
registered agent, as changed, will be identical.
IN AFFIRMATION OF THE FACTS STATED ABOVE,
/s/ GERARD SALISBURY Gerard Salisbury
- -------------------------------------------------------------------------------
(Authorized signature of officer or, if applicable, (Printed Name)
chairman of the board)
Sec 5/12/99
- -------------------------------------------------------------------------------
(Title) (Date of Signature)
<PAGE> 1
EXHIBIT 3.28
BY-LAWS
OF
SCHATZ UNDERGROUND CABLE, INC.
ARTICLE I -- OFFICES
The principal office of the corporation in the State of Missouri
shall be located in the City of Union County of Franklin. The corporation may
have such other offices, either within or without the State of incorporation as
the board of directors may designate or as the business of the corporation may
from time to time require.
ARTICLE II -- STOCKHOLDERS
1. ANNUAL MEETING.
The annual meeting of the stockholders shall be held on the 2nd
Tuesday of December in each year, beginning with the year 1983 at the hour 9:00
o'clock A.M., for the purpose of electing directors and for the transaction of
such other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday such meeting shall be held on the next
succeeding business day.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the president or by
the directors, and shall be called by the president at the request of the
holders of not less than 2/3 per cent of all the outstanding shares of the
corporation entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or without the
State unless otherwise prescribed by statute, as the place of meeting for any
annual meeting or for any special meeting called by the directors. A waiver of
notice signed by all stockholders entitled to vote at a meeting may designate
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<PAGE> 2
any place, either within or without the state unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and and hour of the
meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten nor more than fifty
days before the date of the meeting, either personally or by mail, by or at the
direction of the president, or the secretary, or the officer or persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the stockholder at his address as it appears
on the stock transfer books of the corporation, with postage thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other proper purpose, the directors of
the corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock transfer
books shall be closed for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such books shall be closed
for at least ten days immediately preceding such meeting. In lieu of closing
the stock transfer books, the directors may fix in advance a date as the record
date for any such determination of stockholders, such date in any case to be
not more than fifty days and, in case of a meeting of stockholders, not less
than ten days prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such determination of stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders
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<PAGE> 3
has been made as provided in this section, such determination shall apply to
any adjournment thereof.
6. VOTING LISTS.
The officer or agent having charge of the stock transfer books for
shares of the corporation shall make, at least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten days prior to such meeting, shall be kept on file at the principal office
of the corporation and shall be subject to inspection by any stockholder at any
time during usual business hours. Such list shall also be produced and kept
open at the time and place of the meeting and shall be subject to the
inspection of any stockholder during the whole time of the meeting. The
original stock transfer book shall be prima facie evidence as to who are the
stockholders entitled to examine such list or transfer books or to vote at the
meeting of stockholders.
7. QUORUM.
At any meeting of stockholders the majority of the outstanding shares
of the corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said number of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meetings of stockholders, a stockholder may vote by proxy
executed in writing by the stockholder or by his duly authorized attorney in
fact. Such proxy shall be filed with the secretary of the corporation before or
at the time of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by
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<PAGE> 4
proxy, for each share of stock entitled to vote held by such stockholders. Upon
the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot. All elections for directors shall be
decided by plurality vote; all other questions shall be decided by majority
vote except as otherwise provided by the Certificate of Incorporation or the
laws of this State.
10. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders, shall be
as follows:
1. Roll Call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
11. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be taken at
a meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
By-Laws 4
<PAGE> 5
ARTICLE III -- BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its
board of directors. The directors shall in all cases act as a board, and they
may adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be two (2). Each
director shall hold office until the next annual meeting of stockholders and
until his successor shall have been elected and qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other
notice than this by-law immediately after, and at the same place as, the annual
meeting of stockholders. The directors may provide, by resolution, the time and
place for the holding of additional regular meetings without other notice than
such resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request
of the president or any two directors. The person or persons authorized to call
special meetings of the directors may fix the place for holding any special
meeting of the directors called by them.
5. NOTICE.
Notice of any special meeting shall be given at least two days
previously thereto by written notice delivered personally, or by telegram or
mailed to each director at his business address. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
By-Laws 5
<PAGE> 6
6. QUORUM.
At any meeting of the directors a majority shall constitute a quorum
for the transaction of business, but if less than said number is present at a
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at
which a quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number
of directors and vacancies occurring in the board for any reason except the
removal of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled
by vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the
board, the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the board or such officer, and the acceptance of the resignation shall not
be necessary to make it effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their
services, but by resolution of the board a fixed sum and expenses for actual
attendance at each regular or special meeting of the board may be authorized.
Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
By-Laws 6
<PAGE> 7
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the
directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an
executive committee and other committees, each consisting of three or more
directors. Each such committee shall serve at the pleasure of the board.
By-Laws 7
<PAGE> 8
ARTICLE IV -- OFFICERS
1. NUMBER.
The officers of the corporation shall be a president, a
vice-president, a secretary and a treasurer, each of whom shall be elected by
the directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the directors.
2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall
be elected annually at the first meeting of the directors held after each
annual meeting of the stockholders. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be
removed by the directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
5. PRESIDENT.
The president shall be the principal executive officer of the
corporation and, subject to the control of the directors, shall in general
supervise and control all of the business and affairs of the corporation. He
shall, when present, preside at all meetings of the stockholders and of the
directors. He may sign, with the secretary or any other proper officer of the
corporation thereunto authorized by the directors, certificates for shares of
the corporation, any deeds, mortgages, bonds, contracts, or other instruments
which the directors have authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the directors or
by these by-laws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall
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<PAGE> 9
perform all duties incident to the office of president and such other duties as
may be prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in event of his death, inability
or refusal to act, the vice-president shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the president. The vice-president shall perform such other
duties as from time to time may be assigned to him by the President or by the
directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders, and of the
directors' meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
duties incident to the office of secretary and such other duties as from time to
time may be assigned to him by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by-laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
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<PAGE> 10
ARTICLE V -- CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation, and such authority may be general or confined
to specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the directors. Such authority may be general or confined to
specific instances.
3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes
or other evidences of indebtedness issued in the name of the corporation, shall
be signed by such officer or officers, agent or agents of the corporation and
in such manner as shall from time to time be determined by resolution of the
directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositaries as the directors may select.
ARTICLE VI -- CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be in such
form as shall be determined by the directors. Such certificates shall be signed
by the president and by the secretary or by such other officers authorized by
law and by the directors. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the stockholders, the
number of shares and date of issue, shall be entered on the stock transfer
books of the corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
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<PAGE> 11
former certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the corporation
as the directors may prescribe.
2. TRANSFERS OF SHARES.
(a) Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered
on the transfer book of the corporation which shall be kept at its principal
office.
(b) The corporation shall be entitled to treat the holder of record
of any share as the holder in fact thereof, and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of this state.
ARTICLE VII -- FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of
January in each year.
ARTICLE VIII -- DIVIDENDS
The directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX -- SEAL
The directors shall provide a corporate seal which shall be circular
in form and shall have inscribed thereon the name of the corporation, the state
of incorporation, year of incorporation and the words, "Corporate Seal".
By-Laws 11
<PAGE> 12
ARTICLE X -- WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to
be given to any stockholder or director of the corporation under the provisions
of these by-laws or under the provisions of the articles of incorporation, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI -- AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may
be adopted by a vote of the stockholders representing a majority of all the
shares issued and outstanding, at any annual stockholders' meeting or at any
special stockholders' meeting when the proposed amendment has been set out in
the notice of such meeting.
By-Laws 12
<PAGE> 1
EXHIBIT 3.29
[FILED STAMP]
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
COPENHAGEN UTILITIES AND CONSTRUCTION, INC.
******
The undersigned, COPENHAGEN UTILITIES AND CONSTRUCTION, INC., an Oregon
corporation, pursuant to resolution duly adopted by its Directors on July 1,
1997, hereby amends and restates its articles of incorporation, in their
entirety, to (1) change the corporate name; (2) clarify the capital structure
and voting rights of shareholders; (3) prevent cumulative voting of shares; (4)
modify the provisions for indemnification and limited liability of directors;
(5) allow transactions with interested parties under certain conditions; and (6)
provide for future modification of the bylaws and the articles of incorporation,
as follows:
ARTICLE I
NAME OF CORPORATION
The name of this corporation is COPENHAGEN UTILITIES & CONSTRUCTION.
ARTICLE II
DURATION OF CORPORATION
The duration of this corporation shall be perpetual.
ARTICLE III
CORPORATE PURPOSE
The purposes for which the corporation is organized are to carry on any
lawful business for which corporations may be organized under O.R.S. Chapter 57
and to exercise all powers granted to a corporation formed under that Act,
including any amendments thereto or successor statute that may be hereinafter
enacted.
ARTICLE IV
CAPITALIZATION
The aggregate number of shares this corporation shall have the authority to
issue shall be:
(a) 10,000 shares of non-assessable voting common stock having a par value
of $.02 per share; and
(b) 90,000 shares of non-assessable nonvoting common stock having a par
value of $.02 per share.
AMENDED AND RESTATED ARTICLES OF INCORPORATION -
COPENHAGEN UTILITIES AND CONSTRUCTION, INC. - P. 1
<PAGE> 2
Each share of voting common stock and each share of nonvoting common
stock shall be identical in interest. Neither voting nor nonvoting shares shall
have any preferential or superior rights; provided, however, that a voting share
shall entitle the holder thereof to vote in accordance with the provisions of
Oregon Revised Statutes, Chapter 60. The voting and nonvoting shares shall
constitute one class of shares as defined in Sections 1361(b)(1)(D) and
2701(a)(2)(B) of the Internal Revenue Code. Notwithstanding the above, each
holder of nonvoting common stock shall nonetheless have one vote per share
standing in the name of such holder on the relevant record date (and a
fractional vote for any fractional share) concerning any amendment to articles
of incorporation if the amendment would have any of the effects or cause any of
the changes described by O.R.S. Section 60.441 or otherwise effect a reduction
of or limitation upon any other preference or right accorded to the holder of
such stock as such.
ARTICLE V
NO PREEMPTIVE RIGHTS
The owners of shares of voting and nonvoting common stock of the
corporation shall not be entitled to preemptive rights to subscribe for or
purchase any part of new or additional issues of stock or securities convertible
into stock of any class whatsoever whether now or hereafter authorized, and
whether issued for cash, property, services, by way of dividend or otherwise.
ARTICLE VI
NO CUMULATIVE VOTING
There shall be no cumulative voting of shares.
ARTICLE VII
AMENDMENT OF ARTICLES OF INCORPORATION
The corporation reserves the right to amend, alter, change or repeal
any provisions contained in its articles of incorporation in any manner now or
hereafter prescribed or permitted by statute. All rights of shareholders of the
corporation are granted subject to this reservation.
ARTICLE VIII
BOARD OF DIRECTORS
There shall be at least one director of this corporation, but not more
than seven. The actual number may be set from time to time by the board of
directors.
AMENDED AND RESTATED ARTICLES OF INCORPORATION -
COPENHAGEN UTILITIES AND CONSTRUCTION, INC. - P. 2
<PAGE> 3
ARTICLE IX
AMENDMENT OF BYLAWS
The Board of Directors is expressly authorized to alter, amend or
repeal the bylaws of the corporation and to adopt new bylaws, subject to repeal
or change by majority vote of the shareholders. Nothing herein shall deny the
concurrent power of the shareholders to adopt, alter, amend or repeal the
bylaws.
ARTICLE X
LIMITATION ON DIRECTOR LIABILITY
To the fullest extent permitted by Oregon law and subject to the bylaws
of this corporation, a director of this corporation shall not be liable to the
corporation or its shareholders for monetary damages for his or her conduct as a
director. Any amendment to or repeal of this Article shall not adversely affect
any right of a director of this corporation hereunder with respect to any acts
or omissions of the director occurring prior to amendment or repeal.
ARTICLE XI
INDEMNIFICATION
To the fullest extent permitted by its bylaws and Oregon law, this
corporation is authorized to indemnify any of its officers, directors, employees
and agents. The Board of Directors shall be entitled to determine the terms of
indemnification, including advance of expenses, and to give effect thereto
through the adoption of bylaws, approval of agreements, or by any other manner
approved by the Board of Directors. Any amendment to or repeal of this Article
shall not adversely affect any right of an individual with respect to any right
to indemnification arising prior to such amendment or repeal.
ARTICLE XII
TRANSACTIONS WITH INTERESTED PARTIES
The corporation may enter into contracts and otherwise transact any
business with its directors, officers, and shareholders, and with any entity in
which they may have an interest adverse to the corporation, as freely as though
such adverse interest does not exist, even though the vote, action or presence
of such director, officer or shareholder may be necessary to obligate the
corporation upon such contracts or transactions.
In the absence of fraud, and with the notice required by the following
paragraph, no such contract or transaction shall be avoided and no such
director, officer or shareholder shall be held liable to account to the
corporation, by reason of such adverse interest or by reason of any fiduciary
relationship to the corporation, for any profit or benefit realized by him
through any such contract or transaction.
AMENDED AND RESTATED ARTICLES OF INCORPORATION -
COPENHAGEN UTILITIES AND CONSTRUCTION, INC. - P. 3
<PAGE> 4
Directors and officers of the corporation shall notify the Board of
Directors, at the meeting at which such contract or transaction is authorized or
confirmed, of the nature of their adverse interest. A general notice that a
director or officer of the corporation is interested in any entity shall be
sufficient disclosure of such adverse interest. No notice shall be required if
all directors have actual knowledge of the adverse interest.
The undersigned, president of COPENHAGEN UTILITIES & CONSTRUCTION,
INC., hereby certify that the above Amended and Restated Articles of
Incorporation were adopted by resolution of the board of directors, and were
approved by the shareholders on July 1, 1997, as follows:
NO. OF SHARES NO. OF SHARES VOTING VOTING
CLASS OUTSTANDING: ENTITLED TO VOTE: FOR: AGAINST:
Common 1,248 1,248 1,248 -0-
IN WITNESS WHEREOF, the undersigned Corporation has hereunto set its
hand and seal this [Illegible] day of August, 1997.
-----------
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
By: /s/ P. NICHOLAS JOHNSON
---------------------------------------
P. NICHOLAS JOHNSON, President
ATTEST:
/s/ RODNEY JAMES JOHNSON
- -------------------------------
RODNEY JAMES JOHNSON, Secretary
- --------------------------------------------------------------------------------
AMENDED AND RESTATED ARTICLES OF INCORPORATION -
COPENHAGEN UTILITIES AND CONSTRUCTION, INC. - P. 4
<PAGE> 1
EXHIBIT 3.30
AMENDED AND RESTATED BYLAWS
OF
COPENHAGEN UTILITIES & CONSTRUCTION, INC.
********************
Pursuant to resolution of the Board of Directors held July 1, 1997, the
Bylaws of this Corporation are hereby amended and restated in their entirety, as
follows:
SECTION I
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
1.1 ANNUAL MEETING. The annual meeting of the shareholders of this
corporation (the "Corporation") for the election of directors and for the
transaction of such other business as may properly come before the meeting
shall be held each year at the principal office of the Corporation, or at some
other place either within or without the State of Oregon as designated by the
Board of Directors, on the second Monday of September each year at 9:00 a.m. or
on such other day and time as may be set by the Board of Directors.
1.2 SPECIAL MEETINGS. Special meetings of the shareholders for any purpose
or purposes may be called at any time by the Board of Directors, the Chairman of
the Board, the President, a majority of the Board of Directors, or any
shareholder or shareholders holding in the aggregate one-tenth of the voting
power of all shareholders. The meetings shall be held at such time and place as
the Board of Directors may prescribe, or, if not held upon the request of the
Board of Directors, at such time and place as may be established by the
President or by the Secretary in the President's absence. Only business within
the purpose or purposes described in the meeting notice may be conducted.
1.3 NOTICE OF MEETINGS. Written notice of the place, date and time of the
annual shareholders' meeting and written notice of the place, date, time and
purpose or purposes of special shareholders' meetings shall be delivered not
less than ten (10) or more than sixty (60) days before the date of the meeting,
either personally, by mail, or in any other manner approved by law, by or at the
direction of the President, the Secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to notice of such meeting.
Mailed notices shall be deemed to be delivered when deposited in the mail,
first-class postage prepaid, correctly addressed to the shareholder's address
shown in the Corporation's current record of shareholders.
1.4 WAIVER OF NOTICE. Except where expressly prohibited by law or the
Articles of Incorporation, notice of the place, date, time and purpose or
purposes of any shareholders' meeting may be waived in a signed writing
delivered to the Corporation by any shareholder at any time, either before or
after the meeting. Attendance at the meeting in person or by proxy waives
AMENDED AND RESTATED BYLAWS - P. 1
<PAGE> 2
objection to lack of notice or defective notice of the meeting unless the
shareholder at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting. A shareholder waives objection to
consideration of a particular matter at a meeting that is not within the purpose
or purposes described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
1.5 SHAREHOLDERS' ACTION WITHOUT A MEETING. The shareholders may take any
action without a meeting that they could properly take at a meeting, if a
written consent setting forth the action so taken is signed by all of the
shareholders entitled to vote with respect to the subject matter and is
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. If required by Oregon law, all nonvoting shareholders must be
given written notice of the proposed action at least ten days before the action
is taken, unless such notice is waived in a manner consistent with these Bylaws.
Actions taken under this section are effective when the duly signed consent is
in the possession of the Corporation, unless otherwise specified in the consent.
A shareholder may withdraw consent only by delivering a written notice of
withdrawal to the Corporation prior to the time that the duly signed consent is
in the possession of the Corporation.
1.6 LIST OF SHAREHOLDERS. At least ten days before any shareholders'
meeting, the Secretary of the Corporation or the agent having charge of the
stock transfer books of the Corporation shall have compiled a complete list of
the shareholders entitled to notice of a shareholders' meeting, arranged in
alphabetical order and by voting group, with the address of each shareholder and
the number, class, and series, if any, of shares owned by each. The Secretary
shall have this list available for inspection at each meeting and adjournment
thereof.
1.7 QUORUM AND VOTING. The presence in person or by proxy of the holders
of a majority of the votes entitled to be cast on a matter at a meeting shall
constitute a quorum of shareholders for that matter. If a quorum exists, action
on a matter shall be approved by a voting group upon the affirmative votes of a
majority of the shares represented at the meeting and entitled to vote upon the
subject matter, unless a greater number of affirmative votes is required by the
Articles of Incorporation or by law. If the Articles of Incorporation or Oregon
law provide for voting by two or more voting groups on a matter, action on a
matter is taken only when voted upon by each of those voting groups counted
separately. Action may be taken by one voting group on a matter even though no
action is taken by another voting group.
1.8 ADJOURNED MEETINGS. If a shareholders' meeting is adjourned to a
different place, date or time, whether for failure to achieve a quorum or
otherwise, notice need not be given of the new place, date or time if the new
place, date or time is announced at the meeting before adjournment. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in these Bylaws, that determination shall apply to any
adjournment thereof, unless Oregon law requires fixing a new record date. If
Oregon law requires that a new record date be set for the adjourned meeting,
notice of the adjourned meeting must be given to shareholders as of the new
record date. Any business may be transacted at an adjourned meeting that could
have been transacted at the meeting as originally called.
AMENDED AND RESTATED BYLAWS - P. 2
<PAGE> 3
1.9 PROXIES. A shareholder may appoint a proxy to vote or otherwise act
for the shareholder by signing an appointment form, either personally or by an
agent. No appointment shall be valid after 11 months from the date of its
execution unless the appointment form expressly so provides. An appointment of a
proxy is revocable unless the appointment is coupled with an interest. No
revocation shall be effective until written notice thereof has actually been
received by the Secretary of the Corporation or any other person authorized to
tabulate votes.
1.10 RIGHTS OF NON-VOTING SHARES. If authorized in the Articles of
Incorporation, the corporation may issue shares of non-voting stock. Except to
the extent required by Oregon law, holders of non-voting stock may not vote
those shares upon any matter that may come before shareholders, including,
without limitation, the election of directors and approval of changes to the
Articles of Incorporation.
If the corporation has more than one class of shares outstanding, the
affirmative vote of a majority of shares of each affected class, regardless of
whether any particular class is otherwise non-voting, is required to approve any
amendment to the articles of incorporation that would:
(a) Increase or decrease the aggregate number of authorized shares of such
class;
(b) Increase or decrease the par value of the shares of such class;
(c) Effect an exchange, reclassification or cancellation of all or part of
the shares of such class;
(d) Effect an exchange, or create a right of exchange, of all or part of
the shares of another class into the shares of such class;
(e) Change the designations, preferences, limitations or relative rights
of the shares of such class;
(f) Change the shares of such class, whether with or without par value,
into the same or a different number of shares, either with or without
par value, of the same class or another class or classes;
(g) Create a new class of shares having rights and preferences prior and
superior to the shares of such class, or increase the rights and
preferences or the number of authorized shares, of any class having
rights and preferences prior or superior to the shares of such class;
(h) In the case of a preferred or special class of shares, divide the
shares of such class into series and fix and determine the designation
of such series and the variations in the relative rights and
preferences between the shares of such series, or authorize the board
of directors to do so;
(i) Limit or deny any existing preemptive rights of the shares of such
class; or
AMENDED AND RESTATED BYLAWS - P. 3
<PAGE> 4
(j) Cancel or otherwise affect dividends on the shares of such class which
have accrued but have not been declared.
1.11 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of
another corporation may be voted by such officer, agent or proxy as the bylaws
of such corporation may prescribe. In the absence of such provision, or in the
event more than one officer, agent or proxy has apparent authority to vote the
shares and they attempt to vote them inconsistently, the shares will not be
counted except upon a resolution by the Board of Directors of such other
corporation.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares in
his name. Shares standing in the name of a trustee may be voted by him, either
in person or by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority to do so is
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the corporation, nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
SECTION II
BOARD OF DIRECTORS
2.1 NUMBER AND QUALIFICATION. The business affairs and property of the
Corporation shall be managed under the direction of a Board of Directors, the
number of members of which shall be not less than one nor more than seven. The
Board of Directors may increase or decrease this number by resolution. A
decrease in the number of directors shall not shorten the term of an incumbent
director.
2.2 ELECTION; TERM OF OFFICE. The directors shall be elected by the
shareholders at each annual shareholders' meeting or at a special meeting called
for that purpose. Despite the expiration of a director's term, the director
continues to serve until his or her successor is elected and qualified or until
there is a decrease in the authorized number of directors.
AMENDED AND RESTATED BYLAWS - P. 4
<PAGE> 5
2.3 VACANCIES. Except as otherwise provided by law, vacancies in the Board
of Directors, whether caused by resignation, death, retirement,
disqualification, removal, increase in the number of directors, or otherwise,
may be filled by the Board of Directors, by the shareholders, or, if the
directors in office constitute less than a quorum of the Board of Directors, by
an affirmative vote of a majority of the remaining directors. A director elected
to fill a vacancy shall be elected for the unexpired term of his predecessor,
except that the term of a director elected due to an increase in the number of
directors expires at the next shareholders' meeting at which directors are
elected. A vacancy that will occur at a specific later date may be filled before
the vacancy occurs, but the new director may not take office until the vacancy
occurs.
2.4 QUORUM AND VOTING. At any meeting of the Board of Directors, the
presence in person (including presence by electronic means such as a telephone
conference call) of a majority of the number of directors provided for in these
bylaws (or absent such a provision, then the number stated in the articles of
incorporation) shall constitute a quorum for the transaction of business. If a
quorum is present at the time of a vote, the affirmative vote of a majority of
the directors present at the time of the vote shall be the act of the Board of
Directors and of the Corporation except as may be otherwise specifically
provided by the Articles of Incorporation, by these Bylaws, or by law.
A director who is present at a meeting of the Board of Directors when
action is taken is deemed to have assented to the action taken unless: (a) the
director objects at the beginning of the meeting, or promptly upon his or her
arrival, to holding it or to transacting business at the meeting; (b) the
director's dissent or abstention from the action taken is entered in the minutes
of the meeting; or (c) the director delivers written notice of his or her
dissent or abstention to the secretary of the meeting before its adjournment or
by registered mail to the Corporation within three days after adjournment of the
meeting. The right of dissent or abstention is not available to a director who
votes in favor of the action taken.
2.5 REGULAR MEETINGS. Regular meetings of the Board of Directors shall be
held at such place, date and time as shall from time to time be fixed by
resolution of the Board.
2.6 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
held at any place and at any time and may be called by the Chairman of the
Board, the President, Vice President, Secretary or Treasurer, or any two or more
directors.
2.7 NOTICE OF MEETINGS. Unless the Articles of Incorporation provide
otherwise, any regular meeting of the Board of Directors may be held without
notice of the date, time, place, or purpose of the meeting. Any special meeting
of the Board of Directors must be preceded by at least two days' notice of the
date, time, and place of the meeting, but not of its purpose, unless the
Articles of Incorporation or these Bylaws require otherwise. Notice may be given
personally, by facsimile, by mail, or in any other manner allowed by law. Oral
notice shall be sufficient only if a written record of such notice is included
in the Corporation's minute book.
AMENDED AND RESTATED BYLAWS - P. 5
<PAGE> 6
Notice shall be deemed effective at the earliest of: (a) receipt; (b)
delivery to the proper address or telephone number of the director as shown in
the Corporation's records; or (c) five days after its deposit in the United
States mail, as evidenced by the postmark, if correctly addressed and mailed
with first-class postage prepaid.
Notice of any meeting of the Board of Directors may be waived by any
director at any time, by a signed writing, delivered to the Corporation for
inclusion in the minutes, either before or after the meeting. Attendance or
participation by a director at a meeting shall constitute a waiver of any
required notice of the meeting unless the director promptly objects to holding
the meeting or to the transaction of any business on the grounds that the
meeting was not lawfully convened and the director does not thereafter vote for
or assent to action taken at the meeting.
2.8 DIRECTORS' ACTION WITHOUT A MEETING. The Board of Directors or a
committee thereof may take any action without a meeting that it could properly
take at a meeting if a written consent setting forth the action is signed by all
of the directors, or all of the members of the committee, as the case may be,
either before or after the action is taken, and if the consent is delivered to
the Corporation for inclusion in the minutes or filing with the corporate
records. Such action shall be effective upon the signing of a consent by the
last director to sign, unless the consent specifies a later effective date.
2.9 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors, by
resolutions adopted by a majority of the members of the Board of Directors, may
create from among its members one or more committees and shall appoint the
members thereof. Each such committee must have two or more members, who shall be
directors and who shall serve at the pleasure of the Board of Directors. Each
committee of the Board of Directors may exercise the authority of the Board of
Directors to the extent provided in its enabling resolution and any pertinent
subsequent resolutions adopted in like manner, provided that the authority of
each such committee shall be subject to applicable law. Each committee of the
Board of Directors shall keep regular minutes of its proceedings and shall
report to the Board of Directors when requested to do so.
2.10 TELEPHONE MEETINGS. Members of the Board of Directors or of any
committee appointed by the Board of Directors may participate in a meeting of
the Board of Directors or committee by means of a conference telephone or
similar communications equipment that enables all persons participating in the
meeting to hear each other at the same time during the meeting. Participation by
such means shall constitute presence in person at a meeting.
2.11 COMPENSATION OF DIRECTORS. The Board of Directors may fix the
compensation of directors as such and may authorize the reimbursement of their
expenses.
2.12 DIRECTOR CONFLICTS OF INTEREST. No contract or other transaction
between the corporation and one or more of its directors or any other
corporation, firm, association or entity in which one or more of its directors
are directors or officers or are financially interested, shall be either void or
voidable because of such relationship or interest or because such director or
directors are present at the meeting of the Board of Directors or a committee
thereof which
AMENDED AND RESTATED BYLAWS - P. 6
<PAGE> 7
authorizes, approves or ratifies such contract or transaction or because his or
their votes are counted for such purposes, if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies
the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested
directors; or
(b) The fact of such relationship or interest is disclosed or known to the
stockholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent, in which vote
or consent such interested directors may participate to the extent
that they are also shareholders; or
(c) The contract or transaction is fair and reasonable to the corporation
and the fact of such relationship or interest is fully and fairly
disclosed or known to the corporation.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
SECTION III
OFFICERS
3.1 OFFICERS ENUMERATED; ELECTION. The officers of the Corporation shall
consist of a president, a secretary, a treasurer, and such other officers and
assistant officers as may be designated by resolution of the Board of Directors.
The officers shall hold office at the pleasure of the Board of Directors. Unless
otherwise restricted by the Board of Directors, the President may appoint any
assistant officer, the Secretary may appoint one or more Assistant Secretaries,
and the Treasurer may appoint one or more Assistant Treasurers; provided that
any such appointments shall be recorded in writing in the corporate records.
3.2 QUALIFICATIONS. None of the officers of the Corporation need be a
director. Any two or more corporate offices may be held by the same person.
3.3 DUTIES OF THE OFFICERS. Unless otherwise prescribed by the Board of
Directors, the duties of the officers shall be as follows:
CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is elected,
shall preside at meetings of the Board of Directors and of the
shareholders, shall be responsible for carrying out the plans and
directives of the Board of Directors, shall report to and consult with the
Board of Directors and, if the Board so resolves, shall be the Chief
================================================================================
AMENDED AND RESTATED BYLAWS - P. 7
<PAGE> 8
Executive Officer. The Chairman of the Board shall have such other powers
and duties as the Board of Directors may from time to time prescribe.
PRESIDENT. The president shall exercise the usual executive powers
pertaining to the office of President. In the absence of a Chairman of the
Board, the President shall preside at meetings of the Board of Directors
and of the shareholders, perform the other duties of the Chairman of the
Board prescribed in this Section, and perform such other duties as the
Board of Directors may from time to time designate.
VICE PRESIDENT. Each Vice President, if any shall be elected, shall
perform such duties as the Board of Directors may from time to time
designate. In addition, the Vice President, or if there is more than one,
the most senior Vice President available, shall act as President in the
absence or disability of the President.
SECRETARY. The Secretary shall be responsible for and shall keep,
personally or with the assistance of others, records of the proceedings of
the directors and shareholders; authenticate records of the Corporation;
attest all certificates of stock in the name of the Corporation; keep the
corporate seal, if any, and affix the same to certificates of stock and
other proper documents; keep a record of the issuance of certificates of
stock and the transfers of the same; and perform such other duties as the
Board of Directors may from time to time designate.
TREASURER. The treasurer shall have the care and custody of, and be
responsible for, all funds and securities of the Corporation and shall
cause to be kept regular books of account. The Treasurer shall cause to be
deposited all funds and other valuable effects in the name of the
Corporation in such depositories as may be designated by the Board of
Directors. In general, the Treasurer shall perform all of the duties
incident to the office of Treasurer, and such other duties as from time to
time may be assigned by the Board of Directors.
ASSISTANT OFFICERS. Assistant officers may consist of one or more
Assistant Vice Presidents, one or more Assistant Secretaries, and one or
more Assistant Treasurers. Each assistant officer shall perform those
duties assigned to him or her from time to time by the Board of Directors,
the President, or the officer who appointed him or her.
3.4 VACANCIES. Vacancies in any office arising from any cause may be
filled by the Board of Directors at any regular or special meeting.
3.5 REMOVAL. Any officer or agent may be removed by action of the Board of
Directors with or without cause, but any removal shall be without prejudice to
the contract rights, if any, of the person removed. Election or appointment of
an officer or agent shall not of itself create any contract rights.
3.6 COMPENSATION. The compensation of all officers of the Corporation
shall be fixed by the Board of Directors.
================================================================================
AMENDED AND RESTATED BYLAWS - P. 8
<PAGE> 9
SECTION IV
SHARES AND CERTIFICATES OF SHARES
4.1 SHARE CERTIFICATES. Share certificates shall be issued in numerical
order, and each shareholder shall be entitled to a certificate signed by the
President or a Vice President and attested by the Secretary or an Assistant
Secretary. Share certificates may be sealed with the corporate seal, if any.
Facsimiles of the signatures and seal may be used as permitted by law. Every
share certificate shall state:
(a) The name of the Corporation;
(b) That the Corporation is organized under the laws of the State of
Oregon;
(c) The name of the person to whom the share certificate is issued;
(d) The number, class and series (if any) of shares that the certificate
represents; and
(e) The par value of each share represented by the certificate, or a
statement that the shares are without par value.
If the Corporation is authorized to issue shares of more than one class or
series, that upon written request and without charge, the Corporation will
furnish any shareholder with a full statement of the designations, preferences,
limitations and relative rights of the shares of each class or series, and the
authority of the Board of Directors to determine variations for future series.
Nonvoting shares, if any, shall be so designated as required by the laws of the
State of Oregon.
4.2 CONSIDERATION FOR SHARES. Shares of the Corporation may be issued for
such consideration as shall be determined by the Board of Directors to be
adequate. The consideration for the issuance of shares may be paid in whole or
in part in cash, or in any tangible or intangible property or benefit to the
Corporation, including but not limited to services actually performed.
Establishment by the Board of Directors of the amount of consideration received
or to be received for shares of the Corporation shall be deemed to be a
determination that the consideration so established is adequate.
4.3 TRANSFERS. Shares may be transferred by delivery of the certificate,
accompanied either by an assignment in writing on the back of the certificate,
or by a written power of attorney to sell, assign and transfer the same, signed
by the record holder of the certificate. Except as otherwise specifically
provided in these Bylaws, no shares of stock shall be transferred on the books
of the Corporation until the outstanding certificate therefor has been
surrendered to the Corporation.
================================================================================
AMENDED AND RESTATED BYLAWS - P. 9
<PAGE> 10
generally in the past three years; (f) a list of the names and business
addresses of its current officers and directors; and (g) its most recent annual
report to the Secretary of State.
5.2 COPIES OF CORPORATE RECORDS. Any person dealing with the Corporation
may rely upon a copy of any of the records of the proceedings, resolutions, or
votes of the Board of Directors or shareholders, when certified by the Chairman
of the Board, President, Vice President, Secretary or Assistant Secretary.
5.3 EXAMINATION OF RECORDS. A shareholder shall have the right to inspect
and copy, during regular business hours at the principal office of the
Corporation, in person or by his or her attorney or agent, the corporate records
referred to in the last sentence of Section 5.1 of these Bylaws if the
shareholder gives the Corporation written notice of the demand at least five
business days before the date on which the shareholder wishes to make such
inspection.
In addition, if a shareholder's demand is made in good faith and for a
proper purpose, a shareholder may inspect and copy, during regular business
hours at a reasonable location specified by the Corporation, excerpts from
minutes of any meeting of the Board of Directors, records of any action of a
committee of the Board of Directors, records of actions taken by the Board of
Directors without a meeting, minutes of shareholders' meetings held or records
of action taken by shareholders without a meeting not within the past three
years, accounting records of the Corporation, or the record of shareholders;
provided that the shareholder shall have made a demand describing with
reasonable particularity the shareholder's purpose and the records the
shareholder desires to inspect, and provided further that the records are
directly connected to the shareholder's purpose.
This section shall not affect any right of shareholders to inspect records
of the Corporation that may be otherwise granted to the shareholders by law.
5.4 FINANCIAL STATEMENTS. Not later than four months after the end of each
fiscal year, or in any event prior to its annual meeting of shareholders, the
Corporation shall prepare a balance sheet and income statement in accordance
with Oregon law. The Corporation shall furnish a copy of each to any shareholder
upon written request.
SECTION VI
FISCAL YEAR
The Corporation shall conduct its business on a calendar year.
================================================================================
AMENDED AND RESTATED BYLAWS - P. 11
<PAGE> 11
SECTION VII
CORPORATE SEAL
The corporate seal of the Corporation, if any, shall be in the form as
determined by the Board of Directors.
SECTION VII
MISCELLANEOUS PROCEDURAL PROVISIONS
The Board of Directors may adopt rules of procedure to govern any meetings
of shareholders or directors to the extent not inconsistent with law, the
Corporation's Articles of Incorporation, or these Bylaws, as they are in effect
from time to time. In the absence of any rules of procedure adopted by the Board
of Directors, the chairman of the meeting shall make all decisions regarding the
procedures for any meeting.
SECTION IX
AMENDMENT OF BYLAWS
The Board of Directors is expressly authorized to make, alter and repeal
the Bylaws of the Corporation, subject to the power of the shareholders of the
Corporation to change or repeal the Bylaws.
SECTION X
INDEMNIFICATION OF DIRECTORS AND OTHERS
10.1 GRANT OF INDEMNIFICATION. Subject to Section 10.2, each person who was
or is made a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any threatened, pending, or
completed action, suit or proceeding, whether formal or informal, civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director of the Corporation or
who, while a director of the Corporation, is or was serving at the request of
the Corporation as a director, officer, employee or agent of this or another
Corporation or of a partnership, joint venture, trust, other enterprise, or
employee benefit plan, whether the basis of such proceeding is alleged action in
an official capacity as a director or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent permitted by
AMENDED AND RESTATED BYLAWS - P. 12
<PAGE> 12
applicable law, as then in effect, against all expense, liability and loss
(including attorneys' fees, costs, judgments, fines, ERISA excise taxes or
penalties and amounts to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith, and such indemnification shall continue
as to a person who has ceased to be a director and shall inure to the benefit of
his or her heirs, executors and administrators.
10.2 LIMITATIONS ON INDEMNIFICATION. Notwithstanding Section 10.1, no
indemnification shall be provided hereunder to any such person to the extent
that such indemnification would be prohibited by the Oregon Business Corporation
Act or other applicable law as then in effect. Except as provided in Section
10.4 with respect to proceedings seeking to enforce rights to indemnification,
the Corporation shall not indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person, except
where such proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation.
10.3 ADVANCEMENT OF EXPENSES. The right to indemnification conferred in
this section shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition,
except where the Board of Directors shall have adopted a resolution expressly
disapproving such advancement of expenses.
10.4 RIGHT TO ENFORCE INDEMNIFICATION. If a claim under Section 10.1 is
not paid in full by the Corporation within forty (40) days after a written
claim has been received by the Corporation, or if a claim for expenses incurred
in defending a proceeding in advance of its final disposition authorized under
Section 10.3 is not paid within twenty (20) days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. To the extent
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim.
The claimant shall be presumed to be entitled to indemnification hereunder
upon submission of a written claim (and, in an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition, where the required undertaking has been tendered to the
Corporation), and thereafter the Corporation shall have the burden of proof to
overcome the presumption that the claimant is so entitled.
It shall be a defense to any such action (other than an action with respect
to expenses authorized under Section 10.3) that the claimant has not met the
standards of conduct which make it permissible hereunder or under the Oregon
Business Corporation Act for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation.
The failure of the Corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth herein or in the Oregon Business Corporation Act shall not be a defense to
the action or create a presumption that the claimant is not so entitled.
Further, except as provided in Section 10.3, an actual
AMENDED AND RESTATED BYLAWS - P. 13
<PAGE> 13
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its shareholders) that the claimant is not entitled to
indemnification or to the reimbursement or advancement of expenses also shall
not be a defense to the action or create a presumption that the claimant is not
so entitled.
10.5 NONEXCLUSIVITY. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this section shall be valid to the extent consistent with Oregon
law.
10.6 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS. The Corporation
may, by action of its Board of Directors from time to time, provide
indemnification and pay expenses in advance of the final disposition of a
proceeding to officers, employees and agents of the Corporation on the same
terms and with the same scope and effect as the provisions of this section with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation or pursuant to rights granted pursuant to, or
provided by, the Oregon Business Corporation Act or on such other terms as the
Board may deem proper.
10.7 INSURANCE AND OTHER SECURITY. The Corporation may maintain insurance,
at its expense, to protect itself and any individual who is or was a director,
officer, employee or agent of the Corporation or another Corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against or incurred by the individual in that capacity or arising from
his or her status as an officer, director, agent, or employee, whether or not
the Corporation would have the power to indemnify such person against the same
liability under the Oregon Business Corporation Act.
The Corporation may enter into contracts with any director or officer of
the Corporation in furtherance of the provisions of this section and may create
a trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided in this section.
10.8 AMENDMENT OR MODIFICATION. This section may be altered or amended at
any time as provided in these Bylaws, but no such amendment shall have the
effect of diminishing the rights of any person who is or was an officer or
director as to any acts or omissions taken or omitted to be taken prior to the
effective date of such amendment.
10.9 EFFECT OF SECTION. The rights conferred by this section shall be
deemed to be contract rights between the Corporation and each person who is or
was a director or officer. The Corporation expressly intends each such person to
rely on the rights conferred hereby in performing his or her respective duties
on behalf of the Corporation.
AMENDED AND RESTATED BYLAWS - P. 14
<PAGE> 14
SECTION XI
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
Unless otherwise restricted by the Board of Directors, the Chairman,
President, and any Vice President of the Corporation are each authorized to
vote, represent and exercise on behalf of the Corporation all rights incident to
any and all shares of other corporations standing in the name of the
Corporation. This authority may be exercised by such officers either in person
or by a duly executed proxy or power of attorney.
The foregoing Amended and Restated Bylaws were duly adopted at a special
meeting of the board of directors of COPENHAGEN UTILITIES & CONSTRUCTION, INC.,
held the first day of July, 1997.
/s/ RODNEY JAMES JOHNSON
-----------------------------------
RODNEY JAMES JOHNSON, Secretary
AMENDED AND RESTATED BYLAWS - P. 15
<PAGE> 1
EXHIBIT 3.31
ARTICLES OF INCORPORATION
OF
TEXEL CORPORATION
I hereby associate to form a Corporation under the provisions
of Chapter 1, Title 13.1 of the 1950 Code of Virginia, as amended, and to that
end set forth the following:
1. The name of the Corporation is Texel Corporation.
2. The Corporation is organized for the following purposes:
To provide telecommunication and computer system installation,
maintenance and other related services.
To acquire, by purchase, lease, or otherwise, lands and
interest in lands, and to own, hold, improve, develop and manage any real estate
so acquired, and to erect, or cause to be erected, on any lands owned, held or
occupied by the Corporation, buildings or other structures, with their
appurtenances, and to manage, operate, lease, rebuild, enlarge, alter or improve
any buildings or other structures, now or hereafter erected on any land so
owned, held or occupied, and to encumber or dispose of any lands or interest in
lands, and any buildings or other structures, and any stores, shops, suites,
rooms or parts of any buildings or other structures, at any time owned or held
by the Corporation.
To acquire, by purchase, lease, manufacture, or otherwise, any
personal property deemed necessary or useful in the equipment, furnishing,
improvement, development or management of any property, real or personal, at any
time owned, held or occupied by the Corporation and to invest, trade and deal in
any personal property deemed beneficial to the Corporation, and to encumber or
dispose of any personal property at any time owned or held by the Corporation.
<PAGE> 2
To acquire, by purchase, lease, or otherwise, lands and
interest in lands, and to own, hold, improve, develop and manage any real estate
so acquired, and to erect, or cause to be erected, on any lands owned, held or
occupied by the Corporation, buildings or other structures, with their
appurtenances, and to manage, operate, lease, rebuild, enlarge, alter or improve
any buildings or other structures, now or hereafter erected on any land so
owned, held or occupied, and to encumber or dispose of any lands or interest in
lands, and any buildings or other structures, and any stores, shops, suites,
rooms or parts of any buildings or other structures, at any time owned or held
by the Corporation.
To acquire, by purchase, lease, manufacture, or otherwise, any
personal property deemed necessary or useful in the equipment, furnishing,
improvement, development or management of any property, real or personal, at any
time owned, held or occupied by the Corporation and to invest, trade and deal
in any personal property deemed beneficial to the Corporation, and to encumber
or dispose of any personal property at any time owned or held by the
Corporation.
To transact any or all lawful business for which corporations
may be incorporated under the laws of the Commonwealth of Virginia.
<PAGE> 3
-2-
3. The Corporation may invest its funds in real estate, mortgages,
stocks, bonds or other types of investments as permitted by law.
4. The number of shares which the Corporation shall have authority to
issue and the par value per share are as follows:
<TABLE>
<CAPTION>
Class Shares Par Value
----- ------ ---------
<S> <C> <C>
Common 1000 $1.00
</TABLE>
5. The post office address of the initial registered office of the
Corporation is 4414 Rockcrest Drive, Fairfax, Virginia 22032. The name of the
county in which the registered office is located is the County of Fairfax,
Virginia. The name of the initial registered agent is Joan E. Kasprowicz, who
is a resident of the Commonwealth of Virginia, and is a Director of the
Corporation and whose business address is the same as the address of the
initial registered office of the Corporation.
6. The number of Directors constituting the initial Board of Directors
is four (4) and the names and addresses of the persons to serve as the initial
Directors are:
Edward Scott Kasprowicz Joan Edith Kasprowicz
4414 Rockcrest Drive 4414 Rockcrest Drive
Fairfax, Virginia 22032 Fairfax, Virginia 22032
Rodney William Cannon Kenneth Bruce Harrington
4512 Dixie Hill Road 6927 Chestnut Avenue
Fairfax, Virginia 22030 Falls Church, Virginia 22042
7. The number of Directors of the Corporation shall not be less than
one (1), but the number of Directors may be increased by amendment of the
Bylaws.
8. In the election of Directors, those receiving the greatest number of
votes shall be deemed elected even though not receiving a majority. A
stockholder may cumulate his votes by giving one candidate as many votes as the
number of Directors to be elected multiplied by the number of voting shares he
owns. Direc-
<PAGE> 4
the Commonwealth of Virginia, and is a Director of the Corporation and whose
business address is the same as the address of the initial registered office
of the Corporation.
6. The number of Directors constituting the initial Board of Directors
is four (4) and the names and addresses of the persons to serve as the initial
Directors are:
Edward Scott Kasprowicz Joan Edith Kasprowicz
4414 Rockcrest Drive 4414 Rockcrest Drive
Fairfax, Virginia 22032 Fairfax, Virginia 22032
Rodney William Cannon Kenneth Bruce Harrington
4512 Dixie Hill Road 6927 Chestnut Avenue
Fairfax, Virginia 22030 Falls Church, Virginia 22042
7. The number of Directors of the Corporation shall not be less than
one (1), but the number of Directors may be increased by amendment of the
Bylaws.
8. In the election of Directors, those receiving the greatest number of
votes shall be deemed elected even though not receiving a majority. A
stockholder may cumulate his votes by giving one candidate as many votes as the
number of Directors to elected multiplied by the number of voting shares he
owns. Directors shall not be classified.
GIVEN UNDER MY HAND THIS 14th day of September 1983.
/s/ JOHN S. WISIACKAS (SEAL)
-------------------------------
John S. Wisiackas
Incorporator
<PAGE> 1
EXHIBIT 3.32
BYLAWS
OF
TEXEL CORPORATION
ARTICLE I
Offices
Section 1. Principal Office. The principal office of the Corporation shall
be in the County of Fairfax, in the Commonwealth of Virginia.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the Commonwealth of Virginia as the Board
of Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
Stockholder Meetings
Section 1. Annual Meeting. The annual meeting of the Stockholders for the
election of Directors and the transaction of such other business as may properly
come before it will be held during the last week in September of each year.
Section 2. Special Meetings. Special meetings of the Stockholders, other
than those regulated by statute, may be called at any time by the Board of
Directors, the President or the Stockholders holding, in the aggregate, not less
than ten percent (10%) of all outstanding shares entitled to vote at such
special meetings. The purpose(s) of the proposed meeting shall be stated in the
Notice of Meeting. No business other than that specified in the Notice of
Meeting shall be transacted at any such special meeting.
Section 3. Place of Meeting. The annual and special meetings of
Stockholders will be held at the principal office of the Corporation in the
Commonwealth of Virginia or at such place within or without the Commonwealth of
Virginia as determined by the Board of Directors and set forth in the Notice of
Meeting.
Section 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which it is called shall be given not less than ten (10) nor more
than fifty (50) days before the date of the meeting, either personally or by
first-class mail, by or at the direction of the President or the Secretary or
the officers or persons calling the meeting, to each Stockholder of record
entitled to vote at such meeting. Notice of a Stockholders'
<PAGE> 2
-2-
meeting to act on an amendment to the Articles of Incorporation or on a
reduction of stated capital or a plan of merger, consolidation or exchange shall
be given not less than twenty-five (25) nor more than fifty (50) days before
the date of the meeting (with such notice being accompanied by a copy of the
proposed amendment or plan of reduction, merger, consolidation or exchange). If
mailed, such notice shall be deemed to be given when deposited in the United
States mail, with postage thereon prepaid, addressed to the Stockholder at the
Stockholder's address as it appears on the stock transfer books of the
Corporation, unless the Stockholder has filed with the Secretary a written
request that notice intended for him be mailed to a different address, in which
case it shall be mailed to the address designated in such request.
Section 5. Waiver of Notice of Meeting. Notice of any Stockholders' meeting
may be waived by any Stockholder by signing a waiver of such notice, whether
signed before or after the time set for the meeting. Notice of such meeting
shall not be required as to any Stockholder who shall attend such meeting in
person or by proxy, except where the Stockholder attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum. Except as otherwise provided in the Articles of
Incorporation, the presence, by person or by proxy, of the holders of a majority
of outstanding shares entitled to vote thereat shall be necessary to constitute
a quorum for the transaction of business at all meetings of Stockholders. If,
however, such quorum shall not be present or represented at any meeting of the
Stockholders, a majority of the shares so represented shall have the power to
adjourn that meeting to a future date at which a quorum shall be present or
represented. At such reconvened meeting, any business may be transacted which
might have been transacted at the meeting originally called.
Section 7. Closing of Transfer Books and Fixing of Record Date. For the
purpose of determining Stockholders entitled to notice of or to vote at any
meeting of the Stockholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of Stockholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period, but not to exceed, in any
case, fifty (50) days. In lieu of closing the stock transfer books the Board of
Directors may fix in advance a date as the record date for any such
determination of Stockholders, such date in any case not more than fifty (50)
days prior to the date on which the particular action, requiring such
determination of Stockholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of Stockholders
entitled to notice of or to vote at a meeting of Stockholders, or Stockholders
entitled to receive payment of a dividend or for such other purpose, the date on
which notice of meeting is mailed or the date on which the resolution of the
<PAGE> 3
-3-
Board of Directors declaring such dividend or allotment of rights is adopted, as
the case may be, shall be the record date for such determination of
Stockholders. When a determination of Stockholders entitled to vote at any
meeting of Stockholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 8. Voting Lists. At least ten (10) days prior to each meeting of
Stockholders, the officer or agent having charge of the stock transfer books for
shares of the Corporation shall make a complete list of the Stockholders
entitled to vote at such meeting, or any adjournment thereof, with the address
and the number and class of shares held by each, which list shall be subject to
inspection by any Stockholder during normal business hours for at least ten (10)
days prior to the meeting. The list also shall be produced at the meeting and
shall be subject to inspection by any Stockholder at any time during the
meeting. The original stock transfer book shall be prima facie evidence as to
who are the Stockholders entitled to examine such list or the transfer books or
to vote at any meeting of the Stockholders.
Section 9. Voting. A Stockholder entitled to vote at a meeting may vote at
such meeting in person or by proxy. Except as otherwise provided by law or the
Articles of Incorporation, every Stockholder of record shall be entitled to one
(1) vote for each share of stock standing in his name on the books of the
Corporation on the record date fixed as herein provided. Moreover, except to the
extent that a greater number is required by law or the Articles of
Incorporation, all Stockholder action shall be determined by a vote of the
majority of the votes cast at a meeting of Stockholders by the holders of
shares entitled to vote thereon.
Section 10. Proxies. Every proxy must be dated and signed by the
Stockholder or by his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months after the date of its execution, unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Stockholder executing it, except when an irrevocable proxy is permitted
by Statute. All proxies shall be filed with the Secretary of the Corporation
before or at the time of the meeting. In the event that a proxy shall designate
two (2) or more persons to act as proxies, a majority of such persons present at
the meeting, or, if only one (1) is present, that one (1), shall have all of the
powers conferred by the proxy upon all persons so designated, unless the
instrument provides otherwise. If the proxy holders present at the meeting are
equally divided as to the manner of voting in a particular case, the voting of
such shares shall be prorated.
Section 11. Action by Stockholders Without a Meeting. Whenever by a
provision of Statute, the Articles of Incorporation or by these Bylaws the vote
of Stockholders is required or permitted to be taken at a meeting thereof in
connection with any corporate action, the meeting and the vote of the
Stockholders may be
<PAGE> 4
-4-
dispensed with if all the Stockholders who would have been entitled to vote upon
the action if such meeting were held shall consent in writing to such corporate
action being taken.
ARTICLE III
Directors
Section 1. Number and Qualifications. The entire Board of Directors shall
consist of three (3) members. However, in no event shall these Bylaws be amended
to fix the number at less than one (1) Director. No minor shall serve as a
Director. Unless the Articles of Incorporation provide otherwise, Directors need
not be residents of the Commonwealth or Stockholders of the Corporation.
Section 2. Manner of Election. The Directors shall be elected at the annual
meeting of the Stockholders, except as herein provided for filling vacancies.
Section 3. Term of Office. The term of office of each Director shall be
until the next annual meeting of the Stockholders and until his successor has
been duly elected and has been qualified, unless he sooner dies, resigns or is
removed.
Section 4. Duties, Powers and Manner of Acting. The Board of Directors
shall have full control and management of the affairs, business and property of
the Corporation. The Directors shall in all cases act as a Board, regularly
convened, and in the transaction of business the act of a majority of the
Directors present at a meeting, except to the extent a greater number is
required by law or the Articles of Incorporation, shall be the act or the Board,
provided a quorum is present. The Directors may adopt such rules and regulations
for the conduct of their meetings and for the management of the Corporation
which they may deem proper not inconsistent with law or these Bylaws.
Section 5. Presumption of Assent. A Director who is present at a meeting of
the Board of Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless (a) he announces his
dissent at the meeting and (b) either his dissent shall be entered in the
minutes of the meeting or he shall file his written dissent to such action with
the person acting as the Secretary of the meeting before the adjournment thereof
or shall forward such written dissent, immediately after the meeting is
adjourned, to the Secretary of the meeting or the Corporation by registered mail
or personally. Such right to dissent shall not apply to a Director who voted in
favor of such action.
<PAGE> 5
-5-
Section 6. Annual Meetings. After each annual meeting of Stockholders, the
Board of Directors shall hold its annual meeting at the same place as and
immediately following such annual meeting of Stockholders for the purpose of the
election or appointment of officers and the transaction of such other business
as may come before the meeting. The place and time of such meeting may be varied
by written consent of all the Directors.
Section 7. Regular Meetings. Regular meetings of the Board of Directors may
be held without notice at such time and at such place as shall be determined in
advance from time to time by the Board of Directors.
Section 8. Special Meetings. Special meetings of the Board of Directors
may be called by the President at any time. He must, upon the written request of
a majority of all Directors, call a special meeting to be held not more than ten
(10) days after he has received such request.
Section 9. Notice of Meetings. No notice need be given of any annual or
regular meeting of the Board. Notice of special meetings shall be served upon
each Director in person, by telegram or by mail addressed to him at his last
known post office address, at least two (2) days prior to the date of such
meeting, specifying the place, day and hour of the meeting. If notice is mailed
or sent by telegram, such notice shall be deemed to be delivered when deposited
in the United States mail with postage thereon prepaid or when the telegram is
properly delivered to the telegraph company. Neither the business to
be transacted at, nor the purpose of, any annual, regular or special meeting of
the Board of Directors need be specified in the notice or waiver of such notice
of such meetings. At any meeting at which all of the Directors shall be present,
although held without notice, any business may be transacted which might have
been transacted if the meeting had been duly called.
Section 10. Waiver of Notice of Meeting. Notice of any Board of Directors'
meeting may be waived by any Director by signing a waiver of such notice,
whether signed before or after the time set for the meeting. Notice of such
meeting shall not be required as to any Director who shall attend such meeting
in person or by proxy, except where the Director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 11. Place of Meeting. The Board of Directors may hold its meetings
either within or without the Commonwealth of Virginia. Unless otherwise provided
herein, the person(s) calling such meetings may fix the place of such meetings.
If no such designation is made, the place of the meeting shall be the principal
office of the Corporation.
<PAGE> 6
-6-
Section 12. Quorum. At any meeting of the Board of Directors the
presence of a majority of the number of Directors as determined from time to
time shall be necessary to constitute a quorum for the transaction of business,
unless a greater number is required by the Articles of Incorporation. However,
should a quorum not be present, a lesser number may adjourn the meeting until
some further time, not more than ten (10) days later when it is reasonably
possible to obtain a quorum.
Section 13. Voting. At all meetings of the Board of Directors, each
Director shall have one (1) vote irrespective of the number of shares that he
may hold.
Section 14. Compensation. Each Director shall be entitled to receive for
attendance at each meeting of the Board or of any duly constituted committee
thereof which he attends reimbursement of his expenses, and such fee as is fixed
by the Board or a stated salary as Director. No payment shall preclude any
Director from serving the Corporation in any other capacity and receiving
compensation therefore.
Section 15. Vacancies. Except as may be provided in the Articles of
Incorporation, any vacancy occurring in the Board of Directors, including a
vacancy resulting from an increase, by not more than two (2), in the number of
Directors, may be filled by the affirmative vote of a majority of the remaining
Directors (though less than a quorum of the Board of Directors) at a regular or
special meeting which shall be called for that purpose within sixty (60) days
after the occurrence of the vacancy. The Director thus chosen shall hold office
for the unexpired term of his predecessor in office.
Section 16. Removal of Directors. Any Director may be removed either with
or without cause (except as provided by law), at any time, by vote of the
Stockholders holding a majority of the issued and outstanding shares entitled to
vote at an election of the Director sought to be removed, at any special
Stockholders' meeting called for that purpose, or at the annual Stockholders'
meeting. Any such removal shall be without prejudice to the contract rights, if
any, of the person removed. No Director may be removed, in case cumulative
voting is provided in the Articles of Incorporation, if the vote of a sufficient
number of shares are cast against his removal which, if then cumulatively voted
at an election of a full Board, would be sufficient to elect him.
Section 17. Resignation. Any Director may resign his office at any time.
Such resignation is to be made in writing, delivered to the President or
secretary and to take effect at the time specified in such notice.
Section 18. Action by Directors Without A Meeting. Any action required or
permitted to be taken by any provisions of law, the Articles of Incorporation or
these Bylaws at any meeting of
<PAGE> 7
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the Board of Directors or of any committee thereof may be taken without a
meeting if a written consent, setting forth the action, is signed, either before
or after such action, by all members of the Board of Directors or of such
committee, as the case may be, and filed in the minutes of the proceedings of
the Board of Directors or such committee, as the case may be.
Section 19. Meeting by Telephone. Unless otherwise provided by the Articles
of Incorporation, Directors or the members of any committee thereof will be
deemed present at a meeting of the Board of Directors or of any such committee,
as the case may be, if the meeting is conducted using a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
ARTICLE IV
Officers
Section 1. Officers and Qualifications. The officers of the Corporation
shall consist of a President, Secretary and Treasurer. Such Vice-Presidents and
other officers and assistant officers and agents as deemed necessary may be
elected or appointed by the Board of Directors or chosen in such other manner as
may be prescribed by the Bylaws. Any two (2) or more offices may be held by the
same person except the offices of President and Secretary (provided, however, if
the Corporation has only one (1) Stockholder, he may hold all offices), but in
no case (except if the Corporation has only one (1) Stockholder and one person
who holds all offices) shall one (1) person sign a single instrument of any kind
in more than one (1) capacity.
Section 2. Election. All officers of the Corporation shall be elected
annually by the Board of Directors at its annual meeting. If the election of
officers shall not be held at such meeting, such election shall be held as soon
thereafter as is convenient.
Section 3. Term of Office. All officers shall hold office for one (1) year
and until their successors have been duly elected and have qualified, unless
they sooner die, resign or are removed.
Section 4. Vacancies. All vacancies in any office shall be filled promptly
by the Board of Directors either at annual or regular meetings or at a meeting
specially called for that purpose.
Section 5. Removal of Officers or Agents. Any officer or agent may be
removed either with or without cause at any time by vote of the majority of the
Board of Directors whenever the Board of Directors in its absolute discretion
shall consider that the best interests of the Corporation would be served
thereby. Any officer or agent appointed otherwise than by the Board of
<PAGE> 8
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Directors may be removed with or without cause at any time by any officer or
person(s) having authority to appoint, except as may otherwise be provided in
the Bylaws, whenever such officer in his absolute discretion shall consider that
the best interests of the Corporation will be served thereby. Any such removal
shall be without prejudice to the contract rights, if any, of the person
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
Section 6. Compensation of Officers. The officers shall receive such salary
or compensation as may be fixed by the Board of Directors. If any salary
payment, commission, employee fringe benefit, expense allowance or payment or
other expense incurred by the Corporation for the benefit of an officer,
Director, agent or employee of the Corporation is disallowed in whole or in
part as a deductible expense of the Corporation for federal income tax
purposes, the officer, Director, agent or employee shall promptly reimburse the
Corporation, upon notice and demand, to the full extent of the disallowance.
Section 7. Duties of Officers. The duties and powers of the officers of the
Corporation shall be as follows and shall hereafter be set by resolution of the
Board of Directors:
PRESIDENT
a. The President shall preside at all meetings of the Board of Directors.
He shall also preside at all meetings of the Stockholders.
b. He shall present at each annual meeting of the Stockholders and
Directors a report of the condition of the business of the Corporation.
c. He shall cause to be called annual, regular and special meetings of
the Stockholders and Directors in accordance with the requirement of the
Statutes and of these Bylaws.
d. He shall appoint, discharge and fix the compensation for all employees
and agents of the Corporation, other than the duly elected officers, subject to
the approval of the Board of Directors.
e. He may sign and execute all contracts in the name of the Corporation
and all checks, notes, drafts or other orders for the payment of money. This
power is to be exercised only upon the direction of the Board of Directors.
f. He shall sign with the Secretary all certificates representing shares.
g. He shall cause all books, reports, statements and certificates to be
properly kept and filed as required by law.
<PAGE> 9
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h. He shall enforce these Bylaws and perform all the duties incident to
his office and which are required by law, and, generally, supervise and control
the business and affairs of the Corporation.
VICE-PRESIDENT
During the absence or incapacity of the President, the Vice President in
order of seniority of election shall perform the duties of the President. When
so acting, he shall have all the powers and be subject to all the
responsibilities of the office of President and shall perform such duties and
functions as the Board may prescribe.
SECRETARY
a. The Secretary shall keep the minutes of the meetings of the Board of
Directors and of the Stockholders in appropriate books.
b. He shall attend to the giving of Notice of Special Meetings of the
Board of Directors and of all of the meetings of the Stockholders of the
Corporation.
c. He shall be the custodian of the records and seal of the Corporation
and shall affix the seal to the certificates representing shares and other
corporate papers when required.
d. He shall keep at the principal office of the Corporation a book of
records containing the names, alphabetically arranged, of all persons who are
Stockholders of the Corporation, showing their places of residence, the number
and class of shares held by them respectively and the dates when they
respectively became the owners of record thereof. He shall keep such books of
record and minutes of the proceedings of the Stockholders open daily during the
usual business hours for inspection, within the limits prescribed by law, by any
person duly authorized to inspect such record. At the request of the person
entitled to inspection thereof, he shall prepare and make available a current
list of the officers and Directors of the Corporation and their resident
addresses.
e. He shall sign all certificates representing shares and affix the
corporate seal thereto.
f. He shall attend to all correspondence and present to the Board of
Directors at its meetings all official communications received by him.
g. He may make, sign and endorse in the name of the Corporation all
checks, drafts, notes and other orders for the payment of money and pay out and
dispose of such under the direction of the President or the Board of Directors.
<PAGE> 10
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h. He shall perform all the duties incident to the office of Secretary of
the Corporation.
TREASURER
a. The Treasurer shall have the care and custody of and be responsible
for all funds and securities of the Corporation and shall deposit such funds and
securities in the name of the Corporation in such bank or safe deposit company
as the Board of Directors may designate.
b. He may make, sign and endorse in the name of the Corporation all
checks, drafts, notes and other orders for the payment of money and pay out and
dispose of such under the direction of the President or the Board of Directors.
c. He shall keep at the principal office of the Corporation accurate
books of account of all its business and transactions and shall at all
reasonable hours exhibit books and accounts to any Director upon application at
the office of the Corporation during business hours.
d. He shall render the report of the condition of the finances of the
Corporation at each annual and regular meeting of the Board of Directors and at
such other times as shall be required of him, and he shall make a full financial
report at the annual meeting of the Stockholders.
e. He shall further perform all duties incident to the office of
Treasurer of the Corporation.
f. If required by the Board of Directors, he shall give such bond as
determined to be appropriate for the faithful performance of his duties.
OTHER OFFICERS
Other officers shall perform such duties and may have such powers as may be
assigned to them by the Board of Directors.
ARTICLE V
Executive and Other Committees
Section 1. Creation of Committees. The Board of Directors may designate an
Executive Committee and one (1) or more other committees, each to consist of two
(2) or more of the Directors of the Corporation.
Section 2. Executive Committee. The Executive Committee, if there shall be
one, shall consult with and advise the officers of the Corporation in the
management of its business, and shall have,
<PAGE> 11
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and may exercise, except to the extent otherwise provided in the resolution of
the Board of Directors creating such Executive Committee, such powers of the
Board of Directors as can be lawfully delegated by the Board. However, such
Executive Committee shall not be delegated authority to approve an amendment of
the Articles of Incorporation, a plan of merger or consolidation, plan of
exchange under which the Corporation would be acquired, the sale, lease or
exchange, or the mortgage or pledge for consideration other than money, of all,
or substantially all, of the property and assets of the Corporation otherwise
than in the usual and regular course of its business, the voluntary dissolution
of the Corporation, or revocation of voluntary dissolution proceedings.
Section 3. Other Committees. Such other committees, to the extent provided
in the resolution or resolutions creating them, shall have such functions and
may exercise such powers of the Board of Directors as can be lawfully delegated.
Section 4. Removal or Dissolution. Any committee of the Board of Directors
may be dissolved by the Board at any meeting. Any member of such committee may
be removed by the Board of Directors whenever, in its absolute discretion, the
best interests of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Section 5. Vacancies on Committees. Vacancies on any committee of the Board
of Directors shall be filled by the Board of Directors at any annual, regular or
special meeting.
Section 6. Meetings of Committees. Regular meetings of any committee of the
Board of Directors may be held without notice at such time and at such place as
shall from time to time be determined by such committee, and special meetings of
any such committee may be called by any member thereof upon two (2) days notice
to each of the other members of such committee or on such shorter notice as may
be agreed to in writing by each of the other members of such committee, given
either personally or in the manner provided in Section 9 of Article III of these
Bylaws (pertaining to notice for Directors' meetings).
Section 7. Absence of Committee Members. The Board of Directors may
designate one (1) or more Directors as alternate members of any committee of the
Board of Directors, who may replace at any meeting of such committee any member
not able to attend.
Section 8. Quorum of Committees. At all meetings of committees of the Board
of Directors, a majority of the committee's members then in office shall
constitute a quorum for the transaction of business.
Section 9. Manner of Acting of Committees. The acts of a majority of the
members of any committee of the Board of Directors present at any meeting at
which there is a quorum shall be the act of such committee.
<PAGE> 12
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Section 10. Minutes of Committees. Each committee of the Board of Directors
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when required.
Section 11. Compensation. Members of any committee of the Board of
Directors may be paid compensation in accordance with the provisions of Section
14 of Article III of these Bylaws (pertaining to compensation of Directors).
Section 12. Informal Action. Any committee of the Board of Directors may
take such informal action and hold such informal meetings as allowed by the
provisions of Sections 18 and 19 of Article III of these Bylaws.
ARTICLE VI
Indemnification of Directors,
Officers, Agents and Employees
Section 1. General. The Corporation shall have the power to indemnify its
Directors, officers, agents and employees in accordance with the applicable
provisions of law.
ARTICLE VII
Interested Parties
Section 1. General. No contract or other transaction between the
Corporation and any one or more of its Directors or officers or any other
corporation, firm, association or entity in which one or more of its Directors
or officers are Directors or officers or are financially interested shall be
either void or voidable because of such relationship or interest, because such
Director or Directors were present or were counted in determining the presence
of a quorum at the meeting of the Board of Directors or of a committee thereof
which authorizes, approves or ratifies such contract or transaction or because
such Director's or Directors' votes are counted for such purpose if: (a) the
fact of such relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes, approves or ratifies the contract or
transaction by a vote sufficient for the purpose without counting the votes of
such interested Directors; (b) the fact of such relationship or interest is
disclosed or known to the Stockholders entitled to vote on the matter, and they
authorize, approve or ratify such contract or transaction by vote or written
consent; or (c) the contract or transaction is fair and reasonable as to the
Corporation in view of all of the facts known to any officer or Director at the
time it is authorized, approved or ratified by the Board of Directors, a
committee thereof or the Stockholders. In the case of a contract or transaction
which has not been authorized,
<PAGE> 13
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approved or ratified in accordance with (a) or (b) above, the party seeking to
uphold the contract or transaction shall have the burden of proving that the
contract or transaction complies with the requirement of (c) above.
ARTICLE VIII
Seal
Section 1. Description. The Seal of the Corporation shall have the name of
the Corporation, the word "SEAL" and the year of incorporation, and may be a
facsimile, engraved, printed or impression seal. An impression of said Seal
appears on the margin hereof.
ARTICLE IX
Shares
Section 1. Eligible Stockholders. The shares of the Corporation shall be
issued to any individual, corporation, partnership, joint venture or trust, but
shall not be issued in fractional shares. An individual to be a Stockholder need
not be employed by the Corporation nor participate in the performance of the
services rendered by the Corporation.
Section 2. Certificates. The shares of the Corporation shall be represented
by certificates created by the Board of Directors and signed by the President or
the Vice-President, by the Secretary and/or an Assistant Secretary, or by such
other officers authorized by law and by the Board of Directors to do so, and may
(but need not) be sealed with the Seal of the Corporation or some facsimile. The
certificates shall be numbered consecutively and in the order in which they are
issued. They shall be bound in a book and shall be issued in consecutive order
therefrom; in the margin of the book shall be entered the name of the person to
whom the shares represented by each such certificate are issued, his address,
number, class and series of such shares, and the date of issue. Each certificate
shall state the name of the Corporation, that it is organized under the laws of
the Commonwealth of Virginia, the registered holder's name, the number and class
of shares represented thereby, the date of issue, the par value of such share or
that they are without par value, and any preferences or other rights which the
holder may have.
Section 3. Subscriptions. Subscriptions to the shares shall be paid at such
times and in such installments as the Board of Directors may determine. If a
default shall be made in the payment of any installment as required by such
resolution, the Board may, among other actions, declare that the shares and all
previous
<PAGE> 14
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payments are forfeited for the use of the Corporation, in the manner prescribed
by Statute.
Section 4. Restrictions on Transfer of Shares. Each and every certificate
of stock shall bear a legend to the effect the purchaser represents that the
securities being purchased by him are being purchased for investment and with no
present intention of making any disposition or sale thereof.
Section 5. Transfer of Shares. Transfer of shares of the Corporation shall
be made upon its books by the holder of the shares in person or by the holder's
lawfully constituted representative, upon surrender of the certificate of stock
for cancellation. The person in whose name shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner thereof for all
purposes, and the Corporation shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, save as expressly
provided by the laws of the Commonwealth of Virginia.
Section 6. Lost, Stolen or Destroyed Certificates. The Board of Directors
may direct a new replacement certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Corporation and
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed. Such replacement certificates shall be marked "Replacement" on the
face thereof. When authorizing such issue of a new replacement certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or the owner's legal representatives to
produce satisfactory evidence of such loss, theft or destruction and/or give the
Corporation a bond and/or an undertaking in such sum, and upon such terms, as it
may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
ARTICLE X
Dividends
Section 1. Declaration of Dividends. Subject to any restrictions contained
in the Articles of Incorporation or the law, the Board of Directors at any
annual, regular or special meeting may declare dividends payable out of the
unreserved and unrestricted earned surplus or out of the capital surplus of the
Corporation, whenever in its exercise or its discretion it may deem such
declaration advisable. Such dividends may be paid in cash or property (including
shares of stock or other securities of the Corporation).
<PAGE> 15
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ARTICLE XI
Bills, Notes, etc.
Section 1. Execution. All bills payable, notes, checks, drafts, warrants or
other negotiable instruments of the Corporation shall be made in the name of the
Corporation and shall be signed by such officer or officers as the Board of
Directors shall from time to time by resolution direct.
No officer or agent of the Corporation, either singularly or jointly with
others, shall have the power to make any bill payable, note, draft, warrant or
other negotiable instrument, or endorse the same in the name of the Corporation,
or contract or cause to be contracted any debt or liability on behalf of the
Corporation except as herein expressly prescribed and provided.
ARTICLE XII
Fiscal Year
The fiscal year of the Corporation shall end on the last day of September
of each year.
ARTICLE XIII
Amendments
Section 1. Manner of Amending. These Bylaws may be altered, amended,
repealed or added to by the affirmative vote of a majority of the Board of
Directors, unless otherwise expressly reserved to the Stockholders in the
Articles of Incorporation. In any case, the Bylaws may also be altered, amended,
repealed or added to by the affirmative vote of the Stockholders holding a
majority of the issued and outstanding shares of stock entitled to vote at a
meeting of Stockholders. Any Bylaw adopted by the Board of Directors may be
altered, amended, repealed or added to by the Stockholders, but any Bylaw
adopted by the Stockholders shall not be altered, amended or repealed by the
Board of Directors. Only such changes shall be made which do not conflict with
the law or the Articles of Incorporation.
<PAGE> 1
EXHIBIT 3.33
ARTICLES OF INCORPORATION
OF
LISN COMPANY
The undersigned, desiring to form a corporation for profit under the
General Corporation law of Ohio, does hereby certify:
FIRST: The name of the Corporation is:
LISN COMPANY
SECOND: The place in Ohio where the principal office of the Corporation
shall be located is Cleveland, Cuyahoga County.
THIRD: The purposes for which, and for any of which, the Corporation is
formed are as follows:
1) To install, improve and dismantle central office telephone
equipment. To engage primarily in the sale of telephone cables and
switching equipment to public utility companies; and
2) In general, to carry on any lawful business whatsoever in connection
with the business of the Corporation or which is calculated, directly
or indirectly, to promote the interests of the Corporation or to
enhance the value of its properties; and to have and exercise all
rights, powers and privileges which are now or may hereafter be
conferred upon corporations by the laws of Ohio.
The Corporation reserves the right at any time and from time to time to
change substantially its purposes pursuant to the affirmative vote or approval
of the holders of shares entitled to exercise the proportion of the voting power
of the Corporation now or hereafter required by statute for such approval, and
such vote or approval shall be binding and conclusive upon every shareholder of
the Corporation as fully as if such shareholder had voted therefor; and no
shareholder, notwithstanding that he may have voted against such change of
purpose or may have objected in writing thereto, shall be entitled to payment of
the fair cash value of his shares.
FOURTH: The number of shares of Capital Stock which the Corporation is
authorized to have outstanding is SEVEN HUNDRED FIFTY (750) shares of Common
Stock, without par value.
FIFTH: Notwithstanding any provision of the Ohio Revised Code now or
hereafter in force otherwise requiring for any purpose the vote, consent,
waiver or release of the holders of shares entitling them to exercise
two-thirds, or any other portion, of the voting power of the Corporation or of
any class or classes of shares thereof,
<PAGE> 2
such action, unless otherwise expressly required by statute or by
these Articles of Incorporation, may be taken by the vote, consent,
waiver or release of the holders of shares entitling them to exercise
a majority of the voting power of the Corporation or of such class or
classes.
SIXTH: No holder of any class of shares of the Corporation shall
have any pre-emptive or preferential right to subscribe to or purchase any
shares of any class of stock of the Corporation, whether now or hereafter
authorized and whether unissued or in the treasury, or any obligations
convertible into shares of any class of stock of the Corporation, at any time
issued or sold, or any right to subscribe to or purchase any thereof.
SEVENTH: The Corporation may, from time to time, pursuant to authorization
by its Directors and without action by the shareholders, purchase or otherwise
acquire shares of the Corporation of any class or classes in such manner, upon
such terms and in such amounts as the Directors shall determine, to the extent
permitted by law; subject, however, to such limitation or restriction, if any,
as may be imposed by the terms or provisions of any class of shares or other
securities of the Corporation outstanding at the time of the purchase or
acquisition in question.
EIGHTH: A Director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise, nor shall any transaction,
contract or other act of the Corporation be void or voidable or in any way
affected or invalidated by reason of the fact that any Director or officer, or
any firm in which such Director or officer is a member, or any corporation of
which such Director or officer is a shareholder, director or officer, is in any
way interested in such transaction, contract or other act, provided the fact
that such Director, officer, firm or corporation is so interested shall be
disclosed or shall be known to the Board of Directors at the time at which any
action upon any such transaction, contract or other act occurred; and any such
Director may be counted in determining the existence of a quorum at any meeting
of the Board of Directors of the Corporation which shall authorize or take
action in respect of any such transaction, contract or other act, and may vote
thereat to authorize, ratify or approve any such transaction, contract or other
act with like force and effect as if he or any firm of which he is a member or
any corporation of which he is a shareholder, director or officer were not
interested in such transaction, contract or other act.
NINTH: Any and every statute of the State of Ohio hereafter enacted,
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but
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<PAGE> 3
upon every shareholder of the Corporation to the same extent as if such statute
had been in force at the time of the filing of those Articles of Incorporation
in the office of the Secretary of State of Ohio.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 9th day of
January, 1987.
Frederick N. Widen
-------------------------------------
Frederick N. Widen, Sole Incorporator
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<PAGE> 4
C-123 August 1983
Prescribed by Sherrod Brown
Secretary of State
[SECRETARY OF STATE LOGO]
CONSENT FOR USE OF SIMILAR NAME
On the 9th day of January , 1987
---------------------- ---------------------- -----------,
the BOARD OF DIRECTORS OF Lisn, Inc.
-----------------------------------------------------
(Name of Corporation giving Consent)
(Charter or License No.) 359471
- -------------------------- ---------------------------
passed the following resolution:
RESOLVED, that Lisn, Inc.
-----------------------------------------------------------
(Name of Corporation giving Consent)
gives it consent to Lisn Company
-----------------------------------------------------------
- -------------------------------------------------------------------------------
to use the name Lisn Company
---------------------------------------------------------------
Date January 9, 1987 Signed /s/
------------------------------- -----------------------------------
Secretary or Assistant Secretary of
Consenting Corporation
NOTE: This document MUST BE SIGNED by the SECRETARY or ASSISTANT SECRETARY of
the consenting corporation, pursuant to Section 1701.05(A) of the Ohio
Revised Code
<PAGE> 5
[THE SECRETARY OF STATE LOGO]
ORIGINAL APPOINTMENT OF STATUTORY AGENT
The undersigned, being the sole incorporator of Lisn Company,
--------------------------
(Name of Corporation)
hereby appoints Leader Service Corp. to be statutory agent upon whom any
--------------------
(Name of Agent)
process, notice or demand required or permitted by statute to be served upon the
corporation may be served.
The complete address of the agent is: 1300 Bond Court Building
------------------------
(Street)
Cleveland , Cuyahoga County, Ohio 44114 .
- ----------------- ----------- -------
(City of Village) (Zip Code)
Date: January 9, 1987 /s/ Frederick N. Widen
--------------- ----------------------
Sole (Incorporator)
Frederick N. Widen
----------------------
(Incorporator)
----------------------
(Incorporator)
----------------------
(Incorporator)
Instructions
1) Profit and non-profit articles of Incorporation must be accompanied by an
original appointment of agent R.C. 1701.04(C). 1702.04(C)
2) The statutory agent for a corporation may be (a) a natural person who is a
resident of Ohio, or (b) an Ohio corporation or a foreign corporation
licensed in Ohio which is a business address in this state and is explicitly
authorized by its articles of incorporation to act as a statutory agent R.C.
1701.07(A). 1702.06(A)
3) The agent's complete street must be given; a post office box number is
not acceptable. R.C. 1701.07(C). 1702.08(A).
4) An original appointment of agent form must be signed by a least a majority of
the incorporators of the corporation R.C. 1701.07(B). 1702.07.(B).
<PAGE> 1
EXHIBIT 3.34
CODE OF REGULATIONS
OF
LISN COMPANY
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1. DEFINITIONS.
For purposes of this Code of Regulations, the following words and phrases
have the meanings designated below:
(a) "Articles of Incorporation" herein means the Corporation's
articles of incorporation filed with the Secretary of State of Ohio on
January 12, 1987 and all amendments thereto and restatements thereof.
(b) "Board" herein means the Board of Directors of the Corporation.
(c) "Board Meeting" herein means any Annual Board Meeting, Regular
Board Meeting or Special Board Meeting (as defined in Article III, Sections
1, 2 and 3, respectively).
(d) "Code" herein means this Code of Regulations.
(e) "Corporation" herein means Lisn Company
(f) "Days" herein means calendar days.
(g) "Director" herein means any person properly elected or appointed
to the Board and holding the office as a Director as described in Article
IV of these Regulations.
(h) "Officer" herein means any person properly elected or appointed to
an Office designated in Section 1 of Article V of this Code.
(i) "Regulations" herein means this Code of Regulations.
(j) "Share" herein means a unit of the Corporation's issued and
outstanding voting shares as evidenced by a share certificate.
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<PAGE> 2
(k) "Shareholder" herein means James S. Hivnor and any other person or
entity who or which hereafter owns at least one Share; provided, however,
any such person or entity shall cease being a "Shareholder" for
purposes of these Regulations immediately when such person or entity no
longer owns at least one Share.
(l) "Shareholder Meeting" herein means any Annual Shareholder Meeting
or any Special Shareholder Meeting (as defined in Article II, Sections 1
and 2, respectively).
SECTION 2. WORD USAGE.
Where the context of this Code requires, words used in the masculine shall
include the feminine and neuter; words in the singular, the plural; and
vice-versa.
SECTION 3. OHIO LAW.
This Code is adopted in the State of Ohio and Ohio's laws shall govern all
matters of interpretation, construction and validity and all disputes,
controversies and litigation arising hereunder.
ARTICLE II
SHAREHOLDER MEETINGS
SECTION 1. ANNUAL SHAREHOLDER MEETINGS.
a. The annual meeting of the Shareholders (herein called the "Annual
Shareholder Meeting") shall be held at the Corporation's principal office
on the second Tuesday in December of each year at 9:30 a.m., or on such
other day and at such other time and place (within or without the State of
Ohio) as the Board determines and calls in its sole discretion; provided,
however, that the Annual Shareholder Meeting must be held each year no
later than nine (9) months after the close of the Corporation's fiscal
year.
b. The purposes of the Annual Shareholder Meeting are to fix the
number of and to elect Directors, receive and act upon annual and other
reports of the Officers and the Board, transact other Shareholder business
and activities, and take any other Shareholder actions.
SECTION 2. SPECIAL SHAREHOLDER MEETINGS.
a. Special meetings of the Shareholders (herein called a "Special
Shareholder Meeting") may be called by the registered holders of at least
fifty percent (50%) of the Corporation's Shares, by any two (2) Officers of
the Corporation or by the Board through a written request delivered either
in person or by registered United States mail to the President or the
Secretary of the Corporation.
b. All Special Shareholder Meetings shall be held within fourteen (14)
days of call, on the day, at the time and at the place (within or without
the State of Ohio) as the Board determines.
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c. The purpose(s) of any Special Shareholder Meeting may be to
transact any Shareholder business and activities and to take any
Shareholder actions.
SECTION 3. RECORD DATES.
a. For purposes of determining those Shareholders entitled to (1)
receive Notice of any Shareholder Meeting, or (2) receive dividends or
distributions or (3) exercise any other Shareholder rights, the Board shall
fix record dates (herein called "Record Dates") not earlier than the date
on which the Record Date is established and not more than sixty (60) days
prior to the designated event.
b. Unless otherwise provided by law, only holders of Shares actually
registered in the holder's name on the Corporation's Share records at the
close of business on the Record Date shall be recognized and counted for
the applicable purposes designated in Section 3(a), above.
SECTION 4. NOTICE.
a. Within ten (10) days after a Shareholder Meeting has been called as
provided in this Code, the President or Secretary of the Corporation shall
prepare written notice (herein called "Notice") stating the date, time,
place and purpose(s) of each Shareholder Meeting. Not less than seven (7)
nor more than sixty (60) days before any Shareholder Meeting, the President
or Secretary of the Corporation either shall cause personal delivery of the
Notice or shall mail (by ordinary United States mail, postage prepaid) the
Notice to each registered holder (as of the Record Date) of the
Corporation's Shares at the address then appearing on the Corporation's
Share records.
b. Notwithstanding any contrary provision herein, a Shareholder's
attendance (in person or by proxy) at any Shareholder Meeting waives any
lack of or deficiency in Notice of such Meeting.
c. Notice of adjournment of any Shareholder Meeting need not be given
if the date, time and place to which the Meeting is adjourned are fixed and
announced at such Meeting.
SECTION 5. QUORUM AND ATTENDANCE.
a. A majority of the Shares (represented in person or by proxy)
constitutes a quorum for the transaction of business at any Shareholder
Meeting. A quorum must exist as a condition precedent to (and at the time
of) the transaction of any Shareholder business or the vote upon any
matters submitted to the Shareholders.
b. Whether or not a quorum exists, a majority of the Shares
(represented in person or by proxy) at any Shareholder Meeting may adjourn
the Meeting.
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c. Unless waived by a majority of the Board, not less than twenty-four
(24) hours before any Regular or Special Meeting of the Shareholders, any
Shareholder who desires the presence at such Meeting of any person who is not a
Shareholder shall so notify all Directors, request the presence of such person
at the Meeting, and state the reason therefor. Such person will not be permitted
to attend the Shareholders' Meeting unless a majority of the Board votes to
admit such person to the Meeting.
SECTION 6. VOTING.
a. Except as otherwise modified by the express terms of any Shares or
by these Regulations, each holder of a Share shall be entitled to one (1)
vote for each Share registered in such holder's name on the Corporation's
Share records as of the Record Date.
b. At any Shareholder Meeting, all matters properly submitted to the
Shareholders shall be decided by a majority vote of the Shares represented
in person or by proxy, unless otherwise provided in these Regulations or
required by law.
SECTION 7. PROXIES.
a. A Shareholder may be represented and vote at any Shareholder
Meeting by written proxy signed by such Shareholder (or by the
Shareholder's duly authorized officer) and submitted to the Secretary of
the Corporation or to any other Officer (other than such Shareholder) at or
before the Shareholder Meeting. Such Proxy shall be valid for only the
Shareholder Meeting designated therein and shall name as proxy only another
Shareholder.
b. A Shareholder may exercise any Shareholder consents, waivers,
releases or other Shareholder rights by written proxy signed by such
Shareholder (or by the Shareholder's duly authorized officer) and submitted
to the Secretary of the Corporation or to any other Officer (other than
such Shareholder) prior to the exercise thereof.
SECTION 8. ELECTION OF DIRECTORS.
a. At each Annual Shareholder Meeting, the Shareholders shall fix the
number of and shall elect Directors (in accordance with this Code) to serve
until their respective successors are elected at the next Annual
Shareholder Meeting, or until their earlier death, disqualification,
resignation or removal from the Board.
b. If no Annual Shareholder Meeting is held or if all Directors are
not elected at the Annual Shareholder Meeting, the Shareholders shall elect
persons to the Board at a Special Shareholder Meeting and such Directors
shall serve until their respective successors are elected at the next
Annual Shareholder Meeting, or until their earlier death, disqualification,
resignation or removal from the Board.
c. Any Shareholder may designate, in person or by proxy, nominees (who
qualify under Section 1 of Article IV of this Code) for Directorships. Only
qualified nominees are eligible to be elected Directors and nominees
receiving the greatest number of votes shall be so elected.
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d. Subject to the terms and conditions of these Regulations, any
person (who is qualified as designated in Section 1 of Article IV of this
Code) may serve or be elected to an unlimited number of consecutive or
non-consecutive terms as a Director.
SECTION 9. PARLIAMENTARY PROCEDURE AND MINUTES.
a. Robert's Rules of Order (as periodically revised) constitute the
final authority for parliamentary procedures at all Shareholder Meetings,
except where such Rules conflict with law or with the Regulations.
b. At all Shareholder Meetings, the order of business shall be as
follows:
(1) Roll call or attendance record;
(2) Reading and action upon Minutes of previous Shareholder
Meeting;
(3) Unfinished (old) business;
(4) Financial or other reports of the Board;
(5) Financial or other reports of Officers;
(6) Reports of Committees (if any);
(7) Election of Directors (if applicable);
(8) New or miscellaneous business;
(9) Adjournment.
The order of business may be periodically changed for any particular Shareholder
Meeting by a majority vote of the registered holders of the Corporation's Shares
(represented in person or by proxy) at such Meeting.
c. The Secretary of the Corporation shall cause to be recorded Minutes
of all Shareholder Meetings.
SECTION 10. ACTION BY SHAREHOLDERS IN WRITING WITHOUT A MEETING.
Notwithstanding any contrary provision in this Code, Shareholders may
properly and officially act without a Meeting through a written document signed
by the registered holders of all Shares as of the Record Date for such action.
ARTICLE III
BOARD MEETINGS
SECTION 1. ANNUAL BOARD MEETING.
a. The annual meeting of the Board (herein called the "Annual Board
Meeting") shall be held each year following the Annual Shareholder Meeting
at such time and place (within or without the State of Ohio) as determined
by the Board but, in no event, later than nine (9) months after the close
of the Corporation's fiscal year.
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b. The purposes of the Annual Board Meeting are to elect Officers,
receive and act upon any reports, transact any other Board business and
activities, and take any other Board actions.
SECTION 2. REGULAR BOARD MEETINGS.
Regular meetings of the Board (herein called "Regular Board Meetings") may
be periodically held on the days and at the times and places (within or without
the State of Ohio) as the Board (in its sole discretion) determines; provided,
however, that the Board is not required to hold any Regular Board Meetings.
SECTION 3. SPECIAL BOARD MEETINGS.
a. Special meetings of the Board (herein called "Special Board
Meetings") may be called by any two (2) Officers, or by a majority of the
Directors, or by the registered holders of at least fifty percent (50%) of
the Shares listed on the Corporation's Share records.
b. All Special Board Meetings shall be held within seven (7) days of
call, at the time and at the place (within or without the State of Ohio) as
the President determines.
c. The purpose(s) of any Special Board Meeting may be to transact any
Board business and activities and to take any Board actions.
SECTION 4. NOTICE.
a. The Secretary of the Corporation or any other Officer shall give to
each Director written or oral notice (herein called "Notice") stating the
date, time and place (but not necessarily the purposes) of each Board
Meeting. At least two (2) days before each Board Meeting, the Secretary of
the Corporation (or any other Officer) shall cause personal delivery or
other communication of the Notice or shall mail (by ordinary United States
mail, postage prepaid) the Notice to each Director.
b. Notwithstanding any contrary provision herein, a Director's
attendance at any Board Meeting constitutes such Director's waiver of any
failure to give or deficiency in Notice of such Meeting.
c. Notice of adjournment of any Board Meeting need not be given if the
date, time and place to which the Meeting is adjourned are fixed and
announced at such Meeting.
SECTION 5. QUORUM AND ATTENDANCE.
a. A majority of the Directors in office (who must be present in
person) constitutes a quorum for the transaction of business at any Board
Meeting. A quorum must exist as a condition precedent to (and at the time
of) the transaction of any Board business or the vote upon any matter
submitted to the Board.
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b. Whether or not a quorum exists, a majority of the Directors present
in person at any Board Meeting may adjourn the Meeting.
c. Unless waived by a majority of the Board in attendance, not less
than twenty-four (24) hours before any Regular or Special Meeting of the
Board, any Director who desires the presence at such Meeting of not more
than one (1) person who is not a Director shall notify all other Directors,
request the presence of such person at the Meeting, and state the reason
therefor. Such person will not be permitted to attend the Directors'
Meeting unless a majority of the Board in attendance votes to admit such
person to the Meeting. Such vote shall constitute the first order of
business for any such Meeting of the Board. The right to attend, whether
granted by waiver or vote, may be revoked at any time during the Meeting by
the vote of a majority of the Directors in attendance.
SECTION 6. VOTING.
a. Upon all matters properly submitted to the Board, each Director in
office shall be entitled to one (1) vote but Directors shall vote and act
as a Board.
b. At any Board Meeting, all matters properly submitted to the Board
shall be decided by a majority vote of all the Directors present in person
at the Board Meeting, unless otherwise provided in these Regulations or
required by law.
c. A Director may not vote, consent, take any action as a Director or
be represented at a Board Meeting by proxy. Only Directors present in
person at a Board Meeting during the actual transaction of a matter may
vote thereon.
d. For purposes of this Code, a Director shall be deemed to be
"present in person" at any Board Meeting if such Director: (i) participates
at the Board Meeting by means of communications equipment but only if all
Directors participating at the Board Meeting can hear each other Director,
or (ii) is actually physically present at the Board Meeting.
SECTION 7. ELECTION OFFICERS.
a. At each Annual Board Meeting, the Board shall elect Officers to
serve until their respective successors are elected at the next Annual
Board Meeting, or until their earlier death, disqualification, resignation
or removal from Office.
b. If no Annual Board Meeting is held or if all Officers are not
elected thereat, the Board shall elect any remaining unelected Officers at
a Special or Regular Board Meeting and such Officers shall serve until
their respective successors are elected at the next Annual Board Meeting,
or until their earlier death, disqualification, resignation or removal from
Office.
c. Any Director in office may designate persons (qualified under
Section 1 of Article V of these Regulations) as nominees for Officers. Only
nominees are eligible to be elected Officers and nominees receiving the
greatest number of votes shall be so elected.
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d. Any person (who is qualified as designated in Section 1 of Article
V of these Regulations) may serve or be elected to an unlimited number of
consecutive or non-consecutive terms as an Officer.
SECTION 8. PARLIAMENTARY PROCEDURE.
a. Robert's Rules of Order (as periodically revised) constitute the
final authority for parliamentary procedures at all Board Meetings, except
where such Rules conflict with law or with this Code.
b. The Secretary of the Corporation shall cause to be recorded Minutes
of all Board Meetings.
SECTION 9. ACTION BY DIRECTORS IN WRITING WITHOUT A MEETING.
Notwithstanding any contrary provision in these Regulations, the Board may
properly and officially act without a Meeting through a written document signed
by all Directors then serving on the Board.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. NUMBER, QUALIFICATION AND TERM.
a. The Shareholders may periodically fix, determine and change the
number of Directors to serve on the Board; provided, however, that if the
Shareholders fail to fix and determine the number of Directors, then the
Directors elected shall be deemed to constitute the number of Directors
fixed by the Shareholders.
b. Directors shall be elected by the Shareholders at the Annual
Shareholder Meeting (or at a Special Shareholder Meeting called for the
purpose of electing Directors) to serve until the expiration of their
terms of office and until their successors are elected, or until their
earlier death, disqualification, resignation or removal from the Board.
c. Only individuals (not entities) shall be qualified to be nominated,
to be elected and to serve as Directors of the Corporation.
d. Subject to the qualifications designated in this Section 1, any
person may serve as a Director for an unlimited number of consecutive or
non-consecutive terms.
SECTION 2. BOARD VACANCIES.
a. Board vacancies shall occur from the disqualification, death, or
resignation of any Director; from the removal (with or without cause) of a
Director from the Board; or from the Shareholders' failure to elect the
entire fixed and authorized number of Directors.
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b. Any Director may be removed from the Board (with or without cause)
by the vote of the holders of at least a majority of the Shares registered
on the Corporation's Share records, at any time without prior notice or
demand.
c. At any time, a Director may resign from the Board by delivering or
mailing (by certified, United States mail) written notice of the
resignation to any Officer (other than the resigning Director). The
resignation shall be effective upon actual receipt of the notice by the
Officer, unless the notice specifies a later resignation date.
d. The vote of the holders of a majority of the Shares registered on
the Corporation's Share records shall fill all Board vacancies (when and as
determined by the Shareholders) by electing successor Directors to serve
until their respective successors are elected at the next Annual or Special
Shareholder Meeting, or until their earlier resignation, disqualification,
death or removal from the Board.
SECTION 3. BOARD POWERS AND DUTIES.
a. Except as otherwise expressly provided in this Code, all policy and
administrative powers and authority of the Corporation are vested in and
shall be exercised solely and exclusively by the Board which, in its sole
discretion, shall have charge, control and management of the Corporation's
property, affairs, businesses, activities and funds. In accordance with
these Regulations, the Board also shall elect Officers, create and disband
Board Committees, appoint Board agents, authorize and empower the
Corporation to negotiate and execute contracts, and perform all other acts
and functions permitted by law and consistent with the Articles of
Incorporation and these Regulations.
b. Except as otherwise expressly designated by the Board, individual
Directors shall have no powers and authority to act on the Corporation's
behalf and all Directors shall act and vote as a Board.
SECTION 4. VOTING.
a. Each Director shall be entitled to one (1) vote on all matters
properly submitted to the Board for its vote, consent, waiver, release or
other action.
b. Unless otherwise provided in this Code or by law, the Board shall
act by a majority vote of those Directors present in person at any Board
Meeting when a quorum of Directors is then present.
SECTION 5. BOARD COMMITTEES.
a. The Board may create Board Committee(s) and appoint, remove and
reappoint all members to such Committee(s). Such Committee(s) shall act at
the Board's direction and the Board shall have exclusive authority to
designate the duties, functions and powers of the Committee(s).
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b. The Board may create (from its membership) and define the powers
and duties of an Executive Committee. During the intervals between Meetings
of the Board, the Executive Committee shall possess and may exercise all of
the powers of the Board in the management and control of the business of
the Corporation to the extent permitted by law. All action taken by the
Executive Committee shall be reported to the Board at its first Meeting
thereafter.
c. Unless otherwise provided by the Board, a majority of the members
of any Committee appointed by the Board (pursuant to this Section) shall
constitute a quorum at any meeting thereof and the act of a majority of the
members present at a meeting at which a quorum is present shall be the act
of such Committee. Action may be taken by any such Committee without a
meeting by a writing signed by all its members. Any such Committee shall
prescribe its own rules for calling and holding meetings and its methods of
procedure, subject to any rules prescribed by the Board, and shall keep a
written record of all action taken by the Committee.
SECTION 6. COMPENSATION AND EXPENSES.
Directors shall be entitled to such compensation (if any) and to
reimbursement for such expenses as the Board periodically determines in its sole
discretion.
SECTION 7. BYLAWS.
For its own government, the Board may adopt bylaws consistent with the
Articles of Incorporation and these Regulations.
ARTICLE V
OFFICERS
SECTION 1. DESIGNATION AND QUALIFICATION.
a. The Officers of the Corporation shall consist of a President (who
must also be a Director), Secretary and Treasurer and may further include a
Chairperson of the Board (who must be a Director), one or more
Vice-Presidents, Assistant Officers and such other Officers as the Board
periodically determines. The same person may hold the Offices of President,
Secretary, Treasurer and Vice-President or any combination thereof.
b. At the Annual Board Meeting (or at any other Special or Regular
Board Meeting called for the purpose of electing Officers), the Board shall
elect all Officers to serve until their respective successors are elected
at the next Annual or other Board Meeting, or until their earlier death,
resignation, disqualification, or removal from Office.
c. Only persons (not entities) and only persons who also serve as
Directors shall be qualified to be nominated, to be elected and to serve as
Officers.
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d. Subject to the qualifications designated in this Section 1, any
person may serve or be elected as an Officer for an unlimited number of
consecutive or non-consecutive terms.
SECTION 2. OFFICER VACANCIES AND SUCCESSION.
a. Officer vacancies shall occur from an Officer's disqualification,
death, resignation or removal (with or without cause) from Office.
b. Without prior notice or demand, any Officer may be removed from
Office (with or without cause) by the Board or by action of the holders of
at least a majority of the Shares registered on the Corporation's Share
records.
c. At any time, an Officer may resign from Office by delivering or
mailing (by certified, United States mail) written notice of the
resignation to any Officer or Director (other than the resigning Officer).
The resignation shall be effective upon actual receipt of the notice by the
Officer or Director, unless the notice specifies a later resignation date.
d. The President shall fill any vacancies in the Office of the
Chairperson of the Board (if any) and a Vice-President (so designated by
the Board) shall fill any vacancies in the Presidency for the unexpired
terms of such Offices and until their successors are chosen, or until their
earlier resignation, disqualification, death or removal from Office. The
Board shall fill all other Officer vacancies by electing (when and as
determined by the Board) successor Officers to serve until their respective
successors are elected at the next Annual or other Board Meeting, or until
their earlier resignation, disqualification, death or removal from Office.
SECTION 3. POWERS AND DUTIES OF OFFICERS.
a. Chairperson of the Board. If the Board elects a Chairperson of the
Board, the Chairperson shall: preside at all Shareholder and Board
Meetings; ensure that all Board orders and actions are implemented; sign
the Corporation's documents; exercise general executive supervision,
management and control over the Corporation's affairs, property,
businesses, activities, other Officers and funds; and generally perform all
duties incident to the Office and such other duties and responsibilities as
the Board periodically requires.
b. President. The President of the Corporation shall perform all
duties and responsibilities of the Chairperson of the Board, if the Board
has not elected a Chairperson. If the Board elects a Chairperson, the
President shall perform all duties and responsibilities of the Chairperson
during the Chairperson's absence or incapacity, until the Board otherwise
directs. The President shall also perform such other duties and
responsibilities as the Board periodically requires.
c. Vice-President(s). Any Vice-President(s) of the Corporation shall:
upon request of the Board, perform such portion or all duties and
responsibilities of the President during the President's absence or
incapacity; and generally perform such other duties and responsibilities as
the Board periodically requires.
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d. Secretary. The Secretary of the Corporation shall: take and
maintain (or cause to be taken and maintained) minutes of all Shareholder
Meetings and all Board Meetings; unless otherwise provided herein, give (or
cause to be given) Notice of all Shareholder Meetings and all Director
Meetings as required by these Regulations; maintain (or cause to be
maintained) the Corporation's Seal (if any) and all books, records and
other documents of the Corporation; maintain (or cause to be maintained) a
record of all Share Certificates and all Shareholders; and generally
perform all duties incident to the Office and such other duties and
responsibilities as the Board periodically requires.
e. Treasurer. The Treasurer of the Corporation shall: maintain (or
cause to be maintained) custody of the Corporation's funds, securities,
properties, and other assets as periodically required by the Board; prepare
(or cause to be prepared) accurate financial accounts and statements of the
Corporation's financial condition, as periodically required by the Board;
maintain (or cause to be maintained) accurate accounts of all funds
received and paid by the Corporation and all other financial transactions
of the Corporation; and generally perform all duties incident to the Office
and such other duties and responsibilities as the Board periodically
requires.
f. Other Officers. Any other Officer(s) of the Corporation shall have
such duties and responsibilities as the Board periodically requires.
ARTICLE VI
INDEMNIFICATION OF SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
SECTION 1. DEFINITIONS.
For purposes of this Article, the following words and phrases shall have
the meanings designated below:
(a) "Claim" means, with respect to any Indemnified Individual, any and
all threatened, pending or completed claims, actions, suits or
proceedings (whether civil, criminal, administrative,
investigative or otherwise and whether under State or Federal law)
and any and all appeals related thereto.
(b) "Indemnified Individual" means: (i) all past, present and future
Shareholders, Directors and Officers; and (ii) as the Board may
periodically determine, such employees and other agents of the
Corporation acting in any capacity at the request of or on behalf
of the Corporation.
(c) "Liabilities" means any and all judgments, decrees, fines,
investigation costs, penalties, expenses, fees, amounts paid in
settlement, costs, losses, expenses (including, but not limited
to, attorneys' fees and court costs), charges, and any other
liabilities actually incurred by an Indemnified Individual with
respect to any Claim, either before or after final disposition of
the Claim.
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SECTION 2. INDEMNIFICATION FOR THIRD PARTY CLAIMS.
To the fullest extent authorized or permitted by law, all Shareholders
hereby determine that the Corporation shall indemnify and save harmless any and
all Indemnified Individuals from and against all Liabilities arising or
resulting from any Claim (other than a Claim by or in the right of the
Corporation), under which the Indemnified Individual is a party or participant
because of actions or omissions of the Corporation or of the Indemnified
Individual or of any Shareholder, Director, Officer, employee, agent or other
person acting in any capacity at the request of or on behalf of the Corporation;
provided, however, that Corporation shall not indemnify or save harmless an
Indemnified Individual for such person's gross negligence or willful misconduct.
SECTION 3. INDEMNIFICATION FOR CLAIMS BY OR THROUGH THE CORPORATION.
To the fullest extent authorized or permitted by law, all Shareholders
hereby determine that the Corporation shall indemnify and save harmless any and
all Indemnified Individuals from and against all Liabilities arising or
resulting from any Claim by or in the right of the Corporation, under which the
Indemnified Individual is a party or participant because of actions or omissions
of the Corporation or of the Indemnified Individual or of any Shareholder,
Director, Officer, employee, agent or other person acting in any capacity at the
request of or on behalf of the Corporation; provided, however, that Corporation
shall not indemnify or save harmless an Indemnified Individual for such person's
gross negligence or willful misconduct.
SECTION 4. RELEASE FROM LIABILITY AND CONTRIBUTION.
To the fullest extent authorized or permitted by law, no Indemnified
Individual shall be liable to the Corporation or to any other person and no
Claim shall be maintained against any Indemnified Individual by the Corporation
(or, for the Corporation's benefit, by any other Shareholder) because of any
action or omission (except for gross negligence or willful misconduct) of such
Indemnified Individual in any capacity at the request of or on behalf of the
Corporation; provided, however, that an Indemnified Individual shall be liable
to the Corporation for the Indemnified Individual's gross negligence or willful
misconduct. To the fullest extent authorized or permitted by law, no Indemnified
Individual shall be responsible for or be required to contribute to the payment
of any Liability incurred by the Corporation or by any other Indemnified
Individual because of the actions or omissions (except for gross negligence or
willful misconduct) of any Indemnified Individual serving in any capacity at the
request of or on behalf of the Corporation; provided, however, that an
Indemnified Individual shall be liable to Corporation and to any other
Indemnified Individual for the Indemnified Individual's gross negligence or
willful misconduct.
SECTION 5. SUBROGATION.
To the extent of any payment by the Corporation under this Article, the
Corporation: (i) shall be subrogated to all the Indemnified Individual's rights
of recovery from any other person or entity and, as a condition precedent to any
indemnification or other rights under this Article VI, such Indemnified
Individual shall execute all reasonable documents and take all reasonable
actions requested by the Corporation to implement the Corporation's right of
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subrogation, (ii) hereby waives any right of subrogation against or contribution
from an Indemnified Individual.
SECTION 6. INSURANCE AND SIMILAR PROTECTION.
Whether or not the indemnification, release and other provisions of Section
2, Section 3 or Section 4 apply, the Corporation may purchase and maintain
insurance upon and/or furnish similar protection (including, but not limited to:
trust funds, letters of credit and self-insurance) for any Indemnified
Individual to cover any Liability such Indemnified Individual might incur from
the exercise of the Indemnified Individual's duties for the Corporation or from
such Indemnified Individual's capacity as an agent or representative of the
Corporation.
SECTION 7. OTHER RIGHTS.
The provisions of this Article shall be in addition to and shall not
exclude or limit any rights or benefits to which any Indemnified Individual is
or may be otherwise entitled: (a) as a matter of law or statute; (b) by the
Articles of Incorporation, Regulations or any bylaws; (c) by any agreement; (d)
by the vote of Shareholders or Directors; or (e) otherwise.
SECTION 8. CONDITIONS.
As a condition precedent to the indemnification, release and/or performance
of any other obligation of the Corporation under this Article, the Indemnified
Individual must first: (a) promptly notify the President or Secretary of the
Corporation of any actual or potential Claim; and (b) authorize and permit the
Corporation, in its sole discretion, to choose any legal counsel to defend and
otherwise handle the Claim and all proceedings and matters related thereto
(including, but not limited to, any counter-claims, cross-claims and defenses);
and (c) permit the Corporation to assume total, complete and exclusive control
of the Claim and all proceedings and matters related thereto (including, but not
limited to, any counter-claims, cross-claims and defenses).
ARTICLE VII
SHARES
SECTION 1. CERTIFICATES AND SHARE RECORDS.
a. Certificates (herein called "Certificates" or "Share Certificates")
evidencing ownership of Shares shall be issued and registered (on the
Corporation's Share records) to the lawful owner or holder of such Shares
upon full payment therefor. All Certificates shall contain such signatures
and information as required by this Code and Ohio law and shall be of such
tenor and design as the Board periodically determines.
b. The Secretary of the Corporation shall maintain (or cause to be
maintained) a record of all Share Certificates, the registered owner or
holder thereof, the date of issuance and cancellation and any other
information the Board periodically requires.
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SECTION 2. LOST, STOLEN OR DESTROYED SHARE CERTIFICATES.
The Board may issue new Share Certificates to replace lost, stolen or
destroyed Certificates. In its sole discretion, the Board may first require the
registered Shareholder to indemnify the Corporation and/or to furnish a bond to
the Corporation from such sureties, for such amount, and with such terms and
conditions as the Board determines to protect the Corporation, its Shareholders,
Directors, Officers, and/or any other entity or person from injury or damage by
issuance of a new Share Certificate.
SECTION 3. CANCELLATION OF SHARE CERTIFICATES.
In its sole discretion, the Board shall determine whenever any outstanding
Share Certificates shall be cancelled and exchanged for other Share Certificates
and shall order and require the holders of such outstanding Share Certificates
to surrender them for such purposes. Until compliance with the Board's order,
all rights of the holder (as a Shareholder) of any such Share Certificates shall
be suspended with respect to the Share(s) represented thereby.
SECTION 4. TRANSFER OF SHARES.
a. Subject to Section 5 of this Article VII, Shares may be transferred
on the Corporation's Share records by the registered holder, by the
Shareholder's legally empowered attorney, or by the Shareholder's legal
representative upon surrender and cancellation of the Share Certificates
with duly executed assignment and power of transfer endorsed thereon (or
attached thereto) and with such proof of signatures as the Board requires.
b. After the Board fixes a Record Date for any Shareholder Meeting,
for the payment of a dividend or for the exercise of any Shareholder
rights, no Shares shall be transferred on the Corporation's Share records
until immediately after the occurrence of such event.
SECTION 5. RESTRICTIONS UPON THE ALIENATION AND TRANSFER OF SHARES.
a. No Shares shall be sold, assigned, pledged, disposed of, or
otherwise encumbered or transferred (whether by reason of death, sale,
gift, assignment, order of court, any judicial process, or otherwise)
unless said Shares are offered: first, to the Corporation for redemption,
by tender to the Board; and second, to the other then-existing Shareholders
of the Corporation, in proportion to the number of Shares then owned by
such other Shareholders who desire to accept the offer. The price per Share
shall be fixed by market-value appraisal as follows: one appraiser
appointed by the offerees, one appraiser appointed by the offeror, and a
third appraiser selected by the above two appraisers; provided, however,
that no such appraisers need be appointed or chosen if the offeror and the
offeree(s) mutually agree upon the purchase price of the Shares. Each
offeree, as above-designated, shall have thirty (30) days in which to
accept said offer; if such offeree does not accept said offer within thirty
(30) days, the offeree shall be deemed to have rejected the offer.
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<PAGE> 16
b. The foregoing restrictions and limitations shall be imprinted on
all Share Certificates of the Corporation but may be modified, nullified or
superseded pursuant to written agreement(s) by all the Shareholders or in
accordance with the Articles of Incorporation.
c. As to any particular Shareholder, the foregoing restrictions and
limitations shall be superseded by the terms and conditions of any Share
Redemption Agreement or similar Agreement entered into by the Corporation
and such Shareholder to the extent the terms and conditions of such Share
Redemption or similar Agreement are inconsistent herewith.
d. No Shares shall be issued, sold, offered for sale, hypothecated,
pledged, assigned, disposed of or otherwise transferred (whether by reason
of death, sale, gift, assignment, order of court, any judicial process or
otherwise) unless: (i) such Shares have been duly registered under the
Securities Act of 1933, as amended, pursuant to an effective registration
statement contemplating the transaction or transactions in which the Shares
are to be sold, offered for sale, hypothecated, pledged, assigned, disposed
of, or otherwise transferred; or (ii) both of the following conditions are
satisfied:
(1) During the period in which securities that are part of an
issue are being offered and sold by the Corporation, and for
a period of nine (9) months from the date of the
Corporation's last sale of such securities, all resales of
any part of the Shares of the issue, by any persons, shall be
made only to persons resident within the State of Ohio; and
(2) The Corporation has received the written opinion of its
counsel to the effect that the sale, offer for sale,
hypothecation, assignment, transfer, or other proposed
disposition of the Shares may be accomplished without such
registration under the Securities Act of 1933.
e. Certificates for all the Corporation's issued Shares shall bear a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, OFFERED FOR SALE, HYPOTHECATED, ASSIGNED, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS (A) SUCH SECURITIES ARE REGISTERED
UNDER SAID ACT; OR (B) BOTH OF THE FOLLOWING CONDITIONS ARE
SATISFIED: (i) DURING THE PERIOD IN WHICH AN ISSUE (OF WHICH THESE
SECURITIES ARE A PART) IS BEING OFFERED AND SOLD BY THE CORPORATION
AND FOR A PERIOD OF NINE (9) MONTHS FROM THE DATE OF THE
CORPORATION'S LAST SALE OF SUCH ISSUE, ALL RESALES OF ANY PART OF
THESE SECURITIES BY ANY PERSON SHALL BE MADE ONLY TO PERSONS
RESIDENT WITHIN THE STATE OF OHIO, AND (ii) THE CORPORATION
RECEIVES AN OPINION OF COUNSEL
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<PAGE> 17
SATISFACTORY TO IT THAT SUCH PROPOSED SALE OR OFFER OR OTHER
DISPOSITION DOES NOT REQUIRE REGISTRATION OF SUCH SECURITIES UNDER
SAID ACT.
ARTICLE VIII
OTHER INSTRUMENTS
SECTION 1. PRIOR INSTRUMENTS.
This Code supersedes and nullifies any and all prior codes of regulations,
constitutions, bylaws and similar instruments previously adopted by the
Shareholders and/or the Board.
SECTION 2. CONFLICTS OF INSTRUMENTS.
Except as otherwise provided in Article IX, in the event of a conflict
between this Code and any other instrument, bylaw, rule, regulation, document or
policy of the Corporation, these Regulations shall be superior to any such other
instrument, bylaw, rule, document, regulation and policy of the Corporation
(except as expressly stated herein), and the Articles of Incorporation shall be
superior to this Code.
SECTION 3. LEGEND ON SHARE CERTIFICATES.
A legend referring to the restrictions and limitations designated in these
Regulations shall be imprinted on all Share Certificates.
ARTICLE IX
CLOSE CORPORATION AGREEMENT
SECTION 1. QUALIFICATION AS CLOSE CORPORATION AGREEMENT.
To the extent necessary to make lawful this Code (or any provision hereof)
under the laws of the State of Ohio, these Regulations are intended to be
governed by Section 1701.591 of the Ohio Revised Code and to qualify thereunder
as a Close Corporation Agreement.
SECTION 2. OTHER CLOSE CORPORATION AGREEMENTS.
The terms and conditions of any other document(s) which qualifies as a
close corporation agreement under Section 1701.591 of the Ohio Revised Code and
which pertains to the Corporation shall supersede any and all conflicting
provisions of these Regulations, irrespective of whether such other document(s)
currently exist or are hereafter created.
SECTION 3. LEGEND ON SHARE CERTIFICATES.
A legend disclosing the existence of this Close Corporation Agreement shall
be noted on the face or back of all Share Certificates.
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<PAGE> 18
ARTICLE X
AMENDMENTS AND MISCELLANEOUS
SECTION 1. AMENDMENTS.
a. The Shareholders may repeal or amend this Code or adopt an Amended
and Restated Code: (i) at any Shareholder Meeting (with or without previous
notice of such amendment, repeal or adoption), by the affirmative vote of the
registered holders of two-thirds (2/3) of the Shares represented in person or by
proxy at such Meeting, or (ii) without a meeting, by the written consent of the
registered holders of all the Shares.
b. If this Code is amended or an amended Code is adopted without a
meeting of the Shareholders, the Secretary of the Corporation (or any other
Officer) shall forthwith mail a copy of the Amendment to the Code or the Amended
Code to each Shareholder who did not participate in the adoption of the
Amendment or the Amended Code.
SECTION 2. MISCELLANEOUS.
a. When acting on the Corporation's behalf, no Shareholder, Director,
Officer, employee, or other agent of the Corporation shall discriminate against
any person because of race, religion, color, creed, sex, national origin, or
handicap.
b. If any provision or Article of these Regulations is ever judicially
determined to be invalid or unenforceable, such determination shall not affect
the validity or enforceability of any other provision or Article of this Code.
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<PAGE> 1
EXHIBIT 3.35
CERTIFICATE OF INCORPORATION
OF
ARION SUB, INC.
ARTICLE ONE
The name of the corporation is Arion Sub, Inc.
ARTICLE TWO
The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of
New Castle, Delaware 19801. The name of its registered agent at such address is
The Corporation Trust Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
The total number of shares of stock which the corporation has authority
to issue is One Thousand (1,000) shares of Common Stock, with a par value of
$0.01 per share.
ARTICLE FIVE
The name and mailing address of the sole incorporator are as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Adriana S.C. Hyun Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
</TABLE>
ARTICLE SIX
The corporation is to have perpetual existence.
<PAGE> 2
ARTICLE SEVEN
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the corporation is expressly authorized to
make, alter or repeal the by-laws of the corporation.
ARTICLE EIGHT
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
The corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation in the manner now
or hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator herein before named for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
accordingly have hereunto set my hand this 21st day of May, 1999.
/s/ ADRIANA S.C. HYUN
-----------------------------------
Adriana S.C. Hyun, Sole Incorporator
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<PAGE> 1
EXHIBIT 3.36
BY-LAWS
OF
ARION SUB, INC.
A Delaware Corporation
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation
in the State of Delaware shall be located at Corporation Trust Center, 1209
Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The
name of the corporation's registered agent at such address shall be The
Corporation Trust Company. The registered office and/or registered agent of the
corporation may be changed from time to time by action of the board of
directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year within one hundred twenty (120) days after
the close of the immediately preceding fiscal year of the corporation for the
purpose of electing directors and conducting such other proper business as may
come before the meeting. The date, time and place of the annual meeting shall be
determined by the president of the corporation; provided, that if the president
does not act, the board of directors shall determine the date, time and place of
such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than a majority of the votes at the meeting.
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special
<PAGE> 2
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
executive office of the corporation.
Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or represented by proxy at
the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
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<PAGE> 3
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of common stock held
by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing the dates of
signature of the stockholders who signed the consent or consents, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the state of Delaware, or the corporation's principal place of business, or an
officer or agent of the corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested provided, however, that no consent or consents
delivered by certified or registered mail shall be deemed delivered until such
consent or consents are actually received at the registered office. All consents
properly delivered in accordance with this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered to the corporation as required by this section, written
consents signed by the holders of a sufficient number of shares to take such
corporate action are so recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing. Any action taken
pursuant to such written consent or consents of the stockholders shall have the
same force and effect as if taken by the stockholders at a meeting thereof.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
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<PAGE> 4
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the first board shall be one (1). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the holders of any class or series are entitled to elect one or more
directors by the provisions of the corporation's certificate of incorporation,
the provisions of this section shall apply, in respect to the removal
without cause of a director or directors so elected, to the vote of the holders
of the outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Any director may resign at any time upon written
notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this by-law
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president or any director on at least 24 hours notice to each
director, either personally, by telephone, by mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the
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<PAGE> 5
directors of the corporation, which to the extent provided in such resolution or
these by-laws shall have and may exercise the powers of the board of directors
in the management and affairs of the corporation except as otherwise limited by
law. The board of directors may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by
the certificate of incorporation, any action required or permitted to be taken
at any meeting of the board of directors, or of any committee thereof, may be
taken without a meeting if all members of the board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the board or committee.
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<PAGE> 6
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more
vice-presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person except that neither the
chairman of the board nor the president shall also hold the office of secretary.
In its discretion, the board of directors may choose not to fill any office for
any period as it may deem advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any meeting
of the board of directors. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. Chairman of the Board. The Chairman of the Board shall be
the chief executive officer of the corporation, and shall have the powers and
perform the duties incident to that position. Subject to the powers of the board
of directors, he or she shall be in the general and active charge of the entire
business and affairs of the corporation, and shall be its chief policy making
officer. He or she shall preside at all meetings of the board of directors and
stockholders and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or provided in these by-laws.
Whenever the president is unable to serve, by reason of sickness, absence or
otherwise, the chairman of the board shall perform all the duties and
responsibilities and exercise all the powers of the president.
Section 7. The President. The president shall, subject to the powers of
the board of directors and the chairman of the board, have general charge of the
business, affairs and property of the corporation, and control over its
officers, agents and employees; and shall see that all orders and
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<PAGE> 7
resolutions of the board of directors are carried into effect. The president
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the board of directors to some other officer or
agent of the corporation. The president shall have such other powers and perform
such other duties as may be prescribed by the chairman of the board or the board
of directors or as may be provided in these by-laws.
Section 8. Chief Operating Officer. The chief operating officer of the
corporation, subject to the powers of the board of directors, shall have general
and active management of the business of the corporation; and shall see that all
orders and resolutions of the board of directors are carried into effect. The
chief operating officer shall have such other powers and perform such other
duties as may be prescribed by the chairman of the board, the chief executive
officer or the board of directors or as may be provided in these by-laws.
Section 9. Chief Financial Officer. The chief financial officer of the
corporation shall, under the direction of the chief executive officer, be
responsible for all financial and accounting matters and for the direction of
the offices of treasurer and controller. The chief financial officer shall have
such other powers and perform such other duties as may be prescribed by the
chairman of the board, chief executive officer or the board of directors or as
may be provided in these by-laws.
Section 10. Vice-Presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the board of
directors shall, in the absence or disability of the president, act with all of
the powers and be subject to all the restrictions of the president. The
vice-presidents shall also perform such other duties and have such other powers
as the board of directors, the chairman of the board, the president or these
by-laws may, from time to time, prescribe.
Section 11. The Secretary and Assistant Secretaries. The secretary
shall attend all meetings of the board of directors, all meetings of the
committees thereof and all meetings of the stockholders and record all the
proceedings of the meetings in a book or books to be kept for that purpose.
Under the president's supervision, the secretary shall give, or cause to be
given, all notices required to be given by these by-laws or by law; shall have
such powers and perform such duties as the board of directors, the chairman of
the board, the president or these by-laws may, from time to time, prescribe; and
shall have custody of the corporate seal of the corporation. The secretary, or
an assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature. The
assistant secretary, or if there be more than one, the assistant secretaries in
the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors, the chairman of the board, the president, or secretary may,
from time to time, prescribe.
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<PAGE> 8
Section 12. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the chairman
of the board, the president or these by-laws may, from time to time, prescribe.
If required by the board of directors, the treasurer shall give the corporation
a bond (which shall be rendered every six years) in such sums and with such
surety or sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of the office of treasurer and for the
restoration to the corporation, in case of death, resignation, retirement, or
removal from office, of all books, papers, vouchers, money, and other property
of whatever kind in the possession or under the control of the treasurer
belonging to the corporation. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors, shall in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer. The assistant treasurers shall
perform such other duties and have such other powers as the board of directors,
the chairman of the board, the president or treasurer may, from time to time,
prescribe.
Section 13. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 14. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Nature of Indemnity. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent which it is empowered to
do
- 8 -
<PAGE> 9
so by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended against all expense, liability and loss
(including attorneys' fees actually and reasonably incurred by such person in
connection with such proceeding) and such indemnification shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, except as provided in Section 2 hereof, the corporation shall indemnify
any such person seeking indemnification in connection with a proceeding
initiated by such person only if such proceeding was authorized by the board of
directors of the corporation. The right to indemnification conferred in this
Article V shall be a contract right and, subject to Sections 2 and 5 hereof,
shall include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition. The
corporation may, by action of its board of directors, provide indemnification to
employees and agents of the corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 30 days, the right to indemnification or advances as granted by
this Article V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware, nor an actual determination by
the corporation (including its board of directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
- 9 -
<PAGE> 10
provision of the certificate of incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the corporation or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred by him
or her in any such capacity, whether or not the corporation would have the power
to indemnify such person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
corporation in advance of such proceeding's final disposition unless otherwise
determined by the board of directors in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation. Such expenses incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board of
directors deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
- 10 -
<PAGE> 11
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice-president and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by such holder in the
corporation. If such a certificate is countersigned (1) by a transfer agent or
an assistant transfer agent other than the corporation or its employee or (2) by
a registrar, other than the corporation or its employee, the signature of any
such president, vice-president, secretary, or assistant secretary may be
facsimiles. In case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such certificate or certificates
shall cease to be such officer or officers of the corporation whether because of
death, resignation or otherwise before such certificate or certificates have
been delivered by the corporation, such certificate or certificates may
nevertheless be issued and delivered as though the person or persons who signed
such certificate or certificates or whose facsimile signature or signatures have
been used thereon had not ceased to be such officer or officers of the
corporation. All certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. Shares of stock of the corporation
shall only be transferred on the books of the corporation by the holder of
record thereof or by such holder's attorney duly authorized in writing, upon
surrender to the corporation of the certificate or certificates for such shares
endorsed by the appropriate person or persons, with such evidence of the
authenticity of such endorsement, transfer, authorization, and other matters as
the corporation may reasonably require, and accompanied by all necessary stock
transfer stamps. In that event, it shall be the duty of the corporation to issue
a new certificate to the person entitled thereto, cancel the old certificate or
certificates, and record the transaction on its books. The board of directors
may appoint a bank or trust company organized under the laws of the United
States or any state thereof to act as its transfer agent or registrar, or both
in connection with the transfer of any class or series of securities of the
corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede
- 11 -
<PAGE> 12
the date upon which the resolution fixing the record date is adopted by the
board of directors, and which record date shall not be more than sixty nor less
than ten days before the date of such meeting. If no record date is fixed by the
board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner.
- 12 -
<PAGE> 13
Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer
or officers, or any agent or agents, of the corporation to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. No loans shall be made by the corporation to its
officers or directors, and no loans shall be made by the corporation secured by
its shares. No loans shall be made or contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by resolution of the board of directors. Such authority may be general or
confined to specific instances.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
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<PAGE> 14
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation held by the corporation shall be voted by the president,
unless the board of directors specifically confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.
Section 9. Section Headings. Section headings in these by-laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these by-laws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these by-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.
ARTICLE VIII
AMENDMENTS
These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.
- 14 -
<PAGE> 1
EXHIBIT 3.37
C-101 Prescribed by Secretary of State - Ted W. Brown
[APPROVED
FOR FILING STAMP}
By /s/ [ILLEGIBLE]
----------------
ARTICLES OF INCORPORATION Date [ILLEGIBLE]
--------------
-OF- Amount $100.00
----------
LISN, INC. 72 - 21
- -------------------------------------------------------------------------------
(Name of Corporation)
The undersigned, a majority of whom are citizens of the United States,
desiring to form a corporation, for profit, under Sections 1701.01 et seq. of
the Revised Code of Ohio, do hereby certify:
FIRST. The name of said corporation shall be LISN, INC.
-----------------------------
- -------------------------------------------------------------------------------
SECOND. The place in Ohio where its principal office is to be located is
300 West Ninth Street, Lorain, Ohio 44052, Lorain County.
- -------------------------------------------------------------------------------
(City, Village or Township)
THIRD. The purposes for which it is formed are:
Complete servicing and manufacturing of communication and electronic
equipment, including all things incidental thereto.
In addition to the foregoing, to engage in any other business or activity
for which natural persons may lawfully associate themselves under the laws of
the State of Ohio, including all things authorized by Sec. 1701.13 of the
Revised Code of Ohio as amended, effective September 4, 1963.
<PAGE> 2
FOURTH. The number of shares which the corporation is authorized to have
outstanding is one thousand (1000) shares, all of which shall be common shares,
without par value.
FIFTH. The corporation, through its Board of Directors, shall have the
first right and power to repurchase any of its outstanding shares at such price
and upon such terms as may be agreed upon between the corporation and the
selling shareholder or shareholders, at any time such shareholder or
shareholders intend to transfer, alienate or in any other way dispose of any
share of the corporation.
SIXTH. The amount of stated capital with which the corporation shall begin
business is
FIVE HUNDRED ----------------------------------- Dollars ($500.00).
- ------------------------------------------------ ---------
IN WITNESS WHEREOF, We have hereunto subscribed our names, this 25th day
of March, 1967.
LISN, INC.
--------------------------------------------------------
(Name of Corporation)
/s/ JOHN W. SCHMAUCH, JR.
--------------------------------------------------------
John W. Schmauch, Jr.
/s/ D.L. SANNEMAN
--------------------------------------------------------
D.L. Sanneman
/s/ JAMES S. HIVNOR
--------------------------------------------------------
James S. Hivnor
(INCORPORATORS NAMES SHOULD BE TYPED OR PRINTED BENEATH SIGNATURES)
N.B. Articles will be returned unless accompanied by form designating statutory
agent. See Section 1701.07, Revised Code of Ohio.
<PAGE> 3
Form C-103 Prescribed by Secretary of State Ted W. Brown
ORIGINAL APPOINTMENT OF AGENT
The undersigned, being at least a majority of the incorporators of
--------
LISN, INC.
- -------------------------------------------------------------------------------
(Name of Corporation)
hereby appoint John W. Schmauch, Jr.
----------------------------------------------------------------
(Name of Agent)
a natural person resident in the county in which the corporation has its
principal office,
--------------------------------------------------------------
(Name of Corporation)
(strike out phrase not applicable), upon whom any process, notice or demand
required or permitted by statute to be served upon the corporation may be
served. His
complete address is 300 West Ninth Street , Lorain
----------------------------------------- -----------------
(Street or Avenue) (City or Village)
Lorain County, Ohio.
- -----------------
LISN, INC.
------------------------------------------------------------------
(Name of Corporation)
/s/ JOHN W. SCHMAUCH, JR.
------------------------------------------------------------------
John W. Schmauch, Jr.
/s/ D.L. SANNEMAN
------------------------------------------------------------------
D.L. Sanneman
/s/ JAMES S. HIVNOR
------------------------------------------------------------------
James S. Hivnor
-------------------------------------------------------------------
(INCORPORATORS NAMES SHOULD BE TYPED OR PRINTED BENEATH SIGNATURES)
Bowling Green
-------------------------------------------------------------, Ohio
March 25 , 1967
-------------------------------------------------------------
LISN, INC.
-------------------------------------------------------------
(Name of Corporation)
Gentlemen: I (strike out word not applicable) hereby accept
appointment as agent of your corporation upon whom process, tax notices or
demands may be served.
/s/ JOHN W. SCHMAUCH, JR.
-------------------------------------------------------------
(Signature of Agent or Name of Corporation)
By
-------------------------------------------------------------
(Signature of Officer Signing and Title)
Remarks: All articles of incorporation must be accompanied by an original
appointment of agent. There is no filing fee for this appointment.
<PAGE> 4
C-106 Prescribed By Charter #359471
ANTHONY J. CELEBREZZE, JR. Approved by SP
Secretary of State Date 7-29-81
Fee $35.00
CERTIFICATE OF AMENDMENT
(BY SHAREHOLDERS)
TO THE ARTICLES OF INCORPORATION OF
LISN, INC.
- -------------------------------------------------------------------------------
(Name of Corporation)
( ) Chairman of the Board
Donald L. Sanneman , who is (X) President (check one),
- -------------------------------- ( ) Vice President
and Richard J. Smith , who is (X) Secretary (check one)
----------------------------- ( ) Assistant Secretary
of the above named Ohio corporation for profit with its principal location at
300 West Ninth Street, Lorain , Ohio do hereby certify that: (check the
- -----------------------------------
appropriate box and complete the appropriate statements)
[ ] a meeting of the shareholders was duly called and held on
19 , at which meeting a quorum
----------------------------- --
of the shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them
to exercise % of the voting power of the corporation,
---------
[X] in a writing signed by all of the shareholders who would be
entitled to a notice of a meeting held for that purpose,
the following resolution was adopted to amend the articles:
RESOLVED that Article SECOND of the Corporation's
Articles of Incorporation is hereby amended to read
as follows:
"SECOND. The place in Ohio where its principal office
is to be located is Amherst, Lorain County."
IN WITNESS WHEREOF, the above named officers, acting for and on behalf of
the corporation, have subscribed their names this 15th day of July, 1981.
X /s/ [ILLEGIBLE]
-------------------------------
(President)
X /s/ RICHARD J. SMITH
-------------------------------
(Secretary)
NOTE: Ohio law does not permit one officer to sign in two capacities. Two
separate signatures are required, even if this necessitates the election of a
second officer before the filing can be made.
<PAGE> 5
[OHIO CORPORATIONS LOGO] [STAMPED]
CHANGE OF ADDRESS OF STATUTORY AGENT
FOR OHIO CORPORATIONS
The address of Donald L. Sanneman , the statutory agent for LISN, INC.
--------------------- ---------------
(Name of Agent)
, has been changed from 1200 North Main Street
- -------------------------- --------------------------
(Name of Corporation) (Old Street Address)
, Amherst , Lorain County, Ohio,
- ---------------- ------------------------- ------------------
44001 , to 811 Valley Drive , Amherst
- ------------- --------------------------------------- -----------------,
(Zip Code) (New Street Address) (City or Village)
Lorain County, Ohio, 44001 .
- -------------------------- ---------------
(Zip Code)
LISN, INC.
--------------------------------
(Name of Corporation)
Date: July 15, 1981 By /s/ DONALD L. SANNEMAN
----------------------- ------------------------------
Donald L. Sanneman
Title President
---------------------------
INSTRUCTIONS
1) A change of address of statutory agent must be signed by the chairman of the
board, the president, a vice-president, the secretary or assistant secretary.
R.C. 1701.07(L), 1702.06(K).
2) The agent's complete street address must be given; a post office box number
is not acceptable. R.C. 1701.07(C), 1702.06(C).
3) The filing fee for a change of address of statutory agent is $3.00. R.C.
1701.07(M), 1702.06(L).
Form C-AGA April, 1980
Prescribed by Secretary of State Anthony J. Celebrazze, Jr.
<PAGE> 1
EXHIBIT 3.38
AMENDED AND RESTATED
CODE OF REGULATIONS
OF
LISN, INC.
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1. DEFINITIONS.
For purposes of this Code of Regulations, the following words and phrases
have the meanings designated below:
(a) "Articles of Incorporation" herein means the Corporation's
articles of incorporation filed with the Secretary of State of Ohio on March 27,
1967, and all amendments thereto and restatements thereof.
(b) "Board" herein means the Board of Directors of the Corporation.
(c) "Code" herein means this Code of Regulations.
(d) "Corporation" herein means LISN, INC.
(e) "Days" herein means calendar days.
(f) "Director" herein means any person properly elected or appointed
to the Board and holding the office as a Director as described in Article IV of
these Regulations.
(g) "Officer" herein means any person properly elected or appointed
to an Office designated in Section 1 of Article V of this Code.
(h) "Regulations" herein means this Code of Regulations.
(i) "Share" herein means a unit of the Corporation's issued and
outstanding voting stock as evidenced by a share or stock certificate.
(j) "Shareholder" herein means Donald L. Sanneman, Donald Vanke,
James S. Hivnor, and any other person or entity who or which hereafter owns at
least one Share (as defined in Subsection i, above); provided, however, any such
person or entity shall cease being a "Shareholder" for purposes of these
Regulations immediately when such person or entity no longer owns at least one
Share.
<PAGE> 2
SECTION 2. WORD USAGE.
Where the context of this Code requires, words used in the masculine shall
include the feminine and neuter; words in the singular, the plural; and
vice-versa.
SECTION 3. OHIO LAW.
This Code is adopted in the State of Ohio and Ohio's laws shall govern all
matters of interpretation, construction and validity and all disputes,
controversies and litigation arising hereunder.
ARTICLE II
SHAREHOLDER MEETINGS
SECTION 1. ANNUAL SHAREHOLDER MEETINGS.
a. The annual meeting of the Shareholders (herein called the "Annual
Shareholder Meeting") shall be called and held at the Corporation's principal
office on the second Tuesday in December of each year at 9:30 a.m., or on such
other day and at such other time and place (within or without the State of Ohio)
as the Board determines and calls in its sole discretion; provided, however,
that the Annual Shareholder Meeting must be held each year no later than nine
(9) months after the close of the Corporation's fiscal year.
b. The purposes of the Annual Shareholder Meeting are to fix the
number of and to elect Directors, receive and act upon annual and other reports
of the Officers and the Board, transact other Shareholder business and
activities, and take any other Shareholder actions.
SECTION 2. SPECIAL SHAREHOLDER MEETINGS.
a. Special meetings of the Shareholders (herein called a "Special
Shareholder Meeting") may be called by the registered holders of at least Fifty
Percent (50%) of the Corporation's Shares, by any two (2) Officers of the
Corporation or by the Board through a written request delivered either in person
or by registered United States mail to the President or the Secretary of the
Corporation.
b. All Special Shareholder Meetings shall be held within thirty (30)
days of call, on the day, at the time and at the place (within or without the
State of Ohio) as the Board determines.
c. The purpose(s) of any Special Shareholder Meeting may be to
transact any Shareholder business and activities and to take any Shareholder
actions.
SECTION 3. RECORD DATES.
a. For purposes of determining those Shareholders entitled to (1)
receive Notice of any Shareholder Meeting, or (2) receive dividends or
distributions or (3) exercise any other
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than the date on which the Record Date is established and not more than sixty
(60) days prior to the designated event.
b. Unless otherwise provided by law, only holders of Shares actually
registered in the holder's name on the Corporation's Share records at the close
of business on the Record Date shall be recognized and counted for the
applicable purposes designated in Section 3(a), above.
SECTION 4. NOTICE.
a. Within ten (10) days after a Shareholder Meeting has been called
as provided in this Code, the President or Secretary of the Corporation or shall
give written notice (herein called "Notice") stating the date, time, place and
purpose(s) of each Shareholder Meeting. Not less than seven (7) nor more than
sixty (60) days before any Shareholder Meeting, the President or Secretary of
the Corporation either shall cause personal delivery of the Notice or shall mail
(by ordinary United States mail, postage prepaid) the Notice to each registered
holder (as of the Record Date) of the Corporation's Shares at the address then
appearing on the Corporation's Share records; provided, however, that Notice of
a Special Shareholder Meeting may be given at any time prior to seven (7) days
before the Special Shareholder Meeting.
b. Notwithstanding any contrary provision herein, a Shareholder's
attendance (in person or by proxy) at any Shareholder Meeting waives any lack of
or deficiency in Notice of such Meeting.
c. Notice of adjournment of any Shareholder Meeting need not be given
if the date, time and place to which the Meeting is adjourned are fixed and
announced at such Meeting.
SECTION 5. QUORUM AND ATTENDANCE.
a. A majority of the Shares (represented in person or by proxy)
constitutes a quorum for the transaction of business at any Shareholder Meeting.
A quorum must exist as a condition precedent to (and at the time of) the
transaction of any Shareholder business or the vote upon any matters submitted
to the Shareholders.
b. Whether or not a quorum exists, a majority of the Shares
(represented in person or by proxy) at any Shareholder Meeting may adjourn the
Meeting.
c. Unless otherwise approved in advance by the Board, only
Shareholders may attend Shareholder Meetings.
SECTION 6. VOTING.
a. Except as otherwise modified by the express terms of any Shares or
by these Regulations, each holder of a Share shall be entitled to one (1) vote
for each Share registered in such holder's name on the Corporation's Share
records as of the Record Date.
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b. At any Shareholder Meeting, all matters properly submitted to the
Shareholders shall be decided by a majority vote of the Shares represented in
person or by proxy, unless otherwise provided in these Regulations or required
by law.
SECTION 7. PROXIES.
a. A Shareholder may be represented and vote at any Shareholder
Meeting by written proxy signed by such Shareholder (or by the Shareholder's
duly authorized officer) and submitted to the Secretary of the Corporation or to
any other Officer (other than such Shareholder) at or before the Shareholder
Meeting. Such Proxy shall be valid for only the Shareholder Meeting designated
therein and shall name as proxy only another Shareholder.
b. A Shareholder may exercise any Shareholder consents, waivers,
releases or other Shareholder rights by written proxy signed by such Shareholder
(or by the Shareholder's duly authorized officer) and submitted to the Secretary
of the Corporation or to any other Officer (other than such Shareholder) prior
to the exercise thereof.
SECTION 8. ELECTION OF DIRECTORS.
a. At each Annual Shareholder Meeting, the Shareholders shall fix the
number of and shall elect Directors (in accordance with this Code) to serve
until their respective successors are elected at the next Annual Shareholder
Meeting, or until their earlier death, disqualification, resignation or removal
from the Board.
b. If no Annual Shareholder Meeting is held or if all Directors are
not elected thereat, the Shareholders shall elect persons to the Board at a
Special Shareholder Meeting and such Directors shall serve until their
respective successors are elected at the next Annual Shareholder Meeting, or
until their earlier death, disqualification, resignation or removal from the
Board.
c. Any Shareholder may designate, in person or by proxy, nominees
(who qualify under Section 1 of Article IV of this Code) for Directorships. Only
qualified nominees are eligible to be elected Directors and nominees receiving
the greatest number of votes shall be so elected.
d. Subject to the terms and conditions of these Regulations, any
person (who is qualified as designated in Section 1 of Article IV of this Code)
may serve or be elected to an unlimited number of consecutive or non-consecutive
terms as a Director.
SECTION 9. PARLIAMENTARY PROCEDURE AND MINUTES.
a. Roberts Rules of Order (as periodically revised) constitute the
final authority for parliamentary procedures at all Shareholder Meetings, except
where such Rules conflict with law or with the Regulations.
b. At all Shareholder Meetings, the order of business shall be as
follows:
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(1) Roll call or attendance record;
(2) Reading and action upon Minutes of previous Shareholder
Meeting;
(3) Unfinished (old) business;
(4) Financial or other reports of the Board;
(5) Financial or other reports of Officers;
(6) Reports of Committees (if any);
(7) Election of Directors (if applicable);
(8) New or miscellaneous business;
(9) Adjournment.
The order of business may be periodically changed for any particular Shareholder
Meeting by a majority vote of the registered holders of the Corporation's Shares
(represented in person or by proxy) at such Meeting.
c. The Secretary of the Corporation shall cause to be recorded
Minutes of all Shareholder Meetings.
SECTION 10. ACTION BY SHAREHOLDERS IN WRITING WITHOUT A MEETING.
Notwithstanding any contrary provision in this Code, Shareholders may
properly and officially act without a Meeting through a written document signed
by the registered holders of all Shares as of the Record Date for such action.
ARTICLE III
BOARD MEETINGS
SECTION 1. ANNUAL BOARD MEETING.
a. The annual meeting of the Board (herein called the "Annual Board
Meeting") shall be held each year following the Annual Shareholder Meeting at
such time and place (within or without the State of Ohio) as determined by the
Board but, in no event, later than nine (9) months after the close of the
Corporation's fiscal year.
b. The purposes of the Annual Board Meeting are to elect Officers,
receive and act upon any reports, transact any other Board business and
activities, and take any other Board actions.
SECTION 2. REGULAR BOARD MEETING.
Regular meetings of the Board (herein called "Regular Board
Meetings") may be periodically held on the days and at the times and places
(within or without the State of Ohio) as the Board (in its sole discretion)
determines; provided, however, that the Board is not required to hold any
Regular Board Meetings.
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SECTION 3. SPECIAL BOARD MEETINGS.
a. Special meetings of the Board (herein called "Special Board
Meetings") may be called by any two (2) Officers, or by the holders of at least
50% of the Shares registered on the Corporation's Share records.
b. All Special Board Meetings shall be held within fifteen (15) days
of call, at the time and at the place (within or without the State of Ohio) as
the President determines.
c. The purpose(s) of any Special Board Meeting may be to transact any
Board business and activities and to take any Board actions.
SECTION 4. NOTICE.
a. The Secretary of the Corporation or any other Officer shall give
to each Director written or oral notice (herein called "Notice") stating the
date, time and place (but not necessarily the purposes) of each Board Meeting.
At least two (2) days before each Board Meeting, the Secretary of the
Corporation (or any other Officer) shall cause personal delivery or other
communication of the Notice or shall mail (by ordinary United States mail,
postage prepaid) the Notice to each Director.
b. Notwithstanding any contrary provision herein, a Director's
attendance at any Board Meeting constitutes such Director's waiver of any
failure to give or deficiency in Notice of such Meeting.
c. Notice of adjournment of any Board Meeting need not be given if
the date, time and place to which the Meeting is adjourned are fixed and
announced at such Meeting.
SECTION 5. QUORUM AND ATTENDANCE.
a. A majority of the Directors in office (who must be present in
person) constitutes a quorum for the transaction of business at any Board
Meeting. A quorum must exist as a condition precedent to (and at the time of)
the transaction of any Board business or the vote upon any matter submitted to
the Board.
b. Whether or not a quorum exists, a majority of the Directors
present in person at any Board Meeting may adjourn the meeting.
c. Unless otherwise approved in advance by the Board or by any two
Officers, only Directors may attend Board Meetings.
SECTION 6. VOTING.
a. Upon all matters properly submitted to the Board, each Director in
office shall be entitled to one (1) vote but Directors shall vote and act as a
Board.
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b. At any Board Meeting, all matters properly submitted to the Board
shall be decided by a majority vote of all the Directors present in person at
the Board Meeting, unless otherwise provided in these Regulations or required by
law.
c. A Director may not vote, consent, take any action as a Director or
be represented at a Board Meeting by proxy. Only Directors present in person at
a Board Meeting during the actual transaction of a matter may vote thereon.
d. For purposes of this Code, a Director shall be deemed to be
"present in person" at any Board Meeting if such Director: (i) participates at
the Board Meeting by means of communications equipment but only if all Directors
participating at the Board Meeting can hear each other Director, or (ii) is
actually physically present at the Board Meeting.
SECTION 7. ELECTION OF OFFICERS.
a. At each Annual Board Meeting, the Board shall elect Officers to
serve until their respective successors are elected at the next Annual Board
Meeting, or until their earlier death, disqualification, resignation or removal
from Office.
b. If no Annual Board Meeting is held or if all Officers are not
elected thereof, the Board shall elect any remaining unelected Officers at a
Special or Regular Board Meeting and such Officers shall serve until their
respective successors are elected at the next Annual Board Meeting, or until
their earlier death, disqualification, resignation or removal from Office.
c. Any Director in office may designate persons (qualified under
Section 1 of Article V of these Regulations) as nominees for Officers. Only
nominees are eligible to be elected Officers and nominees receiving the greatest
number of votes shall be so elected.
d. Any person (who is qualified as designated in Section 1 of Article
V of these Regulations) may serve or be elected to an unlimited number of
consecutive or non-consecutive terms as an Officer.
SECTION 8. PARLIAMENTARY PROCEDURE.
a. Roberts Rules of Order (as periodically revised) constitute the
final authority for parliamentary procedures at all Board Meetings, except where
such Rules conflict with law or with this Code.
b. The Secretary of the Corporation shall cause to be recorded
Minutes of all Board Meetings.
SECTION 9. ACTION BY DIRECTORS IN WRITING WITHOUT A MEETING.
Notwithstanding any contrary provision in these Regulations, the Board
may properly and officially act without a Meeting through a written document
signed by all Directors then serving on the Board.
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ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. NUMBER, QUALIFICATION AND TERM.
a. The Shareholders may periodically fix, determine and change the
number of Directors to serve on the Board; provided, however, that if the
Shareholders fail to fix and determine the number of Directors, then the
Directors elected shall be deemed to constitute the number of Directors fixed by
the Shareholders.
b. Directors shall be elected by the Shareholders at the Annual
Shareholder Meeting (or at a Special Shareholder Meeting called for the purpose
of electing Directors) to serve until the expiration of their terms of office
and until their successors are elected, or until their earlier death,
disqualification, resignation or removal from the Board.
c. Only persons (not entities) shall be qualified to be nominated, to
be elected and to serve as Directors of the Corporation.
d. Subject to the qualifications designated in this Section 1, any
person may serve as a Director for an unlimited number of consecutive or
non-consecutive terms.
SECTION 2. BOARD VACANCIES.
a. Board vacancies shall occur from the disqualification, death, or
resignation of any Director; from the removal (with or without cause) of a
Director from the Board; or from the Shareholders' failure to elect the entire
fixed and authorized number of Directors.
b. Any Director may be removed from the Board (with or without cause)
by the vote of the holders of at least a majority of the Shares registered on
the Corporation's Share records, at any time without prior notice or demand.
c. At any time, a Director may resign from the Board by delivering or
mailing (by certified, United States mail) written notice to any Officer (other
than the resigning Director). The resignation shall be effective upon actual
receipt of the notice by the Officer, unless the notice specifies a later
resignation date.
d. The vote of the holders of a majority of the Shares registered on
the Corporation's Share records shall fill all Board vacancies (when and as
determined by the Shareholders) by electing successor Directors to serve until
their respective successors are elected at the next Annual or Special
Shareholder Meeting, or until their earlier resignation, disqualification, death
or removal from the Board.
SECTION 3. BOARD POWERS AND DUTIES.
a. Except as otherwise expressly provided in this Code, all policy
and administrative powers and authority of the Corporation are vested in and
shall be exercised by solely and exclusively the Board which, in its sole
discretion, shall have charge, control and
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management of the Corporation's property, affairs, businesses, activities and
funds. In accordance with these Regulations, the Board also shall elect
Officers, create and disband Board Committees, appoint Board agents, authorize
and empower the Corporation to negotiate and execute contracts, and perform all
other acts and functions permitted by law and consistent with the Articles of
Incorporation and these Regulations.
b. Except as otherwise expressly designated by the Board, individual
Directors shall have no powers and authority to act on the Corporation's behalf
and all Directors shall act and vote as a Board.
SECTION 4. VOTING.
a. Each Director shall be entitled to one (1) vote on all matters
properly submitted to the Board for its vote, consent, waiver, release or other
action.
b. Unless otherwise provided in this Code or by law, the Board shall
act by a majority vote of those Directors present in person at any Board Meeting
when a quorum of Directors is then present.
SECTION 5. BOARD COMMITTEES.
The Board may create Board Committee(s) and appoint, remove and reappoint
all members to such Committee(s). Such Committee(s) shall act at the Board's
direction and the Board shall have exclusive authority to designate the duties,
functions and powers of the Committee(s).
SECTION 6. COMPENSATION AND EXPENSES.
Directors shall be entitled to such compensation (if any) and to
reimbursement for such expenses as the Board periodically determines in its sole
discretion.
SECTION 7. BYLAWS.
For its own government, the Board may adopt bylaws consistent with the
Articles of Incorporation and these Regulations.
ARTICLE V
OFFICERS
SECTION 1. DESIGNATION AND QUALIFICATION.
a. The Officers of the Corporation shall consist of a President (who
must also be a Director), Secretary and Treasurer and may further include a
Chairman of the Board (who must be a Director), one or more Vice-Presidents,
Assistant Officers and such other Officers as the Board periodically determines.
The same person may hold the Offices of President, Secretary, Treasurer and
Vice-President or any combination thereof.
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b. At the Annual Board Meeting (or at any other Special or Regular
Board Meeting called for the purpose of electing Officers), the Board shall
elect all Officers to serve until their respective successors are elected at the
next Annual or other Board Meeting, or until their earlier death, resignation,
disqualification, or removal from Office.
c. Only persons (not entities) and only persons who also serve as
Directors shall be qualified to be nominated, to be elected and to serve as
Officers.
d. Subject to the qualifications designated in this Section 1, any
person may serve or be elected as an Officer for an unlimited number of
consecutive or non-consecutive terms.
SECTION 2. OFFICER VACANCIES AND SUCCESSION.
a. Officer vacancies shall occur from an Officer's disqualification,
death, resignation or removal (with or without cause) from Office.
b. Without prior notice or demand, any Officer may be removed from
Office (with or without cause) by the Board or by the action of the holders of
at least a majority of the Shares registered on the Corporation's Share records.
c. At any time, an Officer may resign from Office by delivering or
mailing (by certified, United States mail) written notice to any Officer or
Director (other than the resigning Officer). The resignation shall be effective
upon actual receipt of the notice by the Officer or Director, unless the notice
specifies a later resignation date.
d. The President shall fill any vacancies in the Office of the
Chairman of the Board (if any) and a Vice-President (so designated by the Board)
shall fill any vacancies in the Presidency for the unexpired terms of such
Offices and until their successors are chosen, or until their earlier
resignation, disqualification, death or removal from Office. The Board shall
fill all other Officer vacancies by electing (when and as determined by the
Board) successor Officers to serve until their respective successors are elected
at the next Annual or other Board Meeting, or until their earlier resignation,
disqualification, death or removal from Office.
SECTION 3. POWERS AND DUTIES OF OFFICERS.
a. Chairman of the Board. If the Board elects a Chairman of the
Board, the Chairman shall: preside at all Shareholder and Board Meetings; ensure
that all Board orders and actions are implemented; sign the Corporation's
documents; exercise general executive supervision, management and control over
the Corporation's affairs, property, businesses, activities, other Officers and
funds; and generally perform all duties incident to the Office and such other
duties and responsibilities as the Board periodically requires.
b. President. The President of the Corporation shall perform all
duties and responsibilities of the Chairman of the Board, if the Board has not
elected a Chairman. If the Board elects a Chairman, the President shall perform
all duties and responsibilities of the Chairman during the Chairman's absence or
incapacity, until the Board otherwise directs. The
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President shall also perform such other duties and responsibilities as the Board
periodically requires.
c. Vice-President(s). Any Vice-President(s) of the Corporation shall:
upon request of the Board, perform such portion or all duties and
responsibilities of the President during the President's absence or incapacity;
and generally perform such other duties and responsibilities as the Board
periodically requires.
d. Secretary. The Secretary of the Corporation shall: take and
maintain (or cause to be taken and maintained) minutes of all Shareholder
Meetings and all Board Meetings; unless otherwise provided herein, give (or
cause to be given) Notice of all Shareholder Meetings and all Director Meetings
as required by these Regulations; maintain (or cause to be maintained) the
Corporation's Seal (if any) and all books, records and other documents of the
Corporation; maintain (or cause to be maintained) a record of all Share
Certificates and all Shareholders; and generally perform all duties incident to
the Office and such other duties and responsibilities as the Board periodically
requires.
e. Treasurer. The Treasurer of the Corporation shall: maintain (or
cause to be maintained) custody of the Corporation's funds, securities,
properties, and other assets as periodically required by the Board; prepare (or
cause to be prepared) accurate financial accounts and statements of the
Corporation's financial condition, as periodically required by the Board;
maintain (or cause to be maintained) accurate accounts of all funds received and
paid by the Corporation and all other financial transactions of the Corporation;
and generally perform all duties incident to the Office and such other duties
and responsibilities as the Board periodically requires.
f. Other Officers. Any other Officer(s) of the Corporation shall have
such duties and responsibilities as the Board periodically requires.
ARTICLE VI
INDEMNIFICATION OF SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
SECTION 1. DEFINITIONS.
For purposes of this Article, the following words and phrases shall have
the meanings designated below:
(a) "Claim" means any and all threatened, pending or completed
claims, actions, suits or proceedings (whether civil, criminal,
administrative, investigative or otherwise and whether under
State or Federal law) and any and all appeals related thereto.
(b) "Indemnified Individual" means: (i) all past, present and
future Shareholders, Directors and Officers; and (ii) as the
Board may periodically determine, such employees and other
agents of the Corporation acting in any capacity at the request
of or on behalf of the Corporation.
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(c) "Liabilities" means any and all judgments, decrees, fines,
investigation costs, penalties, expenses, fees, amounts paid in
settlement, costs, losses, expenses (including, but not limited
to, attorneys' fees and court costs), charges, and any other
liabilities actually and reasonably incurred by an Indemnified
Individual with respect to any Claim, either before or after
final disposition of the Claim.
SECTION 2. INDEMNIFICATION FOR THIRD PARTY CLAIMS.
To the fullest extent authorized or permitted by law, all Shareholders
hereby determine that the Corporation shall indemnify and save harmless any and
all Indemnified Individuals from and against all Liabilities arising or
resulting from any Claim (other than a Claim by or in the right of the
Corporation) under which the Indemnified Individual is a party or participant
because of actions or omissions of the Corporation or of any Shareholder,
Director, Officer, employee, agent or other person acting in any capacity at the
request of or on behalf of the Corporation.
SECTION 3. INDEMNIFICATION FOR CLAIMS BY OR THROUGH THE CORPORATION.
To the fullest extent authorized or permitted by law, all Shareholders
hereby determine that the Corporation shall indemnify and save harmless any and
all Indemnified Individuals from and against all Liabilities arising or
resulting from any Claim by or in the right of the Corporation, under which the
Indemnified Individual is a party or participant because of actions or omissions
of the Corporation or of any Shareholder, Director, Officer, employee, agent or
other person acting in any capacity at the request of or on behalf of the
Corporation.
SECTION 4. RELEASE FROM LIABILITY AND CONTRIBUTION.
To the fullest extent authorized or permitted by law, no Indemnified
Individual shall be liable to the Corporation or to any other person and no
Claim shall be maintained against any Indemnified Individual by the Corporation
(or, for the Corporation's benefit, by any other Shareholder) because of any
action or omission of such Indemnified Individual in any capacity at the request
of or on behalf of the Corporation. To the fullest extent authorized or
permitted by law, no Indemnified Individual shall be responsible for or be
required to contribute to the payment of any Liability incurred by the
Corporation or by any other Indemnified Individual because of the actions or
omissions of any Indemnified Individual serving in any capacity at the request
of or on behalf of the Corporation.
SECTION 5. SUBROGATION.
To the extent of any payment by the Corporation under this Article, the
Corporation shall be subrogated to all the Indemnified Individual's rights of
recovery from any other person or entity and, as a condition precedent to any
indemnification or other rights under this Article, such Indemnified Individual
shall execute all reasonable documents and take all reasonable actions requested
by the Corporation to implement the Corporation's right of subrogation.
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SECTION 6. INSURANCE AND SIMILAR PROTECTION.
Whether or not the indemnification, release and other provisions of Section
2, Section 3 or Section 4 apply, the Corporation may purchase and maintain
insurance upon and/or furnish similar protection (including, but not limited to:
trust funds, letters of credit and self-insurance) for any Indemnified
Individual to cover any Liability such Indemnified Individual might incur from
the exercise of the Indemnified Individual's duties for the Corporation or from
such Indemnified Individual's capacity as an agent or representative of the
Corporation.
SECTION 7. OTHER RIGHTS.
The provisions of this Article shall be in addition to and shall not
exclude or limit any rights or benefits to which any Indemnified Individual is
or may be otherwise entitled: (a) as a matter of law or statute; (b) by the
Articles of Incorporation, Regulations or any bylaws; (c) by any agreement; (d)
by the vote of Shareholders or Directors; or (e) otherwise.
SECTION 8. CONDITIONS.
As a condition precedent to the indemnification, release and/or performance
of any other obligation of the Corporation under this Article, the Indemnified
Individual must first: (a) promptly notify the President or Secretary of the
Corporation of any actual or potential Claim; and (b) authorize and permit the
Corporation, in its sole discretion, to choose any legal council to defend and
otherwise handle the Claim and all proceedings and matters related thereto
(including, but not limited to, any counter-claims, cross-claims and defenses);
and (c) permit the Corporation to assume total, complete and exclusive control
of the Claim and all proceedings and matters related thereto (including, but not
limited to, any counter-claims, cross-claims and defenses).
ARTICLE VII
SHARES
SECTION 1. CERTIFICATES AND SHARE RECORDS.
a. Certificates (herein called "Certificates" or "Share
Certificates") evidencing ownership of Shares shall be issued and registered (on
the Corporation's Share records) to the lawful owner or holder of such Shares
upon full payment therefor. All Certificates shall contain such signatures and
information as required by this Code and Ohio law and shall be of such tenor and
design as the Board periodically determines.
b. The Secretary of the Corporation shall maintain (or cause to be
maintained) a record of all Share Certificates, the registered owner or holder
thereof, the date of issuance and cancellation and any other information the
Board periodically requires.
SECTION 2. LOST, STOLEN OR DESTROYED SHARE CERTIFICATES.
The Board may issue new Share Certificates to replace lost, stolen or
destroyed Certificates. In its sole discretion, the Board may first require the
registered Shareholder to
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indemnify the Corporation and/or to furnish a bond to the Corporation from such
sureties, for such amount, and with such terms and conditions as the Board
determines to protect the Corporation, its Shareholders, Directors, Officers,
and/or any other entity or person from injury or damage by issuance of a new
Share Certificate.
SECTION 3. CANCELLATION OF SHARE CERTIFICATES.
In its sole discretion, the Board shall determine whenever any outstanding
Share Certificates shall be cancelled and exchanged for other Share Certificates
and shall order and require the holders of such outstanding Share Certificates
to surrender them for such purposes. Until compliance with the Board's order,
all rights of the holder (as a Shareholder) of any such Share Certificates shall
be suspended with respect to the Share(s) represented thereby.
SECTION 4. TRANSFER OF SHARES.
a. Subject to Section 5 of this Article VII, Shares may be
transferred on the Corporation's Share records by the registered holder, by the
Shareholder's legally empowered attorney, or by the Shareholder's legal
representative upon surrender and cancellation of the Share Certificates with
duly executed assignment and power of transfer endorsed thereon (or attached
thereto) and with such proof of signatures as the Board requires.
b. After the Board fixes a Record Date for any Shareholder Meeting,
for the payment of a dividend or for the exercise of any Shareholder rights, no
Shares shall be transferred on the Corporation's Share records until immediately
after the occurrence of such event.
SECTION 5. RESTRICTIONS UPON THE ALIENATION AND TRANSFER OF SHARES.
a. No Shares shall be sold, assigned, pledged, disposed of, or
otherwise encumbered or transferred (whether by reason of death, sale, gift,
assignment, order of court, any judicial process, or otherwise) unless said
Shares are offered: first, to the Corporation for redemption, by tender to the
Board; and second, to the other then-existing Shareholders of the Corporation,
in proportion to the number of Shares then owned by such other Shareholders who
desire to accept the offer. The price per Share shall be fixed by market-value
appraisal as follows: one appraiser appointed by the offerees, one appraiser
appointed by the offeror, and a third appraiser selected by the above two
appraisers; provided, however, that no such appraisers need be appointed or
chosen if the offeror and the offeree(s) mutually agree upon the purchase price
of the Shares. Each offeree, as above-designated, shall have thirty (30) days in
which to accept said offer; if such offeree does not accept said offer within
thirty (30) days, the offeree shall be deemed to have rejected the offer.
b. The foregoing restrictions and limitations shall be imprinted on
all Share Certificates of the Corporation but may be modified, nullified or
superseded pursuant to written agreement(s) by all the Shareholders or in
accordance with the Articles of Incorporation.
c. As to any particular Shareholder, the foregoing restrictions and
limitations shall be superseded by the terms and conditions of any Stock
Redemption Agreement or similar
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Agreement entered into by the Corporation and such Shareholder to the extent the
terms and conditions of such Stock Redemption or similar Agreement are
inconsistent herewith.
d. No Shares shall be issued, sold, offered for sale, hypothecated,
pledged, assigned, disposed of or otherwise transferred (whether by reason of
death, sale, gift, assignment, order of court, any judicial process or
otherwise) unless: (i) such Shares have been duly registered under the
Securities Act of 1933, as amended, pursuant to an effective registration
statement contemplating the transaction or transactions in which the Shares are
to be sold, offered for sale, hypothecated, pledged, assigned, disposed of, or
otherwise transferred; or (ii) both of the following conditions are satisfied:
(1) During the period in which securities that are part of an
issue are being offered and sold by the Corporation, and for
a period of nine (9) months from the date of the
Corporation's last sale of such securities, all resales of
any part of the Shares of the issue, by any persons, shall
be made only to persons resident within the State of Ohio;
and
(2) The Corporation has received the written opinion of its
counsel to the effect that the sale, offer for sale,
hypothecation, assignment, transfer, or other proposed
disposition of the Shares may be accomplished without such
registration under the Securities Act of 1933.
e. Certificates for all the Corporation's issued Shares shall bear a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, OFFERED FOR SALE, HYPOTHECATED, ASSIGNED, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS (A) SUCH SECURITIES ARE REGISTERED
UNDER SAID ACT; OR (B) BOTH OF THE FOLLOWING CONDITIONS ARE
SATISFIED: (i) DURING THE PERIOD IN WHICH AN ISSUE (OF WHICH THESE
SECURITIES ARE A PART) IS BEING OFFERED AND SOLD BY THE
CORPORATION AND FOR A PERIOD OF NINE (9) MONTHS FROM THE DATE OF
THE CORPORATION'S LAST SALE OF SUCH ISSUE, ALL RESALES OF ANY PART
OF THESE SECURITIES BY ANY PERSON SHALL BE MADE ONLY TO PERSONS
RESIDENT WITHIN THE STATE OF OHIO, AND (ii) THE CORPORATION
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
PROPOSED SALE OR OFFER OR OTHER DISPOSITION DOES NOT REQUIRE
REGISTRATION OF SUCH SECURITIES UNDER SAID ACT.
-15-
<PAGE> 16
ARTICLE VIII
OTHER INSTRUMENTS
SECTION 1. PRIOR INSTRUMENTS.
This Code supersedes and nullifies any and all prior codes of regulations,
constitutions, bylaws and similar instruments previously adopted by the
Shareholders and/or the Board.
SECTION 2. CONFLICTS OF INSTRUMENTS.
In the event of a conflict between this Code and any other instrument,
bylaw, rule, regulation, document or policy of the Corporation, these
Regulations shall be superior to any such other instrument, bylaw, rule,
document, regulation and policy of the Corporation (except as expressly stated
herein), and the Articles of Incorporation shall be superior to this Code.
SECTION 3. LEGEND ON SHARE CERTIFICATES.
A legend referring to the restrictions and limitations designated in these
Regulations shall be imprinted on all Share Certificates.
ARTICLE IX
CLOSE CORPORATION AGREEMENT
SECTION 1. QUALIFICATION AS CLOSE CORPORATION AGREEMENT.
To the extent necessary to make lawful this Code (or any provision hereof)
under the laws of the State of Ohio, these Regulations are intended to be
governed by Section 1701.591 of the Ohio Revised Code and to qualify thereunder
as a Close Corporation Agreement.
SECTION 2. OTHER CLOSE CORPORATION AGREEMENTS.
The terms and conditions of any other document(s) which qualifies as a
close corporation agreement under Section 1701.591 of the Ohio Revised Code and
which pertains to the Corporation shall supersede any and all conflicting
provisions of these Regulations, irrespective of whether such other document(s)
currently exist or are hereafter created.
SECTION 3. LEGEND ON SHARE CERTIFICATES.
A legend disclosing the existence of this Close Corporation Agreement shall
be noted on the face or back of all Share Certificates.
-16-
<PAGE> 17
ARTICLE X
AMENDMENTS AND MISCELLANEOUS
SECTION 1. AMENDMENTS.
a. The Shareholders may repeal or amend this Code or adopt an Amended
and Restated Code: (i) at any Shareholder Meeting (with or without previous
notice of such amendment, repeal or adoption), by the affirmative vote of at
least two-thirds (2/3) of the registered Shares represented in person or by
proxy at such Meeting, or (ii) without a meeting, by the written consent of the
registered holders of all the Shares.
b. The Secretary of the Corporation (or any other Officer) shall
forthwith mail a copy of the Amendment to the Code or the Amended Code to each
Shareholder.
SECTION 2. MISCELLANEOUS.
a. When acting on the Corporation's behalf, no Shareholder, Director,
Officer, employee, or other agent of the Corporation shall discriminate against
any person because of race, religion, color, creed, sex, national origin, or
handicap.
b. If any provision or Article of these Regulations is ever
judicially determined to be invalid or unenforceable, such determination shall
not affect the validity or enforceability of any other provision or Article of
this Code.
August 16, 1991
-17-
<PAGE> 1
[THE STATE OF TEXAS LOGO]
EXHIBIT 3.39
FILED
In the Office of the
OFFICE OF THE SECRETARY OF STATE Secretary of State of Texas
CORPORATIONS SECTION
P.O. BOX 13697 JAN 10 2000
AUSTIN, TEXAS 78711-3697
CORPORATIONS SECTION
================================================================================
CERTIFICATE OF LIMITED PARTNERSHIP
1. The name of the limited partnership is IRWIN ACQUISITION, L.P.
------------------------------------
----------------------------------------------------------------------------
2. The street address of its proposed registered office in Texas is (a P.O. Box
is not sufficient)
c/o C T Corporation System, 350 N St Paul Street, Dallas, Texas 75201
----------------------------------------------------------------------------
----------------------------------------------------------------------------
and the name of its proposed registered agent in Texas at such address is
---
C T Corporation System
----------------------------------------------------------------------------
3. The address of the principal office in the United States where records of
the partnership are to be kept or made available is
-------------------------
1401 FORUM WAY, SUITE 400, WEST PALM BEACH, FL 33401
----------------------------------------------------------------------------
4. The name, the mailing address, and the street address of the business or
residence of each general partner is as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS STREET ADDRESS
(include city, state, (include city, state,
zip code) zip code)
<S> <C> <C>
SCHATZ UNDERGROUND CABLE, INC. 829 PARK LAMAR, DR. SAME
------------------------------ -------------------------- -------------------------
VILLA RIDGE, MO 63089
------------------------------ -------------------------- -------------------------
------------------------------ -------------------------- -------------------------
</TABLE>
DATE SIGNED: 1/10/00 SCHATZ UNDERGROUND CABLE, INC.
---------
BY: /s/ WILLIAM J. MERCURIO
--------------------------
EXECUTIVE VICE PRESIDENT
/s/ WILLIAM J. MERCURIO
----------------------------
GENERAL PARTNER(S)
<PAGE> 2
FILED
In the Office of the
Secretary of State of Texas
FEB 02 2000
Corporation Section
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF LIMITED PARTNERSHIP
OF
IRWIN ACQUISITION, L.P.
JANUARY 31, 2000
Pursuant to the provisions of Section 2.02 of the Texas Revised Limited
Partnership Act, Irwin Acquisition, L.P., a Texas limited partnership (the
"Partnership"), whose certificate was filed with the Texas Secretary of State
of January 10, 2000, adopts the following Certificate of Amendment to its
Certificate of Limited Partnership.
FIRST: The name of the limited partnership is IRWIN ACQUISITION, L.P.
SECOND: Amendment(s):
ARTICLE 1. shall be amended in its entirety to read as follows:
The name of the limited partnership is
Irwin Telecom Services, L.P.
THIRD: This Certificate of Amendment shall be effective at the time of its
filing with the Texas Secretary of State.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
<PAGE> 3
IN WITNESS WHEREOF, the undersigned officer of the General Partner of the
Partnership has executed this Certificate of Amendment on the date first written
above.
IRWIN ACQUISITION, L.P.,
By its: General Partner
SCHATZ UNDERGROUND CABLE, INC.
By: /s/ William J. Mercurio
-------------------------------
William J. Mercurio
Executive Vice President
<PAGE> 1
EXHIBIT 3.40
- --------------------------------------------------------------------------------
AGREEMENT OF LIMITED PARTNERSHIP
OF
IRWIN TELECOM SERVICES, L.P.
- --------------------------------------------------------------------------------
JANUARY 10, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. FORMATION .................................................................. 1
1.1 Formation ............................................................ 1
2. NAME AND OFFICE ............................................................ 1
2.1 Name ................................................................. 1
2.2 Fictitious Name Certificates ......................................... 1
2.3 Principal Office ..................................................... 1
3. PURPOSES AND TERMS ......................................................... 1
3.1 Purposes ............................................................. 1
3.2 Partnership Powers ................................................... 2
3.3 Term ................................................................. 2
4. CAPITAL .....................................................................2
4.1 Capital Contributions of the Partners ................................ 2
4.2 Loans ................................................................ 2
4.3 Limited Partner's Liability .......................................... 2
4.4 No Interest on Capital Contributions ................................. 2
4.5 Withdrawal of Capital ................................................ 3
4.6 Capital Account ...................................................... 3
5. ACCOUNTING ................................................................. 3
5.1 Books and Records .................................................... 3
5.2 Fiscal Year .......................................................... 3
5.3 Reports .............................................................. 3
5.4 Tax Returns .......................................................... 4
6. BANK ACCOUNTS .............................................................. 4
6.1 Bank Accounts ........................................................ 4
7. ALLOCATION OF NET INCOME AND NET LOSS ...................................... 4
7.1 Net Income ........................................................... 4
7.2 Net Loss ............................................................. 4
7.3 Allocations in Event of Transfer, Admission of New Partner, Etc. ..... 5
8. TAX ELECTIONS .............................................................. 5
8.1 Tax Elections ........................................................ 5
9. DISTRIBUTIONS .............................................................. 5
9.1 Cash Distributions ................................................... 5
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C>
9.2 Property Distributions ............................................... 5
10. MANAGEMENT ................................................................ 6
10.1 Management .......................................................... 6
10.2 Standard of Care of General Partner, Indemnification ................ 6
10.3 Compensation for Services ........................................... 6
10.4 Other Activities .................................................... 7
10.5 Reimbursement of Expenses of General Partner ........................ 7
11. DISSOLUTION ............................................................... 7
11.1 Dissolution ......................................................... 7
11.2 Sale of Assets Upon Dissolution ..................................... 8
11.3 Distributions Upon Dissolution ...................................... 8
11.4 Liquidating Trustee ................................................. 8
11.5 Liquidation of a Partner's Interest ................................. 8
12. WITHDRAWAL, ASSIGNMENT AND ADDITION OF PARTNERS ........................... 9
12.1 Assignment of Limited Partner's Interest ............................ 9
12.2 Substitute Limited Partner .......................................... 9
12.3 Death, Incompetency; Etc. of a Limited Partner ...................... 9
12.4 Assignment of General Partner's Interest ............................ 9
12.5 Admission of New Partners ........................................... 9
12.6 Merger .............................................................. 9
13. POWER OF ATTORNEY .........................................................10
13.1 Power of Attorney ...................................................10
14. TAX MATTERS PARTNER .......................................................11
14.1 Tax Matters Partner .................................................11
15. GENERAL ...................................................................11
15.1 Notices .............................................................11
15.2 Amendment ...........................................................12
15.3 Captions; Section References ........................................12
15.4 Number and Gender ...................................................12
15.5 Severability ........................................................12
15.6 Arbitration .........................................................12
15.7 Binding Agreement ...................................................13
15.8 Applicable Law ......................................................13
15.9 Entire Agreement ....................................................13
15.10 Counterparts .......................................................13
15.11 No Right of Partition ..............................................13
</TABLE>
(ii)
<PAGE> 4
GLOSSARY OF DEFINED TERMS
<TABLE>
<CAPTION>
Defined Term Section
<S> <C>
Act ................................................................. 1.1
Affiliate ........................................................... 10.4
Agreement ........................................................... Preamble
Capital Account ..................................................... 4.6
Contributed Assets .................................................. 7.1(e)
Fiscal Year ......................................................... 5.2
General Partner ..................................................... Preamble
Limited Partner ..................................................... Preamble
Liquidating Trustee ................................................. 11.4
Partner ............................................................. Preamble
Partners ............................................................ Preamble
Partnership ......................................................... Recitals
Percentage Interests ................................................ 4.1(a)
</TABLE>
(iii)
<PAGE> 5
AGREEMENT OF LIMITED PARTNERSHIP
OF
IRWIN TELECOM SERVICES, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP ("Agreement") is entered into and
effective as of the 10th day of January, 2000, by and between (i) Schatz
Underground Cable, Inc., a Missouri corporation, as the general partner
("General Partner"), and (ii) North American Tel-Com Group, Inc., a Florida
corporation, as the limited partner ("Limited Partner"). The General Partner and
the Limited Partner are hereinafter collectively referred to as "Partners" and
individually as a "Partner." For purposes of this Agreement, the terms "General
Partner," "Limited Partner" and "Partner" include all persons then acting in
such capacities in accordance with the terms of this Agreement.
1. FORMATION.
1.1 FORMATION. The Partners do hereby form a limited partnership
pursuant to the visions of the Texas Revised Limited Partnership Act ("Act").
2. NAME AND OFFICE.
2.1 NAME. The name of the Partnership shall be Irwin Acquisition, L.P.
The General Partner shall have the right and authority to operate the business
of the Partnership under such other name as may be appropriate to the extent
required in any jurisdiction in which the Partnership operates.
2.2 FICTITIOUS NAME CERTIFICATES. The Partnership shall file such
certificates of fictitious name as shall be required by law.
2.3 PRINCIPAL OFFICE. The principal office of the Partnership shall be
at 1401 Forum Way Suite 400, West Palm Beach, Florida 33401, or at such other
place as shall be designated by the General Partner from time to time by notice
to the Partners. The General Partner shall notify the Partners of the
establishment of any office of the Partnership in addition to, or in replacement
of, the principal office named herein or any replacement thereof. The books of
the Partnership shall be maintained at such principal place of business or such
other place that the General Partner shall deem appropriate. The Partnership
shall at all times designate an agent for service of process in Texas in
accordance with the provisions of the Act.
3. PURPOSES AND TERMS.
3.1 PURPOSES. The purposes of the Partnership are as follows:
(a) To engage in such other lawful activity as is unanimously
agreed to by the Partners.
<PAGE> 6
(b) To do all other things necessary or desirable in
connection with the foregoing, or otherwise contemplated in this Agreement.
3.2 PARTNERSHIP POWERS. In furtherance of the purposes of the
Partnership as set forth in Section 3.1, the Partnership shall have the power to
do any and all things whatsoever necessary, appropriate or advisable as
determined by the General Partner in connection with such purposes, or as
otherwise contemplated in this Agreement. The General Partner shall not,
however, be entitled to engage in any business other than as set forth in
Section 3.1, nor take any action not contemplated in this Agreement.
3.3 TERM. The term of the Partnership shall commence as of the date
hereof and shall continue until dissolved in accordance with Section 11.
4. CAPITAL.
4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS.
(a) The Limited Partner shall have a Percentage Interest of 99
percent. The General Partner shall have a Percentage Interest of 1 percent. The
name, address and Percentage Interest of each Partner are set forth on Exhibit
"A" hereto.
(b) The General Partner and the Limited Partner shall each
make Capital Contributions to the Partnership in proportion to their respective
Percentage Interests. Upon the request of the General Partner, each Partner
shall make initial Capital Contributions of those assets subject to liabilities
set forth in Exhibit "B" hereto. A Partner shall not be required to make
additional Capital Contributions to the Partnership.
4.2 LOANS. If the partnership has a temporary need for funds, the
Partnership may borrow such funds from one or more of its Partners on such terms
and conditions as shall be agreed to by the General Partner and such Partners.
4.3 LIMITED PARTNER'S LIABILITY. Except as otherwise provided in the
Act, a Limited Partner shall not be liable for any debts, obligations or losses
of the Partnership in excess of the Limited Partner's contribution to the
capital of the Partnership and the Limited Partner's share of the undistributed
net profits of the Partnership. Furthermore, a Limited Partner shall not be
required to contribute any capital to the Partnership.
4.4 No INTEREST ON CAPITAL CONTRIBUTIONS. No Partner shall be entitled
to interest on any capital contributions made to the Partnership.
4.5 WITHDRAWAL OF CAPITAL. No Partner shall be entitled to withdraw any
part of their capital contribution to the Partnership, or receive any
distributions from the Partnership, except provided in Sections 9 and 11. No
Partner shall be entitled to demand or receive any property from the Partnership
other than cash, except as otherwise expressly provided for herein.
2
<PAGE> 7
4.6 CAPITAL ACCOUNT. There shall be established on the books of the
Partnership a capital account ("Capital Account") for each Partner. The Capital
Account of each Partner shall be credited with the fair market value of each
Partner's Capital Contribution. The Capital Account of each Partner shall be
maintained and adjusted by the General Partner in a manner to reflect the
Partner's economic arrangement as set forth in this Agreement. The Capital
Accounts may be adjusted and maintained in the manner specified in regulations
promulgated by the United States Treasury Department, which would apply to a
partnership subject to the provisions of subchapter K of chapter 1 of the
Internal Revenue Code of 1986, as amended. If a Partner transfers all or any
portion of the Partner's Partnership Interest in accordance with the terms of
this Agreement, the Capital Account of the transferor shall become the Capital
Account of the transferee to the extent of the Partnership Interest so
transferred.
5. ACCOUNTING.
5.1 BOOKS AND RECORDS. The General Partner shall maintain full and
accurate books of the Partnership at the Partnership's principal place of
business, or such other place as the General Partner shall deem appropriate,
showing all receipts and expenditures, assets and liabilities, net income and
loss, and all other records necessary for recording the Partnership's business
and affairs, including those sufficient to record the allocations and
distributions provided for in Sections 7, 9 and 11.
5.2 FISCAL YEAR. The fiscal year of the Partnership shall be the
calendar year ("Fiscal Year").
5.3 REPORTS.
(a) Within 30 days after such information is provided to the
General Partner by the Partnership's accountant with respect to each Fiscal Year
of the Partnership, the General Partner shall furnish to each person who was a
Partner at any time during such Fiscal Year all the information relating to the
Partnership which shall be necessary for the preparation by each such person of
their Federal and state income or other tax returns.
(b) The Partnership shall not be obligated to deliver or mail
a copy of the Partnership's Certificate of Limited Partnership, nor any
amendment or cancellation thereof, to the Limited Partners.
5.4 TAX RETURNS. It shall be the duty of the General Partner to
prepare, or cause to be prepared, and timely file, all Federal, state and local
income tax returns and information returns, if any, which the Partnership is
required to file. All expenses incurred in connection with such tax returns and
information returns, as well as for the reports referred to in Section 5.3,
shall be expenses of the Partnership.
6. BANK ACCOUNTS.
6.1 BANK ACCOUNTS. All funds of the Partnership shall be deposited in
its name into such
3
<PAGE> 8
checking, savings and/or money market accounts or time certificates as shall be
designated by the General Partner. Withdrawals therefrom shall be made upon such
signature or signatures as the General Partner may designate. Partnership funds
shall not be commingled with those of any other person or entity.
7. ALLOCATION OF NET INCOME AND NET LOSS.
7.1 NET INCOME.
(a) Except as otherwise provided herein, the net income of the
Partnership for each Fiscal Year shall be allocated to the Partners in
accordance with their respective Percentage Interests.
(b) If net losses are allocated to a Partner in accordance
with the provisions of Section 7.2(b), then notwithstanding the provisions of
Section 7.1(a), net income thereafter recognized by the Partnership shall be
allocated to the Partner until such time as the net income allocated to the
Partner pursuant to this Section 7.1(b) equals the net losses theretofore
allocated to the Partner pursuant to Section 7.2(b).
7.2 NET LOSS.
(a) Except as otherwise provided herein, the net loss of the
Partnership for each Fiscal Year shall be allocated to the Partners in
accordance with their respective Percentage Interests.
(b) Notwithstanding the provisions of Section 7.2(a), net
losses shall be allocated to those Partners which bear the economic risk of loss
for such net losses, if any Partner bears such economic risk of loss, when the
allocations under Section 7.2(a) would otherwise create or increase a deficit
balance in the Capital Accounts of the Partners.
(c) It is the overall intention of the Partners that all
income, losses and distributions be allocated and made to the Partners, and the
Capital Accounts of the Partners be, in proportion to their respective
Percentage Interests. Except as provided in Section 7.1(b) or 7.2(b), the
General Partner shall interpret this Agreement consistent with that overall
intention.
7.3 ALLOCATIONS IN EVENT OF TRANSFER, ADMISSION OF NEW PARTNER, ETC. In
the event of (i) the transfer of all or any part of a Partner's Partnership
Interest (in accordance with the provisions of this Agreement), or (ii) the
admission of a new Partner at any time other than at the end of a Fiscal Year,
the transferring Partner's and new Partner's shares of the Partnership's income,
gain, loss, deductions and credits allocable to such interest, as computed both
for accounting purposes and for income tax purposes, shall be allocated between
the transferor Partner and the transferee Partner (or Partners), or the new
Partner and the other Partners, as the case may be, in the same ratio as the
number of days in such Fiscal Year before and after the date of such transfer or
admission; provided, however, that the General Partner shall have the option to
treat the periods before and after the date of such transfer, admission or
disproportionate capital contributions as separate Fiscal Years and allocate the
Partnership's net income, gain, net loss, deductions and credits
4
<PAGE> 9
for each of such deemed separate Fiscal Years in accordance with the Partners'
respective interests in the Partnership for such deemed separate Fiscal Years.
8. TAX ELECTIONS.
8.1 TAX ELECTIONS. The General Partner shall have the authority to make
any and all tax elections to be made by the Partnership for Federal, state,
local, or foreign tax purposes. Each Partner agrees to execute any and all
necessary forms and other documents necessary to make any such tax election.
9. DISTRIBUTIONS.
9.1 CASH DISTRIBUTIONS. The Partnership's cash available for
distribution (as determined by the General Partner) shall be distributed at such
time or times as the General Partner shall determine. All such distributions
shall be made to the Partners in accordance with their respective Percentage
Interests as of the date of distribution.
9.2 PROPERTY DISTRIBUTIONS. If any property of the Partnership, other
than cash, is distributed by the Partnership to a Partner (in connection with
the liquidation of the Partnership or otherwise), the fair market value of such
Property shall be used for purposes of determining the amount of such
distribution. The difference, if any, of such fair market value over (or under)
the value at which such property is carried on the books of the Partnership
shall be credited or charged to the Capital Accounts of the Partners in
accordance with the ratio in which the Partners share in the gain and loss of
the Partnership pursuant to Sections 7.1 and 7.2. The fair market value of the
property distributed shall be agreed to by the General Partner (Liquidating
Trustee in the case of a liquidating distribution) and the distributee Partner
in good faith. If any such property is distributed other than in exchange for a
Partnership Interest, it shall be distributed in the same manner as a cash
distribution.
10. MANAGEMENT.
10.1 MANAGEMENT.
(a) Control and management of the business of the Partnership
as described in Section 3 shall be vested exclusively in the General Partner
during the term of the Partnership, including its liquidation and dissolution.
Except as specifically provided for herein, the Limited Partners shall not have
any voice in, or take part in, the management of the Partnership. The Limited
Partners shall not have any authority to act for, or to assume any obligations
or responsibilities on behalf of, any other Partner or the Partnership.
(b) The General Partner shall have the right, power and
authority on behalf of the Partnership and in its name, without the consent of
the Limited Partners, to exercise all of the rights, powers and authority which
may be possessed by a general partner pursuant to the Act including, but not
limited to, the sale of all, or substantially all, of the assets of the
Partnership, the incurring
5
<PAGE> 10
of indebtedness and the granting of mortgages or other security interests to
secure such indebtedness.
10.2 STANDARD OF CARE OF GENERAL PARTNER, INDEMNIFICATION.
(a) The General Partner, its officers, directors, employees
and owners shall not be liable, responsible or accountable in damages to any
Partner, or the Partnership, for any act or omission on behalf of the
Partnership performed or omitted by them in good faith and in a manner
reasonably believed by them to be within the scope of the authority granted to
the General Partner by this Agreement and in the best interests of the
Partnership, unless they have been guilty of gross negligence or willful
misconduct.
(b) To the full extent permitted by the Act, the Partnership
shall indemnify the General Partner, its officers, directors and members, for,
and hold the General Partner, its officers, directors and members, harmless
from, any loss or damage incurred by them by reason of any act or omission so
performed or omitted by them (and not involving gross negligence or willful
misconduct). To the full extent authorized or permitted by the Act, the
Partnership shall pay or reimburse reasonable expenses (including reasonable
attorneys' fees) incurred by the General Partner, its officers, directors and
member, who are a party to a proceeding in advance of final disposition of such
proceeding. The Partnership may purchase and maintain insurance on behalf of the
General Partner, its officers, directors, employees and owners against any
liability asserted against or incurred by them as a result of being the General
Partner, or officers, directors or members of the General Partner, whether or
not the Partnership would have the power to indemnify such person against the
same liability under the provisions of this Section 10.2(b) or the Act.
10.3 COMPENSATION FOR SERVICES. The General Partner shall not be
entitled to compensation for its services as General Partner unless agreed to by
the Limited Partner. The General Partner shall, however, participate in the
Partnership's profit and loss, shall receive distributions pursuant to Sections
9 and 11 and shall be entitled to reimbursement from the Partnership for
expenses incurred on behalf of the Partnership as provided in Section 10.5.
10.4 OTHER ACTIVITIES. The General Partner shall devote such of the
General Partner's time as the General Partner deems necessary to the affairs of
the Partnership's business. The General Partner and the General Partner's
Affiliates may engage in, or possess an interest in, other business ventures of
any nature and description, independently or with others, whether or not such
activities are competitive with those of the Partnership. Neither the
Partnership, nor any Partner, shall have any rights by virtue of this Agreement
in and to such independent ventures, or to the income or profits derived
therefrom. The General Partner and the General Partner's Affiliates shall not be
obligated to present any particular business opportunity of a character which,
if presented to the Partnership, could be taken by the Partnership and the
General Partner and the General Partner's Affiliates shall have the right to
take for their own account, or to recommend to others, any such particular
business opportunity. For purposes of this Agreement, the term "Affiliate" shall
mean any person, corporation, partnership, trust, limited liability company or
entity controlling (directly or indirectly), controlled by, or under common
control with, a General Partner.
6
<PAGE> 11
10.5 REIMBURSEMENT OF EXPENSES OF GENERAL PARTNER. Regardless of
whether any distributions are made to the Partners, the Partnership shall
reimburse the General Partner, at the General Partner's cost, for the direct
expenses which the General Partner incurs in performing services on behalf of
the Partnership, including, without limitation, costs of (i) accounting,
statistical or bookkeeping services, (ii) computing or accounting equipment and
(iii) travel, telephone, postage, legal, accounting and other expenses relating
to the operation of the business of the Partnership. Notwithstanding Section
10.3 or this Section 10.5 to the contrary, the Partnership may pay Affiliates of
the General Partner for services or the use of property provided such payments
are no less favorable to the Partnership than those that would be made to a
person that is not an Affiliate of the General Partner.
11. DISSOLUTION.
11.1 DISSOLUTION.
(a) Except as otherwise provided in the Act, the Partnership
shall dissolve upon, but not before, the first to occur of the following:
(1) The occurrence of an event of withdrawal with
respect to the General Partner unless within 90 days after the
occurrence of any such event the Limited Partner selects a successor
general partner to replace the General Partner and agrees to continue
the business of the Partnership; or
(2) The unanimous decision of the Partners to
dissolve the Partnership.
(b) Dissolution of the Partnership shall be effective upon the
date on which the event giving rise to the dissolution occurs, but the
Partnership shall not terminate until the Partnership's Certificate of Limited
Partnership has been canceled and the assets of the Partnership shall have been
distributed as provided in Section 11.3. Notwithstanding dissolution of the
Partnership, prior to the liquidation and termination of the Partnership, the
business of the Partnership and the affairs of the Partners, as such, shall
continue to be governed by this Agreement.
(c) The Partnership shall not dissolve upon the death,
bankruptcy, adjudication of incompetency or insanity, withdrawal from or
assignment of, the interest in the Partnership of a Limited Partner. In any such
event, the General Partner shall have the right and duty to continue the
business of the Partnership under the terms of this Agreement.
11.2 SALE OF ASSETS UPON DISSOLUTION. Following the occurrence of any
of the events set forth in Section 11.1(a), the Liquidating Trustee (referred to
in Section 11.4) shall determine whether the assets of the Partnership are to be
sold or whether all or any part of such assets are to be distributed to the
Partners in kind in dissolution of the Partnership.
11.3 DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Partnership, the properties of the Partnership to be sold shall be liquidated in
orderly fashion and the proceeds thereof and the property to be distributed in
kind shall be distributed on or before the later to occur of (i) the
7
<PAGE> 12
close of the Partnership's taxable year, or (ii) 90 days following the date of
such dissolution, as follows:
(a) First, to the payment and discharge of all of the
Partnership's debts and liabilities (including to Partners in accordance with
the priorities established by law), to the necessary expenses of liquidation and
to the establishment of any cash reserves which the Liquidating Trustee
determines to create in the Liquidating Trustee's sole discretion for unmatured
and/or contingent liabilities or obligations of the Partnership.
(b) Second, to the Partners in accordance with their
respective Percentage Interests.
11.4 LIQUIDATING TRUSTEE. Upon the occurrence of any of the events set
forth in Section 11.1(a), the General Partner, if there is any at such time,
shall constitute the Liquidating Trustee for the Partnership. If there is no
General Partner at such time, then the Limited Partner shall select one or more
individuals to act as Liquidating Trustee for the Partnership. The Liquidating
Trustee, whether or not the General Partner, shall be subject to the same
standards, and be entitled to the same indemnification, as the General Partner
pursuant to Section 10.2.
11.5 LIQUIDATION OF A PARTNER'S INTEREST. If a Partner's Partnership
Interest is to be liquidated by agreement between the Partnership and such
Partner (the Partnership being under no obligation to do so), the Partner shall
be entitled to receive in liquidation an amount equal to the amount determined
by any such agreement. Net income or net loss shall be allocated to the Partner
whose interest is to be liquidated in accordance with Section 7.3 and the
Capital Accounts of the Partners shall be adjusted by the General Partner to
reflect the liquidation.
12. WITHDRAWAL, ASSIGNMENT, ADDITION OF PARTNERS AND MERGER
12.1 ASSIGNMENT OF LIMITED PARTNER'S INTEREST. A Limited Partner may
not freely sell, assign, transfer, pledge, hypothecate, encumber or otherwise
dispose of its Partnership Interest without the consent of the General Partner
which consent may be withheld in the sole and absolute discretion of the General
Partner.
12.2 SUBSTITUTE LIMITED PARTNER. No assignee of a Limited Partner's
Partnership Interest shall have the right to become a substitute Limited Partner
unless all of the following conditions are satisfied:
(a) except in the case of death or adjudication of
incompetency or insanity, the fully executed and acknowledged written instrument
of assignment has been filed with the Partnership setting forth the intention of
the assignor that the assignee become a substitute Limited Partner in place of
the assignor with respect to the Partnership Interest assigned;
(b) the assignor and assignee execute and acknowledge such
other instruments as the General Partner deems necessary or desirable to effect
such admission, including, but not
8
<PAGE> 13
limited to, the written acceptance and adoption by the assignee of the
provisions of this Agreement; and
(c) the General Partner has consented to the assignment and
substitution, which shall be in the General Partner's sole and absolute
discretion.
12.3 DEATH, INCOMPETENCY, ETC. OF A LIMITED PARTNER. In the event of
the death, bankruptcy or adjudication of incapacity or incompetence of a Limited
Partner, the personal representative, heirs, legatees and devisees of the
Limited Partner, as the case may be, shall have all of the rights of an assignee
of a Limited Partner interest, but shall not become a substitute Limited Partner
unless the provisions of Section 12.2 have been complied with. In all of the
above cases, the successor-in-interest to the Limited Partner shall not have a
right to demand payment with respect to the Partnership Interest.
12.4 ASSIGNMENT OF GENERAL PARTNER'S INTEREST. The General Partner may
not sell, assign, transfer, pledge, hypothecate, encumber or otherwise dispose
of its Partnership Interest, nor withdraw from the Partnership, without the
prior written consent of all of the Limited Partners.
12.5 ADMISSION OF NEW PARTNER. Except as otherwise specifically
provided for herein, no new Partner may be admitted to the Partnership without
the consent of all of the Partners. For purposes of this Section 12.5, a
substitute Limited Partner shall not be considered a "new Partner."
12.6 MERGER. The Partnership may merge with any other limited
partnership or other entity pursuant to the applicable provisions of the Act in
the sole discretion of the General Partner.
13. POWER OF ATTORNEY.
13.1 POWER OF ATTORNEY.
(a) To the extent not inconsistent with the terms of this
Agreement, the Limited Partner, including persons who become Limited Partners or
become subject to the provisions of this Agreement after the date hereof, hereby
irrevocably constitute and appoint the General Partner, with full power of
substitution, their true and lawful attorney-in-fact, with full power and
authority, in such Limited Partner's name, place and stead, to make, execute,
consent to, swear or acknowledge, record and file with respect to the
Partnership, the following:
(1) Any certificate or other instrument which may be
required to be filed by the Partnership or the Partners under the laws
of any state, or any other jurisdiction in which the Partnership is
conducting, or proposes to conduct, business;
(2) Any and all amendments or modifications of the
instruments described in Section 13.1(a)(1);
9
<PAGE> 14
(3) All certificates and other instruments which may
be necessary, required or desirable to effect the dissolution and
termination of the Partnership pursuant to the provisions of this
Agreement;
(4) All such other instruments as such
attorney-in-fact may deem necessary or desirable in order to carry out
the provisions of this Agreement in accordance with its terms.
(b) The Power of Attorney hereby granted by a Limited Partner
to the General Partner is a special power of attorney coupled with an interest
and is irrevocable, and shall survive the death, insanity, incompetency,
bankruptcy or insolvency of the Limited Partner granting it. The Power of
Attorney hereby granted may be exercised on behalf of the Limited Partners by
referencing all of the Limited Partners on whose behalf a document is being
executed, and with a single signature as attorney-in-fact for all of them.
(c) The Limited Partners hereby agree to execute and deliver
to the General Partner, within five days after receipt of the General Partner's
written request therefor, such other and further powers of attorney and other
instruments which the General Partner deems necessary or desirable to comply
with any laws, rules or regulations relating to the formation of the
Partnership, or the conduct of business by the Partnership.
14. TAX MATTERS PARTNER.
14.1 TAX MATTERS PARTNER.
(a) Without limiting the authority of the General Partner
under any other provision of this Agreement, the General Partner shall have the
sole authority to take any and all actions respecting any tax authority with
regard to the determination of any item of income, expense, deduction or credit
of the Partnership or of any tax imposed upon the Partnership.
(b) The General Partner is authorized to incur expenses in
connection with any examination or investigation of the Partnership by any tax
authority and in connection with all subsequent administrative and judicial
proceedings arising out of such examination or investigation. These expenses,
whether paid to third parties or incurred by the General Partner or Affiliates
thereof, are Partnership expenses and will be paid by the Partnership.
(c) The provisions of Section 10.2 shall apply to the duties
of the General Partner under this Section 14.1.
15. GENERAL.
15.1 NOTICES.
(a) All notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and be personally
delivered against a written receipt,
10
<PAGE> 15
delivered to a reputable messenger service (such as Federal Express, DHL
Courier, United Parcel Service, etc.) for overnight delivery, transmitted by
confirmed telephonic facsimile (fax), or transmitted by mail, registered,
express or certified, return receipt requested, postage prepaid, addressed as
follows:
(1) If given to the Partnership, to the Partnership
at its principal office; or
(2) If given to a Partner, to the Partner at the
address set forth in the records of the Partnership.
(b) All notices, demands and requests shall be effective upon
being properly personally delivered, upon being delivered to a reputable
messenger service, upon transmission of a confirmed fax or upon being deposited
in the United States mail in the manner provided in Section 15.1(a). However,
the time period in which a response to any such notice, demand or request must
be given shall commence to run from the date of personal delivery, the date of
delivery by a reputable messenger service, the date on the confirmation of a fax
or the date on the return receipt, as applicable. The Partners shall have the
right, from time to time, during the term of the Partnership, to change their
respective addresses for notices by giving the other Partners written notice
thereof.
15.2 AMENDMENT.
(a) Except as provided in Section 15.2(b), this Agreement may
be modified or amended from time to time only upon the unanimous consent of the
Partners.
(b) This Agreement may be amended from time to time by the
General Partner without the consent of any of the other Partners to cure any
ambiguity, to correct or supplement any provision hereof which may be
inconsistent with any other provision hereof, or to make any other provisions
with respect to matters or questions arising under this Agreement which will not
be inconsistent with the provisions of this Agreement.
15.3 CAPTIONS; SECTION REFERENCES. Section titles or captions contained
in this Agreement are inserted only as a matter of convenience and reference,
and in no way define, limit, extend or describe the scope of this Agreement, or
the intent of any provision hereof. All references herein to Sections shall
refer to Sections of this Agreement unless the context clearly requires
otherwise.
15.4 NUMBER AND GENDER. Unless the context otherwise requires, when
used herein, the singular shall include the plural, the plural shall include the
singular, and all nouns, pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, as the identity of the person or
persons may require.
15.5 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person, entity or circumstances, shall be invalid or
unenforceable to any extent, the remainder of this
11
<PAGE> 16
Agreement, and the application of such provision to other persons, entities or
circumstances, shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
15.6 ARBITRATION. If any dispute shall arise between the Partners as to
their rights or liabilities under this Agreement, the dispute shall be
exclusively determined, and the dispute shall be settled, by arbitration in
accordance with the commercial rules of the American Arbitration Association.
The arbitration shall be held in West Palm Beach, Florida, before a panel of
three arbitrators, each of whom shall be selected from a panel selected by the
American Arbitration Association. Each of the parties to the dispute shall
select one arbitrator and the third arbitrator shall be chosen by the two
arbitrators chosen by the parties (or, if the arbitrators chosen by the parties
are unable to agree upon the third arbitrator, the third arbitrator shall be
selected by the American Arbitration Association). The decision of the
arbitrators shall be final and binding upon the Partners and the Partnership and
judgment thereon may be entered by any court of competent jurisdiction. Each of
the Partners hereby acknowledges that this provision constitutes a waiver of
their right to commence a lawsuit in any jurisdiction with respect to the
matters which are required to be settled by arbitration as provided in this
Section 15.6.
15.7 BINDING AGREEMENT. Except as otherwise herein provided, this
Agreement shall be binding upon, and inure to the benefit of, the parties
hereto, and their executors, administrators, heirs, successors and assigns.
15.8 APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas without regard to its
conflict of laws rules.
15.9 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof. No
variations, modifications or changes hereof shall be binding upon any Partner
unless made in accordance with the provisions of Section 15.2.
15.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all such counterparts shall, for all purposes, constitute one
agreement, binding upon the parties hereto, notwithstanding that all parties are
not signatory to the same counterpart.
15.11 NO RIGHT OF PARTITION. The Partners hereby agree that the
Partnership's properties are not, and will not be, suitable for partition.
Accordingly, each of the Partners hereby irrevocably waives any and all rights
which such Partner may have to maintain an action for partition of any of the
Partnership's properties.
12
<PAGE> 17
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
GENERAL PARTNER:
Schatz Underground Cable, Inc.
By: /s/ WILLIAM J. MERCURIO
----------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
LIMITED PARTNER:
North American Tel-Com Group, Inc.
By: /s/ WILLIAM J. MERCURIO
----------------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer and President
13
<PAGE> 18
EXHIBIT "A"
<TABLE>
<CAPTION>
PARTNER NAME PERCENTAGE
AND ADDRESS INTEREST
<S> <C>
GENERAL PARTNER: 1%
Schatz Underground Cable, Inc.
829 Park Lamar Dr.
Villa Ridge, MO 63089
LIMITED PARTNER: 99%
North American Tel-Com Group, Inc.
1401 Forum Way, Suite 400
West Palm Beach, Florida 33401
</TABLE>
14
<PAGE> 19
EXHIBIT "B"
CONTRIBUTED ASSETS
<TABLE>
<S> <C>
North American Tel-Com Group, Inc. $100
Schatz Underground Cable, Inc. $ 10
</TABLE>
15
<PAGE> 1
EXHIBIT 3.41
CERTIFICATE OF INCORPORATION
OF
IRWIN TELECOM HOLDINGS, INC.
* * * * *
1. The name of the corporation is IRWIN TELECOM HOLDINGS, INC.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at
such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is One Hundred (100) and the par value of each of
such shares is $0.001 amounting in the aggregate to Ten Cents ($0.10).
5. The board of directors is authorized to make, alter or repeal the
by-laws of the corporation. Election of directors need not be by
written ballot.
6. The name and mailing address of the sole incorporator is:
Flora R. Perez, Esq.
c/o Akerman Senterfin & Eidson, P.A.
350 E. Las Olas Blvd., Suite 1600
Ft. Lauderdale, FL 33301
7. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper personal
benefit.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 19th day of January, 2000.
/s/ FLORA R. PEREZ
---------------------------------
Flora R. Perez, Sole Incorporator
<PAGE> 1
EXHIBIT 3.42
BYLAWS
OF
IRWIN TELECOM HOLDINGS, INC.
<PAGE> 2
BYLAWS
OF
IRWIN TELECOM HOLDINGS, INC.
ARTICLE I.
STOCKHOLDERS
SECTION 1.1 PLACE OF MEETINGS. Meetings of stockholders shall be held
at the place, either within or without the State of Delaware, as may be
designated by resolution of the Board of Directors from time to time.
SECTION 1.2 ANNUAL MEETINGS. Annual meetings of stockholders shall be
held at the time and place designated by the Board of Directors of the
corporation, at which time they shall elect a Board of Directors and transact
any other business as may properly be brought before the meeting.
SECTION 1.3 SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors which has been duly designated by the Board
of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
SECTION 1.4 NOTICE OF MEETINGS. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the Certificate of Incorporation of
these Bylaws, the written notice of any meeting shall be given no less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the mail, postage prepaid, directed to the
stockholder at his or her address as it appears on the records of the
corporation.
SECTION 1.5 ADJOURNMENTS. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
SECTION 1.6 QUORUM. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders
1
<PAGE> 3
of all outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum, the
stockholders so present may, by majority vote, adjourn the meeting from time to
time in the manner provided in Section 1.5 of these Bylaws until a quorum shall
attend. Shares of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.
SECTION 1.7 ORGANIZATION. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his or her absence by the Vice
Chairman of the Board, if any, or in his or her absence by the President, or in
his or her absence by a Vice President, or in the absence of the foregoing
persons by a chairman designated by the Board of Directors, or in the absence of
such designation by a chairman chosen at the meeting. The Secretary shall act
as secretary of the meeting, but in his or her absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.
SECTION 1.8 VOTING; PROXIES. Except as otherwise provided by the
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A stockholder may revoke any
proxy which is not irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or another duly executed
proxy bearing a later date with the Secretary of the corporation. Voting at
meetings of stockholders need not be by written ballot and need not be conducted
by inspectors of election unless so determined by the holders of shares of stock
having a majority of the votes which could be cast by the holders of all
outstanding shares of stock entitled to vote thereon which are present in person
or by proxy at such meeting. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to elect. All other
elections and questions shall, unless otherwise provided by law, the Certificate
of Incorporation or these Bylaws, be decided by the vote of the holders of
shares of stock having a majority of the votes which could be cast by the
holders of all shares of stock entitled to vote thereon which are present in
person or represented by proxy at the meeting.
SECTION 1.9 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date: (1) in the case of determination of
stockholders
2
<PAGE> 4
entitled to vote at any meeting of stockholders or adjournment thereof, shall,
unless otherwise required by law, not be more than sixty (60) nor less than ten
(10) days before the date of such meeting; (2) in the case of determination of
stockholders entitled to express consent to corporate action in writing without
a meeting, shall not be more than ten (10) days from the date upon which the
resolution fixing the record date is adopted by the Board of Directors; and (3)
in the case of any other action, shall not be more than sixty (60) days prior to
such other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(3) the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
SECTION 1.10 LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list of stockholders or
the books of the corporation, or to vote in person or by proxy at any meeting of
stockholders.
SECTION 1.11 ACTION BY CONSENT OF STOCKHOLDERS. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing
3
<PAGE> 5
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.1 NUMBER; QUALIFICATIONS. The Board of Directors shall
consist of one or more members, the number thereof to be determined from time to
time by resolution of the Board of Directors. The number of directors which
shall comprise the initial Board of Directors shall be that number set forth in
the Certificate of Incorporation. Directors need not be stockholders.
SECTION 2.2 ELECTION; RESIGNATION; REMOVAL; VACANCIES. The Board of
Directors shall be elected at each annual meeting of stockholders and each
director shall hold office for a term of one (1) year or until his or her
successor is elected and qualified. Any director may resign at any time upon
written notice to the corporation. Any newly created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled by a majority of
the remaining members of the Board of Directors, although such majority is less
than a quorum, or by a plurality of the votes cast at a meeting of stockholders,
and each director so elected shall hold office until the expiration of the term
of office of the director whom he has replaced or until his or her successor is
elected and qualified.
SECTION 2.3 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined, notices thereof need not be given.
SECTION 2.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four (24) hours before the special meeting.
SECTION 2.5 TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
bylaw shall constitute presence in person at such meeting.
SECTION 2.6 QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the Certificate
of Incorporation or these Bylaws otherwise provide, the vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
SECTION 2.7 ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his or her absence by
the Vice Chairman of the Board, if any, or in his or her absence by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
4
<PAGE> 6
SECTION 2.8 INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted
by the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or such committee.
ARTICLE III.
COMMITTEES
SECTION 3.1 COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
pages which may require it.
SECTION 3.2 COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these Bylaws.
ARTICLE IV.
OFFICERS
SECTION 4.1 EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF
OFFICE; RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also elect one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers, and such other
officers as the Board of Directors deems necessary. Each such officer shall hold
office until the first meeting of the Board of Directors after the annual
meeting of stockholders next succeeding his or her election, and
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<PAGE> 7
until his or her successor is elected and qualified or until his or her earlier
resignation or removal. Any officer may resign at any time upon written notice
to the corporation. The Board of Directors may remove any officer with or
without cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any office of
the corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
SECTION 4.2 POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of
the corporation shall have such powers and duties in the management of the
corporation as may be prescribed by the Board of Directors and, to the extent
not so provided, as generally pertain to their respective officers, subject to
the control of the Board of Directors. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of his
or her duties.
ARTICLE V.
STOCK
SECTION 5.1 CERTIFICATES. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation, certifying the number of shares
owned by him in the corporation. Any of or all the signatures on the certificate
may be a facsimile. In case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of issue.
SECTION 5.2 LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF
NEW CERTIFICATES. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his or her legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI.
INDEMNIFICATION
SECTION 6.1 RIGHT TO INDEMNIFICATION. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
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<PAGE> 8
(a "proceeding"), by reason of the fact that he or she or a person for whom he
or she is the legal representative, is or was a director or officer of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans (an "indemnitee"), against all liability and
loss suffered and expenses (including attorneys' fees) reasonably incurred by
such indemnitee. The corporation shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if the initiation of such proceeding (or part thereof) by the indemnitee was
authorized by the Board of Directors of the corporation.
SECTION 6.2 PREPAYMENT OF EXPENSES. The corporation shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the director or officer to repay all amounts advanced if it should be
ultimately determined that the director or officer is not entitled to be
indemnified under this Article or otherwise.
SECTION 6.3 CLAIMS. If a claim for indemnification or payment of
expenses under this Article is not paid in full within sixty (60) days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expenses of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the indemnitee was not entitled to the requested indemnification
or payment of expenses under applicable law.
SECTION 6.4 NONEXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article VI shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 6.5 OTHER INDEMNIFICATION. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise, or nonprofit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or nonprofit enterprise.
SECTION 6.6 AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
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<PAGE> 9
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1 FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 7.2 SEAL. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
SECTION 7.3 WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND
COMMITTEES. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
SECTION 7.4 INTERESTED DIRECTORS; QUORUM. No contract or transaction
between the corporation and one or more of its directors or officers, or between
the corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose, if: (1) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (2) the material facts as to
his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified by the Board of Directors,
a committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
SECTION 7.5 FORM OF RECORDS. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time. The corporation shall so convert any records so
kept upon the request of any person entitled to inspect the same.
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<PAGE> 10
SECTION 7.6 AMENDMENT OF BYLAWS. These Bylaws may be altered or
repealed, and new Bylaws made by the Board of Directors, but the stockholders
may make additional bylaws and may alter and repeal any bylaws whether adopted
by them or otherwise.
9
<PAGE> 1
Execution Version
EXHIBIT 4.1
- --------------------------------------------------------------------------------
NATG HOLDINGS, LLC
and
ORIUS CAPITAL CORP.,
as Issuers,
ORIUS CORP.
and
the other GUARANTORS named herein,
as Guarantors,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
------------------
INDENTURE
Dated as of February 9, 2000
------------------
12 3/4% Senior Subordinated Notes due 2010
- --------------------------------------------------------------------------------
<PAGE> 2
Execution Version
<PAGE> 3
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- -------
<S> <C>
310(a)(1) 7.10
310(a)(2) 7.10
310(a)(3) N.A.
310(a)(4) N.A.
310(a)(5) 7.8; 7.10
310(b) 7.8; 7.10; 13.2
310(c) N.A.
311(a) 7.11
311(b) 7.11
311(c) N.A.
312(a) 2.5
312(b) 13.3
312(c) 13.3
313(a) 7.6
313(b)(1) 7.6
313(b)(2) 7.6
313(c) 7.6; 13.2
313(d) 7.6
314(a) 4.8; 4.10; 13.2
314(b) N.A.
314(c)(1) 7.2; 13.4; 13.5
314(c)(2) 7.2; 13.4; 13.5
314(c)(3) N.A.
314(d) N.A.
314(e) 13.5
314(f) N.A.
315(a) 7.1(b)
315(b) 7.5
315(c) 7.1
315(d) 6.5; 7.1(c)
315(e) 6.11
316(a)(last sentence) 2.9
316(a)(1)(A) 6.5
316(a)(1)(B) 6.4
316(a)(2) 9.5
316(b) 6.7
316(c) 9.5
317(a)(1) 6.8
317(a)(2) 6.9
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
317(b) 2.4
318(a) 13.1
318(c) 13.1
</TABLE>
- ----------------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 5
INDENTURE dated as of February 9, 2000 among NATG HOLDINGS, LLC, a
Delaware limited liability company ("NATG"), and ORIUS CAPITAL CORP., a Delaware
corporation (the "Corporate Issuer" and, together with NATG, the "Issuers"), as
Issuers, ORIUS CORP., a Florida corporation ("Parent"), and each of the other
Guarantors named herein, as Guarantors, and UNITED STATES TRUST COMPANY OF NEW
YORK, a banking corporation and trust company organized and existing under the
laws of the State of New York, in its capacity as Trustee (the "Trustee").
The Issuers have duly authorized the creation of an issue of 12 3/4%
Senior Subordinated Notes due 2010 and, to provide therefor, the Issuers have
duly authorized the execution and delivery of this Indenture. All things
necessary to make the Securities, when duly issued and executed by the Issuers
and authenticated and delivered hereunder, the valid and binding obligations of
the Issuers and to make this Indenture a valid and binding agreement of the
Issuers have been done.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of NATG or at the time it merges or consolidates with or into NATG or
any of its Restricted Subsidiaries or is assumed in connection with the
acquisition of assets from such Person and in each case whether or not incurred
by such Person in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of NATG or such acquisition, merger or
consolidation.
"Acquisition Loans" means all Acquisition Loans under and as defined in
the Senior Secured Credit Agreement as in effect on the Issue Date.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise. Notwithstanding the foregoing for purposes of Section
4.12, any Person who owns more than 10% of voting equity of a second Person or
who is an officer or director of such second Person shall be an Affiliate of
such second Person.
"Affiliate Transaction" has the meaning set forth in Section 4.12.
<PAGE> 6
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (a) an Investment by NATG or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of NATG or shall be merged with or into NATG or
any Restricted Subsidiary of NATG or (b) the acquisition by NATG or any
Restricted Subsidiary of NATG of the assets of any person (other than a
Restricted Subsidiary of NATG) not in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by Parent or any Restricted
Subsidiary of NATG to any Person other than NATG or any Wholly Owned Restricted
Subsidiary of NATG of (a) any Capital Stock of any Restricted Subsidiary of
NATG, or (b) any other property or assets of NATG or any Restricted Subsidiary
of NATG other than in the ordinary course of business; provided, that Asset
Sales shall not include: (i) a transaction or series of related transactions for
which NATG or any Restricted Subsidiary of NATG receives aggregate consideration
of less than $1,000,000, (ii) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the assets of NATG as permitted under
Section 5.1, (iii) any sale or other disposition of obsolete assets no longer
used or useful in the business of NATG or any of its Restricted Subsidiaries,
(iv) a disposition consisting of the making of a Permitted Investment, the
making of a Restricted Payment permitted under Section 4.3 or the liquidation of
Cash Equivalents, (v) the leasing or licensing of real or personal property
(including intellectual property) in the ordinary course of business for periods
not in excess of one year (subject to automatic renewals), (vi) the issuance of
Capital Stock by a Restricted Subsidiary of NATG to NATG or a Wholly Owned
Restricted Subsidiary of NATG, (vii) sales of accounts receivable and related
assets of the type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Entity for cash or Purchase Money Notes in an
amount equal to the fair market value thereof, (viii) transfers of accounts
receivable and related assets of the type specified in the definition of
"Qualified Receivables Transaction" (or a fractional undivided interest therein)
by a Receivables Entity in a Qualified Receivables Transaction, and (ix) the
cancellation of promissory notes issued to Parent as permitted under Section
4.12(b)(ix).
"Bankruptcy Law" means title 11 of the United States Code or any
similar Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof or, in the case of a Person
that is not a corporation, the analogous governing body of such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in The City of New York are required or
authorized by law or other governmental action to be closed.
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<PAGE> 7
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person and including any
warrants, options or rights to acquire any of the foregoing and instruments
convertible into any of the foregoing, and (ii) with respect to any Person that
is not a corporation, any and all partnership, membership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of indebtedness, maturing not
more than one year after the date of issue, issued by the United States of
America or any instrumentality or agency thereof, the principal, interest and
premium, if any, of which is guaranteed fully by, or backed by the full faith
and credit of, the United States of America, (ii) dollar denominated time
deposits, certificates of deposit and bankers acceptances maturing not more than
one year after the date of purchase, issued by (x) any lender under the Senior
Secured Credit Agreement, (y) a commercial banking institution having, or which
is the principal banking subsidiary of a bank holding company having, combined
capital and surplus and undivided profits of not less than $200.0 million and a
commercial paper rating of "P-1" (or higher) according to Moody's, "A-1" (or
higher) according to S&P or the equivalent rating by any other nationally
recognized rating agency (any such bank, an "Approved Bank") or (z) a non-United
States commercial banking institution which is either currently ranked among the
100 largest banks in the world (by assets, according to the American Banker),
has combined capital and surplus and undivided profits of not less than $500.0
million or whose commercial paper (or the commercial paper of such bank's
holding company) has a rating of "P-1" (or higher) according to Moody's, "A-1"
(or higher) according to S&P or the equivalent rating by any other nationally
recognized rating agency, (iii) commercial paper, maturing not more than 270
days after the date of purchase, issued or guaranteed by a corporation (other
than Parent or any Subsidiary of Parent or any of their respective Affiliates)
organized and existing under the laws of any state within the United States of
America with a rating, at the time as of which any determination thereof is to
be made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P, (iv) demand deposits with any bank or trust company maintained
in the ordinary course of business, (v) repurchase or reverse repurchase
agreements covering obligations of the type specified in clause (i) with a term
of not more than seven days with any Approved Bank, and (vi) shares of any money
market mutual fund rated at least AAA or the equivalent thereof by S&P or at
least AAA or the equivalent thereof by Moody's.
"Change of Control" means: (i) any sale, lease or transfer of all or
substantially all of the assets of NATG and its Restricted Subsidiaries, taken
as a whole, to any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act), (ii) the liquidation or dissolution of Parent or any Issuer,
(iii) prior to a Qualified IPO, (A) WSP and its Affiliates cease to beneficially
own (and have the exclusive power to vote with respect to), directly or
indirectly, at least 35% of the outstanding Voting Securities of Parent entitled
(without regard to the occurrence of any contingency) to vote (including,
without limitation, pursuant to any valid and enforceable
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<PAGE> 8
stockholders or other voting agreement) for the election of a majority of the
members of the Board of Directors of Parent, and in any event sufficient to
direct or cause the direction of the management and policies of Parent, (B) any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act)
(other than WSP and its Affiliates or a Permitted Group) shall become the owner,
directly or indirectly, beneficially or of record, of a greater number of the
Voting Securities of Parent than the number of Voting Securities of Parent then
owned beneficially and of record by WSP and its Affiliates or (C) the nominees
of WSP and its Affiliates shall at any time fail or cease to constitute a
majority of the members of the Board of Directors of Parent, (iv) after a
Qualified IPO, (A) (1) any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act) (other than WSP and its Affiliates or a Permitted
Group) shall at any time become the owner, directly or indirectly, beneficially
or of record, of shares representing more than 35% of the outstanding Voting
Securities of Parent and (2) the percentage of Voting Securities beneficially
owned by WSP and its Affiliates is less than the percentage so owned or acquired
by such Person or group, or (B) the replacement of a majority of the directors
on the Board of Directors of Parent over a two-year period from the directors
who constituted the Board of Directors of Parent at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of Parent then still in office who either
were members of such Board of Directors at the beginning of such period or whose
election as a member of such Board of Directors was previously so approved, or
(v) Parent ceases to beneficially own (and have the exclusive power to vote with
respect to) all of the issued and outstanding Capital Stock of NATG free and
clear of all Liens other than Liens arising under the Senior Secured Credit
Agreement.
"Change of Control Date" has the meaning set forth in Section 4.15.
"Change of Control Offer" has the meaning set forth in Section 4.15.
"Change of Control Payment Date" has the meaning set forth in Section
4.15.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" means, for any period for any Person, the sum,
without duplication, of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization expense, and
(vi) other non-cash items reducing Consolidated Net Income, less other non-cash
items increasing Consolidated Net Income other than the accrual of revenue in
the ordinary course of business, all of the foregoing as determined on a
consolidated basis for such Person and its Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio of
Consolidated EBITDA of NATG during the four full fiscal quarters for which
internal financial statements are available (the "Four Quarter Period") ending
on or prior to the date of the transaction giving rise to
-4-
<PAGE> 9
the need to calculate the Consolidated Fixed Charge Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of NATG for such Four Quarter
Period. In addition to, and without limitation of, the foregoing, for purposes
of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall
be calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of NATG or
any of its Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any Incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), other than
the Incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities (including
revolving credit facilities), occurring during the Four Quarter Period or at any
time subsequent to the last day of the Four Quarter Period and on or prior to
the Transaction Date, as if such Incurrence or repayment, as the case may be
(and the application of the proceeds thereof), occurred on the first day of the
Four Quarter Period and (ii) any Asset Sales or other dispositions or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of NATG or one of its
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) Incurring Indebtedness and also
including any Consolidated EBITDA (provided, that such Consolidated EBITDA shall
be included only to the extent includable pursuant to the definition of
"Consolidated Net Income" or to the extent it is excluded pursuant to clause
(ii) of the definition of "Consolidated Net Income") and shall be calculated on
a pro forma basis with respect to any Asset Acquisition taking into account the
Pro Forma Adjustments, if any, resulting from such Asset Acquisitions)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period or at any time subsequent thereto)
occurring during the Four Quarter Period or at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date, as if
such Asset Sale or other disposition or Asset Acquisition (including any related
Incurrence of Indebtedness) occurred on the first day of the Four Quarter
Period. If NATG or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the Incurrence of such guaranteed Indebtedness as if NATG or such
Restricted Subsidiary had directly incurred or otherwise assumed such guaranteed
Indebtedness (calculated to avoid duplication). Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date, (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period, and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by Interest Rate Agreements relating thereto, shall be deemed to accrue
at the rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Fixed Charges" shall mean, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
(before amortization or write-off of
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<PAGE> 10
debt issuance costs associated with the offering of the Securities on the Issue
Date), plus (ii) to the extent not included in Consolidated Interest Expense,
the product of (x) the amount of all dividend payments on any series of Capital
Sock of such Person (other than dividends paid in Qualified Capital Stock) paid
in cash during such period, times (y) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Interest Expense" shall mean, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount and amortization or write-off
of deferred financing costs, (b) the net costs under Interest Rate Agreements,
(c) all capitalized interest and (d) the interest portion of any deferred
payment obligation; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period for any Person,
the net income (or loss) of such Person and its Restricted Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; provided, that there shall be excluded (i)
the income (or loss) of any Person (other than a Restricted Subsidiary of such
Person) in which any other Person (other than such first Person or any of its
Restricted Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or any
of its Restricted Subsidiaries by such second Person during such period, (ii)
the income (or loss) of any other Person accrued prior to the date it becomes a
Restricted Subsidiary of such first Person or is merged into or consolidated
with such first Person or any of its Restricted Subsidiaries or whose assets are
acquired by such first Person or any of its Restricted Subsidiaries, (iii) the
income of any Subsidiary of such first Person to the extent that the declaration
or payment of dividends or similar distributions by that Restricted Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales (without regard to the
$1.0 million limitation set forth in the definition thereof), and (v) (to the
extent not included in clauses (i) through (iv) above) any net non-cash
extraordinary gains or net noncash extraordinary losses. For purposes of
computing Consolidated Net Income there shall be excluded from the computation
thereof, without duplication and to the extent not otherwise excluded from the
computation thereof, (i) non-recurring fees and expenses incurred in connection
with the consummation of the LISN Acquisition in an aggregate amount not to
exceed $16.0 million and (ii) non-recurring fees and expenses incurred in
connection with the issuance of the Securities on the Issue Date in an aggregate
amount not to exceed $7.0 million. For purposes of computing Consolidated Net
Income, but only to the extent used in determining the Consolidated Fixed Charge
Coverage Ratio, there shall be excluded from the computation thereof, without
duplication and to the extent not otherwise excluded from the computation
thereof non-recurring fees and expenses incurred in connection with the
consummation of any Asset Acquisition in an aggregate amount not to exceed 5% of
the total consideration for such Asset Acquisition.
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"Contingent Obligations" means as to any Person, any obligation of such
Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (a) for the
purchase or payment of any such primary obligation or (b) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; provided, that the
term "Contingent Obligation" shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Corporate Issuer" means Orius Capital Corp., a Delaware corporation.
"Covenant Defeasance" has the meaning set forth in Section 8.2.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement designed to protect NATG or any of its Restricted
Subsidiaries against fluctuations in currency values.
"Custodian" any receiver, interim receiver, receiver and manager,
trustee, assignee, liquidator, sequestrator or similar official charged with
maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" shall mean The Depository Trust Company, New York, New
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.
"Designated Senior Debt" means (i) Indebtedness under or in respect of
the Senior Secured Credit Agreement and (ii) any other Indebtedness constituting
both Senior Debt and Guarantor Senior Debt which, at the time of determination,
has an aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Senior Debt as "Designated Senior
Debt" by the Issuers.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the
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Maturity Date. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Capital Stock solely because the holder thereof
has the right to require the repurchase of such Capital Stock upon the
occurrence of a change of control or an asset sale (each such term being defined
in substantially the same manner as the corresponding terms in this Indenture)
shall not constitute Disqualified Capital Stock if the terms of such Capital
Stock provide that such Capital Stock may not be repurchased or redeemed
pursuant to such provisions unless the Issuers have first complied with their
obligations under Section 4.15 and Section 4.16 and that such repurchase or
redemption complies with Section 4.3.
"Distribution Compliance Period" means, with respect to any Securities,
the period of 40 consecutive days beginning on and including the later of (i)
the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) and (ii) the
date of issue of such Securities.
"Documents" has the meaning ascribed to such term in the Senior Secured
Credit Agreement as in effect on the Issue Date.
"Equity Offering" means a public or private offering of Qualified
Capital Stock (other than public offerings with respect to Parent's or an
Issuer's Common Stock on Form S-8 or any replacement form for such Form S-8) of
Parent or an Issuer.
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Securities" means securities issued in exchange for the
Initial Securities pursuant to the terms of a Registration Rights Agreement.
"Existing Debt" means the Indebtedness of NATG and its Restricted
Subsidiaries that is Incurred prior to, and is to remain outstanding after, the
issuance of the Securities on the Issue Date and the application of the proceeds
thereof; provided, that Existing Debt shall not include any obligations in
respect of the Senior Secured Credit Agreement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect from time to time.
"Global Security" shall mean one or more IAI Global Securities,
Regulation S Global Securities and 144A Global Securities.
"Guarantee Obligations" has the meaning set forth in Section 12.1.
"Guarantees" means the guarantees of the Securities by the Guarantors.
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"Guarantor" means (i) Parent, (ii) each Restricted Subsidiary of Parent
other than the Issuers and (iii) each Restricted Subsidiary of Parent that in
the future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; provided, that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor, the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law), fees, expenses, indemnities and other
amounts and obligations incurred or owing on any Indebtedness of a Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred, assumed
or guaranteed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Guarantee of such Guarantor. Without limiting the
generality of the foregoing, "Guarantor Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of, (x) all monetary obligations of every nature under the Senior Secured Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities and (y) all IRA Obligations, in each case whether outstanding on the
Issue Date or thereafter incurred. Notwithstanding the foregoing, "Guarantor
Senior Debt" shall not include (i) any Indebtedness of such Guarantor to a
Subsidiary of such Guarantor, (ii) Indebtedness to, or guaranteed on behalf of,
any director, officer, employee of either of such Guarantor or any Subsidiary of
such Guarantor (including, without limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other amounts incurred in connection
with obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing such Guarantor, (vi) Indebtedness to the extent incurred in
violation of Section 4.4, (vii) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is without recourse to such Guarantor, and (viii) any Indebtedness which is, by
its express terms, subordinated in right of payment to any other Indebtedness of
such Guarantor including, without limitation, in the case of Parent,
Indebtedness evidenced by the Junior Subordinated Notes.
"Hedging Obligations" of any Person means any obligation of such Person
under (i) an Interest Rate Agreement, (ii) a Currency Agreement, and (iii) any
Synthetic Arrangement.
"IAI Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities from time to time
sold to Institutional Accredited Investors.
"Incur" or "incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume (including by the
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<PAGE> 14
acquisition of assets subject to Indebtedness), guarantee or otherwise become
liable in respect of such Indebtedness or other obligation or the recording, as
required pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "Incurrence," "Incurred,"
"Incurrable" an "Incurring" shall have meanings correlative to the foregoing);
provided, that (x) any amendment, modification or waiver of any document
pursuant to which Indebtedness was previously Incurred shall only be deemed to
be an Incurrence of Indebtedness if and to the extent such amendment,
modification or waiver (i) increases the principal thereof or interest rate or
premium payable thereon or (ii) changes to an earlier date the stated maturity
thereof or the date of any scheduled or required principal payment thereon or
the time or circumstances under which such Indebtedness shall be redeemed and
(y) any Indebtedness of a Person existing at the time such Person becomes (after
the Issue Date) a Restricted Subsidiary of NATG (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary of NATG.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services (including any earn-out obligations in connection with any
acquisition) which in accordance with GAAP would be shown on the liability side
of the balance sheet of such Person, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
unreimbursed drafts drawn thereunder, (iv) all indebtedness of a second Person
secured by any Lien on any property owned by such first Person (excluding
advances or prepayments made to any Borrower or any of their Subsidiaries
pursuant to turnkey agreements entered into in the ordinary course of business
with TCI or any of its Affiliates), whether or not such indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all Hedging Obligations of such Person, and (viii) all
Contingent Obligations of such Person (other than Contingent Obligations arising
from the guarantee by such Person of the obligations of Parent and/or its
Subsidiaries to the extent such guaranteed obligations do not constitute
Indebtedness and are otherwise permitted hereunder); provided, that Indebtedness
shall not include trade payables and accrued expenses, in each case arising in
the ordinary course of business.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Financial Advisor" means an accounting, appraisal,
valuation or investment banking firm (i) which does not, and whose directors,
officers and employees or Affiliates do not, have a direct or indirect financial
interest in Parent or any of its Subsidiaries and (ii) which, in the judgment of
the Board of Directors of Parent, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Purchasers" means Deutsche Bank Securities, Inc. and Banc of
America Securities LLC.
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"Initial Securities" means the 12 3/4% Senior Subordinated Notes due
2010 of the Issuers issued on the Issue Date in accordance with the requirements
of Section 2.2 of this Indenture; provided, that the term Initial Securities
shall not include any Exchange Securities issued in exchange for theretofore
outstanding Initial Securities.
"Institutional Accredited Investor" or "IAI" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Interest Rate Agreement" means any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect Parent or any Restricted Subsidiary
of Parent against fluctuations in interest rates.
"Investment" by any Person in any other Person means, with respect to
any Person, any direct or indirect loan or other extension of credit (including,
without limitation, a guarantee) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase, acquisition by such
Person of any Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by, such other Person. "Investment" shall
exclude extensions of trade credit by the Issuers and their Restricted
Subsidiaries on commercially reasonable terms in accordance with their normal
trade practices and advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business. For the purposes of Section 4.3,
(1) NATG shall be deemed to have made an "Investment" equal to
the fair market value of the net assets of any Restricted Subsidiary of
NATG at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary and the aggregate amount of Investments made
subsequent to the Issue Date shall exclude (to the extent the
designation as an Unrestricted Subsidiary was included as a Restricted
Payment) the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated
a Restricted Subsidiary, not to exceed the amount of the Investment
deemed made at the date of designation thereof as an Unrestricted
Subsidiary, and
(2) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by NATG or
any of its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, writedowns or write-offs
with respect to such Investment, reduced by the payment of dividends or
distributions (including tax sharing payments) in connection with such
Investment or any other amounts received in respect of such Investment;
provided, that no such payment of dividends or distributions or receipt
of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such
amounts would be included in Consolidated Net Income. If NATG or any
Restricted Subsidiary of NATG sells or otherwise disposes of any
Capital Stock of any Restricted Subsidiary of NATG such that, after
giving effect to any such sale or disposition, NATG no longer owns,
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directly or indirectly, more than 50% of the outstanding Common Stock
of such Restricted Subsidiary, NATG shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the
fair market value of the Capital Stock of such Restricted Subsidiary
not sold or disposed of.
"Investor Rights Agreement" means the Investor Rights Agreement, dated
December 15, 1999, between Parent and its stockholders entered into in
connection with the LISN Acquisition, as in effect on the Issue Date.
"IRA Obligation" means the obligations of a Person under an Interest
Rate Agreement.
"Issue Date" means February 9, 2000, the date of original issuance of
Initial Securities under this Indenture.
"Issuers" means NATG and the Corporate Issuer, the issuers of the
Securities under this Indenture, until, in each case, a successor replaces it
pursuant to this Indenture and thereafter shall mean such successor entity.
"Junior Subordinated Notes" means, collectively, (i) those certain
unsecured and unguaranteed 12% Subordinated Promissory Notes dated December 15,
1999 outstanding on the Issue Date (the "Initial Junior Subordinated Notes") and
(ii) additional junior subordinated promissory notes issued after the Issue Date
with terms substantially similar to those of the Initial Junior Subordinated
Notes.
"Legal Defeasance" has the meaning set forth in Section 8.2.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge, hypothecation, preference, priority, privilege, lease or encumbrance of
any kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest)
and any option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"LISN Acquisition" means the series of transactions whereby Parent
acquired control of LISN Holdings and its subsidiaries.
"LISN Holdings" means LISN Holdings, Inc., an Ohio corporation.
"Maturity Date" means February 1, 2010, the final maturity date of the
Securities.
"Moody's" means Moody's Investors Service, Inc.
"NATG" means NATG Holdings, LLC, a Delaware limited liability company.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by Parent or any of its Restricted Subsidiaries from such
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Asset Sale net of (i) reasonable out-of-pocket expenses and fees relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (ii) taxes paid or payable after taking
into account any reduction in consolidated tax liability due to available tax
credits or deductions and any tax sharing arrangements, (iii) any portion of any
such proceeds which Parent determines in good faith should be reserved for
post-closing adjustments (to the extent Parent delivers to the Trustee an
Officers' Certificate signed by the chief financial officer of Parent as to such
determination); provided, that on the day all such post-closing adjustments have
been determined (which shall not be later than six months following the date of
the respective Asset Sale), the amount (if any) by which the reserved amount in
respect of such sale or disposition exceeds the actual post-closing adjustments
payable by Parent or any of its Restricted Subsidiaries shall constitute Net
Cash Proceeds received by Parent or any such Restricted Subsidiaries on such
date, and (iv) repayment of Indebtedness that is required to be repaid in
connection with such Asset Sale.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
4.16.
"Non-payment Default" has the meaning set forth in Section 10.2.
"Non-Recourse Debt" means Indebtedness: (1) as to which neither NATG
nor any of its Restricted Subsidiaries (other than a Receivables Entity) (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender; and (2) as to
which the lenders thereof have been notified in writing that they will not have
any recourse to the stock or assets of NATG or any of its Restricted
Subsidiaries (other than a Receivables Entity).
"Non-U.S. Person" has the meaning assigned to such term in Regulation
S.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, the Secretary or the Assistant
Secretary of such Person.
"Officers' Certificate" of a Person means a certificate signed by two
Officers of such Person.
"144A Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities from time to time
sold in reliance on Rule 144A under the Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel which
opinion and counsel are reasonably acceptable to the Trustee.
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"Parent" means Orius Corp., a Florida corporation, until a successor
replaces it pursuant to this Indenture, and thereafter shall mean such successor
entity.
"Parent Common Stock" means the Common Stock of Parent.
"Parent Preferred Stock" means the Series C Participating Preferred
Stock of Parent.
"Participants" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning set forth in Section 2.3.
"Payment Blockage Notice" has the meaning set forth in Section 10.2.
"Payment Blockage Period" has the meaning set forth in Section 10.2.
"Payment Default" has the meaning set forth in Section 10.2.
"Permitted Business" means the business of Parent and its Restricted
Subsidiaries as of the Issue Date and any business reasonably related,
complementary or ancillary thereto or a reasonable expansion thereof.
"Permitted Group" means any group of investors deemed to be a person
(as defined in Section 13(d)(3) of the Exchange Act) by virtue of the Investor
Rights Agreement.
"Permitted Indebtedness" means
(i) obligations under this Indenture, the Securities and the
Guarantees,
(ii) Indebtedness incurred pursuant to the Senior Secured
Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed $410.0 million, less the amount of all
permanent prepayments of Senior Term Loans actually made and permanent
reductions of commitments relating to Revolving Loans or Acquisition
Loans and the termination of unused Rollover Letters of Credit
availability,
(iii) Existing Debt,
(iv) IRA Obligations covering Indebtedness otherwise permitted
by this Indenture to the extent the notional principal amount of such
IRA Obligations does not exceed the principal amount of the
Indebtedness to which such IRA Obligations relate,
(v) the Incurrence by NATG or any of its Restricted
Subsidiaries of Hedging Obligations that are Incurred for the purpose
of fixing or hedging the value of foreign currencies or the cost of
commodities purchased or received by NATG or any of its Restricted
Subsidiaries,
(vi) Permitted Refinancing Indebtedness,
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(vii) Indebtedness of NATG or a Restricted Subsidiary of NATG
to NATG or a Restricted Subsidiary of NATG; provided, that (y) if as of
any date any Person other than NATG or a Restricted Subsidiary of NATG
holds any such Indebtedness or holds a Lien in respect of such
Indebtedness (other than a Lien in connection with the Senior Secured
Credit Agreement), such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness by the issuer of
such Indebtedness and (z) if an Issuer or Subsidiary Guarantor is the
obligor on such Indebtedness, such Indebtedness shall constitute
Subordinated Indebtedness,
(viii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course
of business; provided, that such Indebtedness must be extinguished
within five Business Days of Incurrence,
(ix) obligations in respect of workers' compensation claims,
self-insurance obligations, performance, surety and other similar bonds
and completion guarantees provided by NATG or a Restricted Subsidiary
of NATG in the ordinary course of business in accordance with customary
industry practice, in amount and for purposes customary in such
Person's industry,
(x) Indebtedness arising from agreements of NATG or Restricted
Subsidiary of NATG providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets, or a Restricted Subsidiary of NATG, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of
such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition; provided, that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds actually received by an Issuer or Subsidiary
Guarantor in connection with such disposition,
(xi) Capitalized Lease Obligations, mortgage financings and
Purchase Money Obligations of an Issuer or Subsidiary Guarantor
incurred for the purpose of financing all or a part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of an Issuer or Subsidiary Guarantor,
not to exceed $20.0 million at any one time outstanding,
(xii) guarantees by an Issuer or Subsidiary Guarantor of
Indebtedness of an Issuer or Subsidiary Guarantor that was Incurred in
accordance with the terms of this Indenture,
(xiii) the accrual of interest, the accretion or amortization
of original issue discount, the payment of interest on any Indebtedness
in the form of additional Indebtedness with the same terms, provided,
in each such case, that the amount thereof is included in Consolidated
Fixed Charges of NATG as accrued,
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(xiv) the Incurrence by a Receivables Entity of Indebtedness
in a Qualified Receivables Transaction that is Non-Recourse Debt
(except for Standard Securitization Undertakings),
(xv) customary earn-out obligations owing in connection with
any Asset Acquisition,
(xvi) unsecured Indebtedness of Restricted Subsidiaries of
NATG not organized under the laws of the United States or any state
thereof and consisting of working capital lines of credit in an
aggregate amount not to exceed the dollar equivalent of $5.0 million at
any time outstanding,
(xvii) the Incurrence of Indebtedness arising from the
endorsement of negotiable instruments in the ordinary course of
business, and
(xviii) additional unsecured Indebtedness of NATG or its
Restricted Subsidiaries (other than Contingent Obligations NATG or its
Restricted Subsidiaries with respect to Junior Subordinated Notes) in
an aggregate principal amount not to exceed $5.0 million at any one
time outstanding.
"Permitted Investments" means (i) Investments by NATG or any Restricted
Subsidiary of NATG (other than a Receivables Entity) in a Person if as a result
of such Investment such Person transfers or conveys all or substantially all of
its assets to NATG or any Restricted Subsidiary of NATG (other than a
Receivables Entity); provided, that such Person's primary business is a
Permitted Business, (ii) Investments by NATG or any Restricted Subsidiary of
NATG (other than a Receivables Entity) in NATG or any Restricted Subsidiary of
NATG (other than a Receivables Entity) or in any Person if, as a result of such
Investment, such Person shall become, whether by consolidation, merger or
otherwise, a Restricted Subsidiary of NATG; provided, that such Person's primary
business is a Permitted Business, (iii) Investments by NATG or its Restricted
Subsidiaries existing on the Issue Date (which shall exclude any Investment
described in clause (ix) below), (iv) Investments in cash and Cash Equivalents,
(v) loans and advances to employees and officers of Parent and its Restricted
Subsidiaries in the ordinary course of business for bona fide business purposes
not in excess of $1.0 million at any one time outstanding, (vi) Interest Rate
Agreements entered into in the ordinary course of NATG's or its Restricted
Subsidiaries' businesses and otherwise in compliance with this Indenture, (vii)
Investments in securities of trade creditors or customers received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such trade creditors or customers, (viii) Investments made by NATG
or its Subsidiaries as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.16, (ix) Investments in
women/minority owned business enterprises in an aggregate amount not to exceed
$5.0 million at any time, (x) deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases, and (xi)
Investments by NATG or any Guarantor in a Receivables Subsidiary or any
Investment by a Receivables Subsidiary in any other Person, in each case in
connection with a Qualified Receivables Transaction; provided, that any such
Investment in a Receivables Entity is in the form
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of a Purchase Money Note or an equity interest, (xii) Indebtedness permitted to
be incurred under Section 4.4, and (xiii) additional Investments not to exceed
$5.0 million at any time.
"Permitted Liens" means
(i) Liens for taxes or claims either (a) not delinquent or (b)
contested in good faith by appropriate proceedings and as to which
Parent or a Subsidiary shall have set aside on its books such reserves
as may be required by GAAP,
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith by appropriate proceedings; provided,
that (x) any proceedings commenced for the enforcement of such Liens
shall have been stayed or suspended within 30 days of the commencement
thereof and (y) a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor,
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money),
(iv) any attachment or judgment Lien not constituting an Event
of Default under Section 6.1(e),
(v) Permitted Real Property Encumbrances, easements,
rights-of-way, restrictions, minor defects, encroachments or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Parent or any of its Restricted Subsidiaries,
(vi) any interest or title of a lessor under any Capitalized
Lease Obligation or mortgage permitted to be Incurred under clause (xi)
of the definition of Permitted Indebtedness; provided, that such Liens
do not extend to any property or assets which is not leased property
subject to such Capitalized Lease Obligation or mortgage or other
property subject to a permitted Lien held by the Lien holder of such
Capitalized Lease Obligation,
(vii) Liens to finance property or assets (including the cost
of construction) of any Restricted Subsidiary of NATG acquired in the
ordinary course of business; provided, that (A) the related Purchase
Money Obligations shall be permitted to be Incurred under Section 4.4
and shall not exceed the cost of such property or assets (including the
cost of construction) and shall not be secured by any property or
assets of NATG or any Restricted Subsidiary other than the property and
assets so acquired and (B) the Lien securing such Indebtedness shall be
created within 90 days of such acquisition or construction,
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(viii) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of NATG or any of its Restricted Subsidiaries, including
rights of offset and set-off,
(ix) Liens arising out of consignment or similar arrangements
for the sale of goods in the ordinary course of business,
(x) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of Parent and
its Restricted Subsidiaries,
(xi) Liens arising from filing Uniform Commercial Code
financing statements regarding leases,
(xii) Liens in favor of TCI or any of its Affiliates securing
advances made to NATG or any of its Restricted Subsidiaries pursuant to
turnkey agreements entered into in the ordinary course of business with
TCI or any of its Affiliates; provided, that such Liens shall only
attach to property (including proceeds thereof) which is purchased with
the applicable advance and shall automatically terminate when the
applicable advance has been fully paid,
(xiii) Liens attaching solely to cash earnest money deposits
made by NATG or any of its Restricted Subsidiaries in connection with
any letter of intent or purchase agreement entered into by it in
connection with an Asset Acquisition,
(xiv) Liens deemed to exist in connection with repurchase
agreements and other similar Permitted Investments,
(xv) customary rights of set off, revocation, refund or
chargeback under deposit agreements or under the UCC of banks or other
financial institutions where any Issuer maintains deposits in the
ordinary course of business permitted by this Indenture,
(xvi) Liens on accounts receivable for which attempts at
collection have been undertaken by a third party authorized by the
Person owing such accounts receivable,
(xvii) Liens arising from the granting of a license by NATG or
any Restricted Subsidiary of NATG to any Person in the ordinary course
of business,
(xviii) Liens arising by operation of law on insurance
policies and proceeds thereof to secure premiums thereunder,
(xix) Liens relating solely to assets to be sold in any Asset
Sale permitted in this Indenture and arising pursuant to the sale
agreements governing such Asset Sale,
(xx) Liens on property of a Person existing at the time such
Person is acquired by, merged with or into, or consolidated with NATG
or any Restricted Subsidiary of NATG; provided, that such Liens were in
existence prior to the contemplation of such
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acquisition, merger or consolidation and do not extend to any assets other than
those of the Person acquiring merged into or consolidated with NATG or the
Restricted Subsidiary,
(xxi) Liens existing on the Issue Date,
(xxii) Liens on assets transferred to a Receivables Entity or
on assets of a Receivables Entity, in either case incurred in
connection with a Qualified Receivables Transaction, and
(xxiii) Liens incurred in the ordinary course of business of
any Restricted Subsidiary of NATG with respect to obligations that do
not exceed $3.0 million in the aggregate at any one time outstanding
and that (a) are not incurred in connection with the borrowing of money
or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use
thereof in the operation of business by such Restricted Subsidiary.
"Permitted Real Property Encumbrances" means (i) those Liens,
encumbrances and other matters affecting title to any real property securing
Senior Debt to the extent found reasonably acceptable by the agent for such
Senior Debt, (ii) such easements, encroachments, covenants, rights of way, minor
defects, irregularities, encumbrances on title or similar restrictions on any
real property securing Senior Debt which do not, in the reasonable opinion of
the agents for such Senior Debt, materially impair such real property for the
purposes for which it is held by the owner or lessor thereof or the Lien thereon
created in favor of such Senior Debt, and (iii) municipal and zoning ordinances,
which are not violated in any material respect by the existing improvements and
the present use of any real property securing Senior Debt.
"Permitted Refinancing Indebtedness" means any Refinancing by NATG or
any Restricted Subsidiary of NATG of Indebtedness incurred in accordance with
Section 4.4 (other than pursuant to clauses (ii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), or (xviii)
of the definition of Permitted Indebtedness), in each case that does not (A)
result in an increase in the aggregate principal amount of Indebtedness of such
Person as of the date of such proposed Refinancing, (plus the amount of any
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses Incurred by such Person
in connections with such Refinancing), or (B) create Indebtedness with: (1) a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (2) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced,
provided, that if (x) such Indebtedness being Refinanced ranked pari passu with
the Securities or the Guarantees, such Refinancing Indebtedness shall rank
either pari passu with or junior to the Securities or the Guarantees, as
applicable, and (y) such Indebtedness being Refinanced constituted Subordinated
Indebtedness, such Refinancing Indebtedness shall be subordinated to the
Securities and the Guarantees, as applicable, at least to the same extent and in
the same manner as the Indebtedness being Refinanced.
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"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Physical Securities" has the meaning provided in Section 2.1.
"Principal" or "principal" of any Indebtedness (including the
Securities) means the principal amount of such Indebtedness plus the premium, if
any, on such Indebtedness; provided, that in the case of Indebtedness issued
with original issue discount, "Principal" or "principal" shall refer to the
accreted value of such Indebtedness.
"Private Exchange Security" means the "Private Exchange Notes" as
defined in the Registration Rights Agreement and any similar Securities issued
in compliance with Section 2.2 in accordance with any other registration rights
agreement.
"Private Placement Legend" means the legends initially set forth on the
Securities in the form set forth in Exhibit B.
"Pro Forma Adjustments" means, with respect to a particular Asset
Acquisition, adjustments to eliminate the effect of any non-recurring expenses
or income from such Asset Acquisition with respect to NATG and its Restricted
Subsidiaries or any acquired Person or assets on Consolidated EBITDA, determined
in good faith by the chief financial officer of Parent and approved by the Board
of Directors of Parent, as set forth in an Officers' Certificate delivered to
the Trustee setting forth in reasonable detail the basis for such adjustments.
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from NATG or any of its
Restricted Subsidiaries to a Receivables Entity in connection with a Qualified
Receivables Transaction which note shall be repaid from cash available to the
Receivables Entity, other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest,
principal and other amounts owing to such investors and amounts paid in
connection with the purchase of newly generated receivables.
"Purchase Money Obligations" of any Person shall mean any obligations
of such Person or any of its Restricted Subsidiaries to any seller or any other
Person incurred or assumed in connection with the purchase of real or personal
property to be used in the business of such Person or any of its Restricted
Subsidiaries within 180 days of such purchase.
"Put/Call Agreement" means the Orius Call Agreements, Orius Put
Agreements, HIG Call Agreements and HIG Put Agreements, as each such term is
defined in the Reorganization Agreement and as each may be amended, restated,
supplemented or otherwise modified from time to time.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock or that is not Indebtedness that is convertible or
exchangeable into Capital Stock.
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"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualified IPO" means a bona fide underwritten sale to the public of
Parent Common Stock pursuant to a registration statement (other than on Form S-8
or any other form relating to securities issuable under any benefit plan of
Parent or any of its Restricted Subsidiaries, as the case may be) that is
declared effective by the SEC and such offering results in gross cash proceeds
(exclusive of underwriter's discounts and commissions and other expenses) of at
least $50.0 million.
"Qualified Receivables Transaction" means any transaction or series of
transactions pursuant to which NATG or any of its Restricted Subsidiaries may
sell, convey or otherwise transfer to (a) a Receivables Entity (in the case of a
transfer by NATG or any of its Restricted Subsidiaries) and (b) any other Person
(in case of a transfer by a Receivables Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising or
acquired in the future) of NATG or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and contract rights and all guarantees
or other obligations in respect to such accounts receivable and equipment,
proceeds of such accounts receivable and other assets (including contract
rights) which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable, all of the foregoing for the purpose
of providing working capital financing on terms that are more favorable to NATG
and its Restricted Subsidiary than would otherwise be available at that time.
"Receivables Entity" means a Wholly Owned Subsidiary of NATG (or
another Person in which NATG or any Restricted Subsidiary of NATG makes an
Investment and to which NATG or any Restricted Subsidiary of NATG transfers
accounts receivable and related assets) that engages in no activities other than
in connection with the financing of accounts receivable and that is designated
by the Board of Directors of NATG (as provided below) as a Receivables Entity
(a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which (i) is guaranteed by NATG or any of its Restricted
Subsidiaries (other than such Receivables Entity), excluding guarantees of
obligations (other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates NATG or any of its Restricted Subsidiaries (other than such
Receivables Entity) in any way other than pursuant to Standard Securitization
Undertakings or (iii) subjects any property or asset of NATG or any of its
Restricted Subsidiaries (other than such Receivables Entity), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings, (b) with which neither NATG
nor any of its Restricted Subsidiaries (other than such Receivables Entity) has
any material contract, agreement, arrangement or understanding other than on
terms no less favorable to NATG or such Restricted Subsidiary than those that
might be obtained at the time from Persons that are not Affiliates of Parent,
other than fees payable in the ordinary course of business in connection with
servicing receivables of such entity, and (c) to which neither NATG nor any
Restricted Subsidiary of NATG (other than such Receivables Entity) has any
obligation to maintain or preserve such entity's financial condition or cause
such entity to achieve certain levels of operating results. Any such designation
by the Board of Directors shall be evidenced to the
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Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Record Date" means the applicable Record Date specified in the
Securities; provided, that if any such date is not a Business Day, the Record
Date shall be the first day immediately preceding such specified day that is a
Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Reference Date" has the meaning set forth in Section 4.3.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Registrar" has the meaning set forth in Section 2.3.
"Registration Rights Agreement" means means the Registration Rights
Agreement dated as of the Issue Date among the Issuers, the Guarantors and the
Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities from
time to time sold in reliance on Regulation S under the Securities Act.
"Reorganization Agreement" means the Agreement and Plan of
Reorganization, dated November 8, 1999, by and among LISN Holdings, Parent and
Orius Merger Sub, Inc.
"Replacement Assets" has the meaning set forth in Section 4.16.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided, that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times be the holders
of a majority in outstanding principal amount of such Designated Senior Debt in
respect of any Designated Senior Debt.
"Responsible Officer" means, when used with respect to the Trustee, any
officer in the corporate trust office of the Trustee including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, or any other officer of the Trustee who
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customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Restricted Investment" means any investment other than a Permitted
Investment.
"Restricted Payment" has the meaning set forth in Section 4.3.
"Restricted Security" means a Security that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, that the Trustee shall be entitled to request and conclusively rely on
an Opinion of Counsel with respect to whether any Security constitutes a
Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary. For
the avoidance of doubt, the Issuers shall be deemed to be Restricted
Subsidiaries of Parent, and the Corporate Issuer shall be deemed to be a
Restricted Subsidiary of NATG.
"Revolving Loans" means all Revolving Loans under and as defined in the
Senior Secured Credit Agreement as in effect on the Issue Date.
"Rollover Letters of Credit" means all Rollover Letters of Credit under
and as defined in the Senior Secured Credit Agreement as in effect on the Issue
Date.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services.
"Securities" means, collectively, the Issuers' 12 3/4% Senior
Subordinated Notes due 2010 issued under this Indenture (whether on the Issue
Date or thereafter) and any Exchange Securities issued in exchange therefor,
treated as a single class of securities under this Indenture, as amended or
supplemented from time to time in accordance with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Securityholder" or "Holder" means the Person in whose name a Security
is registered on the Registrar's books.
"Senior Debt" means the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law), fees and
expenses on any Indebtedness of an Issuer, whether outstanding on the Issue Date
or thereafter created, incurred, assumed or guaranteed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. Without
limiting the generality of the foregoing, "Senior Debt" shall also
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include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature under the
Senior Secured Credit Agreement, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities and (y) all IRA Obligations, in each case whether
outstanding on the Issue Date or thereafter incurred. Notwithstanding the
foregoing, "Senior Debt" shall not include (i) any Indebtedness of an Issuer to
a Subsidiary of Parent, (ii) any Indebtedness to, or guaranteed on behalf of,
any director, officer or employee of Parent or any of its Subsidiaries
(including, without limitation, amounts owed for compensation), (iii)
Indebtedness to trade creditors and other amounts incurred in connection with
obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by an Issuer, (vi) Indebtedness to the extent incurred in
violation of Section 4.4, (vii) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is without recourse to an Issuer and (viii) any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of an
Issuer.
"Senior Loans" means all Loans under and as defined in the Senior
Secured Credit Agreement.
"Senior Secured Credit Agreement" means the Credit Agreement, dated as
of December 15, 1999, among NATG, LISN, LLC, the various lending institutions
party thereto, and Bankers Trust Company, as Agent, together with the documents
related thereto (including, without limitation, any guaranty agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented, replaced, refinanced or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder, (provided, that such
increased amount is permitted by Section 4.4 or adding or deleting Subsidiaries
as additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Senior Term Loan" means all Term Loans under and as defined in the
Senior Secured Credit Agreement as in effect on the Issue Date and shall include
any Acquisition Term Loans (as defined in the Senior Secured Credit Agreement as
in effect on the Issue Date) to the extent termed out and any subsequent term
loans under the Senior Secured Credit Agreement that refinance such Term Loans
or Acquisition Term Loans (or any subsequent term loans).
"Significant Subsidiary," with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
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"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by NATG or any Subsidiary of
NATG that are reasonably customary in Qualified Receivables Transactions
intended to create Non-Recourse Debt.
"Subordinated Indebtedness" means Indebtedness of any Issuer or
Guarantor which is expressly subordinated in right of payment to the obligations
of such Issuer or Guarantor in respect of this Indenture, the Securities and the
Guarantees, as applicable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means any Guarantor that is also a Subsidiary of
NATG.
"Surviving Entity" has the meaning set forth in Section 5.1.
"Synthetic Arrangement" means any derivative product that provides for
the synthetic purchase or repurchase of any Indebtedness or securities
(including equity and debt securities).
"TCI" shall mean TCI Atlantic, Inc., a Colorado corporation.
"Temporary Reg. S Global Security" shall have the meaning provided in
Section 2.1.
"TIA" means the Trust Indenture act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended, as in effect on the Issue Date until such time as
this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA, except as otherwise
provided in Section 9.4.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters or, in the
case of a successor trustee, an officer assigned to the department, division or
group performing the corporate trust work of such successor.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do not and
are not required to bear the Private Placement Legend in the form set forth in
Exhibit B, including, without limitation, the Exchange Securities.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
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Subsidiary. The Board of Directors of a Person may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) of such Person to be
an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, Parent or any other Restricted
Subsidiary of Parent that is not a Subsidiary of the Subsidiary to be so
designated; provided, that (x) Parent delivers a copy of the relevant Board
Resolution to the Trustee together with an Officers' Certificate from Parent
certifying that such designation complies with the terms of this Indenture,
including the requirements set forth in this definition and in Section 4.4 and
(y) each Subsidiary to be so designated and each of its Subsidiaries has not at
the time of designation, and does not thereafter, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
Parent or any of its Restricted Subsidiaries; and, provided, further, that under
no circumstances may an Issuer be designated as an Unrestricted Subsidiary. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation,
Parent would be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.4 and (y) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. Any such designation
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate from Parent certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged and which
are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Person" has the meaning set forth in Regulation S.
"Voting Securities" means any class of Capital Stock of a Person
pursuant to which the holders thereof have, at the time of determination, the
general voting power under ordinary circumstances to vote for the election of
directors, managers, trustees or general partners of such Person (irrespective
of whether or not at the time any other class or classes will have or might have
voting power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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"Wholly Owned Restricted Subsidiary" of any Person means any Wholly
Owned Subsidiary of such Person which at the time of determination is a
Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding Voting Securities (other than in the case of
a foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of facsimile transmission, telegraph or cable.
"WSP" means Willis Stein & Partners II, L.P. and Willis Stein &
Partners Dutch, L.P.
Section 1.2 Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, such provision is incorporated by reference
in, and made a part of, this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers, any Guarantor
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
Section 1.3 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
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(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
Section 1.4 Ancillary Agreements. The Trustee is hereby authorized and
directed to execute and deliver such agreements, notices, certificates and
assignments as are necessary to implement the terms of this Indenture, including
but not limited to the letter of representations with the Depository.
ARTICLE TWO
THE SECURITIES
Section 2.1 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage. The Issuers shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security shall
be dated the date of its issuance and show the date of its authentication. Each
Security shall have an executed Guarantee from each of the Guarantors endorsed
thereon substantially in the form of Exhibit E.
The terms and provisions contained in the Securities and the Guarantees
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Issuers, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. Securities offered and sold to QIBs in
reliance on Rule 144A, Securities offered and sold in reliance on Regulation S
and Securities offered and sold to Institutional Accredited Investors in
reliance on Regulation D of the Securities Act shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A, deposited with the Trustee, as custodian for the Depository, duly
executed by the Issuers (and having an executed Guarantee from each of the
Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter
provided and shall bear the legends set forth in Exhibit B. Securities initially
offered and sold in offshore transactions pursuant to Regulation S under the
Securities Act shall initially be issued in the form of a temporary Global
Security in registered form, deposited with the Trustee as custodian for the
Depositary (the "Temporary Reg. S Global Security"). Upon the expiration of the
Distribution Compliance Period, and upon receipt by the Trustee of the
certification required by Regulation S under the Securities Act, the Temporary
Reg. S Global Security shall be exchanged for the Regulation S Global Security
in equal principal amount. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Securities issued in exchange for interests in a Global Security
pursuant to Section 2.16 may be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Exhibit A
(the "Physical Securities").
Section 2.2 Execution and Authentication. Two Officers, or an Officer
and an Assistant
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Secretary, shall sign, or one Officer shall sign and one Officer or an Assistant
Secretary (each of whom shall, in each case, have been duty authorized by all
requisite limited liability company or corporate actions, as the case may be)
shall attest to, the Securities for each of the Issuers by manual or facsimile
signature.
If an Officer whose signature is on a Security or Guarantee, as the
case may be, was an Officer at the time of such execution but no longer holds
that office at the time the Trustee authenticates the Security, the Security or
such Guarantee shall nevertheless be valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $300.0 million upon a
written order of the Issuers, provided that the aggregate principal amount of
Initial Securities issued on the Issue Date shall not exceed $150.0 million,
provided, further, that in connection with any Initial Securities originally
issued after the Issue Date, NATG complies with Section 4.4, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of the same type of Initial Securities in accordance with the terms of a
Registration Rights Agreement and (iii) Unrestricted Securities from time to
time (A) in exchange for a like principal amount of Initial Securities or a like
principal amount of Private Exchange Securities or (B) as the Issuers may
determine in accordance with this Indenture, in each case upon a written order
of each Issuer. Each such order shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$300.0 million, except as provided in Section 2.7.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its reasonable efforts to obtain the
same "CUSIP" number for such Securities as is printed on the Securities
outstanding at such time.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuers to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuers and Affiliates of the Issuers.
The Securities shall be issuable only in fully registered form without
coupons in denominations of $1,000 and integral multiples thereof.
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Section 2.3 Registrar and Paying Agent. The Issuers shall maintain an
office or agency in the Borough of Manhattan, The City of New York, where (a)
Securities may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Securities may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands to or upon the Issuers in
respect of the Securities and this Indenture may be served. The Issuers may also
from time to time designate one or more other offices or agencies where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, that no such designation
or rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Issuers may act as Registrar or Paying Agent except that
for the purposes of Articles Three and Eight and Sections 4.15 and 4.16, neither
the Issuers nor any Affiliate of the Issuers shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Issuers, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Issuers initially appoint the Trustee as Registrar and Paying Agent until such
time as the Trustee has resigned or a successor has been appointed.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuers shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
Section 2.4 Paying Agent To Hold Assets in Trust. The Issuers shall
require each Paying Agent other than the Trustee to agree in writing that,
subject to Article Ten and Article Twelve, each Paying Agent shall hold in trust
for the benefit of Holders or the Trustee all assets held by the Paying Agent
for the payment of principal of, or interest on, the Securities (whether such
assets have been distributed to it by the Issuers or any other obligor on the
Securities), and shall notify the Trustee of any Default by the Issuers (or any
other obligor on the Securities) in making any such payment. If an Issuer or an
Affiliate of an Issuer acts as Paying Agent, it shall segregate such assets and
hold them as a separate trust fund. The Issuers at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Issuers to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
Section 2.5 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Issuers
shall furnish to the Trustee on or before each Interest Payment Date and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
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Section 2.6 Transfer and Exchange. Subject to Sections 2.15 and 2.16,
when Securities are presented to the Registrar or a co-Registrar with a request
to register the transfer of such Securities or to exchange such Securities for
an equal principal amount of Securities of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Issuers and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfers and exchanges, the Issuers shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Issuers may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
tax or charge payable upon exchanges or transfers pursuant to Sections 2.10,
3.6, 4.15, 4.16 or 9.6). The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of Securities and ending at the close of business on the day of such
mailing, (ii) selected for redemption in whole or in part pursuant to Article
Three, except the unredeemed portion of any Security being redeemed in part, and
(iii) during a Change of Control Offer or an Net Proceeds Offer if such Security
is tendered pursuant to such Change of Control Offer or Net Proceeds Offer and
not withdrawn.
Any Holder of a beneficial interest in a Global Security shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Securities may be effected only through a book-entry
system maintained by the Holder of such Global Security (or its agent), and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book-entry system.
Section 2.7 Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Issuers shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's
requirements for replacement of Securities are met. If required by the Trustee
or the Issuers, such Holder must provide an indemnity bond or other indemnity,
sufficient in the reasonable judgment of both the Issuers and the Trustee, to
protect the Issuers, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. The Issuers may charge such Holder for
their reasonable out-of-pocket expenses in replacing a Security pursuant to this
Section 2.7, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Issuers
and every replacement Guarantee shall constitute an additional obligation of the
Guarantors.
Section 2.8 Outstanding Securities. Securities outstanding at any time
are all the Securities that have been authenticated by the Trustee except those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.8 as not outstanding. A Security does not cease to be outstanding
because the Issuers, the Guarantors or any of their respective Affiliates holds
such Security (subject to the provisions of Section 2.9).
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If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide protected purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.7. If the principal amount of any Security is considered paid under
Section 4.1, it ceases to be outstanding and interest ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than Parent, an Issuer or any of their respective Affiliates) holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Securities payable on that date, then on and after that date
such Securities shall cease to be outstanding and interest on them shall cease
to accrue.
Section 2.9 Treasury Securities. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by Parent, any of its Subsidiaries or any of
their respective Affiliates shall be disregarded, except that, for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows or has
reason to know are so owned shall be disregarded.
Section 2.10 Temporary Securities. Until definitive Securities are
ready for delivery, the Issuers may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers reasonably
consider appropriate for temporary Securities. Without unreasonable delay, the
Issuers shall prepare and the Trustee shall authenticate definitive Securities
in exchange for temporary Securities. Until such exchange, temporary Securities
shall be entitled to the same rights, benefits and privileges as definitive
Securities. Notwithstanding the foregoing, so long as the Securities are
represented by a Global Security, such Global Security may be in typewritten
form. Notwithstanding the foregoing, this Section 2.10 shall not affect the
Issuers' obligations with respect to the Temporary Reg. S Global Security set
forth in Section 2.1.
Section 2.11 Cancellation. An Issuer at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer, exchange
or payment. The Trustee, or at the direction of the Trustee, the Registrar or
the Paying Agent (other than Parent, an Issuer or any of their respective
Affiliates), and no one else, shall cancel and, at the written direction of the
Issuers, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7, the Issuers may not issue new
Securities to replace Securities that they have paid or delivered to the Trustee
for cancellation. If any Issuer or any Guarantor shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
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Section 2.12 Defaulted Interest. If the Issuers default in a payment of
interest on the Securities, they shall, unless the Trustee fixes another record
date pursuant to Section 6.10, pay the defaulted interest, plus (to the extent
lawful) any interest payable on the defaulted interest, in any lawful manner.
The Issuers may pay the defaulted interest to the persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Issuers for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before any such subsequent special record date, the Issuers shall mail to
each Holder, with a copy to the Trustee, a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Section 2.13 CUSIP Number. The Issuers in issuing the Securities shall
use "CUSIP" numbers, and if so, the Trustee shall use such CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided, that
any such notice may state that no representation is made as to the correctness
or accuracy of the CUSIP numbers printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities.
Section 2.14 Deposit of Moneys. Prior to 11:00 a.m. New York City time
on each Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, the Issuers shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date and Net Proceeds Offer Payment
Date, as the case may be, in a timely manner which permits the Paying Agent to
remit payment to the Holders on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date and Net Proceeds Offer Payment
Date, as the case may be.
Section 2.15 Book-Entry Provisions for Global Securities. (a) The
Global Securities initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in Exhibit
B.
Members of, or participants in, the Depository ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under such
Global Security, and the Depository may be treated by the Issuers, the Trustee
and any agent of the Issuers or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the
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Global Securities may be transferred or exchanged for Physical Securities in
accordance with the rules and procedures of the Depository and the provisions of
Section 2.16. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in Global
Securities if (i) the Depository notifies the Issuers that it is unwilling or
unable to continue as Depository for any Global Security and a successor
Depository is not appointed by the Issuers within 90 days of such notice, (ii)
the Issuers notify the Trustee in writing that they elect to cause the issuance
of Securities in definitive form or (iii) an Event of Default has occurred and
is continuing and the Registrar has received a written request from the
Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Issuers shall execute, the Guarantors shall execute Guarantees, and the
Trustee shall authenticate and deliver, one or more Physical Securities of
authorized denominations in an aggregate principal amount equal to the principal
amount of the beneficial interest in the Global Security so transferred.
(d) In connection with the transfer of a Global Security as an entirety
to beneficial owners pursuant to paragraph (b) of this Section 2.15, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Issuers shall execute, the Guarantors shall execute Guarantees on and the
Trustee shall upon written instructions from the Issuers authenticate and
deliver, to each beneficial owner identified by the Depository in exchange for
its beneficial interest in such Global Security, an equal aggregate principal
amount of Physical Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (b) or
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
Section 2.16 Special Transfer Provisions. (a) Transfers to Non-QIB
Institutional Accredited Investors and Non-U.S. Persons. The following
additional provisions shall apply with respect to the registration of any
proposed transfer of a Restricted Security to any Institutional Accredited
Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
Restricted Security, whether or not such Security bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the initial date of issuance of such Security; provided,
that neither the Issuers nor any Affiliate of the Issuers has held any
beneficial interest in such Security, or portion thereof, at any time
on or prior to such second anniversary or (y) (1) in the case of a
transfer to an Institutional Accredited Investor which is not a QIB
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(excluding Non-U.S. Persons), the proposed transferee has delivered to
the Registrar a certificate substantially in the form of Exhibit C and
any legal opinions and certifications required thereby and (2) in the
case of a transfer to a Non-U.S. Person, the transferor has delivered
to the Registrar a certificate substantially in the form of Exhibit D;
(ii) if the proposed transferee is a Participant and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the IAI Global Security,
Temporary Reg. S Global Security or Regulation S Global Security, as
the case may be, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall
register the transfer and reflect on its books and records the date and
an increase in the principal amount of the IAI Global Security,
Temporary Reg. S Global Security or Regulation S Global Security, as
the case may be, in an amount equal to the principal amount of Physical
Securities to be transferred, and the Registrar shall cancel the
Physical Securities so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Security, upon receipt by the
Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above, the
Registrar shall register the transfer and reflect on its books and
records the date and (A) a decrease in the principal amount of the
Global Security from which such interests are to be transferred in an
amount equal to the principal amount of the Securities to be
transferred and (B) an increase in the principal amount of the IAI
Global Security or the Regulation S Global Security, as the case may
be, in an amount equal to the principal amount of the Securities to be
transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security to
a QIB:
(i) the Registrar shall register the transfer of any
Restricted Security, whether or not such Security bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the initial date of issuance of such Security; provided,
that neither the Issuers nor any Affiliate of the Issuers has held any
beneficial interest in such Security, or portion thereof, at any time
on or prior to the second anniversary of the initial date of issuance
of such Security or (y) such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security
stating, or has otherwise advised the Issuers and the Registrar in
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided
for on the form of Security stating, or has otherwise advised the
Issuers and the Registrar in writing, that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has
received such
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information regarding the Issuers as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule
144A;
(ii) if the proposed transferee is a Participant and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the 144A Global
Security, upon receipt by the Registrar of written instructions given
in accordance with the Depository's and the Registrar's procedures, the
Registrar shall, subject to clause (y) of paragraph (i) above, register
the transfer and reflect on its book and records the date and an
increase in the principal amount of the 144A Global Security in an
amount equal to the principal amount of Physical Securities to be
transferred, and the Registrar shall cancel the Physical Securities so
transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the IAI Global Security or the Regulation S
Global Security, upon receipt by the Registrar of written instructions
given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall, subject to clause (y) of paragraph (i)
above, register the transfer and reflect on its books and records the
date and (A) a decrease in the principal amount of the IAI Global
Security or the Regulation S Global Security, as the case may be, in an
amount equal to the principal amount of the Securities to be
transferred and (B) an increase in the principal amount of the 144A
Global Security in an amount equal to the principal amount of the
Securities to be transferred.
(c) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless (i) there
is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the
Issuers and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (ii) such Security has been sold pursuant to
an effective registration statement under the Securities Act.
(e) Temporary Reg. S. Global Security. Notwithstanding anything to the
contrary in Section 2.15 or 2.16, interests in the Temporary Reg. S Global
Security may not be offered or sold to a U.S. Person (other than to a QIB that
takes delivery in the form of an interest in the Rule 144A Global Security or to
an Institutional Accredited Investor that takes delivery in the form of an
interest in the IAI Global Security, so long as the other requirements of this
Indenture
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are met with respect to any such transfer) or for the account or benefit of a
U.S. Person prior to the expiration of the Distribution Compliance Period, and
no transfer or exchange of the Temporary Reg. S Global Security or interest in
the Temporary Reg. S Global Security may be made for a Physical Security or an
interest in a Physical Security until after the later of the date of expiration
of the Distribution Compliance Period and the date on which the certification
required by Regulation S relating to such transfer or exchange has been provided
to the effect that the beneficial owner or owners of such interest are not U.S.
Persons.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Issuers shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
Section 3.1 Notices to Trustee. If the Issuers elect to redeem
Securities pursuant to Section 3.7, they shall notify the Trustee in writing of
the Redemption Date, the Redemption Price and the principal amount of Securities
to be redeemed. The Issuers shall give notice of redemption to the Paying Agent
and Trustee at least 30 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be agreed to by the Trustee in writing),
together with an Officers' Certificate of each of them stating that such
redemption will comply with the conditions contained herein.
Section 3.2 Selection of Securities To Be Redeemed. In the event that
less than all of the Securities are to be redeemed at any time, selection of
such Securities for redemption will be made by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
such Securities are listed or, if such Securities are not then listed on a
national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, that no Securities of a
principal amount of $1,000 or less shall be redeemed in part; and provided,
further, that if a partial redemption is made with the net cash proceeds of an
Equity Offering, selection of the Securities or portions thereof for redemption
shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata
basis as is practicable (subject to the procedures of the Depository), unless
such method is otherwise prohibited.
Section 3.3 Notice of Redemption. At least 30 days but not more than 60
days before a Redemption Date, the Issuers shall mail a notice of redemption by
first class mail, postage prepaid, to each Holder whose Securities are to be
redeemed at its registered address. At the
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Issuers' request, the Trustee shall give the notice of redemption in the
Issuers' name and at the Issuers' expense. Each notice of redemption shall
identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Issuers defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price upon surrender to the
Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion thereof
will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding after such partial
redemption; and
(8) the Section of this Indenture pursuant to which the
Securities are to be redeemed.
The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption in whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 3.3, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price plus
accrued and unpaid interest, if any. Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price (which shall include accrued interest thereon to the Redemption Date), but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant Record Dates.
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Section 3.5 Deposit of Redemption Price. On or before 11:00 a.m. New
York time on the Redemption Date, the Issuers shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price plus accrued
interest, if any, of all Securities to be redeemed on that date.
If the Issuers comply with the preceding paragraph, then, unless the
Issuers default in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Securities are
presented for payment.
Section 3.6 Securities Redeemed in Part. Upon surrender of a Security
that is to be redeemed in part only, the Trustee shall upon written instruction
from the Issuers authenticate for the Holder a new Security or Securities in a
principal amount equal to the unredeemed portion of the Security surrendered.
Section 3.7 Optional Redemption. (a) Except as provided in Section
3.7(b), the Securities will not be redeemable at the option of the Issuers prior
to February 1, 2005. On and after such date, the Securities will be redeemable,
at the Issuers' option, in whole or in part, at the following Redemption Prices
(expressed in percentages of principal amount), if redeemed during the 12-month
period commencing on February 1st of the years set forth below, plus accrued and
unpaid interest, if any, to the Redemption Date:
<TABLE>
<CAPTION>
Period Redemption
- ------ Price
-----
<S> <C>
2005.................................................... 106.375%
2006.................................................... 104.250%
2007.................................................... 102.125%
2008 and thereafter..................................... 100.0000%
</TABLE>
(b) At any time, or from time to time, on or prior to February 3, 2003,
the Issuers may, at their option, use the net cash proceeds of one or more
Equity Offerings to redeem up to 35% of the aggregate principal amount of the
Securities issued pursuant to this Indenture at a Redemption Price equal to
112.750% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided, that after any such
redemption the aggregate principal amount of Securities outstanding must equal
at least 65% of the aggregate principal amount of the Securities theretofore
issued pursuant to this Indenture. In order to effect the foregoing redemption
with the net cash proceeds of any Equity Offering, the Issuers shall make such
redemption not more than 60 days after the consummation of any such Equity
Offering.
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ARTICLE FOUR
COVENANTS
Section 4.1 Payment of Securities. The Issuers shall pay the principal
of and interest on the Securities in the manner provided in the Securities. An
installment of principal of or interest on the Securities shall be considered
paid on the date it is due if the Trustee or Paying Agent holds on that date
U.S. Legal Tender designated for and sufficient to pay the installment. Interest
on the Securities will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Section 4.2 Maintenance of Office or Agency. (a) The Issuers shall
maintain in the Borough of Manhattan, The City of New York, the office or agency
required under Section 2.3. The Issuers shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.2.
(b) The Issuers may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Issuers will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c) The Issuers hereby initially designate the Trustee located in the
Borough of Manhattan, The City of New York, as such office of the Issuers in
accordance with Section 2.3.
Section 4.3 Limitation on Restricted Payments. (a) NATG shall not, and
shall not permit any of its Restricted Subsidiaries to directly or indirectly:
(A) declare or pay any dividend or make any distribution on or in respect of
shares of NATG's Capital Stock to holders of such Capital Stock (other than
dividends or distributions payable in Qualified Capital Stock of NATG), (B)
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
NATG or any Capital Stock of any Subsidiary of NATG not held by an Issuer or
Subsidiary Guarantor, or any warrants, rights or options to purchase or acquire
shares of any class of any such Capital Stock, or declare or pay any dividend,
or make any distribution, on or in respect of any such Capital Stock, (C) make
any principal payment on, purchase, defease, redeem, prepay or otherwise acquire
or retire for value, prior to any scheduled final maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Indebtedness, or (D) make
any Restricted Investment (each of the foregoing actions set forth in clauses
(A), (B), (C) and (D) being referred to as a "Restricted Payment"); provided,
that a Restricted Payment may be made, if at the time of such Restricted Payment
and immediately after giving effect thereto, (i) no Default or Event of Default
shall have occurred and be continuing, (ii) NATG is able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) in compliance
with Section 4.4 and (iii) the aggregate amount of Restricted Payments
(including such proposed Restricted Payment) made subsequent to
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December 31, 1999 (the amount expended for such purposes, if other than in cash,
being the fair market value of such property as determined reasonably and in
good faith by the Board of Directors of Parent) shall not exceed the sum of: (x)
50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss) of NATG earned subsequent to
December 31, 1999 and through the last day of the fiscal quarter ending prior to
the date the Restricted Payment occurs (the "Reference Date") treating such
period as a single accounting period; plus (y) 100% of the aggregate net cash
proceeds of, or fair market value of property other than cash (determined in
good faith by the Board of NATG) constituting, any equity contribution received
by NATG from a holder of NATG's Capital Stock to the extent not required to be
used to repay Indebtedness under the Senior Secured Credit Agreement or redeem
Securities under this Indenture; plus (z) (1) the lesser of (I) 100% of the
aggregate amount of cash and/or fair market value of property other than cash
(as determined in good faith by the Board of Directors of Parent) received by an
Issuer or Subsidiary Guarantor from the disposition or sale of any Restricted
Investment (other than to a Subsidiary of Parent) that was made after the Issue
Date and (II) the initial amount of such Investment; plus (2) an amount equal to
the net reduction in Restricted Investments in Unrestricted Subsidiaries of NATG
resulting from dividends, repayments of loans or advances or other transfers of
assets, in each case to an Issuer or Subsidiary Guarantor from an Unrestricted
Subsidiary; plus (3) to the extent any Unrestricted Subsidiary of NATG is
redesignated as a Restricted Subsidiary, the lesser of (I) the amount of NATG's
initial Investment in such Unrestricted Subsidiary and (II) the fair market
value of NATG's investment in such Unrestricted Subsidiary as of the date of
such redesignation; provided, that no amount shall be included in this clause
(z) to the extent such amount is included in Consolidated Net Income of NATG.
(b) The provisions of paragraph (a) above do not, however,
prohibit: (1) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of such dividend or
notice of such redemption if the dividend or redemption would have been
permitted on the date of declaration or notice; (2) the acquisition of any
Subordinated Indebtedness, either (i) solely in exchange for shares of Qualified
Capital Stock of Parent, (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Restricted Subsidiary of
Parent) of shares of Qualified Capital Stock of Parent, or (iii) with the net
cash proceeds of Permitted Refinancing Indebtedness used to Refinance such
Subordinated Indebtedness; (3) so long as no Default or Event of Default shall
have occurred and be continuing, dividends or loans to Parent to enable Parent
to repurchase Junior Subordinated Notes and/or Capital Stock of Parent from
former or current employees, officers, directors or consultants of Parent or any
of its Subsidiaries or their authorized representatives upon the death,
disability or termination of employment of such Persons, in an amount not to
exceed $2.0 million in any calendar year; provided, that NATG may carry over and
make in a subsequent year, in addition to the amounts permitted for such fiscal
year, the amount of such dividends or loans permitted to have been made but not
made in any preceding fiscal year up to a maximum of $10.0 million in any fiscal
year; (4) so long as no Default or Event of Default shall have occurred and be
continuing, dividends or loans to Parent not to exceed $100,000 in any fiscal
year, to enable Parent to make payments to holders of its Capital Stock in lieu
of issuance of fractional shares of its Capital Stock; (5) dividends or loans to
Parent to enable Parent to repurchase, or the repurchase by NATG or a Restricted
Subsidiary of NATG, for cash pursuant to, and in compliance with, the Put/Call
Agreements certain shares of Parent Common Stock and Parent Preferred Stock
issued and
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outstanding prior to the Issue Date; (6) dividends or loans to Parent in an
amount not to exceed $250,000 in any calendar year for the purpose of permitting
Parent to pay its ordinary operating expenses (including, without limitation,
directors' fees, indemnification obligations, professional fees and expenses);
(7) dividends or loans to Parent solely for the purpose of paying franchise
taxes, federal, state and local income taxes and interest and penalties with
respect thereto, if any, payable by Parent, provided, that any such income taxes
shall be attributable to income of NATG and its Restricted Subsidiaries; or (8)
so long as no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof, other Restricted Payments in an
aggregate amount not to exceed $7.5 million since the Issue Date.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the first
paragraph of this Section 4.3(a), amounts expended pursuant to clauses (1),
(2)(i), (2)(ii), (3), (4) and (6), in each case to the extent not duplicative of
amounts already included therein.
(c) The amount of all Restricted Payments (other than an Investment
(which shall be valued as set forth in the definition thereof) and cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued to or by NATG or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.3 shall be determined by the Board of Directors of Parent whose
resolution with respect thereto shall be conclusive. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
Independent Financial Adviser if the fair market value exceeds $10.0 million.
(d) Not later than the date of making any Restricted Payment, NATG
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon Parent's latest available internal quarterly
financial statements.
Section 4.4 Limitation on Incurrence of Additional Indebtedness. NATG
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, Incur any Indebtedness (other than Permitted Indebtedness);
provided, that if no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the Incurrence of any such
Indebtedness, NATG or any Subsidiary Guarantor may Incur Indebtedness
(including, without limitation, Acquired Indebtedness), if on the date of the
Incurrence of such Indebtedness, after giving effect to the Incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio is greater than 2.0 to 1.0 during
the period commencing on the Issue Date and ending January 31, 2002, 2.25 to 1.0
during the period commencing February 1, 2002 and ending January 31, 2004, and
2.5 to 1.0 thereafter; provided, further, that NATG shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any
Contingent Obligations in respect of any Junior Subordinated Notes.
Section 4.5 Corporate Existence. Except as otherwise permitted by
Article Five, NATG shall do or cause to be done all things necessary to preserve
and keep in full force and effect its
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limited liability company existence and the corporate, limited liability
company, partnership or other existence of each of its Restricted Subsidiaries
(including the Corporate Issuer) in accordance with the respective
organizational documents of each such Restricted Subsidiary and the rights
(charter and statutory) and material franchises of NATG and each of its
Restricted Subsidiaries; provided, that NATG shall not be required to preserve
any such right, franchise or corporate existence with respect to any Subsidiary
of an Issuer if the Board of Directors of Parent shall determine that the loss
thereof is not, and will not be, adverse in any material respect to the Holders;
and provided, further, that notwithstanding anything to the contrary in this
Indenture, the Issuers shall ensure that at all times at least one of the
Issuers or any co-issuer of the Securities is a corporation organized under the
laws of the United States or any state thereof or the District of Columbia.
Section 4.6 Payment of Taxes and Other Claims. (a) NATG will, and will
cause each of its Restricted Subsidiaries to, pay all material taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty, fine or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty, fine or interest shall be incurred with respect thereto; provided, that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, with respect to any liability
for taxes, as shall be required in conformity with GAAP shall have been made
therefor in the financial statements of NATG or any of its Restricted
Subsidiaries.
(b) NATG will not, and will not permit any of its Restricted
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Parent and its Restricted Subsidiaries).
Section 4.7 Maintenance of Properties and Insurance. NATG will, and
will cause its Restricted Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of NATG and its Restricted
Subsidiaries and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. NATG will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and businesses of its
Restricted Subsidiaries against loss or damage (including, without limitation,
business interruption insurance) of the kinds customarily carried or maintained
under similar circumstances by corporations of established reputation engaged in
similar businesses.
Section 4.8 Compliance Certificate; Notice of Default. (a) Each Issuer
shall deliver to the Trustee, within 120 days after the close of each fiscal
year an Officers' Certificate stating that a review of the activities of such
Issuer has been made under the supervision of the signing Officers with a view
to determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such
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certificate, that to the best of such Officer's knowledge, such Issuer during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such year
and at the date of such certificate there is no Default or Event of Default that
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe its status with particularity.
The Officers' Certificate shall also notify the Trustee should the Issuers elect
to change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the recommendations of the American
Institute of Certified Public Accountants, the annual financial statements
delivered pursuant to Section 4.10 shall be accompanied by a written report of
the Issuers' independent accountants (who shall be a firm of established
national reputation) that in conducting their audit of such financial statements
nothing has come to their attention that would lead them to believe that the
Issuers have violated any provisions of Article Four, Five or Six of this
Indenture insofar as they relate to accounting matters or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) Each Issuer shall deliver to the Trustee, forthwith upon becoming
aware of any Default or Event of Default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying the Default or Event of Default and describing its status with
particularity.
Section 4.9 Compliance with Laws. NATG shall comply, and shall cause
each of its Restricted Subsidiaries to comply, with all applicable statutes,
rules, regulations, orders and restrictions of the United States, all states and
municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of their
respective properties, except for such noncompliances as would not in the
aggregate have a material adverse effect on the financial condition or results
of operations of NATG and its Restricted Subsidiaries taken as a whole.
Section 4.10 Reports to Holders. (a) Whether or not required by the
rules and regulations of the SEC, so long as any Securities are outstanding,
Parent and the Issuers shall furnish the Holders of Securities:
(1) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if Parent or the Issuers were required to file such Forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial
condition and results of operations of Parent and its consolidated
Subsidiaries (or, if Parent shall cease to own more than a majority of
the Voting Securities of NATG, of NATG and its consolidated
subsidiaries) (showing in the case of Parent's financial statements, in
reasonable detail, either on the face of the financial statements or in
the footnotes thereto, the information required to be presented with
respect to the Issuers and the Guarantors under Staff
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Accounting Bulletin 53 or any successor interpretation or rule of the
SEC with respect thereto) and, with respect to the annual information
only, a report thereon by the certified independent accountants of
Parent and its consolidated subsidiaries (or, if Parent shall cease to
own more than a majority of the Voting Securities of NATG, of NATG and
its consolidated subsidiaries), in each case, within five days after
the time specified in the rules and regulations of the SEC;
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if Parent or the Issuers were required to file
such reports, in each case within two days after the time periods
specified in the SEC's rules and regulations.
(b) Following the consummation of the exchange offer contemplated by a
Registration Rights Agreement, whether or not required by the rules and
regulations of the SEC, Parent or NATG will file a copy of all such information
and reports with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, for so long as any Securities
remain outstanding, NATG shall furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. Parent and the
Issuers will also comply with the other provisions of TIA ss.314(a).
Section 4.11 Waiver of Stay, Extension or Usury Laws. Each of the
Issuers and each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive such Issuer or Guarantor
from paying all or any portion of the principal of and/or interest on the
Securities or the Guarantee of any such Guarantor as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and (to the extent that it may
lawfully do so) each hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 4.12 Limitations on Transactions with Affiliates. (a) NATG
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with or for the benefit of any Affiliate (each an
"Affiliate Transaction") other than (i) Affiliate Transactions permitted under
the following paragraph and (ii) Affiliate Transactions on terms that are no
less favorable to NATG or such Restricted Subsidiary, as the case may be, than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of
NATG or such Restricted Subsidiary. All Affiliate Transactions (and each series
of related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value in
excess of $2.5 million shall be approved by the Board of Directors of NATG or
such Restricted Subsidiary, as the case may be, such approval to be
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evidenced by a resolution stating that such Board of Directors has determined
that such transaction complies with the foregoing provisions. If NATG or any
such Restricted Subsidiary enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves an
aggregate fair market value of more than $10.0 million, NATG or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
an opinion that the Affiliate Transaction complies with the requirements of this
covenant from an Independent Financial Advisor and file the same with the
Trustee.
(b) The restrictions set forth in paragraph (a) shall not apply to: (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees, agents or consultants of Parent, NATG or any
Restricted Subsidiaries of NATG as determined in good faith by Parent's Board of
Directors or senior officers; (ii) transactions exclusively between or among any
of NATG or any Restricted Subsidiaries of NATG; provided, that such transactions
are not otherwise prohibited by this Indenture; (iii) any agreement as in effect
as of the Issue Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to NATG or its Subsidiaries, as the case may be, in any
material respect, than the original agreement as in effect on the Issue Date;
(iv) Restricted Payments permitted under Section 4.3; (v) any issuance of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans of Parent entered into in the ordinary course of business and
approved by Parent's Board of Directors; (vi) the payment of reasonable and
customary management, consulting and advisory fees and related out of pocket
expenses of WSP and its Affiliates, including, without limitation, in connection
with acquisitions, divestitures, or financings by Parent or any of its
Restricted Subsidiaries, in each case as may be approved by the Board of
Directors of Parent in good faith; (vii) loans and advances to employees and
officers of Parent and its Restricted Subsidiaries in the ordinary course of
business for bona fide business purposes not in excess of $1.0 million at any
time outstanding; (viii) indemnification agreements provided for the benefit of
Parent or any Restricted Subsidiary of Parent from officers, directors,
employees agents or consultants of Parent or any Restricted Subsidiary of
Parent; (ix) transactions effected as part of a Qualified Receivables
Transaction; and (x) the payment to Jack Reich for consulting services pursuant
to his consulting agreement with Parent and its Subsidiaries as in effect as of
the Issue Date or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) in any replacement agreement
thereto so long as any such amendment or replacement agreement is not more
disadvantageous to Parent or its Subsidiaries, as the case may be, in any
material respect than the original agreement as in effect on the Issue Date.
Section 4.13 Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. NATG shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of NATG to: (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
to pay any Indebtedness or other obligation owed to any Issuer or Subsidiary
Guarantor; or (c) transfer any of its property or assets to any Issuer or
Subsidiary Guarantor, except for such encumbrances or restrictions existing
under or by reason of: (1) applicable law, regulations or orders of any
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governmental or judicial authority; (2) this Indenture, the Securities, the
Guarantees, or the Senior Secured Credit Agreement to the extent Incurred in
accordance with this Indenture; (3) customary non-assignment provisions of any
contract or any lease governing a leasehold interest of NATG or any Restricted
Subsidiary of NATG; (4) agreements existing on the Issue Date to the extent and
in the manner such agreements are in effect on the Issue Date; (5) any
restriction or encumbrance contained in contracts for sale of assets permitted
by this Indenture in respect of the assets being sold pursuant to such contracts
pending the close of such sale, which encumbrance or restriction is not
applicable to any asset other than the asset being sold pursuant to such
contract; (6) Purchase Money Obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(c) above on the property so acquired; (7) restrictions of the nature described
in clause (c) above on the transfer of assets subject to any Lien permitted
under this Indenture imposed by the holder of such Lien; (8) any instrument
governing Indebtedness or Capital Stock of a Person acquired by NATG or any of
its Restricted Subsidiaries as in effect at the time of such acquisition (except
to the extent such Indebtedness or Capital Stock was incurred in connection with
or in contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired; provided,
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of this Indenture to be incurred; (9) provisions with respect to the disposition
or distribution of assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements entered into in
the ordinary course of business; (10) any encumbrance or restriction on a
Receivables Entity effected in connection with a Qualified Receivables
Transaction; (11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business; or
(l2) an agreement governing Indebtedness incurred to refinance the Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clause (b)
or (d) above; provided, that the provisions relating to such encumbrance or
restriction contained in any such Indebtedness are no less favorable to the
Issuers or Subsidiary Guarantors in any material respect as determined by the
Board of Directors of Parent in its reasonable and good faith judgment than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (b) or (d).
` Section 4.14 Limitation on Liens. NATG shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of NATG or any of its Restricted Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any state or under any
similar recording or notice statute, unless, (i) in the case of Liens securing
Subordinated Indebtedness, the Securities and Guarantees are secured by a Lien
on such property, assets or proceeds that is senior in priority to such Liens
and (ii) in all other cases, the Securities and Guarantees are equally and
ratably secured. Notwithstanding the foregoing, this Section 4.14 shall not
prohibit or apply to (A) Liens securing the Senior Secured Credit Agreement; (B)
Liens securing Senior Debt and Liens securing Guarantor Senior Debt; (C) Liens
securing the Securities and the Guarantees; (D) Liens of an Issuer or Subsidiary
Guarantor on assets of any other Issuer or Subsidiary Guarantor; and (E)
Permitted Liens.
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Section 4.15 Change of Control. (a) Upon the occurrence of a Change of
Control, the Issuers shall be obligated to make an offer to purchase (the
"Change of Control Offer"), and shall purchase, on a Business Day (the "Change
of Control Payment Date") as described below, all of the then outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the Change of Control
Payment Date. The Change of Control Offer shall remain open for at least 20
Business Days and until the close of business on the Change of Control Payment
Date.
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following any Change of Control, each Issuer covenants to
(i) repay in full all Indebtedness under the Senior Secured Credit Agreement and
all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full all Indebtedness under the Credit Agreement
and all other such Senior Debt and to repay the Indebtedness owed to each lender
which has accepted such offer or (ii) obtain the requisite consents under the
Senior Secured Credit Agreement and all other Senior Debt to permit the
repurchase of the Securities as provided below. An Issuer shall first comply
with the covenant in the immediately preceding sentence before it shall be
required to repurchase Securities pursuant to the provisions described below. An
Issuer's failure to comply with the covenant described in the second preceding
sentence (and any failure to send the notice referred to in clause (c) below
because same is prohibited by the second preceding sentence) may (with notice
and lapse of time) constitute an Event of Default described in clause (c) of
Section 6.1 but shall not constitute an Event of Default described in clause (b)
of Section 6.1.
(c) Within 30 days following the date upon which a Change of Control
occurs (the "Change of Control Date"), the Issuers shall send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders shall
contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Securities tendered and not withdrawn
will be accepted for payment;
(2) the purchase price (including the amount of accrued
interest) and the Change of Control Payment Date, which shall be a
Business Day, that is not earlier than 30 days or later than 45 days
from the date such notice is mailed;
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Issuers default in making payment
therefor, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent
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at the address specified in the notice prior to the close of business
on the third Business Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the second Business Day
prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in part
will be issued new Securities in a principal amount equal to the
unpurchased portion of the Securities surrendered; and
(8) the circumstances and relevant facts regarding such Change
of Control.
(d) On or before the Change of Control Payment Date, the Issuers shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof being purchased by the Issuers. The Paying Agent shall promptly mail to
the Holders of Securities so accepted payment in an amount equal to the purchase
price plus accrued interest, if any, and upon written order of the Issuers the
Trustee shall promptly authenticate and mail to such Holders new Securities
equal in principal amount to any unpurchased portion of the Securities
surrendered. Any Securities not so accepted shall be promptly mailed by the
Issuers to the Holder thereof. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
(e) Any amounts remaining with the Paying Agent after the purchase of
Securities pursuant to a Change of Control Offer shall be returned by the
Trustee to the Issuers.
(f) The Issuers intend to comply with the requirements of Rule 14e-1
under the Exchange Act to the extent such laws and regulations are applicable in
connection with the repurchase of Securities pursuant to a Change of Control
Offer. To the extent the Issuers comply with the provisions of any such
securities laws or regulations, the Issuers will not be deemed to have breached
their obligations under the provisions of this Section 4.15.
Section 4.16 Limitation on Asset Sales. (a) NATG shall not, and shall
not permit any of its Restricted Subsidiaries to, consummate an Asset Sale,
unless (i) NATG or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale which, taken as a whole,
is at least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith, by Parent's Board of Directors); (ii)
at least 75% of the consideration received by the Issuers or the Restricted
Subsidiary, as the case may be, from such Asset Sale is received at the time of
the disposition and consists of one of the following: (a) cash or Cash
Equivalents; (b) any liabilities (as shown on NATG's or such Restricted
Subsidiary's most recent balance sheet) of NATG or any such Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Securities) that are assumed by the transferee of any such assets, (c)
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any securities, notes or other obligations received by NATG or any such
Subsidiary from such transferee that are converted by NATG or any such
Subsidiary into cash within 180 days after such Asset Sale (to the extent of the
cash received); and (d) any combination of the foregoing; (iii) upon the
consummation of an Asset Sale, NATG shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor
Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under
any revolving credit facility, effect a permanent reduction in the availability
under such revolving credit facility; provided, that no such permanent reduction
in availability need be made prior to December 15, 2001 to the extent that the
Senior Debt being repaid had been borrowed under the acquisition subfacility of
the revolving credit facility under the Senior Secured Credit Agreement and/or
(B) to invest in or to acquire other properties and assets that replace the
properties and assets that were the subject of such Asset Sale or in properties
and assets that will be used or useful in a Permitted Business ("Replacement
Assets") and/or (C) to acquire all or substantially all of the assets of, or all
of the voting stock of, another Person engaged in a Permitted Business;
provided, that if voting stock is acquired, such Person becomes a Subsidiary
Guarantor; provided, that NATG may not sell or otherwise dispose of any Capital
Stock of the Corporate Issuer except in compliance with Section 5.1. Pending the
final application of any Net Cash Proceeds, NATG or such Restricted Subsidiary
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Cash Proceeds in any manner that is not otherwise prohibited by this Indenture.
On the 366th day after an Asset Sale or such earlier date, if any, as the senior
management or Board of Directors, as the case may be, of NATG or such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clause (iii) of the preceding paragraph (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
has not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clause (iii) of the next preceding sentence (each a "Net Proceeds
Offer Amount") shall be applied by NATG or such Restricted Subsidiary to make an
offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that
principal amount of Securities equal to the Net Proceeds Offer Amount at a price
equal to 100% of the principal amount of the Securities to be purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase; provided,
that if at any time any non-cash consideration received by NATG or any such
Restricted Subsidiary, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this covenant. The
Issuers may defer the Net Proceeds Offer until there is an aggregate unutilized
Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from
one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer
Amount, and not just the amount in excess of $10.0 million, shall be applied as
required pursuant to this paragraph).
(b) In the event of the transfer of substantially all (but not all) of
the property and assets of NATG and its Restricted Subsidiaries as an entirety
to a Person in a transaction permitted under the covenant described under
Section 5.1. hereof, the successor corporation shall be deemed to have sold the
properties and assets of NATG and its Subsidiaries not so transferred for
purposes of this
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covenant, and shall comply with the provisions of this covenant with respect to
such deemed sale as if it were an Asset Sale. In addition, the fair market value
of such properties and assets of NATG or such Subsidiaries deemed to be sold
pursuant to this paragraph less the fair market value of all liabilities of such
Person related to such property and assets not transferred shall be deemed to be
Net Cash Proceeds for purposes of this covenant.
(c) Notwithstanding the foregoing provisions of this covenant, NATG and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such clauses to the extent that: (1) at least 75% of the
consideration for such Asset Sale constitutes Replacement Assets; and (2) such
Asset Sale is for fair market value as determined in good faith by the Board of
Directors of Parent; provided, that any consideration not constituting
Replacement Assets received by NATG or any of its Restricted Subsidiaries in
connection with any Asset Sale permitted to be consummated under this clause (c)
shall constitute Net Cash Proceeds subject to the provisions the foregoing
provisions of this covenant.
(d) Notice of each Net Proceeds Offer shall be mailed or caused to be
mailed, by first class mail, by NATG or the relevant Subsidiary within 30 days
following the applicable Net Proceeds Offer Trigger Date to all Holders at their
last registered addresses, with a copy to the Trustee. A Net Proceeds Offer
shall remain open for a period of 20 Business Days or such longer period as may
be required by law. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Net
Proceeds Offer and shall comply with the procedures set forth in this Indenture.
To the extent that the aggregate amount of Securities tendered is less than the
Net Proceeds Offer Amount, NATG or the relevant Restricted Subsidiary may use
the remaining Net Proceeds Offer Amount for general corporate purposes or for
any other purpose not prohibited by this Indenture, and any such remaining Net
Cash Proceeds shall thereafter be deemed not to constitute Net Cash Proceeds.
(e) NATG and its Restricted Subsidiaries intend to comply with the
requirements of Rule 14e-1 under the Exchange Act to the extent such laws and
regulations are applicable in connection with the repurchase of Securities
pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this covenant,
NATG and its Restricted Subsidiaries shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached their obligations
under this covenant by virtue thereof.
Section 4.17 Prohibition on Incurrence of Senior Subordinated Debt.
NATG shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (other than the Securities and
the Guarantees and Indebtedness owed to an Issuer or a Wholly Owned Restricted
Subsidiary of an Issuer) that is by its terms (or by the terms of any agreement
governing such Indebtedness) subordinated in right of payment to any other
Indebtedness of such Person unless such Indebtedness (i) is Incurred by an
Issuer or Subsidiary Guarantor and (ii) is by its terms (or by the terms of any
agreement governing such Indebtedness) made expressly subordinate to the
obligations of such Issuer or Subsidiary Guarantor under this Indenture, the
Securities (in the case of an Issuer) and the Guarantees (in the case of a
Subsidiary
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Guarantor) to the same extent and in the same manner as such obligations are
subordinated to Senior Debt or Guarantor Senior Debt, as applicable.
Section 4.18 Additional Subsidiary Guarantees. (a) NATG will cause any
Subsidiary of NATG that after the Issue Date first becomes a guarantor of an
Issuer's obligations under the Senior Secured Credit Agreement to, within 10
days of the date on which it became such a guarantor (i) execute and deliver to
the Trustee a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Subsidiary shall unconditionally guarantee all of
the Issuers' obligations under the Securities and this Indenture on the terms
set forth in this Indenture and (ii) deliver to the Trustee an Opinion of
Counsel that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Subsidiary. Thereafter, such Subsidiary shall be
a Guarantor for all purposes of this Indenture.
(b) In the event that the Senior Secured Credit Agreement shall no
longer be in effect, NATG shall cause any Domestic Restricted Subsidiary of
NATG, other than a Receivables Entity or a Restricted Subsidiary that is already
a Guarantor, to promptly (i) execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee pursuant to which such
Subsidiary shall unconditionally guarantee all of the Issuers' obligations under
the Securities and this Indenture on the terms set forth in this Indenture and
(ii) deliver to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and constitutes a legal, valid, binding and enforceable obligation of such
Subsidiary. Thereafter, such Subsidiary shall be a Guarantor for all purposes of
this Indenture.
Section 4.19 Conduct of Business. (a) NATG shall not, and shall not
permit any of its Restricted Subsidiaries to, engage in any business other than
Permitted Businesses.
(b) The Corporate Issuer shall engage in no business other than the
issuance of the Securities. Notwithstanding the foregoing, the Corporate Issuer
may engage in those activities that are incidental to (i) the maintenance of is
corporate existence in compliance with applicable law, (ii) legal, tax and
accounting matters in connection with any of the foregoing activities and (iii)
entering into, and performing its obligations under, the Documents to which it
is a party.
Section 4.20 Disposal of Subsidiary Stock. Except for any sale of 100%
of the Capital Stock or other equity securities of a Restricted Subsidiary
effected in compliance with Section 4.3 and Section 5.1, NATG will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly sell,
assign, pledge or otherwise encumber or dispose of any shares of Capital Stock
or other equity securities of any Restricted Subsidiary of NATG, except (1) to
qualify directors if required by applicable law, (2) to an Issuer or Subsidiary
Guarantor, and (3) Liens in favor of the lenders under the Senior Secured Credit
Agreement.
Section 4.21 Payments for Consent. NATG will not, and will not permit
any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
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paid and is paid to all Holders of the Securities that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
Section 4.22 Maintenance of Separate Identity. Parent and NATG shall
take all actions required to maintain NATG's status and the status of NATG's
Restricted Subsidiaries as separate legal entities from Parent, including,
without limitation; (i) not holding NATG or its Restricted Subsidiaries out to
third parties as other than entities with assets and liabilities distinct from
Parent and Parent's other subsidiaries; (ii) not holding Parent out to be
responsible for the debts of NATG or NATG's Restricted Subsidiaries or, other
than by reason of owning Voting Securities of NATG, for any decisions or actions
relating to NATG; (iii) taking such other actions as are necessary on Parent's
part to ensure that all corporate procedures required by Parent's and NATG's
respective certificates of incorporation or of formation, as applicable, and
by-laws, if applicable, are duly and validly taken; (iv) keeping correct and
complete records and books of accounting and corporate minutes; and (v) not
acting in any manner that could foreseeably mislead others with respect to
NATG's and NATG's Restricted Subsidiaries separate identities.
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ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.1 Merger, Consolidation and Sale of Assets. (a) No Issuer
shall, in a single transaction or series of related transactions, consolidate or
merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Restricted Subsidiary of such
Issuer to sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the assets of such Issuer and its Restricted Subsidiaries
(determined on a consolidated basis for such Issuer and its Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless: (i) either (1) such Issuer shall be the surviving or continuing
corporation or (2) the Person (if other than such Issuer) formed by such
consolidation or into which such Issuer is merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of such Issuer and its Restricted Subsidiaries
substantially as an entirety (for purposes of this paragraph, the "Surviving
Entity") (x) shall be a corporation, partnership, trust or a limited liability
company organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and (y) shall expressly assume, by
supplemental indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on all of the Securities and the
performance of every covenant of the Securities, this Indenture and the
Registration Rights Agreement on the part of such Issuer to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), such Issuer or
such Surviving Entity, as the case may be, shall be able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.4; (iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (1)(ii)(y) above
(including, without limitation, giving effect to any Indebtedness and Acquired
Indebtedness incurred or anticipated to be incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; and (iv) such Issuer or Surviving
Entity, as the case may be, shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied. Notwithstanding the foregoing, the merger of an
Issuer with an Affiliate incorporated solely for the purpose of reincorporating
or similarly reorganizing such in another jurisdiction shall be permitted.
(b) For purposes of the foregoing paragraph (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of an Issuer the Capital Stock of which constitutes
all or substantially all of the properties and assets of such Issuer, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of such Issuer.
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(c) Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with Section 4.16 shall not, and NATG
shall not cause or permit any Guarantor to, consolidate with or merge with or
into any Person unless: (i) the entity formed by or surviving any such
consolidation or merger (if other than such Guarantor) is a corporation,
partnership, trust or limited liability company organized and existing under the
laws of the United States or any State thereof or the District of Columbia; (ii)
such entity assumes by supplemental indenture all of the obligations of such
Guarantor under this Indenture and on its Guarantee; (iii) immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing; and (iv) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis,
Parent could satisfy the provisions of clause (ii) of paragraph (a) of this
Section 5.1. Any merger or consolidation of a Guarantor with and into an Issuer
(with such Issuer being the surviving entity) or a Guarantor that is a Wholly
Owned Subsidiary of an Issuer need only comply with clause (iv) of paragraph (a)
of this Section 5.1.
(d) Notwithstanding anything to the contrary in this Section 5.1, no
transaction shall be permitted under this Section 5.1 unless after giving effect
thereto, there shall be a co-issuer of the Securities that is a corporation
organized and existing under the laws of the United States or any State thereof
or the District of Columbia.
Section 5.2 Successor Corporation Substituted. Upon any consolidation,
combination or merger or any transfer of all or substantially all of the assets
of an Issuer in accordance with Section 5.1 in which such Issuer is not the
continuing corporation, the successor Person formed by such consolidation or
into which such Issuer is merged or to which such conveyance, lease or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, such Issuer under this Indenture and the Securities with the same
effect as if such Surviving Entity had been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.1 Events of Default. Each of the following shall be an "Event
of Default":
(a) the failure to pay interest on any Securities when the same becomes
due and payable and the default continues for a period of 30 days (whether or
not such payment shall be prohibited by Article Ten or Article Twelve of this
Indenture);
(b) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Securities tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article Ten or Article Twelve of this
Indenture);
(c) a default in the observance or performance of any other covenant or
agreement contained in this Indenture, which default continues for a period of
30 days after the Issuers
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receive written notice specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Securities;
(d) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of NATG or any Restricted Subsidiary of NATG (other than
Non-Recourse Debt of a Receivables Entity) or the acceleration of the final
stated maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 20 days of receipt by NATG or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal amount
of such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final maturity or which
has been accelerated (in each case with respect to which the 20-day period
described above has elapsed), aggregates $10.0 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against NATG or any of its Significant
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and
non-appealable;
(f) Parent, an Issuer, or any of their respective Significant
Subsidiaries (i) commences a voluntary case or proceeding under any Bankruptcy
Law with respect to itself, (ii) consents to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (iii) consents to the appointment of a custodian of it or for
substantially all of its property, (iv) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it, (v) makes a
general assignment for the benefit of its creditors or (vi) takes any corporate
action to authorize or effect any of the foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of Parent, an Issuer or any of their respective
Significant Subsidiaries in an involuntary case or proceeding under any
Bankruptcy Law, which shall (i) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of Parent, an
Issuer or any of their respective Significant Subsidiaries, (ii) appoint a
Custodian of Parent, an Issuer or any of their respective Significant
Subsidiaries or for substantially all of any property of any of them or (iii)
order the winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or
(h) (i) any Guarantee or any provision thereof shall cease to be in
full force or effect (other than in accordance with its express terms), or (ii)
Parent or any other Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under its
Guarantee, or (iii) Parent or any other Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed, after giving effect to any applicable grace periods,
pursuant to its Guarantee.
Section 6.2 Acceleration. If an Event of Default (other than an Event
of Default specified in either clause (f) or (g) of Section 6.1 above with
respect to an Issuer) shall occur and be continuing, the Trustee or the Holders
of at least 25% in principal amount of outstanding
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Securities may declare the principal of and accrued interest on all the
Securities to be due and payable by notice in writing to the Issuers (and the
Trustee if given by the Holders) specifying the respective Event of Default and
that it is a "notice of acceleration" (the "Acceleration Notice"), and the same
(i) shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Senior Secured Credit Agreement, shall become immediately
due and payable upon the first to occur of an acceleration under the Senior
Secured Credit Agreement or 5 business days after receipt by the Issuers and the
Representative under the Senior Secured Credit Agreement of such Acceleration
Notice but only if such Event of Default is then continuing. If an Event of
Default specified in either clause (f) or (g) of Section 6.1 above with respect
to an Issuer occurs and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may rescind and cancel such declaration and
its consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Issuers have paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
either clause (f) or (g) of Section 6.1, the Trustee shall have received an
Officers' Certificate from each Issuer and an Opinion of Counsel that such Event
of Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Section 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4 Waiver of Past Defaults. Subject to Sections 2.9, 6.7 and
9.2, the Holders of not less than a majority in principal amount of the
outstanding Securities by notice to the Trustee may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of or interest on any Security as specified in clauses (a) and (b) of
Section 6.1. Each Issuer shall deliver to the Trustee an Officers' Certificate
stating that the requisite
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percentage of Holders have consented to such waiver and attaching copies of such
consents. When a Default or Event of Default is waived, it is cured and ceases.
Section 6.5 Control by Majority. The Holders of not less than a
majority in principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. Subject to Section
7.1, however, the Trustee may refuse to follow any direction that conflicts with
any law or this Indenture, that the Trustee determines may be unduly prejudicial
to the rights of another Securityholder, or that may involve the Trustee in
personal liability; provided, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
Section 6.6 Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 45-day period the Holder or Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 6.7 Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default in
payment of principal or interest specified in clause (a) or (b) of Section 6.1
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Issuers or any
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other obligor on the Securities or the Guarantees for the whole amount of
principal and accrued interest and fees remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Securityholders allowed in any judicial
proceedings relating to any Issuer or Guarantor, their respective creditors or
property, and shall be entitled and empowered to participate as a member, voting
or otherwise, of any official committee of creditors appointed in such matter
and to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same, and any Custodian in any such
judicial proceedings is hereby authorized by each Securityholder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agent and counsel, and any other amounts due
the Trustee under Section 7.7. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money or property
pursuant to this Article Six, it shall pay out the money or property in the
following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of ny kind, according to the amounts due and
payable on the Securities for interest;
Third: to Holders for principal amounts due and unpaid on the
Securities, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for principal; and
Fourth: to the Issuers or, if applicable, the Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Issuers, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
Section 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an
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undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by a Holder or Holders of more than 10% in principal amount of the outstanding
Securities.
ARTICLE SEVEN
TRUSTEE
Section 7.1 Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth herein or in the TIA and no duties, covenants,
responsibilities or obligations shall be implied in this Indenture
against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
(including Officers' Certificates) or opinions (including Opinions of
Counsel) furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture, but shall not be obligated to verify the contents
thereof.
(c) Notwithstanding anything to the contrary herein, the Trustee may
not be relieved from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) This paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
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(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.1.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct on
the part of the Trustee, the Trustee shall not be responsible for the
application of any money by any Paying Agent other than the Trustee.
Section 7.2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and an Opinion of Counsel, which shall to the extent
relevant, conform to the provisions of Section 13.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection from liability in respect of any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
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(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any Officers'
Certificate), statement, instrument, opinion (including any Opinion of Counsel),
notice, request, direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled, upon reasonable notice to the Issuers, to examine the books, records,
and premises of the Issuers, personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
Section 7.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Issuers, their respective Subsidiaries, and their
respective Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Issuers' use of the
proceeds from the issuance of the Securities, and it shall not be responsible
for any statement of the Issuers or the Guarantors in this Indenture or any
document issued in connection with the sale of Securities or any statement in
the Securities other than the Trustee's certificate of authentication. The
Trustee makes no representations with respect to the effectiveness or adequacy
of this Indenture.
Section 7.5 Notice of Default. If a Default or an Event of Default
occurs and is continuing and the Trustee receives actual notice of such Default
or Event of Default, the Trustee shall mail to each Securityholder notice of the
uncured Default or Event of Default within 60 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Security, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or the Net Proceeds Offer Payment Date
pursuant to a Net Proceeds Offer, the Trustee may withhold the notice if and so
long as the Board of Directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determines
that withholding the notice is in the interest of the Securityholders.
Section 7.6 Reports by Trustee to Holders. Within 60 days after each
May 15, beginning with the first May 15 following the date of this Indenture,
the Trustee shall, to the extent that any of the events described in TIA ss.
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Securityholder a brief report dated as of such date that complies with TIA
ss. 313(a). The Trustee also shall comply with TIA ss.ss. 313(b), 313(c) and
313(d).
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A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Issuers and filed with the Commission and each securities
exchange, if any, on which the Securities are then listed.
The Issuers shall notify the Trustee if the Securities become listed on
any securities exchange or of any delisting thereof and the Trustee shall comply
with TIA ss. 313(d).
Section 7.7 Compensation and Indemnity. The Issuers shall pay to the
Trustee from time to time reasonable compensation for its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances (including
reasonable fees and expenses of counsel) incurred or made by it in addition to
the compensation for its services, except any such disbursements, expenses and
advances as may be attributable to the Trustee's negligence, bad faith or
willful misconduct. Such expenses shall include the reasonable fees and expenses
of the Trustee's agents and counsel.
The Issuers shall indemnify the Trustee and its agents, employees,
officers, stockholders and directors for, and hold them harmless against, any
claim (whether asserted by the Issuers or any other Person), loss, liability or
expense incurred by them except for such actions to the extent caused by any
negligence, bad faith or willful misconduct on their part, arising out of or in
connection with the acceptance or administration of this trust including the
costs and expenses of enforcing this Indenture against the Issuers (including
this Section 7.7), including the reasonable costs and expenses of defending
themselves against or investigating any claim or liability in connection with
the exercise or performance of any of the Trustee's rights, powers or duties
hereunder. The Trustee shall notify the Issuers promptly of any claim asserted
against the Trustee or any of its agents, employees, officers, stockholders and
directors for which it may seek indemnity. The Issuers may, subject to the
approval of the Trustee, defend the claim and the Trustee shall cooperate in the
defense. The Trustee and its agents, employees, officers, stockholders and
directors subject to the claim may have separate counsel and the Issuers shall
pay the reasonable fees and expenses of such counsel; provided, that the Issuers
will not be required to pay such fees and expenses if, subject to the approval
of the Trustee, it assumes the Trustee's defense and there is no conflict of
interest between the Issuers and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection with
such defense as reasonably determined by the Trustee. The Issuers need not pay
for any settlement made without their written consent, which consent will not be
unreasonably withheld or delayed. The Issuers need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Issuers' payment obligations in this Section 7.7, the
Trustee shall have a senior claim prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
assets or money held in trust to pay principal of or interest on particular
Securities.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (f) or (g) of Section 6.1 occurs, such expenses and
the compensation for such services shall be paid to the extent allowed under any
Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.7 shall survive the satisfaction and discharge of
this Indenture or the appointment of a successor Trustee.
Section 7.8 Replacement of Trustee. The Trustee may resign at any time
by so notifying the Issuers in writing. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Issuers and the Trustee and may appoint a successor Trustee. The Issuers may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting as trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.7, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Issuers' obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
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Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the resulting,
surviving or transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee, provided that such corporation shall be otherwise
qualified and eligible under this Article Seven.
Section 7.10 Eligibility; Disqualification. This Indenture shall always
have a Trustee who satisfies the requirement of TIA ss.ss. 310(a)(1), 310(a)(2)
and 310(a)(5). The Trustee shall have a combined capital and surplus of at least
$50.0 million as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of the bank holding company,
shall meet the capital requirements of TIA ss. 310(a)(2). The Trustee shall
comply with TIA ss. 310(b); provided, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Issuers are outstanding, if the requirements for such exclusion set forth in
TIA ss. 310(b)(1) are met. The provisions of TIA ss. 310 shall apply to the
Issuers and any other obligor of the Securities.
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee, in its capacity as Trustee hereunder shall comply with TIA ss. 311(a),
excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has
resigned or been removed shall be subject to TIA ss. 311(a) to the extent
indicated.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1 Termination of the Issuers' Obligations. The Issuers may
terminate their obligations in respect of the Securities and this Indenture,
except those obligations referred to in the penultimate paragraph of this
Section 8.1, if all Securities previously authenticated and delivered (other
than destroyed, lost or stolen Securities which have been replaced or paid or
Securities for whose payment U.S. Legal Tender has theretofore been deposited
with the Trustee or the Paying Agent in trust or segregated and held in trust by
the Issuers and thereafter repaid to the Issuers, as provided in Section 8.5)
have been delivered to the Trustee for cancellation and the Issuers have paid
all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Issuers shall have given
notice to the Trustee, and mailed a notice of redemption to each Holder, of the
redemption of all of the Securities in accordance with the provisions hereof or
(ii) all Securities have otherwise become due and payable hereunder;
(b) the Issuers shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under the
terms of an irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds in trust solely for the benefit of the Holders of
that purpose, U.S. Legal Tender in such amount as is sufficient without
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consideration of reinvestment of such interest, to pay principal of, premium, if
any, and interest on the outstanding Securities to maturity or redemption;
provided, that the Trustee shall have been irrevocably instructed to apply such
U.S. Legal Tender to the payment of said principal, premium, if any, and
interest with respect to the Securities and provided, further, that from and
after the time of deposit, the money deposited shall not be subject to the
rights of holders of Senior Debt or Guarantor Senior Debt pursuant to the
provisions of Article Ten or Twelve, as the case may be;
(c) no Default or Event of Default with respect to this Indenture or
the Securities shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, this Indenture, the
Senior Secured Credit Agreement, any other material agreement or instrument to
which Parent or any of its Subsidiaries is a party or by which it is bound;
(d) the Issuers shall have paid all other sums payable by them
hereunder; and
(e) each Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of such Issuers'
obligations in respect of the Securities and this Indenture have been complied
with. Each such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the Senior Credit Agreement or any
other material agreement or instrument then known to such counsel that binds or
affects such Issuer.
Subject to the next sentence and notwithstanding the foregoing
paragraph, the Issuers' obligations in Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2,
7.7, 8.5 and 8.6 shall survive until the Securities are no longer outstanding
pursuant to the last paragraph of Section 2.8. After the Securities are no
longer outstanding, the Issuers' obligations in Sections 7.7, 8.5 and 8.6 shall
survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Issuers' obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
Section 8.2 Legal Defeasance and Covenant Defeasance. (a) The Issuers
may, at their option by Board Resolution of the Board of Directors of each
Issuer, at any time, elect to have either paragraph (b) or (c) below be applied
to all outstanding Securities upon compliance with the conditions set forth in
Section 8.3.
(b) Upon the Issuers' exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.3, be deemed to have been discharged
from their obligations with respect to all outstanding Securities on the date
the conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Issuers shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 and the other Sections of this Indenture referred to in
clauses (i) and (ii) below, and to have satisfied all
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its other obligations in respect of such Securities and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments prepared by the Issuers acknowledging the same), and Holders of the
Securities and any amounts deposited under Section 8.3 shall cease to be subject
to any obligations to, or the rights of, any holder of Senior Debt under Article
Ten or otherwise, except for the following provisions, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Section 8.4, and as more fully set forth in such Section, payments in respect of
the principal of premium, if any, and interest on such Securities when such
payments are due, (ii) the Issuers' obligations with respect to such Securities
under Article Two and Section 4.2 hereof, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Issuers' obligations in
connection therewith and (iv) this Article Eight. Subject to compliance with
this Article Eight, the Issuers may exercise their option under this paragraph
(b) notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Issuers' exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.3 hereof, be released from their
obligations under the covenants contained in Sections 4.3, 4.4 and Sections 4.12
through 4.22 and Article Five hereof with respect to the outstanding Securities
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes) and Holders of the Securities and any
amounts deposited under Section 8.3 hereof shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Debt under Article Ten or
otherwise. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Issuers may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1(c) hereof, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon the
Issuers' exercise under paragraph (a) hereof of the option applicable to this
paragraph (c), subject to the satisfaction of the conditions set forth in
Section 8.3 hereof, Sections 6.1(c), 6.1(d) and 6.1(e) shall not constitute
Events of Default.
Section 8.3 Conditions to Legal Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.2(b) or
8.2(c) hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government Obligations
or a combination thereof which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms, will provide, not
later than one day before the due date of any payment on the Securities, U.S.
Legal Tender in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the Securities on the stated date
for payment thereof or on the applicable Redemption Date, as the case may be;
(b) in the case of a Legal Defeasance, each Issuer shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that (A) the Issuers have received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of a Covenant Defeasance, each Issuer shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Securities pursuant to this Article Eight
concurrently with such incurrence and the grant of any Lien securing such
incurrence) or insofar as Sections 6.1(f) and 6.1(g) hereof are concerned, at
any time in the period ending on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture (other than
a Default or Event of Default resulting from the incurrence of Indebtedness all
or a portion of the proceeds of which will be used to defease the Securities
pursuant to this Article Eight concurrently with such incurrence and the grant
of any Lien securing such incurrence), the Senior Secured Credit Agreement or
any other material agreement or instrument to which Parent or any of its
Restricted Subsidiaries is a party or by which Parent or any of its Restricted
Subsidiaries is bound;
(f) each Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Issuers or others;
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(g) each Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(h) each Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any rights
of any holders of Senior Debt or Guarantor Senior Debt, including, without
limitation, those arising under this Indenture, and (ii) assuming no intervening
bankruptcy or insolvency of an Issuer between the date of deposit and the 91st
day following the deposit and that no Holder is an insider of an Issuer, after
the 91st day following the deposit, the trust funds will not be subject to the
effect of any applicable Bankruptcy Law; and
(i) if at the time, Securities are listed on a national securities
exchange, each Issuer shall have delivered to the Trustee and Opinion of Counsel
to the effect that the Securities will not be delisted as a result of such
deposit, defeasance and discharge.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above of this Section 8.3 with respect to a Legal Defeasance need not
be delivered if all Securities not theretofore delivered to the Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
on the Maturity Date within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Issuers.
Section 8.4 Application of Trust Money. The Trustee or Paying Agent
shall hold in trust U.S. Legal Tender or U.S. Government Obligations deposited
with it pursuant to this Article Eight, and shall apply the deposited U.S. Legal
Tender and the money from U.S. Government Obligations in accordance with this
Indenture to the payment of principal of and interest on the Securities. The
Trustee shall be under no obligation to invest said U.S. Legal Tender or U.S.
Government Obligations except as it may agree with the Issuers.
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the Issuers'
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.3 hereof the amount of which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, is in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.5 Repayment to the Issuers. Subject to this Article Eight,
the Trustee and the Paying Agent shall promptly pay to the Issuers upon request
any excess U.S. Legal Tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all
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liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Issuers upon request any money held by them for the payment of principal
or interest that remains unclaimed for two years; provided, that the Trustee or
such Paying Agent, before being required to make any payment, may at the expense
of the Issuers cause to be published once in a newspaper of general circulation
in The City of New York and mail to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein which
shall be at least 30 days from the date of such publication and mailing any
unclaimed balance of such money then remaining will be repaid to the Issuers.
After payment to the Issuers, Holders entitled to such money must look to the
Issuers for payment as general creditors unless an applicable law designates
another Person.
Section 8.6 Reinstatement. If the Trustee or Paying Agent is unable to
apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
this Article Eight by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuers' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Eight until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with this Article Eight; provided, that if
the Issuers have made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Issuers shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
U.S. Legal Tender or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders. Subject to Section 9.3, the
Issuers, the Guarantors and the Trustee, together, may amend or supplement this
Indenture, the Securities or the Guarantees without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article Five hereof
of another Person to an Issuer and the assumption by any such successor of the
covenants of such Issuer herein and in the Securities;
(3) to provide for uncertificated Securities in addition to or in place
of certificated Securities;
(4) to make any other change that does not adversely affect the rights
of any Securityholders hereunder in any material respect;
(5) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA; or
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(6) to add or release any Guarantor pursuant to the terms of this
Indenture;
provided that each Issuer has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.1.
Section 9.2 With Consent of Holders. Subject to Sections 6.7 and 9.3,
the Issuers, the Guarantors and the Trustee, together, with the written consent
of the Holder or Holders of at least a majority in aggregate principal amount of
the outstanding Securities, may amend or supplement this Indenture, the
Securities or the Guarantees, without notice to any other Securityholders.
Subject to Sections 6.7 and 9.3, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Securities may waive compliance by
the Issuers or the Guarantors with any provision of this Indenture, the
Securities or the Guarantees without notice to any other Securityholder. Without
the consent of each Securityholder affected, however, no amendment, supplement
or waiver, including a waiver pursuant to Section 6.4, may:
(1) reduce the amount of Securities the Holders of which must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including default interest, on any Securities;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Securities, or change the date on which any Securities
may be subject to redemption or repurchase, or reduce the redemption or purchase
price therefor;
(4) make any Securities payable in money other than that stated in the
Securities;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on such
Security on or after the due date thereof or to bring suit to enforce such
payment;
(6) modify or change any provision of this Indenture or the related
definitions affecting the subordination or ranking of the Securities or any
Guarantee in a manner which adversely affects the Holders; or
(7) release (i) Parent or (ii) any Guarantor that is a Significant
Subsidiary of Parent or an Issuer from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Issuers shall mail to the Holders affected thereby a notice
briefly describing the amendment,
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supplement or waiver. Any failure of the Issuers to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
Section 9.3 Effect on Senior Debt. No amendment of, or supplement or
waiver to, this Indenture shall adversely affect the rights of any holder of
Senior Debt or Guarantor Senior Debt under Article Ten or Article Twelve, as the
case may be, of this Indenture, without the consent of such holder.
Section 9.4 Compliance with TIA. From the date on which this Indenture
is qualified under the TIA, every amendment, waiver or supplement of this
Indenture, the Securities or the Guarantees shall comply with the TIA as then in
effect.
Section 9.5 Revocation and Effect of Consents. Until an amendment,
waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of his Security by notice to the Trustee or the Issuers received
before the date on which the Trustee receives Officers' Certificates from the
Issuers certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (7) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
Section 9.6 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Issuers may require
the Holder of the Security to deliver it to the Trustee. The Issuers shall
provide the Trustee with an appropriate notation on the Security about the
changed terms and cause the Trustee to return it to the Holder at the Issuers'
expense. Alternatively, if the Issuers or the Trustee so determine, in exchange
for the Security
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the Issuers shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or issue a
new Security shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 9.7 Trustee To Sign Amendments, Etc. The Trustee shall execute
any amendment, supplement or waiver authorized pursuant to this Article Nine;
provided, that the Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture. The Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel and an
Officers' Certificate from each Issuer each stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and constituted the legal, valid and
binding obligations of the Issuers enforceable in accordance with its terms.
Such Opinions of Counsel shall be at the expense of the Issuers.
ARTICLE TEN
SUBORDINATION OF SECURITIES
Section 10.1 Securities Subordinated to Senior Debt. Anything herein to
the contrary notwithstanding, each Issuer, for itself and its successors, and
each Holder, by his or her acceptance of Securities, agrees that the payment of
all obligations owing to the Holders in respect of the Securities is
subordinated, to the extent and in the manner provided in this Article Ten, to
the prior payment in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, of all
obligations on Senior Debt (including the obligations with respect to the Senior
Secured Credit Agreement). Notwithstanding the foregoing, payments and
distributions made relating to the Securities pursuant to the trust described
under Article Eight shall not, so long as the conditions specified in Article
Eight (without any waiver or modification of the requirement that the deposits
pursuant thereto do not conflict with the terms of the Senior Secured Credit
Agreement or any other Senior Debt) are satisfied on the date of any deposit
pursuant to said trust, be so subordinated in right of payment.
This Article Ten shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and such holders are made
obligees hereunder and any one or more of them may enforce such provisions.
Section 10.2 Suspension of Payment When Senior Debt Is in Default. (a)
If any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Debt (a "Payment Default"),
then no payment or distribution of any kind or character shall be made by or on
behalf of the Issuers or any other Person on behalf of any of them with respect
to any obligation on or relating to the Securities or to acquire any of the
Securities for cash or property or otherwise.
(b) If any other event of default (other than a Payment
Default) occurs and is continuing with respect to any Designated Senior Debt (as
such event of default is defined in the
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instrument creating or evidencing such Designated Senior Debt) permitting the
holders of such Designated Senior Debt then outstanding to accelerate the
maturity thereof (a "Non-payment Default") and if the Representative for the
respective issue of Designated Senior Debt gives notice of the event of default
to the Trustee stating that such notice is a payment blockage notice (a "Payment
Blockage Notice"), then, unless and until all events of default have been cured
or waived or have ceased to exist or the Trustee receives notice thereof from
the Representative for the respective issue of Designated Senior Debt
terminating the Payment Blockage Period (as defined below), during the 180 days
after the delivery of such Payment Blockage Notice (the "Payment Blockage
Period"), neither the Issuers nor any other Person on their behalf shall (x)
make any payment of any kind or character with respect to any obligation on or
with respect to the Securities or (y) acquire any of the Securities for cash or
property or otherwise. Notwithstanding anything herein to the contrary, (x) in
no event will a Payment Blockage Period extend beyond 180 days from the date the
applicable Payment Blockage Notice is received by the Trustee and (y) only one
such Payment Blockage Period may be commenced within any period of 360
consecutive days. For all purposes of this Section 10.2(b), no event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be made,
the basis for the commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by the foregoing provisions of this Section 10.2, such payment shall
be held for the benefit of, and shall be paid over or delivered to, the holders
of Senior Debt (pro rata to such holders on the basis of the respective amount
of Senior Debt held by such holders) or their respective Representatives, as
their respective interests may appear. The Trustee shall be entitled to rely on
information regarding amounts then due and owing on the Senior Debt, if any,
received from the holders of Senior Debt (or their Representatives) or, if such
information is not received from such holders or their Representatives, from the
Issuers and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Debt.
Nothing contained in this Article Ten shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Section 6.2 or to pursue any rights or
remedies hereunder; provided, that all Senior Debt thereafter due or declared to
be due shall first be paid in full in cash or Cash Equivalents before the
Holders are entitled to receive any payment of any kind or character with
respect to obligations on the Securities.
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Section 10.3 Securities Subordinated to Prior Payment of All Senior
Debt on Dissolution, Liquidation or Reorganization of an Issuer. (a) Upon any
payment or distribution of assets of the Issuers of any kind or character,
whether in cash, property or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors or marshaling of assets of an Issuer or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
an Issuer or its property, whether voluntary or involuntary, all obligations due
or to become due upon all Senior Debt shall first be paid in full in cash or
Cash Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Debt, before any payment or distribution of any kind or
character is made on account of any obligation on or relating to the Securities,
or for the acquisition of any of the Securities for cash or property or
otherwise. Upon any such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets of an
Issuer of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall be paid by such Issuer or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of Senior Debt (pro
rata to such holders on the basis of the respective amounts of Senior Debt held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf
of an Issuer, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of an Issuer of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by this Section 10.3, such payment or distribution
shall be held for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt (pro rata to such holders on the basis of the respective
amount of Senior Debt held by such holders) or their respective Representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of Senior Debt remaining unpaid until all such Senior
Debt has been paid in full in cash or Cash Equivalents, after giving effect to
any concurrent payment, distribution or provision therefor to or for the holders
of such Senior Debt.
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(d) The consolidation of an Issuer with, or the merger of an Issuer
with or into, another corporation, partnership, trust or limited liability
company or the liquidation or dissolution of an Issuer following the conveyance
or transfer of all or substantially all of its assets, to another corporation,
partnership, trust or limited liability company upon the terms and conditions
provided in Article Five hereof and as long as permitted under the terms of the
Senior Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume such
Issuer's obligations hereunder in accordance with Article Five hereof.
Section 10.4 Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article Ten or elsewhere in this Indenture shall prevent (i)
the Issuers, except under the conditions described in Sections 10.2 and 10.3,
from making payments at any time for the purpose of making payments of principal
of and interest on the Securities, or from depositing with the Trustee any
moneys for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 10.2 or 10.3, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of, and interest on, the Securities to the
Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment would otherwise become due and payable a Trust Officer
shall have actually received the written notice provided for in the first
sentence of Section 10.2(b) or in Section 10.7 (provided, that notwithstanding
the foregoing, the Holders receiving any payments made in contravention of
Section 10.2 and/or 10.3 (and any such payments) shall otherwise be subject to
the provisions of Section 10.2 and Section 10.3). The Issuers shall give prompt
written notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of the Issuers, although any delay or failure to give any such
notice shall have no effect on the subordination provisions contained herein.
Section 10.5 Holders To Be Subrogated to Rights of Holders of Senior
Debt. Subject to the payment in full in cash or Cash Equivalents of all Senior
Debt, the Holders of the Securities shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash, property or
securities of the Issuers applicable to the Senior Debt until the Securities
shall be paid in full; and, for the purposes of such subrogation, no such
payments or distributions to the holders of the Senior Debt by or on behalf of
the Issuers, or by or on behalf of the Holders by virtue of this Article Ten,
which otherwise would have been made to the Holders shall, as between the
Issuers and the Holders, be deemed to be a payment by the Issuers to or on
account of the Senior Debt, it being understood that the provisions of this
Article Ten are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of Senior Debt, on the
other hand.
Section 10.6 Obligation of the Issuers Unconditional. Nothing contained
in this Article Ten or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Issuers, their creditors other than
the holders of Senior Debt, and the Holders, the obligation of the Issuers,
which is absolute and unconditional, to pay to the Holders the principal of and
any interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Issuers other than the holders of the
Senior Debt, nor shall anything herein or therein prevent the
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Holder of any Security or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, in respect of cash, property or securities of the Issuers
received upon the exercise of any such remedy.
Section 10.7 Notice to Trustee. Each Issuer shall give prompt written
notice to the Trustee of any fact known to such Issuer which would prohibit the
making of any payment to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Ten, although any delay or failure to give any
such notice shall have no effect on the subordination provisions contained
herein. Regardless of anything to the contrary contained in this Article Ten or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior Debt
or of any other facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee shall have received notice in writing
from an Issuer, or from a holder of Senior Debt or a Representative therefor
and, prior to the receipt of any such written notice, the Trustee shall be
entitled to assume (in the absence of actual knowledge to the contrary) that no
such facts exist. The Trustee shall be entitled to rely on the delivery to it of
any notice pursuant to this Section 10.7 to establish that such notice has been
given by a holder of Senior Debt (or a trustee thereof).
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 10.8 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of an Issuer referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, assignee for the
benefit of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Securities, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Ten.
Section 10.9 Trustee's Relation to Senior Debt. The Trustee and any
agent of an Issuer or the Trustee shall be entitled to all the rights set forth
in this Article Ten with respect to any Senior Debt which may at any time be
held by it in its individual or any other capacity to the
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same extent as any other holder of Senior Debt and nothing in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
Section 10.10 Subordination Rights Not Impaired by Acts or Omissions of
an Issuer or Holders of Senior Debt. No right of any present or future holders
of any Senior Debt to enforce subordination as provided herein shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
an Issuer or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by an Issuer with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Securities and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Securities to the holders of the Senior Debt, do any one or more
of the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Issuers and any other Person.
Section 10.11 Securityholders Authorize Trustee To Effectuate
Subordination of Securities. Each Holder of Securities by its acceptance thereof
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Senior Debt and the Holders of Securities, the subordination provided in this
Article Ten, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of an Issuer (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
credits or otherwise) tending towards liquidation of the business and assets of
an Issuer, the filing of a claim for the unpaid balance of its Securities and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or its
Representative are or is hereby authorized to have the right to
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file and are or is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Securities. Nothing herein contained shall be
deemed to authorize the Trustee or any holder of Senior Debt or its
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee or the holders of Senior Debt or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
Section 10.12 This Article Ten Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the
Securities by reason of any provision of this Article Ten will not be construed
as preventing the occurrence of an Event of Default.
Section 10.13 Trustee's Compensation Not Prejudiced. Nothing in this
Article Ten will apply to amounts due to the Trustee pursuant to other sections
of this Indenture.
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
Section 11.1 Unconditional Guarantee. Subject to the provisions of this
Article Eleven, each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably guarantees, on a senior subordinated basis (such
guarantees to be referred to herein as a "Guarantee") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the obligations of the Issuers or any other
Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest on the Securities shall be duly and
punctually paid in full when due, whether at maturity, upon redemption at the
option of Holders pursuant to the provisions of the Securities relating thereto,
by acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other
obligations of the Issuers or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including amounts due the Trustee under Section 7.7
hereof) and all other obligations shall be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed,
or failing performance of any other obligation of the Issuers to the Holders
under this Indenture or under the Securities, for whatever reason, each
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Securities
shall constitute an event of default under this Guarantee, and shall entitle the
Holders of Securities to accelerate the obligations of the Guarantors hereunder
in the same manner and to the same extent as the obligations of the Issuers.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
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the Securities with respect to any provisions hereof or thereof, any release of
any other Guarantor, the recovery of any judgment against an Issuer, any action
to enforce the same, whether or not a Guarantee is affixed to any particular
Security, or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each of the Guarantors hereby
waives the benefit of diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of an Issuer, any
right to require a proceeding first against an Issuer, protest, notice and all
demands whatsoever and covenants that its Guarantee shall not be discharged
except by complete performance of the obligations contained in the Securities,
this Indenture and this Guarantee. This Guarantee is a guarantee of payment and
not of collection. If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to an Issuer or
such Guarantor, any amount paid by an Issuer or such Guarantor to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between it, on the one hand, and the Holders of Securities and the Trustee, on
the other hand, (a) subject to this Article Eleven, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Guarantor on a pro rata
basis, based on the net assets of each Guarantor, determined in accordance with
GAAP.
Section 11.2 Limitations on Guarantees. The Obligations of each
Guarantor under its Guarantee are limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor
(including without limitation, its guarantee of obligations in respect of the
Senior Secured Credit Agreement and any other Guarantor Senior Debt) and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under this Indenture, will
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law.
Section 11.3 Execution and Delivery of Guarantee. To further evidence
the Guarantee set forth in Section 11.1, each Guarantor hereby agrees that a
notation of such Guarantee, substantially in the form of Exhibit E, shall be
endorsed on each Security authenticated and delivered by the Trustee. Such
Guarantee shall be executed on behalf of each Guarantor by either manual or
facsimile signature of one Officer of each Guarantor who shall have been duly
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authorized to so execute by all requisite corporation action. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.1 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
Section 11.4 Release of a Guarantor. (a) Upon the sale or disposition
of all of the Capital Stock of a Guarantor by an Issuer, in a transaction or
series of related transactions that either (i) does not constitute an Asset Sale
or (ii) constitutes an Asset Sale the Net Cash Proceeds of which are applied in
accordance with Section 4.16, or upon the consolidation or merger of a Guarantor
(other than Parent) with or into any Person in compliance with Article Five (in
each case, other than to or into an Issuer or an Affiliate of an Issuer), or if
any Guarantor is dissolved or liquidated in accordance with this Indenture, such
Guarantor's Guarantee will be automatically discharged and released from all
obligations under this Article Eleven without any further action required on the
part of the Trustee or any Holder. Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.
(b) The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor prepared by the Issuers or such Guarantor upon receipt of
a request by the Issuers or such Guarantor accompanied by an Officers'
Certificate and an Opinion of Counsel certifying compliance with this Section
11.4; provided, that the legal counsel delivering such Opinion of Counsel may
rely as to matters of fact on Officers' Certificates of the Issuers.
The Trustee shall execute any documents reasonably requested by the
Issuers or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article Eleven.
Except as set forth in Articles Four and Five and this Section 11.4,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor (other than Parent) with or into an
Issuer or another Guarantor or shall prevent any sale or conveyance of the
property of a Guarantor (other than Parent) as an entirety or substantially as
an entirety to an Issuer or another Guarantor.
(c) Notwithstanding the foregoing, the Guarantee of Parent may not be
released.
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Section 11.5 Waiver of Subrogation. Until this Indenture is discharged
and all of the Securities are discharged and paid in full, each Guarantor hereby
irrevocably waives and agrees not to exercise any claim or other rights which it
may now or hereafter acquire against an Issuer that arise from the existence,
payment, performance or enforcement of such Issuer's obligations under the
Securities or this Indenture and such Guarantor's obligations under this
Guarantee and this Indenture, in any such instance including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, and any right to participate in any claim or remedy of the
Holders against an Issuer, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from an Issuer, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and any amounts owing to the
Trustee or the Holders of Securities under the Securities, this Indenture, or
any other document or instrument delivered under or in connection with such
agreements or instruments, shall not have been paid in full, such amount shall
have been deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Trustee or the Holders and shall forthwith
be paid to the Trustee for the benefit of itself or such Holders to be credited
and applied to the obligations in favor of the Trustee or the Holders, as the
case may be, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.5 is knowingly made in contemplation of
such benefits.
Section 11.6 Immediate Payment. Each Guarantor agrees to make immediate
payment to the Trustee on behalf of the Holders of all obligations in respect of
the Securities owing or payable to the respective Holders upon receipt of a
demand for payment therefor by the Trustee to such Guarantor in writing.
Section 11.7 No Set-Off. Each payment to be made by a Guarantor
hereunder in respect of the obligations in respect of the Securities shall be
payable in the currency or currencies in which such obligations are denominated,
and shall be made without set-off, counterclaim, reduction or diminution of any
kind or nature.
Section 11.8 Obligations Absolute. The obligations of each Guarantor
hereunder are and shall be absolute and unconditional and any monies or amounts
expressed to be owing or payable by each Guarantor hereunder which may not be
recoverable from such Guarantor on the basis of a Guarantee shall be recoverable
from such Guarantor as a primary obligor and principal debtor in respect
thereof.
Section 11.9 Obligations Continuing. The obligations of each Guarantor
hereunder shall be continuing and shall remain in full force and effect until
all the obligations have been paid and satisfied in full. Each Guarantor agrees
with the Trustee that it will from time to time deliver to the Trustee suitable
acknowledgments of this continued liability hereunder and under any other
instrument or instruments in such form as counsel to the Trustee may advise and
as will prevent any action brought against it in respect of any default
hereunder being barred by any statute of
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limitations now or hereafter in force and, in the event of the failure of a
Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and
agent of such Guarantor to make, execute and deliver such written acknowledgment
or acknowledgments or other instruments as may from time to time become
necessary or advisable, in the judgment of the Trustee on the advice of counsel,
to fully maintain and keep in force the liability of such Guarantor hereunder.
Section 11.10 Obligations Not Reduced. The obligations of each
Guarantor hereunder shall not be satisfied, reduced or discharged solely by the
payment of such principal, premium, if any, interest, fees and other monies or
amounts as may at any time prior to discharge of this Indenture pursuant to
Article Eight be or become owing or payable under or by virtue of or otherwise
in connection with the Securities or this Indenture.
Section 11.11 Obligations Reinstated. The obligations of each Guarantor
hereunder shall continue to be effective or shall be reinstated, as the case may
be, if at any time any payment which would otherwise have reduced the
obligations of any Guarantor hereunder (whether such payment shall have been
made by or on behalf of an Issuer or by or on behalf of a Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of an Issuer or any Guarantor or otherwise, all as
though such payment had not been made. If demand for, or acceleration of the
time for, payment by an Issuer is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of an Issuer, all such Indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
each Guarantor as provided herein.
Section 11.12 Obligations Not Affected. The obligations of each
Guarantor hereunder shall not be affected, impaired or diminished in any way by
any act, omission, matter or thing whatsoever, occurring before, upon or after
any demand for payment hereunder (and whether or not known or consented to by
any Guarantor or any of the Holders) which, but for this provision, might
constitute a whole or partial defense to a claim against any Guarantor hereunder
or might operate to release or otherwise exonerate any Guarantor from any of its
obligations hereunder or otherwise affect such obligations, whether occasioned
by default of any of the Holders or otherwise, including, without limitation:
(a) any limitation of status or power, disability, incapacity or other
circumstance relating to an Issuer or any other Person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding-up or other proceeding involving or affecting an Issuer or
any other Person;
(b) any irregularity, defect, unenforceability or invalidity in respect
of any indebtedness or other obligation of an Issuer or any other Person under
this Indenture, the Securities or any other document or instrument;
(c) any failure of an Issuer, whether or not without fault on its part,
to perform or comply with any of the provisions of this Indenture or the
Securities, or to give notice thereof to a Guarantor;
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(d) the taking or enforcing or exercising or the refusal or neglect to
take or enforce or exercise any right or remedy from or against an Issuer or any
other Person or their respective assets or the release or discharge of any such
right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to an Issuer or
any other Person;
(f) any change in the time, manner or place of payment of, or in any
other term of, any of the Securities, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any of
the Securities or this Indenture, including, without limitation, any increase or
decrease in the principal amount of or premium, if any, or interest on any of
the Securities;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of an Issuer or a Guarantor;
(h) any merger or amalgamation of an Issuer or a Guarantor with any
Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Obligations in respect of the Securities or the obligations of a Guarantor under
its Guarantee; and
(j) any other circumstance, including release of the Guarantor pursuant
to Section 11.4 (other than by complete, irrevocable payment) that might
otherwise constitute a legal or equitable discharge or defense of an Issuer
under this Indenture or the Securities or of a Guarantor in respect of its
Guarantee hereunder.
Section 11.13 Waiver. Without in any way limiting the provisions of
Section 11.1 hereof, each Guarantor hereby waives notice of acceptance hereof,
notice of any liability of any Guarantor hereunder, notice or proof of reliance
by the Holders upon the obligations of any Guarantor hereunder, and diligence,
presentment, demand for payment on any Issuer, protest, notice of dishonor or
non-payment of any of the Obligations, in respect of the securities or other
notice or formalities to any Issuer or any Guarantor of any kind whatsoever.
Section 11.14 No Obligation To Take Action Against the Issuers. Neither
the Trustee nor any other Person shall have any obligation to enforce or exhaust
any rights or remedies or to take any other steps under any security for the
Obligations or against any Issuer or any other Person or any property of any
Issuer or any other Person before the Trustee is entitled to demand payment and
performance by any or all Guarantors of their liabilities and obligations under
their Guarantees or under this Indenture.
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Section 11.15 Dealing with the Issuers and Others. The Holders, without
releasing, discharging, limiting or otherwise affecting in whole or in part the
obligations and liabilities of any Guarantor hereunder and without the consent
of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to an Issuer or any other
Person;
(b) take or abstain from taking security or collateral from an Issuer
or from perfecting security or collateral of an Issuer;
(c) release, discharge, compromise, realize, enforce or otherwise deal
with or do any act or thing in respect of (with or without consideration) any
and all collateral, mortgages or other security given by an Issuer or any third
party with respect to the obligations or matters contemplated by this Indenture
or the Securities;
(d) accept compromises or arrangements from an Issuer;
(e) apply all monies at any time received from an Issuer or from any
security upon such part of the Issuers' obligations in respect of the Securities
as the Holders may see fit or change any such application in whole or in part
from time to time as the Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
an Issuer and all other Persons and any security as the Holders or the Trustee
may see fit.
Section 11.16 Default and Enforcement. If any Guarantor fails to pay in
accordance with Section 11.6 hereof, the Trustee may proceed in its name as
trustee hereunder in the enforcement of the Guarantee of any such Guarantor and
such Guarantor's obligations thereunder and hereunder by any remedy provided by
law, whether by legal proceedings or otherwise, and to recover from such
Guarantor the obligations.
Section 11.17 Amendment, Etc. No amendment, modification or waiver of
any provision of this Indenture relating to any Guarantor or consent to any
departure by any Guarantor or any other Person from any such provision will in
any event be effective unless it is signed by such Guarantor and the Trustee.
Section 11.18 Acknowledgment. Each Guarantor hereby acknowledges
communication of the terms of this Indenture and the Securities and consents to
and approves of the same.
Section 11.19 Costs and Expenses. Each Guarantor shall pay on demand by
the Trustee any and all costs, fees and expenses (including, without limitation,
legal fees on a solicitor and client basis) incurred by the Trustee, its agents,
advisors and counsel or any of the Holders in enforcing any of their rights
under any Guarantee.
Section 11.20 No Merger or Waiver; Cumulative Remedies. No Guarantee
shall operate by way of merger of any of the obligations of a Guarantor under
any other agreement, including, without limitation, this Indenture. No failure
to exercise and no delay in exercising, on the part of
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the Trustee or the Holders, any right, remedy, power or privilege hereunder or
under this Indenture or the Securities, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Guarantor and/or any Issuer and the Trustee are cumulative and not
exclusive of any rights, remedies, powers and privilege provided by law.
Section 11.21 Survival of Obligations. Without prejudice to the
survival of any of the other obligations of each Guarantor hereunder, the
obligations of each Guarantor under Section 11.1 shall survive the payment in
full of the obligations of the Issuers in respect of the Securities and shall be
enforceable against such Guarantor without regard to and without giving effect
to any defense, right of offset or counterclaim available to or which may be
asserted by any Issuer or any Guarantor.
Section 11.22 Guarantee in Addition to Other Obligations. The
obligations of each Guarantor under its Guarantee and this Indenture are in
addition to and not in substitution for any other obligations to the Trustee or
to any of the Holders in relation to this Indenture or the Securities and any
guarantees or security at any time held by or for the benefit of any of them.
Section 11.23 Severability. Any provision of this Article Eleven which
is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction unless its removal would substantially defeat the basic
intent, spirit and purpose of this Indenture and this Article Eleven.
Section 11.24 Successors and Assigns. Each Guarantee shall be binding
upon and inure to the benefit of each Guarantor and the Trustee and the other
Holders and their respective successors and permitted assigns, except that no
Guarantor may assign any of its obligations hereunder or thereunder.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
Section 12.1 Guarantee Obligations Subordinated to Guarantor Senior
Debt. Anything herein to the contrary notwithstanding, each of the Guarantors,
for itself and its successors, and each Holder, by his or her acceptance of
Guarantees, agrees that the payment of all obligations owing to the Holders in
respect of its Guarantee (collectively, as to any Guarantor, its "Guarantee
Obligations") is subordinated, to the extent and in the manner provided in this
Article Twelve, to the prior payment in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Guarantor
Senior Debt, of all obligations on Guarantor Senior Debt of such Guarantor.
This Article Twelve shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Guarantor Senior Debt, and such
provisions are made for the benefit of the holders of Guarantor Senior Debt and
such holders are made obligees hereunder and any one or more of them may enforce
such provisions.
Section 12.2 Suspension of Guarantee Obligations When Guarantor Senior
Debt Is in Default. (a) If any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or otherwise,
of any principal of, interest on, unpaid drawings for letters of credit issued
in respect of, or regularly accruing fees with respect to, any Guarantor Senior
Debt, then no payment of any kind or character shall be made by or on behalf of
such Guarantor or any other Person on its behalf with respect to any Guarantee
Obligations or to acquire any of the Securities for cash or property or
otherwise and until such Payment Default shall have been cured or waived or
shall have ceased to exist or such Guarantor Senior Debt shall have been
discharged or paid in full in cash or Cash Equivalents.
(b) At any time while any Payment Blockage Period is in existence,
neither any Guarantor nor any other Person on any Guarantor's behalf shall (x)
make any payment of any kind or character with respect to any obligations on its
Guarantee or (y) acquire any of the Securities for cash or otherwise.
(c) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by the
foregoing provisions of this Section 12.2, such payment shall be held for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt (pro rata to such holders on the basis of the respective amount of
Guarantor Senior Debt held by such holders) or their respective Representatives,
as their respective interests may appear. The Trustee shall be entitled to rely
on information regarding amounts then due and owing on the Guarantor Senior
Debt, if any, received from the holders of Guarantor Senior Debt (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from a Guarantor and only amounts included in the
information provided to the Trustee shall be paid to the holders of Guarantor
Senior Debt.
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Section 12.3 Guarantee Obligations Subordinated to Prior Payment of All
Guarantor Senior Debt on Dissolution, Liquidation or Reorganization of Such
Guarantor. (a) Upon any payment or distribution of assets of any Guarantor of
any kind or character, whether in cash, property or securities, to creditors
upon any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all obligations due or to become due upon all Guarantor Senior
Debt shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Guarantor Senior Debt,
before any payment or distribution of any kind or character is made on account
of any Guarantee Obligations or for the acquisition of any of the Securities for
cash or property or otherwise. Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of such Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
such Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders or
by the Trustee under this Indenture if received by them, directly to the holders
of Guarantor Senior Debt (pro rata to such holders on the basis of the
respective amounts of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in full in cash or Cash Equivalents after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of a Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Guarantor Senior Debt or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuers of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by this Section 12.3, such payment or distribution
shall be held for the benefit of, and shall be paid over or delivered to, the
holders of Guarantor Senior Debt (pro rata to such holders on the basis of the
respective amount of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in
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full in cash or Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
a Guarantor following the conveyance or transfer of all or substantially all of
its assets to another corporation upon the terms and conditions provided in
Article Five hereof, and as long as permitted under the terms of the Guarantor
Senior Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 12.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assumes
the Guarantee of such Guarantor hereunder in accordance with Article Five
hereof.
Section 12.4 Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article Twelve or elsewhere in this Indenture shall prevent
(i) any Guarantor, except under the conditions described in Sections 12.2 and
12.3, from making payments at any time for the purpose of making payments on
Guarantee Obligations, or from depositing with the Trustee any moneys for such
payments, or (ii) in the absence of actual knowledge by the Trustee that a given
payment would be prohibited by Section 12.2 or 12.3, the application by the
Trustee of any moneys deposited with it for the purpose of making such payments
on Guarantee Obligations to the Holders entitled thereto unless at least two
Business Days prior to the date upon which such payment would otherwise become
due and payable a Trust Officer shall have actually received the written notice
provided for in the first sentence of Section 10.2(b) or in Section 12.7
(provided, that notwithstanding the foregoing, the Holders receiving any
payments made in contravention of Sections 12.2 and/or 12.3 (and any such
payments) shall otherwise be subject to the provisions of Section 12.2 and
Section 12.3). Each Guarantor shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of such Guarantor,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein.
Section 12.5 Holders of Guarantee Obligations To Be Subrogated to
Rights of Holders of Guarantor Senior Debt. Subject to the payment in full in
cash or Cash Equivalents of all Guarantor Senior Debt, the Holders of Guarantee
Obligations of any Guarantor shall be subrogated to the rights of the holders of
Guarantor Senior Debt of such Guarantor to receive payments or distributions of
cash, property or securities of such Guarantor applicable to such Guarantor
Senior Debt until all amounts owing on or in respect of the Guarantee
Obligations shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of such Guarantor Senior Debt by
or on behalf of such Guarantor, or by or on behalf of the Holders by virtue of
this Article Twelve, which otherwise would have been made to the Holders shall,
as between such Guarantor and the Holders, be deemed to be a payment by such
Guarantor to or on account of such Guarantor Senior Debt, it being understood
that the provisions of this Article Twelve are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Guarantor Senior Debt, on the other hand.
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Section 12.6 Obligations of the Guarantors Unconditional. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Guarantees is intended to or shall impair, as among the Guarantors, their
creditors other than the holders of Guarantor Senior Debt, and the Holders, the
obligation of the Guarantors, which is absolute and unconditional, to pay to the
Holders all amounts due and payable under the Guarantees as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the
Guarantors other than the holders of the Guarantor Senior Debt, nor shall
anything herein or therein prevent any Holder or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
Section 12.7 Notice to Trustee. Each Guarantor shall give prompt
written notice to the Trustee of any fact known to such Guarantor which would
prohibit the making of any payment to or by the Trustee in respect of the
Guarantees pursuant to the provisions of this Article Twelve, although any delay
or failure to give any such notice shall have no effect on the subordination
provisions contained herein. Regardless of anything to the contrary contained in
this Article Twelve or elsewhere in this Indenture, the Trustee shall not be
charged with knowledge of the existence of any default or event of default with
respect to any Guarantor Senior Debt or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing from a Guarantor, or from a holder of
Guarantor Senior Debt or a Representative therefor and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in the absence
of actual knowledge to the contrary) that no such facts exist. The Trustee shall
be entitled to rely on the delivery to it of any notice pursuant to this Section
12.7 to establish that such notice has been given by a holder of Senior Debt (or
a trustee thereof).
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amounts of Guarantor Senior
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Twelve, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 12.8 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of a Guarantor referred to in
this Article Twelve, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trustee, receiver, assignee for the benefit of
creditors, agent or other person making such payment or distribution, delivered
to the Trustee or the Holders, for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the holders of the
Guarantor Senior Debt
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and other Indebtedness of such Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
Section 12.9 Trustee's Relation to Guarantor Senior Debt. The Trustee
and any agent of a Guarantor or the Trustee shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior Debt which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Guarantor Senior Debt and nothing in this
Indenture shall deprive the Trustee or any such agent of any of its rights as
such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Guarantor Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
Section 12.10 Subordination Rights Not Impaired by Acts or Omissions of
the Guarantors or Holders of Guarantor Senior Debt. No right of any present or
future holders of any Guarantor Senior Debt to enforce subordination as provided
herein shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by any Guarantor with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Guarantor Senior Debt, or otherwise amend or supplement in any manner
Guarantor Senior Debt, or any instrument evidencing the same or any agreement
under which Guarantor Senior Debt is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Guarantor Senior Debt; and (iv) exercise or refrain
from exercising any rights against the Guarantors and any other Person.
Section 12.11 Holders Authorize Trustee To Effectuate Subordination of
Guarantee Obligations. Each Holder of Guarantee Obligations by its acceptance
thereof authorizes and expressly directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate, as between the holders
of Guarantor Senior Debt and the Holders, the subordination provided in this
Article Twelve, and appoints the Trustee its attorney-in-fact for such purposes,
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including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Guarantor Senior Debt
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Guarantee Obligations. Nothing herein contained shall be
deemed to authorize the Trustee or any holder of Guarantor Senior Debt or its
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Guarantee Obligations or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
Section 12.12 This Article Twelve Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the
Guarantees by reason of any provision of this Article Twelve will not be
construed as preventing the occurrence of an Event of Default.
Section 12.13 Trustee's Compensation Not Prejudiced. Nothing in this
Article Twelve will apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.1 TIA Controls. If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required or deemed to be
included in this Indenture by the TIA, such required or deemed provision shall
control.
Section 13.2 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
if to the Issuers or a Guarantor:
c/o Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, FL 33401
Attention: Robert E. Agres
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<PAGE> 97
Telephone: 561-687-8300
Facsimile: 561-687-8080
with a copy to:
Kirkland & Ellis
200 E. Randolph Drive, 54th Floor
Chicago, IL 60601-6636
Attention: Dennis M. Meyers
Telephone: 312-861-2000
Facsimile: 312-861-2200
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Telephone: 212-852-1662
Facsimile: 212-852-1626
with a copy to:
Winston & Strawn
200 Park Avenue, 42nd Floor
New York, New York 10166-4193
Attention: Jeffrey H. Elkin, Esq.
Telephone: 212-294-6711
Facsimile: 212-294-4700
Each of the Issuers and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Issuers and the Trustee, shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that any notice or communication to the
Trustee or a notice of change of address shall not be deemed to have been given
until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
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Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 13.3 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture, the
Securities or the Guarantees. The Issuers, the Trustee, the Registrar and any
other Person shall have the protection of TIA ss. 312(c).
Section 13.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Issuers to the Trustee to take any action
under this Indenture, each Issuer shall furnish to the Trustee at the request of
the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions precedent
to be performed or effected by the Issuers, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
any and all such conditions precedent have been complied with.
Section 13.5 Officers' Certificates and Opinions of Counsel. (a) Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.8 (which shall contain the statements set
forth therein), shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
(b) In the event that Officers' Certificates or Opinions of Counsel are
required to be delivered by more than one Person, such Persons may jointly
deliver a single Officers' Certificate or Opinion of Counsel as applicable,
provided, that in the case of an Officers' Certificate, such Officers'
Certificate is signed by two Officers of each Person required to deliver such
Officers' Certificate.
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Section 13.6 Rules by Trustee, Paying Agent, Registrar. The Trustee,
Paying Agent or Registrar may make reasonable rules for its functions.
Section 13.7 Legal Holidays. If a payment date is not a Business Day,
payment may be made on the next succeeding day that is a Business Day.
Section 13.8 Governing Law. THIS INDENTURE, THE SECURITIES AND THE
GUARANTEES WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the
parties hereto agrees to submit to the jurisdiction of the courts of the State
of New York in any action or proceeding arising out of or relating to this
Indenture, the Securities or the Guarantees.
Section 13.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of any of Parent, the Issuers or any of their Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 13.10 No Recourse Against Others. A director, officer,
employee, member, stockholder or incorporator, as such, of Parent or any of its
Subsidiaries shall not have any liability for any obligations of the Issuers in
respect of the Securities or for any claim based on, in respect of or by reason
of such obligations or their creation; provided, that the foregoing shall in no
way limit the obligations of any Guarantor in respect of the Guarantees. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
Section 13.11 Successors. All agreements of the Issuers and the
Guarantors in this Indenture, the Securities and the Guarantees shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 13.12 Duplicate Originals. All parties may sign any number of
copies of this Indenture. Each signed copy or counterpart shall be an original,
but all of them together shall represent the same agreement.
Section 13.13 Severability. In case any one or more of the provisions
in this Indenture, in the Securities or in the Guarantees shall be held invalid,
illegal or unenforceable, in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
Section 13.14 References to Parent's Board of Directors. In the event
that Parent should cease to own and control a majority of the Voting Securities
of NATG, all references herein to Parent's Board of Directors shall thenceforth
be deemed to be references to NATG's Board of Directors.
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<PAGE> 100
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the date first written above.
NATG HOLDINGS, LLC
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer and
President
ORIUS CAPITAL CORP.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: President
GUARANTORS:
ORIUS CORP.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer and
President
NORTH AMERICAN TEL-COM
GROUP, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer and
President
LISN COMPANY,
By /s/ Robert C. Froetscher
-----------------------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
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<PAGE> 101
LISN, INC.,
By /s/ Robert C. Froetscher
-----------------------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
ARION SUB, INC.
By /s/ Robert C. Froetscher
-----------------------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
CATV SUBSCRIBER SERVICES, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
CABLEMASTERS, CORP.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
CHANNEL COMMUNICATIONS, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
EXCEL CABLE CONSTRUCTION, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
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MICH-COM CABLE SERVICES
INCORPORATED
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
STATE WIDE CATV, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
U.S. CABLE, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
DAS-CO OF IDAHO, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
NETWORK CABLING SERVICES, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
SCHATZ UNDERGROUND CABLE,
INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
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<PAGE> 103
COPENHAGEN UTILITIES &
CONSTRUCTION INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
TEXEL CORPORATION
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
IRWIN TELECOMSERVICES, L.P., F/K/A
IRWIN ACQUISITION, L.P.
By: SCHATZ UNDERGROUND CABLE,
INC., its general partner
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
IRWIN TELECOM HOLDINGS, INC.
By /s/ William J. Mercurio
-----------------------------------------------
Name: William J. Mercurio
Title: Executive Vice President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By /s/ Gerard F. Ganey
-----------------------------------------------
Name: Gerard F. Ganey
Title: Senior Vice President
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<PAGE> 104
EXHIBIT A
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
12 3/4% Senior Subordinated Notes due 2010
CUSIP No. [144A: 62874L AA4]
[Reg. S: U62918 AA2]
[AI: 62874L AB2]
No. $
NATG HOLDINGS, LLC, a Delaware limited liability company, and ORIUS
CAPITAL CORP., a Delaware corporation (together the "Issuers", which term
includes any successors), for value received jointly and severally promise to
pay to CEDE & CO. or registered assigns, the principal sum of
$_________________on _______ ___, 2010.
Interest Payment Dates: August 1 and February 1, commencing August 1,
2000.
Record Dates: July 15 and January 15.
Reference is made to the further provisions of this Security set forth
on the reverse hereof, which will for all purposes have the same effect as if
set forth at this place.
<PAGE> 105
EXHIBIT A
Page 2
IN WITNESS WHEREOF, the Issuers have caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: February ___, 2000
NATG HOLDINGS, LLC
By_____________________________
Name:
Title:
By_____________________________
Name:
Title:
ORIUS CAPITAL CORP.
By_____________________________
Name:
Title:
By_____________________________
Name:
Title:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12 3/4% Senior Subordinated Notes due 2010 described
in the within-mentioned Indenture.
Dated: February ___, 2000
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:_____________________________
Authorized Signatory
<PAGE> 106
EXHIBIT A
Page 3
(REVERSE OF SECURITY)
NATG HOLDINS, LLC
ORIUS CAPITAL CORP.
12 3/4% Senior Subordinated Note
due February 1, 2010
1. Interest.
The Issuers jointly and severally promise to pay interest on the
principal amount of this Security at the rate per annum shown above. The Issuers
will pay interest semi-annually on August 1 and February 1 of each year (each,
an "Interest Payment Date"), commencing August 1, 2000. Interest on this
Security will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from February 9, 2000. Interest on this
Security will be computed on the basis of a 360-day year of twelve 30-day
months.
The Issuers shall pay interest on overdue principal from time to time
on demand at the rate borne by this Security plus 1.5% and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuers
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Issuers may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, the United States Trust Company of New York (the "Trustee")
will act as Paying Agent and Registrar. The Issuers may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Issuers or any of
its Subsidiaries may, subject to certain exceptions, act as Registrar or
co-Registrar.
4. Indenture.
The Issuers issued the Securities under an Indenture, dated as of
February 9, 2000 (the "Indenture"), among the Issuers, Parent and the other
Guarantors named therein and the Trustee.
<PAGE> 107
EXHIBIT A
Page 4
This Security is one of a duly authorized issue of Securities of the Issuers
designated as their 12 3/4% Senior Subordinated Notes due 2010 (the
"Securities"). The Securities are treated as a single class of securities under
the Indenture unless otherwise specified in the Indenture. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein. The
terms of the Securities include those stated in the Indenture and those made
part of this Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the Issue Date until
such time as the Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and Holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are general obligations of the
Issuers limited in aggregate principal amount to $300.0 million.
5. Subordination.
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Senior Debt of the Issuers, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Optional Redemption.
The Securities will be redeemable, at the Issuers' option, in whole at
any time or in part from time to time, on and after February 1, 2005, upon not
less than 30 nor more than 60 days' notice, at the following Redemption Prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on February 1 of the years set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2005.................................. 106.375%
2006.................................. 104.250%
2007.................................. 102.125%
2008.................................. 100.000%
</TABLE>
<PAGE> 108
EXHIBIT A
Page 5
7. Optional Redemption upon Equity Offerings.
At any time, or from time to time, on or prior to February 1, 2003, the
Issuers may, at their option, use the net cash proceeds of one or more Equity
Offerings to redeem up to 35% aggregate principal amount of the Securities
issued pursuant to the Indenture at a Redemption Price equal to 112.750% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided, that after any such redemption the aggregate
principal amount of Securities outstanding must equal at least 65% of the
aggregate principal amount of the Securities issued pursuant to the Indenture.
In order to effect the foregoing redemption with the net cash proceeds of any
Equity Offering, the Issuers shall make such redemption not more than 60 days
after the consummation of any such Equity Offering.
8. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
9. Change of Control Offer.
Upon the occurrence of a Change of Control, the Issuers will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase.
10. Limitation on Asset Sales.
The Issuers are, subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount, plus accrued and
unpaid interest, if any, thereon to the date of repurchase with certain cash
proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture.
<PAGE> 109
EXHIBIT A
Page 6
The Registrar need not register the transfer of or exchange any Securities or
portions thereof selected for redemption, except the unredeemed portion of any
security being redeemed in part.
12. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
thereof for all purposes.
13. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will, subject to certain
requirements, repay the funds to the Issuers at their request. After that, all
liability of the Trustee and such Paying Agent with respect to such funds shall
cease.
14. Discharge Prior to Redemption or Maturity.
The Issuers and the Guarantors may be discharged from their obligations
under the Indenture, the Securities and the Guarantees except for certain
provisions thereof, and may be discharged from obligations to comply with
certain covenants contained in the Indenture, the Securities and the Guarantees,
in each case upon satisfaction of certain conditions specified in the Indenture.
15. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Securities and the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
16. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the NATG and its Restricted Subsidiaries to make Restricted
Payments, to incur Indebtedness, to create Liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Issuers to the Issuers, to consolidate, merge or sell all or substantially all
of their assets or to engage in transactions with affiliates. The limitations
are subject to a number of important qualifications and exceptions. The Issuers
must annually report to the Trustee on compliance with such limitations.
<PAGE> 110
EXHIBIT A
Page 7
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with Parent, the Issuers, their subsidiaries and their respective Affiliates as
if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, member, employee or incorporator, as
such, of Parent, the Issuers or any of their subsidiaries shall have any
liability for any obligation of the Issuers in respect of the Securities or for
any claim based on, in respect of or by reason of, such obligations or their
creation; provided, that the foregoing shall in no way limit the obligations of
any Guarantor in respect of its Guarantee. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. Governing Law.
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York, as applied to contracts made and performed
within the State of New York, without regard to applicable principles of
conflicts of laws.
<PAGE> 111
EXHIBIT A
Page 8
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Registration Rights.(1)
Pursuant to, but subject to the exceptions in, the Registration Rights
Agreement, the Issuers and the Guarantors will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for a 12 3/4% Senior Subordinated Note due 2010
of the Issuers which shall have been registered under the Securities Act, in
like principal amount and having terms identical in all material respects as
this Security. The Holders shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated or the
Securities are not offered for resale and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time. Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture.
26. Guarantees.
This Security will be entitled to the benefits of certain senior
subordinated Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.
The Issuers will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
NATG HOLDINGS, INC. and ORIUS CAPITAL CORP. at 1401 Forum Way, Suite 400, West
Palm Beach, FL 33401, Attention: Chief Financial Officer.
- ----------------
(1) Not applicable to Form of Exchange Securities
<PAGE> 112
EXHIBIT A
Page 9
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent
to transfer this Security on the books of the Issuers. The agent may substitute
another to act for him.
Dated: _________________ Signed: __________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee: _____________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 113
EXHIBIT A
Page 10
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) February 9, 2002 the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
[Check One]
(1) ___ to Orius Corp., the Issuers or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
as amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form
of which letter can be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign purchaser" in
compliance with Rule 904 of Regulation S under the Securities
Act of 1933, as amended; or
(5) ___ pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Issuers as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
___ The transferee is an Affiliate of the Issuers.
Unless one of the items is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, that if item (3), (4), (5)
or (7) is checked, the Issuers or the Trustee may require, prior to registering
any such transfer of the Securities, in their sole discretion, such written
legal opinions, certifications (including an investment letter in the case of
box (3) or (4) and other information as the Trustee or the Issuers have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
<PAGE> 114
EXHIBIT A
Page 11
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated:_______________ Signed:___________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature
Guarantee:___________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuers as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:_______________ __________________________________________
NOTICE: To be executed by an executive officer
<PAGE> 115
EXHIBIT A
Page 12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ] Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by the
Issuers pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount: $___________
Dated: _________________ Signed: ____________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee: _______________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
<PAGE> 116
EXHIBIT B
FORM OF LEGENDS
Each Global Security and Physical Security that constitutes a
Restricted Security or is sold in compliance with Regulation S shall bear the
following legend (the "Private Placement Legend") on the face thereof until
after the second anniversary of its date of issuance, unless otherwise agreed by
the Issuer and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"),
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO ORIUS CORP.,
THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE DATE OF
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFER IS BEING MADE TO AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE ISSUERS SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND
<PAGE> 117
EXHIBIT B
Page 2
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Security authenticated and delivered hereunder shall also
bear the following legend:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
Any Temporary Reg. S. Global Security shall bear the following legend:
THIS SECURITY AND INTERESTS IN THIS SECURITY MAY NOT BE OFFERED OR SOLD
TO A U.S. PERSON (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES
ACT) OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON PRIOR TO THE EXPIRATION OF
THE DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED IN THE INDENTURE), AND NO
TRANSFER OR EXCHANGE OF THIS SECURITY OR INTEREST IN THIS SECURITY MAY BE MADE
FOR A PHYSICAL SECURITY OR AN INTEREST IN A PHYSICAL SECURITY UNTIL AFTER THE
LATER OF THE DATE OF EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD AND
<PAGE> 118
EXHIBIT B
Page 3
THE DATE ON WHICH THE PROPER REQUIRED CERTIFICATION RELATING TO SUCH TRANSFER OR
EXCHANGE HAS BEEN PROVIDED IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, TO THE
EFFECT THAT THE BENEFICIAL OWNER OR OWNERS OF SUCH INTEREST ARE NOT U.S.
PERSONS.
<PAGE> 119
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of 12 3/4% Senior Subordinated
Notes due 2010 (the "Securities") of NATG HOLDINGS, LLC, a Delaware limited
liability company, and ORIUS CAPITAL CORP., a Delaware corporation (together,
the "Issuers"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated February 4, 2000, relating to the Securities and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Transfer Restrictions" of such Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (the "Indenture") as described in the Offering
Memorandum and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities, we will do so only (i) to Orius
Corp., the Issuers or any of their subsidiaries, (ii) inside the United States
in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act), (iii)
inside the United States to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to the Trustee (as defined in the Indenture) a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Securities (the form of which letter can be
obtained from the Trustee), (iv) outside the United States in accordance with
Rule 904 of Regulation S promulgated under the Securities Act to non-U.S.
persons, (v) pursuant to the exemption from registration provided by Rule 144
under the
<PAGE> 120
EXHIBIT C
Page 2
Securities Act (if available), or (vi) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Securities from us a notice advising such purchaser
that resales of the Securities are restricted as stated herein.
4. We are not acquiring the Securities for or on behalf of, and will
not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Issuers such certification,
legal opinions and other information as the Trustee and the Issuers may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You, the Issuers, the Trustee and others are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By__________________________________
Name:
Title:
<PAGE> 121
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed sale of [$ ] aggregate principal amount
of the 12 3/4% Senior Subordinated Notes due 2010 (the "Securities") of NATG
HOLDINGS, LLC, a Delaware limited liability company, and ORIUS CAPITAL CORP., a
Delaware corporation (together, the "Issuers"), we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
<PAGE> 122
EXHIBIT D
Page 2
You, the Issuers and counsel for the Issuers are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________
Authorized Signature
<PAGE> 123
EXHIBIT E
GUARANTEE
For value received, each of the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Security the cash payments in United States dollars of principal of, premium, if
any, and interest on this Security in the amounts and at the times when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Issuers under the Indenture (as defined below) or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article Eleven
of the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article Eleven of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of February 9, 2000, among NATG
Holdings, LLC and Orius Capital Corp., as issuers (collectively, the "Issuers"),
the Guarantors named therein and the United States Trust Company of New York, as
trustee (the "Trustee"), as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subordinated in right of payment, in the manner and
to the extent set forth in Article Twelve of the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Debt of the
Guarantors, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW. Each undersigned Guarantor hereby agrees to submit to the jurisdiction
of the courts of the State of New York in any action or proceeding arising out
of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
<PAGE> 124
EXHIBIT E
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
Date: February ___, 2000
ORIUS CORP.
By_____________________________
Name:
Title:
NORTH AMERICAN TEL-COM
GROUP, INC.
By_____________________________
Name:
Title:
LISN COMPANY,
By_____________________________
Name:
Title:
LISN, INC.,
By_____________________________
Name:
Title:
ARION SUB, INC.
By_____________________________
Name:
Title:
<PAGE> 125
EXHIBIT E
CATV SUBSCRIBER SERVICES, INC.
By_____________________________
Name:
Title:
CABLEMASTERS, CORP.
By_____________________________
Name:
Title:
CHANNEL COMMUNICATIONS, INC.
By_____________________________
Name:
Title:
EXCEL CABLE CONSTRUCTION, INC.
By_____________________________
Name:
Title:
MICH-COM CABLE SERVICES
INCORPORATED
By_____________________________
Name:
Title:
STATE WIDE CATV, INC.
By_____________________________
Name:
Title:
<PAGE> 126
EXHIBIT E
U.S. CABLE, INC.
By_____________________________
Name:
Title:
DAS-CO OF IDAHO, INC.
By_____________________________
Name:
Title:
NETWORK CABLING SERVICES, INC.
By_____________________________
Name:
Title:
SCHATZ UNDERGROUND CABLE,
INC.
By_____________________________
Name:
Title:
COPENHAGEN UTILITIES &
CONSTRUCTION INC.
By_____________________________
Name:
Title:
TEXEL CORPORATION
By_____________________________
Name:
Title:
<PAGE> 127
EXHIBIT E
IRWIN ACQUISITION, L.P.
By: SCHATZ UNDERGROUND CABLE,
INC., its general partner
By_____________________________
Name:
Title:
IRWIN TELECOM HOLDINGS, INC.
By_____________________________
Name:
Title:
<PAGE> 128
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE........................................................................1
Section 1.1 Definitions.......................................................................................1
Section 1.2 Incorporation by Reference of TIA................................................................27
Section 1.3 Rules of Construction............................................................................27
Section 1.4 Ancillary Agreements.............................................................................28
ARTICLE TWO
THE SECURITIES...................................................................................................28
Section 2.1 Form and Dating..................................................................................28
Section 2.2 Execution and Authentication.....................................................................29
Section 2.3 Registrar and Paying Agent.......................................................................30
Section 2.4 Paying Agent To Hold Assets in Trust.............................................................30
Section 2.5 Holder Lists.....................................................................................31
Section 2.6 Transfer and Exchange............................................................................31
Section 2.7 Replacement Securities...........................................................................31
Section 2.8 Outstanding Securities...........................................................................32
Section 2.9 Treasury Securities..............................................................................32
Section 2.10 Temporary Securities............................................................................32
Section 2.11 Cancellation....................................................................................32
Section 2.12 Defaulted Interest..............................................................................33
Section 2.13 CUSIP Number....................................................................................33
Section 2.14 Deposit of Moneys...............................................................................33
Section 2.15 Book-Entry Provisions for Global Securities.....................................................33
Section 2.16 Special Transfer Provisions.....................................................................34
ARTICLE THREE
REDEMPTION.......................................................................................................37
Section 3.1 Notices to Trustee...............................................................................37
Section 3.2 Selection of Securities To Be Redeemed...........................................................37
Section 3.3 Notice of Redemption.............................................................................37
Section 3.4 Effect of Notice of Redemption...................................................................38
Section 3.5 Deposit of Redemption Price......................................................................38
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Section 3.6 Securities Redeemed in Part......................................................................39
Section 3.7 Optional Redemption..............................................................................39
ARTICLE FOUR
COVENANTS........................................................................................................39
Section 4.1 Payment of Securities............................................................................39
Section 4.2 Maintenance of Office or Agency..................................................................40
Section 4.3 Limitation on Restricted Payments................................................................40
Section 4.4 Limitation on Incurrence of Additional Indebtedness..............................................42
Section 4.5 Corporate Existence..............................................................................42
Section 4.6 Payment of Taxes and Other Claims................................................................43
Section 4.7 Maintenance of Properties and Insurance..........................................................43
Section 4.8 Compliance Certificate; Notice of Default........................................................43
Section 4.9 Compliance with Laws.............................................................................44
Section 4.10 Reports to Holders..............................................................................44
Section 4.11 Waiver of Stay, Extension or Usury Laws.........................................................45
Section 4.12 Limitations on Transactions with Affiliates.....................................................45
Section 4.13 Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.........46
Section 4.14 Limitation on Liens.............................................................................47
Section 4.15 Change of Control...............................................................................47
Section 4.16 Limitation on Asset Sales.......................................................................49
Section 4.17 Prohibition on Incurrence of Senior Subordinated Debt...........................................51
Section 4.18 Additional Subsidiary Guarantees................................................................51
Section 4.19 Conduct of Business.............................................................................52
Section 4.20 Disposal of Subsidiary Stock....................................................................52
Section 4.21 Payments for Consent............................................................................52
Section 4.22 Maintenance of Separate Identity................................................................52
ARTICLE FIVE
SUCCESSOR CORPORATION............................................................................................53
Section 5.1 Merger, Consolidation and Sale of Assets........................................................53
Section 5.2 Success or Corporation Substituted..............................................................54
ARTICLE SIX
DEFAULT AND REMEDIES.............................................................................................54
Section 6.1 Events of Default...............................................................................54
Section 6.2 Acceleration....................................................................................56
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Section 6.3 Other Remedies....................................................................................56
Section 6.4 Waiver of Past Defaults...........................................................................56
Section 6.5 Control by Majority...............................................................................57
Section 6.6 Limitation on Suits...............................................................................57
Section 6.7 Rights of Holders To Receive Payment..............................................................57
Section 6.8 Collection Suit by Trustee........................................................................57
Section 6.9 Trustee May File Proofs of Claim..................................................................58
Section 6.10 Priorities.......................................................................................58
Section 6.11 Undertaking for Costs............................................................................58
ARTICLE SEVEN
TRUSTEE...........................................................................................................59
Section 7.1 Duties of Trustee.................................................................................59
Section 7.2 Rights of Trustee.................................................................................60
Section 7.3 Individual Rights of Trustee......................................................................61
Section 7.4 Trustee's Disclaimer..............................................................................61
Section 7.5 Notice of Default.................................................................................61
Section 7.6 Reports by Trustee to Holders.....................................................................61
Section 7.7 Compensation and Indemnity........................................................................62
Section 7.8 Replacement of Trustee............................................................................63
Section 7.9 Successor Trustee by Merger, Etc..................................................................63
Section 7.10 Eligibility; Disqualification....................................................................64
Section 7.11 Preferential Collection of Claims Against Company................................................64
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE................................................................................64
Section 8.1 Termination of the Issuers' Obligations...........................................................64
Section 8.2 Legal Defeasance and Covenant Defeasance..........................................................65
Section 8.3 Conditions to Legal Defeasance or Covenant Defeasance.............................................66
Section 8.4 Application of Trust Money........................................................................68
Section 8.5 Repayment to the Issuers..........................................................................68
Section 8.6 Reinstatement.....................................................................................69
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS...............................................................................69
Section 9.1 Without Consent of Holders........................................................................69
Section 9.2 With Consent of Holders...........................................................................69
Section 9.3 Effect on Senior Debt.............................................................................70
Section 9.4 Compliance with TIA...............................................................................71
Section 9.5 Revocation and Effect of Consents.................................................................71
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Section 9.6 Notation on or Exchange of Securities............................................................71
Section 9.7 Trustee To Sign Amendments, Etc..................................................................72
ARTICLE TEN
SUBORDINATION OF SECURITIES......................................................................................72
Section 10.1 Securities Subordinated to Senior Debt..........................................................72
Section 10.2 Suspension of Payment When Senior Debt Is in Default............................................72
Section 10.3 Securities Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation or
Reorganization of an Issuer...................................................................73
Section 10.4 Payments May Be Paid Prior to Dissolution.......................................................75
Section 10.5 Holders To Be Subrogated to Rights of Holders of Senior Debt....................................75
Section 10.6 Obligation of the Issuers Unconditional.........................................................75
Section 10.7 Notice to Trustee...............................................................................75
Section 10.8 Reliance on Judicial Order or Certificate of Liquidating Agent..................................76
Section 10.9 Trustee's Relation to Senior Debt...............................................................76
Section 10.10 Subordination Rights Not Impaired by Acts or Omissions of an Issuer or Holders of Senior Debt..77
Section 10.11 Securityholders Authorize Trustee To Effectuate Subordination of Securities....................77
Section 10.12 This Article Ten Not To Prevent Events of Default..............................................77
Section 10.13 Trustee's Compensation Not Prejudiced..........................................................78
ARTICLE ELEVEN
GUARANTEE OF SECURITIES..........................................................................................78
Section 11.1 Unconditional Guarantee.........................................................................78
Section 11.2 Limitations on Guarantees.......................................................................79
Section 11.3 Execution and Delivery of Guarantee.............................................................79
Section 11.4 Release of a Guarantor..........................................................................80
Section 11.5 Waiver of Subrogation...........................................................................80
Section 11.6 Immediate Payment...............................................................................81
Section 11.7 No Set-Off......................................................................................81
Section 11.8 Obligations Absolute............................................................................81
Section 11.9 Obligations Continuing..........................................................................81
Section 11.10 Obligations Not Reduced........................................................................81
Section 11.11 Obligations Reinstated.........................................................................82
Section 11.12 Obligations Not Affected.......................................................................82
Section 11.13 Waiver.........................................................................................83
Section 11.14 No Obligation To Take Action Against the Issuers...............................................83
Section 11.15 Dealing with the Issuers and Others............................................................83
Section 11.16 Default and Enforcement........................................................................84
Section 11.17 Amendment,Etc..................................................................................84
Section 11.18 Acknowledgment.................................................................................84
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Section 11.19 Costs and Expenses..............................................................................84
Section 11.20 No Merger or Waiver; Cumulative Remedies........................................................84
Section 11.21 Survival of Obligations.........................................................................84
Section 11.22 Guarantee in Addition to Other Obligations......................................................85
Section 11.23 Severability....................................................................................85
Section 11.24 Successors and Assigns..........................................................................85
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE........................................................................................85
Section 12.1 Guarantee Obligations Subordinated to Guarantor Senior Debt......................................85
Section 12.2 Suspension of Guarantee Obligations When Guarantor Senior Debt Is in Default.....................85
Section 12.3 Guarantee Obligations Subordinated to Prior Payment of All Guarantor Senior Debt on Dissolution,
Liquidation or Reorganization of Such Guarantor................................................86
Section 12.4 Payments May Be Paid Prior to Dissolution........................................................87
Section 12.5 Holders of Guarantee Obligations To Be Subrogated to Rights of Holders of Guarantor Senior Debt..87
Section 12.6 Obligations of the Guarantors Unconditional......................................................88
Section 12.7 Notice to Trustee................................................................................88
Section 12.8 Reliance on Judicial Order or Certificate of Liquidating Agent...................................89
Section 12.9 Trustee's Relation to Guarantor Senior Debt......................................................89
Section 12.10 Subordination Rights Not Impaired by Acts or Omissions of the Guarantors or Holders of Guarantor
Senior Debt....................................................................................89
Section 12.11 Holders Authorize Trustee To Effectuate Subordination of Guarantee Obligations..................90
Section 12.12 This Article Twelve Not To Prevent Events of Default............................................90
Section 12.13 Trustee's Compensation Not Prejudiced...........................................................90
ARTICLE THIRTEEN
MISCELLANEOUS.....................................................................................................90
Section 13.1 TIA Controls.....................................................................................90
Section 13.2 Notices..........................................................................................90
Section 13.3 Communications by Holders with Other Holders.....................................................92
Section 13.4 Certificate and Opinion as to Conditions Precedent...............................................92
Section 13.5 Officers' Certificates and Opinions of Counsel...................................................92
Section 13.6 Rules by Trustee, Paying Agent, Registrar........................................................93
Section 13.7 Legal Holidays...................................................................................93
Section 13.8 Governing Law....................................................................................93
Section 13.9 No Adverse Interpretation of Other Agreements....................................................93
Section 13.10 No Recourse Against Others......................................................................93
Section 13.11 Successors......................................................................................93
Section 13.12 Duplicate Originals.............................................................................93
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Section 13.13 Severability...................................................................................93
Section 13.14 References to Parent's Board of Directors......................................................94
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EXHIBITS
EXHIBIT A - Form of Security
EXHIBIT B - Form of Legends
EXHIBIT C - Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
EXHIBIT D - Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S
EXHIBIT E - Form of Guarantee
(vii)
<PAGE> 1
Execution Version
================================================================================
EXHIBIT 4.3
NATG HOLDINGS, LLC
and
ORIUS CAPITAL CORP.
and
THE GUARANTORS NAMED HEREIN,
and
THE INITIAL PURCHASERS NAMED HEREIN
12 3/4% Senior Subordinated Notes Due 2010
REGISTRATION RIGHTS AGREEMENT
Dated: February 9, 2000
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of February 9, 2000, by and among NATG HOLDINGS, LLC, a Delaware limited
liability company ("NATG"), ORIUS CAPITAL CORP., a Delaware corporation
(together with NATG, the "Companies"), ORIUS CORP., a Florida corporation
("Parent"), the other guarantors listed in the signature pages attached hereto
(together with Parent, the "Guarantors"), DEUTSCHE BANK SECURITIES INC. ("DB")
and BANC OF AMERICA SECURITIES LLC (together with DB, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated February 4,
2000, among the Companies, the Guarantors and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale to the Initial Purchasers of
$150,000,000 aggregate principal amount of 12 3/4% Senior Subordinated Notes Due
2010 (the "Notes") of the Companies, guaranteed by the Guarantors (the
"Guarantees"). The Notes and the Guarantees are referred to collectively as the
"Securities." In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Companies and the Guarantors (collectively, the
"Issuers") have agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"Additional Interest" shall have the meaning provided in Section 4(a).
"Advice" shall have the meaning provided in Section 5(b).
"Applicable Period" shall have the meaning provided in Section 2.
"Companies" shall have the meaning provided in the introductory paragraphs.
"DB" shall have the meaning provided in the introductory paragraphs.
"Effectiveness Date" means the 210th day after the Issue Date; provided,
that with respect to any Shelf Registration, the Effectiveness Date shall be the
later of the 60th day after the date the Shelf Registration was filed or the
210th day after the Issue Date.
"Effectiveness Period" shall have the meaning provided in Section 3(a).
"Event Date" shall have the meaning provided in Section 4(b).
<PAGE> 3
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Exchange Notes" shall have the meaning provided in Section 2(a).
"Exchange Offer" shall have the meaning provided in Section 2(a).
"Exchange Offer Registration Statement" shall have the meaning provided in
Section 2(a).
"Filing Date" means (A) with respect to an Exchange Offer Registration
Statement or a Shelf Registration Statement filed in lieu of an Exchange Offer
Registration Statement by the Issuers pursuant to this Agreement, the 120th day
after the Issue Date; and (B) with respect to a Shelf Registration Statement,
the later of the 60th day after the delivery of a Shelf Notice as required
pursuant to Section 2(c) and the 120th day after the Issue Date.
"Guarantees" shall have the meaning provided in the introductory
paragraphs.
"Guarantors" shall have the meaning provided in the introductory
paragraphs.
"Holder" means any record holder of a Registrable Note or Registrable
Notes.
"Indemnified Person" shall have the meaning provided in Section 7(c).
"Indemnifying Person" shall have the meaning provided in Section 7(c).
"Indenture" means the Indenture, dated as of February 9, 2000, by and among
the Companies, the Guarantors and United States Trust Company of New York, as
trustee, pursuant to which the Securities are being issued, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning provided in the introductory
paragraphs.
"Initial Shelf Registration" shall have the meaning provided in Section
3(a).
"Inspectors" shall have the meaning provided in Section 5(m).
"Issue Date" means February 9, 2000, the date of original issuance of the
Notes.
"Issuers" shall have the meaning provided in the introductory paragraphs.
"NASD" shall have the meaning provided in Section 5(r).
"Notes" shall have the meaning provided in the introductory paragraphs.
-2-
<PAGE> 4
"Offering Memorandum" means the final offering memorandum of the
Companies dated February 4, 2000, in respect of the offering of the Securities.
"Parent" shall have the meaning provided in the introductory paragraphs.
"Participant" shall have the meaning provided in Section 7(a).
"Participating Broker-Dealer" shall have the meaning provided in Section
2(b).
"Person" means an individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
"Private Exchange" shall have the meaning provided in Section 2(b).
"Private Exchange Notes" shall have the meaning provided in Section 2(b).
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Purchase Agreement" shall have the meaning provided in the introductory
paragraphs hereof.
"Records" shall have the meaning provided in Section 5(m).
"Registrable Notes" means each Note upon original issuance (and the related
Guarantee) and, at all times subsequent thereto, each Exchange Note (and the
related Guarantee) as to which Section 2(c)(iv) hereof is applicable upon
original issuance and at all times subsequent thereto and each Private Exchange
Note (and the related Guarantee) upon original issuance thereof and at all times
subsequent thereto, until (i) a Registration Statement (other than, with respect
only to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Security, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Security,
Exchange Note or such Private Exchange Note (and the related Guarantees), as the
case may be, has been disposed of in accordance with such effective Registration
Statement, (ii) such Security has been exchanged pursuant to the Exchange Offer
for an Exchange Note or Exchange Notes (and the related Guarantees) and Section
2(c)(iv) is not applicable thereto, (iii) such Security, Exchange Note or
Private Exchange Note (and the related Guarantees), as the case may be, ceases
to be outstanding for purposes of the Indenture or (iv) such Security, Exchange
Note or Private Exchange Note (and the related Guarantees), as the case
-3-
<PAGE> 5
may be, has been sold, or may be resold without restriction, pursuant to Rule
144 (or any similar provision then in force) under the Securities Act.
"Registration Statement" means any registration statement of the Issuers
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes
(and the related Guarantees) filed with the SEC under the Securities Act,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
"Rule 415" means Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities" shall have the meaning provided in the introductory
paragraphs.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Shelf Notice" shall have the meaning provided in Section 2(c).
"Shelf Registration" shall have the meaning provided in Section 3(b).
"Subsequent Shelf Registration" shall have the meaning provided in Section
3(b).
"Suspension Period" shall have the meaning provided in Section 3(d).
"TTX' means the Trust Indenture Act of 1939, as amended.
"Trustee" means the trustee under the indenture and the trustee (if any)
under any indenture governing the Exchange Notes and Private Exchange Notes (and
the related Guarantees).
-4-
<PAGE> 6
"Underwritten Registration" or "Underwritten Offering" means a
registration in which securities of one or more of the Issuers are sold to an
underwriter for reoffering to the public.
2. Exchange Offer. (a) To the extent not prohibited by any applicable law
or applicable interpretation of the staff of the SEC, the Issuers shall file
with the SEC, no later than the Filing Date, a Registration Statement (the
"Exchange Offer Registration Statement") on an appropriate registration form
with respect to a registered offer (the "Exchange Offer") to exchange any and
all of the Registrable Notes for a like aggregate principal amount of notes of
the Companies, guaranteed by the Guarantors, that are identical in all material
respects to the Securities (the "Exchange Notes"), except that (i) the Exchange
Notes shall contain no restrictive legend thereon and (ii) interest thereon will
accrue (A) from the later of (1) the last interest payment date on which
interest was paid on the Note surrendered therefor or (2) if the Note is
surrendered for exchange on a date in a period which includes the record date
for an interest payment date to occur on or after the date of such exchange and
as to which interest will be paid, the date of such interest payment, or (B) if
no interest has been paid on such Note, from the Issue Date and which are
entitled to the benefits of the Indenture or a trust indenture which is
identical in all material respects to the Indenture (other than such changes to
the Indenture or any such identical trust indenture as are necessary to comply
with the TIA) and which, in either case, has been qualified under the TIA. The
Exchange Offer shall comply with all applicable tender offer rules and
regulations under the Exchange Act and other applicable law. The Issuers shall
use their reasonable best efforts to (x) cause the Exchange Offer Registration
Statement to be declared effective under the Securities Act on or before the
Effectiveness Date; (y) keep the Exchange Offer open for at least 20 business
days (or longer if required by applicable law) after the date that notice of the
Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or
prior to the 30th day after the effective date of the Exchange Offer
Registration Statement. If, after the Exchange Offer Registration Statement is
initially declared effective by the SEC, the Exchange Offer or the issuance of
the Exchange Notes thereunder is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, the Exchange Offer Registration Statement shall be deemed not to have
become effective for purposes of this Agreement during the period of such
interference, until the Exchange Offer may legally resume.
Each Holder that participates in the Exchange Offer will be required, as a
condition to its participation in the Exchange Offer, to represent to the
Issuers in writing (which may be contained in the applicable letter of
transmittal) that: (i) any Exchange Notes to be received by it will be acquired
in the ordinary course of its business, (ii) such Holder has no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes in violation of the provisions of the Securities Act, (iii) such Holder is
not an affiliate of the Issuers within the meaning of the Securities Act or, if
such Holder is an affiliate, that it will comply with the registration and
prospectus delivery requirements of the Securities Act applicable to it, (iv) if
such Holder is not a broker-dealer, such Holder is not engaged in, and does not
intend to engage in, the distribution (within the meaning of the Securities Act)
of Exchange Notes, (v) if such Holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, such Holder will deliver a
prospectus in connection with any resale of such Exchange Notes and (vi) the
Holder is not acting
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<PAGE> 7
on behalf of any persons or entities who could not truthfully make the foregoing
representations. Such Holder will also be required to make such other
representations as may be necessary under applicable SEC rules, regulations or
interpretations to render available the use of Form S-4 or any other appropriate
form under the Securities Act.
Upon consummation of the Exchange Offer in accordance with this Section 2,
the provisions of this Agreement shall continue to apply solely with respect to
Registrable Notes that are Private Exchange Notes, Exchange Notes as to which
Section 2(c)(iv) is applicable and Exchange Notes held by Participating
Broker-Dealers (as defined), and the Issuers shall have no further obligation to
register Registrable Notes (other than Private Exchange Notes and other than in
respect of any Exchange Notes as to which clause 2(c)(iv) hereof applies)
pursuant to Section 3 hereof
No securities other than the Exchange Notes shall be included in the
Exchange Offer Registration Statement.
(b) To the extent required by applicable law or SEC policy, the Issuers
shall include within the Prospectus contained in the Exchange Offer Registration
Statement a section entitled "Plan of Distribution," reasonably acceptable to
the Initial Purchasers, which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC (and publicly disseminated) with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule l3d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (a "Participating
Broker-Dealer") (other than any Notes acquired by it and having the status of an
unsold allotment in the initial distribution). Such "Plan of Distribution"
section shall also expressly permit, to the extent permitted by applicable
policies and regulations of the SEC, the use of the Prospectus by all Persons
subject to the prospectus delivery requirements of the Securities Act,
including, to the extent permitted by applicable policies and regulations of the
SEC, all Participating Broker-Dealers, and include a statement describing the
means by which Participating Broker-Dealers may resell the Exchange Notes in
compliance with the Securities Act.
In the event that the Issuers receive notice from a Participating
Broker-Dealer within 30 days after the consummation of the Exchange Offer that
such Participating Broker-Dealer holds Notes (other than Notes acquired by it
that have the status of an unsold allotment in the initial distribution
thereof), the Issuers shall use their reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as is necessary to comply with applicable
law in connection with any resale of the exchange Notes covered thereby,
provided, such period shall not be required to exceed 270 days, or such longer
period if extended pursuant to the last sentence of Section 5 (the "Applicable
Period").
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them that have the status of an unsold allotment in
the initial distribution, the Issuers upon the request of the Initial Purchasers
shall simultaneously with the delivery of the Exchange
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<PAGE> 8
Notes in the Exchange Offer, issue and deliver to the Initial Purchasers, in
exchange (the "Private Exchange") for such Notes held by the Initial Purchasers,
a like principal amount of notes (the "Private Exchange Notes") of the
Companies, guaranteed by the Guarantors, that are identical in all material
respects to the Exchange Notes except for the placement of a restrictive legend
on such Private Exchange Notes. The Private Exchange Notes shall be issued
pursuant to the same indenture as the Exchange Notes and bear the same CUSIP
number as the Exchange Notes, to the extent possible.
In connection with the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder of record entitled to
participate in the Exchange Offer a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) use their reasonable best efforts to keep the Exchange Offer open
for not less than 20 business days after the date that notice of the
Exchange Offer is mailed to Holders (or longer if required by
applicable law);
(3) utilize the services of a depository for the Exchange Offer with an
address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw tendered Securities at any time prior to
the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable laws,
rules and regulations.
As soon as reasonably practicable after the close of the Exchange Offer and
the Private Exchange, if any, the Issuers shall:
(1) accept for exchange all Registrable Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer and the Private
Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(3) cause the trustee to authenticate and deliver promptly to each
Holder of Securities, Exchange Notes or Private Exchange Notes, as the
case may be, equal in principal amount to the Securities of such Holder
so accepted for exchange.
The Exchange Offer and the Private Exchange shall not be subject to any
conditions, other than that (i) the Exchange Offer or the Private Exchange, as
the case may be, does not violate applicable law, statute, rule or regulation or
any applicable interpretation of the staff of the SEC,
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<PAGE> 9
(ii) no action or proceeding shall have been instituted or threatened in any
court or by any governmental agency which might materially impair the ability of
the Issuers to proceed with the Exchange Offer or the Private Exchange, (iii)
all governmental approvals shall have been obtained, which approvals the Issuers
deem necessary for the consummation of the Exchange Offer or the Private
Exchange, (iv) there has not been any material change, or development involving
a prospective material change, in the business or financial affairs of the
Issuers which, in the reasonable judgment of the Issuers, would materially
impair the Issuers' ability to consummate the Exchange Offer or the Private
Exchange, and (v) there has not been proposed, adopted or enacted any law,
statute, rule or regulation which, in the reasonable judgment of the Issuers,
would materially impair the Issuers' ability to consummate the Exchange Offer or
the Private Exchange or have a material adverse effect on the Issuers if the
Exchange Offer or the Private Exchange was consummated. In the event that the
Issuers are unable to consummate the Exchange Offer or the Private Exchange due
to any event listed in clauses (i) through (v) above, the Issuers shall not be
deemed to have breached any covenant under this Section 2; provided, that the
occurrence of any such event shall not prevent the accrual of Additional
Interest.
The Exchange Notes and the Private Exchange Notes shall be issued under (i)
the Indenture or (ii) an indenture identical in all material respects to the
Indenture and which, in either case, has been qualified under the TIA or is
exempt from such qualification and shall provide that the Exchange Notes shall
not be subject to the transfer restrictions set forth in the Indenture. The
Indenture or such indenture shall provide that the Exchange Notes, the Private
Exchange Notes and the Securities shall vote and consent together on all matters
as one class and that none of the Exchange Notes, the Private Exchange Notes or
the Securities will have the right to vote or consent as a separate class on any
matter.
(c) If (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuers determine in good faith
that they are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 255 days of the Issue Date, as extended pursuant
to this agreement, (iii) the holder of Private Exchange Notes so requests in
writing to the Issuers within 60 days after the consummation of the Exchange
Offer, or (iv), in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without delivering a Prospectus and an Issuer has actual
knowledge of such fact or such Holder delivers written notice of such fact to
Parent or NATG, and in the reasonable opinion of counsel to the Issuers the
Prospectus included in the Exchange Offer Registration Statement is not legally
available for such resales by such Holder, then in the case of each of clauses
(i) to and including (iv) of this sentence, the Issuers shall promptly deliver
to the Holders and the Trustee written notice thereof (the "Shelf Notice") and
shall file a Shelf Registration pursuant to Section 3 hereof
3. Shelf Registration. If at any time a shelf Notice is delivered as
contemplated by Section 2(c) hereof, then:
(a) Shelf Registration. The Issuers shall use their reasonable best efforts
to file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes
covered by such Shelf Notice (the "Initial Shelf
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<PAGE> 10
Registration"). The Issuers shall use their reasonable best efforts to file with
the SEC the initial Shelf Registration on or before the applicable Filing Date.
The Initial Shelf Registration shall be on Form S-1 or another appropriate form
permitting registration of such Registrable Notes for resale by Holders in the
manner or manners designated by them (including, without limitation, one
underwritten offering if requested by one or more Holders who together hold at
least $20 million aggregate principal amount of Notes (the "Required Holders")).
The Issuers shall not permit any securities other than the Registrable Notes to
be included in the Initial Shelf Registration or any Subsequent Shelf
Registration (as defined below).
The Issuers shall, subject to applicable law or applicable interpretations
of the staff of the SEC, use their reasonable best efforts to cause the Initial
Shelf Registration to be declared effective under the Securities Act on or prior
to the Effectiveness Date and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is two
years from the Issue Date or such shorter period ending when (i) all Registrable
Notes covered by the Initial Shelf Registration have been sold in the manner set
forth and as contemplated in the Initial Shelf Registration or cease to be
outstanding, (ii) a Subsequent Shelf Registration covering all of the
Registrable Notes covered by and not sold under the Initial Shelf Registration
or an earlier Subsequent Shelf Registration has been declared effective under
the Securities Act or (iii) all outstanding Registrable Notes cease to be
Registrable Notes (the "Effectiveness Period"), provided, that the Effectiveness
Period in respect of the Initial Shelf Registration shall be extended to the
extent required to permit dealers to comply with the applicable prospectus
delivery requirements of Rule 174 under the Securities Act and as otherwise
provided herein.
No holder of Registrable Notes may include any of its Registrable Notes in
any Shelf Registration Statement pursuant to this Agreement unless and until
such holder furnishes to the Issuers in writing, within 15 business days after
receipt of a request therefor, such information concerning such Holder required
to be included in any Shelf Registration Statement or Prospectus or preliminary
prospectus included therein. No holder of Registrable Notes shall be entitled to
Additional Interest pursuant to Section 4 hereof unless and until such holder
shall have provided all such information. Each holder of Registrable Notes as to
which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Issuers all information required to be disclosed in order to
make information previously furnished to the Issuers by such Holder not
materially misleading.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration or
any Subsequent Shelf Registration ceases to be effective for any reason at any
time during the Effectiveness Period (other than because of the sale of all of
the securities registered thereunder), the Issuers shall use their reasonable
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 45 days of such cessation
of effectiveness use their reasonable best efforts to amend the Initial Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes covered by and not
sold under the Initial Shelf Registration or an earlier Subsequent Shelf
Registration (each, a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Issuers shall use their reasonable best efforts to
cause the Subsequent Shelf Registration to be declared effective
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<PAGE> 11
under the Securities Act as soon as practicable after such filing and to keep
such subsequent Shelf Registration continuously effective for a period equal to
the number of days in the Effectiveness Period less the aggregate number of days
during which the Initial Shelf Registration or any Subsequent Shelf Registration
was previously continuously effective. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Issuers shall promptly supplement and
amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes. The Issuers shall not be required to amend or supplement a Shelf
Registration Statement to reflect additional Holders more than once per fiscal
quarter after it has been declared effective by the Commission.
(d) Suspension of Shelf Registration Statement. The Issuers' obligation to
keep the Shelf Registration Statement effective and usable for offers and sales
of the Registrable Securities may be suspended by the Issuers in good faith for
valid business reasons, including, without limitation, a pending acquisition or
divestiture of assets. Any such period during which the Issuers fail to keep the
Shelf Registration Statement effective and usable for offers and sales of
Registrable Securities is referred to as a "Suspension Period." A Suspension
Period shall commence on and include the date that the Issuers give notice that
the Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of the Registrable
Securities and shall end on the date when each Holder of Registrable Securities
covered by such registration statement either receives the copies of the
supplemented or amended prospectus contemplated by Section 3(c) hereof or is
advised in writing by the Issuers that the use of the prospectus may be resumed;
provided, that any such suspension shall not prevent the accrual of Additional
Interest.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the Holders will
suffer damages if the Issuers fail to fulfill their obligations under Section 2
or Section 3 hereof and that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, the Issuers agree to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration has been filed on or prior to 120 days after
the Issue Date or (B) notwithstanding that the issuers have consummated
or will consummate the Exchange Offer, the Issuers are required to file
a Shelf Registration and such Shelf Registration is not filed on or
prior to the Filing Date applicable thereto, then, commencing on the
day after any such Filing Date, Additional Interest shall accrue at a
rate of 0.50% per annum for the first 90 days immediately following
each such Filing Date, and such Additional Interest rate shall increase
by an additional 0.50% per annum at the beginning of each subsequent
90-day period; or
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<PAGE> 12
(ii) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior
to the relevant Effectiveness Date or (B) notwithstanding that the
Issuers have consummated or will consummate the Exchange Offer, the
Issuers are required to file a Shelf Registration and such Shelf
Registration is not declared effective by the SEC on or prior to the
Effectiveness Date in respect of such Shelf Registration, then,
commencing on the day after such Effectiveness Date, Additional
Interest shall accrue at a rate of 0.50% per annum for the first 90
days immediately following each such Effectiveness Date, and such
Additional Interest rate shall increase by an additional 0.50% per
annum at the beginning of each subsequent 90-day period; or
(iii) if (A) the Issuers have not exchanged Exchange Notes for all
Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the effective date of
the Exchange Offer Registration Statement, (B) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period, or
(C) the Issuers effect a Suspension Period, then in each case,
Additional Interest shall accrue at a rate of 0.50% per annum for the
first 90 days commencing on the (x) 31st day after the Issue Date, in
the case of (A) above, (y) day such Shelf Registration ceases to be
effective in the case of (B) above or (z) day such Suspension Period
commences in the case of (C) above, and such Additional Interest rate
shall increase by an additional 0.50% per annum at the beginning of
each such subsequent 90-day period;
provided, that Additional Interest on the Notes may not accrue under more than
one of the foregoing clauses (i)-(iii) at any one time and at no time shall the
aggregate amount of Additional Interest exceed 1.50% per annum; provided,
further, however, that (1) upon the filing of the applicable Exchange Offer
Registration Statement or the applicable Shelf Registration Statement as
required hereunder (in the case of clause (i) above of this Section 4(a)), (2)
upon the effectiveness of the Exchange Offer Registration Statement or the
applicable Shelf Registration Statement as required hereunder (in the case of
clause (ii) of this Section 4(a)), or (3) upon (X) the exchange of the
applicable Exchange Notes for all Securities tendered (in the case of clause
(iii)(A) of this Section 4), (Y) the effectiveness of the applicable Shelf
Registration Statement which had ceased to remain effective (in the case of
(iii)(B) of this Section 4(a)) or (Z) the termination of the Suspension Period
(in the case of clause (iii)(A) of this Section 4(a)), Additional Interest on
the Notes in respect of which such events relate as a result of such clause (or
the relevant subclause thereof), as the case may be, shall cease to accrue.
(b) The Issuers shall notify the Trustee within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable in cash semiannually on each February 1 and August 1, to the Holders on
the January 15 and July 15 (whether or not a business day) immediately preceding
such dates, commencing with the first such date occurring after any such
Additional Interest commences to
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<PAGE> 13
accrue. The amount of Additional Interest will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Registrable
Notes, multiplied by a fraction, the numerator of which is the number of days
such Additional Interest rate was applicable during such period (determined on
the basis of a 360-day year comprised of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. Registration Procedures. In connection with the filing of any
Registration Statement pursuant to Sections 2 or 3 hereof, the Issuers shall
effect such registrations to permit the sale of the securities covered thereby
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Issuers hereunder each of the Issuers shall:
(a) Prepare and file with the SEC prior to the applicable Filing Date, a
Registration Statement or Registration Statements as prescribed by Sections 2 or
3 hereof, and use their reasonable best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; provided,
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuers shall, to the
extent permitted by law, furnish to and afford the Holders of the Registrable
Notes included in such Registration Statement (with respect to a Shelf
Registration filed pursuant to Section 3 hereof) or each such Participating
Broker-Dealer identified to the Issuers, as the case may be, their counsel and
the managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including, if requested in writing, copies of any documents
to be incorporated by reference therein and all exhibits thereto) proposed to be
filed (in each case at least five days prior to such filing, or such later date
as is reasonable under the circumstances). The Issuers shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto if
the Holders of a majority in aggregate principal amount of the Registrable Notes
included in such Registration Statement, or any such Participating
Broker-Dealer, as the case may be, their counsel, or the managing underwriters,
if any, shall reasonably object in writing on a timely basis unless in the
opinion of counsel to the Issuers the filing thereof is required by law.
(b) Use their reasonable best efforts to prepare and file with the SEC such
amendments and post-effective amendments to each Shelf Registration Statement or
the Exchange Offer Registration Statement, as the case may be, as may be
necessary to keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be; cause the
related Prospectus to be supplemented by any Prospectus supplement required by
applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange Act applicable
to each of them with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a
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<PAGE> 14
Participating Broker-Dealer covered by any such Prospectus. The Issuers shall be
deemed to have used their reasonable best efforts to keep a Registration
Statement effective during the Effectiveness Period or the Applicable Period, as
the case may be, relating thereto, even if the Issuers voluntarily take any
action that results in selling Holders of the Registrable Notes covered thereby
or Participating Broker-Dealers seeking to sell Exchange Notes not being able to
sell such Registrable Notes or such Exchange Notes during that period if such
action is required by applicable law or if the Issuers comply with this
Agreement, including Section 3(d) which shall be applicable to the Exchange
Offer Registration Statement during the applicable period and Section 5(j) and
the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer as contemplated by Section 2 hereof, notify the selling Holders of
Registrable Notes who are named as selling securityholders in the applicable
Shelf Registration Statement, or each such Participating Broker-Dealer, as the
case may be, and the managing underwriters, if any, promptly (but in any event
within five business days), and, if requested by any such persons, confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any applicable
Registration Statement or any post-effective amendment, when the same has become
effective under the Securities Act (including in such notice a written statement
that any Holder may, upon request in writing, obtain, at the sole expense of the
Issuers, one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules and, if specifically
requested, documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, (iii) if at any time when a prospectus is required
by the Securities Act to be delivered in connection with sales of the
Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers
the representations and warranties of the Issuers contained in any agreement
(including any underwriting agreement) contemplated by Section 5(l) hereof cease
to be true and correct in all material respects, (iv) of the receipt by any
Issuer of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein
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<PAGE> 15
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that such notification need not
specifically identify such event if notification of the occurrence thereof
would, in the reasonable judgment of any Issuer, involve the disclosure of
confidential, nonpublic information, and (vi) of the Issuers' determination that
a post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer as contemplated by Section 2 hereof, use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued,
to use its reasonable best efforts to obtain the withdrawal of any such order at
the earliest possible time.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any) or the Required
Holders, (i) as promptly as reasonably practicable incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter or underwriters (if any), or such Required Holders or counsel for
any of them reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as reasonably practicable after the Issuers have received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement; provided, that the Issuers shall not be required to take any action
pursuant to this paragraph (e) that would, in the opinion of counsel to the
Issuers, violate applicable law or any agreement to which the Issuers are then
subject.
(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer as contemplated by Section 2 hereof, furnish to each Holder of Registrable
Notes named as a selling securityholder in the applicable Shelf Registration
Statement, to each such Participating Broker-Dealer who so requests and each
managing underwriter, if any, at the sole expense of the Issuers, one conformed
copy of the Registration Statement or Registration Statements and each post-
effective amendment thereto, including financial statements and schedules, and,
if specifically requested in writing, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is
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<PAGE> 16
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period
relating thereto from whom the Issuers have received written notice that it will
be a Participating Broker-Dealer in the Exchange Offer as contemplated by
Section 2 hereof, deliver to each selling Holder of Registrable Notes named as a
selling securityholder in the applicable Shelf Registration Statement, or each
such Participating Broker-Dealer, as the case may be, and the managing
underwriters, if any, at the sole expense of the Issuers, as many copies of the
Prospectus or Prospectuses (including each form of preliminary prospectus) and
each amendment or supplement thereto and, if requested in writing, any documents
incorporated by reference therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Issuers hereby consent to
the use of such Prospectus and each amendment or supplement thereto (provided
the manner of such use complies with any limitations resulting from any
applicable state securities "Blue Sky" laws as provided in writing to such
Holders by the Issuers and subject to the provisions of this Agreement) by each
of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the Exchange
Notes pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom the Issuers have received written
notice that it will be a Participating Broker-Dealer in the Exchange Offer as
contemplated by Section 2 hereof, use its reasonable best efforts to register or
qualify, and to cooperate with the Holders of Registrable Notes named as selling
securityholders in the applicable Shelf Registration Statement or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the securities
or Blue Sky laws of such jurisdictions within the United States as any Holder
named as a selling securityholder in the applicable Shelf Registration
Statement, Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request in writing; provided, that where Exchange Notes
held by Participating Broker-Dealers or Registrable Notes are offered other than
through an underwritten offering, the Issuers agree to, or to cause their
counsel to (i) perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h), (ii) use
their reasonable best efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period such Registration Statement
is required to be kept effective and (iii) do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement; provided,
that no Issuer shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
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(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes named as selling
securityholders in the applicable Shelf Registration Statement and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or selling Holders may
reasonably request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer as contemplated by Section 2 hereof, upon the occurrence of any event
contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 3(d) or Section 5(a) hereof) file with the SEC,
at the sole expense of the Issuers, a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Notes being sold thereunder or to the purchasers of the
Exchange Notes to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes or as soon thereafter as practicable, (i)
provide the Trustee with certificates for the Exchange Notes and Private
Exchange Notes in a form eligible for deposit with The Depository Trust Company
and (ii) provide a CUSIP number for the Exchange Notes and Private Exchange
Notes (which CUSIP number shall, to the extent permissible, be the same as the
CUSIP number for any other notes issued under the Indenture in exchange for
Securities initially issued thereunder).
(1) In connection with an underwritten offering of Registrable Notes
pursuant to a Shelf Registration and upon the request of the Required Holders,
enter into an underwriting agreement as is customary in underwritten offerings
of debt securities similar to the Registrable Notes in form and substance
reasonably satisfactory to the Issuers and provided that the underwriters are
reasonably acceptable to the Issuers and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to
expedite or facilitate the registration or the disposition of such Registrable
Notes and, in such connection, if reasonably requested (i) make such
representations and warranties to, and covenants with, the underwriters with
respect to the business of the Issuers and the subsidiaries of the Issuers
(including any acquired business, properties or entity, if applicable) and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are
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<PAGE> 18
customarily made by issuers to underwriters in underwritten offerings of debt
securities similar to the Registrable Notes, and confirm the same in writing if
and when reasonably requested in form and substance reasonably satisfactory to
the Issuers; (ii) upon the request of the managing underwriter or Required
Holders, use its reasonable best efforts to obtain the written opinions of
counsel to the Issuers and written updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
reasonably requested in underwritten offerings and such other matters as may be
reasonably requested by the managing underwriter or underwriters; (iii) upon the
request of the managing underwriter or Required Holders, use its reasonable best
efforts to obtain "comfort" letters and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or underwriters
from the independent public accountants of the Issuers (and, if necessary, any
other independent public accountants of the Issuers, any subsidiary of the
Issuers or of any business acquired by the Issuers for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Registrable Notes and
such other matters as reasonably requested by the managing underwriter or
underwriters as permitted by the Statement on Auditing Standards No. 72; and
(iv) if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable to the sellers and
underwriters, if any, than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to the managing underwriters, if any, and
the Required Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(m) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer, make available for inspection by any selling Holder of such Registrable
Notes being sold, or each such Participating Broker-Dealer, as the case may be,
any underwriter participating in any such disposition of Registrable Notes, if
any, and any attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Issuers and subsidiaries of
the Issuers (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Issuers and any of their
subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement and Prospectus. The
foregoing inspection and information gathering shall be coordinated on behalf of
the other parties by one counsel designated by such parties as described in
Section 6(b) hereof. Each Inspector shall agree in writing that it will keep the
Records confidential and that it will not disclose any of the Records that the
Issuers determine, in good faith, to be confidential unless (i) the release of
such Records is ordered pursuant to a subpoena or
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<PAGE> 19
other order from a court of competent jurisdiction, or (ii) the information in
such Records has been made generally available to the public; provided, that
prior notice shall be provided as soon as practicable to the Issuers of the
potential disclosure of any information by such Inspector pursuant to clause (i)
of this sentence to permit the Issuers to obtain a protective order or take
other appropriate action to prevent the disclosure of such information at the
Issuers' sole expense (or waive the provisions of this paragraph (m)) and that
such Inspector shall take such actions as are reasonably necessary to protect
the confidentiality of such information (if practicable) to the extent such
action is otherwise not inconsistent with, an impairment of or in derogation of
the rights and interests of the Holder or any Inspector.
(n) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and use its reasonable best efforts to cause
the Indenture or the trust indenture provided for in Section 2(a) hereof, as the
case may be, to be qualified under the TIA not later than the effective date of
the first Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the Holders of the Registrable Notes to effect such changes to such indenture as
may be required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its reasonable best efforts to cause such
trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders with regard to any applicable
Registration Statement, a consolidated earnings statement, which need not be
audited but that satisfies the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act), no later than 60 days after the end of any fiscal quarter (or
120 days after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable Notes are
sold to underwriters in a firm commitment or reasonable best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Issuers after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.
(p) Upon consummation of the Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuers, if requested by the Trustee, in a
form customary for underwritten transactions, addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or the Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes, as the case may be, the related Guarantee and the related
indenture constitute legal, valid and binding obligations of the Issuers,
enforceable against them in accordance with their respective terms, subject to
customary exceptions and qualifications.
(q) If the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuers (or to such
other Person as directed by the Issuers) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Issuers shall mark, or cause
to be marked, on such Registrable Notes that such Registrable
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<PAGE> 20
Notes are being cancelled in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be; in no event shall such Registrable Notes be
marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(s) Use its reasonable best efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be reasonably necessary to
enable the seller or sellers thereof or the underwriter or underwriters, if any,
to consummate the disposition of such Registrable Notes, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals.
(t) Use their reasonable best efforts to take all other steps
reasonably necessary to effect the registration of the Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Issuers such information
regarding such seller and the distribution of such Registrable Notes as the
Issuers may, from time to time, reasonably request. The Issuers may exclude from
such registration the Registrable Notes of any seller so long as such seller
fails to furnish such information within a reasonable time after receiving such
request. Each seller as to which any Shelf Registration is being effected agrees
to furnish promptly to the Issuers all information required to be disclosed in
order to make the information previously furnished to the Issuers by such seller
not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by its acquisition of such Registrable Notes or Exchange Notes to be sold
by such Participating Broker Dealer, as the case may be, that, upon actual
receipt of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder
will forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(j) hereof, or until it is advised
in writing (the "Advice") by the Issuers that the use of the applicable
Prospectus may be resumed, and has received copies of any amendments or
supplements thereto. In the event that the Issuers shall give any such notice,
the Effectiveness Period or the Applicable Period, as the case may be, shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or Exchange Notes to be
sold by such Participating Broker-Dealer, as the case may be, shall have
received (x)
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<PAGE> 21
the copies of the supplemented or amended Prospectus contemplated by Section
5(j) hereof or (y) the Advice.
6. Registration Expenses. (a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Issuers (other than any
underwriting discounts or commissions) shall be borne by the Issuers including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (B) reasonable fees and expenses
of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Notes or Exchange Notes and determination
of the eligibility of the Registrable Notes or Exchange Notes for investment
under the laws of such jurisdictions (x) where the holders of Registrable Notes
are located, in the case of the Exchange Notes, or (y) as provided in Section
5(h) hereof, in the case of Registrable Notes or Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses, including, without limitation, expenses of printing certificates for
Registrable Notes or Exchange Notes in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or underwriters, if any,
by the Required Holders, or by a Participating Broker-Dealer in respect of
Registrable Notes or Exchange Notes to be sold by such Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Issuers, (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(l)(iii) hereof (including, without
limitation, the expenses of any special audit and "comfort" letters required by
or incident to such performance), (vi) Securities Act liability insurance, if
the Issuers desire such insurance, (vii) fees and expenses of all other Persons
retained by the Issuers, (viii) internal expenses of the Issuers (including,
without limitation, all salaries and expenses of officers and employees of the
Issuers performing legal or accounting duties), (ix) the expense of any annual
audit, (x) any fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, and the obtaining of a
rating of the securities, in each case, if applicable, (xi) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, indentures and any other documents
necessary in order to comply with this Agreement and (xii) the fees and
disbursements of the Trustee and any exchange agent (including the reasonable
fees and expenses of their counsel). Anything contained herein to the contrary
notwithstanding, the Issuers shall not have any obligation whatsoever in respect
of any underwriters' discounts or commissions, brokerage commissions, dealers'
selling concessions, transfer taxes or any other selling expenses (other than
those expressly enumerated in clauses (i) through (xii) above) incurred in
connection with the underwriting, offering or sale of Registrable Notes or
Exchange Notes by or on behalf of any Person.
(b) The Issuers shall reimburse the Holders of the Registrable Notes
being registered in a Shelf Registration for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Registration Statement or, in the
case of an underwritten transaction, chosen by the managing underwriter or
underwriters.
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7. Indemnification. (a) Each of the Issuers, jointly and severally,
agrees to indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the affiliates, officers, directors, representatives, employees and agents of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages, judgments, liabilities and expenses (including, without
limitation, the reasonable legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused by,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented if the Issuers shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by, arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the case of the Prospectus in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Issuers
in writing by such Participant expressly for use therein and with respect to any
preliminary Prospectus, to the extent that any such loss, claim, damage or
liability arises solely from the fact that any Participant sold Notes to a
person to whom (i) there was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of such sale if
the Issuers shall have previously furnished copies thereof to the Participant in
accordance herewith and the Prospectus (as amended or supplemented) would have
corrected any such untrue statement or omission or (ii) there was delivered a
copy of the Prospectus (as amended or supplemented) after the Holder received
written notice at least one business day prior to the date of delivery of the
Prospectus of any event described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv),
5(c)(v) or 5(c)(vi) and failed to discontinue the delivery of such Prospectus
(as amended or supplemented); provided that with respect to Section 5(c)(iv)
such Holder only needs to discontinue the delivery of such Prospectus (as
amended or supplemented) only in the specific jurisdiction specified in the
notice provided pursuant to Section 5(c)(iv).
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, their respective affiliates, officers, directors,
representatives, employees and agents of each Issuer and each Person who
controls each Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent (but on a several, and not
joint, basis) as the foregoing indemnity from the Issuers to each Participant,
but only with reference to information relating to such Participant furnished to
the Issuers in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph (c) shall in
no event exceed the proceeds received by such Participant from sales of
Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of
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which indemnity may be sought pursuant to either Section 7(a) or 7(b), such
Person (the "Indemnified Person") shall promptly notify the Persons against whom
such indemnity may be sought (the "Indemnifying Persons") in writing, and the
Indemnifying Persons, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding; provided, that the
failure to so notify the Indemnifying Persons will not relieve it from any
liability under Section 7(a) or 7(b) above unless and to the extent such failure
results in the forfeiture by the Indemnifying Person of substantial rights and
defenses and the Indemnifying Person was not otherwise aware of such action or
claim. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Persons and
the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both any Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Persons shall not, in connection with such proceeding or separate
but substantially similar related proceeding in the same jurisdiction arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed promptly as
they are incurred. Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Notes and Exchange Notes sold by all such
Participants and shall be reasonably acceptable to the Issuers, and any such
separate firm for the Issuers, their affiliates, officers, directors,
representatives, employees and agents and such control Persons of such Issuer
shall be designated in writing by the Issuers and shall be reasonably acceptable
to the Holders.
The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its prior written consent (which consent shall not
be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person (which consent shall not be unreasonably withheld or
delayed), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of such Indemnified Person.
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<PAGE> 24
(d) If the indemnification provided for in the Section 7(a) or 7(b) is
for any reason unavailable to, or insufficient to hold harmless, an Indemnified
Person in respect of any losses, claims, damages or liabilities referred to
therein, then each Indemnifying Person under such sections, in lieu of
indemnifying such Indemnified Person thereunder and in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Person or Persons on the one hand and the Indemnified Person
or Persons on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Issuers on the one hand or
such Participant or such other Indemnified Person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 7(d). The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages, judgments,
liabilities and expenses referred to in Section 7(d) shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses actually incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall a Participant be required to
contribute any amount in excess of the amount by which proceeds received by such
Participant from sales of Registrable Notes or Exchange Notes, as the case may
be, exceeds the amount of any damages that such Participant has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the Indemnifying Person to the Indemnified Person as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Holder or any person who controls a
Holder, the Issuers, their directors, officers, employees or agents or any
person controlling an Issuer, and (ii) any termination of this Agreement.
(g) The indemnity and contribution agreements contained in this Section
7 will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
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<PAGE> 25
8. Rules 144 and 144A. Each of Parent and each Issuer covenants and
agrees that it will use its reasonable best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act. Each of Parent
and each Issuer further covenants and agrees, for so long as any Registrable
Notes remain outstanding, to make available to any Holder or beneficial owner of
Registrable Notes in connection with any sale thereof and any prospective
purchaser of such Registrable Notes from such Holder or beneficial owner the
information required by Rule 144A(d)(4) and 144(c) under the Securities Act in
order to permit resales of such Registrable Notes pursuant to Rule 144A and Rule
144(k).
9. Underwritten Registrations. If any of the Registrable Notes covered
by any Shelf Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Required Holders and shall be reasonably
acceptable to the Issuers. The Required Holders shall have the right to require
the Issuers to effect one underwritten offering.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Issuers have not, as of the date
hereof, and the Issuers shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with the rights granted to the
holders of the Issuers' other issued and outstanding securities under any such
agreements. The Issuers will not enter into any agreement with respect to any of
their securities which will grant to any Person piggy-back registration rights
with respect to any Registration Statement; provided, that any Securities issued
under the Indenture may be included on a Registration Statement.
(b) Adjustments Affecting Registrable Notes. The Issuers shall not,
directly or indirectly, take any action with respect to the Registrable Notes as
a class that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuers and (II)(A) the
-24-
<PAGE> 26
Holders of not less than a majority in aggregate principal amount of the then
outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority in aggregate principal amount of the Exchange
Notes held by all Participating Broker-Dealers; provided, that Section 7 and
this Section 10(c) may not be amended, modified or supplemented without the
prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture.
(ii) if to an Issuers, at the address as follows:
c/o Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, FL 33401
Attention: Chief Financial Officer
with copies to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Dennis M. Myers, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when transmission is
confirmed, if sent by facsimile.
-25-
<PAGE> 27
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto,
the Holders and the Participating Broker-Dealers; provided, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuers or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuers or their affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
-26-
<PAGE> 28
(1) Entire Agreement. This Agreement, together with the Purchase Agreement
and the Indenture, is intended by the parties as a final and exclusive statement
of the agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuers on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
-27-
<PAGE> 29
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NATG HOLDINGS, LLC
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer & President
ORIUS CAPITAL CORP.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: President
ORIUS CORP.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer & President
NORTH AMERICAN TEL-COM
GROUP, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Chief Executive Officer & President
LISN COMPANY
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
<PAGE> 30
LISN, INC.
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
ARION SUB, INC.
By /s/ Robert C. Froetscher
----------------------------------
Name: Robert C. Froetscher
Title: Assistant Secretary
CATV SUBSCRIBER SERVICES, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
CABLEMASTERS, CORP.
By /s/ William J. Mercurio
----------------------------------
Name William J. Mercurio
Title: Executive Vice President
CHANNEL COMMUNICATIONS, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
<PAGE> 31
EXCEL CABLE CONSTRUCTION, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
MICH-COM CABLE SERVICES
INCORPORATED
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
STATE WIDE CATV, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
U.S. CABLE, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
DAS-CO OF IDAHO, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
<PAGE> 32
NETWORK CABLING SERVICES, INC
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
SCHATZ UNDERGROUND CABLE, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
COPENHAGEN UTILITIES & CONSTRUCTION
INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
TEXEL CORPORATION
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
IRWIN TELECOM IRWIN ACQUISITION, L.P.
SERVICES, L.P. F/K/A
By: SCHATZ UNDERGROUND CABLE,
INC., its general partner
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
<PAGE> 33
IRWIN TELECOM HOLDINGS, INC.
By /s/ William J. Mercurio
----------------------------------
Name: William J. Mercurio
Title: Executive Vice President
Confirmed and accepted as of the date first above written:
DEUTSCHE BANK SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
By: /s/ John C. Moses
----------------------------------
Name: John C. Moses
Title: Managing Director
By: /s/ Marla Heller
----------------------------------
Name: Marla Heller
Title: Director
<PAGE> 1
EXHIBIT 10.1
===============================================================================
$375,000,000
CREDIT AGREEMENT
among
ORIUS CORP.,
NATG HOLDINGS, LLC,
LISN, LLC,
BANKERS TRUST COMPANY, as Agent
and
VARIOUS LENDING INSTITUTIONS
Dated as of December 15, 1999
-----------------------------------------------
with
DEUTSCHEBANK SECURITIES INC., as Lead Arranger and
Book Manager, BANK OF AMERICA, N.A., as
Syndication Agent, and FIRST UNION NATIONAL
BANK, as Documentation Agent
===============================================================================
<PAGE> 2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 15, 1999, is made
by and among NATG HOLDINGS, LLC, a Delaware limited liability company ("NATG"),
LISN, LLC, a Delaware limited liability company ("LISN"), ORIUS CORP., a Florida
corporation ("Holdings"), the undersigned financial institutions, including
Bankers Trust Company, in their capacities as lenders hereunder (collectively,
the "Lenders," and each individually, a "Lender"), and Bankers Trust Company, as
administrative agent ("Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrowers have requested that the Lenders (i) make
term loans with a letter of credit subfacility to Borrowers in the aggregate
principal amount of $75,000,000 maturing on December 15, 2004, (ii) make term
loans to Borrowers in the aggregate principal amount of $200,000,000 maturing on
December 15, 2006, and (iii) provide a revolving credit facility to Borrowers in
an initial aggregate amount not to exceed $100,000,000 at any time outstanding
and maturing on December 15, 2004, and accessible before December 15, 2001 in an
aggregate principal amount not to exceed $75,000,000 at any time outstanding to
fund Permitted Acquisitions;
WHEREAS, the proceeds of the term loans and the revolving
credit facility described above will be used by Borrowers to repay all
outstanding indebtedness and obligations under the Existing Credit Agreements,
to finance the Reorganization and to pay related fees and expenses in connection
herewith and therewith, and for working capital and capital expenditures, and
for other general corporate purposes;
WHEREAS, the proceeds of the Acquisition Revolving Loans will
be used by Borrowers solely to finance Permitted Acquisitions and to pay related
fees and expenses in connection therewith;
WHEREAS, the Lenders are willing to extend commitments to make
the term loans and revolving credit loans to Borrowers for the purposes
specified above and only on the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, and for other valuable consideration the
receipt and sufficiency of which are hereby acknowledged the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. Definitions. As used herein, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Acquisition Commitment Period" means the period from and
including the date hereof to but not including the Acquisition Revolver
Conversion Date.
"Acquisition Consideration" is defined in Section 8.4(k).
<PAGE> 3
"Acquisition Loan" is defined in Section 2.1(b).
"Acquisition Percentage" means, as of any date of
determination, expressed as a percentage, (i) the aggregate principal amount of
outstanding Acquisition Term Loans divided by (ii) the aggregate principal
amount of all outstanding Term Loans.
"Acquisition Revolver Conversion Date" means December 15, 2001
or such earlier date as the Revolving Commitments shall have been terminated or
otherwise reduced to $0 pursuant to this Agreement.
"Acquisition Revolving Loan" means any Revolving Loan incurred
by Borrowers to finance a Permitted Acquisition.
"Acquisition Revolving Sublimit" means, at any time,
$75,000,000.
"Acquisition Term Loan" and "Acquisition Term Loans" are
defined in Section 2.1(b).
"Additional Collateral" is defined in Section 7.12(a).
"Additional Security Documents" means all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 7.12 with respect to Additional Collateral.
"Adjusted Fixed Charge Coverage Ratio" means, for any period,
the ratio of (i) the sum of (A) Consolidated EBITDA for such period minus (B)
the aggregate amount of Capital Expenditures (excluding Capital Expenditures
made with the Borrowers' Portion of Excess Cash Flow pursuant to Section
9.1(b)(ii) and Capital Expenditures made pursuant to Sections 9.1(c)(i)-(vi))
made by Holdings and its Subsidiaries during such period to (ii) the sum of (A)
Consolidated Interest Expense for such period plus (B) the aggregate amount of
Scheduled Term Repayments (after giving effect to any mandatory repayments under
Sections 4.4(c)-(h)) and the aggregate amount of principal payments made with
respect to any Seller Subordinated Notes, in each case made by Holdings and its
Subsidiaries during such period.
"Adjusted Working Capital" means the difference between (i)
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) and (ii) Consolidated Current Liabilities excluding from
Consolidated Current Liabilities all short-term borrowings, the current portion
of long-term indebtedness and the current portion of Capitalized Lease
Obligations.
"Affiliate" means, with respect to any Person, any other
Person (including, for purposes of Section 8.9 only, all directors and officers
of such Person) or group acting in concert in respect of the Person in question
that, directly or indirectly, controls (including but not limited to all
directors and officers of such Person) or is controlled by or is under common
control with such Person provided that neither BT nor any Lender, nor any
Affiliate of BT or any Lender, shall be deemed to be an Affiliate of Borrower.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person or group of Persons, shall mean the possession,
2
<PAGE> 4
directly or indirectly, of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. For purposes of this definition, a
Person (and any director and officer thereof) shall be deemed to control an
entity if such Person possesses, directly or indirectly, the power to vote 10%
or more of the securities or other equity interests having ordinary voting power
for the election of directors (if a corporation) or to select the managing
member, trustee or equivalent controlling interest.
"Agent" is defined in the introduction to this Agreement and
any successor Agent in such capacity.
"Agreement" means this Credit Agreement, as the same may at
any time be amended, restated, supplemented or otherwise modified in accordance
with the terms hereof and in effect.
"Applicable Base Rate Margin" means at any date, (i) with
respect to Acquisition Loans, Revolving Loans and Term A Loans, the applicable
percentage set forth in the following table under the column Applicable Base
Rate Margin opposite the Most Recent Ratio of Total Debt to EBITDA as of such
date and (ii) with respect to Term B Loans, 2.50%:
<TABLE>
<CAPTION>
Most Recent Ratio of Total Applicable Base
Debt to EBITDA Rate Margin
-------------------------- ---------------
<S> <C>
Less than 1.25 to 1.00 .75%
Equal to or greater than 1.25 to 1.00 but 1.00%
less than 2.00 to 1.00
Equal to or greater than 2.00 to 1.00 but 1.25%
less than 2.75 to 1.00
Equal to or greater than 2.75 to 1.00 but 1.50%
less than 3.50 to 1.00
Equal to or greater than 3.50 to 1.00 but 1.75%
less than 4.25 to 1.00
Greater than or equal to 4.25 to 1.00 2.00%
</TABLE>
"Applicable Commitment Fee Percentage" means at any date, the
applicable percentage set forth in the following table under the column
Applicable Commitment Fee Percentage opposite the Most Recent Ratio of Total
Debt to EBITDA as of such date:
<TABLE>
<CAPTION>
Most Recent Ratio of Total Applicable Commitment
Debt to EBITDA Fee Percentage
-------------------------- ---------------------
<S> <C>
Less than 2.00 to 1.00 0.375%
Greater than or equal to 2.00 to 1.00 0.50%
</TABLE>
"Applicable Eurodollar Rate Margin" means at any date, (i)
with respect to Acquisition Loans, Revolving Loans and Term A Loans, the
applicable percentage set forth in the following table under the column
Applicable Eurodollar Rate Margin opposite the Most
3
<PAGE> 5
Recent Ratio of Total Debt to EBITDA as of such date and (ii) with respect to
Term B Loans, 3.50%:
<TABLE>
<CAPTION>
Most Recent Ratio of Total Applicable Eurodollar Rate
Debt to EBITDA Margin
-------------------------- --------------------------
<S> <C>
Less than 1.25 to 1.00 1.75%
Equal to or greater than 1.25 to 1.00 but 2.00%
less than 2.00 to 1.00
Equal to or greater than 2.00 to 1.00 but 2.25%
less than 2.75 to 1.00
Equal to or greater than 2.75 to 1.00 but 2.50%
less than 3.50 to 1.00
Equal to or greater than 3.50 to 1.00 but 2.75%
less than 4.25 to 1.00
Greater than or equal to 4.25 to 1.00 3.00%
</TABLE>
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
all or any part of an interest in shares of Capital Stock of a Subsidiary of any
Borrower (other than directors' qualifying shares), Investments, property or
other assets (each referred to for the purposes of this definition as a
"disposition") by Holdings or any Borrower or any of their Subsidiaries;
provided, however, that (i) any sale or transfer of inventory in the ordinary
course of business and consistent with past practices of Borrowers and their
Subsidiaries, (ii) any sale or other disposition of obsolete assets no longer
used or useful in the business of Holdings or any of its Subsidiaries, (iii) any
asset sale or series of related asset sales described above having a fair market
value not in excess of $100,000, (iv) the liquidation of any Cash Equivalents
and (v) the leasing or licensing of real or personal property (including
Intellectual Property) in the ordinary course of business for periods not in
excess of one (1) year (subject to automatic renewals) shall, in each case, not
be deemed an "Asset Disposition" for purposes of this Agreement.
"Assignee" is defined in Section 12.8(c).
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit 12.8(c) annexed hereto
and made a part hereof made by any applicable Lender, as assignor, and such
Lender's assignee in accordance with Section 12.8.
"Attorney Costs" means all reasonable fees and disbursements
of any law firm or other external counsel and the reasonable allocated cost of
internal legal services, including all reasonable disbursements of internal
counsel.
"Available Revolving Commitment" means, as to any Revolving
Lender at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment over (b) the sum of (i) the aggregate principal amount then
outstanding of Acquisition Revolving Loans and Working Capital Loans made by
such Lender and (ii) such Lender's Revolver Pro Rata Share of the LC Obligations
and Swing Line Loans then outstanding.
4
<PAGE> 6
"Available Term A Commitment" means, as to any Term A Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's Term A
Commitment over (b) the sum of (i) the aggregate principal amount then
outstanding of Term A Loans made by such Lender and (ii) such Lender's Term A
Pro Rata Share of the Rollover LC Obligations then outstanding.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy" as from time to time amended, including the rules and
regulations promulgated thereunder, or any successor statute and the rules and
regulations promulgated thereunder.
"Base Rate" means the greater of (i) the rate most recently
announced by BT at its principal office as its "prime rate", which is not
necessarily the lowest rate made available by BT or (ii) the Federal Funds Rate
plus 1/2 of 1% per annum. The "prime rate" announced by BT is evidenced by the
recording thereof after its announcement in such internal publication or
publications as BT may designate. Any change in the interest rate resulting from
a change in such "prime rate" announced by BT shall become effective without
prior notice to Borrower as of 12:01 A.M. (New York City time) on the Business
Day on which each change in such "prime rate" is announced by BT. BT may make
commercial or other loans to others at rates of interest at, above or below its
"prime rate".
"Base Rate Loan" means any Loan which bears interest at a rate
determined with reference to the Base Rate.
"Benefited Lender" is defined in Section 12.6(a).
"Board" means the Board of Governors of the Federal Reserve
System.
"Borrowers" means, collectively, LISN and NATG, and "Borrower"
means either LISN or NATG, individually; provided, however, that following the
LISN Mergers, the terms "Borrowers" and "Borrower" means NATG, individually and
as successor by merger to LISN.
"Borrowers' Portion of Excess Cash Flow" means, at any date of
determination, the cumulative amount (whether positive or negative) of Excess
Cash Flow for each full Fiscal Year of Holdings commencing on or after January
1, 2000 and ending prior to the date of determination that (i) was not or is not
required to be applied to the prepayment of Loans or the reduction of
Commitments, in each case as described in Sections 4.2, 4.4 and 4.5, and (ii)
has not been utilized on or prior to the date of determination (A) to make
interest payments and pay related dividends pursuant to clause (iii) of the
proviso in Section 8.5(c) or (B) to make Capital Expenditures pursuant to
Section 9.1(b)(ii).
"Borrowing" means a group of Loans of a single Type made by
the Lenders or the Swing Line Lender, as appropriate on a single date and in the
case of Eurodollar Loans, as to which a single Interest Period is in effect,
provided that Base Rate Loans or Eurodollar Loans incurred pursuant to Section
3.7 shall be considered part of any related Borrowing of Eurodollar Loans.
"Bridge Conversion Date" means the earlier of (i) the
repayment in full of the Bridge Loan Notes and the termination of the Bridge
Loan Agreement, and (ii) the "Conversion Date" as such term is defined in the
Bridge Loan Agreement.
5
<PAGE> 7
"Bridge Loan Agreement" means that certain Senior Subordinated
Loan Agreement (including the Exhibits thereto) by and among Holdings, NATG,
LISN, various financial institutions from time to time party thereto, Bankers
Trust Company, as Administrative Agent, and NationsBridge, L.L.C., as
Syndication Agent, as the same may at any time be amended, supplemented,
restated or otherwise modified (including, without limitation, through the
execution and delivery of the "Senior Subordinated Indenture" as such term is
defined in the Bridge Loan Agreement) in accordance with the terms hereof and in
effect from time to time.
"Bridge Loan Documents" means the Bridge Loan Agreement, the
Bridge Loan Notes, the Bridge Loan Guaranties and all other agreements,
instruments and documents executed in connection therewith, in each case as the
same may be amended, restated, supplemented or otherwise modified from time to
time as permitted hereunder.
"Bridge Loan Guaranties" means, collectively, the Holdings
Guaranty (as such term is defined in the Bridge Loan Agreement) and the
Subsidiary Guaranty (as such term is defined in the Bridge Loan Agreement), in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time as permitted hereunder.
"Bridge Loan Notes" means each promissory note issued pursuant
to the Bridge Loan Agreement, including, without limitation, each Bridge Note,
each Term Note and each Subsequent Loan Note, as each such term is defined in
the Bridge Loan Agreement, in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder.
"BT" means Bankers Trust Company, a New York banking
corporation, and its successors.
"Business Day" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any other
day which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" means, without duplication, with
respect to any Person, any amounts expended, incurred or obligated to be
expended during or in respect of a period for any purchase or other acquisition
for value of any asset that should be classified on a consolidated balance sheet
of such Person prepared in accordance with GAAP as a fixed or capital asset
(including capitalized costs in respect of Intellectual Property) including,
without limitation, the direct or indirect acquisition of such assets or
improvements by way of increased product or service charges, offset items or
otherwise, and shall include Capitalized Lease Obligations.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock (including each class of common and
preferred stock), partnership interests, membership
6
<PAGE> 8
interests or other equivalent interests and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options exchangeable for or convertible into such capital stock or other
interests.
"Capitalized Lease" means, at the time any determination
thereof is to be made, any lease of property, real or personal, in respect of
which the present value of the minimum rental commitment is capitalized on the
balance sheet of the lessee in accordance with GAAP.
"Capitalized Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
Capitalized Lease which would at such time be so required to be capitalized on
the balance sheet of the lessee in accordance with GAAP.
"Cash" means money, currency or the available credit balance
in Dollars in a Deposit Account.
"Cash Equivalents" means (i) any evidence of indebtedness,
maturing not more than one year after the date of issue, issued by the United
States of America or any instrumentality or agency thereof, the principal,
interest and premium, if any, of which is guaranteed fully by, or backed by the
full faith and credit of, the United States of America, (ii) Dollar denominated
time deposits, certificates of deposit and bankers acceptances maturing not more
than one year after the date of purchase, issued by (x) any Lender or (y) a
commercial banking institution having, or which is the principal banking
subsidiary of a bank holding company having, combined capital and surplus and
undivided profits of not less than $200,000,000 and a commercial paper rating of
"P-1" (or higher) according to Moody's, "A-1" (or higher) according to S&P or
the equivalent rating by any other nationally recognized rating agency (any such
bank, an "Approved Bank"), or (z) a non-United States commercial banking
institution which is either currently ranked among the 100 largest banks in the
world (by assets, according to the American Banker), has combined capital and
surplus and undivided profits of not less than $500,000,000 or whose commercial
paper (or the commercial paper of such bank's holding company) has a rating of
"P-1" (or higher) according to Moody's, "A-1" (or higher) according to S&P or
the equivalent rating by any other nationally recognized rating agency, (iii)
commercial paper, maturing not more than 270 days after the date of purchase,
issued or guaranteed by a corporation (other than Borrower or any Subsidiary of
Borrower or any of their respective Affiliates) organized and existing under the
laws of any state within the United States of America with a rating, at the time
as of which any determination thereof is to be made, of "P-1" (or higher)
according to Moody's, or "A-1" (or higher) according to S&P, (iv) demand
deposits with any bank or trust company maintained in the ordinary course of
business, (v) repurchase or reverse repurchase agreements covering obligations
of the type specified in clause (i) with a term of not more than seven days with
any Approved Bank and (vi) shares of any money market mutual fund rated at least
AAA or the equivalent thereof by S&P or at least AAA or the equivalent thereof
by Moody's, including, without limitation, any such mutual fund managed or
advised by any Lender or Agent.
"Change of Control" means (i) the sale, lease or transfer of
all or substantially all of Holdings' or any Borrower's assets to any Person or
group (as such term is used in Section 13(d)(3) of the Exchange Act), (ii) the
liquidation or dissolution of Holdings, LISN Holdings, or any Borrower (other
than in connection with the LISN Mergers), (iii) prior to a Qualified IPO of
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<PAGE> 9
Holdings Common Stock, (A) WSP ceases to beneficially own (and have the
exclusive power to vote with respect to), directly or indirectly, at least 35%
of the outstanding Voting Securities of Holdings entitled (without regard to the
occurrence of any contingency) to vote (including, without limitation, pursuant
to any valid and enforceable stockholders or other voting agreement) for the
election of a majority of the members of the board of directors of Holdings, and
in any event sufficient to direct or cause the direction of the management and
policies of Holdings, (B) the nominees of WSP shall at any time fail or cease to
constitute a majority of the members of the board of directors of Holdings or
(C) any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) (other than the Permitted Holders) shall at any time become the
owner, directly or indirectly, beneficially or of record, of shares representing
more than the aggregate number of shares of outstanding Voting Securities of
Holdings owned beneficially and of record by WSP, (iv) after a Qualified IPO of
Holdings Common Stock, (A) any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act) (other than the Permitted Holders) shall at any
time become the owner, directly or indirectly, beneficially or of record, of
shares representing more than (x) 20% of the outstanding Voting Securities of
Holdings or (y) the aggregate number of shares of outstanding Voting Securities
of Holdings owned beneficially and of record by WSP, or (B) the replacement of a
majority of the directors on the board of directors of Holdings over a two-year
period from the directors who constituted the board of directors of Holdings at
the beginning of such period, and such replacement shall not have been approved
by a vote of at least a majority of the board of directors of Holdings then
still in office who either were members of such board of directors at the
beginning of such period or whose election as a member of such Board of
Directors was previously so approved, (v) Holdings ceases to beneficially own
(and have the exclusive power to vote with respect to) all of the issued and
outstanding Capital Stock of (A) prior to the consummation of the LISN Mergers,
LISN Holdings (except solely with respect to the Vanke Shares prior to the Vanke
Redemption) or (B) NATG, in each case free and clear of all Liens other than
Liens in favor of the Collateral Agent, (vi) prior to the consummation of the
LISN Mergers, LISN Holdings ceases to beneficially own (and have the exclusive
power to vote with respect to) all of the issued and outstanding Capital Stock
of LISN free and clear of all Liens other than Liens in favor of the Collateral
Agent or (vii) a "Change of Control" (or other similarly used defined term)
under and as defined in any of the Junior Subordinated Notes, the Seller
Subordinated Notes, the Senior Subordinated Notes or the Bridge Loan Agreement.
"Closing Date" means December 15, 1999.
"Code" means the Internal Revenue Code of 1986, as from time
to time amended, including the regulations proposed or promulgated thereunder,
or any successor statute and the regulations proposed or promulgated thereunder.
"Collateral" means all "Collateral" as defined in each of the
Security Documents.
"Collateral Account" is defined in Section 4.4(a).
"Collateral Agent" means the Agent acting as collateral agent
for the Secured Creditors.
"Collateral Assignment of Leases" is defined in Section
5.1(f).
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<PAGE> 10
"Commercial Letter of Credit" means any letter of credit or
similar instrument payable on a sight basis issued for the purpose of providing
the primary payment mechanism in connection with the purchase of any materials,
goods or services by Borrower or any Subsidiary in the ordinary course of
business.
"Commitment" means, with respect to each Lender, the aggregate
of the Revolving Commitment, the Term A Commitment and the Term B Commitment of
such Lender and "Commitments" means such commitments of all of the Lenders
collectively.
"Commitment Fee" is defined in Section 3.2(a).
"Commitment Period" means, the period from and including the
date hereof to but not including the Revolver Termination Date or, in the case
of the Swing Line Commitment, five (5) Business Days prior to the Revolver
Termination Date.
"Consolidated Current Assets" means, with respect to any
Person, as at the time any determination thereof is to be made, the amount,
without duplication, that is classified on a consolidated balance sheet of such
Person and its Subsidiaries as the consolidated current assets of such Person
and its Subsidiaries in accordance with GAAP.
"Consolidated Current Liabilities" means, with respect to any
Person, as at the time any determination thereof is to be made, all Indebtedness
of such Person and its Subsidiaries, without duplication, that is classified as
consolidated current liabilities on a consolidated balance sheet of such Person
and its Subsidiaries in accordance with GAAP.
"Consolidated EBITDA" means, for any applicable period, the
Consolidated Net Income or Consolidated Net Loss of Holdings and its
Subsidiaries (or of any business or Person to be acquired in any Permitted
Acquisition for purposes of determining Consolidated EBITDA on a pro forma basis
pursuant to Section 8.4(k)) for such period, plus, to the extent deducted in
determining the foregoing, (i) Consolidated Interest Expense for such period,
(ii) the provision for taxes based on income and foreign withholding taxes for
such period, (iii) depreciation expense for such period, (iv) amortization
expense for such period, minus (or plus) any non-cash non-operating income (or
loss) for such period to the extent included in Consolidated Net Income or
Consolidated Net Loss, and excluding any gain or loss recognized in determining
Consolidated Net Income or Consolidated Net Loss for such period in respect of
post-retirement benefits as a result of the application of FASB 106 and any
foreign currency translation adjustments as a result of the application of FASB
52. For purposes of computing Consolidated Net Income or Consolidated Net Loss
in determining Consolidated EBITDA of Holdings and its Subsidiaries, there shall
be excluded from the computation thereof, without duplication and to the extent
not otherwise excluded from the computation thereof, (i) non-recurring fees and
expenses incurred in connection with the consummation of the Transactions (other
than the issuance of the Senior Subordinated Notes) in an aggregate amount not
to exceed $16,000,000, (ii) non-recurring fees and expenses incurred in
connection with the issuance of the Senior Subordinated Notes in an aggregate
amount not to exceed $7,000,000 and (iii) non-recurring fees and expenses
incurred in connection with the consummation of any Permitted Acquisition in an
aggregate amount not to exceed five percent (5.0%) of the total Acquisition
Consideration for such Permitted Acquisition. In addition, for purposes of
computing Consolidated EBITDA for
9
<PAGE> 11
any four-quarter period ending on or prior to December 31, 2000, Consolidated
EBITDA for any period prior to the Closing Date shall be calculated on a pro
forma basis assuming the consummation of the Transactions as of the first day of
such four-quarter period. Solely for purposes of computing the Leverage Ratio,
the Adjusted Fixed Charge Coverage Ratio, the Interest Coverage Ratio and the
Most Recent Ratio of Total Debt to EBITDA for any applicable period,
Consolidated EBITDA shall be calculated on a pro forma basis with respect to any
Permitted Acquisition effected during such period assuming the consummation of
such Permitted Acquisition as of the first day of such period, and taking into
account the same Pro Forma Adjustments used for determining Consolidated EBITDA
on a pro forma basis pursuant to Section 8.4(k) with respect to such Permitted
Acquisition.
"Consolidated Interest Expense" means for any Person, for any
period, the sum of total interest expense (including that attributable to
Capitalized Leases in accordance with GAAP) of such Person and its Subsidiaries
(net of interest income paid in cash) on a consolidated basis with respect to
all outstanding Indebtedness of such Person and its Subsidiaries, including,
without limitation, the net costs associated with Interest Rate Agreements and
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, but excluding, however, any
prepayment premiums or amortization of original issue discount, all as
determined on a consolidated basis for such Person and its consolidated
Subsidiaries in accordance with GAAP; provided, however, that solely for
purposes of calculating the Adjusted Fixed Charge Coverage Ratio and the
Interest Coverage Ratio under this Agreement, Consolidated Interest Expense
shall (i) exclude any accrued interest on Indebtedness not paid in cash in
accordance with the terms, including subordination terms, of such Indebtedness
(including, without limitation, any PIK Interest), (ii) include any actual cash
payments when made (except cash interest payments described in clause (iii)
below) with respect to any accrued and unpaid interest (including, without
limitation, any PIK Interest) that have previously been excluded from
Consolidated Interest Expense pursuant to clause (i) above and (iii) exclude the
first interest payment made on the Junior Subordinated Notes pursuant to Section
1(b) of the Junior Subordinated Notes made after the fifth anniversary of the
issuance date thereof as permitted hereunder. For purposes of computing
Consolidated Interest Expense for any four-quarter period ending on or prior to
December 31, 2000, Consolidated Interest Expense shall be calculated on a pro
forma basis assuming the consummation of the Transactions as of the first day of
such four-quarter period.
"Consolidated Net Income" and "Consolidated Net Loss" mean,
respectively, with respect to any period, the aggregate of the net income (loss)
of the Person in question for such period, determined in accordance with GAAP on
a consolidated basis, provided that (i) the net income (loss) of any Person
which is not a consolidated Subsidiary shall be included only to the extent of
the amount of cash dividends or distributions paid to the Person in question or
to a consolidated Subsidiary of such Person and (ii) except for determinations
of net income (loss) to be made on a pro forma basis (A) in connection with a
Permitted Acquisition pursuant to Section 8.4(k) or (B) pursuant to either of
the last two sentences appearing in the definition of "Consolidated EBITDA", the
net income (loss) of any Person accrued prior to the date it becomes a
Subsidiary of any Borrower or is merged into or consolidated with any Borrower
or any of its Subsidiaries or that Person's assets are acquired by any Borrower
or any of its Subsidiaries shall be excluded.
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<PAGE> 12
"Consolidated Net Worth" of a Person means, without
duplication, the sum of (i) total stockholders' equity (excluding treasury
stock), plus (ii) the aggregate outstanding principal amount (including accrued
and unpaid interest) of Junior Subordinated Notes, minus (iii) the stated value
of any Investment (other than Investments of such Person in readily marketable
securities and other than Investments in any Person which is not subject to any
restriction or encumbrance (other than applicable law) on the ability to pay
dividends or make distributions) which such Person or any consolidated
Subsidiary of such Person has in any entity which is not a Subsidiary of such
Person, as determined from a consolidated balance sheet of such Person and its
consolidated Subsidiaries prepared in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any
provision of any Securities issued by such Person or of any indenture or credit
agreement or any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound or to which it may be
subject.
"Control Agreement" is defined in Section 5.1(d).
"Credit Event" means, collectively, the making of any Loan or
the issuance of any Letter of Credit.
"Credit Exposure" is defined in Section 12.8(b).
"Credit Party" means each Borrower, Holdings, LISN Holdings,
each Subsidiary Guarantor and any guarantor which may hereafter enter into a
guarantee agreement with respect to the Obligations.
"Customary Permitted Liens" means for any Person:
(i) Liens for taxes not yet due and payable or which
are being contested in good faith by appropriate proceedings diligently pursued,
provided that (A) any proceedings commenced for the enforcement of such Liens
shall have been stayed or suspended within 30 days of the commencement thereof
and (B) provision for the payment of all such taxes known to such Person has
been made on the books of such Person to the extent required by GAAP;
(ii) mechanics', processor's, materialmen's,
carriers', warehousemen's, landlord's and similar Liens (including statutory and
common law landlords' liens under leases to which any Credit Party or any
Subsidiary is a party) arising in the ordinary course of business and securing
obligations of such Person that are not overdue for a period of more than 90
days or are being contested in good faith by appropriate proceedings diligently
pursued, provided that (A) any proceedings commenced for the enforcement of such
Liens shall have been stayed or suspended within 30 days of the commencement
thereof and (B) provision for the payment of such Liens has been made on the
books of such Person to the extent required by GAAP;
(iii) Liens arising in connection with worker's
compensation, unemployment insurance, old age pensions and social security
benefits which are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that (A) any proceedings
commenced for the enforcement of such Liens shall have been stayed or
11
<PAGE> 13
suspended within 30 days of the commencement thereof and (B) provision for the
payment of such Liens has been made on the books of such Person to the extent
required by GAAP;
(iv) Liens (A) incurred or deposits made in the
ordinary course of business to secure the performance of bids, tenders,
statutory obligations, fee and expense arrangements with trustees and fiscal
agents (exclusive of obligations incurred in connection with the borrowing of
money or the payment of the deferred purchase price of property) and (B)
securing surety, indemnity, performance, appeal and release bonds, provided that
(x) full provision for the payment of all such obligations has been made on the
books of such Person to the extent required by GAAP and (y) the aggregate amount
of all such obligations does not exceed $1,000,000 at any time outstanding;
(v) Permitted Real Property Encumbrances;
(vi) attachment, judgment or other similar Liens
arising in connection with court or arbitration proceedings involving
individually and in the aggregate liability (to the extent not paid or covered
by a reputable insurance company which has accepted liability in writing) of
$1,000,000 or less at any one time, provided the same are discharged, or that
execution or enforcement thereof is stayed pending appeal, within 30 days or, in
the case of any stay of execution or enforcement pending appeal, within such
lesser time during which such appeal may be taken;
(vii) leases or subleases granted to others not
interfering in any material respect with the business of any Credit Party or any
of their Subsidiaries and any interest or title of a lessor under any lease
(whether a Capitalized Lease or an Operating Lease) permitted by this Agreement
or the Security Documents;
(viii) customary rights of set off, revocation,
refund or chargeback under deposit agreements or under the UCC of banks or other
financial institutions where Borrower maintains deposits in the ordinary course
of business permitted by this Agreement;
(ix) Liens upon real and/or tangible personal
property, acquired by purchase, construction or otherwise by a Person, each of
which Liens was created solely for the purpose of securing Indebtedness
representing, or incurred to finance, the cost (including the cost of
construction) of the property (hereinafter referred to as "Purchase Money
Liens"); provided that:
(a) no such Purchase Money Lien shall extend to or
cover any property of such Person other than the respective
property so acquired and improvements thereon;
(b) the principal amount of the Indebtedness secured
by any such Purchase Money Lien shall at no time exceed 100%
of the fair value (as reasonably determined in good faith by a
Responsible Officer of such Person) of the respective property
at the time it was so acquired; and
(c) the aggregate principal amount of the
Indebtedness secured by all Purchase Money Liens, taken
together with the aggregate principal amount of
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<PAGE> 14
Indebtedness consisting of Capitalized Lease Obligations,
shall not exceed the aggregate amount of Purchase Money
Indebtedness permitted from time to time under Section 8.2(i),
or, if assumed in connection with any Permitted Acquisition
pursuant to Section 8.2(m), shall not exceed the aggregate
amount of Indebtedness permitted from time to time under
Section 8.2(m) (provided that any excess may be permitted
under Section 8.2(i) to the extent available thereunder);
(x) Liens on accounts receivables for which attempts
at collection have been undertaken by a third party authorized by the Person
owning such accounts receivable;
(xi) Liens arising from precautionary UCC financing
statements regarding Operating Leases permitted by this Agreement;
(xii) Liens arising from the granting of a license to
any Person in the ordinary course of business of any Credit Party and their
Subsidiaries;
(xiii) Liens attaching solely to cash earnest money
deposits made by any Borrower or any of their Subsidiaries in connection with
any letter of intent or purchase agreement entered into by it in connection with
a Permitted Acquisition;
(xiv) Liens deemed to exist in connection with
repurchase agreements and other similar Investments to the extent such
Investments are permitted under Section 8.8; and
(xv) Liens arising by operation of law on insurance
policies and proceeds thereof to secure premiums thereunder.
"Default Rate" means a variable rate per annum which shall be
two percent (2%) per annum plus either (i) the then applicable interest rate
hereunder in respect of the amount on which the Default Rate is being assessed
or (ii) if there is no such applicable interest rate, the Base Rate plus the
Applicable Base Rate Margin, but in no event in excess of that permitted by
applicable law.
"Defaulting Lender" means any Lender with respect to which a
Lender Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Designated Asset Disposition" means any Asset Disposition
relating to any assets or Capital Stock acquired in any Permitted Acquisition
which are identified by Borrowers in reasonable detail in a written notice
delivered to Agent at the time of delivery of the officer's certificate relating
to such Permitted Acquisition pursuant to Section 8.4(k) as being assets or
Capital Stock that Borrowers intend to sell or otherwise dispose of following
such Permitted Acquisition.
"Documents" means the Loan Documents and the Transaction
Documents.
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<PAGE> 15
"Dollar" and "$" means lawful money of the United States of
America.
"Domestic Subsidiary" means any Subsidiary of a Borrower that
is incorporated under the laws of any State of the U.S., the District of
Columbia or any territory or possession of the U.S.
"Effective Date" is defined in Section 12.17.
"Eligible Assignee" means (i) a commercial bank, investment
company, financial institution, financial company, fund (whether a corporation,
partnership, trust or other entity), insurance company or other "accredited
investor" (as defined in Regulation D of the Securities Act), (ii) any Lender
party to this Agreement, and (iii) any other Person approved by Agent and, in
the absence of an Unmatured Event of Default or Event of Default, Borrowers,
such approval not to be unreasonably withheld; provided, however, that an
Affiliate of Holdings shall not qualify as an Eligible Assignee.
"Employee Benefit Plan" means an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is or has been established or
maintained, or to which contributions are or have been made, by Borrower or any
of its ERISA Affiliates, any Subsidiary of Borrower or ERISA Affiliate of such
Subsidiary.
"Environmental Claim" means any notice of violation, claim,
suit, demand, abatement order or other order or direction (conditional or
otherwise) by any Governmental Authority or any Person for any damage, personal
injury (including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage to
the environment, nuisance, pollution, contamination or other adverse effects on
the environment, human health, or natural resources, or for fines, penalties,
restrictions or injunctive relief, resulting from or based upon (a) the
occurrence or existence of a Release or threatened Release (whether sudden or
non-sudden or accidental or non-accidental) of, or exposure to, any Hazardous
Material in, into or onto the environment at, in, by, from or related to any
real estate owned, leased or operated at any time by Borrower or any of its
Subsidiaries (the "Premises"), (b) the use, handling, generation,
transportation, storage, treatment or disposal of Hazardous Materials in
connection with the operation of any Premises, or (c) the violation, or alleged
violation, of any Environmental Laws.
"Environmental Laws" means any and all applicable foreign,
federal, state or local laws, statutes, ordinances, codes, rules, regulations,
orders, decrees, judgements, directives and cleanup or action standards, levels
or objectives imposing liability or standards of conduct for or relating to the
protection of health, safety or the environment, including, but not limited to,
the following statutes as now written and hereafter amended: the Water Pollution
Control Act, as codified in 33 U.S.C. ss. 1251 et seq., the Clean Air Act, as
codified in 42 U.S.C. ss. 7401 et seq., the Toxic Substances Control Act, as
codified in 15 U.S.C. ss. 2601 et seq., the Solid Waste Disposal Act, as
codified in 42 U.S.C. ss. 6901 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act, as codified in 42 U.S.C. ss. 9601 et
seq., the Emergency Planning and Community Right-to-Know Act of 1986, as
codified in 42 U.S.C. ss. 11001 et seq., and the Safe Drinking Water Act, as
codified in 42 U.S.C. ss. 300f et seq., and any related regulations, as well as
all state and local equivalents.
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<PAGE> 16
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (i) any liability under foreign, federal, state or local
Environmental Laws or regulations, or (ii) damages arising from, or costs
incurred by such Governmental Authority in response to, a Release or threatened
Release of any Hazardous Material into the environment.
"Environmental Permits" means any and all permits, licenses,
certificates, authorizations or approvals of any Governmental Authority required
by Environmental Laws and necessary or reasonably required for the business of
any Borrower or any Subsidiary of any Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) which, together with such Person, is
under common control as described in Section 414(c) of the Code, is a member of
a "controlled group", as defined in Section 414(b) of the Code, or is a member
of an "affiliated service group", as defined in Section 414(m) of the Code which
includes such Person. Unless otherwise qualified, all references to an "ERISA
Affiliate" in this Agreement shall refer to an ERISA Affiliate of Borrower or
any Subsidiary.
"Eurodollar Loan" means any Loan which bears interest at a
rate determined with reference to the Eurodollar Rate.
"Eurodollar Rate" means with respect to each Interest Period
for a Eurodollar Loan, the arithmetic average (rounded upwards, if necessary, to
the nearest 1/16 of 1%) of the rate per annum obtained by dividing (i) the
offered quotation, if any, to first-class banks in the interbank eurodollar
market by BT for Dollar deposits of amounts in immediately available funds
comparable to the principal amount of the Eurodollar Rate Loan to be made by BT
with maturities comparable to such Interest Period, determined as of
approximately 10:00 A.M. (New York City time) on the Interest Rate Determination
Date, by (ii) a percentage equal to 100% minus the stated maximum rate
(expressed as a percentage) as prescribed by the Board of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves and all reserves required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
any successor regulation)) applicable on the first day of such Interest Period
to any member bank of the Federal Reserve System in respect of eurodollar
funding or liabilities. The determination of the Eurodollar Rate by Agent shall
be conclusive and binding on Borrowers absent manifest error.
"Event of Default" is defined in Section 10.1.
"Excess Cash Flow" means, for any period, the sum of (i) the
sum (without duplication) of (A) Consolidated Net Income for such period, plus
(B) the amount of all non-cash charges (including, without limitation or
duplication, depreciation, amortization and non-cash (including without
limitation any original issue discount or pay-in-kind interest expense) interest
expense) included in determining Consolidated Net Income for such period, plus
(C) the decrease, if any, in Adjusted Working Capital from the first day to the
last day of such period,
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<PAGE> 17
plus (D) provisions for taxes appearing on an income statement of Holdings and
its Subsidiaries for such period, plus (E) losses from sales of assets, minus
(ii) the sum (without duplication) of (A) any non-cash credits (including from
sales of assets) included in determining Consolidated Net Income for such
period, plus (B) gains from sales of assets included in determining Consolidated
Net Income for such period, plus (C) the aggregate amount of Capital
Expenditures (excluding Capital Expenditures made pursuant to Section 9.1(c)(i)
but including the payment of $7,885,450 to the Vanke Trust pursuant to the Vanke
Redemption as a Capital Expenditure) made by Holdings and its Subsidiaries
during such period to the extent not financed by any Indebtedness specified in
clause (i), (iii) or (vi) of the definition of "Indebtedness", plus (D) the
aggregate principal amount of permanent principal payments of Indebtedness for
borrowed money of Holdings and its Subsidiaries (other than (1) repayment of
Indebtedness with proceeds of issuance of other Indebtedness or equity or equity
contributions or with Net Sale Proceeds or Recovery Events and (2) repayment of
Loans, provided that repayments of Loans shall be deducted in determining Excess
Cash Flow if such repayments were (x) required as a result of a Scheduled Term
Repayments under Section 4.4(b) or (y) made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of
Acquisition Revolving Loans, Working Capital Loans or Swing Line Loans, only to
the extent accompanied by a voluntary permanent reduction to the Total Revolving
Commitment, as applicable)) during such period, plus (E) non-cash charges added
back in a previous period pursuant to clause (i)(B) above to the extent any such
charge has become a cash item in the current period, plus (F) the increase, if
any, in Adjusted Working Capital from the first day to the last day of such
period, plus (G) taxes paid by Holdings and its Subsidiaries during such period,
plus (H) the principal portion of Capitalized Lease Obligations paid by Holdings
and its Subsidiaries during such period.
"Excess Cash Flow Period" means, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
Fiscal Year of Holdings.
"Excess Cash Payment Date" means the date occurring 95 days
after the last day of a Fiscal Year of Holdings (beginning with its Fiscal Year
ending on December 31, 2000).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and as codified in 15 U.S.C. ss. 78a et seq., and as hereafter amended.
"Existing Credit Agreements" means, collectively, the Existing
Holdings Credit Agreement and the Existing LISN Credit Agreement, and all
documents, instruments and agreements relating to such loan agreements,
including, without limitation, all guaranties, pledge agreements and security
agreements.
"Existing Credit Agreement Termination Documents" means the
documents entered into with respect to the termination of the commitments, and
the reimbursement obligations with respect to any letters of credit issued,
under the Existing Credit Agreements, the repayment of the loans thereunder, the
release of all guaranties and security with respect thereto and any consents
required in connection therewith.
"Existing Holdings Credit Agreement" means that certain Credit
Agreement dated as of February 26, 1999, as amended, by and among NATG Holdings
and its Subsidiaries, the
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<PAGE> 18
lenders party thereto, Merrill Lynch and Co., Merrill Lynch, Pierce, Fenner &
Smith, Inc., as Joint Lead Arranger and Syndication Agent and PNC Bank, National
Association, as Joint Lead Arranger and Administrative Agent, together with all
guaranties, security documents and all other documents, instruments and
agreements executed and delivered in connection therewith.
"Existing LISN Credit Agreement" means that certain Credit
Agreement dated as of May 28, 1999, as amended, by and among LISN Holdings,
certain of its Subsidiaries, the lenders party thereto, BankBoston, N.A., as
Agent and BancBoston Robertson Stephens Inc., as Syndication Agent and Arranger,
together with all guaranties, security documents and all other documents,
instruments and agreements executed and delivered in connection therewith.
"Facility" means any of the credit facilities established
under this Agreement from time to time.
"Facing Agent" is defined in Section 2.9(a).
"Fair Market Value" means, with respect to any asset, the
price at which a willing buyer, not an Affiliate of the seller, and a willing
seller who does not have to sell, would agree to purchase and sell such asset,
as determined in good faith by the Board of Directors or other governing body
or, pursuant to a specific delegation of authority by such Board or governing
body, a designated senior executive officer, of Borrowers or the Subsidiary of
Borrowers selling such asset.
"FASB 52" means Statement of Financial Accounting Standards
No. 52 promulgated by the Financial Accounting Standards Board.
"FASB 106" means Statement of Financial Accounting Standards
No. 106 promulgated by the Financial Accounting Standards Board.
"Federal Funds Rate" means on any one day, the rate per annum
equal to the weighted average (rounded upwards, if necessary, to the nearest
1/100th of 1%) of the rate on overnight federal funds transactions with members
of the Federal Reserve System only arranged by federal funds brokers, as
published as of such day by the Federal Reserve Bank of New York, or, if such
rate is not so published, the average of the quotations for such day on such
transactions received by BT from three federal funds brokers of recognized
standing selected by BT.
"Fiscal Quarter" is defined in Section 7.13.
"Fiscal Year" is defined in Section 7.13.
"Foreign Pension Plan" means any plan, fund (including,
without limitation, any super-annuation fund) or other similar program
established or maintained outside of the United States of America by a Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees of
a Borrower or such Subsidiaries residing outside the United States of America,
which plan, fund, or similar program provides or results in, retirement income,
a deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which is not subject to ERISA or the Code.
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"Foreign Subsidiary" means any Subsidiary of a Borrower that
is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in the
U.S. as in effect from time to time.
"Government Acts" is defined in Section 2.9(g).
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
"Guarantee Obligations" means, as to any Person, without
duplication, any direct or indirect obligation of such Person guaranteeing or
intended to guarantee any Indebtedness, Capitalized Lease or operating lease,
dividend or other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent:
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor; (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation, or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor; (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include any endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation at any time shall be deemed to be an amount
equal to the lesser at such time of (y) the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made or (z)
the maximum amount for which such Person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation; or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guaranty" means and includes each of the Holdings Guaranty
and the Subsidiary Guaranty.
"Hazardous Materials" means (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls and
radon gas the existence or exposure to which is prohibited, limited or regulated
by any Governmental Authority; (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "restricted hazardous materials," "extremely
hazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar meaning and
regulatory effect as defined by Environmental Laws ; or (c) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any Governmental Authority.
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"Holdings" is defined in the introduction to this Agreement.
"Holdings Common Stock" means Holdings' Common Stock, par
value $0.01 per share.
"Holdings Guaranty" is defined in Section 5.1(e).
"Holdings Preferred Stock" means Holdings' Series C
Participating Preferred Stock, par value $0.01 per share.
"Indebtedness" means, as applied to any Person (without
duplication):
(i) all indebtedness (including principal, interest,
fees and charges) of such Person for borrowed money;
(ii) the deferred and unpaid balance of the purchase
price of assets (including any earn-out obligation in connection with
any acquisition) or services (other than trade payables incurred in the
ordinary course of business that are not overdue by more than 90 days
unless being contested in good faith);
(iii) all Capitalized Lease Obligations;
(iv) all indebtedness secured by any Lien on any
property owned by such Person (excluding advances or prepayments made
to any Borrower or any of their Subsidiaries pursuant to turnkey
agreements entered into in the ordinary course of business with TCI or
any of its Affiliates), whether or not such indebtedness has been
assumed by such Person or is nonrecourse to such Person (valued at the
lesser of (A) the fair market value of the property so secured and (B)
the aggregate amount of indebtedness so secured);
(v) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for
borrowed money;
(vi) indebtedness or obligations of such Person, in
each case, evidenced by bonds, notes or similar written instrument;
(vii) the face amount of all letters of credit and
bankers' acceptances issued for the account of such Person, and without
duplication, all unpaid drawings in respect thereof and all drafts
drawn thereunder;
(viii) all net obligations of such Person under
Interest Rate Agreements or Other Hedging Agreements;
(ix) Guarantee Obligations of such Person; and
(x) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed
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money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.
"Indebtedness to Remain Outstanding" is defined in Section
6.5(d).
"Indemnified Person" is defined in Section 12.4(b).
"Initial Borrowing" means the first Borrowing by Borrowers
under this Agreement.
"Initial Borrowing Date" means the date of the Initial
Borrowing.
"Initial Loan" means the first Loan made by the Lenders under
this Agreement.
"Intellectual Property" is defined in Section 6.21.
"Interest Coverage Ratio" means, for any period, the ratio of
Consolidated EBITDA for such period to Consolidated Interest Expense for such
period.
"Interest Payment Date" means (i) as to any Base Rate Loan,
each Quarterly Payment Date to occur while such Loan is outstanding, (ii) as to
any Eurodollar Loan the last day of the Interest Period applicable thereto and
(iii) as to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months after the first day of the Interest
Period applicable thereto; provided, however, that, in addition to the
foregoing, each of (A) the date upon which the Revolving Commitments have been
terminated, and the Loans have been paid in full and (B) each of the Term A Loan
Maturity Date and the Term B Loan Maturity Date shall be deemed to be an
"Interest Payment Date" with respect to any interest which is then accrued
hereunder.
"Interest Period" is defined in Section 3.4.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate futures contract, interest rate option contract or other similar agreement
or arrangement to which any Credit Party or any Subsidiary is a party.
"Interest Rate Determination Date" means with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Investment" means, as applied to any Person, (i) any direct
or indirect purchase or other acquisition by that Person of, or a beneficial
interest in, Securities of any other Person, or a capital contribution by that
Person to any other Person, (ii) any direct or indirect loan or advance to any
other Person (other than prepaid expenses or accounts receivable created or
acquired in the ordinary course of business), including all Indebtedness to such
Person arising from a sale of property by such Person other than in the ordinary
course of its business, (iii) any purchase by that Person of all or a
significant part of the assets of a business conducted by another Person
(including any purchase) or (iv) any purchase by that Person of a futures
contract
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<PAGE> 22
or such Person otherwise becoming liable for the purchase or sale of
currency or other commodity at a future date in the nature of a futures
contract. The amount of any Investment by any Person on any date of
determination shall be the sum of the value of the gross assets acquired by such
Person (including the amount of any liability assumed in connection with the
acquisition by such Person to the extent such liability would be reflected on a
balance sheet prepared in accordance with GAAP) plus the cost of all additions,
thereto, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, minus the
amount of all cash returns of principal or capital thereon, cash dividends
thereon and other cash returns on investment thereon or liabilities expressly
assumed by another Person (other than a Credit Party or another Subsidiary of a
Credit Party) in connection with the sale of such Investment. Whenever the term
"outstanding" is used in this Agreement with reference to an Investment, it
shall take into account the matters referred to in the proceeding sentence.
"Investment Agreement" means the Investment Agreement as
defined in the Reorganization Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder,
pursuant to which the WSP Entities shall purchase the New LISN Notes on or prior
to the Closing Date.
"IRS" means the United States Internal Revenue Service, or any
successor or analogous organization.
"Junior Subordinated Documents" means the Junior Subordinated
Notes and all other agreements, instruments and documents executed and delivered
in connection therewith.
"Junior Subordinated Notes" means, collectively, (i) those
certain 12% Subordinated Promissory Notes dated the Closing Date in the initial
aggregate principal amount of $138,266,128 issued by Holdings in favor of the
WSP Entities, the Orius Investors and the LISN Investors, and (ii) additional
12% Subordinated Promissory Notes issued after the Closing Date in accordance
with Section 8.2(c), provided that (A) such Indebtedness is unsecured and
subordinated to the Obligations and any obligations under any Interest Rate
Agreement or Other Hedging Agreement on the same terms and conditions
(including, without limitation, standstill provisions) as the Junior
Subordinated Notes issued on the Closing Date, (B) such Junior Subordinated
Notes bear interest at a rate not higher than twelve percent (12.0%) per annum
with at least sixty percent (60%) of such interest to be payable in kind on the
same basis as the Junior Subordinated Notes issued on the Closing Date or the
payment of which is deferred or accrues as additional principal until the date
on which the final principal payments thereunder are made (except with respect
to catch-up payments as provided in Section 1(b) of the Junior Subordinated
Notes, to the extent such payments are permitted through the payment of
dividends or distributions in accordance with Section 8.5(c)), (C) such Junior
Subordinated Notes mature on a date not earlier than the later of (x) the tenth
anniversary of the Closing Date or (y) one (1) year following the final payment
in full of the Senior Subordinated Notes (if issued) and (D) shall otherwise be
on the same terms and conditions as the Junior Subordinated Notes issued on the
Closing Date, as the same may be amended, restated, supplemented or otherwise
modified from time to time as permitted hereunder.
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"Landlord Consent" means a letter in favor of Agent and the
Lenders which is executed by each lessor of any material leased facility of any
Borrower or any Subsidiary of any Borrower at which Collateral may now or in the
future be located, in form and substance satisfactory to Agent.
"LC Commission" is defined in Section 2.9(e)(ii)(A).
"LC Obligations" means, at any time, an amount equal to the
sum of (i) the aggregate Stated Amount of the then outstanding Letters of Credit
(other than the Rollover Letters of Credit) and (ii) the aggregate amount of
Unpaid Drawings (other than Unpaid Drawings related to Rollover Letters of
Credit). The LC Obligation of any Lender at any time shall mean its Revolver Pro
Rata Share of the aggregate LC Obligations outstanding at such time.
"Lender" and "Lenders" have the respective meanings assigned
to those terms in the introduction to this Agreement and shall include any
Person that becomes a "Lender" as contemplated by Section 12.8.
"Lender Default" means (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.1 (provided that the
conditions to funding in respect thereof have been satisfied) or 2.9(f) or (ii)
a Lender having notified in writing Borrowers and/or Agent that it does not
intend to comply with its obligations under Section 2.1 (whether or not as a
result of any takeover of such Lender by any regulatory authority or agency).
"Letter of Credit Payment" means as applicable (i) all
payments made by the Facing Agent pursuant to either a draft or demand for
payment under a Letter of Credit or (ii) all payments made by the Lenders to the
Facing Agent in respect thereof (whether or not in accordance with their
Revolver Pro Rata Shares).
"Letter of Credit Request" is defined in Section 2.9(b).
"Letters of Credit" means, collectively, all Commercial
Letters of Credit, Standby Letters of Credit and Rollover Letters of Credit
issued pursuant to this Agreement, and "Letter of Credit" means any one of such
Letters of Credit.
"Leverage Ratio" means, for any period, the ratio of Total
Consolidated Indebtedness (but excluding any Indebtedness with respect to the
Junior Subordinated Notes) as of the end of such period to Consolidated EBITDA
for such period.
"Lien" means (i) any judgment lien or execution, attachment,
levy, distraint or similar legal process and (ii) any mortgage, pledge,
hypothecation, collateral assignment, security interest, encumbrance, lien,
charge or deposit arrangement (other than a deposit to a Deposit Account in the
ordinary course of business and not intended as security) of any kind
(including, without limitation, any conditional sale or other title retention
agreement or lease in the nature thereof, any agreement to give any of the
foregoing, or any filing or agreement to file a financing statement as debtor
under the UCC or any similar statute other than to reflect
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<PAGE> 24
ownership by a third party of property leased to any Borrower or any of its
Subsidiaries under a lease which is not in the nature of a conditional sale or
title retention agreement).
"LISN" is defined in the introduction to this Agreement.
"LISN Equity Rollover" means the contribution by the existing
stockholders of LISN Holdings to Holdings of not less than 90% of the value of
the Capital Stock on the Closing Date (on a fully diluted basis) of LISN
Holdings and all of the LISN Junior Notes pursuant to the Merger Agreement, the
Note Exchange Agreement and the other Reorganization Documents.
"LISN Holdings" means LISN Holdings, Inc., an Ohio
corporation.
"LISN Investors" means those shareholders of LISN Holdings
listed on Exhibit B to the Reorganization Agreement.
"LISN Junior Notes" means the LISN 12% Junior Subordinated
Notes issued pursuant to the LISN Recapitalization Agreement.
"LISN Mergers" means, collectively, (i) the merger of LISN
with and into NATG with NATG as the surviving entity and (ii) the merger of LISN
Holdings with and into Holdings with Holdings as the surviving entity.
"LISN Recapitalization Agreement" means that certain
Recapitalization Agreement dated as of May 28, 1999 by and among LISN Holdings,
LISN, Inc., an Ohio corporation, Arion Sub, Inc., a Delaware corporation, James
S. Hivnor, James S. Hivnor Revocable Electing Small Business Trust (dated
December 25, 1998), Donald L. Sanneman, Donald J. Vanke, Vanke Trust, WSP and
the other purchasers signatory thereto.
"Loan" means any of the Term A Loans, the Term B Loans, the
Swing Line Loans, the Acquisition Loans or the Revolving Loans and "Loans" means
all such Loans collectively.
"Loan Documents" means, collectively, this Agreement, the
Notes, each Letter of Credit, each Security Document, each Interest Rate
Agreement to which any Lender or any Affiliate of a Lender is a party, and all
other agreements, instruments and documents executed in connection therewith, in
each case as the same may at any time be amended, supplemented, restated or
otherwise modified and in effect.
"Majority Lenders" of any Facility means those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations of other Facilities under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Material Adverse Effect" means a material adverse effect on
(i) the business, financial condition, assets, liabilities or results of
operations of Holdings and its Subsidiaries taken as a whole, (ii) the ability
of any Credit Party to perform its respective obligations under any Loan
Document to which it is a party, or (iii) the validity or enforceability (other
than in
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accordance with its terms) of this Agreement or any of the Security Documents or
the rights or remedies of Agent and the Lenders hereunder or thereunder.
"Maximum Commitment" means, when used with reference to any
Lender, the aggregate of such Lender's Term A Commitment, Term B Commitment and
Revolving Commitment in the amounts not to exceed those set forth opposite the
name of such Lender on Schedule 1.1(a) hereto, subject to reduction from time to
time in accordance with the terms of this Agreement.
"Merger Agreement" means the Merger Agreement as defined in
the Reorganization Agreement, as the same may be amended, restated, supplemented
or otherwise modified from time to time as permitted hereunder, pursuant to
which Orius Merger Sub, Inc. will merge with and into LISN Holdings on or before
the Closing Date.
"Minimum Borrowing Amount" means, with respect to Base Rate
Loans, $1,000,000, and with respect to Eurodollar Loans, $1,000,000, and with
respect to Swing Line Loans, $250,000.
"Moody's" means Moody's Investors Service, Inc. or any
successor to the rating agency business ------- thereof.
"Mortgage" is defined in Section 5.1(g) and shall also include
any mortgages or similar documents executed pursuant to Section 7.12, all as
amended, restated, supplemented or otherwise modified from time to time.
"Mortgage Policies" is defined in Section 5.1(g) and shall
also include any mortgage policies or similar documents executed pursuant to
Section 5.3 or 7.12.
"Mortgaged Property" is defined in Section 5.1(g) and shall
also include any real property subject to a mortgage pursuant to Section 5.3 or
7.12.
"Most Recent Ratio of Total Debt to EBITDA" means, at any date
of determination, the ratio of Total Consolidated Indebtedness (but excluding
any Indebtedness with respect to the Junior Subordinated Notes) as of the end of
the most recently ended fiscal quarter of Holdings for which financial
statements have been delivered pursuant to Section 7.1 to Consolidated EBITDA
for the period of four consecutive fiscal quarters ending on the last day of the
most recently ended fiscal quarter of Holdings for which financial statements
have been delivered pursuant to Section 7.1; provided, however, that if Holdings
fails to deliver such financial statements as required by Article VII and
further fails to remedy such default within five days of notice thereof from
Agent, then, without prejudice to any other rights of any Lender hereunder, the
Most Recent Ratio of Total Debt to EBITDA shall be deemed to be greater than
4.25 to 1.0 as of the date such financial statements were required to be
delivered under Section 7.1. Notwithstanding the foregoing or the provisions of
the last sentence of Section 3.3, from the date hereof to the date of delivery
of financial statements for the period ending June 30, 2000, the Most Recent
Ratio of Total Debt to EBITDA shall be deemed to be greater than 4.25 to 1.00.
"Multiemployer Plan" means any plan described in Section
4001(a)(3) of ERISA to which contributions are or have, within the preceding six
years, been made, or are or were,
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within the preceding six years, required to be made, by any Borrower or any of
its ERISA Affiliates or any Subsidiary of any Borrower or ERISA Affiliates of
such Subsidiary.
"NATG" is defined in the introduction to this Agreement.
"Net Offering Proceeds" means the cash proceeds received by
Holdings or any of its Subsidiaries (including cash received by way of referred
payment pursuant to a note receivable, conversion of non-cash consideration or
otherwise, but only as and when such cash is received) from (i) the issuance of
any Capital Stock or (ii) the incurrence of any Indebtedness, in each case net
of the actual liabilities for reasonably anticipated cash taxes in connection
with such issuance or incurrence, if any, any underwriting, brokerage and other
customary selling commissions incurred in connection with such issuance or
incurrence, and reasonable legal, advisory and other out-of-pocket fees and
expenses, including title and recording tax expenses, if any, incurred in
connection with such issuance or incurrence.
"Net Sale Proceeds" means, with respect to any Asset
Disposition the aggregate cash payments received by any Borrower or any
Subsidiary from such Asset Disposition (including, without limitation, cash
received by way of deferred payment pursuant to a note receivable, conversion of
non-cash consideration, cash payments in respect of purchase price adjustments
or otherwise, but only as and when such cash is received and excluding any
deferred payment pursuant to any non-cash consideration to the extent such
payment represents interest income to Borrower or any Subsidiary) minus (i) the
direct costs and expenses incurred in connection therewith (including in the
case of any Asset Disposition, the payment of the outstanding principal amount
of, premium, if any, and interest on any Indebtedness (other than hereunder)
required to be repaid as a result of such Asset Disposition); (ii) any provision
for taxes in respect thereof made in accordance with GAAP provided that such
expenses shall only include taxes to the extent that taxes are payable in cash
in the current year or the following year as a result of such Asset Disposition;
and (iii) any portion of any such proceeds which Holdings determines in good
faith should be reserved for post-closing adjustments (to the extent Holdings
delivers to the Lenders a certificate signed by the chief financial officer of
Holdings as to such determination), it being understood and agreed that on the
day that all such post-closing adjustments have been determined (which shall not
be later than six months following the date of the respective asset sale), the
amount (if any) by which the reserved amount in respect of such sale or
disposition exceeds the actual post-closing adjustments payable by Holdings or
any of its Subsidiaries shall constitute Net Sale Proceeds on such date received
by Holdings or any of its Subsidiaries. Any proceeds received in a currency
other than Dollars shall, for purposes of the calculation of the amount of Net
Sale Proceeds, be in an amount equal to the Dollar equivalent thereof as of the
date of receipt thereof by such Person. For purposes of this Agreement, Net Sale
Proceeds shall not include proceeds from any Recovery Event.
"New Domestic Subsidiary" is defined in Section 7.12(b).
"New LISN Notes" means the New LISN Notes as defined in the
Reorganization Agreement, which notes shall be purchased by the WSP Entities
pursuant to the Investment Agreement and exchanged pursuant to the Note Exchange
Agreement on or before the Closing Date.
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"Non-Defaulting Lender" means each Lender which is not a
Defaulting Lender.
"Note" means any of the Revolving Notes, the Swing Line Note,
the Term A Notes or the Term B Notes and "Notes" means all of such Notes
collectively.
"Note Exchange Agreement" means the Note Exchange Agreement as
defined in the Reorganization Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder,
pursuant to which all of the LISN Junior Notes will be exchanged for Junior
Subordinated Notes and all of the New LISN Notes will be exchanged for Holdings
Common Stock, Holdings Preferred Stock and Junior Subordinated Notes, in each
case pursuant to the terms and conditions set forth in the Note Exchange
Agreement and the Reorganization Agreement.
"Notice Address" is defined in Section 2.5.
"Notice of Borrowing" is defined in Section 2.5.
"Notice of Conversion or Continuation" is defined in Section
2.6.
"Notice Office" means the office of the Agent located at One
Bankers Trust Plaza, 130 Liberty Street, 14th Floor, New York, New York 10006,
Attention: Deal Administrator, or such other office as the Agent may designate
to Borrower and the Lenders from time to time.
"Obligations" means all liabilities and obligations of the
Credit Parties and any Subsidiary of any Borrower now or hereafter arising under
this Agreement and all of the other Loan Documents, whether for principal,
interest, fees, expenses, indemnities or otherwise, and whether primary,
secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
"Operating Lease" of any Person, means any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) by such Person, as lessee, which
is not a Capitalized Lease.
"Organizational Documents" means, with respect to any Person,
such Person's articles or certificate of incorporation, bylaws, partnership
agreement, operating agreement, joint venture agreement or other similar
governing documents and any document setting forth the designation, amount
and/or relative rights, limitations and preferences of any class or series of
such Person's Capital Stock.
"Orius Equity Rollover" is defined in Section 5.1(w).
"Orius Investors" means the persons identified in the
Reorganization Agreement as the stockholders of Holdings, H.I.G. Cable, Inc. and
H.I.G. Cable West, Inc.
"Other Hedging Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, commodity agreements, option
contract, synthetic cap or other similar agreement.
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"Participants" is defined in Section 12.8(b).
"Payment Office" is defined in Section 2.7.
"PBGC" means the Pension Benefit Guaranty Corporation created
by Section 4002(a) of ERISA.
"Perfection Certificate" is defined in Section 5.1(b).
"Permitted Acquisition Capex Amount" means, for any Fiscal
Year of Holdings and its Subsidiaries, an amount equal to twenty percent (20%)
of the pro forma Consolidated EBITDA of each Person or business acquired in any
Permitted Acquisition which is used to determine Consolidated EBITDA on a pro
forma basis pursuant to Section 8.4(k) (but only with respect to such Person or
business so acquired); provided, however that the calculation of Permitted
Acquisition Capex Amount for any Permitted Acquisition shall be pro-rated in the
Fiscal Year in which such Permitted Acquisition is consummated to account for
the portion of the Fiscal Year remaining following the consummation thereof.
"Permitted Acquisitions" is defined in Section 8.4(k).
"Permitted Covenant" means (i) any periodic reporting
covenant, (ii) any covenant restricting payments by Holdings with respect to any
securities of Holdings which are junior to the Permitted Holdings Preferred
Stock, (iii) any covenant the default of which can only result in an increase in
the amount of any redemption price, repayment amount, dividend rate or interest
rate, (iv) any covenant providing board observance rights with respect to
Holdings' board of directors and (v) any other covenant that does not adversely
affect the interests of the Lenders (as reasonably determined by Agent).
"Permitted Holders" means WSP and its Subsidiaries and
Affiliates.
"Permitted Holdings Preferred Stock" means (a) Holdings
Preferred Stock and (b) any other preferred stock of Holdings (or any equity
security of Holdings that is convertible or exchangeable into any preferred
stock of Holdings), so long as the terms of any such preferred stock or equity
security of Holdings (i) do not provide any collateral security, (ii) do not
provide any guaranty or other support by the Borrower or any Subsidiaries of the
Borrower, (iii) do not contain any mandatory put, redemption, repayment, sinking
fund or other similar provision occurring before the eighth anniversary of the
Closing Date, (iv) do not require the cash payment of dividends or interest, (v)
do not contain any covenants other than any Permitted Covenant, (vi) do not
grant the holders thereof any voting rights except for (x) voting rights
required to be granted to such holders under applicable law, (y) limited
customary voting rights on fundamental matters such as mergers, consolidations,
sales of substantial assets, or liquidations involving Holdings and (z) other
voting rights to the extent not greater than or superior to those allocated to
Holdings common stock on a per share basis, and (vii) are otherwise reasonably
satisfactory to Agent.
"Permitted Liens" is defined in Section 8.1.
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<PAGE> 29
"Permitted Real Property Encumbrances" means (i) those liens,
encumbrances and other matters affecting title to any Mortgaged Property listed
in the Mortgage Policies in respect thereof and found, on the date of delivery
of such Mortgage Policies to Agent in accordance with the terms hereof,
reasonably acceptable by Agent, (ii) as to any particular parcel of real
property at any time, such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which do not, in the
reasonable opinion of Agent, materially impair such parcel of real property for
the purpose for which it is held by the user thereof, or the Lien held by Agent,
(iii) municipal and zoning ordinances, which are not violated in any material
respect by the existing improvements and the present use made by the mortgagor
thereof of the Premises (as defined in the respective Mortgage), (iv) general
real estate taxes and assessments not yet delinquent, and (v) such other items
as to which Agent may consent.
"Person" means an individual or a corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PIK Interest" means any accrued interest payments on the
Junior Subordinated Notes, any Seller Subordinated Notes or any other
Subordinated Indebtedness that are deferred until the date on which the final
principal payments thereunder are made or made through the issuance of
"payment-in-kind" notes or other similar securities (including book-entry
accrual with respect to such deferred interest payments), all in accordance with
the terms of the Junior Subordinated Notes; provided, however, that in no event
shall PIK Interest include any interest payments made with cash or Cash
Equivalents.
"Plan" means any plan described in Section 4021(a) of ERISA
and not excluded pursuant to Section 4021(b) thereof, which is or has, within
the preceding six years, been established or maintained, or to which
contributions are or have, within the preceding six years, been made, by
Borrower or any of its ERISA Affiliates or any Subsidiary of Borrower or any
ERISA Affiliates of such Subsidiary, but not including any Multiemployer Plan.
"Plan Administrator" has the meaning assigned to the term
"administrator" in Section 3(16)(A) of ERISA.
"Plan Sponsor" has the meaning assigned to the term "plan
sponsor" in Section 3(16)(B) of ERISA.
"Pledge Agreement" is defined in Section 5.1(c).
"Pledged Securities" means all of the Pledged Securities as
defined in Section 3.4 of the Pledge Agreement.
"Pro Forma Adjustments" is defined in Section 8.4(k).
"Pro Forma Balance Sheet" is defined in Section 6.5(a).
"Pro Rata Share" means, when used with reference to any Lender
and any described aggregate or total amount, an amount equal to the result
obtained by multiplying such described aggregate or total amount by a fraction
the numerator of which shall be such Lender's
28
<PAGE> 30
Maximum Commitment and the denominator of which shall be the Total Commitment
or, if no Commitments are then outstanding, such Lender's aggregate outstanding
principal amount of Loans to the total outstanding principal balance of all
Loans hereunder.
"Projections" is defined in Section 6.5(e).
"Purchase Money Indebtedness" is defined in Section 8.2(i).
"Put and Call Agreements" means the Orius Call Agreements,
Orius Put Agreements, HIG Call Agreements and HIG Put Agreements, as each such
term is defined in the Reorganization Agreement and as each may be amended,
restated, supplemented or otherwise modified from time to time as permitted
hereunder.
"Qualified IPO" means a bona fide underwritten sale to the
public of Holdings Common Stock pursuant to a registration statement (other than
on Form S-8 or any other form relating to securities issuable under any benefit
plan of Holdings or any of its Subsidiaries, as the case may be) that is
declared effective by the SEC and such offering results in gross cash proceeds
(exclusive of underwriter's discounts and commissions and other expenses) of at
least $75,000,000.
"Quarterly Payment Date" means, subject to Section 4.6, the
fifteenth (15th) day of each March, June, September and December of each year
commencing March 15, 2000.
"Real Property" means all of the right, title and interest of
any Person in and to land, improvements and fixtures, including any such
interest as lessee or licensee in, to and under leases or licenses.
"Recovery Event" means the receipt by any Borrower (or any of
its Affiliates) of any insurance or condemnation proceeds payable (i) by reason
of any theft, physical destruction or damage or any other similar event with
respect to any properties or assets of such Borrower or any of its Subsidiaries,
(ii) by reason of any condemnation, taking, seizing or similar event with
respect to any properties or assets of such Borrower or any of its Subsidiaries
and (iii) under any policy of insurance required to be maintained under Section
7.8.
"Refunded Swing Line Loans" is defined in Section 2.1(c)(ii).
"Regulation D" means Regulation D of the Board as from time to
time in effect and any successor to all or a portion thereof establishing
reserve requirements.
"Release" means any release, spill, emission, leaking,
pumping, pouring, emptying, dumping, injection, disposal, discharge, escape,
leaching or migration into the environment.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Hazardous Materials in the indoor or
outdoor environment, (ii) prevent or minimize the Release or threat of Release
of Hazardous Materials so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; or (iii)
perform pre-remedial or post-remedial studies and investigations and
post-remedial
29
<PAGE> 31
monitoring and care or any other studies, reports or investigations relating to
Hazardous Materials.
"Reorganization" means the reorganization of Holdings and its
Subsidiaries pursuant to and in accordance with the terms and conditions of the
Reorganization Documents.
"Reorganization Agreement" means that certain Agreement and
Plan of Reorganization dated as of November 8, 1999 by and among LISN Holdings,
Holdings and Orius Merger Sub, Inc., as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder.
"Reorganization Documents" means the Reorganization Agreement,
the Merger Agreement, the Note Exchange Agreement, the Investment Agreement, the
Put and Call Agreements and all other documents, instruments and agreements
entered into or delivered pursuant thereto.
"Replaced Lender" is defined in Section 3.7.
"Replacement Lender" is defined in Section 3.7.
"Reportable Event" means a "reportable event" described in
Section 4043(c) of ERISA or in the regulations thereunder with respect to a
Plan, the filing of a notice of intent to terminate a Plan, the termination of a
Plan, any event requiring disclosure under Section 4063(a) or 4062(e) of ERISA,
receipt of a notice of withdrawal liability with respect to a Multiemployer Plan
pursuant to Section 4202 of ERISA or receipt of a notice of reorganization or
insolvency with respect to a Multiemployer Plan pursuant to Section 4242 or 4245
of ERISA.
"Required Lenders" means Non-Defaulting Lenders the sum of
whose outstanding Term Loans, Term A Pro Rata Share of outstanding Rollover LC
Obligations and Revolving Commitments (or, after the Total Revolving Commitment
has been terminated, outstanding Acquisition Revolving Loans and Working Capital
Loans, and Revolver Pro Rata Share of outstanding Swing Line Loans and LC
Obligations) constitute greater than 50% of the sum of (i) the total outstanding
Term Loans and the aggregate Term A Pro Rata Share of outstanding Rollover LC
Obligations of Non-Defaulting Lenders, and (ii) the Total Revolving Commitment
less the aggregate Revolving Commitments of Defaulting Lenders (or, if after the
Total Revolving Commitment has been terminated, the total outstanding
Acquisition Revolving Loans and Working Capital Loans, and the aggregate
Revolver Pro Rata Share of all Non-Defaulting Lenders of the total outstanding
Swing Line Loans and LC Obligations at such time).
"Requirement of Law" means, as to any Person, any law
(including common law), treaty, rule or regulation or judgment, decree,
determination or award of an arbitrator or a court or other Governmental
Authority, including without limitation, any Environmental Law, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Responsible Officer" means, as to any Person, any of the
Chairman of the Board of Directors, President, Chief Executive Officer, Chief
Financial Officer, any Vice President, the Treasurer, any Assistant Treasurer or
the General Counsel of such Person.
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<PAGE> 32
"Restricted Payment" is defined in Section 8.5.
"Returns" is defined in Section 6.9.
"Revolver Pro Rata Share" means, when used with reference to
any Revolving Lender and any described aggregate or total amount, an amount
equal to the result obtained by multiplying such described aggregate or total
amount by a fraction the numerator of which shall be such Lender's Revolving
Commitment and the denominator of which shall be the Revolving Commitments or,
if the Revolver Termination Date has occurred, such Lender's aggregate
outstanding principal amount of Revolving Loans and its pro rata share of
outstanding Swing Line Loans and LC Obligations to the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans hereunder and the
aggregate outstanding amount of all LC Obligations.
"Revolver Termination Date" means December 15, 2004 or such
earlier date as the Revolving Commitments shall have been terminated or
otherwise reduced to $0 pursuant to this Agreement.
"Revolving Commitment" means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to participate in Letters
of Credit (other than Rollover Letters of Credit), as such commitment may be
reduced from time to time pursuant to this Agreement, which commitment as of the
date hereof is the amount set forth opposite such lender's name on Schedule
1.1(a) hereto under the caption "Amount of Revolving Commitment" as the same may
be adjusted from time to time pursuant to the terms hereof and "Revolving
Commitments" means such commitments collectively, which commitments equal
$100,000,000 in the aggregate as of the Closing Date.
"Revolving Facility" means the credit facility under this
Agreement evidenced by the Revolving Commitments and the Revolving Loans
(including Acquisition Loans).
"Revolving Lender" means any Lender which has a Revolving
Commitment or is owed a Revolving Loan.
"Revolving Loan" and "Revolving Loans" have the meanings given
in Section 2.1(b), it being understood and agreed that Revolving Loans may
consist of Working Capital Loans, Acquisition Revolving Loans and/or Acquisition
Term Loans.
"Revolving Note" is defined in Section 2.2(a).
"Rollover LC Commission" is defined in Section 2.9(e)(ii)(B).
"Rollover LC Obligations" means, at any time, an amount equal
to the sum of (a) the aggregate Stated Amount of the then outstanding Rollover
Letters of Credit and (b) the aggregate amount of Unpaid Drawings related to
Rollover Letters of Credit. The Rollover LC Obligations of any Lender at any
time shall mean its Term A Pro Rata Share of the aggregate Rollover LC
Obligations outstanding at such time.
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<PAGE> 33
"Rollover LC Termination Date" means the earlier of (i) the
latest exercise date of any put right under the Put and Call Agreements or (ii)
September 20, 2000.
"Rollover Letters of Credit" mean those irrevocable standby
letters of credit issued on the Initial Borrowing Date by Facing Agent pursuant
to Section 2.9(a) substantially in the form of Exhibit 1.1(a) hereto in the
Stated Amounts and for the beneficiaries set forth on Schedule 1.1(b) hereto,
and issued for the account of Borrowers to be drawn upon in satisfaction of
Holdings' and LISN, Inc.'s obligations owing to the Persons listed on Schedule
1.1(b) hereto under the Put and Call Agreements.
"Sale and Leaseback Transaction" means any arrangement,
directly or indirectly, whereby a seller or transferor shall sell or otherwise
transfer any real or personal property and then or thereafter lease, or
repurchase under an extended purchase contract, conditional sales or other title
retention agreement, the same or similar property.
"Scheduled Acquisition Repayments" means, with respect to the
principal payments on the Acquisition Term Loans for each date set forth below
an amount equal to the product of (i) the outstanding Acquisition Term Loans at
9:01 a.m. (New York City time) on the Acquisition Revolver Conversion Date
multiplied by (ii) the percentage set forth opposite the applicable date below:
<TABLE>
<CAPTION>
Scheduled Acquisition
Date Principal Payment
---- -----------------
<S> <C>
March 31, 2002 5%
June 30, 2002 5%
September 30, 2002 5%
December 31, 2002 5%
March 31, 2003 6.25%
June 30, 2003 6.25%
September 30, 2003 6.25%
December 31, 2003 6.25%
March 31, 2004 13.75%
June 30, 2004 13.75%
September 30, 2004 13.75%
Revolver Termination Date 13.75% or, if less, the aggregate principal
amount of Acquisition Term Loans out-standing
</TABLE>
"Scheduled Term Repayments" means Scheduled Acquisition
Repayments, Scheduled Term A Repayments, Scheduled Term B Repayments.
"Scheduled Term A Repayments" means, with respect to the
principal payments on the Term A Loans for each date set forth below, the Dollar
amount set forth opposite thereto:
32
<PAGE> 34
<TABLE>
<CAPTION>
Scheduled Term A Loan
Date Principal Payment
---- -----------------
<S> <C>
March 31,2000 $1,500,000
June 30, 2000 $1,500,000
September 30, 2000 $1,500,000
December 31, 2000 $1,500,000
March 31, 2001 $2,812,500
June 30, 2001 $2,812,500
September 30, 2001 $2,812,500
December 31, 2001 $2,812,500
March 31, 2002 $3,750,000
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
December 31, 2002 $3,750,000
March 31, 2003 $4,687,500
June 30, 2003 $4,687,500
September 30, 2003 $4,687,500
December 31, 2003 $4,687,500
March 31, 2004 $6,000,000
June 30, 2004 $6,000,000
September 30, 2004 $6,000,000
Term A Loan Maturity Date $6,000,000 or, if less, the aggregate
principal amount of Term A Loans
outstanding
</TABLE>
"Scheduled Term B Repayments" means, with respect to the
principal payments on the Term B Loans for each day set forth below, the Dollar
amount set forth opposite thereto:
<TABLE>
<CAPTION>
Scheduled Term B Loan
Date Principal Payment
---- -----------------
<S> <C>
March 31, 2000 $500,000
June 30, 2000 $500,000
September 30, 2000 $500,000
December 31, 2000 $500,000
March 31, 2001 $500,000
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $500,000
March 31, 2002 $500,000
June 30, 2002 $500,000
September 30, 2002 $500,000
December 31, 2002 $500,000
March 31, 2003 $500,000
</TABLE>
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<PAGE> 35
<TABLE>
<S> <C>
June 30, 2003 $500,000
September 30, 2003 $500,000
December 31, 2003 $500,000
March 31, 2004 $500,000
June 30, 2004 $500,000
September 30, 2004 $500,000
December 31, 2004 $500,000
March 31, 2005 $23,750,000
June 30, 2005 $23,750,000
September 30, 2005 $23,750,000
December 31, 2005 $23,750,000
March 31, 2006 $23,750,000
June 30, 2006 $23,750,000
September 30, 2006 $23,750,000
Term B Loan Maturity Date $23,750,000 or, if less, the aggregate
principal amount of Term B Loans
out-standing
</TABLE>
"SEC" means the Securities and Exchange Commission or any
successor thereto.
"Secured Creditors" shall have the meaning provided in the
respective Security Documents.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, options, warrants, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
and as codified in 15 U.S.C.ss. 77a et seq., and as hereafter amended.
"Security Agreement" is defined in Section 5.1(b).
"Security Documents" means, collectively the Security
Agreement, the Holdings Guaranty, the Subsidiary Guaranty, the Pledge Agreement,
the Mortgages, the Control Agreement, the Perfection Certificates, the
Collateral Assignment of Leases, and all other agreements, assignments, security
agreements, instruments and documents executed in connection therewith,
including, without limitation, all Additional Security Documents, in each case
as the same may at any time be amended, supplemented, restated or otherwise
modified and in effect. For purposes of this Agreement, "Security Documents"
shall also include all guaranties, security agreements, mortgages, pledge
agreements, collateral assignments, subordination agreements and other
collateral documents in the nature of any thereof entered into by any Credit
Party or any Subsidiary of any Credit Party after the date of this Agreement in
favor of Agent or Collateral Agent for the benefit of the Lenders in
satisfaction of the requirements of this Agreement.
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<PAGE> 36
"Seller Subordinated Notes" means unsecured subordinated
promissory notes issued by Holdings after the Closing Date in accordance with
Section 8.2(l), provided that (i) such Indebtedness is unsecured and
subordinated to the Obligations and any obligations under any Interest Rate
Agreement or Other Hedging Agreement on substantially the same terms and
conditions (including, without limitation, standstill provisions) as the Junior
Subordinated Notes issued on the Closing Date, (ii) such Seller Subordinated
Notes bear interest at a rate not higher than fourteen percent (14.0%) per annum
with not more than ten percent (10%) payable in cash prior to the final maturity
date thereof and with the remainder of such interest payable in kind or
otherwise deferred or accrued as additional principal until the final maturity
date thereof, (iii) such Seller Subordinated Notes have no principal payments
due for at least two (2) years from the date of issuance thereof and (iv) such
Seller Subordinated Notes shall be on such other terms and conditions reasonably
satisfactory to Agent, as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted hereunder.
"Senior Subordinated Documents" means the Senior Subordinated
Notes, the Senior Subordinated Indenture, the Senior Subordinated Guaranties and
all other agreements, instruments and documents executed in connection
therewith, in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted hereunder.
"Senior Subordinated Guaranties" means, collectively, the
guaranties executed by Holdings, LISN Holdings and the Subsidiary Guarantors
after the Closing Date in accordance with Section 8.3(c) in connection with the
Senior Subordinated Notes, as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted hereunder.
"Senior Subordinated Note Indenture" means an indenture
entered into after the Closing Date by Borrowers pursuant to which Borrowers
issue their Senior Subordinated Notes, as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder.
"Senior Subordinated Notes" means, collectively, the senior
unsecured subordinated promissory notes issued by Borrowers after the Closing
Date in one or more series in accordance with Section 8.2(e), as the same may be
amended, restated, supplemented or otherwise modified from time to time as
permitted hereunder.
"S&P" means Standard & Poor's Rating Services, a division of
McGraw-Hill, Inc., or any successor to the rating agency business thereof.
"Standby Letter of Credit" means any of the irrevocable
standby letters of credit issued for the account of any Borrower pursuant to
this Agreement (other than the Rollover Letters of Credit) having a Stated
Amount and otherwise in form and substance acceptable to the Facing Agent,
together with any increases or decreases in the Stated Amount thereof and any
renewals, amendments and/or extensions thereof.
"Stated Amount" or "Stated Amounts" means with respect to any
Letter of Credit the stated or face amount of such Letter of Credit to the
extent available at the time for drawing
35
<PAGE> 37
(subject to presentment of all requisite documents), as the same may be
increased or decreased from time to time in accordance with the terms of such
Letter of Credit. For purposes of calculating the Stated Amount of any Letter of
Credit at any time:
(i) any increase in the Stated Amount of any Letter
of Credit by reason of any amendment to any Letter of Credit shall be
deemed effective under this Agreement as of the date Facing Agent
actually issues an amendment purporting to increase the Stated Amount
of such Letter of Credit, whether or not Facing Agent receives the
consent of the Letter of Credit beneficiary or beneficiaries to the
amendment, except that if Borrowers have required that the increase in
Stated Amount be given effect as of an earlier date and Facing Agent
issues an amendment to that effect, then such increase in Stated Amount
shall be deemed effective under this Agreement as of such earlier date
requested by Borrowers; and
(ii) any reduction in the Stated Amount of any Letter
of Credit by reason of any amendment to any Letter of Credit shall be
deemed effective under this Agreement as of the later of (x) the date
Facing Agent actually issues an amendment purporting to reduce the
Stated Amount of such Letter of Credit, whether or not the amendment
provides that the reduction be given effect as of an earlier date, or
(y) the date Facing Agent receives the written consent (including by
telex or facsimile transmission) of the Letter of Credit beneficiary or
beneficiaries to such reduction, whether written consent must be dated
on or after the date of the amendment issued by Facing Agent purporting
to effect such reduction.
"Subordinated Indebtedness" means, collectively, (i)
Indebtedness evidenced by or incurred pursuant to the Junior Subordinated
Documents, the Bridge Loan Documents, the Senior Subordinated Documents and the
Seller Subordinated Notes, and (ii) any other unsecured Indebtedness of Holdings
or any Subsidiary, the repayment of which is subordinated to the repayment of
the Obligations on terms and conditions satisfactory to the Required Lenders.
"Subsidiary" of any Person means any corporation, partnership
(limited or general), limited liability company, trust or other entity of which
a majority of the stock (or equivalent ownership or controlling interest) having
voting power to elect a majority of the board of directors (if a corporation) or
to select the trustee or equivalent controlling interest, shall, at the time
such reference becomes operative, be directly or indirectly owned or controlled
by such Person or one or more of the other subsidiaries of such Person or any
combination thereof. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of a Borrower.
"Subsidiary Guarantor" means each of the Subsidiaries party to
the Subsidiary Guaranty as of the Closing Date and each of the Subsidiaries of
Borrowers that becomes a party to a Subsidiary Guaranty after the Closing Date
as contemplated in Section 7.12(b).
"Subsidiary Guaranty" is defined in Section 5.1(e).
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<PAGE> 38
"Super Majority Lenders" of the Revolving Facility, the Term A
Facility or the Term B Facility means those Non-Defaulting Lenders the sum of
whose outstanding Acquisition Loans (or, if no Acquisition Loans are outstanding
at such time, then outstanding Revolving Commitment), Term A Loans or Term B
Loans, respectively, constitute greater than 66-2/3% of the total outstanding
Acquisition Loans (or, if no Acquisition Loans are outstanding at such time,
then outstanding Revolving Commitments), Term A Loans or Term B Loans,
respectively, of Non-Defaulting Lenders.
"Swing Line Commitment" of the Swing Line Lender at any date,
the obligation of the Swing Line Lender to make Swing Line Loans pursuant to
Section 2.1(c) in the amount referred to therein.
"Swing Line Lender" means BT.
"Swing Line Loan Participation Certificate" means a
certificate, substantially in the form of Exhibit 2.1(c).
"Swing Line Loans" is defined in Section 2.1(c)(i).
"Swing Line Note" is defined in Section 2.2(a).
"Syndication Period" is defined in Section 2.4.
"Taxes" is defined in Section 4.7(a).
"Term A Commitment" means, with respect to any Lender, the
obligation of such Lender to make Term A Loans and to participate in Rollover
Letters of Credit, as such commitment may be reduced from time to time pursuant
to this Agreement, which commitment as of the date hereof is the amount set
forth opposite such lender's name on Schedule 1.1(a) hereto under the caption
"Amount of Term A Commitment" as the same may be adjusted from time to time
pursuant to the terms hereof and "Term A Commitments" means such commitments
collectively, which commitments equal $75,000,000 in the aggregate as of the
Closing Date.
"Term A Facility" means the credit facility under this
Agreement evidenced by the Term A Commitments and the Term A Loans.
"Term A Lender" means any Lender which has a Term A Commitment
or is owed a Term A Loan.
"Term A Loan" and "Term A Loans" is defined in Section 2.1(a).
"Term A Loan Maturity Date" means December 15, 2004 or such
earlier date as the outstanding Term A Loan shall have been reduced to $0
pursuant to this Agreement.
"Term A Note" is defined in Section 2.2(a).
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<PAGE> 39
"Term A Percentage" means, as of any date of determination,
expressed as a percentage, (i) the aggregate principal amount of outstanding
Term A Loans divided by (ii) the aggregate principal amount of all outstanding
Term Loans.
"Term A Pro Rata Share" means, when used with reference to any
Term A Lender and any described aggregate or total amount, an amount equal to
the result obtained by multiplying such described aggregate or total amount by a
fraction the numerator of which shall be such Lender's then outstanding Term A
Loan and the denominator of which shall be all then outstanding Term A Loans.
"Term B Commitment" means, with respect to any Term B Lender,
the principal amount set forth opposite such Lender's name on Schedule 1.1(a)
hereto or in any Assignment and Assumption Agreement under the caption "Amount
of Term B Commitment", as such commitment may be adjusted from time to time
pursuant to this Agreement, and "Term B Commitments" means such commitments
collectively, which commitments equal $200,000,000 in the aggregate as of the
Closing Date.
"Term B Facility" means the credit facility under this
Agreement evidenced by the Term B Commitments and the Term B Loans.
"Term B Lender" means any Lender which has a Term B Commitment
or is owed a Term B Loan.
"Term B Loan" and "Term B Loans" is defined in Section 2.1(a).
"Term B Loan Maturity Date" means December 15, 2006 or such
earlier date as the outstanding Term B Loan shall have been reduced to $0
pursuant to this Agreement.
"Term B Note" is defined in Section 2.2(a).
"Term B Percentage" means, as of any date of determination,
expressed as a percentage, (i) the aggregate principal amount of outstanding
Term B Loans divided by (ii) the aggregate principal amount of all outstanding
Term Loans.
"Term B Pro Rata Share" means, when used with reference to any
Term B Lender and any described aggregate or total amount, an amount equal to
the result obtained by multiplying such described aggregate or total amount by a
fraction the numerator of which shall be such Lender's then outstanding Term B
Loan and the denominator of which shall be all then outstanding Term B Loans.
"Term Commitments" means the Term A Commitments and the Term B
Commitments.
"Term Loans" means the Term A Loans, Term B Loans and the
Acquisition Term Loans.
"Test Period" means, as of any date of determination, the
period of four consecutive Fiscal Quarters of Holdings most recently ended.
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<PAGE> 40
"Total Available Revolving Commitment" means, at the time, any
determination thereof is made, the sum of the respective Available Revolving
Commitments of the Lenders at such time.
"Total Commitment" means, at the time, the sum of the Term A
Commitments, Term B Commitments and the Revolving Commitments at such time.
"Total Consolidated Indebtedness" means, at any time, the
total of all Indebtedness of Holdings and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Total Revolving Commitment" means, at any time, the sum of
the Revolving Commitments of each of the Lenders at such time.
"Transaction Documents" means, collectively, the
Reorganization Documents, the Bridge Loan Documents, the Junior Subordinated
Documents and the Existing Credit Agreement Termination Documents.
"Transactions" means, collectively, (i) each of the Credit
Events occurring on the Closing Date, (ii) the Reorganization, (iii) the
consummation of the transactions contemplated by the Bridge Loan Documents, (iv)
the issuance of the Junior Subordinated Notes, (v) the termination of the
Existing Credit Agreements, (vi) such other transactions as are contemplated by
the Documents, and (vii) the payment of fees and expenses in connection with the
foregoing.
"Transferee" is defined in Section 12.8(d).
"Type" means any type of Loan, namely, a Base Rate Loan or a
Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction.
"Unmatured Event of Default" means an event, act or occurrence
which with the giving of notice or the lapse of time (or both) would become an
Event of Default.
"Unpaid Drawing" means the aggregate amount of drawings under
all Letters of Credit which have not then been reimbursed pursuant to Section
2.9(c).
"Vanke Redemption" means the redemption or repurchase by LISN
Holdings of the Vanke Shares from the Vanke Trust for $7,885,450 in cash
pursuant to the terms and conditions of the LISN Recapitalization Agreement as
in effect on the Closing Date.
"Vanke Shares" means the 5.74690 shares of Class C Common
Stock issued by LISN Holdings in the name of and held on the Closing Date by the
Vanke Trust, subject to repurchase by LISN Holdings pursuant to Section 5.7 of
the LISN Recapitalization Agreement.
"Vanke Trust" means the Donald J. Vanke Revocable Electing
Small Business Trust (dated December 25, 1998).
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"Voting Securities" means any class of Capital Stock of a
Person pursuant to which the holders thereof have, at the time of determination,
the general voting power under ordinary circumstances to vote for the election
of directors, managers, trustees or general partners of such Person
(irrespective of whether or not at the time any other class or classes will have
or might have voting power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"Wholly-Owned Subsidiary" means, with respect to any Person,
any Subsidiary of such Person, all of the outstanding shares of Capital Stock of
which (other than qualifying shares required to be owned by directors or by
foreign nationals) are at the time owned directly or indirectly by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person.
"Working Capital Loan" means each Revolving Loan incurred by
Borrowers hereunder which does not constitute an Acquisition Loan.
"Working Capital Sublimit" means, at any time, $50,000,000.
"Written" or "In Writing" means any form of written
communication or a communication by means of telecopier device or authenticated
telex, telegraph or cable.
"WSP" means, collectively, Willis Stein & Partners II, L.P.
and Willis Stein & Partners Dutch, L.P.
"WSP Entities" means WSP and certain other investors
identified in Exhibit D to the Reorganization Agreement.
"WSP Financing" is defined in Section 5.1(w).
"Y2K Problem" means any significant risk that computer
hardware, software or equipment containing embedded microchips essential to the
business or operations of Borrowers or any of their Subsidiaries will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as efficiently and reliably in all material respects as in the case of
times or time periods occurring before January 1, 2000, including the making of
accurate leap year calculations.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms. The words "herein," "hereof"
and words of similar import as used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision in this Agreement.
References to "Articles", "Sections", "paragraphs", "Exhibits" and "Schedules"
in this Agreement shall refer to Articles, Sections, paragraphs, Exhibits and
Schedules of this Agreement unless otherwise expressly provided; references to
Persons include
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their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
Section 1.2. Accounting Terms; Financial Statements. All
accounting terms used herein but not expressly defined in this Agreement shall
have respective meanings given to them in accordance with GAAP in effect on the
date hereof in the United States of America. Except as otherwise expressly
provided herein, all computations and determinations for purposes of determining
compliance with the financial requirements of this Agreement shall be made in
accordance with GAAP in effect in the United States of America on the date
hereof and on a basis consistent with the presentation of the financial
statements and projections delivered pursuant to, or otherwise referred to in,
Sections 6.5(a) and 6.5(e). Notwithstanding the foregoing sentence, the
financial statements required to be delivered pursuant to Section 7.1 shall be
prepared in accordance with GAAP in the United States of America as in effect on
the respective dates of their preparation. Unless otherwise provided for herein,
wherever any computation is to be made with respect to any Person and its
Subsidiaries, such computation shall be made so as to exclude all items of
income, assets and liabilities attributable to any Person which is not a
Subsidiary of such Person.
ARTICLE II
AMOUNT AND TERMS OF CREDIT
Section 2.1. The Commitments.
(a) Term Loans.
(i) Term A Loans. Each Term A Lender, severally and for itself
alone, hereby agrees, on the terms and subject to the conditions
hereinafter set forth and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents, to make
loans (each such loan, a "Term A Loan" and collectively, the "Term A
Loans") to Borrowers (on a joint and several basis) on the Initial
Borrowing Date (i) in an aggregate principal amount equal to its Term A
Pro Rata Share of $28,531,510.92 and (ii) pursuant to Section
2.9(c)(ii), from time to time on or prior to the final expiration date
of the Rollover Letters of Credit in an aggregate principal amount
equal to its Term A Pro Rata Share of each drawing under any Rollover
Letter of Credit, with the aggregate principal amount of all Term A
Loans made by each such Term A Lender not to exceed the Term A
Commitment of such Term A Lender. The Term A Loans incurred by
Borrowers (i) shall be denominated in Dollars and (ii) shall be made as
Base Rate Loans. Except as hereinafter provided, Term A Loans may, at
the option of Borrowers, be maintained as and/or converted into Base
Rate Loans or Eurodollar Loans. All Term A Loans made by the Term A
Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Term A Loans of the
same Type and (ii) shall not exceed for any Lender at the time of
incurrence thereof that aggregate principal amount which when added to
all other Term A Loans made by such Lender equals the Term A
Commitment, if any, of such Lender at such time. No amount of a Term A
Loan which is repaid or prepaid by Borrower may be reborrowed
hereunder.
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(ii) Term B Loans. Each Term B Lender, severally and for
itself alone, hereby agrees, on the terms and subject to the conditions
hereinafter set forth and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents, to make a
loan (each such loan, a "Term B Loan" and collectively, the "Term B
Loans") to Borrowers (on a joint and several basis) on the Initial
Borrowing Date in an aggregate principal amount equal to the Term B
Commitment of such Term B Lender. The Term B Loans (i) shall be
incurred by Borrowers pursuant to a single drawing, which shall be on
the Initial Borrowing Date, (ii) shall be denominated in Dollars, (iii)
shall be made as Base Rate Loans and, except as hereinafter provided,
may, at the option of Borrowers, be maintained as and/or converted into
Base Rate Loans or Eurodollar Loans, provided, that all Term B Loans
made by the Term B Lenders pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, consist entirely of Term B
Loans of the same Type and (iv) shall not exceed for any Lender at the
time of incurrence thereof on the Initial Borrowing Date that aggregate
principal amount which equals the Term B Commitment, if any, of such
Lender at such time. No amount of a Term B Loan which is repaid or
prepaid by Borrower may be reborrowed hereunder.
(b) Revolving Loans.
(i) Working Capital Loans and Acquisition Revolving Loans.
Each Revolving Lender, severally and for itself alone, hereby agrees,
on the terms and subject to the conditions hereinafter set forth and in
reliance upon the representations and warranties set forth herein and
in the other Loan Documents, to make loans to Borrowers (on a joint and
several basis) on a revolving basis from time to time during the
Commitment Period (provided that Acquisition Revolving Loans may only
be made during the Acquisition Commitment Period), in an amount not to
exceed its Revolver Pro Rata Share of the Total Available Revolving
Commitment (each such loan by any Lender, a "Revolving Loan" and
collectively, the "Revolving Loans"). The Revolving Loans (i) shall be
denominated in Dollars and (ii) if made on the Initial Borrowing Date
(or any date, in the case of Acquisition Revolving Loans), shall be
made as Base Rate Loans and, except as hereinafter provided, may, at
the option of Borrowers, be maintained as and/or converted into Base
Rate Loans or Eurodollar Loans. All Revolving Loans comprising the same
Borrowing hereunder shall be made by the Revolving Lenders
simultaneously and in proportion to their respective Revolving
Commitments. Prior to the Revolver Termination Date, Working Capital
Loans may be repaid and reborrowed by Borrowers in accordance with the
provisions hereof. Prior to the last day of the Acquisition Commitment
Period, Acquisition Revolving Loans may be repaid and reborrowed by
Borrowers in accordance with the provisions hereof. Except as otherwise
specifically provided herein, all Revolving Loans comprising the same
Borrowing shall at all times be of the same Type.
(ii) Sublimit Amounts. Revolving Loans may not be incurred as
Acquisition Revolving Loans if after giving effect thereto the
aggregate outstanding principal amount of Acquisition Revolving Loans
would exceed the Acquisition Revolving Sublimit at such time. Revolving
Loans may not be incurred as Working Capital Loans if after giving
effect thereto the aggregate outstanding principal amount of Working
Capital Loans would exceed the Working Capital Sublimit at such time.
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(iii) Conversion of Acquisition Revolving Loans. Subject to
and upon the terms and conditions set forth herein, Borrowers and each
Lender agree that, at 9:00 A.M. (New York City time) on the Acquisition
Revolver Conversion Date, the aggregate principal amount of Acquisition
Revolving Loans owing to each Revolving Lender and outstanding at such
time shall (unless such Acquisition Revolving Loans have been declared
(or have become) due and payable pursuant to this Agreement), without
any notice or action by any party hereto, automatically convert to and
thereafter constitute term loans (each such Loan by any Revolving
Lender, an "Acquisition Term Loan" and collectively the "Acquisition
Term Loans" and together with the Acquisition Revolving Loans, the
"Acquisition Loans") owing to such Lenders hereunder. The Acquisition
Term Loans shall (i) subject to the provisions of Section 2.3,
initially be continued as one or more Borrowing of Base Rate Loans or
Eurodollar Loans in accordance with the designation of such Borrowings
immediately prior to giving effect to such conversion, with any
Interest Periods applicable thereto to continue in effect until the
expiration thereof, provided that, all Acquisition Term Loans
comprising the same Borrowing shall at all times be of the same Type
and (ii) not exceed an initial principal amount for any Lender that
amount which equals the aggregate principal amount of Acquisition
Revolving Loans owed to such Lender and outstanding immediately prior
to such conversion. Once repaid, Acquisition Term Loans may not be
reborrowed.
(c) Swing Line Loans.
(i) Swing Line Commitment. Subject to the terms and conditions
hereof, the Swing Line Lender in its individual capacity agrees to make
swing line loans in Dollars ("Swing Line Loans") to Borrowers (on a
joint and several basis) on any Business Day from time to time during
the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed $2,500,000; provided, however, that in no
event may the amount of any Borrowing of Swing Line Loans (A) exceed
the Total Available Revolving Commitment immediately prior to such
Borrowing (after giving effect to the use of proceeds thereof), (B)
cause the outstanding Acquisition Revolving Loans and Working Capital
Loans of any Revolving Lender, when added to such Lender's Revolver Pro
Rata Share of the then outstanding Swing Line Loans and Revolver Pro
Rata Share of the aggregate LC Obligations (exclusive of Unpaid
Drawings relating to LC Obligations which are repaid with the proceeds
of, and simultaneously with the incurrence of, Working Capital Loans or
Swing Line Loans) to exceed such Lender's Revolving Commitment or (C)
cause the outstanding Working Capital Loans of all Revolving Lenders,
when added to the then outstanding Swing Line Loans and the aggregate
LC Obligations (exclusive of Unpaid Drawings relating to LC Obligations
which are repaid with the proceeds of, and simultaneously with the
incurrence of, Working Capital Loans or Swing Line Loans) to exceed the
Working Capital Sublimit. Amounts borrowed by Borrowers under this
Section 2.1(c)(i) may be repaid and reborrowed during the period from
the Closing Date to but excluding five (5) Business Days prior to the
Revolver Termination Date. The Swing Line Loans shall be made in
Dollars and maintained as Base Rate Loans and, notwithstanding Section
2.6, shall not be entitled to be converted into any other Type of Loan.
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(ii) Refunding of Swing Line Loans. The Swing Line Lender, at
any time in its sole and absolute discretion, may on behalf of
Borrowers (which hereby irrevocably direct the Swing Line Lender to so
act on their behalf) notify each Revolving Lender (including the Swing
Line Lender) to make a Working Capital Loan in an amount equal to such
Lender's Revolver Pro Rata Share of the principal amount of the Swing
Line Loans (the "Refunded Swing Line Loans") outstanding on the date
such notice is given, provided, however, that such notice shall be
deemed to have automatically been given upon the occurrence of an Event
of Default under Sections 10.1(e) or 10.1(f) or upon the occurrence of
a Change of Control. Unless any of the events described in Sections
10.1(e) or 10.1(f) shall have occurred (in which event the procedures
of Section 2.1(c)(iii) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a
Working Capital Loan are then satisfied, each Revolving Lender shall
make the proceeds of its Working Capital Loan available to the Swing
Line Lender at the Payment Office prior to 11:00 A.M., New York City
time, in funds immediately available on the Business Day next
succeeding the date such notice is given. The proceeds of such Working
Capital Loans shall be immediately applied to repay the Refunded Swing
Line Loans.
(iii) Participation in Swing Line Loans. If, prior to
refunding a Swing Line Loan with a Revolving Loan pursuant to Section
2.1(c)(ii), one of the events described in Sections 10.1(e) or 10.1(f)
shall have occurred, or if for any other reason a Working Capital Loan
cannot be made pursuant to Section 2.1(c)(ii), then, subject to the
provisions of Section 2.1(c)(iv) below, each Revolving Lender will, on
the date such Working Capital Loan was to have been made, purchase
(without recourse or warranty) from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its
Revolver Pro Rata Share of such Swing Line Loan. Upon request, each
Revolving Lender will immediately transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation and upon
receipt thereof the Swing Line Lender will deliver to such Lender a
Swing Line Loan Participation Certificate dated the date of receipt of
such funds and in such amount.
(iv) Lenders' Obligations Unconditional. Each Revolving
Lender's obligation to make Working Capital Loans in accordance with
Section 2.1(c)(ii) and to purchase participating interests in
accordance with Section 2.1(c)(iii) above shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line
Lender, any Borrower or any other Person for any reason whatsoever; (B)
the occurrence or continuance of any Event of Default or Unmatured
Event of Default; (C) any adverse change in the condition (financial or
otherwise) of any Borrower or any other Person; (D) any breach of this
Agreement by any Borrower or any other Person; (E) any inability of any
Borrower to satisfy the conditions precedent to borrowing set forth in
this Agreement on the date upon which such participating interest is to
be purchased or (F) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any
Revolving Lender does not make available to the Swing Line Lender the
amount required pursuant to Section 2.1(c)(ii) or (iii) above, as the
case may be, the Swing Line Lender shall be entitled to recover such
amount on demand from such Lender, together with interest
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thereon for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Rate for the first two Business Days
and at the Base Rate thereafter. Notwithstanding the foregoing
provisions of this Section 2.1(c)(iv), no Lender shall be required to
make a Working Capital Loan to Borrower for the purpose of refunding a
Swing Line Loan pursuant to Section 2.1(c)(ii) above or to purchase a
participating interest in a Swing Line Loan pursuant to Section
2.1(c)(iii) if an Event of Default or Unmatured Event of Default has
occurred and is continuing and, prior to the making by the Swing Line
Lender of such Swing Line Loan, the Swing Line Lender has received
written notice from such Lender specifying that such Event of Default
or Unmatured Event of Default has occurred and is continuing,
describing the nature thereof and stating that, as a result thereof,
such Lender shall cease to make such Refunded Swing Line Loans and
purchase such participating interests, as the case may be; provided,
however, that the obligation of such Lender to make such Refunded Swing
Line Loans and to purchase such participating interests shall be
reinstated upon the earlier to occur of (y) the date upon which such
Lender notifies the Swing Line Lender that its prior notice has been
withdrawn and (z) the date upon which the Event of Default or Unmatured
Event of Default specified in such notice no longer is continuing.
Section 2.2. Notes.
(a) Evidence of Indebtedness. Borrowers' obligation to pay the
principal of and interest on all the Loans made to it by each Lender shall be
evidenced, (1) if Term A Loans, by a promissory note (each, a "Term A Note"
and, collectively, the "Term A Notes") duly executed and delivered by Borrowers
on a joint and several basis substantially in the form of Exhibit 2.2(a)(1)
hereto, with blanks appropriately completed in conformity herewith, (2) if Term
B Loans, by a promissory note (each, a "Term B Note" and, collectively, the
"Term B Notes") duly executed and delivered by Borrowers on a joint and several
basis substantially in the form of Exhibit 2.2(a)(2) hereto, with blanks
appropriately completed in conformity herewith, (3) if Revolving Loans, by a
promissory note (each, a "Revolving Note" and, collectively, the "Revolving
Notes") duly executed and delivered by Borrowers on a joint and several basis
substantially in the form of Exhibit 2.2(a)(3) hereto, with blanks
appropriately completed in conformity herewith, and (4) if Swing Line Loans, by
a promissory note (the "Swing Line Note") duly executed and delivered by
Borrowers on a joint and several basis substantially in the form of Exhibit
2.2(a)(4) hereto, with blanks appropriately completed in conformity herewith.
(i) Provisions of the Term A Notes. The Term A Note issued to
each Term A Lender shall (A) be executed by Borrowers on a joint and
several basis, (B) be payable to the order of such Term A Lender and be
dated the Initial Borrowing Date, (C) be in a stated principal amount
equal to the Term A Commitment of such Term A Lender and be payable in
the aggregate principal amount of the Term A Loan evidenced thereby,
(D) mature, with respect to each Term A Loan evidenced thereby, on the
Term A Loan Maturity Date, (E) be subject to mandatory prepayment as
provided in Section 4.4, (F) bear interest as provided in Section 3.1
in respect of the Base Rate Loans and Eurodollar Loans, as the case may
be, evidenced thereby and (G) be entitled to the benefits of this
Agreement and the other applicable Loan Documents.
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(ii) Provisions of the Term B Notes. The Term B Note issued to
each Term B Lender shall (A) be executed by Borrowers on a joint and
several basis (B) be payable to the order of such Term B Lender and be
dated the Initial Borrowing Date, (C) be in a stated principal amount
equal to the Term B Commitment of such Term B Lender and be payable in
the aggregate principal amount of the Term B Loan evidenced thereby,
(D) mature, with respect to each Term B Loan evidenced thereby, on the
Term B Loan Maturity Date, (E) be subject to mandatory prepayment as
provided in Section 4.4, (F) bear interest as provided in Section 3.1
in respect of the Base Rate Loans and Eurodollar Loans, as the case may
be, evidenced thereby and (G) be entitled to the benefits of this
Agreement and the other applicable Loan Documents.
(iii) Provisions of the Revolving Notes. The Revolving Note
issued to each Revolving Lender shall (A) be executed by Borrowers on a
joint and several basis, (B) be payable to the order of such Lender and
be dated the Initial Borrowing Date, (C) prior to the Acquisition
Revolver Conversion Date be in a stated principal amount equal to the
Revolving Commitment (and, from and after the Acquisition Revolver
Conversion Date, equal to the Revolving Commitment plus the aggregate
principal amount of such Lender's outstanding Acquisition Term Loans as
of the Acquisition Revolver Conversion Date) of such Revolving Lender
and be payable in the aggregate principal amount of the Revolving Loans
evidenced thereby, (D) mature, with respect to each Loan evidenced
thereby, on the Revolver Termination Date, (E) be subject to mandatory
prepayment as provided in Section 4.4, (F) bear interest as provided in
the appropriate clause of Section 3.1 in respect of the Base Rate Loans
and Eurodollar Loans, as the case may be, evidenced thereby and (G) be
entitled to the benefits of this Agreement and the other applicable
Loan Documents.
(iv) Provisions of the Swing Line Note. The Swing Line Note
issued to BT shall (A) be executed by Borrowers on a joint and several
basis, (B) be payable to the order of BT or its registered assigns and
be dated the Initial Borrowing Date, (C) be in a stated principal
amount equal to the Swing Line Commitment and be payable in the
aggregate principal amount of the Swing Line Loans evidenced thereby,
(D) mature, with respect to each Loan evidenced thereby, five (5)
Business Days prior to the Revolver Termination Date, (E) be subject to
mandatory prepayment as provided in Section 4.4 and voluntary
prepayment as provided in Section 4.3, (F) bear interest as provided in
Section 3.1 in respect of the Base Rate Loan evidenced thereby and (G)
be entitled to the benefits of this Agreement and the other applicable
Loan Documents.
(b) Notation of Payments. Each Lender will note on its
internal records the amount of each Loan made by it and each payment in respect
thereof and will, prior to any transfer of any of its Notes, endorse on the
reverse side thereof the outstanding principal amount of Loans evidenced
thereby. Failure to make any such notation shall not affect any Borrower's or
any guarantor's obligations hereunder or under the other applicable Loan
Documents in respect of such Loans.
Section 2.3. Minimum Amount of Each Borrowing; Maximum Number
of Borrowings. Except for the funding of Working Capital Loans pursuant to
Sections 2.1(c)(ii) and 2.9(c)(i) and the funding of Term A Loans on the Initial
Borrowing Date pursuant to Section
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2.1(a)(i) and after the Initial Borrowing Date pursuant to Section 2.9(c)(ii),
the aggregate principal amount of each Borrowing by Borrowers hereunder shall be
not less than (i) in the case of a Base Rate Loan, $1,000,000 and, if greater,
shall be in integral multiples of $500,000 above such minimum (or, if less, the
then Total Available Revolving Commitment) and (ii) in the case of a Eurodollar
Loan, $1,000,000 and, if greater, shall be in integral multiples of $500,000
above such minimum and (iii) in the case of a Swing Line Loan, $250,000 and, if
greater, shall be in integral multiples of $50,000 above such minimum. The
aggregate principal amount of the initial Borrowing of Acquisition Term Loans
shall be equal to the outstanding principal amount of Borrowings of Acquisition
Revolving Loans at 9:00 a.m. (New York City time) on the Acquisition Revolver
Conversion Date. More than one Borrowing may be incurred on any date; provided
that at no time shall there be outstanding more than ten (10) Borrowings of
Eurodollar Loans.
Section 2.4. Borrowing Options. The Term Loans and the
Revolving Loans shall, at the option of Borrowers except as otherwise provided
in this Agreement, be (i) Base Rate Loans, (ii) Eurodollar Loans, or (iii) part
Base Rate Loans and part Eurodollar Loans; provided, however, that prior to the
earlier to occur of (a) the 90th day after the Initial Borrowing Date and (b)
the date on which Agent determines in its sole discretion that the primary
syndication of the Loans has been completed (with Agent agreeing to promptly
notify Borrowers of such determination) (the "Syndication Period"), no Loan may
be made or converted, into a Eurodollar Loan with an Interest Period in excess
of 14 days (with all such Interest Periods ending on the same day during such
period). As to any Eurodollar Loan, any Lender may, if it so elects, fulfill its
commitment by causing a foreign branch or affiliate to make or continue such
Loan, provided that in such event that Lender's Loan shall, for the purposes of
this Agreement, be considered to have been made by that Lender and the
obligation of Borrowers to repay such Loan shall nevertheless be to that Lender
and shall be deemed held by that Lender, for the account of such branch or
affiliate.
Section 2.5. Notice of Borrowing. Whenever a Borrower desires
to make a Borrowing of any Loan hereunder, it shall give Agent at its office
located at One Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006
(or such other address as the Agent may hereafter designate in writing to the
parties hereto) (the "Notice Address") at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing), given not later
than 12:00 P.M. (New York City time) of each Base Rate Loan, and at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing), given not later than 12:00 P.M. (New York City time), of each
Eurodollar Loan to be made hereunder; provided, however, that a Notice of
Borrowing with respect to Borrowings to be made on the date hereof may, at the
discretion of Agent, be delivered later than the time specified above. Whenever
a Borrower desires that Swing Line Lender make a Swing Line Loan under Section
2.1(c), it shall deliver to Swing Line Lender prior to 12:00 P.M. (New York City
time) on the date of Borrowing written notice (or telephonic notice promptly
confirmed in writing). Each such notice (each a "Notice of Borrowing"), which
shall be in the form of Exhibit 2.5 hereto, shall be deemed a representation by
Borrowers that all conditions precedent to such Borrowing have been satisfied
and shall specify (i) the aggregate principal amount of the Loans to be made
pursuant to such Borrowing, (ii) the date of Borrowing (which shall be a
Business Day), (iii) whether the Revolving Loans being made pursuant to such
Borrowing are Working Capital Loans or Acquisition Revolving Loans and (iv)
whether the Loans being made pursuant to such
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Borrowing are to be Base Rate Loans or Eurodollar Loans and, with respect to
Eurodollar Loans, the Interest Period to be applicable thereto. Agent shall as
promptly as practicable give each Lender written or telephonic notice (promptly
confirmed in writing) of each proposed Borrowing, of such Lender's Revolver Pro
Rata Share, Term A Pro Rata Share or Term B Pro Rata Share, as applicable,
thereof and of the other matters covered by the Notice of Borrowing. Without in
any way limiting Borrowers' obligation to confirm in writing any telephonic
notice, Agent or the Swing Line Lender (in the case of Swing Line Loans) or the
respective Facing Agent (in the case of Letters of Credit) may act without
liability upon the basis of telephonic notice believed by Agent in good faith
and in the absence of gross negligence or willful misconduct to be from a
Responsible Officer of a Borrower prior to receipt of written confirmation.
Agent's records shall, absent manifest error, be final, conclusive and binding
on Borrowers with respect to evidence of the terms of such telephonic Notice of
Borrowing.
Section 2.6. Conversion or Continuation. Subject to Section
2.4, any Borrower may elect (i) on any Business Day to convert Base Rate Loans
or any portion thereof to Eurodollar Loans and (ii) at the end of any Interest
Period with respect thereto, to convert Eurodollar Loans or any portion thereof
into Base Rate Loans or to continue such Eurodollar Loans or any portion thereof
for an additional Interest Period; provided, however, that the aggregate
principal amount of the Eurodollar Loans for each Interest Period therefor must
be in an aggregate principal amount of $1,000,000 or an integral multiple of
$500,000 in excess thereof. Each such election shall be in substantially the
form of Exhibit 2.6 hereto (a "Notice of Conversion or Continuation") and shall
be made by giving Agent at least three Business Days' prior written notice
thereof, given not later than 12:00 P.M. (New York City time), to the Notice
Address specifying (i) the amount and type of conversion or continuation, (ii)
in the case of a conversion to or a continuation of Eurodollar Loans, the
Interest Period therefor, (iii) whether such conversion or continuation is made
with respect to Acquisition Loans, Working Capital Loans, Term A Loans or Term B
Loans and (iv) in the case of a conversion, the date of conversion (which date
shall be a Business Day and, if a conversion from Eurodollar Loans, shall also
be the last day of the Interest Period therefor). Notwithstanding the foregoing,
no conversion in whole or in part of Base Rate Loans to Eurodollar Loans, and no
continuation in whole or in part of Eurodollar Loans upon the expiration of any
Interest Period therefor, shall be permitted at any time at which an Unmatured
Event of Default or an Event of Default shall have occurred and be continuing.
If, within the time period required under the terms of this Section 2.6, Agent
does not receive a Notice of Conversion or Continuation from a Borrower
containing a permitted election to continue any Eurodollar Loans for an
additional Interest Period or to convert any such Loans, then, upon the
expiration of the Interest Period therefor, such Loans will be automatically
converted to Base Rate Loans. Each Notice of Conversion or Continuation shall be
irrevocable.
Section 2.7. Disbursement of Funds. No later than 12:00 P.M.
(New York City time) on the date specified in each Notice of Borrowing, each
Lender will make available its Term A Pro Rata Share of Term A Loans, Term B Pro
Rata Share of Term B Loans and Revolver Pro Rata Share of Revolving Loans of the
Borrowing requested to be made on such date in Dollars and in immediately
available funds, at the office (the "Payment Office") of Agent located at One
Bankers Trust Plaza, 130 Liberty Street, 14th Floor New York, New York 10006
Attention: Commercial Loan Division (for the account of such non-U.S. office of
Agent as Agent may direct in the case of Eurodollar Loans) and Agent will make
available to Borrowers at
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its Payment Office the aggregate of the amounts so made available by the
Lenders. Unless Agent shall have been notified by any Lender at least one
Business Day prior to the date of Borrowing that such Lender does not intend to
make available to Agent such Lender's portion of the Borrowing to be made on
such date, Agent may assume that such Lender has made such amount available to
Agent on such date of Borrowing and Agent may, but shall not be required to, in
reliance upon such assumption, make available to Borrower a corresponding
amount. If such corresponding amount is not in fact made available to Agent by
such Lender on the date of Borrowing, Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify Borrowers and, if so notified, Borrowers shall immediately pay
such corresponding amount to Agent. Agent shall also be entitled to recover from
Borrowers interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by Agent to Borrowers to the
date such corresponding amount is recovered by Agent, at a rate per annum equal
to the rate for Base Rate Loans or Eurodollar Loans, as the case may be,
applicable during the period in question, provided, however, that any interest
paid to Agent in respect of such corresponding amount shall be credited against
interest payable by Borrowers to such Lender under Section 3.1 in respect of
such corresponding amount. Any amount due hereunder to Agent from any Lender
which is not paid when due shall bear interest payable by such Lender, from the
date due until the date paid, at the Federal Funds Rate for the first three days
after the date such amount is due and thereafter at the Federal Funds Rate plus
1%, together with Agent's standard interbank processing fee. Further, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Loans, amounts due with respect to its Letters of Credit (or
its participations therein) and any other amounts due to it hereunder first to
Agent to fund any outstanding Loans made available on behalf of such Lender by
Agent pursuant to this Section 2.7 until such Loans have been funded (as a
result of such assignment or otherwise) and then to fund Loans of all Lenders
other than such Lender until each Lender has outstanding Loans equal to its Term
A Pro Rata Share of all Term A Loans, its Term B Pro Rata Share for all Term B
Loans and its Revolver Pro Rata Share of all Revolving Loans (as a result of
such assignment or otherwise). Such Lender shall not have recourse against any
Borrower with respect to any amounts paid to Agent or any Lender with respect to
the preceding sentence; provided, that such Lender shall have full recourse
against Borrowers to the extent of the amount of such Loans it has so been
deemed to have made. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment hereunder or to prejudice any rights
which Borrowers may have against the Lender as a result of any default by such
Lender hereunder.
Section 2.8. Pro Rata Borrowings. All Borrowings of Term A
Loans, Term B Loans and Revolving Loans under this Agreement shall be loaned by
the Lenders pro rata on the basis of their Term A Commitments, Term B
Commitments or Revolving Commitments, as the case may be. No Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and each Lender shall be obligated to make the Loans provided to be
made by it hereunder, regardless of the failure of any other Lender to fulfill
its Commitments hereunder.
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Section 2.9. Letter of Credit.
(a) Letter of Credit Commitments.
(i) Subject to and upon the terms and conditions herein set
forth and such other conditions as are applicable to its customers
generally, BT agrees to issue, or cause one of its Affiliates
(including without limitation Deutsche Bank AG, New York Branch), to
issue in its own name (in such capacity, "Facing Agent"), but for the
ratable benefit of all Term A Lenders (including Facing Agent) in the
case of Rollover Letters of Credit and for the ratable benefit of all
Revolving Lenders (including the Facing Agent) in the case of all
Letters of Credit other than Rollover Letters of Credit (A) on the
Initial Borrowing Date, the Rollover Letters of Credit, and (B) at any
time and from time to time on or after the Initial Borrowing Date and
prior to the 30th day preceding the Revolver Termination Date, one or
more Letters of Credit (other than a Rollover Letter of Credit), each
having a Stated Amount in Dollars and each being issued at sight, for
the account of a Borrower in an aggregate undrawn amount at any one
time outstanding that together with the aggregate Stated Amount of
other Letters of Credit then outstanding (other than the Rollover
Letters of Credit), does not exceed $15,000,000; provided, however,
that Facing Agent shall not issue or extend the expiration of any
Letter of Credit if, immediately after giving effect to such issuance
or extension, (A) the aggregate LC Obligations at such time would
exceed $15,000,000, (B) the Available Revolving Commitment of any
Revolving Lender would be less than zero or (C) the outstanding Working
Capital Loans of all Revolving Lenders, when added to the then
outstanding Swing Line Loans and the aggregate LC Obligations, would
exceed the Working Capital Sublimit. Each Revolving Lender severally,
but not jointly, agrees to participate in each such Letter of Credit
(other than a Rollover Letter of Credit) issued by Facing Agent to the
extent of its Revolver Pro Rata Share and to make available to Facing
Agent such Lender's Revolver Pro Rata Share of any payment made to the
beneficiary of such Letter of Credit to the extent not reimbursed by
Borrowers pursuant to Section 2.9(c)(i); provided, however, that no
Revolving Lender shall be required to participate in any such Letter of
Credit to the extent that such participation therein would exceed such
Lender's Available Revolving Commitment then in effect. Each Term A
Lender severally, but not jointly agrees to participate in each
Rollover Letter of Credit issued by Facing Agent to the extent of its
Term A Pro Rata Share and to make available to Facing Agent such
Lender's Term A Pro Rata Share of any payment made to the beneficiary
of such Rollover Letter of Credit pursuant to Section 2.9(c)(ii);
provided, however, that no Term A Lender shall be required to
participate in any Rollover Letter of Credit to the extent that such
participation therein would exceed such Lender's Available Term A
Commitment then in effect. No Lender's obligation to participate in any
Letter of Credit or to make available to Facing Agent such Lender's
Revolver Pro Rata Share or Term A Pro Rata Share as applicable of any
Letter of Credit Payment made by Facing Agent shall be affected by any
other Lender's failure to participate in the same or any other Letter
of Credit or by any other Lender's failure to make available to Facing
Agent such other Lender's Revolver Pro Rata Share or Term A Pro Rata
Share as applicable of any Letter of Credit Payment. Notwithstanding
the foregoing, in the event a Lender Default exists, Facing Agent shall
not be required to issue any Letter of Credit unless Facing Agent has
entered into arrangements satisfactory to it and Borrowers to eliminate
such Facing
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Agent's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing
such Defaulting Lender's or Lenders' Revolver Pro Rata Share or Term A
Pro Rata Share as applicable of the LC Obligations.
(ii) Each Standby Letter of Credit issued or to be issued
hereunder shall have an expiration date of one (1) year or less from
the issuance date thereof and each Commercial Letter of Credit issued
or to be issued hereunder shall have an expiration date of one hundred
eighty (180) days or less from the issuance date hereof; provided,
however, that each Standby Letter of Credit may provide by its terms
that it will be automatically extended for additional successive
periods of up to one (1) year unless Facing Agent shall have given
notice to the applicable beneficiary of the election by Facing Agent
(such election to be in the sole and absolute discretion of Facing
Agent) not to extend such Letter of Credit; provided, further, that no
Standby Letter of Credit or extension thereof shall be stated to expire
later than the 10th Business Day preceding the Revolver Termination
Date, no Rollover Letter of Credit or extension thereof shall be stated
to expire later than the Rollover LC Termination Date and no Commercial
Letter of Credit or extension thereof shall be stated to expire later
than the day thirty (30) days prior to the Revolver Termination Date.
(b) Procedure for Issuance of Letters of Credit. Whenever a
Borrower desires the issuance of a Letter of Credit hereunder, it shall give
Agent and Facing Agent at least three (3) Business Days' prior written notice
(or such shorter period as may be agreed to by such Borrower, Agent and Facing
Agent) specifying the day of issuance thereof (which day shall be a Business
Day), such notice to be given prior to 12:00 P.M. (New York City time) on the
date specified for the giving of such notice. Each such notice (each, a "Letter
of Credit Request") shall be in the form of Exhibit 2.9 hereto and shall specify
(A) the proposed issuance date and expiration date, (B) the name(s) of each
obligor with respect to such Letter of Credit, (C) a Borrower as the account
party, (D) the name and address of the beneficiary (which Person shall be
reasonably acceptable to Facing Agent), (E) the Stated Amount of such proposed
Letter of Credit and (F) the purpose of such Letter of Credit and such other
information as Facing Agent may reasonably request (which shall be acceptable to
Agent and Facing Agent). In addition, each Letter of Credit Request shall
contain a description of the terms and conditions to be included in such
proposed Letter of Credit (all of which terms and conditions shall be acceptable
to Facing Agent). Promptly after the issuance or amendment of any Letter of
Credit, Facing Agent shall notify Agent and the applicable Borrower of such
issuance or amendment, and such notice shall be accompanied by a copy of such
issuance or amendment. Promptly after receipt of such notice, Agent shall notify
the Lenders of such issuance or amendment and shall provide a copy thereof upon
the request of any Lender. Unless otherwise specified, all Letters of Credit
will be governed by the Uniform Customs and Practice for Documentary Credits as
in effect on the date of issuance of such Letter of Credit. Each Letter of
Credit shall include any other documents as Facing Agent customarily requires in
connection therewith. On the Business Day specified by a Borrower and upon
fulfillment or waiver of the applicable conditions set forth in Article V,
Facing Agent will issue the requested Letter of Credit to the applicable
beneficiary.
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(c) Draws upon Letters of Credit; Reimbursement Obligation.
(i) In the event of any drawing under any Letter of Credit
(other than a Rollover Letter of Credit) by the beneficiary thereof,
Facing Agent shall give written notice to the applicable Borrower and
Agent (x) confirming such drawing and (y) of the date on or before
which Facing Agent intends to honor such drawing, and Borrowers shall
reimburse Facing Agent on the day on which such drawing is honored in
an amount in same day funds and like currency equal to the amount of
such drawing; provided, however, that, anything contained in this
Agreement to the contrary notwithstanding, (A) unless Borrowers shall
have notified Agent and Facing Agent prior to 11:00 A.M. (New York City
time) on the Business Day Facing Agent intends to honor such drawing
that Borrowers intend to reimburse Facing Agent for the amount of such
drawing with funds other than the proceeds of Working Capital Loans,
Borrowers shall be deemed to have timely given a Notice of Borrowing to
Agent requesting each Revolving Lender to make Working Capital Loans
which are Base Rate Loans on the date on which such drawing is honored
in an amount equal to the amount of such drawing and (B) unless any of
the events described in Section 10.1(e) or 10.1(f) shall have occurred
(in which event the procedures of Section 2.9(d) shall apply) each such
Lender shall, on the date of such drawing, make Working Capital Loans
which are Base Rate Loans in the amount of its Revolver Pro Rata Share
of such drawing, the proceeds of which shall be applied directly by
Agent to reimburse Facing Agent for the amount of such drawing;
provided, further, that, if for any reason, proceeds of Working Capital
Loans are not received by Facing Agent on such date in an amount equal
to the amount of such drawing, Borrowers shall reimburse Facing Agent,
on the Business Day immediately following the date of such drawing, in
an amount in same day funds equal to the excess of the amount of such
drawing over the amount of such Working Capital Loans, if any, which
are so received, plus accrued interest on such amount at the rate set
forth in Section 3.1(a).
(ii) In the event of any drawing under any Rollover Letter of
Credit by the beneficiary thereof, Facing Agent shall give written
notice to the applicable Borrower and Agent (which notice Agent shall
promptly transmit to the Term A Lenders) confirming such drawing and of
the date on or before which Facing Agent intends to honor such drawing.
Borrowers shall be deemed to have timely given a Notice of Borrowing to
Agent requesting each Term A Lender to make Term A Loans which are Base
Rate Loans on the date on which such drawing is honored in an amount
equal to the amount of such drawing and unless any of the events
described in Section 10.1(e) or 10.1(f) shall have occurred (in which
event the procedures of Section 2.9(d) shall apply) each Term A Lender
shall, on the date of such drawing, make Term A Loans which are Base
Rate Loans in the amount of its Term A Pro Rata Share of such drawing,
the proceeds of which shall be applied directly by Agent to reimburse
Facing Agent for the amount of such drawing; provided, further, that,
if for any reason, proceeds of Term A Loans are not received by Facing
Agent on such date in an amount equal to the amount of such drawing,
Borrowers shall reimburse Facing Agent, on the Business Day immediately
following the date of such drawing, in an amount in same day funds
equal to the excess of the amount of such drawing over the amount of
such Term A Loans, if any, which are so received, plus accrued interest
on such amount at the rate set forth in Section 3.1(a).
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(d) Lenders' Participation in Letters of Credit. In the
event that Borrowers shall fail to reimburse Facing Agent as provided in Section
2.9(c) in an amount equal to the amount of any drawing honored by Facing Agent
under a Letter of Credit issued by it in accordance with the terms hereof,
Facing Agent shall promptly notify Agent and Agent shall promptly notify each
Lender of the unreimbursed amount of such drawing and of such Lender's
respective participation therein. Each such Lender shall make available to
Facing Agent an amount equal to its Revolver Pro Rata Share or Term A Pro Rata
Share, as applicable, of such drawing in same day funds, at the office of Facing
Agent specified in such notice, not later than 1:00 P.M. (New York City time) on
the Business Day after the date such Lender is notified by Agent. In the event
that any such Lender fails to make available to Facing Agent the amount of such
Lender's participation in such Letter of Credit as provided in this Section
2.9(d), Facing Agent shall be entitled to recover such amount on demand from
such Lender together with interest at the Federal Funds Rate for two Business
Days and thereafter at the Base Rate. Nothing in this Section 2.9(d) shall be
deemed to prejudice the right of any Lender to recover from Facing Agent any
amounts made available by such Lender to Facing Agent pursuant to this Section
2.9(d) in the event that it is determined that the payment with respect to a
Letter of Credit by Facing Agent in respect of which payment was made by such
Lender constituted gross negligence or willful misconduct as determined by a
court of competent jurisdiction on the part of Facing Agent. Facing Agent shall
distribute to each other Lender which has paid all amounts payable by it under
this Section 2.9(d) with respect to any Letter of Credit issued by Facing Agent
such other Lender's Revolver Pro Rata Share or Term A Pro Rata Share, as
applicable, of all payments received by Facing Agent from Borrowers in
reimbursement of drawings honored by Facing Agent under such Letter of Credit
when such payments are received. Upon any change in the Revolving Commitments or
Term A Commitments of the Lenders pursuant to Section 3.7 or 12.8(c) or
otherwise, it is hereby agreed that, with respect to all LC Obligations, there
shall be an automatic adjustment to the participations pursuant to this Section
2.9(d) to reflect the new Revolver Pro Rata Shares of the assigning Lender and
the Assignee and with respect to all Rollover LC Obligations, there shall be an
automatic adjustment to the participations pursuant to this Section 2.9(d) to
reflect the new Term A Pro Rata Shares of the assigning Lender and the Assignee.
(e) Fees for Letters of Credit.
(i) Facing Agent Fees. Borrowers agree jointly and severally
to pay the following amounts to Facing Agent with respect to Letters of
Credit issued by it for the account of any Borrower:
(A) with respect to drawings honored under any Letter of
Credit, interest, payable on demand, at a rate which is at all times
equal to 2% per annum in excess of the Base Rate on the amount paid by
Facing Agent in respect of each such drawing from the date the drawing
is honored (unless such drawing occurs after 4:00 p.m. (New York City
time) in which case from the day following such drawing) to the date
such amount is reimbursed by Borrowers (including any such
reimbursement out of the proceeds of Revolving Loans or Term A Loans,
as applicable, pursuant to Section 2.9(c));
(B) with respect to the issuance or amendment of each Letter
of Credit and each payment made thereunder, documentary and processing
charges in accordance with
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Facing Agent's standard schedule for such charges in effect at the time
of such issuance, amendment, transfer or payment, as the case may be;
and
(C) a facing fee equal to 0.25% per annum of the outstanding
LC Obligations and Rollover LC Obligations payable with respect to the
maximum Stated Amount under such outstanding Letters of Credit payable
in arrears on each Quarterly Payment Date, on the Revolver Termination
Date and thereafter, on demand together with customary issuance and
drawing charges payable pursuant to clause (B) above; provided,
however, if calculation of the facing fee in the manner set forth above
would result in a facing fee of less than $500 per year per Letter of
Credit, Borrower shall be obligated to pay such additional amount to
the Facing Agent so as to provide for a minimum facing fee of $500 per
year per Letter of Credit.
(ii) Participating Lender Fees.
(A) Borrowers agree jointly and severally to pay to Agent
for distribution to each participating Lender that is not a Defaulting
Lender in respect of all Letters of Credit (other than Rollover Letters
of Credit) outstanding such Lender's Revolver Pro Rata Share of a per
annum commission equal to the Applicable Eurodollar Rate Margin for
Revolving Loans with respect to the daily Stated Amount under such
outstanding Letters of Credit (the "LC Commission"), payable in arrears
on each Quarterly Payment Date, on the Revolver Termination Date and
thereafter, on demand. The LC Commission shall be computed on a per
annum basis from the first day of issuance of each Letter of Credit and
on the basis of the actual number of days elapsed over a year of 360
days.
(B) Borrowers agree jointly and severally to pay to Agent
for distribution to each participating Lender that is not a Defaulting
Lender in respect of all Rollover Letters of Credit outstanding such
Lender's Term A Pro Rata Share of a per annum commission equal to the
Applicable Eurodollar Rate Margin for Revolving Loans with respect to
the daily Stated Amount under such outstanding Rollover Letters of
Credit (the "Rollover LC Commission"), payable in arrears on each
Quarterly Payment Date, on the final expiration date of all Rollover
Letters of Credit and thereafter, on demand. The Rollover LC Commission
shall be computed on a per annum basis from the first day of issuance
of each Rollover Letter of Credit and on the basis of the actual number
of days elapsed over a year of 360 days.
Promptly upon receipt by Facing Agent or Agent of any amount
described in clause (i)(A) with respect to Letters of Credit other then Rollover
Letters of Credit or (ii)(A) of this Section 2.9(e), Facing Agent or Agent shall
distribute to each Lender (other than a Defaulting Lender) that has reimbursed
Facing Agent in accordance with Section 2.9(d) its Revolver Pro Rata Share of
such amount. Promptly upon receipt by Facing Agent or Agent of any amount
described in clause (i)(A) with respect to Rollover Letters of Credit or (ii)(B)
of this Section 2.9(e), Facing Agent or Agent shall distribute to each Lender
(other than a Defaulting Lender) that has reimbursed Facing Agent in accordance
with Section 2.9(d) its Term A Pro Rata Share of such amount. Amounts payable
under clause (i)(B) and (C) of this Section 2.9(e) shall be paid directly to
Facing Agent.
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(f) LC Obligations Unconditional. Subject to the last
paragraph of Section 2.9(g), the obligation of Borrowers to reimburse Facing
Agent for drawings made under any Letter of Credit issued by it and the
obligations of each Lender under Section 2.9(d) with respect thereto shall be
joint and several, unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances (except for
any wrongful payment arising solely out of the willful misconduct, bad faith or
gross negligence of Facing Agent), including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of such Letter of
Credit;
(ii) the existence of any claim, setoff, defense or other
right which any Borrower or any of its Affiliates may have at any time
against a beneficiary or any transferee of such Letter of Credit (or
any persons or entities for which any such beneficiary or transferee
may be acting), Facing Agent, any Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between any Borrower or one of its Subsidiaries and the beneficiary of
such Letter of Credit);
(iii) any draft, demand, certificate or any other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect, provided the same appears
substantially in compliance with the draw requirements for the Letter
of Credit;
(iv) payment by Facing Agent under such Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit,
provided the same appears on its face to substantially comply with the
draw requirements for the Letter of Credit; and
(v) the fact that an Event of Default or an Unmatured Event
of Default shall have occurred and be continuing.
(g) Indemnification. In addition to amounts payable as
elsewhere provided in this Agreement, each Borrower hereby agrees, jointly and
severally, to protect, indemnify, pay and save Facing Agent harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys fees) (other than for
Taxes, which shall be covered by Section 4.7) which Facing Agent may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of the
Letters of Credit, except to the extent resulting primarily from the gross
negligence, bad faith or willful misconduct of Facing Agent or (ii) the failure
of Facing Agent to honor a drawing under any Letter of Credit as a result of any
act or omissions, whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority (all such acts or omissions
herein called "Government Acts"). As between Borrowers and Facing Agent,
Borrowers assume all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Facing Agent by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
Facing Agent shall not be responsible: (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of or any drawing under such
Letters of Credit, even if it should in
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fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged, provided such document appears on its face to
substantially comply with the requirements applicable to it; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (viii) for any consequences
arising from causes beyond the control of Facing Agent, including, without
limitation, any Government Acts. None of the above shall affect, impair, or
prevent the vesting of any of Facing Agent's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by Facing
Agent under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not put Facing
Agent under any resulting liability to Borrowers. Notwithstanding anything to
the contrary contained in this Agreement, Borrowers shall have no obligation to
indemnify Facing Agent in respect of any liability incurred by Facing Agent
arising primarily out of the gross negligence, bad faith or willful misconduct
of Facing Agent. The right of indemnification in the first paragraph of this
Section 2.9(g) shall not prejudice any rights that Borrowers may otherwise have
against Facing Agent with respect to a Letter of Credit issued hereunder.
(h) Stated Amount. The Stated Amount of each Letter of Credit
shall not be less than $100,000 or such lesser amount as Facing Agent has agreed
to.
(i) Increased Costs. If at any time after the Closing Date,
Facing Agent or any Lender determines that the introduction of or any change in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by Facing Agent
or such Lender with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by Facing Agent or participated in by any Lender, or (ii) impose
on Facing Agent or any Lender any other conditions relating, directly or
indirectly, to this Agreement or any Letter of Credit; and the result of any of
the foregoing is to increase the cost to Facing Agent or any Lender of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by Facing Agent or any Lender hereunder or reduce
the rate of return on its capital with respect to Letters of Credit, then, upon
demand to Borrowers by Facing Agent or any Lender (a copy of which demand shall
be sent by Facing Agent or such Lender to Agent), Borrowers shall pay to Facing
Agent or such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital (but excluding costs resulting
from (A) changes in the rate of tax on, or determined by reference to, the net
income or profits of such Facing Agent
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or Lender imposed by the jurisdiction in which such Facing Agent's or Lender's
principal office or applicable lending office is located and (B) United States
withholding taxes which shall be governed by the provisions of Section 4.7). In
determining such additional amounts pursuant to the preceding sentence, Facing
Agent or such Lender will act reasonably and in good faith and will, to the
extent the increased costs or reductions in amounts receivable or reductions in
rates of return relate to Facing Agent's or such Lender's letters of credit in
general and are not specifically attributable to the Letters of Credit
hereunder, use averaging and attribution methods which are reasonable and which
cover all letters of credit similar to the Letters of Credit issued by or
participated in by Facing Agent or such Lender whether or not the documentation
for such other Letters of Credit permit Facing Agent or such Lender to receive
amounts of the type described in this Section 2.9(i). Facing Agent or any
Lender, upon determining that any additional amounts will be payable pursuant to
this Section 2.9(i), will give prompt written notice thereof to Borrowers, which
notice shall include a certificate submitted to Borrowers by Facing Agent or
such Lender (a copy of which certificate shall be sent by Facing Agent or such
Lender to Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate Facing
Agent or such Lender, although failure to give any such notice shall not release
or diminish Borrowers' obligations to pay additional amounts pursuant to this
Section 2.9(i) provided that Borrowers shall not be required to compensate a
Lender or Facing Agent pursuant to this section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
Facing Agent, as the case may be, notifies Borrower in writing of the additional
amounts and of such Lender's or Facing Agent's intention to claim compensation
therefor; provided further that, if the change in law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
The certificate required to be delivered pursuant to this Section 2.9(i) shall,
absent manifest error, be final, conclusive and binding on Borrowers and Facing
Agent or the Lender, as applicable.
ARTICLE III
INTEREST AND FEES
Section 3.1. Interest.
(a) Base Rate Loans. Borrowers agree jointly and severally to
pay interest in respect of the unpaid principal amount of each Base Rate Loan at
a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin
from the date the proceeds thereof are made available to Borrowers until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan or (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 2.6.
(b) Eurodollar Loans. Borrowers agree jointly and severally
to pay interest in respect of the unpaid principal amount of each Eurodollar
Loan from the date the proceeds thereof are made available to Borrowers until
the earlier of (i) the maturity (whether by acceleration or otherwise) of such
Eurodollar Loan or (ii) the conversion of such Eurodollar Loan to a Base Rate
Loan pursuant to Section 2.6 at a rate per annum equal to the relevant
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
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(c) Payment of Interest. Interest on each Loan shall be
payable in arrears on each Interest Payment Date; provided, however, that
interest accruing pursuant to Section 3.1(e) shall be payable from time to time
on demand. Interest shall also be payable on all then outstanding Acquisition
Revolving Loans on the Acquisition Revolver Conversion Date, on all then
outstanding Revolving Loans on the Revolver Termination Date, on all then
outstanding Swing Line Loans on the fifth (5th) Business Day prior to the
Revolver Termination Date, and on all Loans on the date of repayment (including
prepayment) thereof (except that (i) voluntary prepayments of Revolving Loans
that are Base Rate Loans made pursuant to Section 4.3 on any day other than a
Quarterly Payment Date or the Revolver Termination Date or Acquisition Revolver
Conversion Date need not be made with accrued interest from the most recent
Quarterly Payment Date, provided such accrued interest is paid on the next
Quarterly Payment Date and (ii) voluntary prepayment of Swing Line Loans made
pursuant to Section 4.3 on any day other than a Quarterly Payment Date or on the
fifth Business Day prior to the Revolver Termination Date need not be made with
accrued interest from the most recent Quarterly Payment Date, provided such
accrued interest is paid on the next Quarterly Payment Date) and on the date of
maturity (by acceleration or otherwise) of such Loans. During the existence of
any Event of Default, interest on any Loan shall be payable on demand.
(d) Notification of Rate. Agent, upon determining the
interest rate for any Borrowing of Eurodollar Loans for any Interest Period,
shall promptly notify Borrowers and the Lenders thereof. Such determination
shall, absent manifest error and subject to Section 3.6, be final, conclusive
and binding upon all parties hereto.
(e) Default Interest. Notwithstanding the rates of interest
specified herein, effective immediately upon any failure to pay any Obligations
or any other amounts due under any of the Loan Documents when due, whether by
acceleration or otherwise, the principal balance of each Loan then outstanding
and, to the extent permitted by applicable law, any interest payment on each
Loan not paid when due or other amounts then due and payable shall bear interest
payable on demand, after as well as before judgment at a rate per annum equal to
the Default Rate.
(f) Maximum Interest. If any interest payment or other charge
or fee payable hereunder exceeds the maximum amount then permitted by applicable
law, Borrowers shall be jointly and severally obligated to pay the maximum
amount then permitted by applicable law and Borrowers shall continue to pay the
maximum amount from time to time permitted by applicable law until all such
interest payments and other charges and fees otherwise due hereunder (in the
absence of such restraint imposed by applicable law) have been paid in full.
Section 3.2. Fees.
(a) Commitment Fee. Borrowers agree jointly and severally to
pay to Agent for pro rata distribution to each Non-Defaulting Lender having a
Revolving Commitment (based on its Revolver Pro Rata Share) a commitment fee
(the "Commitment Fee") for the period commencing on the Initial Borrowing Date
to and including the Revolver Termination Date or the earlier termination of the
Revolving Commitments (and, in either case, repayment in full of the Revolving
Loans and payment in full, or cash collateralization by the deposit of cash into
the Collateral Account in amounts and pursuant to arrangements satisfactory to
Agent, of the LC
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Obligations), computed at a rate equal to the Applicable Commitment Fee
Percentage per annum on the average daily Total Available Revolving Commitment.
Unless otherwise specified, accrued Commitment Fees shall be due and payable (i)
on each Quarterly Payment Date, (ii) on the Revolver Termination Date and (iii)
upon any reduction or termination in whole or in part of the Revolving
Commitments (but only, in the case of a reduction, on the portion of the
Revolving Commitments then being reduced).
(b) Agency Fees. Borrowers agree jointly and severally to
pay to Agent for its own account, agency and other Loan fees in the amount and
at the times set forth in the letter agreement between Borrower and Agent.
Section 3.3. Computation of Interest and Fees; Changes in
Margins and Fees. Interest on all Loans and fees payable hereunder shall be
computed on the basis of the actual number of days elapsed over a year of 360
days; provided that interest on all Base Rate Loans based on the prime lending
rate shall be computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be. Each determination of an interest
rate by Agent pursuant to any provision of this Agreement shall be conclusive
and binding on Borrowers and the Lenders in the absence of manifest error. Agent
shall, at any time and from time to time upon request of Borrowers, deliver to
Borrowers a statement showing the quotations used by Agent in determining any
interest rate applicable to Eurodollar Loans pursuant to this Agreement. Each
change in the Applicable Base Rate Margin, Applicable Eurodollar Margin, LC
Commission, Rollover LC Commission or Applicable Commitment Fee Percentage as a
result of a change in Borrower's Most Recent Ratio of Total Debt to EBITDA shall
become effective on the date upon which financial statements reporting such
change are delivered to Agent pursuant to Section 7.1 and shall continue to be
effective until the next date on which financial statements reporting such
change are delivered pursuant to Section 7.1, in each case subject to the
proviso in the definition of "Most Recent Ratio of Total Debt to EBITDA".
Section 3.4. Interest Periods. At the time it gives any Notice
of Borrowing or a Notice of Conversion or Continuation with respect to
Eurodollar Loans, a Borrower shall elect, by giving Agent written notice, the
interest period (each an "Interest Period") which Interest Period shall, at the
option of such Borrower, be one, two, three or six months or, if available to
each of the applicable Lenders (as determined by each such applicable Lender in
its sole discretion) a nine or twelve month period, or during the Syndication
Period only, a period of up to 14 days provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of such Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Loan of a
different Type) and each Interest Period occurring thereafter in
respect of such Eurodollar Loan shall commence on the last day of the
immediately preceding Interest Period;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such
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Interest Period shall end on the last Business Day of such calendar
month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(v) no Interest Period may be selected at any time when an
Unmatured Event of Default or Event of Default is then in existence;
(vi) no Interest Period shall extend beyond the Term A Loan
Maturity Date for any Term A Loan, the Term B Loan Maturity Date for
any Term B Loan or the Revolver Termination Date for any Revolving
Loan; and
(vii) no Interest Period in respect to any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of Term Loans will be required to be made under
Section 4.4(b), (c), (d), (e), (f), or (h), as the case may be, if the
aggregate principal amount of Term Loans which have Interest Periods
which will expire after such date will be in excess of the aggregate
principal amount of Term Loans then outstanding less the aggregate
amount of such required prepayment.
Section 3.5. Compensation for Funding Losses.
(a) Borrowers agree jointly and severally to compensate each
Lender, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Loans to the
extent not recovered by the Lender in connection with the liquidation or
re-employment of such funds and including the compensation payable by such
Lender to a Participant but excluding loss of anticipated profit with respect to
any Loans) and any loss sustained by such Lender in connection with the
liquidation or re-employment of such funds (including, without limitation, a
return on such liquidation or re-employment that would result in such Lender
receiving less than it would have received had such Eurodollar Loan remained
outstanding until the last day of the Interest Period applicable to such
Eurodollar Loans) which such Lender may sustain as a result of: (i) for any
reason (other than a default by such Lender or Agent) a continuation or
Borrowing of, or conversion from or into, Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion or
Continuation (whether or not withdrawn); (ii) any payment, prepayment or
conversion or continuation of any of its Eurodollar Loans occurring for any
reason whatsoever on a date which is not the last day of an Interest Period
applicable thereto; (iii) any repayment of any of its Eurodollar Loans not being
made on the date specified in a notice of payment given by a Borrower; or (iv)
(A) any other failure by Borrowers to repay Eurodollar Loans when required by
the terms of this Agreement or (B) an election made by a Borrower pursuant to
Section 3.7. A written notice as to additional amounts owed such Lender
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under this Section 3.5 and delivered to Borrowers and Agent by such Lender
shall, absent manifest error, be final, conclusive and binding for all purposes;
provided that Borrowers shall not be required to compensate such Lender pursuant
to this Section for any losses, expenses and liabilities incurred more than 180
days prior to the date that such Lender notifies Borrowers thereof.
(b) Calculation of all amounts payable to a Lender under
this Section 3.5 shall be made as though that Lender had actually funded its
relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of that Loan,
having a maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that Lender to a
domestic office of that Lender in the United States of America; provided,
however, that each Lender may fund each of its Eurodollar Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 3.5.
Section 3.6. Increased Costs, Illegality, Etc.
(a) Generally. In the event that any Lender shall have
determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clause (i)
below, may be made only by Agent):
(i) on any Interest Rate Determination Date that, by reason
of any changes arising after the Closing Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that any Lender shall incur increased costs
or reduction in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
Closing Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payments to any Lender of the
principal of or interest on the Obligations or any other amounts
payable hereunder (except for (a) changes in the rate of tax on, or
determined by reference to, the net income or profits of such Lender
imposed by the jurisdiction in which its principal office or applicable
lending office is located and (b) United States withholding taxes,
which shall be governed by the provisions of Section 4.7) or (B) a
change in official reserve requirements (but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances
since the Closing Date affecting such Lender or the interbank
Eurodollar market or the position of such Lender in such market
(excluding, however, differences in a Lender's cost of funds from those
of Agent which are solely the result of credit differences between such
Lender and Agent); or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y)
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impossible by compliance by any Lender in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market; then, and in any such event, such Lender (or Agent,
in the case of clause (i) above) shall promptly give notice (by
telephone confirmed in writing) to Borrowers and, except in the case of
clause (i) above, to Agent of such determination (which notice Agent
shall promptly transmit to each of the other Lenders). Thereafter (x)
in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as Agent notifies Borrowers and the Lenders
that the circumstances giving rise to such notice by Agent no longer
exist (which notice Agent shall promptly transmit upon learning of the
availability of Eurodollar Loans), and any Notice of Borrowing or
Notice of Conversion or Continuation given by any Borrower with respect
to Eurodollar Loans (other than with respect to conversions to Base
Rate Loans) which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by Borrowers, (y) in the case of
clause (ii) above, Borrowers agree jointly and severally to pay to such
Lender, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such
increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such
Lender, showing in reasonable detail the basis for the calculation
thereof, submitted to Borrowers by such Lender shall, absent manifest
error, be final and conclusive and binding on all the parties hereto;
however the failure to give any such notice shall not release or
diminish Borrowers' obligations to pay additional amounts pursuant to
this Section 3.6 (a)(y)) provided that Borrowers shall not be required
to compensate such Lender pursuant to this section for any increased
costs or reductions incurred more than 180 days prior to the date that
such Lender notifies Borrowers in writing of the increased costs or
reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the change in law giving rise to
such increased costs or reductions is retroactive, then the 180-day
period referred to above shall be extended to include the period of
retroactive effect thereof and (z) in the case of clause (iii) above,
Borrowers shall take one of the actions specified in Section 3.6(b) as
promptly as possible and, in any event, within the time period required
by law. In determining such additional amounts pursuant to clause (y)
of the immediately preceding sentence, each Lender shall act reasonably
and in good faith and will, to the extent the increased costs or
reductions in amounts receivable relate to such Lender's loans in
general and are not specifically attributable to a Loan hereunder, use
averaging and attribution methods which are reasonable and which cover
all loans similar to the Loans made by such Lender whether or not the
loan documentation for such other loans permits the Lender to receive
increased costs of the type described in this Section 3.6(a).
(b) Eurodollar Loans. At any time that any Eurodollar Loan is
affected by the circumstances described in Section 3.6(a)(ii) or (iii),
Borrowers may (and, in the case of a Eurodollar Loan affected by the
circumstances described in Section 3.6(a)(iii), shall) either (i) if the
affected Eurodollar Loan is then being made initially or pursuant to a
conversion, by giving Agent telephonic notice (confirmed in writing) on the same
date that Borrowers were notified by the affected Lender or Agent pursuant to
Section 3.6(a)(ii) or (iii), cancel the respective
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Borrowing, or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' written notice to Agent, require the affected Lender
to convert such Eurodollar Loan into a Base Rate Loan, provided, that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 3.6(b).
(c) Capital Requirements. If any Lender determines that the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of law)
concerning capital adequacy, or any change in (after the Closing Date)
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitments
hereunder or its obligations hereunder, then Borrowers agree jointly and
severally to pay to such Lender, upon its written demand therefor, such
additional amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of capital. In determining such additional amounts,
each Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable and which will, to the extent the
increased costs or reduction in the rate of return relates to such Lender's
commitments or obligations in general and are not specifically attributable to
the Commitments and obligations hereunder, cover all commitments and obligations
similar to the Commitments and obligations of such Lender hereunder whether or
not the loan documentation for such other commitments or obligations permits the
Lender to make the determination specified in this Section 3.6(c), and such
Lender's determination of compensation owing under this Section 3.6(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 3.6(c), will give prompt written notice thereof
to Borrowers, which notice shall show in reasonable detail the basis for
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish any of Borrowers' obligations to pay
additional amounts pursuant to this Section 3.6(c) provided that Borrowers shall
not be required to compensate such Lender pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that
such Lender notifies Borrowers in writing of the increased costs or reductions
and of such Lender's intention to claim compensation thereof; provided further
that, if the change in law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
(d) Change of Lending Office. Each Lender which is or will
be owed compensation pursuant to Section 3.6(a) or (c) or Section 2.9(i) will,
if requested by Borrowers, use reasonable efforts (subject to overall policy
considerations of such Lender) to cause a different branch or Affiliate to make
or continue a Loan or Letter of Credit if such designation will avoid the need
for, or materially reduce the amount of, such compensation to such Lender and
will not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender as determined by such Lender in its sole discretion and will not result
in the imposition upon Borrowers of an increased liability for Taxes pursuant to
Section 3.6(a) or (c), Section 2.9(i) or Section 4.7. Borrowers hereby agree
jointly and severally to pay all reasonable expenses incurred by any Lender in
utilizing a different branch or Affiliate pursuant to this Section 3.6(d).
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Nothing in this Section 3.6(d) shall affect or postpone any of the obligations
of any Borrower or the right of any Lender provided for herein.
Section 3.7. Replacement of Affected Lenders. (x) If any
Revolving Lender becomes a Defaulting Lender or otherwise defaults in its
Obligations to make Loans or fund Unpaid Drawings, (y) if any Lender (or in the
case of Section 2.9(i), Facing Agent) is owed increased costs under Section
3.6(a)(ii) or (iii), Section 3.6(c), Section 2.9(i), or any Borrower is required
to make any payments under Section 4.7(c) to any Lender, in each case materially
in excess of those to the other Lenders or (z) as provided in Section 12.1(b) in
the case of refusals by a Lender to consent to proposed amendments, changes,
supplements, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders, Borrowers shall have the
right, if no Event of Default or Unmatured Event of Default then exists, to
replace such Lender (the "Replaced Lender") with one or more other Eligible
Assignee or Eligible Assignees, none of whom shall constitute a Defaulting
Lender at the time of such replacement (collectively, the "Replacement Lender")
reasonably acceptable to Agent, provided that (i) at the time of any replacement
pursuant to this Section 3.7, the Replacement Lender shall enter into one or
more assignment agreements, in form and substance reasonably satisfactory to
Agent, pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of, and participation in Letters of Credit and
Swing Line Loans by, the Replaced Lender and (ii) all obligations of Borrowers
owing to the Replaced Lender (including, without limitation, such increased
costs and excluding those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being paid)
shall be paid in full to such Replaced Lender concurrently with such
replacement. Upon the execution of the respective assignment documentation, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by Borrowers, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to constitute a
Lender hereunder, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Lender. Notwithstanding
anything to the contrary contained above, no Lender that acts as a Facing Agent
may be replaced hereunder at any time which it has Letters of Credit outstanding
hereunder unless arrangements reasonably satisfactory to such Facing Agent
(including the furnishing of a standby letter of credit in form and substance,
and issued by an issuer reasonably satisfactory to such Facing Agent or the
depositing of cash collateral into the Collateral Account in amounts and
pursuant to arrangements reasonably satisfactory to such Facing Agent) have been
made with respect to such outstanding Letters of Credit.
ARTICLE IV
REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS
Section 4.1. Voluntary Reduction of Commitments. (a) Upon at
least three (3) Business Days' prior written notice (or telephonic notice
confirmed in writing) to Agent at the Notice Office (which notice Agent shall
promptly transmit to each Lender), Borrower shall have the right, without
premium or penalty, to terminate the unutilized portion of the Revolving
Commitments or the Swing Line Commitment, as the case may be, in part or in
whole; provided that (i) any such voluntary termination of the Revolving
Commitments shall apply to proportionately and permanently reduce the Revolving
Commitment of each Revolving Lender,
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(ii) any partial voluntary reduction pursuant to this Section 4.1 shall be in
the amount of at least $5,000,000 and integral multiples of $1,000,000 in excess
of that amount, (iii) any such voluntary termination of the Revolving
Commitments shall occur simultaneously with a voluntary prepayment, pursuant to
Section 4.3 such that the total of the Revolving Commitments shall not be
reduced below the aggregate principal amount of outstanding Acquisition
Revolving Loans and Working Capital Loans plus the aggregate LC Obligations and
the Swing Line Commitment, as the case may be and (iv) no partial voluntary
reduction shall occur prior to the Acquisition Revolver Conversion Date.
(b) In the event of refusals by a Lender to consent to
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as provided in
Section 12.1(b), Borrowers shall have the right, upon three (3) Business Days'
prior written notice to Agent (which notice Agent shall promptly transmit to
each of the Lenders), to terminate the entire Revolving Commitment and Term A
Commitment of such Lender, so long as all Loans, together with accrued and
unpaid interest, fees and all other amounts, due and owing to such Lender are
repaid concurrently with the effectiveness of such termination at which time
Schedule 1.1(a) shall be deemed modified to reflect such changed amounts
pursuant to Section 4.3(b) and Borrowers cash collateralize such Lender's
Revolver Pro Rata Share and/or Term A Pro Rata Share of the LC Obligations and
Rollover LC Obligations (in the manner set forth in Section 4.4(a)) then
outstanding. At such time, such Lender shall no longer constitute a "Lender" for
purposes of this Agreement, except with respect to indemnifications under this
Agreement which shall survive as to such repaid Lender.
Section 4.2. Mandatory Reductions of Commitments.
(a) Reduction of Revolving Commitments. The Revolving
Commitments shall be reduced at the time and in the amounts required to be
reduced pursuant to Section 4.4(c), (d), (e), (f) and (g). On the Acquisition
Revolver Conversion Date, the Revolving Commitments shall be reduced by an
amount equal to the greater of (i) the aggregate principal amount of all
outstanding Acquisition Term Loans on such date immediately after giving effect
to the conversion of Acquisition Revolving Loans into Acquisition Term Loans on
such date and (ii) $50,000,000.
(b) Reduction of Term Commitments. The Term A Commitments
shall be reduced on the Initial Borrowing Date by the aggregate principal amount
of Term A Loans funded on such date and on any subsequent date of funding of any
Term A Loans, to the extent and on such date of any subsequent funding of any
Term A Loans, and the remaining portion of the Term A Commitments, if any, shall
terminate on the expiration date of the Rollover Letters of Credit. The Term B
Commitments shall terminate on the Initial Borrowing Date, after giving effect
to the Borrowing of Term B Loans on such date.
(c) Proportionate Reductions. Each reduction or adjustment
to the Term A Commitments, Term B Commitments or the Revolving Commitments
pursuant to this Section 4.2 shall apply proportionately to the Term A
Commitments, Term B Commitments or the Revolving Commitment, as the case may be,
of each Lender.
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(d) Reduction of Commitments. The Commitments will terminate
in their entirety on December 15, 1999 unless the Initial Borrowing Date has
occurred on or before such date.
(e) Reductions Following Term Loan Repayments. In addition
to any other mandatory commitment reductions pursuant to this Section 4.2, on
each date upon which a mandatory repayment of Term Loans pursuant to Section 4.4
(other than pursuant to Section 4.4(d)) is required (and exceeds the aggregate
principal amount of Term Loans then outstanding) or would be required if Term
Loans were then outstanding, the Total Available Revolving Commitment shall be
permanently reduced by the amount, if any, by which the amount required to be
applied pursuant to said Section 4.4 (determined as if an unlimited amount of
Term Loans were actually outstanding) exceeds the aggregate principal amount of
Term Loans then outstanding.
Section 4.3. Voluntary Prepayments. (a) Borrowers shall have
the right to prepay the Loans in whole or in part from time to time on the
following terms and conditions: (i) Borrowers shall give Agent irrevocable
written notice at its Notice Office (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans or Swing Line Loans, the amount of
such prepayment and the specific Borrowings to which such prepayment is to be
applied, which notice shall be given by Borrowers to Agent by 12:00 noon (New
York City time) (x) on the date of prepayment with respect to Revolving Loans
and Swing Line Loans which are Base Rate Loans, (y) at least one Business Day
prior to the date of such prepayment with respect to Term Loans that are Base
Rate Loans and (z) at least three Business Days prior to the date of such
prepayment with respect to Eurodollar Loans and which notice shall (except in
the case of Swing Line Loans) promptly be transmitted by Agent to each of the
applicable Lenders; (ii) each partial prepayment of any Borrowing (other than a
Borrowing of Swing Line Loans) shall be in an aggregate principal amount of at
least $1,000,000 and each partial prepayment of a Swing Line Loan shall be in an
aggregate principal amount of at least $500,000; provided that no partial
prepayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the aggregate principal amount of the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) Eurodollar Loans may only be prepaid pursuant to this Section 4.3
on the last day of an Interest Period applicable thereto or on any other day
subject to Section 3.5; (iv) each prepayment in respect of any Borrowing shall
be applied pro rata among the Loans comprising such Borrowing provided, that
such prepayment shall not be applied to any Revolving Loans of a Defaulting
Lender at any time when the aggregate amount of Revolving Loans of any
Non-Defaulting Lender exceeds such Non-Defaulting Lender's Revolver Pro Rata
Share of all Revolving Loans then outstanding; and (v) in the event that all or
any portion of the Term B Loans are prepaid on or before the second anniversary
of the Closing Date, such prepayment shall be made at 101% of the principal
amount of the Term B Loan repaid. Voluntary prepayments of Term Loans shall be
applied first to the unpaid Scheduled Term A Repayments, the Scheduled Term B
Repayments and Scheduled Acquisition Repayments due within the 12 month period
following the date of such prepayment in direct order of maturity and,
thereafter, shall be applied in proportional amounts equal to the Term A
Percentage, Term B Percentage and Acquisition Percentage (in each case, after
giving effect to the prepayments made to the unpaid Scheduled Term A Repayments,
Scheduled Term B Repayments and Scheduled Acquisition Repayments due within such
twelve month period as specified above), as the case may be, of such remaining
prepayment, if any, and within each
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Term Loan, shall be applied to reduce the remaining Scheduled Term A Repayments,
Scheduled Term B Repayments and Scheduled Acquisition Repayments on a pro rata
basis. Unless otherwise specified by Borrower, such prepayment shall be applied
first to the payment of Base Rate Loans and second to the payment of such
Eurodollar Loans as Borrower shall request (and in the absence of such request,
as Agent shall determine so as to minimize, if possible, any amounts due under
Section 3.5). The notice provisions, the provisions with respect to the minimum
amount of any prepayment, and the provisions requiring prepayments in integral
multiples above such minimum amount of this Section 4.3 are for the benefit of
Agent and may be waived unilaterally by Agent.
(b) In the event of refusals by a Lender to consent to
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as provided in
Section 12.1(b), Borrowers shall have the right, upon three (3) Business Days'
prior written notice to Agent (which notice Agent shall promptly transmit to
each of the Lenders), to repay all Loans, together with accrued and unpaid
interest, fees and all other amounts due and owing to such Lender in accordance
with said Section 12.1(b), so long as (A) in the case of the repayment of
Revolving Loans of any Revolving Lender pursuant to this clause (b), the
Revolving Commitment of such Revolving Lender is terminated concurrently with
such repayment pursuant to Section 4.1(b) and, in the case of the repayment of
Term A Loans of any Term A Lender pursuant to this clause (b), the Term A
Commitment of such Term A Lender is terminated concurrently with such repayment
pursuant to Section 4.1(b) and (c) and (B) in the case of the repayment of Loans
of any Lender, the consents required by Section 12.1(b) in connection with the
repayment pursuant to this clause (b) shall have been obtained.
Section 4.4. Mandatory Prepayments.
(a) Prepayment Upon Overadvance. Borrowers shall prepay the
outstanding principal amount of the Acquisition Revolving Loans, Working Capital
Loans or the Swing Line Loan on any date on which the aggregate outstanding
principal amount of such Loans together with the aggregate LC Obligations (after
giving effect to any other repayments or prepayments on such day) exceeds the
aggregate Revolving Commitments or the Swing Line Commitment, as the case may
be, in the amount of such excess. In addition, Borrowers shall prepay the
outstanding principal amount of (i) Acquisition Revolving Loans on any date on
which the aggregate outstanding principal amount of Acquisition Revolving Loans
exceeds the Acquisition Revolving Sublimit and (ii) Working Capital Loans on any
date on which the aggregate outstanding principal amount of Working Capital
Loans, when added to the then outstanding Swing Line Loans and the aggregate LC
Obligations, exceeds the Working Capital Sublimit, in each case in the amount of
such excess. If, after giving effect to the prepayment of all outstanding
Acquisition Revolving Loans and Working Capital Loans, the aggregate LC
Obligations exceeds the Revolving Commitments then in effect, Borrowers shall
cash collateralize LC Obligations by depositing, pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
Agent, cash with Agent in an amount equal to the difference between such LC
Obligations and the Revolving Commitments then in effect. Agent shall establish
in its name for the benefit of the Revolving Lenders a cash collateral account
(the "Collateral Account") into which it shall deposit such cash to hold as
collateral security for the LC Obligations.
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(b) Scheduled Term Repayments.
(i) Scheduled Term A Repayments. Borrowers agree jointly and
severally to pay Scheduled Term A Repayments on the Term A Loans until
the Term A Loans are paid in full in the amounts and at the times
specified in the definition of Scheduled Term A Repayments to the
extent that prepayments have not previously been applied to such
Scheduled Term A Repayments (and such Scheduled Term A Repayments have
not otherwise been reduced) pursuant to the terms hereof.
(ii) Scheduled Term B Repayments. Borrowers agree jointly and
severally to pay Scheduled Term B Repayments on the Term B Loans until
the Term B Loans are paid in full in the amounts and at the times
specified in the definition of Scheduled Term B Repayments to the
extent that prepayments have not previously been applied to such
Scheduled Term B Repayments (and such Scheduled Term B Repayments have
not otherwise been reduced) pursuant to the terms hereof.
(iii) Scheduled Acquisition Repayments. Borrowers agree
jointly and severally to pay Scheduled Acquisition Repayments on the
Acquisition Term Loans until the Acquisition Term Loans are repaid in
full in the amounts and at the times specified in the definition of
Scheduled Acquisition Repayments to the extent that prepayments have
not previously been applied to such Scheduled Acquisition Repayments
(and such Scheduled Acquisition Repayments have not otherwise been
reduced) pursuant to the terms hereof.
(c) Mandatory Prepayment Upon Asset Disposition. On the
first Business Day after the date of receipt thereof by Holdings, Borrowers
and/or any of their Subsidiaries of Net Sale Proceeds from any Asset
Disposition, an amount equal to 100% of the Net Sale Proceeds from such Asset
Disposition shall be applied as a mandatory repayment of principal of the Loans
as provided in Section 4.5, in each case subject to modification of such
application as set forth in Section 4.5(d), provided, that with respect to no
more than $5,000,000 in the aggregate of such Net Sale Proceeds (but excluding
any Net Sale Proceeds from any Designated Asset Disposition) in any Fiscal Year
of Holdings, the Net Sale Proceeds therefrom shall not be required to be so
applied on such date to the extent that no Event of Default or Unmatured Event
of Default then exists at the time of receipt of such proceeds and Borrowers
deliver a certificate to Agent on or prior to such date stating that such Net
Sale Proceeds shall be used or contractually committed to be used to purchase
assets used or to be used in the businesses referred to in Section 8.12 within
180 days following the date of such Asset Disposition (which certificate shall
set forth the estimates of the proceeds to be so expended), provided, further,
that (1) if all or any portion of such Net Sale Proceeds not so applied to the
repayment of Loans are not so used (or contractually committed to be used)
within such 180 day period, such remaining portion shall be applied on the last
day of such 180 day period as a mandatory repayment of principal of outstanding
Loans as provided above in this Section 4.4(c) and (2) if all or any portion of
such Net Sale Proceeds are not required to be applied on the 180th day referred
to above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this Section 4.4(c), and provided,
further,
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that Net Sale Proceeds from any Designated Asset Disposition shall be applied as
a mandatory repayment of principal of Acquisition Loans as provided in Section
4.5 in an amount equal to the aggregate principal amount of Acquisition Loans
incurred to finance the Permitted Acquisition which relates to such Designated
Asset Disposition, and any excess Net Sale Proceeds, after giving effect to such
repayment, shall be required to be so applied to the repayment of the Loans as
provided above.
(d) Mandatory Prepayment With Excess Cash Flow. On each Excess
Cash Payment Date, an amount equal to 50% of Excess Cash Flow, if positive, of
Holdings and its Subsidiaries for the most recent Excess Cash Flow Period ending
prior to such Excess Cash Payment Date shall be applied as a mandatory repayment
of principal of the Loans as provided in Section 4.5 in each case subject to
modification of such application as set forth in Section 4.5(d).
(e) Mandatory Payment With Proceeds of Capital Stock. On the
first Business Day after receipt thereof by Holdings and/or any of its
Subsidiaries after the Initial Borrowing Date, an amount equal to 50% of the Net
Offering Proceeds of the sale or issuance of Capital Stock or Junior
Subordinated Notes of (or cash capital contributions to) Holdings or any of its
Subsidiaries shall be applied as a mandatory repayment of principal of the Term
Loans as provided in Section 4.5 in each case subject to modification of such
application as set forth in Section 4.5(d); provided, however, that so long as
no Event of Default or Unmatured Event of Default (but only with respect to
clauses (ii) and (iii) below) exists at the time of receipt, the following Net
Offering Proceeds shall not be required to be so applied: (i) equity
contributions permitted under Section 8.8 to any Subsidiary Guarantor made by
any Borrower or any of their Subsidiaries; (ii) Net Offering Proceeds received
as a result of the exercise of any stock options exercised by or any Capital
Stock or Junior Subordinated Notes issued to any director, officer or employee
of Holdings or any of its Subsidiaries to the extent the proceeds excluded
pursuant to this clause (ii) do not exceed $5,000,000 in the aggregate for all
such exercises and issuances; (iii) Net Offering Proceeds of any Capital Stock
of Holdings issued as consideration in any Permitted Acquisition; and (iv) Net
Offering Proceeds received as a result of any Capital Stock or Junior
Subordinated Notes issued to any existing shareholder (other than a Person
identified in clause (ii) above) of Holdings as of the Closing Date (and any
Affiliate of such shareholder).
(f) Mandatory Prepayment Upon Incurrence of Indebtedness. On
the first Business Day after receipt thereof by Holdings and/or any of its
Subsidiaries after the Initial Borrowing Date, an amount equal to 100% of the
Net Offering Proceeds of the incurrence of Indebtedness (other than Indebtedness
relating to Junior Subordinated Notes) by Holdings and/or any of its
Subsidiaries (other than Indebtedness permitted to be incurred by Section 8.2)
shall be applied as a mandatory repayment of principal of the Term Loans as
provided in Section 4.5 in each case subject to modification of such application
as set forth in Section 4.5(d).
(g) Mandatory Prepayment Upon Recovery Event. Within ten (10)
days following each date on which Holdings or any of its Subsidiaries receives
any cash proceeds from any Recovery Event, an amount equal to 100% of the
proceeds of such Recovery Event (net of reasonable costs and taxes incurred in
connection with such Recovery Event) shall be applied as a mandatory repayment
of principal of the Loans as provided in Section 4.5 in each case subject to
modification of such application as set forth in Section 4.5(d), provided that
(1) so long as no Event of Default or Unmatured Event of Default then exists, if
the net proceeds from
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any Recovery Event are less than $1,000,000, then no prepayment shall be
required pursuant to this Section 4.4(g), and (2) so long as no Event of Default
or Unmatured Event of Default then exists, with respect to any single or series
of related Recovery Events the net proceeds therefrom which are equal to or
greater than $1,000,000 but less than $5,000,000, such proceeds shall not be
required to be so applied on such date to the extent that (x) Borrowers have
delivered a certificate to the Agent on or prior to such date stating that such
proceeds shall be used to replace or restore any properties or assets in respect
of which such proceeds were paid within 180 days following the date of the
receipt of such proceeds (which certificate shall set forth the estimates of the
proceeds to be so expended) and (y) such proceeds are deposited in an escrow
account with Agent for the benefit of the Secured Parties (the "Recovery Event
Escrow Account"), from which escrow account amounts may be withdrawn only to
repay the Loans or to be used for the purposes described in clause (x) above,
provided, further, that (i) if the amount of such proceeds from any single or
series of related Recovery Events exceeds $2,000,000, then the entire amount and
not just the portion in excess of $2,000,000 shall be applied as a mandatory
repayment of Loans as provided above in this Section 4.4(g), (ii) if all or any
portion of such proceeds not required to be applied to the repayment of Loans
pursuant to the first proviso of this Section 4.4(g) are not so used (or
contractually committed to be used) within 180 days after the day of the receipt
of such proceeds, such remaining portion shall be applied on the last day of
such period as a mandatory repayment of principal of the Loans as provided in
this Section 4.4(g) and (iii) if all or any portion of such proceeds are not
required to be applied on the 180th day referred to in clause (ii) above because
such amount is contractually committed to be used and subsequent to such date
such contract is terminated or expires without such portion being so used, then
such remaining portion shall be applied on the date of such termination or
expiration as a mandatory repayment of principal of outstanding Loans as
provided in this Section 4.4(g).
(h) Mandatory Prepayment Upon Issuance of Senior Subordinated
Notes. On the date of receipt thereof by Borrowers, an amount equal to the cash
proceeds of the issuance of any Senior Subordinated Notes in accordance with
Section 8.2(e), after giving effect to the repayment in full of all indebtedness
and obligations owing under the Bridge Loan Documents and all fees, costs and
expenses incurred in connection with the issuance of the Senior Subordinated
Notes, shall be applied as a mandatory repayment of principal of the Term B
Loans as provided in Section 4.5 subject to modification as set forth in
Sections 4.5(c) and (d).
Section 4.5. Application of Prepayments.
(a) Prepayments. Except as expressly provided in this
Agreement, all prepayments of principal made by Borrowers pursuant to Section
4.4 (other than Section 4.4(h) and prepayments of Net Cash Proceeds for
Designated Asset Dispositions pursuant to Section 4.4(c)) shall be applied (i)
first to the payment of the unpaid principal amount of the Term Loans (with,
except as provided in the second succeeding sentence, the Term A Percentage of
such repayment to be applied as a repayment of Term A Loans, the Term B
Percentage of such repayment to be applied as a repayment of Term B Loans and
the Acquisition Percentage of such repayment to be applied as a repayment of
Acquisition Term Loans), and second to the payment of the then outstanding
balance of the Revolving Loans and the cash collateralization of LC Obligations
and Rollover LC Obligations; (ii) within each of the foregoing Loans, first to
the payment of Base Rate Loans and second to the payment of Eurodollar Loans;
and (iii) with respect to Eurodollar Loans, in such order as Borrowers shall
request (and in the absence of such
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request, as Agent shall determine so as to minimize, if possible, any amounts
due under Section 3.5). Except as expressly provided in this Agreement, all
prepayments of principal made by Borrowers pursuant to Section 4.4(h) shall be
applied (i) to the payment of the unpaid principal amount of the Term B Loans
and (ii) first to the payment of Base Rate Loans and second to the payment of
Eurodollar Rate Loans, in such order as Borrowers shall request (and in the
absence of such request, as Agent shall determine so as to minimize, if
possible, any amounts due under Section 3.5). All prepayments of Acquisition
Loans with Net Cash Proceeds from Designated Asset Dispositions pursuant to
Section 4.4(c) shall be applied (i) to the payment of the unpaid principal
amount of the Acquisition Loans and (ii) first to the payment of Base Rate Loans
and second to the payment of Eurodollar Rate Loans, in such order as Borrowers
shall request (and in the absence of such request, as Agent shall determine so
as to minimize, if possible, any amounts due under Section 3.5). Each prepayment
of the Term Loans pursuant to Section 4.4(c), (d), (e), (f) and (g) shall be
applied first to the Term Loans based on the aggregate principal amount of the
unpaid Scheduled Term A Repayments, Scheduled Term B Repayments and Scheduled
Acquisition Repayments due within the twelve month period following the date of
such prepayment and shall be applied to such Scheduled Term A Repayments,
Scheduled Term B Repayments and Scheduled Acquisition Repayments in direct order
of maturity, and, thereafter, shall be allocated second to the Term Loans in
proportional amounts equal to the Term A Percentage, Term B Percentage and
Acquisition Percentage (in each case, after giving effect to the prepayments
made to the unpaid Scheduled Term A Repayments, Scheduled Term B Repayments and
Scheduled Acquisition Repayments due within such twelve month period as
specified above), as the case may be, of such remaining prepayment, if any and,
within each Term Loan, shall be applied to reduce the remaining Scheduled Term A
Repayments, Scheduled Term B Repayments and Scheduled Acquisition Repayments on
a pro rata basis (based upon the then remaining principal amount of such
Scheduled Term A Repayments, Scheduled Term B Repayments and Scheduled
Acquisition Repayments, respectively.) Any prepayment of the Acquisition
Revolving Loans and Working Capital Loans pursuant to this section shall be
allocated first to the Acquisition Revolving Loans until paid in full and second
to the Working Capital Loans. If any prepayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount, such
Borrowing shall immediately be converted into Base Rate Loans. All prepayments
shall include payment of accrued interest on the principal amount so prepaid,
shall be applied to the payment of interest before application to principal and
shall include amounts payable, if any, under Section 3.5.
(b) Payments. All regular installment payments of principal on
the Term Loans shall be applied (i) first to the payment of Base Rate Loans and
second to the payment of Eurodollar Loans and (ii) with respect to Eurodollar
Loans, in such order as Borrowers shall request (and in the absence of such
request, as Agent shall determine). All payments shall include payment of
accrued interest on the principal amount so paid, shall be applied to the
payment of interest before application to principal and shall include amounts
payable, if any, under Section 3.5.
(c) Term B Call Protection. Notwithstanding anything to the
contrary herein, in the event that any payment is received in respect of Term B
Loans prior to December 15, 2001 pursuant to Section 4.3 or 4.4(h), such
repayment shall be made at 101% of the principal amount
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of the Term B Loans repaid and repayment of other Loans, if any, shall be
adjusted accordingly to allow such repayment.
(d) Waiver of Certain Prepayments by Term B Lenders.
Notwithstanding anything to the contrary contained in this Section 4.5 or
elsewhere in this Agreement (including, without limitation, in Section 12.1),
with respect to the amount of any prepayment described in Sections 4.3, 4.4(d),
(e), (f) and (g) that is allocated to the then outstanding Term B Loans (such
amounts, the "Waivable Prepayment"), Borrowers shall, not less than 3 nor more
than 20 Business Days prior to the date specified therein for such prepayment
(the "Mandatory Prepayment Date"), provide to each Term B Lender a written
notice (each, a "Prepayment Option Notice"), which shall refer to this Section
4.5(d) and shall (i) set forth the Waivable Prepayment and the portion thereof
that the applicable Term B Lender (each, a "Prepayment Lender") will be entitled
to receive if it accepts such mandatory prepayment in accordance with this
clause (i), (ii) request such Prepayment Lender to notify Agent in writing no
later than the Business Day prior to the Mandatory Prepayment Date of such
Prepayment Lender's acceptance or rejection (in each case, in whole and not in
part) of its share of the Waivable Prepayment and (iii) inform such Prepayment
Lender that failure by such Prepayment Lender to reject in writing its share of
the Prepayment Amount on or before the Business Day prior to the Mandatory
Prepayment Date shall be deemed an acceptance of such amount. Each Prepayment
Option Notice shall be given by telecopy, confirmed by hand delivery, overnight
courier service or registered or certified mail, in each case addressed as
provided in Section 12.3. On the Mandatory Prepayment Date, Borrowers shall
apply the aggregate amount necessary to prepay that portion of the Prepayment
Amount in respect of which such Prepayment Lenders have accepted prepayment as
described above (such Prepayment Lenders, the "Accepting Lenders") with the
remainder of the Waivable Prepayment applied to the Term A Loans and Acquisition
Term Loans in accordance with Section 4.5(a), as if all Term B Loans had been
paid in full.
Section 4.6. Method and Place of Payment.
(a) Except as otherwise specifically provided herein, all
payments under this Agreement shall be made to Agent, for the ratable account of
the Lenders entitled thereto, not later than 1:00 P.M. (New York City time) on
the date when due and shall be made in immediately available funds in lawful
money of the United States of America and in each case to the account specified
therefor for Agent or if no account has been so specified at the Payment Office,
it being understood that with respect to payments in Dollars, written telex or
telecopy notice by Borrowers to Agent to make a payment from the funds in
Borrowers' account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account. Agent will thereafter
cause to be distributed on the same day (if payment was actually received by
Agent prior to 1:00 P.M. (New York City time) on such day) like funds relating
to the payment of principal or interest or fees ratably to the Lenders entitled
to receive any such payment in accordance with the terms of this Agreement. If
and to the extent that any such distribution shall not be so made by Agent in
full on the same day (if payment was actually received by Agent prior to 1:00
P.M. (New York City time) on such day), Agent shall pay to each Lender its
ratable amount thereof and each such Lender shall be entitled to receive from
Agent, upon demand, interest on such amount at the overnight Federal Funds Rate
for each day from the date such amount is paid to Agent until the date Agent
pays such amount to such Lender.
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(b) Any payments under this Agreement which are made by
Borrowers later than 1:00 P.M. (New York City time) shall, for the purpose of
calculation of interest, be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension, except that with respect to Eurodollar
Loans, if such next succeeding Business Day is not in the same month as the date
on which such payment would otherwise be due hereunder or under any Note, the
due date with respect thereto shall be the next preceding applicable Business
Day.
Section 4.7. Net Payments.
(a) All payments made by or on behalf of Borrowers hereunder
or under any Loan Document will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.7(d), all payments hereunder and under
any of the Loan Documents (including, without limitation, payments on account of
principal and interest and fees) shall be made by or on behalf of Borrowers free
and clear of and without withholding for or on account of any present or future
tax, duty, levy, impost, assessment or other charge of whatever nature now or
hereafter imposed by any Governmental Authority, but excluding therefrom (i) a
tax imposed on the overall net income (including a franchise tax based on net
income) of the lending office of the Lender in respect of which the payment is
made by the jurisdiction in which the Lender is incorporated or organized or the
jurisdiction (or political subdivision or taxing authority thereof) in which its
lending office is located, (ii) in the case of any Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) and
that does not comply with Section 4.7(d), any taxes imposed by the United States
by means of withholding at the source unless such withholding results from a
change in applicable law, treaty or regulations or the interpretation or
administration thereof (including, without limitation, any guideline or policy
not having the force of law) by any authority charged with the administration
thereof subsequent to the date such Lender becomes a Lender with respect to the
Loan or portion thereof affected by such change and (iii) any tax imposed on or
measured by the overall net income (including a franchise tax based on net
income, but excluding any taxes imposed by the United States by means of
withholding at the source) of a Lender or an office or branch thereof by the
United States of America or any political subdivision or taxing authority
thereof or therein (such tax or taxes, other than excluded tax or taxes, being
herein referred to as "Tax" or "Taxes"). If Borrowers are required by law to
make any deduction or withholding of any Taxes from any payment due hereunder or
under any of the Loan Documents, then the amount payable will be increased to
such amount which, after deduction from such increased amount of all such Taxes
required to be withheld or deducted therefrom, will not be less than the amount
due and payable hereunder had no such deduction or withholding been required.
(b) If Borrowers make any payment hereunder or under any of
the Loan Documents in respect of which it is required by law to make any
deduction or withholding of any Taxes, it shall pay the full amount to be
deducted or withheld to the relevant taxation or other authority within the time
allowed for such payment under applicable law and shall deliver to the Lenders
within 30 days after it has made such payment to the applicable authority a
receipt
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issued by such authority evidencing the payment to such authority of all amounts
so required to be deducted or withheld from such payment.
(c) Without prejudice to the provisions of Section 4.7(a), if
any Lender, or Agent on its behalf, is required by law to make any payment on
account of Taxes on or in relation to any such received or receivable tax
hereunder or under any of the Loan Documents by such Lender, or Agent on its
behalf, or any liability for Tax in respect to any such payment is imposed,
levied or assessed against any Lender or Agent on its behalf, Borrowers (on a
joint and several basis) will promptly indemnify such person against such Tax
payment or liability, together with any interest, penalties and expenses
(including counsel fees and expenses) payable or incurred in connection
therewith, including any tax of any Lender arising by virtue of payments under
this Section 4.7(c), computed in a manner consistent with this Section 4.7(c). A
certificate (showing in reasonable detail the basis for such calculation) as to
the amount of such payment by such Lender, or Agent on its behalf, absent
manifest error, shall be final, conclusive and binding upon all parties hereto
for all purposes.
(d) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to
Borrowers and Agent on or prior to the Initial Borrowing Date, or in the case of
a Lender that is an Assignee of an interest under this Agreement pursuant to
Section 3.7 or 12.8 (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment), on the date of such assignment to such
Lender, together with any other certificate or statement of exemption required
under the Code to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender, (i) two accurate and complete original signed copies of IRS Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (x) a
certificate substantially in the form of Exhibit 4.7(d) (any such certificate, a
"Section 4.7(d)(ii) Certificate") and (y) two accurate and complete original
signed copies of IRS Form W-8 (or successor form) (including Form W-8BEN
(Certificate of Foreign Status of Beneficial Owner for United States Tax
Withholding) and Form W-8ECI (Certificate of Foreign Person's Claim for
Exemption From Withholding On Income Effectively Connected with the Conduct of a
Trade or Business in the United States)) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Initial Borrowing
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
Borrowers and Agent two new accurate and complete original signed copies of IRS
Form 4224 or 1001, or Form W-8 and a Section 4.7(d)(ii) Certificate, as the case
may be, and such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding Tax with respect to payments under this Agreement and
any Note, or it shall immediately notify Borrowers and Agent of its inability to
deliver any such form or certificate. Notwithstanding anything to the contrary
contained in Section 4.7(a), but subject to Section 12.8(c) and the immediately
succeeding sentence, (x) Borrowers shall be entitled, to the extent they are
required to do so by law, to deduct or withhold income or similar Taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from interest,
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fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for United States Federal income tax purposes to the extent that such
Lender has not provided to Borrowers IRS Forms that establish a complete
exemption from such deduction or withholding and (y) Borrowers shall be
obligated pursuant to Section 4.7(a) hereof to gross-up payments to be made to a
Lender in respect of income or similar Taxes imposed by the United States unless
(I) upon timely notice from the Borrowers, such Lender has not provided to
Borrowers the IRS Forms required to be provided to Borrowers pursuant to this
Section 4.7(d), or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such IRS Forms do not
establish a complete exemption from withholding of such Taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.7 and except as set forth in Section 12.8(c), Borrowers agree to
jointly and severally pay additional amounts and to indemnify each Lender in the
manner set forth in Section 4.7(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Initial Borrowing Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes.
(e) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of any event or the existence of any
condition that would cause Borrowers to make a payment in respect of any Taxes
to such Lender pursuant to Section 4.7(a) or a payment in indemnification for
any Taxes pursuant to Section 4.7(c), it will use reasonable efforts to make,
fund or maintain the Loan (or portion thereof) of such Lender with respect to
which the aforementioned payment is or would be made through another lending
office of such Lender if as a result thereof the additional amounts which would
otherwise be required to be paid by Borrowers in respect of such Loans (or
portions thereof) or participation in Letters of Credit pursuant to Section
4.7(a) or Section 4.7(c) would be materially reduced, and if, in the judgment of
such Lender, the making, funding or maintaining of such Loans or participation
in Letters of Credit (or portions thereof) through such other lending office
would not be otherwise disadvantageous to such Lender. Borrowers agree to
jointly and severally pay all reasonable expenses incurred by any Lender in
utilizing another lending office of such Lender pursuant to this Section 4.7(e).
(f) If Borrowers shall pay any Taxes pursuant to this Section
4.7 and any Lender at any time thereafter receives a refund of tax or credit
against its tax liabilities on account of such payment of Taxes, then such
Lender shall promptly pay to Borrowers the amount of such refund or credit.
ARTICLE V
CONDITIONS OF CREDIT
Section 5.1. Conditions Precedent to the Initial Borrowing.
The obligation of the Lenders to make the Initial Loans and the obligation of
the Facing Agent to issue and the Lenders to participate in Letters of Credit
and Rollover Letters of Credit under this Agreement shall be subject to the
fulfillment, at or prior to the Initial Borrowing Date, of each of the following
conditions:
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(a) Credit Agreement and Notes. Holdings and Borrowers shall have duly
executed and delivered to Agent, with a signed counterpart for each Lender, this
Agreement (including all schedules, exhibits, certificates, opinions and
financial statements delivered pursuant hereto), the Notes payable to the order
of each applicable Lender in the amount of their respective Commitments all of
which shall be in full force and effect;
(b) Security Agreement. Each Credit Party shall have duly authorized,
executed and delivered a Security Agreement substantially in the form of Exhibit
5.1(b) hereto (as amended, restated, supplemented or otherwise modified from
time to time, the "Security Agreement") together with:
(i) proper financing statements (Form UCC-1 or such other financial
statements or similar notices as shall be required by local law) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of
Agent, desirable to perfect the security interests purported to be created
by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-1), or equivalent reports, listing all effective financing statements
or similar notices that name Borrowers or their Subsidiaries (by its actual
name or any trade name, fictitious name or similar name), or any division
or other operating unit thereof, as debtor and that are filed in the
jurisdiction referred to in said clause (i), together with copies of such
other financing statements (none of which shall cover the Collateral except
to the extent evidencing Permitted Liens or for which Agent shall have
received termination statements (Form UCC-3 or such other termination
statements as shall be required by local law) fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement and all other actions as may
be necessary or, in the reasonable opinion of Agent, desirable to perfect
the security interests intended to be created by the Security Agreement;
(iv) an executed Landlord Consent from each lessor of any material
leased facility of any Borrower or any Subsidiary of any Borrower at which
any Collateral may be located (provided that to the extent any such
Landlord Consent has not been delivered on the Closing Date, Borrowers
shall use their reasonable best efforts to cause such Landlord Consents to
be executed and delivered within ninety (90) days following the Closing
Date);
(v) a duly authorized, executed and delivered Perfection Certificate
substantively in the form of Exhibit 5.1(b)(v) hereto properly completed by
each Credit Party (each, a "Perfection Certificate" and collectively, the
"Perfection Certificates"); and
(vi) evidence that all other actions necessary, or in the reasonable
opinion of Agent, reasonably desirable to perfect the security interests
purported to be taken by the Security Agreement have been taken;
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(c) Pledge Agreement. Each Credit Party shall have duly authorized,
executed and delivered the Pledge Agreement substantially in the form of Exhibit
5.1(c) hereto (as amended, restated, supplemented or otherwise modified from
time to time, the "Pledge Agreement") and shall have delivered to Agent, as
Pledgee, all the Pledged Securities referred to therein then owned, if any, by
such Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated stock
powers, in the case of capital stock constituting Pledged Securities, or other
transfer assignment instruments in form and substance satisfactory to Agent, in
the case of membership interests constituting Pledged Securities and (z) the
Pledge Agreement and such other documents shall be in full force and effect, and
each Credit Party which is a limited liability company shall have certificated
all existing membership interests and delivered to Agent, as Pledgee, such
pledged certificates as Pledged Securities;
(d) Control Agreement. Each Credit Party which is a limited liability
company and each member thereof shall have duly authorized, executed and
delivered the Control Agreement substantively in the form of Exhibit 5.1(d)
hereto (as amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement");
(e) Guaranties. Holdings and LISN Holdings shall have duly authorized,
executed and delivered the Guaranty substantially in the form of Exhibit
5.1(e)(1) herewith (as amended, restated, supplemented or otherwise modified
from time to time, the "Holdings Guaranty") and each Subsidiary Guarantor shall
have duly authorized, executed and delivered the Guaranty substantially in the
form of Exhibit 5.1(e)(2) (as amended, restated, supplemented or otherwise
modified from time to time, the "Subsidiary Guaranty");
(f) Collateral Assignment of Leases. Each Credit Party which has
entered into a lease agreement with respect to any real property leased by
Holdings or any of its Subsidiaries (as a lessee) shall have duly authorized,
executed and delivered the Collateral Assignment of Leases substantially in the
form of Exhibit 5.1(f) hereto (as amended, restated, supplemented or otherwise
modified from time to time, the "Collateral Assignment of Leases");
(g) Mortgages; Title Insurance; Surveys. Collateral Agent shall have
received:
(i) fully executed counterparts of deeds of trust, mortgages and
similar documents in each case in form and substance reasonably
satisfactory to Agent (as modified, supplemented or amended from time to
time in accordance with the terms thereof and hereof, each a "Mortgage" and
collectively, the "Mortgages"), which Mortgages shall cover such of the
Real Property owned by Borrower or any Subsidiary as shall be listed on
Schedule 6.11(c) (each a "Mortgaged Property" and collectively, the
"Mortgaged Properties"), together with evidence that counterparts of the
Mortgages have been delivered to the title insurance company insuring the
Lien of the Mortgages for recording in all places to the extent necessary
or desirable, in the judgment of Collateral Agent, to create a valid and
enforceable first priority Lien, subject only to Permitted Liens, on each
Mortgaged Property in favor of Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors;
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(ii) mortgagee title insurance polices issued by Chicago Title
Insurance Company or title insurers satisfactory to Collateral Agent (the
"Mortgage Policies") in amounts reasonably satisfactory to Agent and the
Required Lenders insuring Collateral Agent that the Mortgages are valid and
enforceable first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances other than
Permitted Liens, and the Mortgage Policies shall be in form and substance
reasonably satisfactory to Agent and the Required Lenders and (a) shall
include, as appropriate and to the extent reasonably available, an
endorsement for future advances under this Agreement and the Notes and for
any other matter that Agent in its discretion may reasonably request, (b)
shall not include an exception for mechanics' liens, and (c) shall provide
for affirmative insurance and such reinsurance (including direct access
agreements) as Agent in its discretion may reasonably request;
(iii) a survey, in form and substance satisfactory to Collateral Agent
and the title insurance company, of each Mortgaged Property, dated a recent
date acceptable to Collateral Agent, certified in a manner satisfactory to
Collateral Agent by a licensed professional surveyor reasonably
satisfactory to Collateral Agent and the title insurance company (provided
that to the extent any such survey has not been delivered on the Closing
Date, Borrowers shall cause such surveys to be delivered within thirty (30)
days following the Closing Date); and
(iv) such estoppel letters, landlord waiver letters, non-disturbance
letters and similar assurances as may be reasonably requested by Collateral
Agent, which letters and assurances shall be in form and substance
reasonably satisfactory to Collateral Agent;
(h) Opinions of Counsel. Agent shall have received from (i) Kirkland &
Ellis, special counsel to the Credit Parties, an opinion addressed to Agent and
each of the Lenders and dated the Closing Date, which shall be in form and
substance reasonably satisfactory to Agent and which shall cover such customary
matters incident to the transactions contemplated herein as Agent or the
Required Lenders may reasonably request and (ii) opinions of local counsel to
the Credit Parties from the States of Florida, Ohio and Missouri from counsel
reasonably satisfactory to Agent dated the Closing Date, each of which shall be
in form and substance reasonably satisfactory to Agent, which opinions shall
cover such customary matters incident to the transactions contemplated herein
and in the other Loans Documents as Agent or the Required Lenders may reasonably
request; and (ii) confirmation from each counsel delivering a legal opinion in
connection with any portion of the Transactions (including, without limitation,
Kirkland & Ellis) that Agent and Lenders are entitled to rely upon their
respective opinions delivered pursuant to the Transactions;
(i) Officer's Certificate. Agent shall have received, with a signed
counterpart for each Lender, a certificate executed by a Responsible Officer on
behalf of Borrowers, dated the date of this Agreement and substantially in the
form of Exhibit 5.1(i) hereto, stating that the representations and warranties
set forth in Article VI hereof are true and correct in all material respects as
of the date of the certificate except to the extent such representations and
warranties are expressly made as of a specified date in which event such
representations and warranties were true and correct in all material respects as
of such specified date, that no Event of Default or Unmatured Event of Default
has occurred and is continuing, that the conditions of Section 5.1
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hereof have been fully satisfied (except that no opinion need be expressed as to
the Agent's or Required Lenders' satisfaction with any document, instrument or
other matter) and that to the best of Borrowers' knowledge, no Liens (except for
Permitted Liens) have been placed against the Collateral since the respective
dates of the searches of financing statements filed under the Uniform Commercial
Code and delivered pursuant to this Section 5.1;
(j) Secretary's Certificate. On the Closing Date, the Agent shall have
received from each Credit Party a certificate, dated the Closing Date, signed by
the secretary or any assistant secretary of such Credit Party, substantially in
the form of Exhibit 5.1(j) with appropriate insertions, as to the incumbency and
signature of the officers of each such Credit Party executing any Document (in
form and substance satisfactory to Agent) and any certificate or other document
or instrument to be delivered pursuant hereto or thereto by or on behalf of such
Credit Party, together with evidence of the incumbency of such Secretary or
Assistant Secretary, and certifying as true and correct, attach copies of the
Articles or Certificate of Incorporation and By-Laws (or other Organizational
Documents) of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the foregoing (including each such
Articles or Certificate of Incorporation and By-Laws (or other Organizational
Documents)) shall be reasonably satisfactory to Agent or the Required Lenders;
(k) Good Standing. A good standing certificate or certificate of
status of each Credit Party from the Secretary of State (or other governmental
authority) of its state of organization and such other states as shall be
reasonably requested by Agent.
(l) Employee Benefit Plans; Shareholders' Agreements; Collective
Bargaining
Agreements; Tax Sharing Agreements; Debt Agreements. On the Initial Borrowing
Date, there shall have been delivered to Agent true and correct copies,
certified as true and complete by an appropriate officer of Borrowers on behalf
of Borrowers, of:
(i) all employee benefit plans (other than multiemployer plans as
defined in Section 4001(a)(3) of ERISA), or any other similar plans or
arrangements for the benefit of employees of Holdings or any of its
Subsidiaries and any profit sharing plans and deferred compensation plans
of Holdings or any of its Subsidiaries (collectively, the "Employee Benefit
Plans");
(ii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to Holdings or any
of its Subsidiaries with respect to their capital stock (collectively, the
"Shareholder Agreements");
(iii) all agreements with members of, or with respect to the,
management of Holdings or any of its Subsidiaries other than Employment
Agreements (collectively, the "Management Agreements");
(iv) any employment agreements entered into by Holdings or any of its
Subsidiaries (collectively, the "Employment Agreements");
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(v) all collective bargaining agreements applying or relating to any
employee of Holdings or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness to Remain
Outstanding of Holdings or any of its Subsidiaries and all agreements
evidencing or relating to any Indebtedness of Holdings or any of its
Subsidiaries which is to remain outstanding after giving effect to the
incurrence of Loans on the Closing Date (collectively, the "Debt
Agreements"); and
(vii) all tax sharing, disaffiliation tax allocation and other similar
agreements entered into by Holdings or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements and Tax Sharing Agreements shall be in form and substance reasonably
satisfactory to the Agent and the Required Lenders; and shall be in full force
and effect on the Initial Borrowing Date, except such agreements previously
identified to Agent and the Required Lenders which will be terminated in
connection with the consummation of this transaction;
(m) Adverse Change. On or prior to the Closing Date, nothing shall
have occurred (and neither Agent nor Lenders shall have become aware of any
facts or conditions not previously known) which Agent or the Required Lenders
shall reasonably determine has or is reasonably likely to have a material
adverse effect on the rights or remedies of the Lenders or the Agent, or on the
ability of Holdings and its Subsidiaries, taken as a whole (immediately after
giving effect to the Transactions), to perform their obligations to the Lenders
or which is reasonably likely to constitute or give rise to any material adverse
condition or material adverse change in or affecting the business, assets,
liabilities, results of operations or financial condition of Holdings and its
Subsidiaries taken as a whole (after giving effect to the Transactions);
(n) Approvals. All necessary governmental (domestic and foreign) and
third party approvals and/or consents in connection with the Transactions and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods shall have expired without any action
being taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of, including, without
limitation, all filings required to be made and any approval required to be
received (including any action required to be taken as a condition thereto)
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. Additionally, there shall not exist any judgment, order, injunction or
other restraint prohibiting or imposing material adverse conditions upon the
Transactions, or the making of the Loans or the issuance of the Letters of
Credit or Rollover Letters of Credit or the other transactions contemplated
hereby;
(o) Litigation. No litigation by any entity (private or governmental)
shall be pending or threatened with respect to (i) this Agreement or any other
Loan Document, (ii) any other Document or any documentation executed in
connection herewith or the transactions contemplated hereby (including, without
limitation, the Transactions), or (iii) Holdings or any of
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its Subsidiaries which, in the case of any litigation described in this clause
(iii), Agent or the Required Lenders shall reasonably determine is reasonably
likely to have a Material Adverse Effect;
(p) Fees. Borrowers shall have paid all reasonable costs, fees and
expenses (including, without limitation, reasonable legal fees and expenses of
Winston & Strawn and the costs, fees and expenses referred to in Section 12.4)
payable to Agent to the extent then due;
(q) Insurance. On or prior to the Closing Date, Agent shall have
received evidence of insurance complying with the requirements of Section 7.8
for the business and properties of Borrowers and their Subsidiaries, in scope,
form and substance reasonably satisfactory to Agent and the Required Lenders and
naming the Collateral Agent as an additional insured, mortgagee and/or loss
payee, and stating that such insurance shall not be cancelled or revised without
30 days' prior written notice by the insurer to the Collateral Agent.
(r) Appointment of Agent. Agent shall have received a letter from CT
Corporation System, presently located at 111 Eighth Avenue, New York, New York
10011, substantially in the form of Exhibit 5.1(r) hereto, indicating its
consent to its appointment by the Credit Parties as their agent to receive
service of process as specified in Section 12.9 of this Agreement;
(s) Pro Forma Balance Sheet. Agent shall have received the Pro Forma
Balance Sheet prepared in accordance with GAAP in form and substance reasonably
satisfactory to Agent and the Required Lenders;
(t) Termination of Existing Credit Agreements.
(i) On or prior to the Closing Date, the total commitments under each
of the Existing Credit Agreements shall have been terminated, all loans
thereunder shall have been repaid in full, together with interest thereon,
and all other amounts other than contingent and indemnification
obligations) owing pursuant to the Existing Credit Agreements shall have
been repaid in full and the Existing Credit Agreements shall have been
terminated on terms and conditions reasonably satisfactory to Agent and the
Required Lenders and be of no further force or effect. On the Closing Date,
(x) the termination of the Existing Credit Agreements shall be reasonably
satisfactory to Agent and the Required Lenders and all such conditions
shall have been satisfied to the reasonable satisfaction of Agent and the
Required Lenders or waived with the consent of Agent and the Required
Lenders and (y) evidence in form, scope and substance reasonably
satisfactory to Agent and the Required Lenders that the matters set forth
in this Section 5.1(t) have been satisfied on such date;
(ii) The creditors under the Existing Credit Agreements shall have
terminated and released all security interests and Liens on the assets
owned by the Credit Parties. Agent shall have received (or arrangements
have been made for the delivery thereof which are reasonably satisfactory
to Agent) such releases of security interest in and Liens on the assets
owned by the Credit Parties as may have been requested by Agent or the
Required Lenders, which releases shall be in form and substance reasonably
satisfactory to Agent and the Required Lenders. Without limiting the
foregoing, there shall have been delivered (or arrangements have been made
for the delivery thereof which are reasonably satisfactory
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to Agent) proper termination statements (Form UCC-3 or the appropriate
equivalent) for filing under the UCC of each jurisdiction where a financing
statement (Form UCC-1 or the appropriate equivalent) was filed with respect
to any Credit Party in connection with the security interests created with
respect to any Existing Credit Agreement and the documentation related
thereto all collateral owned by the Credit Parties in possession of any
other agent, collateral agent or trustee for the creditors under any
Existing Credit Agreement or any financial institution party to any
Existing Credit Agreement or any related agreement;
(u) Existing Indebtedness and Preferred Stock. On the Closing Date and
after giving effect to the Transactions and the other transactions contemplated
hereby, the Credit Parties shall not have any Indebtedness outstanding except
for the Loans, the Junior Subordinated Notes, the Bridge Loan Agreement, the
Holdings Preferred Stock and the Indebtedness to Remain Outstanding. The
aggregate principal amount of the Indebtedness to Remain Outstanding shall not
exceed $3,200,000 and the Indebtedness to Remain Outstanding shall not be
incurred in connection with, or in contemplation of, the Transactions and the
terms and conditions of the Indebtedness to Remain Outstanding shall be
reasonably satisfactory to Agent and the Required Lenders;
(v) Tax and Accounting Aspects of Transactions/Capital Structure.
Agent and the Required Lenders shall be reasonably satisfied with all tax and
accounting matters relating to the Transactions. On the Closing Date, the
ownership and capital structure (including without limitation, the terms of any
capital stock, options, warrants or other securities issued by Holdings, any
Borrower or any of their Subsidiaries) and management of Holdings, Borrowers and
their Subsidiaries shall be in form and substance reasonably satisfactory to the
Agent and the Required Lenders;
(w) Consummation of the Reorganization.
(i) On or prior to the Closing Date, each of the Reorganization
Documents shall have been duly authorized, executed and delivered by each
of the respective parties thereto and shall be in full force and effect and
shall not have been amended or modified except for immaterial amendments
and modifications and material amendments and modifications, if any, as may
be reasonably satisfactory to the Agent and the Required Lenders; provided
that Borrowers shall promptly provide notice of any such material
amendments and the substance thereof to Agent. All material conditions
precedent to the consummation of the Reorganization as set forth in the
Reorganization Documents shall have been satisfied and not waived except
with the consent of Agent and the Required Lenders, to the reasonable
satisfaction of Agent. The Reorganization shall have been, or shall be,
consummated contemporaneously herewith, in all material respects, in
accordance with the Reorganization Documents and all applicable law;
(ii) Simultaneously with the consummation of the transactions
contemplated by this Agreement, on the Closing Date, LISN Holdings shall
have received cash in the amount of approximately $112,300,000 from WSP
Entities as consideration for the
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issuance of the New LISN Notes, which New LISN Notes shall have been
exchanged for Holdings Common Stock, Holdings Preferred Stock and Junior
Subordinated Notes to such WSP Entities pursuant to the Note Exchange
Agreement (the "WSP Financing"). The structure and all terms of, and all
documentation for, the WSP Financing shall be reasonably satisfactory in
form and substance to Agent. On or prior to the Closing Date, Holdings
shall have applied or caused to be applied the total aggregate amount of
cash received by it as described in the second immediately preceding
sentence to the payment of amounts owing in connection with the
Reorganization;
(iii) Simultaneously with the consummation of the transactions
contemplated by this Agreement, on the Closing Date, Holdings shall have
acquired not less than 90% (on a fully-diluted basis) of the Capital Stock
of LISN Holdings and all of the LISN Junior Notes from the LISN Investors
having an aggregate value of at least $166,900,000 pursuant to the LISN
Equity Rollover. The structure and all terms of, and all documentation for,
the LISN Equity Rollover shall be reasonably satisfactory in form and
substance to Agent;
(iv) Simultaneously with the consummation of the transactions
contemplated by this Agreement, on the Closing Date, the Orius Investors
shall have rolled over into Holdings not less than 50% of the aggregate
equity interests in Holdings owned by them with an aggregate value of at
least $91,200,000 (the "Orius Equity Rollover"). The structure and all
terms of, and all documentation for, the Orius Equity Rollover shall be
reasonably satisfactory in form and substance to Agent;
(v) Simultaneously with the consummation of the transactions
contemplated by this Agreement, on the Closing Date, Holdings, LISN
Holdings, and/or the Borrowers shall have used all cash proceeds described
in preceding clause (ii) and the aggregate principal amount of the loans
under the Bridge Loan Agreement to make payments owing in connection with
the Transactions before utilizing any proceeds of Loans for such purpose
(it being understood and agreed, however, that to the extent required under
the Put and Call Agreements, Borrowers may use proceeds of Rollover Letters
of Credit issued pursuant to this Agreement to redeem equity interests in
Holdings held by the Orius Investors and/or the LISN Investors as part of
the Transactions; provided that all cash proceeds received from the
financing described in preceding clause (ii) and the aggregate principal
amount of the loans under the Bridge Loan Agreement shall concurrently with
the receipt of such funds and the incurrence of the Loans on the Closing
Date be utilized in full to make other payments owing in connection with
the Transactions). The cash proceeds received on or prior to the Closing
Date as described in preceding clause (ii), when added to (i) the aggregate
principal amount of Term Loans, (ii) the aggregate principal amount of the
loans under the Bridge Loan Agreement, and (iii) available cash on hand
shall be sufficient to effect the Transactions and to pay all fees and
expenses in connection therewith (excluding fees and expenses in connection
with the issuance of the Senior Subordinated Notes) (which fees and
expenses shall not in the aggregate exceed $16,000,000); and
(vi) After giving effect to the Transactions, the stockholders of
Holdings shall hold Holdings Common Stock, Holdings Preferred Stock and
Junior Subordinated Notes
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on an approximately 9%-53%-38% basis and there
shall be no more than $139,100,000 in aggregate principal amount of Junior
Subordinated Notes outstanding.
(x) Junior Subordinated Documents. Simultaneously with the
consummation of the transactions contemplated by this Agreement, on the Closing
Date the Junior Subordinated Notes shall have been issued pursuant to the terms
of the Reorganization Documents, and Agent shall have received certified copies
of the fully executed Junior Subordinated Documents which shall be in form and
substance reasonably satisfactory to the Agent and its counsel;
(y) Bridge Loan Financing. Simultaneously with the consummation of the
transactions contemplated by this Agreement, on the Closing Date, Borrowers
shall have received not less than $100,000,000 in cash proceeds from the loans
under the Bridge Loan Agreement, which agreement and all other Bridge Loan
Documents shall be on terms and conditions and in form and substance reasonably
satisfactory to Agent and the Required Lenders. The Bridge Loan Agreement shall
be unsecured;
(z) Notice of Borrowing. A duly executed Notice of Borrowing with
respect to initial advance of Loans to be made on the Closing Date;
(aa) Solvency Certificate. On the Closing Date, Agent shall have
received a solvency certificate duly executed on behalf of Borrowers by the
Chief Financial Officer of Borrowers in the form of Exhibit 5.1(aa) hereto;
(bb) Employment Agreements. On the Closing Date, Holdings and/or
Borrowers shall have entered into employment agreements and non-compete
agreements on terms and conditions acceptable to Agent with certain managers of
Holdings and Borrowers as Holdings and Agent shall reasonably deem appropriate;
and
(cc) Other Matters. All corporate and other proceedings taken in
connection with the Transactions at or prior to the date of this Agreement, and
all documents incident thereto will be reasonably satisfactory in form and
substance to Agent; and Agent shall have received such other instruments and
documents as Agent shall reasonably request in connection with the execution of
this Agreement, and all such instruments and documents shall be reasonably
satisfactory in form and substance to Agent.
Section 5.2. Conditions Precedent to All Credit Events. The obligation
of each Lender to make Loans (including Loans made on the Initial Borrowing
Date) and the obligation of any Facing Agent to issue or any Lender to
participate in any Letter of Credit hereunder in each case shall be subject to
the fulfillment at or prior to the time of each such Credit Event of each of the
following conditions:
(a) Representations and Warranties. The representations and warranties
contained in this Agreement and the other Loan Documents shall each be true and
correct in all material respects at and as of such time, as though made on and
as of such time except to the extent such representations and warranties are
expressly made as of a specified date in which event such representations and
warranties shall be true and correct in all material respects as of such
specified date.
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(b) No Default. No Event of Default or Unmatured Event of Default
shall have occurred and shall then be continuing on such date or will occur
after giving effect to such Credit Event.
(c) Notice of Borrowing; Letter of Credit Request.
(i) Prior to the making of each Loan, Agent shall have received a
Notice of Borrowing meeting the requirements of Section 2.5.
(ii) Prior to the issuance of each Letter of Credit, Agent and the
respective Facing Agent shall have received a Letter of Credit Request
meeting the requirements of Section 2.9(b).
(d) Adverse Change. At the time of each such Credit Event and after
giving effect thereto, nothing shall have occurred (and the Lenders shall not
have become aware of any facts or conditions previously unknown) which has, or
is reasonably likely to have, a Material Adverse Effect.
(e) Other Information. Agent shall have received such other
instruments, documents and opinions as it may reasonably request in connection
with such Credit Event, and all such instruments and documents shall be
reasonably satisfactory in form and substance to Agent.
The acceptance of the benefits of each such Credit Event by Borrowers
shall be deemed to constitute a representation and warranty by them to the
effect of paragraphs (a), (b), (c) and (d) of this Section 5.2 (except that no
opinion need be expressed as to the Agent's or Required Lenders' satisfaction
with any document, instrument or other matter).
Section 5.3. Conditions Precedent to All Acquisition Revolving Loan
Credit Events. The obligation of each Revolving Lender to make Acquisition
Revolving Loans shall be subject to the fulfillment at or prior to the time
(unless a later time may be specified below) of each such Credit Event of each
of the following conditions:
(a) Additional Security Documents. Each Credit Party (including any
New Domestic Subsidiaries) shall have duly authorized executed and delivered to
Agent the Additional Security Documents, including, without limitation, any
additional Mortgages reasonably requested by Agent, together with (provided that
Agent may , in its discretion, accept delivery of any of the documents specified
in this clause (a) within thirty (30) days following the date of funding of such
Acquisition Revolving Loans to the extent any such document is not readily
available on such date):
(i) proper financing statements (Form UCC-1 or such other financial
statements or similar notices as shall be required by local law) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of
Agent, desirable to perfect the security interests purported to be granted
by the Additional Security Documents;
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(ii) certified copies of Requests for Information Copies (Form UCC-1)
or equivalent reports, listing all effective financing statements or
similar notices that name the acquired Person or business or, to the extent
applicable, its Subsidiaries (by its actual name or, to the extent
applicable, any trade name, fictitious name or similar name), or any
division or other operating unit thereof (to the extent the same is being
acquired), as debtor and that are filed in the jurisdiction referred to in
clause (i), together with copies of such other financing statements (none
of which shall cover the Additional Collateral except to the extent
evidencing Permitted Liens or for which Agent shall have received
termination statements (Form UCC-3 or such other termination statements as
shall be required by local law) fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Additional Security Documents and all other
actions as may be necessary or, in the reasonable opinion of Agent,
desirable to perfect the security interests intended to be created by the
Additional Security Documents;
(iv) with respect to each additional Mortgaged Property (A) such
additional Mortgage Policies with respect to Additional Collateral and
additional Mortgaged Property reasonably satisfactory to Agent insuring
Collateral Agent that each additional Mortgage is a valid and enforceable
first priority mortgage Lien, free and clear of all defects and
encumbrances other than Permitted Liens, together with assurances
satisfactory to Agent for the recordations of the additional Mortgages in
the real estate records of all appropriate jurisdictions (B) surveys, in
form and substance reasonably satisfactory to Collateral Agent and the
title insurance company, of each additional Mortgaged Property, dated a
recent date acceptable to Collateral Agent, by a licensed professional
surveyor reasonably satisfactory to Collateral Agent and the title
insurance company, and (C) such documentary, intangible or similar taxes
with respect to the Additional Collateral and additional Mortgaged
Property;
(v) an executed Landlord Consent from each lessor of any material
leased facility of any Credit Party (including any New Domestic Subsidiary)
at which any Additional Collateral may be located (provided that to the
extent any such Landlord Consent has not been delivered on the date of such
Acquisition Revolving Loan, Borrowers shall use their reasonable best
efforts to cause such Landlord Consents to be executed and delivered
promptly following such date);
(vi) a duly executed and delivered Perfection Certificate from each
new Credit Party appropriately completed; and
(vii) evidence that all other actions necessary, or in the reasonable
opinion of Agent, desirable to perfect the security interests purported to
be taken by the Additional Security Documents have been taken;
(b) Opinions of Counsel. To the extent reasonably requested by Agent,
Agent shall have received from (i) special counsel to the Credit Parties, an
opinion addressed to Agent and each of the Lenders and dated the date of the
Acquisition Revolving Loan, which shall be in form and substance reasonably
satisfactory to Agent and which shall cover such matters incident
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to the Permitted Acquisition and the Additional Security Documents as Agent may
reasonably request; (ii) customary opinions of local counsel to the Credit
Parties dated the date of the Acquisition Revolving Loan, each of which shall be
in form and substance reasonably acceptable to Agent, which opinions shall cover
such matters incident to the Additional Security Documents as Agent may
reasonably request and (iii) confirmation from counsel to the Target and from
special counsel to the Credit Parties that Agent and the Lenders are entitled to
rely upon their respective opinions, if any, delivered pursuant to the documents
governing the Permitted Acquisition;
(c) Officer's Acquisition Certificate. Agent shall have received a
certificate executed by a Responsible Officer on behalf of Borrowers, dated the
date of the Acquisition Revolving Loan, certifying as to the matters set forth
in Section 8.4(k), in form and substance reasonably satisfactory to Agent;
(d) Officer's Certificate. Agent shall have received a certificate
executed by a Responsible Officer on behalf of Borrowers, dated the date of the
Acquisition Revolving Loan, stating that the representations and warranties set
forth in Article VI hereof are true and correct as of the date of the
certificate except to the extent such representations and warranties are
expressly made as of a specified date in which event such representations and
warranties were true and correct in all material respects as of such specified
date, that no Event of Default or Unmatured Event of Default has occurred and is
continuing, that the conditions of Section 5.3 hereof have been fully satisfied
(except that no opinion need be expressed as to the Agent's or Required Lenders'
satisfaction with any document, instrument or other matter) and that to the best
knowledge of Borrowers, no Liens (except for Permitted Liens) have been placed
against the Additional Collateral since the respective dates of the searches of
financing statements filed under the Uniform Commercial Code and delivered
pursuant to this Section 5.3;
(e) Secretary's Certificate. The Agent shall have received from each
New Domestic Subsidiary and each other Credit Party executing any Loan Document
in connection with a Permitted Acquisition a certificate, dated the date of the
Acquisition Revolving Loan, signed by the secretary or any assistant secretary
of such New Domestic Subsidiary or Credit Party on behalf of such New Domestic
Subsidiary or Credit Party, as to the incumbency and signature of the officers
of each such New Domestic Subsidiary or Credit Party executing any such Loan
Document (in form and substance reasonably satisfactory to Agent) and any
certificate or other document or instrument to be delivered pursuant hereto or
thereto by or on behalf of such New Domestic Subsidiary or Credit Party,
together with evidence of the incumbency of such Secretary or Assistant
Secretary, and certifying as true and correct, attach copies of the Articles or
Certificate of Incorporation and By-Laws (or other Organizational Documents) of
such New Domestic Subsidiary or Credit Party and the resolutions of such New
Domestic Subsidiary or Credit Party referred to in such certificate and all of
the foregoing (including each such Articles or Certificate of Incorporation and
By-Laws (or other Organizational Documents)) shall be reasonably satisfactory to
Agent;
(f) Good Standing. A good standing certificate or certificate of
status of each New Domestic Subsidiary from the Secretary of State (or other
governmental authority) of its state of organization and such other states as
shall be reasonably requested by Agent.
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(g) Approvals. All necessary governmental (domestic and foreign) and
third party approvals in connection with the Permitted Acquisition and otherwise
referred to herein or therein shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the consummation of the Permitted Acquisition,
including, without limitation, all filings required to be made and any approval
required to be received (including any action required to be taken as a
condition thereto) pursuant to the Hart-Scott-Rodino Antitrust Improvement Act
of 1976, as amended. Additionally, there shall not exist any judgment, order,
injunction or other restraint prohibiting or imposing material adverse
conditions upon the Permitted Acquisition;
(h) Environmental Review. Agent shall have received such reasonable
environmental site assessments with respect to the Real Property of Target as
shall be requested by the Agent. Agent shall be reasonably satisfied as to the
existing and potential liability of Holdings and its Subsidiaries with respect
to any environmental matters including compliance with all laws and regulations
relating to environmental protection;
(i) Appointment of Agent. Agent shall have received a letter from CT
Corporation System, presently located at 111 Eighth Avenue, New York, New York
10011, substantially in the form of Exhibit 5.1(r) hereto, indicating its
consent to its appointment by each New Domestic Subsidiary as its agent to
receive service of process as specified in Section 12.9 of this Agreement;
(j) Pro Forma Balance Sheet. Agent shall have received a pro forma
(after giving effect to the Permitted Acquisition) consolidated balance sheet of
Holdings prepared in accordance with of the Securities Act in form and substance
reasonably satisfactory to Agent and the Required Lenders;
(k) Tax and Accounting Aspects of Transactions/Capital Structure.
Agent shall be reasonably satisfied with all tax and accounting matters relating
to the Permitted Acquisition and the changes to the ownership and capital
structure (including without limitation, the terms of any capital stock,
options, warrants or other securities issued by Holdings, Borrower or any of its
Subsidiaries) and management of Holdings, Borrowers and their Subsidiaries
resulting from the Permitted Acquisition;
(l) Consummation of the Acquisition. Simultaneously with the making of
the Acquisition Revolving Loan, the applicable acquiring Credit Party and the
Target shall have consummated the Permitted Acquisition, substantially in
accordance with the terms set forth in the agreement governing such acquisition
(which terms and conditions shall be reasonably satisfactory to Agent and its
counsel in all material respects) and all applicable laws, rules and
regulations, no material conditions to closing set forth therein shall have been
waived, and all documents executed in connection therewith shall have been
executed and delivered by the Persons specified therein, and Borrowers shall
have furnished to Agent a certificate signed by a Responsible Officer of
Borrowers certifying that the transactions (other than those contemplated by
this Agreement) contemplated in the agreement governing such acquisition have
been consummated in accordance with such agreement in all material respects, and
Agent shall have received certified copies of a draft of such agreement and all
material agreements, documents
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and instruments executed and delivered in connection therewith and all material
consents, approvals or permits necessary or advisable to be obtained in
connection therewith, in form and substance reasonably satisfactory to Agent and
its counsel (followed by copies of such executed documents within five (5)
Business Days after the making of the Acquisition Revolving Loan);
(m) No Acquired Liabilities. Upon consummation of the Permitted
Acquisition, no New Domestic Subsidiary nor Holdings or any of its Subsidiaries
shall have any material existing liabilities or other obligations other than
those existing under or permitted by this Agreement and the other Loan Documents
and those contractual obligations and liabilities arising in the ordinary course
of business.
(n) Other Matters. All corporate and other proceedings taken in
connection with the Permitted Acquisition, and all documents incident thereto
will be reasonably satisfactory in form and substance to Agent; and Agent shall
have received such other instruments and documents as Agent shall reasonably
request in connection with the Permitted Acquisition, and all such instruments
and documents shall be reasonably satisfactory in form and substance to Agent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, and issue (or participate in) the Letters of Credit as provided
herein, Holdings and Borrowers make the following representations, warranties
and agreements as of the Closing Date (immediately after giving effect to the
consummation of the Transactions) and as of the date of each subsequent Credit
Event, all of which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans and issuance of the Letters of Credit,
with the occurrence of each Credit Event on or after the Closing Date being
deemed to constitute a representation and warranty that the matters specified in
this Article VI are true and correct in all material respects on and as of the
Closing Date and on and as of the date of each of such Credit Event, provided
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects on the
date of each Credit Event but only as of such specified date:
Section 6.1. Corporate Status. Each Credit Party (i) is a duly
organized and validly existing corporation, partnership or limited liability
company or other entity, as applicable, in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable, (ii) has all
requisite power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage in and (iii) is
duly qualified and is authorized to do business and is in good standing in its
jurisdiction of incorporation or formation, as applicable, and in each other
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified in a foreign jurisdiction could not reasonably be expected to
have a Material Adverse Effect.
Section 6.2. Corporate Power and Authority. Each Credit Party has all
necessary power and authority to execute, deliver and perform the terms and
provisions of each
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of the Documents to which it is a party and has taken all necessary
corporate or other action to authorize the execution, delivery and performance
by it of each of such Documents. Each Credit Party has duly executed and
delivered each of the Documents to which it is a party, and each of such
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
Section 6.3. No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party
(including, without limitation, the granting of Liens pursuant to the Security
Documents), nor compliance by it with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein (i) will contravene any
provision of any Requirement of Law applicable to any Credit Party, (ii) will
conflict with or result in any breach of or constitute a tortious interference
with any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except pursuant to the Security Documents) upon any
of the property or assets of any Credit Party pursuant to the terms of any
Contractual Obligation to which any Credit Party is a party or by which or any
of its property or assets is bound or to which it may be subject, (iii) will
violate any provision of any Organizational Document of any Credit Party or (iv)
require any approval of stockholders or any approval or consent of any Person
(other than a Governmental Authority) which has not been obtained except as set
forth on Schedule 6.3, and except, solely with respect to the execution,
delivery and performance of the Transaction Documents, for immaterial violations
or conflicts, or failure to obtain any immaterial consent or approval.
Section 6.4. Governmental and Other Approvals. Except for the
recording of the Mortgages, filings with the U.S. Patent and Trademark Office
and the U.S. Copyright Office to record liens on intellectual property and the
filing of the UCC financing statements which shall be recorded and filed,
respectively, on, or as soon as practicable after, the date hereof, no order,
consent, approval, license, authorization or validation of, or filing, recording
or registration with (except as have been obtained or made on or prior to the
Initial Borrowing Date), or exemption by, any Governmental Authority, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document, (ii) the legality, validity, binding
effect or enforceability of any such Document or (iii) the Transactions, except
for immaterial orders, consents, approvals, licenses, authorizations,
validations, filings, recordings or registrations solely in connection with the
Transactions (other than the Credit Events occurring on the Closing Date).
Section 6.5. Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections.
(a) Financial Statements. (i) The consolidated balance sheets
of Holdings and its predecessors dated December 31, 1997, December 31, 1998,
September 30, 1999 and the related consolidated statements of operations, cash
flows and shareholders' equity of Holdings for the Fiscal Year or other period
ended on such dates, as the case may be, and copies of which have hereto been
furnished to the Lenders prior to the Closing Date which, in the case of the
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December 31, 1997 and 1998 statements, have been examined by
PriceWaterhouseCoopers LLP, independent certified public accountants, who
delivered an unqualified opinion in respect thereto, present fairly in all
material respects, in accordance with GAAP (except, in the case of unaudited
financial statements, for the absence of footnotes and normal occurring year-end
audit adjustments), the financial condition and results of operations of
Holdings and its Subsidiaries for the periods referred to therein, (ii) the
consolidated balance sheets of LISN Holdings and its Subsidiaries dated December
31, 1996, December 31, 1997, December 31, 1998, June 30, 1999 and September 30,
1999 and the related statements of operations, cash flows and changes in
stockholders' equity of LISN Holdings and its Subsidiaries for the Fiscal Year
or other period ended on such dates, as the case may be, and copies of which
have hereto been furnished to the Lenders prior to the Closing Date which, in
the case of the December 31, 1996, December 31, 1997 and 1998 statements, have
been examined by PriceWaterhouseCoopers LLP, independent certified public
accountants, who delivered an unqualified opinion in respect thereto, present
fairly in all material respects, in accordance with GAAP (except, in the case of
unaudited financial statements, for the absence of footnotes and normal
occurring year-end audit adjustments), the financial condition and results of
operations of LISN Holdings and its Subsidiaries for the periods referred to
therein, the consolidated balance sheet of Arion, Inc. and its Subsidiaries
dated December 31, 1998 and the related statements of income, stockholders'
equity and cash flows of Arion, Inc. and its Subsidiaries for the fiscal year
ended on such date and copies of which have hereto been furnished to the Lenders
prior to the Closing Date, which have been examined by PriceWaterhouseCoopers
LLP, independent certified public accountants, who delivered an unqualified
opinion in respect thereto, present fairly in all material respects, in
accordance with GAAP, the financial condition and results of operations of
Arion, Inc. and its Subsidiaries for the period referred to therein and (iv) the
pro forma (after giving effect to the Transactions, the related financing
thereof and the other transactions contemplated hereby and thereby) consolidated
balance sheet of Holdings attached hereto as Schedule 6.5(a) (the "Pro Forma
Balance Sheet") presents fairly the consolidated financial condition of Holdings
and its Subsidiaries at the date of such balance sheet and presents a good faith
estimate of the pro forma consolidated financial condition of Borrowers and
their Subsidiaries (after giving effect to the Transactions, the related
financing thereof and the other transactions contemplated hereby and thereby) at
the date thereof. The Pro Forma Balance Sheet has been prepared in accordance
with GAAP consistently applied (except as may be indicated in the notes thereto)
subject to footnote disclosure and normal year-end audit adjustments. Since
December 31, 1998 there has been no material adverse change in the business,
financial condition, assets, liabilities or results of operations of Holdings
and its Subsidiaries taken as a whole.
(b) Solvency. On and as of the Closing Date, after giving
effect to the Transactions and to all Indebtedness (including the Loans, the
Junior Subordinated Notes and the loans incurred under the Bridge Loan
Agreement) being incurred, and to be incurred (and the use of proceeds thereof),
and Liens created, and to be created, by the Credit Parties in connection with
the transactions contemplated hereby, with respect to each of Holdings and its
Subsidiaries (on a consolidated basis) and of each Borrower and its Subsidiaries
(on a consolidated basis) (i) the sum of the assets, at a fair valuation
(measured on a going concern basis), of each of Holdings and its Subsidiaries
(on a consolidated basis) and each Borrower and its Subsidiaries (on a
consolidated basis) will exceed its debts (taking into account the joint and
several nature of Borrowers' Obligations); (ii) neither Holdings and its
Subsidiaries (on a consolidated basis) nor each Borrower and its Subsidiaries
(on a consolidated basis) have incurred nor intend, nor
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believe that they will, incur debts beyond its ability to pay such debts as
such debts mature in the ordinary cause of business; and (iii) each of Holdings
and its Subsidiaries (on a consolidated basis) and each Borrower and its
Subsidiaries (on a consolidated basis) will have sufficient capital with which
to conduct their business. For purposes of this Section 6.5(b) "debt" means any
liability on a claim, and "claim" means (y) any right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured (including all obligations, if any, under any Plan or the
equivalent for unfunded past service liability, and any other unfunded medical
and death benefits) or (z) any right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(c) No Undisclosed Liabilities. Except as fully reflected in
the financial statements and the notes related thereto delivered pursuant to
Section 6.5(a) or as reflected in the Pro Forma Balance Sheet or Schedule 6.5(c)
hereto and the Indebtedness incurred under this Agreement, the Junior
Subordinated Notes and the Bridge Loan Agreement, there were as of the Closing
Date (and after giving effect to the Transactions and the other transactions
contemplated hereby) no liabilities or obligations with respect to the Credit
Parties (whether absolute, accrued or contingent and whether or not due) which,
either individually or in aggregate, exceed $1,000,000. As of the Closing Date
(and after giving effect to the Transactions and the other transaction
contemplated hereby), neither Holdings nor any Borrower knows of any basis for
the assertion against any Credit Party of any liability or obligation that is
not fully reflected in the financial statements or the notes related thereto
delivered pursuant to Section 6.5(a), on Schedule 6.5(c) or on Schedule 6.5(d)
which, either individually or in the aggregate, exceed $1,000,000.
(d) Indebtedness. Schedule 6.5(d) sets forth a true and
complete list of all Indebtedness (other than the Loans and the Letters of
Credit) of Holdings and its Subsidiaries as of the Closing Date and which is to
remain outstanding after giving effect to the Transactions (the "Indebtedness to
Remain Outstanding"), in each case showing the aggregate principal amount
thereof (and the aggregate amount of any undrawn commitments with respect
thereto) and the name of the respective obligor and any other entity which
directly or indirectly guaranteed such debt. No Indebtedness to Remain
Outstanding has been incurred in connection with, or in contemplation of, the
Transactions or the other transactions contemplated hereby. All Indebtedness of
Holdings, Borrowers and each Subsidiary to Agent or to the Lenders under the
Loan Documents constitutes indebtedness which is senior in priority of payment
to the Junior Subordinated Notes and the Bridge Loan Agreement.
(e) Projections. On and as of the Closing Date, the
financial projections previously delivered to Agent and the Lenders by Borrower
and contained in that certain confidential information memorandum dated November
1999 (the "Projections") were prepared on a basis consistent with the financial
statements referred to in Section 6.5(a) and, at the time of the preparation
thereof, were based on good faith estimates and assumptions made by the
management of Holdings, and there are no statements or conclusions in any of the
Projections which were based upon or include information known to any Credit
Party to be misleading or which failed to take into account material information
regarding the matters reported therein. On the Closing Date, Holdings and each
Borrower believes that the Projections are reasonable and
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attainable, it being understood that uncertainty is inherent in any forecasts or
projections and that no assurance can be given that the results set forth in the
Projections will actually be obtained.
Section 6.6. Litigation. There are no actions, suits or
proceedings pending or, to the best knowledge of Holdings or any Borrower,
threatened (i) with respect to any Document, (ii) with respect to any
Indebtedness or Capital Stock of Holdings or any of its Subsidiaries or (iii)
that could reasonably be expected to have a Material Adverse Effect.
Section 6.7. True and Complete Disclosure. All factual
information (taken as a whole) heretofore or contemporaneously furnished by or
on behalf of Holdings or any of its Subsidiaries in writing to any Lender
(including, without limitation, all information contained in the Documents)
(other than the Projections as to which Section 6.5(e) applies) for purposes of
or in connection with this Agreement or any transaction contemplated herein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Holdings or any of its Subsidiaries in writing to any Lender for
purposes of or in connection with this Agreement or any transaction contemplated
herein are and will be (and, solely with respect to any such information
furnished on behalf of Holdings or any Subsidiary by a third party, to the best
knowledge of Holdings and Borrowers after due inquiry are and will be) true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
Section 6.8. Use of Proceeds; Margin Regulations.
(a) Term Loan Proceeds. All proceeds of the Term Loans
incurred on the Initial Borrowing Date shall be used by Borrowers (i) to
refinance, in part, all of the indebtedness and obligations under the Existing
Credit Agreements, (ii) to finance the Reorganization, (iii) to pay fees and
expenses in connection with the Transactions, and (iv) for general corporate
purposes of Borrowers and their Subsidiaries.
(b) Working Capital Loan Proceeds. All proceeds of the
Working Capital Loans incurred hereunder shall be used by Borrowers for ongoing
working capital needs, Capital Expenditures and general corporate purposes of
the Borrowers and their Subsidiaries (but excluding Permitted Acquisitions and
the repayment of Acquisition Loans).
(c) Acquisition Revolving Loan Proceeds. All proceeds of the
Acquisition Revolving Loans incurred hereunder shall be used by Borrowers (i) to
finance Permitted Acquisitions and (ii) to pay fees and expenses in connection
with Permitted Acquisitions.
(d) Margin Regulations. No part of the proceeds of any Loan
will be used to purchase or carry any margin stock, directly or indirectly, or
to extend credit for the purpose of purchasing or carrying any such margin stock
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the loans or extensions of credit under this Agreement to be
considered a "purpose credit" within the meaning of Regulation T, U or X of the
Board.
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Section 6.9. Taxes.
(a) Tax Returns and Payments. Each of Holdings and each of
its Subsidiaries has timely filed or caused to be filed with the appropriate
taxing authority, all returns, statements, forms and reports for material taxes
(the "Returns") required to be filed by or with respect to the income,
properties or operations of Holdings and/or any of its Subsidiaries. The Returns
accurately reflect all liability for taxes of Holdings and its Subsidiaries for
the periods covered thereby. Each of Holdings and each of its Subsidiaries has
paid all material taxes payable by it before they have become delinquent other
than those contested in good faith and for which adequate reserves have been
established in conformity with GAAP. As of the Closing Date, there is no action,
suit, proceeding, investigation, audit, or claim pending or, to the knowledge of
Borrower, threatened by any authority regarding any taxes relating to Holdings
or any of its Subsidiaries other than as disclosed on Schedule 6.9 hereto. As of
the Closing Date, neither Holdings nor any of its Subsidiaries has entered into
an agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Holdings or any of its Subsidiaries, or is aware of any circumstances
that would cause the taxable years or other taxable periods of Holdings or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations. As of the Closing Date, neither Holdings nor any of its
Subsidiaries have provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code. Neither Holdings nor any of its
Subsidiaries has incurred, or will incur, any material tax liability in
connection with the Transactions.
(b) Tax Examinations. Except as set forth on Schedule 6.9
hereto, as of the Closing Date, the federal income tax returns on each of
Holdings and its Subsidiaries have been examined by the IRS (or closed by
applicable statutes) for any tax periods, and there are no other tax
examinations in progress. All deficiencies which have been asserted against
Holdings or any of its Subsidiaries as a result of such examinations have been
fully paid or finally settled or are being contested in good faith, and no issue
has been raised in any such examination which, by application or similar
principles, reasonably can be expected to result in an assertion of a deficiency
for any other year not so examined that has not been accrued on Holding's and
its Subsidiaries' or LISN Holdings' and its Subsidiaries audited financial
statements for its most recently ended Fiscal Year that would be required to be
so accrued in accordance with GAAP. Neither Holdings nor any of its Subsidiaries
has knowledge of any material federal income tax liability with respect to open
taxable years in excess of amounts accrued on such Person's financial statements
for its most recently ended Fiscal Year that would be required to be so accrued
in accordance with GAAP, nor does Holdings or any of its Subsidiaries anticipate
any further material tax liability with respect to such open taxable years taken
as a whole in excess of such accrued amounts.
Section 6.10. Compliance With ERISA. Each Plan is in all
material respects in compliance with ERISA and the Code; no Reportable Event
which could reasonably be expected to result in the termination of any Plan has
occurred with respect to a Plan; no Multiemployer Plan is insolvent or in
reorganization; the aggregate fair market value of the assets of each Plan
equals or exceeds the aggregate present value of the accrued benefits under such
Plan (using the actuarial funding assumptions then in effect for such Plan); no
Plan has an accumulated or waived funding deficiency, has permitted decreases in
its funding standard account or has
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applied for an extension of any amortization period within the meaning of
Section 412 of the Code of Section 302 of ERISA; neither Holdings nor any of its
Subsidiaries nor any ERISA Affiliate has incurred any material liability to or
on account of a Plan pursuant to Section 409, 502(i), 502(d), 515, 4062, 4063,
4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or is
expected to incur any material liability under any of the foregoing Sections
with respect to any Plan; no proceedings have been instituted to terminate any
Plan; no condition exists which presents a risk to Holdings or any of its
Subsidiaries or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
using actuarial assumptions and computation methods consistent with subpart 1 of
Subtitle E of Title IV of ERISA, Holdings and its Subsidiaries and its ERISA
Affiliates would not have any liability to all Plans which are Multiemployer
Plans in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ending prior to the date of any Credit
Event; no Lien imposed under the Code or ERISA on the assets of Holdings or any
of its Subsidiaries or any ERISA Affiliate exists or is likely to arise on
account of any Plan; and Holdings and its Subsidiaries do not maintain or
contribute to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees (other than as required by
Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA), except where any of the foregoing, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
Section 6.11. Security Documents.
(a) Security Agreement Collateral. The provisions of the
Security Agreement are effective to create in favor of Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of each Credit Party in the
Collateral, and the Security Agreement, together with the timely filings of Form
UCC-1 creates a fully perfected first lien on, and security interest in, all
right, title and interest of each Credit Party in all of the Collateral (other
than trademarks, patents and copyrights) described therein, subject to no other
Liens other than Permitted Liens. The recordation in the United States Patent
and Trademark Office and in the United States Copyright Office of grants of
security interests made pursuant to the Security Agreement, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will be
effective, under Federal law, to perfect the security interest granted to Agent
in the registered trademarks, patents and copyrights covered by the Security
Agreement, and the filing of grants of security interests made pursuant to the
Security Agreement, with the United States Copyright Office together with
filings on Form UCC-1 made pursuant to the Security Agreement, will be effective
under Federal law to perfect the security interest granted to Collateral Agent
in the registered copyrights covered by the Security Agreement. Each Credit
Party has good and marketable title to, or rights in, all Security Agreement
Collateral, free and clear of all Liens except Permitted Liens.
(b) Pledged Securities. The security interests created in
favor of Collateral Agent, as Pledgee for the benefit of the Secured Creditors
under the Pledge Agreement, constitute first perfected security interests in the
Pledged Securities, if any, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect the security
interests created in the Pledged Securities under the Pledge Agreement.
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(c) Real Estate Collateral. The Mortgages create, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on all of the Mortgaged Properties (including,
without limitation, all fixtures and improvements relating to such Mortgaged
Properties and affixed or added thereto on or after the Closing Date in favor of
Collateral Agent (or such other trustee as may be named therein)) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third Persons (except that the security interest created in the Mortgaged
Properties may be subject to the Permitted Liens related thereto) and subject to
no other Liens (other than Liens permitted under Section 8.1). Schedule 6.11(c)
contains a true and complete list of each parcel of Real Property owned or
leased by Holdings and its Subsidiaries on the Closing Date, identifies which
Credit Party has an interest therein and the type of interest therein held by
such Credit Party. Each Credit Party will have good and marketable title to all
Mortgaged Properties of such Credit Party free and clear of all Liens except
those described in the first sentence of this Section 6.11(c).
Section 6.12. Documents.
(a) True and Accurate Copies; Consummation of Transactions.
Borrowers have heretofore delivered to Agent true, correct and complete copies
of the Documents entered into in connection with the Transactions on or prior to
the Closing Date. Holdings and Borrowers have, concurrently with the execution
and delivery of this Agreement, consummated the transactions contemplated by the
Documents to be consummated as of the Closing Date pursuant thereto, and the
Documents set forth the entire agreement among the parties thereto with respect
to the subject matter thereof. Except as set forth on Schedule 6.12 hereto, no
party to the Documents has waived the fulfillment of any material condition
precedent set forth therein to the consummation of the transactions contemplated
thereby, no party is in default or has failed to perform any of its material
obligations thereunder or under any instrument or document executed and
delivered in connection therewith.
(b) Representations and Warranties in Documents. All
representations and warranties made by Holdings or any of its Subsidiaries or,
to the best knowledge of Holdings and Borrowers, made by any third party in the
Documents were true and correct in all material respects at the time as of which
such representations and warranties were made or deemed made and as of the
Initial Borrowing Date, provided that any representation or warranty which by
its terms is made as of a specified date shall be true and correct in all
material respects as of such specified date.
Section 6.13. Ownership of Property. Borrowers and each
Subsidiary has good and marketable title to, or a subsisting leasehold interest
in or right to use, all material items of real and personal property used in its
operations (except as to leasehold interests) free and clear of all Liens,
except Permitted Liens with respect to personal property and except Permitted
Real Property Encumbrances with respect to Real Property. Substantially all
items of material real and material personal property owned by, leased to or
used by each Borrower and each Subsidiary are in adequate operating condition
and repair, ordinary wear and tear excepted, are free and clear of any known
defects except such defects as do not substantially interfere with the continued
use thereof in the conduct of normal operations, and are able to serve the
function for which they are currently being used. The items of material real and
personal property owned by, leased to or used by each Borrower and each
Subsidiary constitute all of the assets used in the
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conduct of such Person's business as presently conducted, and neither this
Agreement nor any other Document, nor any transaction contemplated under any
such agreement, will affect any right, title or interest of any Borrower or any
Subsidiary in and to any of such assets in a manner that would have or is
reasonably likely to have a Material Adverse Effect. To the knowledge of
Holdings and Borrowers, there are no actual, threatened or alleged defaults with
respect to any material leases of real property under which any Borrower or any
Subsidiary is lessee or lessor which could reasonably be expected to have a
Material Adverse Effect. Holdings and each Subsidiary have granted mortgages to
secure the Obligations on all parcels of real estate material to the operations
of Holdings and such Subsidiaries.
Section 6.14. Capitalization. All shares of Capital Stock of
Holdings and Borrowers have been duly authorized and validly issued, are fully
paid and non-assessable. As of the Closing Date and after giving effect to the
Transaction, no authorized but unissued or treasury shares of Capital Stock of
Holdings or any Borrower are subject to any option, warrant, right to call or
commitment of any kind or character, except as expressly set forth on Schedule
6.14. As of the Closing Date and after giving effect to the Transactions,
neither Holdings nor any Borrower has any outstanding stock or securities
convertible into or exchangeable for any shares of its Capital Stock, or any
rights issued to any Person (either preemptive or other) to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to any of its Capital Stock or any stock or securities
convertible into or exchangeable for any of its Capital Stock other than as
expressly set forth on Schedule 6.14. As of the Closing Date, except as
disclosed on Schedule 6.14, neither Holdings nor any Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Capital Stock or any convertible securities, rights or
options of the type described in the preceding sentence.
Section 6.15. Subsidiaries.
(a) Organization. Schedule 6.15 hereto sets forth a true,
complete and correct list of each direct and indirect Subsidiary of Holdings as
of the Closing Date after giving effect to the Transactions and indicates for
each such Person (i) its jurisdiction of incorporation and, (ii) its ownership
(by holder and percentage interest). Holdings has no direct Subsidiaries other
than LISN Holdings and NATG. No Borrower has any Subsidiaries except for
Subsidiaries created in accordance with Section 8.16 and those Subsidiaries
listed as such on Schedule 6.15 hereto.
(b) Capitalization. The capitalization of each direct and
indirect Subsidiary of each Borrower as of the Closing Date and after giving
effect to the Transactions is set forth on Schedule 6.15. On the Closing Date
and at all times thereafter:
(i) all shares of Capital Stock of each of the direct and
indirect Subsidiaries of each Borrower will have been duly authorized
and validly issued, will be fully paid and non-assessable and will be
Wholly-Owned Subsidiaries of Borrowers (except for qualifying shares
required to be owned by directors or foreign nationals), free and clear
of all Liens other than Permitted Liens arising other than as a result
of a voluntary act of Borrowers or the applicable Subsidiary; and
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(ii) no authorized but unissued or treasury shares of
Capital Stock of any Subsidiary of any Borrower are subject to any
option, warrant, right to call or commitment of any kind or character.
A complete and correct copy of each of the Organizational Documents of
each such Subsidiary in effect on the Closing Date has been delivered
to Agent.
(c) Restrictions on or Relating to Subsidiaries. There does
not exist any encumbrance or restriction on the ability of (i) any Subsidiary of
a Borrower to pay dividends or make any other distributions on its Capital Stock
or any other interest or participation in its profits owned by a Borrower or any
Subsidiary of a Borrower, or to pay any Indebtedness owed, respectively, to a
Borrower or a Subsidiary of a Borrower, (ii) any Subsidiary of a Borrower to
make loans or advances, respectively, to a Borrower or any of Borrower's
Subsidiaries or (iii) a Borrower or any of its Subsidiaries to transfer any of
its properties or assets to any Borrower or any of its Subsidiaries, except for
such encumbrances or restrictions existing under or by reason of (w) any
permitted Asset Disposition arising pursuant to any sale agreement entered into
in connection with such Asset Disposition, so long as such encumbrance or
restriction relates solely to the assets or entity to be sold in such Asset
Disposition, (x) applicable law, (y) this Agreement or the other Loan Documents
or (z) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of a Borrower or a Subsidiary of a Borrower.
Section 6.16. Compliance With Law, Etc. Neither Holdings nor
any of its Subsidiaries is in default under or in violation of any Requirement
of Law or Contractual Obligation or under its Organizational Documents, as the
case may be, in each case the consequences of which default or violation, either
in any one case or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 6.17. Investment Company Act. Neither Holdings nor any
of its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
Section 6.18. Public Utility Holding Company Act. Neither
Holdings nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 6.19. Environmental Matters.
(a) Holdings and each of its Subsidiaries have complied in
all material respects with, and on the date of such Credit Event are in
compliance in all material respects with, all applicable Environmental Laws and
the requirements of any permits issued under such Environmental Laws except for
such noncompliance that could not reasonably be expected to have a Material
Adverse Effect. There are no material past, pending or, to the best knowledge of
Holdings and Borrowers, threatened Environmental Claims against Holdings or any
of its Subsidiaries or any real property owned or at any time operated by
Holdings or any of its Subsidiaries except for such Environmental Claims which
could not reasonably be expected to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any real property owned or at
any time operated by Holdings or any of its Subsidiaries or, to the
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best knowledge of Holdings and Borrowers, on any property adjoining any real
property owned or operated by Holdings and its Subsidiaries that could
reasonably be expected (i) to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries or any such real property, or (ii) to cause
such real property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such real property under any Environmental
Law, except, in each case for clause (i) and (ii) above, for such Environmental
Claims or restrictions which could not reasonably be expected to have a Material
Adverse Effect.
(b) Hazardous Materials have not been, to the knowledge of
Holdings and Borrowers at any time in the past, and are not presently being,
generated, used, treated or stored on, or transported to or from, any real
property owned or at any time operated by Holdings or any of its Subsidiaries
where such generation, use, treatment or storage has violated or could
reasonably be expected to violate or create liability under any Environmental
Law except where such violation or liability could not reasonably be expected to
have a Material Adverse Effect. To the best knowledge of Holdings and Borrowers,
Hazardous Materials have not at any time been Released on or from any real
property owned or at any time operated by Holdings or any of its Subsidiaries
where such Release has violated or could reasonably be expected to violate or
create liability under any Environmental Law except where such violation or
liability could not reasonably be expected to have a Material Adverse Effect. To
the best knowledge of the Holdings and Borrowers, except as disclosed on
Schedule 6.19, there are not now and never have been any underground storage
tanks located on any real property owned or operated by Holdings or any of its
Subsidiaries, except for such tanks, the presence of which, could not reasonably
be expected to have a Material Adverse Effect.
Section 6.20. Labor Relations. Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no significant unfair
labor practice complaint pending against Holdings or any of its Subsidiaries or,
to the best knowledge of Holdings and Borrowers, threatened against any of them
before the National Labor Relations Board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against Holdings or any of its Subsidiaries
or, to the best knowledge of Holdings and Borrowers, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending
against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings and Borrowers, threatened against Holdings or any of its Subsidiaries
and (iii) to the best knowledge of Holdings and Borrowers, no question
concerning union representation exists with respect to the employees of Holdings
or any of its subsidiaries, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, either individually or in the aggregate) such
as could not reasonably be expected to have a Material Adverse Effect.
Section 6.21. Intellectual Property, Licenses, Franchises and
Formulas. Each Borrower and each of their Subsidiaries owns or holds licenses or
other rights to or under all the material patents, patent applications,
trademarks, service marks, trademark and service mark registrations and
applications therefor, trade names, copyrights, copyright registrations and
applications therefor, trade secrets, proprietary information, computer
programs, data bases, licenses, permits, franchises and formulas, or rights with
respect to the foregoing which are necessary to the operation of the business of
Borrowers and their Subsidiaries (collectively, "Intellectual Property"), and
has obtained assignments of all leases and other rights of whatever
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nature, necessary for the present conduct of its business, without any known
material conflict with the rights of others. Neither Borrower nor any of its
Subsidiaries has knowledge of any existing or threatened claim by any Person
contesting the validity, enforceability, use or ownership of the Intellectual
Property, or of any existing state of facts that would support a claim that use
by a Borrower or any of its Subsidiaries of any such Intellectual Property has
infringed or otherwise violated any proprietary rights of any other Person,
which could reasonably be expected to have a Material Adverse Effect.
Section 6.22. Certain Fees. Except as set forth in Schedule
6.22 attached hereto, this Agreement, the letter agreement between Holdings,
Borrowers, Bankers Trust Corporation, BT and NationsBridge, L.L.C., the letter
agreement between LISN Holdings, Deutsche Bank Securities Inc. and Banc of
America Securities LLC and the letter agreement between LISN Holdings, Agent and
Bank of America, N.A., no broker's or finder's fees or commissions or any
similar fees or commissions will be payable by Holdings or any of its
Subsidiaries with respect to the incurrence and maintenance of the Obligations,
any other transaction contemplated by the Loan Documents or any services
rendered in connection with such transactions. Each Borrower covenants that it
will indemnify Agent and each Lender against and hold Agent and each Lender
harmless from any claim, demand or liability for broker's or finder's fees or
similar fees or commissions alleged to have been incurred in connection with any
of the transactions contemplated hereby.
Section 6.23. Transactions. At the time of consummation
thereof, each of the Transactions shall have been consummated in all material
respects in accordance with the terms of the respective Documents and all
applicable laws. Additionally, at the time of consummation thereof, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the consummation of any Transactions, and there does not
exist any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the occurrence of any Credit Event or the performance by
Holdings and its Subsidiaries of their obligations under the Documents. All
actions taken by Holdings and its Subsidiaries pursuant to or in furtherance of
each Transactions have been taken in all material respects in compliance with
the respective Documents and all applicable laws.
Section 6.24. Y2K. Holdings and LISN have each reviewed its
operations and those of its Subsidiaries with a view to assessing whether its
businesses, or the businesses of any of its Subsidiaries, will be vulnerable to
a Y2K Problem or will be vulnerable in any material respect to the effects of a
Y2K Problem suffered by any of Holdings' or any of its Subsidiaries' major
customers and suppliers. Holdings and each Borrower represents and warrants that
it has a reasonable basis to believe that no Y2K Problem could reasonably be
expected to have a Material Adverse Effect.
Section 6.25. Subordination. The Obligations constitute
"Senior Debt" as such term (or any similar term) is defined in the Junior
Subordinated Notes, the Bridge Loan Documents, the Senior Subordinated Documents
and each other agreement or instrument governing or guarantying any other
Subordinated Indebtedness, and the subordination provisions contained in the
Junior Subordinated Notes, the Bridge Loan Agreement, the Senior Subordinated
Indenture and each other agreement or instrument governing or guarantying any
other Subordinated Indebtedness are enforceable against Holdings and its
Subsidiaries and the
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holders of such Subordinated Indebtedness (except to the extent enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law)).
ARTICLE VII
AFFIRMATIVE COVENANTS
Holdings and Borrowers hereby covenant and agree that, so long
as any of the Commitments remain in effect, or any Loan, LC Obligation or
Rollover LC Obligation remains outstanding and unpaid or any other amount is
owing to any Lender or Agent hereunder (but excluding any unasserted contingent
and indemnification obligations which by their terms expressly survive the
termination hereof):
Section 7.1. Financial Statements. Holdings and/or Borrowers
will furnish, or cause to be furnished, to Agent (which will furnish copies to
each Lender with reasonable promptness):
(a) Quarterly Financial Statements. Within forty-five (45)
days after the end of each of the first three Fiscal Quarters of each Fiscal
Year of Holdings, unaudited financial statements consisting of a consolidated
balance sheet and statement of stockholders' equity of Holdings and its
Subsidiaries as at the end of such quarter and consolidated and consolidating
statements of income and a consolidated statement of cash flows of Holdings and
its Subsidiaries for such quarter and for the Fiscal Year through such quarter,
all in reasonable detail and certified on behalf of Holdings by the chief
financial officer of Holdings as having been prepared in accordance with
generally accepted accounting principles consistently applied (other than for
normal year-end audit adjustments and, unless then required by Holding's
reporting obligations to the Securities and Exchange Commission or by generally
accepted accounting principles, footnote disclosure).
(b) Annual Financial Statements. Within ninety (90) days
after the end of each Fiscal Year of Holdings, audited financial statements
consisting of a consolidated and consolidating balance sheet and statement of
stockholder's equity of Holdings and its Subsidiaries as at the end of such
Fiscal Year and consolidated and consolidating statements of income and cash
flows of Holdings and its Subsidiaries for such Fiscal Year, setting forth in
comparative form the corresponding figures for the preceding Fiscal Year,
certified (without adverse opinions, scope limitations or qualifications with
respect to departures from generally accepted accounting principles other than
departures (x) which are not material, (y) which will not cause the financial
statements to fail to meet the requirements of the Securities and Exchange
Commission for financial information to be contained or incorporated by
reference in registration statements, and (z) which do not cause the financial
statements to fail to accurately reflect the financial condition of Holdings)
without qualification as to scope of examination by independent public
accountants of recognized national standing and reputation selected by Holdings.
(c) Monthly Financial Statements. Within thirty (30) days
after the end of each month (other than the last month of any Fiscal Quarter) of
Holdings, unaudited financial statements consisting of a consolidated balance
sheet as at the end of such month and
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consolidated statements of income of Holdings and its Subsidiaries and such
other financial statements as are prepared by Holdings in the ordinary course of
business for such month and for the Fiscal Year through such month, all in
reasonable detail and certified on behalf of Holdings by the chief financial
officer of Holdings as having been prepared in accordance with generally
accepted accounting principles consistently applied (other than for normal
year-end audit adjustments and footnote disclosure).
Section 7.2. Certificates; Other Information. Holdings and/or
Borrowers will furnish, or cause to be furnished, to Agent (which will furnish
copies to each Lender with reasonable promptness):
(a) Accountant's Certificates. Concurrently with the
delivery of the financial statements referred to in Section 7.1(b), (i) to the
extent not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, a certificate from
PriceWaterhouseCoopers LLP or other independent certified public accountants of
nationally recognized standing, stating that, in the course of their annual
audit of the books and records of Holdings and its Subsidiaries, no Event of
Default or Unmatured Event of Default has come to their attention which was
continuing at the end of such Fiscal Year or on the date of their certificate,
or if such an Event of Default or Unmatured Event of Default has come to their
attention, the certificate shall indicate the nature of such Event of Default or
Unmatured Event of Default and (ii) a letter, in form reasonably satisfactory to
Agent from such accountants with respect to reliance on such accountant's
certificate and report on the annual consolidated financial statements referred
to in this Section 7.2(a).
(b) Officer's Certificates. Concurrently with the delivery
of the financial statements referred to in Sections 7.1(a) and 7.1(b), a
certificate of the chief financial officer of Holdings substantially in the form
of Exhibit 7.2(b) stating that, to the best of such officer's knowledge, (i)
such financial statements present fairly in all material respects, in accordance
with GAAP, the financial condition and results of operations of Holdings and its
Subsidiaries for the period referred to therein (subject, in the case of interim
statements, to normal year-end audit adjustments and the absence of footnote
disclosure) and (ii) no Event of Default or Unmatured Event of Default has
occurred, except as specified in such certificate and, if so specified, the
action which Borrowers propose to take with respect thereto, which certificate
shall set forth detailed computations to the extent necessary to establish
Borrowers' compliance with the covenants set forth in Article IX of this
Agreement;
(c) Audit Reports and Statements. Promptly following
Holdings' or any Borrower's receipt thereof, copies of all consolidated
financial or other consolidated reports or statements, if any, submitted to
Holdings or any of its Subsidiaries by independent public accountants relating
to any annual or interim audit of the books of Holdings or any of its
Subsidiaries;
(d) Management Letters. Promptly after receipt by Holdings
or any of its Subsidiaries, a copy of any "management letter" received by
Holdings or any of its Subsidiaries from its certified public accountants;
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(e) Budgets; Projections. As soon as available and in any
event within thirty (30) days following the first day of each Fiscal Year of
Holdings, (i) an annual budget in form reasonably satisfactory to Agent and the
Required Lenders (including budgeted statements of income, operations, cash
flows, shareholders' equity and balance sheets) prepared by Holdings for each
Fiscal Quarter of such Fiscal Year and (ii) projections in form reasonably
satisfactory to Agent and the Required Lenders covering the period from such
Fiscal Year through the Revolver Termination Date in each case prepared in
reasonable detail, with appropriate presentation and discussion of the principal
assumptions upon which such budgets and projections are based, which shall be
accompanied by the statement of a Responsible Officer of Holdings to the effect
that, to the best of his knowledge, such budget and projections are a reasonable
estimate when made for the periods respectively covered thereby;
(f) Public Filings. Within 10 days after the same become
public, copies of all financial statements, filings, registrations and reports
which Holdings or any Borrower may make to, or file with the SEC or any
successor or analogous Governmental Authority; and
(g) Other Requested Information. Such other information
respecting the respective properties, business affairs, financial condition
and/or operations of Holdings or any of its Subsidiaries as Agent or any Lender
may from time to time reasonably request.
Section 7.3. Notices. Holdings and/or Borrowers will furnish,
or will cause to be furnished, promptly and in any event within three (3)
Business Days after a Responsible Officer of Holdings or of any Borrower obtains
knowledge thereof, written notice to Agent (which shall provide a copy of such
notice to each Lender with reasonable promptness) of:
(a) Event of Default or Unmatured Event of Default. The
occurrence of any Event of Default or Unmatured Event of Default, accompanied by
a statement of a Responsible Officer of Borrowers setting forth details of the
occurrence referred to therein and stating what action Borrowers propose to take
with respect thereto;
(b) Litigation and Related Matters. The commencement of, or
any material development in, any action, suit, proceeding or investigation
pending or threatened against or affecting Holdings or any of its Subsidiaries
or any of their respective properties before any arbitrator or Governmental
Authority, (i) in which the amount involved is $5,000,000 or more, (ii) with
respect to any Document or any material Indebtedness or Capital Stock of
Holdings or any of its Subsidiaries or (iii) which, if determined adversely to
Holdings or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect;
(c) Environmental Matters. The occurrence of one or more of
the following environmental matters which could reasonably be expected to result
in liabilities, costs or expenses of $5,000,000 or more: (i) any pending or
threatened Environmental Claim against Holdings or any of its Subsidiaries or
any real property at any time owned or operated by Holdings or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from any real
property at any time owned or operated by Holdings or any of its Subsidiaries
that (y) results in noncompliance by Holdings or any of its Subsidiaries with
any applicable Environmental Law, or (z) could reasonably be expected to form
the basis of a Environmental Claim against Holdings or any of its Subsidiaries
or any such real property; (iii) any condition or occurrence on any real
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property owned or operated by Holdings or any of its Subsidiaries that could
reasonably be expected to cause such real property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such real
property under any Environmental Law; and (iv) the taking of any removal or
remedial action, as those terms are defined under the Environmental Laws, in
response to the actual or alleged presence of any Hazardous Material on any real
property owned or operated by Holdings or any of its Subsidiaries as required by
an Environmental Law or any Governmental Authority. All such notices shall
describe in reasonable detail the nature of the claim, investigation, condition,
occurrence or removal or remedial action and Holdings' or such Subsidiary's
response thereto. In addition, Borrowers will provide the Lenders with copies of
all material written communications with any Governmental Authority or with any
Person (provided that the disclosure of such written communications with any
Person shall not be subject to any attorney-client or other legally recognized
privilege that would otherwise be violated or the benefit of which would be lost
through the disclosure thereof, as such privilege and violation or loss of
benefit is demonstrated to the reasonable satisfaction of Agent and its counsel)
relating to the matters described in (i)-(iv) above as may reasonably be
requested by the Lenders.
(d) Notice of Change of Control. Each occasion that any
Change of Control shall occur and such notice shall set forth in reasonable
detail the particulars of each such occasion.
(e) Notices under Transaction Documents. Promptly following
the receipt or delivery thereof, copies of any material demands, notices of
default or other material notices received or delivered by Holdings or any of
its Subsidiaries under or pursuant to any Transaction Document.
Section 7.4. Conduct of Business and Maintenance of Existence.
Holdings will, and will cause each of its Subsidiaries to, continue to engage in
business of the same general type as now conducted by Holdings and its
Subsidiaries on the Closing Date and preserve, renew and keep in full force and
effect its and each Subsidiary's corporate existence and take all reasonable
action to maintain all rights, privileges and franchises material to its and
those of each of its Subsidiaries' business except as otherwise permitted
pursuant to Section 8.4 and comply and cause each of its Subsidiaries to comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to maintain or comply therewith would not in the aggregate
reasonably be expected to have a Material Adverse Effect.
Section 7.5. Payment of Obligations. Holdings will, and will
cause each of its Subsidiaries to, pay or discharge or otherwise satisfy at
maturity or, to the extent permitted hereby, prior to maturity or before they
become delinquent, as the case may be:
(i) all taxes, assessments and governmental charges or
levies imposed upon any of them or upon any of their income or profits
or any of their respective properties or assets prior to the date on
which penalties attach thereto; and
(ii) all lawful claims prior to the time they become a Lien
upon any of their respective properties or assets;
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provided, however, that neither Holdings nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge, levy or claim
while the same is being contested by it in good faith and by appropriate
proceedings diligently pursued so long as Holdings or such Subsidiary, as the
case may be, shall have set aside on its books adequate reserves in accordance
with GAAP (segregated to the extent required by GAAP) with respect thereto and
title to any material properties or assets is not jeopardized in any material
respect.
Section 7.6. Inspection of Property, Books and Records.
Holdings will, and will cause each of its Subsidiaries to, keep, or cause to be
kept adequate records and books of account, in which complete entries are to be
made reflecting its and their business and financial transactions, such entries
to be made in accordance with sound accounting principles consistently applied
and Holdings will permit, and cause each of its Subsidiaries to permit, Agent
and/or its designated representatives, at any reasonable time during normal
business hours, and from time to time at the reasonable request of Agent made to
Borrowers and upon reasonable prior written notice, to visit and inspect its and
their respective properties, to examine and make copies of and take abstracts
from its and their respective records and books of account (other than materials
protected by attorney-client privilege the disclosure or inspection of which,
based on a written opinion of counsel to Borrowers reasonably acceptable to
Agent, would waive such privilege), (provided that so long as no Event of
Default or Unmatured Event of Default exists and is continuing, Borrowers shall
not be obligated to pay for more than one visit and inspection by Agent per
Fiscal Year, provided, further, that during the continuance of an Event of
Default or Unmatured Event of Default all visits and inspections shall be at the
expense of Borrowers) and to discuss its and their respective affairs, finances
and accounts with its and their respective principal officers, directors and,
with prior written notice to Borrowers, independent public accountants (and by
this provision Holdings and Borrowers authorize such accountants to discuss with
Agent and/or the Lenders and such representatives the affairs, finances and
accounts of Holdings and its Subsidiaries so long as Holdings, Borrowers and
their officers and representatives are afforded the reasonable opportunity to
attend or participate in any such discussion).
Section 7.7. ERISA. Holdings will, and will cause each of its
Subsidiaries to, (i) as soon as practicable and in any event within ten (10)
Business Days after a Responsible Officer of Holdings or any of its Subsidiaries
or ERISA Affiliates knows or has reason to know that a Reportable Event has
occurred with respect to any Plan (whether or not the requirement for notice of
such Reportable Event has been waived by the PBGC), deliver, or cause such ERISA
Affiliate to deliver, to Agent a certificate on behalf of Holdings or such
Subsidiary or ERISA Affiliate of a Responsible Officer of Holdings or such
Subsidiary or ERISA Affiliate, as the case may be, setting forth the details of
such Reportable Event and the action, if any, which Holdings or such Subsidiary
or ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given; (ii) upon the reasonable request of any Lender
made from time to time, deliver, or cause each ERISA Affiliate to deliver, to
each Lender a copy of the most recent actuarial report and annual report
completed with respect to any Plan; (iii) as soon as possible and in any event
within ten (10) Business Days after a Responsible Officer of Holdings or any of
its Subsidiaries or ERISA Affiliates knows or has reason to know that any of the
following have occurred or is reasonably likely to occur with respect to any
Plan: (A) such Plan has been or may be terminated, reorganized, petitioned or
declared insolvent under Title IV of ERISA, (B) the Plan Sponsor intends to
terminate such Plan, (C) the PBGC has instituted or will
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institute proceedings under Section 515 of ERISA to collect a delinquent
contribution to such Plan or under Section 4042 of ERISA to terminate such Plan,
(D) that an accumulated funding deficiency has been incurred or that on
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or on extension of any amortization period under Section
412 of the Code, (E) that Holdings, or any Subsidiary of Holdings, or any ERISA
Affiliate will or may incur any liability (including, but not limited to,
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code
or Section 409 or 502(1) of ERISA, or (F) Holdings or any Subsidiary of Holdings
has or may incur any liability under any employee welfare benefit plan (within
the meaning of Section 3(1) of ERISA) that provides benefits to retired
employees (other than as required by Section 601 of ERISA) or any employee
pension benefit plans (as defined in Section 3(2) of ERISA), deliver, or cause
such ERISA Affiliate to deliver, to Agent a written notice thereof; and (iv) as
soon as possible and in any event within thirty days after Holdings or any of
its Subsidiaries or ERISA Affiliates knows or has reason to know that any of
them has incurred a complete withdrawal or partial withdrawal (within the
meaning of Sections 4203 and 4205, respectively, of ERISA) from any
Multiemployer Plan, deliver, or cause such ERISA Affiliate to deliver, to Agent
a written notice thereof. For purposes of this Section 7.7, Holdings and
Borrowers shall be deemed to have knowledge of all facts known by the Plan
Administrator of any Plan of which Holdings or Borrowers is the Plan Sponsor,
and each Subsidiary and ERISA Affiliate of Holdings shall be deemed to have
knowledge of all facts known by the Plan Administrator of any Plan of which such
Subsidiary or such ERISA Affiliate, respectively, is a Plan Sponsor. In addition
to its other obligations set forth in this Article VII, each of Holdings and
Borrowers shall, and shall cause each of its Subsidiaries and ERISA Affiliates
to:
(A) provide Agent with prompt written notice, with respect to
any Plan, of any failure to satisfy the minimum funding standard
requirements of Section 412 of the Code or section 302 of ERISA, which
failure to so satisfy exceeds $5,000,000,
(B) furnish to Agent, promptly after delivery of the same to
the PBGC, a copy of any delinquency notice pursuant to Section
412(n)(4) of the Code or Section 302(f)(4) of ERISA,
(C) correct any such failure to satisfy funding requirements
or delinquency referred to in the foregoing clauses (A) and (B) within
ninety (90) days after the occurrence thereof, except where the failure
to so satisfy would not reasonably be expected to have a Material
Adverse Effect;
(D) comply in good faith with the requirements set forth in
Section 4980(B) of the Code and with Sections 601(a) and 606 of ERISA;
(E) at the request of any Lender, deliver to such Lender (and
a copy to Agent) a complete copy of the annual report (Form 5500) of
each Plan required to be filed with the Internal Revenue Service; and
(F) at the request of any Lender, deliver to such Lender (and
a copy to Agent) copies of the annual reports and notices received by
Holdings or any Subsidiary or any
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ERISA Affiliate with respect to any Plan or Foreign Pension Plan no
later than ten (10) Business Days after the date of such request.
Section 7.8. Maintenance of Property, Insurance. Holdings
will, and will cause each of its Subsidiaries to, (i) keep all material property
(including, but not limited to, equipment) used in its business in good working
order and condition, normal wear and tear and damage by casualty excepted, and
subject to Section 8.4(b), (ii) maintain insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons, such insurance shall be maintained with financially sound and
reputable insurers, except that a portion of such insurance program (not to
exceed that which is customary in the case of companies engaged in the same or
similar business or having similar properties similarly situated) may be
effected through self-insurance, provided adequate reserves therefor, in
accordance with GAAP, are maintained, and (iii) furnish to Agent, on the Closing
Date and on each anniversary thereof, certificates of insurance as to the
insurance carried. All insurance policies or certificates (or certified copies
thereof) with respect to such insurance (A) shall be endorsed to the Agent's
reasonable satisfaction for the benefit of the Agent and Lenders (including,
without limitation, by naming Agent as loss payee or additional insured, as
appropriate); and (B) shall state that such insurance policy shall not be
cancelled or revised without thirty days' prior to written notice thereof by the
insurer to the Agent. At any time that insurance at levels described in Schedule
7.8 is not being maintained by Holdings or any of its Subsidiaries, Borrowers
will notify the Lenders in writing within five Business Days thereof and, if
thereafter notified by Agent or the Required Lenders to do so, Borrowers or any
such Subsidiary, as the case may be, shall obtain insurance at such levels at
least equal to those set forth on Schedule 7.8. The provisions of this Section
7.8 shall be deemed to be supplemental to, but not duplicative of, the
provisions of any of the Security Documents that require the maintenance of
insurance.
Section 7.9. Environmental Laws.
(a) Holdings will, and will cause each of its Subsidiaries
to, comply with, and cause its Subsidiaries to comply with, and, in each case
take reasonable steps to ensure compliance by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and take reasonable steps to ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Law except to the extent that in
the case of any of the foregoing, failure to do so would not reasonably be
expected to have a Material Adverse Effect;
(b) Holdings will, and will cause each of its Subsidiaries
to, conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders, directives and
information requests of all Governmental Authorities regarding Environmental
Laws except to the extent that any of the same are being contested in good faith
by appropriate proceedings and the pendency of such proceedings would not
reasonably be expected to have a Material Adverse Effect; and
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(c) Borrowers agree to jointly and severally defend,
indemnify and hold harmless Agent and the Lenders, and their respective
employees, agents, officers, trustees and directors, from and against any and
all claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of Holdings, any of its Subsidiaries or their respective properties,
or any orders, requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorneys' and consultants'
fees, investigation and laboratory fees, costs arising from any Remedial Action,
court costs and litigation expenses, except to the extent that any of the
foregoing resulted primarily from the gross negligence, bad faith or willful
misconduct of the party seeking indemnification therefor. The agreements in this
Section 7.9(c) shall survive the termination of this Agreement and the repayment
of the Notes and all other Obligations.
Section 7.10. Interest Rate Protection. Borrowers will, no
later than ninety (90) days following the Closing Date, enter into and maintain
arrangements reasonably acceptable to Agent which have the effect of
establishing a fixed or maximum interest rate acceptable to Agent and the
Required Lenders for an aggregate notional principal amount of Indebtedness
equal to at least $110,000,000 for a period of at least three (3) years.
Section 7.11. Use of Proceeds. Borrowers will use all proceeds
of the Loans as provided in Section 6.8.
Section 7.12. Additional Security; Further Assurances.
(a) Agreement to Grant Additional Security. Promptly, and in
any event within 30 days after the acquisition by Holdings, any Borrower or any
Subsidiary of assets or real or personal property that would have constituted
Collateral on the Closing Date and investments of the type that would have
constituted Collateral on the Closing Date (the "Additional Collateral"),
Holdings and Borrowers will take, or will cause their Subsidiaries to take, all
necessary action, including (i) the filing of appropriate financing statements
under the provisions of the UCC, applicable domestic or local laws, rules or
regulations in each of the offices where such filing is necessary or appropriate
and (ii) with respect to owned real property, the execution of a mortgage, the
obtaining of Mortgage Policies, title surveys and real estate appraisals (or
with respect to material leased real property, Landlord Consents) satisfying all
Requirements of Law, to grant Collateral Agent a perfected Lien in such
Collateral pursuant to and to the full extent required by the Security Documents
and this Agreement.
(b) Additional Subsidiary Guarantors. Holdings and each
Borrower agree to cause each new Domestic Subsidiary established or created in
accordance with Section 8.16 (a "New Domestic Subsidiary") to execute and
deliver the Subsidiary Guaranty or such other guaranty of all Obligations and
all obligations under Interest Rate Agreements and Other Hedging Agreements in
form and substance reasonably satisfactory to Agent.
(c) Pledge of New Subsidiary Stock. Holdings and Borrowers
agree to pledge, or to cause their Subsidiaries to pledge, (i) all of the
Capital Stock of each new Domestic Subsidiary and (ii) 65% of all Capital Stock
of each new direct Foreign Subsidiary established or
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created to Collateral Agent for the benefit of the Secured Creditors pursuant to
the Pledge Agreement.
(d) Grant of Security by New Domestic Subsidiaries. Holdings
and Borrowers will cause each new Domestic Subsidiary established or created in
accordance with Section 8.16 and which is required to execute and deliver the
Subsidiary Guaranty pursuant to Section 7.12(b) to grant to Collateral Agent a
first priority Lien on all property (tangible and intangible) of such Subsidiary
upon terms substantially similar to those set forth in the Security Documents as
appropriate, and reasonably satisfactory in form and substance to Agent.
Holdings and Borrowers shall cause each Subsidiary, at its own expense, to
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record in any appropriate
governmental office, any document or instrument reasonably deemed by Agent to be
necessary or desirable for the creation and perfection of the foregoing Liens.
Holdings and Borrowers will cause each of its newly established Subsidiaries to
take all actions reasonably requested by Agent (including, without limitation,
the filing of UCC-1's) in connection with the granting of such security
interests.
(e) Documentation for Additional Security. The security
interests required to be granted pursuant to this Section 7.12 shall be granted
pursuant to such security documentation (which shall be substantially similar to
the Security Documents already executed and delivered by the Credit Parties on
the Closing Date) reasonably satisfactory in form and substance to Agent and
shall constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except Permitted
Liens. The Additional Security Documents and other instruments related thereto
shall be duly recorded or filed in such manner and in such places and at such
times as are required by law to establish, perfect, preserve and protect the
Liens, in favor of Collateral Agent for the benefit of the Secured Creditors,
required to be granted pursuant to the Additional Security Document and, all
taxes, fees and other charges payable in connection therewith shall be paid in
full by Borrowers. At the time of the execution and delivery of the Additional
Security Documents, Holdings and Borrowers shall cause to be delivered to the
Collateral Agent such agreements, certificates, customary opinions of counsel,
Mortgage Policies and other related documents as may be reasonably requested by
Agent to assure themselves that this Section 7.12 has been complied with.
(f) Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
Borrowers reasonably acceptable to Agent does not within 30 days after a request
from Agent or the Required Lenders deliver evidence, in form and substance
reasonably satisfactory to Agent, with respect to any Foreign Subsidiary which
has not already had all of its stock pledged pursuant to the Pledge Agreement
that a pledge of 66-2/3% or more (in the case of any direct Foreign Subsidiary)
or all (in the case of any indirect Foreign Subsidiary) of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, would cause the undistributed earnings of such Foreign Subsidiary as
determined for Federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent for Federal income tax purposes,
then that portion of such Foreign Subsidiary's outstanding capital stock not
theretofore pledged pursuant to the Pledge Agreement shall be pledge to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
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needed), to the extent that entering into such Pledge Agreement is permitted by
the laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 7.12 to be in form and substance reasonably
satisfactory to Agent.
Section 7.13. End of Fiscal Years; Fiscal Quarters. Holdings
will cause each of its and its Subsidiaries' annual accounting reporting periods
to end on the Friday nearest December 31 of each year (each a "Fiscal Year"),
with quarterly accounting reporting periods ending on the Friday nearest March
31, June 30, September 30 and December 31 of each Fiscal Year (each a "Fiscal
Quarter").
Section 7.14. Y2K. Holdings and Borrowers shall take all
actions reasonably necessary and commit adequate resources to assure that its
computer-based and other systems (and those of all Subsidiaries) are able to
effectively process dates, including dates before, on and after January 1, 2000,
without experiencing any Y2K Problem that could reasonably be expected to have a
Material Adverse Effect. At the reasonable request of Agent, Holdings and
Borrowers will provide the Lenders with assurances and substantiations
(including, but not limited to, the results of internal or external audit
reports prepared in the ordinary course of business) reasonably acceptable to
the Lenders as to the capability of Holdings, Borrowers and their Subsidiaries
to conduct its and their businesses and operations before, on and after January
1, 2000 without experiencing a Y2K Problem which would reasonably be expected to
have a Material Adverse Effect.
Section 7.15. Vanke Redemption. Holdings will cause LISN
Holdings to consummate the Vanke Redemption on or prior to January 3, 2000
pursuant to Section 5.7 of the LISN Recapitalization Agreement as in effect on
the Closing Date, and cause all of the Vanke Shares to be permanently cancelled
such that the shares of LISN Holdings common stock delivered to the Collateral
Agent on the Closing Date and pledged under the Pledge Agreement shall
constitute all of the issued and outstanding shares of Capital Stock of LISN
Holdings from and after the consummation of the Vanke Redemption.
Section 7.16. Ownership of Subsidiaries. Holdings will at all
times prior to the LISN Mergers directly own 100% of the outstanding Capital
Stock of each of LISN Holdings (except solely with respect to the Vanke Shares
prior to the consummation at the Vanke Redemption) and NATG, and LISN Holdings
will at all times prior to the LISN Mergers directly own 100% of the outstanding
Capital Stock of LISN. Holdings will at all times after the LISN Mergers
directly own 100% of the outstanding Capital Stock of NATG. Borrowers will
directly or indirectly own 100% of the Capital Stock of each other Subsidiary of
Holdings.
Section 7.17. LISN Mergers. Holdings will effect and will
cause its applicable Subsidiaries to effect the LISN Mergers prior to January
30, 2000.
Section 7.18. Waiver to Existing Turnkey Agreements. Promptly,
and in any event within thirty (30) days following the Closing Date, Holdings
and Borrowers will begin to use their commercially reasonable efforts to obtain
executed waivers, with terms and conditions reasonably satisfactory to Agent, to
the existing turnkey agreements with TCI and its Affiliates to permit the Liens
created by the Loan Documents with respect to the property secured by such
turnkey agreements.
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ARTICLE VIII
NEGATIVE COVENANTS
Holdings and Borrowers hereby covenant and agree that, so long
as any of the Commitments remain in effect or any Loan, LC Obligation or
Rollover LC Obligation remains outstanding and unpaid or any other amount is
owing to any Lender or Agent hereunder (but excluding any unasserted contingent
and indemnification obligations which by their terms expressly survive the
termination hereof):
Section 8.1. Liens. Holdings will not, and will not permit any of its
Subsidiaries to (i) create, incur, assume or suffer to exist or agree to create,
incur or assume any Lien in, upon or with respect to any of Holdings' or any of
its Subsidiaries' properties or assets (including, without limitation, any
securities or debt instruments of any of its Subsidiaries), whether now owned or
hereafter acquired, or assign or otherwise convey any right to receive income to
secure any obligation; (ii) take, cause or permit to be taken or cause any
action to be taken, which could create a Lien (other than a Lien permitted under
this Section), or suffer to exist any Lien (other than a Lien permitted under
this Section), on the Capital Stock of any Borrower or any Subsidiary of
Holdings or any Borrower which would require the sharing of an interest in such
capital stock with any Person; or (iii) enter into or assume any agreement
containing a negative pledge which would require a sharing of an interest in any
Collateral or any Mortgaged Property or prohibits or limits the grant of any
such interest, except for the following Liens (herein referred to as "Permitted
Liens"):
(a) Liens created by the Loan Documents or permitted by the
Security Documents;
(b) Customary Permitted Liens;
(c) Liens existing on the Closing Date and listed on Schedule
8.1(c) hereto securing Indebtedness to Remain Outstanding which is listed on
Schedule 6.5(d) hereto;
(d) Liens in favor of TCI or any of its Affiliates securing
advances made to any Borrower or any of its Subsidiaries pursuant to turnkey
agreements entered into in the ordinary course of business with TCI or any of
its Affiliates, provided that (i) such Liens shall only attach to property
(including proceeds thereof) which is purchased by the applicable advance and
shall automatically terminate when the applicable advance has been fully paid,
and (ii) Liens created by the Loan Documents in favor of the Collateral Agent
shall not be prohibited by any such turnkey agreement entered into after the
Closing Date;
(e) Liens relating solely to assets to be sold in any Asset
Disposition as permitted under Section 8.6(e); and
(f) additional Liens incurred by Borrowers and their
Subsidiaries which do not secure Indebtedness for money borrowed so long as the
value of the property subject to such Liens, and the Indebtedness and other
obligations secured thereby, do not exceed $3,000,000.
If requested by a lender of Purchase Money Indebtedness in
connection with an extension of credit to any Borrower or any Subsidiary which
is otherwise permitted by this
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Agreement, any lien or security interest of Agent or Collateral Agent for the
benefit of the Lenders in or upon the asset(s) being acquired by such Borrower
or Subsidiary and financed by such lender of Purchase Money Indebtedness may be
expressly subordinated to the lien or security interest therein of such lender
of Purchase Money Indebtedness on terms and conditions reasonably acceptable to
Agent and such lender of Purchase Money Indebtedness, which terms may include an
agreement by Agent or Collateral Agent not to foreclose upon the asset(s) being
financed by the lender of Purchase Money Indebtedness without the prior written
consent of such lender of Purchase Money Indebtedness, and the Lenders hereby
severally authorize Agent and Collateral Agent to enter into such an agreement.
Section 8.2. Indebtedness. Holdings will not, and will not
permit any of its Subsidiaries to, incur, create, assume directly or indirectly,
or suffer to exist any Indebtedness except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Loan Documents;
(b) unsecured Indebtedness of Holdings evidenced by the Junior
Subordinated Notes as in existence on the Closing Date in an initial aggregate
principal amount not to exceed $139,100,000, as reduced by any repayments of
principal thereof;
(c) unsecured Indebtedness of Holdings evidenced by additional
Junior Subordinated Notes issued after the Closing Date to existing stockholders
of Holdings as of the Closing Date and their affiliates and/or to managers,
employees and directors of Holdings or any of its Subsidiaries (each such
Person, an "Orius Holder" and, collectively, the "Orius Holders"), the proceeds
of which are used solely as consideration paid in connection with any Permitted
Acquisition, or issued to any seller pursuant to a Permitted Acquisition,
provided that (i) no Event of Default or Unmatured Event of Default exists at
the time of issuance thereof or will result therefrom, (ii) the principal amount
of any such Junior Subordinated Notes issued to any Orius Holder shall not
exceed thirty-eight percent (38%) of the total equity contribution (including
such Junior Subordinated Notes) being made by such Orius Holder at the time of
issuance thereof, and (iii) the aggregate principal amount of all Junior
Subordinated Notes issued after the Closing Date pursuant to this clause (c)
shall not exceed $25,000,000, as reduced by any repayment of principal thereof;
(d) unsecured Indebtedness of Borrowers incurred pursuant to
the Bridge Loan Documents, as reduced by any repayments of principal thereof;
(e) unsecured Indebtedness of Borrowers (and any Subsidiary
which becomes a co-obligor) in an aggregate principal amount up to $150,000,000
(as reduced by any repayment of principal thereof) evidenced by unsecured Senior
Subordinated Notes and issued pursuant to a Senior Subordinated Note Indenture,
in each case on terms and conditions no more restrictive than the Bridge Loan
Documents when taken as a whole, the proceeds of such Senior Subordinated Notes
being used by Borrowers (i) to refinance in whole Borrowers' Indebtedness owing
under the Bridge Loan Documents (including accrued interest, make-whole premium
and any related costs and expenses), (ii) to repay the outstanding principal
amount of the Term B
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Loans in accordance with Section 4.4(h) and applied in accordance with Section
4.5, and (iii) to pay fees, costs and expenses in connection with the issuance
of the Senior Subordinated Notes;
(f) Indebtedness outstanding on the Closing Date (other than
the Junior Subordinated Notes and the Bridge Loan Notes) and listed on Schedule
6.5(d) hereto and any Indebtedness resulting from the refinancing of any such
Indebtedness; provided, however, that (i) the principal amount of any such
refinancing Indebtedness (as determined as of the date of the incurrence of such
refinancing Indebtedness in accordance with GAAP) does not exceed the principal
amount of the Indebtedness refinanced thereby on such date plus the amount of
(A) any contractually stated call and/or redemption premium, if any, and (B) any
transaction fees, in each case, paid in connection with the refinancing of such
outstanding Indebtedness, (ii) the Weighted Average Life to Maturity of such
Indebtedness is not decreased (to the extent such Weighted Average Life to
Maturity precedes the Term B Loan Maturity Date) and, to the extent the final
maturity is later than the Term B Loan Maturity Date, the aggregate principal
payments prior to the Term B Loan Maturity Date are not increased, (iii) the
obligor(s) with respect to such refinancing Indebtedness are the same Persons
which are obligors with respect to the Indebtedness refinanced thereby, and (iv)
in the case of any such refinancing Indebtedness, (A) the covenants, defaults
and similar provisions applicable to such refinancing Indebtedness or
obligations are no more restrictive in any material respect than the provisions
contained in this Agreement and do not conflict with, or cause a breach of, any
provision of this Agreement or any other Loan Document and (B) such refinancing
Indebtedness is otherwise upon terms and subject to definitive documentation
which is in form and substance reasonably satisfactory to Agent;
(g) Indebtedness of Borrowers or any of their Subsidiaries
under Interest Rate Agreements entered into to protect any Borrower or any of
its Subsidiaries against fluctuations in interest rate in respect of the
Obligations and Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values or in the price of commodities and raw
materials in connection with any Borrower's or any of their Subsidiaries'
operations so long as management of such Borrower or such Subsidiary, as the
case may be, has determined that the entering into of such Other Hedging
Agreements are bona fide hedging activities;
(h) unsecured Indebtedness of any Borrower or any Subsidiary
Guarantor owing to one another, provided that all such Indebtedness owing by any
Borrower or any Subsidiary Guarantor shall be subordinated to the Obligations in
a manner reasonably satisfactory to Agent and evidenced by one or more
promissory notes in form and substance reasonably acceptable to Agent, which
promissory notes shall be pledged to the Collateral Agent pursuant to the Pledge
Agreement;
(i) Indebtedness of any Borrower or any of its Subsidiaries
consisting of (i) Capitalized Lease Obligations and/or (ii) debt incurred to
finance the cost (including the cost of construction) of acquisition of property
("Purchase Money Indebtedness"), provided the aggregate principal amount of all
Indebtedness described in clauses (i) and (ii) shall not exceed (x) $1,000,000
at any time outstanding prior to the Bridge Conversion Date and (y) $10,000,000
at any time outstanding thereafter (the "Purchase Money Basket");
(j) Guarantee Obligations permitted under Section 8.3;
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(k) unsecured Indebtedness of Holdings evidenced by additional
Junior Subordinated Notes issued after the Closing Date to Orius Holders, the
proceeds of which are not used as consideration for or in connection with any
Permitted Acquisition, provided that the principal amount of any such Junior
Subordinated Notes issued to any Orius Holder shall not exceed thirty-eight
percent (38%) of the total equity contribution (including such Junior
Subordinated Notes) being made by such Orius Holder at the time of issuance
thereof;
(l) unsecured Indebtedness of Holdings evidenced by Seller
Subordinated Notes issued after the Closing Date to any seller solely as
consideration for a Permitted Acquisition or for transactions permitted by
Section 8.5(b), provided that (A) no Event of Default or Unmatured Event of
Default exists at the issuance thereof or will result therefrom, (B) the
aggregate principal amount of all Seller Subordinated Notes issued after the
Closing Date pursuant to this clause (l) shall not exceed $15,000,000 at any
time outstanding, (C) in no event shall the aggregate outstanding principal
amount of all Seller Subordinated Notes, when added to the aggregate outstanding
principal amount of all Acquisition Loans, exceed $75,000,000 at any time prior
to the Bridge Conversion Date and (D) no principal payments (whether voluntary
or mandatory) may be made with respect to any Seller Subordinated Note unless
Holdings and its Subsidiaries may incur at least $1 of additional Indebtedness
immediately before and immediately after giving effect to such principal payment
under Section 7.01(b) of the Bridge Loan Agreement or any other similar
provision or Section of any agreement which replaces the Bridge Loan Agreement
or of the Senior Subordinated Indenture;
(m) Indebtedness of any Person acquired by any Borrower or any
Subsidiary in a Permitted Acquisition and assumed by any Borrower or any
Subsidiary pursuant to such Permitted Acquisition, provided that (i) immediately
after the consummation of such Permitted Acquisition and after giving effect
thereto on a pro forma basis, no Event of Default or Unmatured Event of Default
shall then exist, (ii) such Indebtedness was in existence prior to such
Permitted Acquisition and was not incurred in contemplation thereof, (iii) the
aggregate principal amount of such Indebtedness shall not exceed $10,000,000 at
any time outstanding, and (iv) such Indebtedness shall not be secured by any
Liens on any property of Holdings and its Subsidiaries except for Customary
Permitted Liens securing the property acquired in such Permitted Acquisition;
(n) customary earn-out obligations owing in connection with
any Permitted Acquisition or any acquisition consummated prior to the Closing
Date and described on Schedule 8.2(n) hereto;
(o) after the Bridge Conversion Date, unsecured Indebtedness
of Foreign Subsidiaries of any Borrower consisting of working capital lines of
credit in an aggregate amount not to exceed the dollar equivalent of $2,500,000
at any time outstanding; and
(p) additional unsecured Indebtedness of any Borrower or any
Subsidiary of any Borrower in an aggregate amount not to exceed (x) $250,000 at
any time outstanding prior to the Bridge Conversion Date and (y) $5,000,000 at
any time outstanding thereafter.
Section 8.3. Guaranties. Holdings will not, and will not
permit any of its Subsidiaries to, assume, guarantee or endorse (other than for
collection or deposit in the ordinary
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course of business), or otherwise become directly or contingently liable in
respect of, any obligation of any other Person, except, without duplication:
(a) guaranties by any Borrower or any Subsidiary of any
Borrower existing on the Closing Date and listed on Schedule 8.3 hereto;
(b) guaranties by any Borrower or any Subsidiary of any
Borrower of Indebtedness constituting Capitalized Leases or Purchase Money
Indebtedness of any Borrower or Subsidiary of any Borrower permitted by Section
8.2;
(c) the Bridge Loan Guaranties and any guaranties by Holdings,
LISN Holdings or any Subsidiary Guarantor of the Senior Subordinated Notes on
terms and conditions no more restrictive than the Bridge Loan Guaranties when
taken as a whole;
(d) customary indemnification provisions and purchase price
adjustments entered into in connection with any Permitted Acquisition or Asset
Dispositions permitted hereunder;
(e) performance, surety, bid, appeal or similar bonds arising
in the ordinary course of business;
(f) guaranties by any Borrower or any Subsidiary of any lease
or other contractual obligation not constituting Indebtedness entered into by
any Borrower or any Subsidiary in the ordinary course of business; and
(g) guaranties by any Borrower or any Subsidiary of any
Borrower in the ordinary course of business of such Borrower or such Subsidiary
of Indebtedness not exceeding (x) $250,000 in the aggregate at any time
outstanding prior to the Bridge Conversion Date and (y) $5,000,000 in the
aggregate at any time outstanding thereafter.
Section 8.4. Consolidation, Merger, Purchase or Sale of
Assets, etc. Holdings will not, and will not permit any of its Subsidiaries to,
wind-up, liquidate or dissolve any of their affairs or enter into any
transaction of merger, amalgamation or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time
without the Agent's prior written consent) all or any part of its property or
assets, or enter into any Sale and Leaseback Transaction, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials, equipment and intangible assets in the ordinary course of business)
of any Person, except that:
(a) each Borrower and its Subsidiaries shall be permitted to
make Capital Expenditures to the extent not in violation of Section 9.1;
(b) each Borrower and its Subsidiaries may: (i) in the
ordinary course of business, sell, lease or otherwise dispose of any assets
which, in the reasonable judgment of such Person, are obsolete, worn out or
otherwise no longer used or useful in the conduct of such Person's business; and
(ii) so long as no Event of Default or Unmatured Event of Default exists at the
time of the respective sale of assets or immediately after giving effect
thereto, sell or
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otherwise dispose of any assets or property (which may include interests in
Subsidiaries, provided that no part of the Capital Stock of any Subsidiary may
be sold pursuant to this clause (ii) unless all of the Capital Stock of the
respective Subsidiary is sold pursuant to such sale) with a Fair Market Value
not to exceed $5,000,000 in the aggregate during any Fiscal Year, provided that
(A) the sale price with respect to each such Asset Disposition shall not be less
than the Fair Market Value of such asset or assets sold, (B) at least
eighty-five percent (85%) of such sale price shall be paid in Cash or Cash
Equivalents (and treating as Cash for this purpose the trade-in or exchange
value of any item of equipment that is being sold to the extent that a new item
of equipment is being purchased as part of such transaction), and (C) the Net
Sale Proceeds from such sale or disposition are applied to repay Loans to the
extent required by Section 4.4(c);
(c) Investments may be made to the extent permitted by Section
8.8;
(d) each Borrower and its Subsidiaries may enter into leases
(as lessee) in the ordinary course of business, including Capitalized Leases to
the extent permitted by Section 8.2(i);
(e) each Borrower and its Subsidiaries may make sales or
transfers of inventory in the ordinary course of business and consistent with
past practices; (f) each Borrower and its Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business, accounts
receivable arising in the ordinary course of business (x) which are overdue, or
(y) which such Borrower may reasonably determine are difficult to collect but
only in connection with the compromise or collection thereof consistent with
customary industry practice (and not as part of any bulk sale or financing of
receivables);
(g) the LISN Mergers may be consummated following the Vanke
Redemption and any Subsidiary of any Borrower may merge or consolidate with or
into (i) any Borrower so long as Borrower is the surviving Person or (ii)
another Wholly-Owned Subsidiary of any Borrower which is a Subsidiary Guarantor
so long as a Wholly-Owned Subsidiary which is a Subsidiary Guarantor is the
surviving Person;
(h) each Borrower and its Subsidiaries may acquire inventory
and other assets in the ordinary course of business;
(i) Any Subsidiary of any Borrower may be dissolved or
liquidated into such Borrower or any Wholly-Owned Subsidiary of such Borrower
which is a Subsidiary Guarantor, and any Subsidiary of any Borrower may sell,
lease, transfer or otherwise dispose of any or all of its assets to such
Borrower or any Wholly-Owned Subsidiary of such Borrower which is a Subsidiary
Guarantor;
(j) Holdings and its Subsidiaries may consummate the
Transactions as of the Closing Date pursuant to the Transaction Documents;
(k) any Borrower or any of its Subsidiaries may acquire (other
than through an unsolicited public offer) assets constituting all or
substantially all of a business, business unit, division or product line of any
Person not already a Subsidiary of a Borrower (a "Target") or all
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of the Capital Stock of any such Person (including any such acquisition by way
of merger or consolidation) to the extent such acquired Person or the surviving
entity of such merger or consolidation is or becomes a Credit Party and executes
the Additional Security Documents and takes such other actions as are required
in Section 7.12 (any such acquisition permitted by this clause (k) or otherwise
consented to in writing by the Required Lenders, a "Permitted Acquisition"),
provided that (i) no Event of Default or Unmatured Event of Default then exists
(both before and after giving effect to such Permitted Acquisition), (ii)
Holdings and its Subsidiaries shall be in compliance, on a pro forma basis after
giving effect to such Permitted Acquisition, with the covenants contained in
Article IX recomputed as of the last day of the most recently ended Fiscal
Quarter of Holdings as if such Permitted Acquisition had occurred on the first
day of each relevant period for testing such compliance, (iii) the business or
Person acquired pursuant to such Permitted Acquisition is engaged in the same or
substantially similar line of business as conducted by Borrowers and their
Subsidiaries as of the Closing Date, (iv) the business or Person acquired
pursuant to such Permitted Acquisition had positive pro forma Consolidated
EBITDA for the full twelve month period last ended prior to the consummation of
such Permitted Acquisition, (v) the most recent drafts of all material
documentation governing such Permitted Acquisition shall be delivered to Agent
and its counsel in advance of the consummation of such Permitted Acquisition and
shall be reasonably acceptable to Agent, (vi) the only consideration paid in
connection with such Permitted Acquisition (including any deferred payments,
whether in the form of purchase price adjustments, earn-out payments or
otherwise) consists of cash, Holdings Common Stock, Junior Subordinated Notes,
Seller Subordinated Notes and/or Permitted Holdings Preferred Stock
(collectively, "Acquisition Consideration"), (vii) no more than 90% of the
Acquisition Consideration for such Permitted Acquisition consists of cash,
(viii) no more than 38% of the Acquisition Consideration for such Permitted
Acquisition consisting of Holdings Common Stock, Junior Subordinated Notes
and/or Permitted Holdings Preferred Stock is in the form of Junior Subordinated
Notes, (ix) the aggregate amount of Acquisition Consideration (as such value,
including future earn-out obligations, is determined in good faith by the board
of directors of Holdings in a resolution delivered to Agent) for any such
Permitted Acquisition (or series of related acquisitions) shall not exceed
$25,000,000 and for all such Permitted Acquisitions shall not exceed
$150,000,000, (x) the Total Available Revolving Commitment is equal to or
greater than $5,000,000 both before and immediately after giving effect to such
Permitted Acquisition, (xi) no more than fifteen (15) Permitted Acquisitions may
be consummated after the Closing Date and (xii) Borrowers deliver an officer's
certificate to Agent certifying on behalf of Borrowers as to compliance with the
requirements of this clause (k) and containing detailed calculations
satisfactory to Agent required pursuant to clauses (ii), (iv), (vii), (viii) and
(ix), above. Pro forma calculations made pursuant to clauses (ii) and (iv) above
may include adjustments (the "Pro Forma Adjustments") to eliminate the effect of
any non-recurring expenses or income with respect to Holdings and its
Subsidiaries or any acquired Person or assets on Consolidated EBITDA, as
determined reasonably and in good faith by the chief financial officer of
Holdings on behalf of Borrowers and approved by the board of directors of
Holdings, as set forth in an officer's certificate delivered to Agent setting
forth in reasonable detail the basis for such adjustments and reasonably
acceptable by Agent;
(l) the liquidation of any Cash Equivalents; and
(m) the cancellation of any promissory notes permitted by
Section 8.8(l).
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Section 8.5. Dividends or Other Distributions. Holdings will
not, and will not permit any of its Subsidiaries to, either: (i) declare or pay
any dividend or make any distribution on or in respect of its Capital Stock
("Dividend") or to the direct or indirect holders of its Capital Stock (except
dividends or distributions payable solely in such Capital Stock or in options,
warrants or other rights to purchase such Capital Stock and except dividends or
distributions payable to any Borrower or a Wholly-Owned Subsidiary of any
Borrower that is a Subsidiary Guarantor); or (ii) purchase, redeem or otherwise
acquire or retire for value any Capital Stock of Holdings or any of its
Subsidiaries (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being hereinafter
referred to as a "Restricted Payment"); provided, however, that, during such
time as no Event of Default or Unmatured Event of Default has occurred and is
continuing or would result therefrom (other than with respect to clauses (a) and
(d) below):
(a) any Subsidiary of Borrower may pay dividends to Borrower
or any Wholly-Owned Subsidiary of Borrower that is a Subsidiary Guarantor, and
Holdings may distribute shares of its Common Stock to holders of the same or
another class of its Common Stock as a stock dividend or in connection with a
stock split;
(b) Holdings may make payments (whether in cash or through the
issuance of Seller Subordinated Notes pursuant to Section 8.2(l)) with respect
to stock option plans and stock appreciation rights programs of Holdings and
repurchase options and with respect to the repurchase of Holdings Common Stock,
Holdings Preferred Stock and Junior Subordinated Notes upon the termination of
employment, death, permanent disability or retirement of its employees or
management (and Borrowers and LISN Holdings may pay dividends to Holdings solely
to allow Holdings to make such payments or repurchases) provided, that the
aggregate amount expended or incurred by Holdings pursuant to this clause (b)
shall not exceed (i) $1,000,000 in any Fiscal Year of Holdings or (ii)
$5,000,000 from and after the Closing Date;
(c) Borrowers and LISN Holdings may pay dividends to LISN
Holdings and Holdings solely for the purpose of allowing Holdings to pay up to
forty percent (40%) of the interest on the Junior Subordinated Notes pursuant to
the terms and subject to the conditions (including, without limitation, the
subordination provisions) of the Junior Subordinated Notes, provided that (i)
such dividends may only be paid on the date when an interest payment is due
(including, without limitation, payments permitted by the terms of the Junior
Subordinated Notes after the cure of a default and the termination of any
blockage period) and only in the amount of such interest payment when due, (ii)
no such dividends may be paid to or by LISN Holdings until such time as LISN
Holdings is a Wholly-Owned Subsidiary of Holdings and (iii) commencing of the
fifth anniversary of the Closing Date, additional interest (and related
dividends as described above) may be paid on the Junior Subordinated Notes
pursuant to Section 1(b) of the Junior Subordinated Notes in an aggregate amount
not exceeding the sum of (A) $15,000,000 plus (B) the Borrowers' Portion of
Excess Cash Flow, if positive;
(d) Borrowers and LISN Holdings may pay cash dividends to LISN
Holdings and Holdings solely for the purpose of paying, so long as the proceeds
thereof are promptly used by Holdings to pay, franchise taxes and federal, state
and local income taxes and interest and penalties with respect thereto, if any,
payable by Holdings or LISN Holdings, provided that (A) any refund shall be
promptly returned by Holdings or LISN Holdings to Borrowers and (B) no
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such dividends may be paid to or by LISN Holdings until such time as LISN
Holdings is a Wholly-Owned Subsidiary of Holdings; and
(e) Borrowers and LISN Holdings may pay dividends to LISN
Holdings and Holdings solely for the purpose of allowing Holdings to pay
interest on the Seller Subordinated Notes in an amount up to ten percent (10%)
per annum of the aggregate outstanding principal amount of the Seller
Subordinated Notes pursuant to the terms and subject to the conditions
(including, without limitation, the subordination provisions) of the Seller
Subordinated Notes, provided that (i) such dividends may only be paid on the
date when an interest payment is due (including, without limitation, payments
permitted by the terms of the Seller Subordinated Notes after the cure of any
default and the termination of any blockage period) and only in the amount of
such interest payment when due and (ii) no such dividends may be paid to or by
LISN Holdings until such time as LISN Holdings is a Wholly-Owned Subsidiary of
Holdings.
Section 8.6. Limitation on Certain Restrictions on
Subsidiaries. Holdings will not, and will not permit any of its Subsidiaries to
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Borrower or any Subsidiary of
any Borrower to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligation owed to any Borrower or any of
its other Subsidiaries, (ii) make any loans or advances to any Borrower or any
of its other Subsidiaries, or (iii) transfer any of its property or assets to
any Borrower or any of its other Subsidiaries, except:
(a) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Closing Date and reflected on Schedule 8.6(a)
hereto or pursuant to the Senior Subordinated Documents or the Bridge Loan
Documents;
(b) any encumbrance or restriction with respect to a
Subsidiary of a Borrower pursuant to an agreement relating to any Indebtedness
issued by such Subsidiary on or prior to the date on which such Subsidiary
became a Subsidiary of such Borrower or was acquired by such Borrower (other
than Indebtedness issued as consideration in, or to provide all or any portion
of the funds utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by such Borrower) and outstanding on such date;
(c) any such encumbrance or restriction consisting of
customary non-assignment provisions in leases or licenses governing leasehold
interests or licenses, as applicable, to the extent such provisions restrict the
transfer of the lease or license, as applicable;
(d) in the case of clause (iii) above, Permitted Liens or
other restrictions contained in security agreements securing Indebtedness
permitted hereby to the extent such restrictions restrict the transfer of the
property subject to such security agreements; and
(e) any encumbrance or restriction relating solely to assets
to be sold in any Asset Disposition permitted hereunder and arising pursuant to
any sale agreement entered into in connection with such Asset Disposition.
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Section 8.7. Issuance of Capital Stock.
(a) Holdings will not issue (i) any preferred stock other than
Permitted Holdings Preferred Stock or (ii) any redeemable common stock.
(b) Holdings will not permit any Subsidiary of Holdings to
issue any Capital Stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, Capital Stock,
except (i) for transfers and replacements of the then outstanding shares of
Capital Stock, (ii) for stock splits, stock dividends and additional issuances
which do not decrease the percentage ownership of Holdings or any of its
Subsidiaries in any class of the Capital Stock of LISN Holdings, Borrowers or
such Subsidiary, (iii) in the case of Foreign Subsidiaries of Borrowers, to
qualify directors to the extent required under applicable law and (iv)
Subsidiaries of Borrowers formed after the Closing Date pursuant to Section 8.16
may issue Capital Stock to Borrowers or the respective Subsidiary of Borrowers
which owns such Capital Stock in accordance with the requirements of Section
7.16. All Capital Stock issued in accordance with this Section 8.7(b) shall, to
the extent required by the Pledge Agreement, be delivered to the Collateral
Agent and pledged pursuant to the Pledge Agreement.
Section 8.8. Loans and Investments. Holdings will not, and
will not permit any of its Subsidiaries to make any loans or make or own any
Investments except that:
(a) Borrowers and their Subsidiaries may acquire and hold Cash
and Cash Equivalents;
(b) Borrowers and their Subsidiaries may hold the Investments
existing on the Closing Date (other than existing Investments described in
Section 8.8(m)) and identified on Schedule 8.8, without giving effect to any
additions thereto;
(c) Borrowers and their Subsidiaries may acquire and hold
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(d) Borrowers and their Subsidiaries may enter into Interest
Rate Agreements and Other Hedging Agreements as permitted under Section 8.2;
(e) Borrowers and their Subsidiaries may make deposits made in
the ordinary course of business consistent with past practices to secure the
performance of leases;
(f) Borrowers and their Subsidiaries may incur guarantees
permitted by Section 8.3;
(g) Borrowers and their Subsidiaries may make loans to
officers, directors and employees of a Borrower and its Subsidiaries not to
exceed $1,000,000 in the aggregate at any time outstanding;
(h) any Borrower and any Subsidiary Guarantor may make
intercompany loans pursuant to Section 8.2(h) and any Borrower may make
Investments in any Subsidiary
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Guarantor and any Subsidiary Guarantor may make Investments in any other
Subsidiary Guarantor;
(i) Borrowers and their Subsidiaries may make Permitted
Acquisitions in accordance with Section 8.4(k);
(j) Borrowers and their Subsidiaries may hold Investments
consisting of non-cash consideration received in connection with a sale of
assets permitted under Section 8.4(b);
(k) Holdings and its Subsidiaries may consummate the
Transactions pursuant to the Transaction Documents;
(l) Holdings may hold promissory notes issued by any officer,
director or employee of Holdings or any Subsidiary of Holdings solely as
consideration for the purchase of Capital Stock and Junior Subordinated Notes
issued by Holdings; and
(m) Borrowers and their Subsidiaries may hold Investments in
and make loans and advances to women/minority business enterprises in an
aggregate amount not to exceed $5,000,000 at any time outstanding.
Section 8.9. Transactions with Affiliates. Holdings will not,
and will not permit any of its Subsidiaries to, conduct any business or enter
into any transaction or series of similar transactions (including the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of Holdings or any of its Subsidiaries or any legal or beneficial
owner of 10% or more of any class of Capital Stock of Holdings or any of its
Subsidiaries or with any Affiliate of such owner (other than a Wholly-Owned
Subsidiary of a Borrower which is a Subsidiary Guarantor) unless the terms of
such business, transaction or series of transactions are (i) as favorable to
Borrower or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in arm's-length
dealings with an unrelated third person or, if such transaction is not one which
by its nature could be obtained from such person, is on fair and reasonable
terms and (ii) are in the ordinary course of business or, if not in the ordinary
course of business, are set forth in writing and a disinterested majority of the
board of directors of such Borrower or such Subsidiary, as the case may be, has
determined in good faith that such business or transaction or series of
transactions meets the applicable criteria set forth in clause (i) above;
provided, however, that the following shall be permitted: (A) reasonable fees
and compensation paid to and indemnity provided on behalf of, officers,
directors, employees, agents or consultants of Holdings or any of its
Subsidiaries as determined in good faith by Holdings' board of directors or
senior officers; (B) any agreement as in effect as of the Closing Date or any
amendment thereto or any transaction contemplated thereby (including pursuant to
any amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to Holdings or
any of its Subsidiaries, as the case may be, in any material respect than the
original agreement as in effect on the Closing Date; (C) any issuance of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans of Holdings entered into in the ordinary course of business and
approved by Holdings' board of directors; (D) the payment of reasonable
out-of-pocket expenses of WSP to the extent actually incurred; (E)
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loans and advances to employees and officers of Holdings and its Subsidiaries in
the ordinary course of business for bona fide business purposes not in excess of
$1,000,000 at any time outstanding; (F) indemnification agreements provided for
the benefit of Holdings or any of its Subsidiaries from officers, directors or
employees of Holdings or any Subsidiaries; (G) the issuance and acceptance of
promissory notes pursuant to Section 8.8(l); (H) transactions permitted under
Section 8.5; (I) the cancellation of any promissory note as permitted under
Section 8.4(m); and (J) the payment by Holdings to Jack Reich for consulting
services to the extent actually rendered in an amount not to exceed $25,000 per
month. All affiliate transactions (and each series of related affiliate
transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $1,000,000
shall be approved by the board of directors of Holdings or such Subsidiary, as
the case may be, such approval to be evidenced by a resolution stating that such
board of directors has determined that such transaction complies with the
foregoing provisions. If Holdings or any of its Subsidiaries enters into an
affiliate transaction (or a series of related affiliate transactions related to
a common plan) that involves an aggregate fair market value of more than
$10,000,000, Holdings or such Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to Holdings or the relevant
Subsidiary, as the case may be, from a financial point of view, from an
independent financial advisor and file the same with the Agent.
Section 8.10. Sale-Leasebacks. Holdings will not, and will not
permit any Subsidiary to lease any property as lessee in connection with a Sale
and Leaseback Transaction entered into after the Closing Date.
Section 8.11. Intentionally Omitted.
Section 8.12. Lines of Business.
(a) Holdings will not, and will not permit any Subsidiary to,
engage in any business or business activity except in the same or substantially
similar lines of business (including incidental activities) as are conducted by
them as of the Closing Date.
(b) Holdings will engage in no business other than (i) its
ownership of the capital stock of LISN Holdings and NATG, (ii) the issuance of
the Holdings Common Stock and options and warrants to purchase Holdings Common
Stock, (iii) the issuance of Permitted Holdings Preferred Stock, Seller
Subordinated Notes and Junior Subordinated Notes, (iv) holding Investments
permitted under Section 8.8(l), (v) the transactions permitted under Section
8.5(b), (vi) the cancellation of promissory notes as permitted under Section
8.4(m), and (vii) the incurrence of guaranty and other contingent obligations
permitted under Section 8.3. Notwithstanding the foregoing, Holdings may engage
in those activities that are incidental to (A) the maintenance of its corporate
existence in compliance with applicable law, (B) legal, tax and accounting
matters in connection with any of the foregoing activities and (C) entering
into, and performing its obligations under, the Documents and the Senior
Subordinated Documents to which it is a party.
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(c) Holdings will not permit LISN Holdings to engage in any
business other than (i) its own ownership of the capital stock of LISN and (ii)
the issuance of common stock to Holdings and redemption of Capital Stock.
Notwithstanding the foregoing, LISN Holdings may engage in those activities that
are incidental to (A) the maintenance of its corporate existence in compliance
with applicable law, (B) legal, tax and accounting matters in connection with
any of the foregoing activities and (C) entering into, and performing its
obligations under, the Documents to which it is a party.
Section 8.13. Fiscal Year. Holdings will not, and will not
permit any of its Subsidiaries to, change the Fiscal Year of Holdings or its
Subsidiaries.
Section 8.14. Limitation on Voluntary Payments and Certain
Modifications. Holdings will not, and will not permit any of its Subsidiaries
to:
(a) make any voluntary prepayment of, or redeem, repurchase or
defease any Indebtedness except (i) prepayments of the Obligations, (ii)
mandatory prepayments required pursuant to the instrument evidencing such
Indebtedness or pursuant to which any such Indebtedness was issued, (iii)
refinancings of Indebtedness permitted by Section 8.2 and (iv) the repurchase of
Junior Subordinated Notes as permitted by Section 8.5(b);
(b) amend, modify or change in any way materially adverse to
the interests of the Lenders, its Organizational Documents, or any agreement
entered into by it, with respect to its Capital Stock (including any
shareholders' agreement), or enter into any new agreement with respect to its
Capital Stock which in any way could be materially adverse to the interests of
the Lenders;
(c) amend, modify or grant any waiver with respect to any
Junior Subordinated Document, Seller Subordinated Note, Bridge Loan Document (it
being understood and agreed that the execution and delivery of the "Senior
Subordinated Indenture" as such term is defined in the Bridge Loan Agreement
shall not be deemed to be an amendment or modification of the Bridge Loan
Documents) or Senior Subordinated Document;
(d) amend, modify or grant any waiver with respect to any
Transaction Document, except in any case for changes thereto which do not
adversely affect the interests of the Lenders, and except as may otherwise be
consented to by the Required Lenders.
Section 8.15. Accounting Changes. Holdings will not make or
permit to be made any change in accounting policies affecting the presentation
of financial statements or reporting practices from those employed by it on the
Closing Date, unless (i) such change is either (A) required by GAAP or (B)
permitted by GAAP so long as such permitted change has no material impact on the
presentation of financial statements and has no impact on the calculation of the
financial covenants set forth in Article IX or in the definition of Excess Cash
Flow, (ii) such change is disclosed to the Lenders through Agent or otherwise
and (iii) relevant prior financial statements that are affected by such change
are restated (in form and detail reasonably satisfactory to Agent) as may be
required by GAAP to show comparative results. If any changes in GAAP or the
application thereof from that used in the preparation of the financial
statements referred to in Section 6.5(a) hereof occur after the Closing Date and
such changes
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result in, in the sole judgment of Agent, a meaningful change in the calculation
of any financial covenants or restrictions set forth in this Agreement, then the
parties hereto agree to enter into and diligently pursue negotiations in order
to amend such financial covenants and restrictions so as to equitably reflect
such changes, with the desired result that the criteria for evaluating the
financial condition and results of operations of Holdings and its Subsidiaries
shall be the same after such changes as if such changes had not been made.
Section 8.16. Limitation on Creation of Subsidiaries. Holdings
will not, and will not permit any of its Subsidiaries to, establish, create or
acquire any Subsidiary, except that any Borrower may acquire, pursuant to a
Permitted Acquisition, establish or create one or more Wholly-Owned Subsidiaries
of Borrowers which are Domestic Subsidiaries and transfer assets to such newly
established or created Subsidiaries so long as (i) the creation or establishment
of any such new Subsidiary is in compliance with Section 8.8(h) (with the
transfer of any assets constituting an Investment under Section 8.8(h)), (ii)
100% of the Capital Stock of such Subsidiary is upon the creation, establishment
or acquisition of any such new Subsidiary pledged and delivered to the
Collateral Agent for the benefit of the Secured Creditors under the Pledge
Agreement and (iii) upon the creation, establishment or acquisition of any such
new Domestic Subsidiary, such Subsidiary executes the Additional Security
Documents and guaranty required to be executed by it in accordance with Section
7.12.
Section 8.17. Powers of Attorney. Holdings will not, and will
not permit its Subsidiaries to, issue any power of attorney or other contract or
agreement giving any Person power or control over the day-to-day operations of
its business except as expressly contemplated by the Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
Holdings and Borrowers hereby covenant and agree that, so long
as the Commitments remain in effect or any Loan, LC Obligation or Rollover LC
Obligation remains outstanding and unpaid or any other amount is owing to any
Lender or Agent hereunder (but excluding any unasserted contingent and
indemnification obligations which by their terms expressly survive the
termination hereof), neither Holdings nor any Borrower shall, directly or
indirectly:
Section 9.1. Capital Expenditures. (a) Permit it or any of its
Subsidiaries to, make any Capital Expenditures, except that during any Fiscal
Year set forth below Borrowers and their Subsidiaries may make Capital
Expenditures so long as the aggregate amount so made by Borrowers and their
Subsidiaries (on a consolidated basis) after the Closing Date during any such
Fiscal Year does not exceed the amount set forth opposite such Fiscal Year
below;
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ ------
<S> <C>
December 31, 1999 $16,000,000
December 31, 2000 $18,000,000
December 31, 2001 $20,000,000
December 31, 2002 $23,000,000
and each Fiscal Year thereafter
</TABLE>
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(b) Notwithstanding the foregoing, (i) in the event that the
amount of Capital Expenditures permitted to be made by Borrowers and their
Subsidiaries pursuant to clause (a) above in any fiscal year (before giving
effect to any increase in such permitted expenditure amount pursuant to this
clause (b)) is greater than the amount of such Capital Expenditures made by
Borrowers and their Subsidiaries during such fiscal year, 50% of such excess
(the "Rollover Amount") may be carried forward and utilized to make Capital
Expenditures in the next succeeding fiscal year; and (ii) the amount of Capital
Expenditures permitted to be made by Borrowers and their Subsidiaries pursuant
to clause (a) above in any fiscal year may be increased by an amount equal to
the Borrowers' Portion of Excess Cash Flow, if positive; provided, however, that
in no event shall the aggregate amount of Capital Expenditures made by Borrowers
and their Subsidiaries during any fiscal year pursuant to Section 9.1(a) exceed
125% of the amount set forth in such Section 9.1(a).
(c) Notwithstanding the foregoing, Borrowers and their
Subsidiaries may make additional Capital Expenditures (which Capital
Expenditures will not be included in any determination under the foregoing
clause (a)) as follows: (i) Capital Expenditures with the insurance or
condemnation proceeds received by Borrower or any of its Subsidiaries from any
Recovery Event so long as such Capital Expenditures are to replace or restore
any properties or assets in respect to which such proceeds were paid within 180
days (or committed to be paid within such 180 days so long as such replacement
or restoration is made within 180 days after the end of such 180 day period)
following the date of the receipt of such insurance proceeds to the extent such
insurance proceeds are not required to be applied to repay Term Loans pursuant
to Section 4.4(g); (ii) Capital Expenditures constituting Permitted Acquisitions
and the Transactions; (iii) Capital Expenditures resulting, if any, from the
Vanke Redemption; (iv) Capital Expenditures resulting from the payment of
earn-out obligations as set forth on Schedule 8.2(n); (v) proceeds of Asset
Dispositions which are used or contractually committed to be used to purchase
any properties or assets used or useful in the business of Borrowers and their
Subsidiaries within 180 days of receipt by Borrowers and their Subsidiaries;
(vi) Capital Expenditures made with the Net Offering Proceeds received from the
sale of Holdings Capital Stock and/or Junior Subordinated Notes to the extent
(A) Borrowers designate in writing to Agent that such Net Offering Proceeds will
be used for Capital Expenditures and (B) such Net Offering Proceeds are actually
used for such designated Capital Expenditures within sixty (60) days of the
receipt thereof; and (vii) Capital Expenditures in an aggregate amount not to
exceed the Permitted Acquisition Capex Amount during any Fiscal Year.
Section 9.2. Interest Coverage Ratio. Permit the Interest
Coverage Ratio of Holdings for the applicable Test Period ending on (or a date
closest to) a date set forth below to be less than the ratio set forth opposite
such date:
<TABLE>
<CAPTION>
Date Ratio
---- -----
<S> <C>
December 31, 1999 1.90 to 1.00
March 31, 2000 1.90 to 1.00
June 30, 2000 2.00 to 1.00
September 30, 2000 2.00 to 1.00
December 31, 2000 2.15 to 1.00
March 31, 2001 2.15 to 1.00
</TABLE>
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<TABLE>
<S> <C>
June 30, 2001 2.25 to 1.00
September 30, 2001 2.25 to 1.00
December 31, 2001 2.35 to 1.00
March 31, 2002 2.35 to 1.00
June 30, 2002 2.60 to 1.00
September 30, 2002 2.60 to 1.00
December 31, 2002 2.85 to 1.00
March 31, 2003 2.85 to 1.00
June 30, 2003 3.10 to 1.00
September 30, 2003 3.10 to 1.00
December 31, 2003 3.35 to 1.00
March 31, 2004 3.35 to 1.00
June 30, 2004 3.85 to 1.00
September 30, 2004 3.85 to 1.00
December 31, 2004 and
each Fiscal Quarter thereafter 4.35 to 1.00
</TABLE>
Section 9.3. Leverage Ratio. Permit the Leverage Ratio of
Holdings for the applicable Test Period ending on (or a date closest to) a date
set forth below to be more than the ratio set forth opposite such date:
<TABLE>
<CAPTION>
Date Ratio
---- -----
<S> <C>
December 31, 1999 5.00 to 1.00
March 31, 2000 5.00 to 1.00
June 30, 2000 4.75 to 1.00
September 30, 2000 4.75 to 1.00
December 31, 2000 4.50 to 1.00
March 31, 2001 4.50 to 1.00
June 30, 2001 4.00 to 1.00
September 30, 2001 4.00 to 1.00
December 31, 2001 3.60 to 1.00
March 31, 2002 3.60 to 1.00
June 30, 2002 3.25 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 2.90 to 1.00
March 31, 2003 2.90 to 1.00
June 30, 2003 2.65 to 1.00
September 30, 2003 2.65 to 1.00
December 31, 2003 2.40 to 1.00
March 31, 2004 2.40 to 1.00
June 30, 2004 2.20 to 1.00
September 30, 2004 2.20 to 1.00
December 31, 2004 and
each Fiscal Quarter thereafter 2.00 to 1.00
</TABLE>
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Section 9.4. Adjusted Fixed Charge Coverage Ratio. Permit the
Adjusted Fixed Charge Coverage Ratio of Holdings for the applicable Test Period
ending on (or a date closet to) a date set forth below to be less than the ratio
set forth opposite such date:
<TABLE>
<CAPTION>
Date Ratio
---- -----
<S> <C>
December 31, 1999 1.100 to 1.00
March 31, 2000 1.100 to 1.00
June 30, 2000 1.150 to 1.00
September 30, 2000 1.150 to 1.00
December 31, 2000 1.200 to 1.00
March 31, 2001 1.200 to 1.00
June 30, 2001 1.225 to 1.00
September 30, 2001 1.225 to 1.00
December 31, 2001 1.250 to 1.00
March 31, 2002 1.250 to 1.00
June 30, 2002 1.275 to 1.00
September 30, 2002 1.275 to 1.00
December 31, 2002 1.300 to 1.00
March 31, 2003 1.300 to 1.00
June 30, 2003 1.350 to 1.00
September 30, 2003 1.350 to 1.00
December 31, 2003 1.400 to 1.00
March 31, 2004 1.400 to 1.00
June 30, 2004 1.450 to 1.00
September 30, 2004 1.450 to 1.00
December 31, 2004 and
each Fiscal Quarter thereafter 1.500 to 1.00
</TABLE>
Section 9.5. Maintenance of Consolidated Net Worth. Permit
the Consolidated Net Worth of Holdings on the last day of any Fiscal Quarter to
be less than the sum of (i) $124,848,000 plus (ii) the amount equal to 50% of
the aggregate Consolidated Net Income of Holdings from and after December 31,
1999 (provided that in the event that Holdings has a Consolidated Net Loss for
any Fiscal Quarter, Consolidated Net Income for purposes only of this Section
9.4 shall be deemed to be zero for such Fiscal Quarter), plus, (iii) the amount
equal to 100% of the net cash proceeds received by Holdings after the Closing
Date from the sale or issuance of its Capital Stock or cash capital
contributions received by Holdings.
ARTICLE X
EVENTS OF DEFAULT
Section 10.1. Events of Default. Any of the following events,
acts, occurrences or state of facts shall constitute an "Event of Default" for
purposes of this Agreement:
(a) Failure to Make Payments When Due. Any Borrower (i) shall
default in the payment of principal on any of the Loans or any reimbursement
obligation with respect to
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any Letter of Credit; or (ii) shall default in the payment of interest on any of
the Loans or default in the payment of any fee or any other amount owing
hereunder or under any other Loan Document when due and such default in payment
shall continue for three (3) Business Days; or
(b) Representations and Warranties. Any representation or
warranty made by or on the part of Holdings, any Borrower or any Credit Party,
as the case may be, contained in any Loan Document or any document, instrument
or certificate delivered pursuant hereto or thereto shall have been incorrect or
misleading in any material respect when made or deemed made, or
(c) Covenants. Holdings or any Borrower shall (i) default in
the performance or observance of any term, covenant, condition or agreement on
its part to be performed or observed under Article VIII or Article IX hereof or
(ii) default in the performance or observance of any term, covenant, condition
or agreement on its part to be performed or observed under Sections 7.3, 7.6,
7.8, 7.9, 7.10 or 7.12 and such default shall remain unremedied for a period of
five (5) Business Days or (iii) default in the due performance or observance by
it of any other term, covenant or agreement contained in this Agreement and such
default shall continue unremedied for a period of thirty (30) days after written
notice to Borrowers by Agent or any Lender; or
(d) Default Under Other Loan Documents. Any Credit Party shall
default in the performance or observance of any term, covenant, condition or
agreement on its part to be performed or observed hereunder or under any Loan
Document (and not constituting an Event of Default under any other clause of
this Section 10.1) and such default shall continue unremedied for a period of
thirty (30) days after written or telephonic (immediately confirmed in writing)
notice thereof has been given to Borrowers by Agent or any Lender; or
(e) Voluntary Insolvency, Etc. Holdings or any of its
Subsidiaries shall become insolvent or generally fail to pay, or admit in
writing its inability to pay, its debts as they become due, or shall voluntarily
commence any proceeding or file any petition under any bankruptcy, insolvency or
similar law or seeking dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for it or a substantial portion of
its property, assets or business or to effect a plan or other arrangement with
its creditors, or shall file any answer admitting the jurisdiction of the court
and the material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt,
or shall make a general assignment for the benefit of creditors, or shall
consent to, or acquiesce in the appointment of, a receiver, trustee, custodian
or liquidator for a substantial portion of its property, assets or business,
shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts or shall take any corporate action authorizing any of
the foregoing; or
(f) Involuntary Insolvency, Etc. Involuntary proceedings or an
involuntary petition shall be commenced or filed against Holdings or any of its
Subsidiaries under any bankruptcy, insolvency or similar law or seeking the
dissolution or reorganization of it or the appointment of a receiver, trustee,
custodian or liquidator for it or of a substantial part of its property, assets
or business, or any writ, judgment, warrant of attachment, execution or similar
process shall be issued or levied against a substantial part of its property,
assets or business, and
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such proceedings or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded, within sixty (60) days after commencement, filing or
levy, as the case may be, or any order for relief shall be entered in any such
proceeding; or
(g) Default Under Other Agreements. (i) Holdings or any of its
Subsidiaries shall default in the payment when due, whether at stated maturity
or otherwise, of any Indebtedness (other than Indebtedness owed to the Lenders
under the Loan Documents) in excess of $5,000,000 in the aggregate beyond the
period of grace (not to exceed thirty (30) days), if any, provided in the
instrument or agreement under which such Indebtedness was created, or (ii) a
default shall occur in the performance or observance of any agreement or
condition to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice of acceleration or similar notice is required), any such
Indebtedness to become due or be repaid prior to its stated maturity or (iii)
any such Indebtedness of Holdings or any of its Subsidiaries shall be declared
to be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving, individually or
in the aggregate, a liability (to the extent not paid or covered by a reputable
and solvent insurance company which has accepted liability in writing or by
third party indemnification for which immediately available funds have been
irrevocably deposited in escrow to cover such liability) of $5,000,000 or more
and all such judgments or decrees shall not have been vacated, discharged,
satisfied, stayed or bonded pending appeal within thirty (30) days from the
entry thereof; or
(i) Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect in accordance with the terms thereof or shall cease to give Agent for
the benefit of the Lenders the Liens, rights, powers and privileges purported to
be created thereby (including, without limitation, a first priority perfected
security interest in, and Lien on, all of the Collateral for which Agent or
Collateral Agent has taken necessary actions to perfect its security interest),
in favor of Agent, superior to and prior to the rights of all third Persons and
subject to no other Liens (except to the extent expressly permitted herein or
therein); or any Credit Party shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any of the Security Documents and such default shall continue beyond
any grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
(j) Invalidity of Subordination Provisions. The subordination
provisions of any agreement or instrument governing or relating to the Junior
Subordinated Documents, the Seller Subordinated Notes (if any), the Bridge Loan
Documents, the Senior Subordinated Documents or any Subordinated Indebtedness is
for any reason revoked or invalidated, or otherwise ceases to be in full force
and effect, Holdings or any of its Subsidiaries contests in any manner the
validity or enforceability thereof or denies that it has any further liability
or obligation thereunder, or the Loans and the other Obligations hereunder
entitled to receive the
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benefits of any Loan Document is for any reason subordinated or does not have
the priority contemplated by this Agreement or such subordination provisions; or
(k) ERISA. Either (i) any Reportable Event which the Required
Lenders determine constitutes reasonable grounds for the termination of any Plan
by the PBGC or of any Multiemployer Plan or for the appointment by the
appropriate United States District Court of a trustee to administer or liquidate
any Plan or Multiemployer Plan shall have occurred, (ii) a trustee shall be
appointed by a United States District Court to administer any Plan or
Multiemployer Plan, (iii) the PBGC shall institute proceedings to terminate any
Plan or Multiemployer Plan or to appoint a trustee to administer any Plan; (iv)
Holdings or any of its Subsidiaries or any of their ERISA Affiliates shall
become liable to the PBGC or any other party under Section 4062, 4063 or 4064 of
ERISA with respect to any Plan; or (v) Holdings or any of its Subsidiaries or
any of their ERISA Affiliates shall become liable to make a current payment with
respect to any Multiemployer Plan under Section 4201 et seq. of ERISA; if as of
the date thereof or any subsequent date, the sum of each of Holdings' and its
Subsidiaries and their ERISA Affiliates' various liabilities (such liabilities
to include, without limitation, any liability to the PBGC or to any other party
under Section 4062, 4063 or 4064 of ERISA with respect to any Plan, or to any
Multiemployer Plan under Section 4201 et seq. of ERISA, and to be calculated
after giving effect to the tax consequences thereof) as a result of such events
listed in subclauses (i) through (v) above exceeds $5,000,000; or
(l) Failure to Exercise Calls. Holdings or any of its
Subsidiaries shall fail to exercise any call right under any of the Put and Call
Agreements prior to the expiration of such call right; or
(m) Change in Control. A Change of Control shall occur.
If any of the foregoing Events of Default shall have occurred
and be continuing, Agent, at the written direction of the Required Lenders
shall, take one or more of the following actions: (i) by written or oral or
telephonic notice (in the case of oral or telephonic notice confirmed in writing
immediately thereafter) to Borrowers declare the Total Commitments to be
terminated whereupon the Total Commitments shall forthwith terminate, (ii) by
written or oral or telephonic notice (in the case of oral or telephonic notice
confirmed in writing immediately thereafter) to Borrowers declare all sums then
owing by Borrowers hereunder and under the Loan Documents to be forthwith due
and payable, whereupon all such sums shall become and be immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrowers, or (iii) terminate any Letter of
Credit in accordance with its terms, (iv) direct Borrowers to pay (and each
Borrower agrees that upon receipt of such notice, or upon the occurrence of any
Event of Default specified in Section 10.1(e) or Section 10.1(f) with respect to
such Borrower it will pay) to Agent at the Payment Office such additional amount
of cash, to be held as security by Agent, as is equal to the aggregate Stated
Amount of all Letters of Credit issued for the account of any Borrower and its
Subsidiaries and then outstanding, and (v) enforce, as Agent or Collateral
Agent, all of the Liens and security interests created pursuant to the Security
Documents, and deliver a blockage notice or exercise any other rights with
respect to any Subordinated Indebtedness. In cases of any occurrence of any
Event of Default described in Section 10.1(e) or Section 10.1(f), the Total
Commitments shall immediately terminate and the Loans, together with accrued
interest thereon,
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shall become due and payable forthwith without the requirement
of any such acceleration or request, and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by Borrowers, any
provision of this Agreement or any other Loan Document to the contrary
notwithstanding, and other amounts payable by Borrowers hereunder shall also
become immediately due and payable all without notice of any kind.
Anything in this Section 10.1 to the contrary notwithstanding, Agent
shall, at the request of the Required Lenders, rescind and annul any
acceleration of the Loans by written instrument filed with Borrowers; provided
that at the time such acceleration is so rescinded and annulled: (A) all past
due interest and principal, if any, on the Loans and all other sums payable
under this Agreement and the other Loan Documents shall have been duly paid, and
(B) no other Event of Default shall have occurred and be continuing which shall
not have been waived in accordance with the provision of Section 12.1 hereof.
Section 10.2. Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE XI
THE AGENT
In this Article XI, the Lenders agree among themselves as follows:
Section 11.1. Appointment. The Lenders hereby appoint BT as Agent (for
purposes of this Article XI, the term "Agent" shall include BT in its capacity
as Collateral Agent pursuant to the Security Documents) to act as herein
specified herein and in the other Loan Documents. Each Lender hereby irrevocably
authorizes and each holder of any Note by the acceptance of such Note shall be
deemed to irrevocably authorize Agent to take such action on its behalf under
the provisions hereof, the other Loan Documents (including, without limitation,
to give notices and take such actions on behalf of the Required Lenders as are
consented to in writing by the Required Lenders) and any other instruments,
documents and agreements referred to herein or therein and to exercise such
powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Agent may perform any of its duties hereunder and under the other Loan
Documents, by or through its officers, directors, agents, employees or
affiliates.
Section 11.2. Nature of Duties. Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of Agent shall be mechanical and administrative in nature. EACH LENDER HEREBY
ACKNOWLEDGES AND AGREES THAT AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY
LENDER. Nothing in any of the Loan Documents, expressed or implied, is intended
to or shall be so construed as to impose upon Agent any obligations in respect
of any of the Loan Documents except as expressly set forth herein or therein.
Each Lender shall make its own independent investigation of the financial
condition and affairs of Holdings and Borrowers in connection with the making
and the continuance of the Loans hereunder and shall make its own
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appraisal of the credit worthiness of Holdings and Borrowers, and Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before making of the Loans or at any time or
times thereafter. Agent will promptly notify each Lender at any time that the
Required Lenders have instructed it to act or refrain from acting pursuant to
Article X.
Section 11.3. Exculpation, Rights Etc. Neither Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, unless resulting primarily
from its or their gross negligence, willful misconduct or bad faith. Agent shall
not be responsible to any Lender for any recitals, statements, representations
or warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of any of the Loan Documents or
any other document or the financial condition of Holdings or Borrowers. Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents or any other Document or the financial condition of
Holdings or Borrowers, or the existence or possible existence of any Unmatured
Event of Default or Event of Default unless requested to do so by the Required
Lenders. Agent may at any time request instructions from the Lenders with
respect to any actions or approvals (including the failure to act or approve)
which by the terms of any of the Loan Documents, Agent is permitted or required
to take or to grant, and if such instructions are requested, Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting, approving or
refraining from acting or approving under any of the Loan Documents in
accordance with the instructions of the Required Lenders or, to the extent
required by Section 12.1, all of the Lenders.
Section 11.4. Reliance. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any notice, writing, resolution, notice,
statement, certificate, order or other document or any telephone, telex,
teletype or telecopier message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining herein or to any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by Agent.
Section 11.5. Indemnification. To the extent Agent is not reimbursed
and indemnified by Borrowers, the Lenders will reimburse and indemnify Agent for
and against any and all liabilities, obligations, losses, damages, claims,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any of
the other Loan Documents or any action taken or omitted by Agent under this
Agreement or any of the other Loan Documents, in proportion to each Lender's
Aggregate Pro Rata Share of the outstanding Loans and Commitments hereunder;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, claims, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or
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willful misconduct. The obligations of the Lenders under this Section 11.5 shall
survive the payment in full of the Notes and the termination of this Agreement.
For purposes hereof, "Aggregate Pro Rata Share" means, when used with
reference to any Lender and any described aggregate or total amount, an amount
equal to the result obtained by multiplying such desired aggregate or total
amount by a fraction the numerator of which shall be the aggregate principal
amount of such Lender's Revolving Loan, Term A Loan and Term B Loan and the
denominator of which shall be aggregate of all of the Loans outstanding
hereunder.
Section 11.6. Agent In Its Individual Capacity. With respect to its
Loans and Commitments (and its Revolver Pro Rata Share, Term A Pro Rata Share,
Term B Pro Rata Share or Pro Rata Share, as applicable, thereof), Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender or holder of Obligations. The terms "Lenders", "holder of
Obligations" or "Required Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include Agent in its individual capacity as
a Lender, one of the Required Lenders or a holder of Obligations. Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Holdings, any Borrower or any Subsidiary
or affiliate of Holdings as if it were not acting as Agent hereunder or under
any other Loan Document, including, without limitation, the acceptance of fees
or other consideration for services without having to account for the same to
any of the Lenders.
Section 11.7. Notice of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default hereunder unless Agent has received written notice from a Lender or
Borrowers referring to this Agreement describing such Event of Default or
Unmatured Event of Default and stating that such notice is a "notice of
default". In the event that Agent receives such a notice, Agent shall give
prompt notice thereof to the Lenders.
Section 11.8. Holders of Obligations. Agent may deem and treat the
payee of any Obligation as reflected on the books and records of Agent as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with Agent pursuant to
Section 12.8(c). Any request, authority or consent of any Person who, at the
time of making such request or giving such authority or consent, is the holder
of any Obligation shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Obligation or of any Obligation or Obligations
granted in exchange therefor.
Section 11.9. Resignation by Agent.
(a) Agent may resign from the performance of all its functions and
duties hereunder at any time by giving fifteen (15) Business Days' prior written
notice to Borrowers and the Lenders. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent with the prior written consent of Borrower (not to be
unreasonably withheld
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or delayed), so long as no Event of Default has occurred and is continuing, and
who shall be an incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed within said
fifteen (15) Business Day period, Agent, with, provided no Event of Default has
occurred and is continuing, the prior written consent of Borrowers (not to be
unreasonably withheld or delayed), shall then appoint a successor Agent who
shall serve as Agent until such time, if any, as the Required Lenders, with,
provided no Event of Default has occurred and is continuing, the consent of
Borrowers, appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) by the twentieth (20th) Business Day after the date such notice of
resignation was given by Agent, Agent's resignation shall become effective and
the Required Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Required Lenders, with, provided no Event of
Default has occurred and is continuing, the consent of Borrowers, appoint a
successor Agent as provided above.
Section 11.10. Other Titles. None of the institutions identified as
"Lead Arranger," "Book Manager," "Syndication Agent" or "Documentation Agent on
the title page to this Agreement shall have any obligations, liabilities or
duties under this Agreement other than those applicable to a Lender (but only if
such institution is a Lender) as such, and no such institution shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any such institution
in deciding to enter into this Agreement or in taking or not taking any action
hereunder.
ARTICLE XII
MISCELLANEOUS
Section 12.1. No Waiver; Modifications in Writing. (a) No failure or
delay on the part of Agent or any Lender in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to Agent or any Lender at law or in equity or
otherwise. Neither this Agreement nor any terms hereof may be amended, modified,
supplemented, waived, discharged, terminated or otherwise changed unless such
amendment, modification, supplement, waiver, discharge, termination or other
change is in writing signed by the respective Credit Parties party thereto and
the Required Lenders, provided that no such amendment, modification, supplement,
waiver, discharge, termination or other change shall, without the consent of
each Lender (other than a Defaulting Lender) (with Obligations directly affected
thereby in the case of the following clause (i)), (i) extend the final scheduled
maturity of any Loan or Note (it being understood that amending the definitions
of Scheduled Term A Repayments (other than the Term A Loan Maturity Date),
Scheduled Term B Repayments (other than the Term B Loan Maturity Date) or
Scheduled Acquisition Repayments (other than the Revolver Termination Date) or
amending the mandatory prepayment provisions or financial covenants shall not
constitute an extension of the final scheduled maturity of any Loan or Note) or
extend the stated maturity of any Letter of
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Credit beyond the Revolver Termination Date or any Rollover Letter of Credit
beyond the Rollover LC Termination Date, or reduce the rate or extend the time
of payment of interest or fees thereon, or reduce the principal amount thereof,
(ii) release all or substantially all of the Collateral (except as expressly
provided in this Agreement or in the Security Document as in effect on the
Closing Date) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 12.1, (iv) reduce the percentage specified in the
definition of Required Lenders (it being understood that, with the consent of
the Required Lenders, additional extensions of credit pursuant to this Agreement
(including, without limitation, any new or additional Facility) may be included
in the determination of the Required Lenders on substantially the same basis as
the extensions of Term Loans and Revolving Commitments are included in such
determination on the date hereof) or (v) consent to the assignment or transfer
by Holdings or any Borrower of any of its rights and obligations under this
Agreement; provided, further, that no such amendment, modification, supplement,
waiver, discharge, termination or other change shall (1) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Events of Default or Unmatured Events of
Default shall not constitute an increase of the Commitment of any Lender, and
that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase in the Commitment of such Lender), (2) without the
consent of Facing Agent, amend, modify or waive any provision of Section 2.9 or
alter its rights or obligations with respect to Letters of Credit, (3) without
the consent of Agent, amend, modify or waive any provision of Article XI as same
applies to Agent or any other provisions as same relates to the rights or
obligations of Agent, (4) without the consent of Agent or the Collateral Agent,
amend, modify or waive any provisions relating to the rights or obligations of
Agent or the Collateral Agent under the other Loan Documents, (5) without the
consent of the Majority Lenders of each Facility which is being allocated a
lesser prepayment, repayment or commitment reduction, alter the required
application of any prepayments or repayments (or commitment reduction), as
between the various Facilities pursuant to clause (i) of the first sentence of
Section 4.5(a), clause (i) of the second sentence of Section 4.5(a) and the
fourth and fifth sentences of Section 4.5(a) (although the Required Lenders may
waive in whole or in part, any such prepayment, repayment or commitment
reduction so long as the application, as amongst the various Facilities, of any
such prepayment, repayment or commitment reduction which is still required to be
made is not altered), (6) without the consent of each Term A Lender, amend the
definition of Term A Pro Rata Share, without the consent of each Term B Lender,
amend the definition of the Term B Pro Rata Share, and without the consent of
each Revolving Lender amend the definition of Revolver Pro Rata Share, (7)
without the consent of the Majority Lenders of the Term A Facility, amend the
definition of Majority Lenders (but only if the Term A Lenders are directly
affected thereby), without the consent of the Majority Lenders of the Term B
Facility, amend the definition of Majority Lenders (but only if the Term B
Lenders are directly affected thereby), and without the consent of the Majority
Lenders of the Revolving Facility, amend the definition of Majority Lenders (but
only if the Revolving Lenders are directly affected thereby), or (8) without the
consent of the Super Majority Lenders of the Term A Facility, amend the
definition of Scheduled Term A Repayments or the definition of Super Majority
Lenders (but only if the Term A Lenders are directly affected thereby), without
the consent of the Super Majority Lenders of the Term B Facility, amend the
definition of Scheduled Term B Repayments or the definition of Super Majority
Lenders (but only if the Term B Lenders are directly affected thereby), and
without the
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consent of the Super Majority Lenders of the Revolving Facility, amend the
definition of Scheduled Acquisition Repayments or the definition of Super
Majority Lenders (but only if the Revolving Lenders are directly affected
thereby).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (a)(i) through (v), inclusive, of the first proviso to the third
sentence of Section 12.1(a), the consent of the Required Lenders is obtained but
the consent of one or more of such other Lenders whose consent is required is
not obtained, then Borrowers shall have the right, so long as all non-consenting
Lenders whose individual consent is required are treated as described in either
clauses (A) or (B) below, to either (A) replace each such non-consenting Lender
or Lenders (or, at the option of Borrowers if the respective Lender's consent is
required with respect to less than all Loans, to replace only the respective
Loans of the respective non-consenting Lender which gave rise to the need to
obtain such Lender's individual consent) with one or more Replacement Lenders
pursuant to Section 3.7 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed amendment, modification, supplement.
waiver, discharge, termination or other change or (B) terminate such
non-consenting Lender's Revolving Commitment and Term A Commitment and repay all
outstanding Loans of such Lender which gave rise to the need to obtain such
Lender's consent, in accordance with Section 4.l(b) and/or 4.3; provided that,
unless the Revolving Commitment and Term A Commitment terminated and Loans
repaid pursuant to the preceding clause (B) are immediately replaced in full at
such time through the addition of new Lenders or the increase of the Commitments
and/or outstanding Loans of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B) the Required Lenders (determined before giving effect to the proposed
action) shall specifically consent thereto, provided, further, that in any event
Borrowers shall not have the right to replace a Lender, terminate its Revolving
Commitment or Term A Commitment or repay its Loans solely as a result of the
exercise of such Lender's rights (and the withholding of any required consent by
such Lender) contemplated by the first proviso to this Section 12.1(b).
Section 12.2. Further Assurances. Each Borrower agrees to do such
further acts and things and to execute and deliver to Agent such additional
assignments, agreements, powers and instruments, as Agent may reasonably require
or deem advisable to carry into effect the purposes of this Agreement or any of
the Loan Documents or to better assure and confirm unto Agent its rights, powers
and remedies hereunder.
Section 12.3. Notices, Etc. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto or any other Person shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or by a reputable overnight or courier delivery service, or
by prepaid telex or telecopier, and shall be deemed to be given for purposes of
this Agreement on the third day after deposit in registered or certified mail,
postage prepaid, and otherwise on the date that such writing is delivered or
sent to the intended recipient thereof, or in the case of notice delivered by
telecopy, upon completion of transmission with a copy of such notice also being
delivered under any of the methods provided above, all in accordance with the
provisions of this Section 12.3. Unless otherwise specified in a notice sent or
delivered in accordance with
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the foregoing provisions of this Section 12.3, notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their respective
telex, TWX or telecopier numbers) indicated on Schedule 12.3 or, in the case of
any Assignee, on its signature page to its Assignment and Assumption Agreement
and, in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party on Schedule 12.3 hereto or such
Assignment Agreement, as the case may be.
Section 12.4. Costs, Expenses and Taxes; Indemnification.
(a) Generally. Borrowers agree to jointly and severally pay promptly
upon request by Agent (or any Lender, in connection with any enforcement as
provided below) all reasonable out-of-pocket costs and expenses in connection
with the negotiation, preparation, printing, typing, reproduction, execution and
delivery and syndication of this Agreement and the other Loan Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver, consent relating hereto or thereto or other modifications of (or
supplements to) any of the foregoing and any and all other documents and
instruments furnished pursuant hereto or thereto or in connection herewith or
therewith, including without limitation, the reasonable fees and out-of-pocket
expenses of Winston & Strawn, special counsel to Agent, and any local counsel
retained by Agent relative thereto, other Attorney Costs, independent public
accountants and other outside experts retained by Agent and all search fees,
appraisal fees and expenses, title insurance policy fees, costs and expenses and
filing and recording fees, and all costs and expenses (including, without
limitation, Attorney Costs), if any, of Agent and each Lender in connection with
the enforcement of this Agreement, any of the Loan Documents or any other
agreement furnished pursuant hereto or thereto or in connection herewith or
therewith. In addition, Borrowers agree to jointly and severally pay any and all
present and future stamp, transfer, excise and other similar taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement, any Loan Document, or the making of any Loan (but excluding any tax
determined by reference to the net income or profits of Agent or any Lender
imposed by the jurisdiction in which Agent's or such Lender's principal office
or applicable lending office is located), and each agrees to save and hold Agent
and each Lender harmless from and against any and all liabilities with respect
to or resulting from any delay by any Borrower in paying, or omission by any
Borrower to pay, such taxes. Any portion of the foregoing fees, costs and
expenses which remains unpaid more than thirty (30) days following Agent's or
any Lender's statement and request for payment thereof shall bear interest from
the date of such statement and request to the date of payment at the Default
Rate.
(b) Indemnification. Borrowers agree to jointly and severally indemnify
and hold harmless Agent and each Lender and each director, officer, trustee,
employee and Affiliate of Agent and each Lender (each such Person an
"Indemnified Person" and collectively, the "Indemnified Persons") from and
against all losses, claims, damages, obligations (including removal or remedial
actions), expenses or liabilities (not including Taxes as to which Borrowers are
not required to make any payment of additional amounts pursuant to Section 4.7
hereof) to which such Indemnified Person may become subject, insofar as such
losses, claims, damages, penalties, obligations (including removal or remedial
actions), expenses or liabilities (or actions, suits or proceedings including
any inquiry or investigation or claims in respect thereof (whether or not Agent
or any Lender is a party thereto)) arise out of, in any way relate to, or result
from
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the transactions contemplated by this Agreement or any of the other Loan
Documents and to reimburse each Indemnified Person upon their demand, for any
Attorney Costs or other expenses incurred in connection with investigating,
preparing to defend or defending any such loss, claim, damage, liability, action
or expense; provided, however, (a) that no Indemnified Person shall have the
right to be so indemnified hereunder for any loss, claim, damage, penalties,
obligations, expense or liability to the extent it arises or results primarily
from the gross negligence or willful misconduct or bad faith of such Indemnified
Person and (b) that nothing contained herein shall affect the express
contractual obligations of the Lenders to Borrowers contained herein. If any
action, suit or proceeding arising from any of the foregoing is brought against
Agent, any Lender or any other Person indemnified or intended to be indemnified
pursuant to this Section 12.4, Borrowers will, if requested by Agent, any Lender
or any such Indemnified Person, resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by counsel reasonably
satisfactory to the Person or Persons indemnified or intended to be indemnified.
Each Indemnified Person shall, unless Agent, a Lender or other Indemnified
Person has made the request described in the preceding sentence and such request
has been complied with, have the right to employ its own counsel (or (but not as
well as) staff counsel) to investigate and control the defense of any matter
covered by such indemnity and the reasonable fees and expenses of such counsel
shall be at the expense of the indemnifying party. Borrowers further agree to
jointly and severally indemnify and hold each Indemnified Person harmless from
all loss, cost (including Attorney Costs), liability and damage whatsoever
incurred by such Indemnified Person, excluding any liability arising out of the
gross negligence, willful misconduct or bad faith of such Indemnified Person, by
reason of any violation of any Environmental Laws or Environmental Permits or
for the Release or threatened Release of any Hazardous Materials into the
environment for which Holdings, any Borrower or any of its Subsidiaries has any
liability or which occurs upon the Mortgaged Property or which is related to any
property currently or formerly owned, leased or operated by or on behalf of
Holdings, any Borrower or any of its Subsidiaries, or by reason of the
imposition of any Environmental Lien or which occurs by a breach of any of the
representations, warranties or covenants relating to environmental matters
contained herein, including, without limitation, by reason by any matters
disclosed in Schedule 6.19, provided that, with respect to any liabilities
arising from acts or failure to act for which Borrower or any of its
Subsidiaries is strictly liable under any Environmental Law or Environmental
Permit, Borrowers' obligation to each Indemnified Person under this indemnity
shall likewise be without regard to fault on the part of any Borrower or any
such Subsidiary. If any Borrower shall fail to do any act or thing which it has
covenanted to do hereunder or any representation or warranty on the part of any
Borrower or any Subsidiary contained herein or in any other Loan Document shall
be breached, Agent may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach, and may expend its funds for such purpose,
and will use reasonable efforts to give prompt written notice to Borrowers that
it proposes to take such action. Any and all amounts so expended by Agent shall
be repaid to it by Borrowers promptly upon Agent's demand therefor, with
interest at the Default Rate in effect from time to time during the period
including the date so expended by Agent to the date of repayment. To the extent
that the undertaking to indemnify, pay or hold harmless Agent or any Lender as
set forth in this Section 12.4 may be unenforceable because it is violative of
any law or public policy, Borrowers shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law. The obligations
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of Borrowers under this Section 12.4 shall survive the termination of this
Agreement and the discharge of Borrowers' other Obligations hereunder.
(c) Foreign Exchange Indemnity. If any sum due from any Borrower under
this Agreement or any order or judgment given or made in relation hereto has to
be converted from the currency (the "first currency") in which the same is
payable hereunder or under such order or judgment into another currency (the
"second currency") for the purpose of (i) making or filing a claim or proof
against any Borrower with any Governmental Authority or in any court or
tribunal, or (ii) enforcing any order or judgment given or made in relation
hereto, Borrowers agree to jointly and severally indemnify and hold harmless
each of the Persons to whom such sum is due from and against any loss actually
suffered as a result of any discrepancy between (a) the rate of exchange used to
convert the amount in question from the first currency into the second currency,
and (b) the rate or rates of exchange at which such Person, acting in good faith
in a commercially reasonable manner, purchased the first currency with the
second currency after receipt of a sum paid to it in the second currency in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
The foregoing indemnity shall constitute a separate obligation of Borrowers
distinct from its other obligations hereunder and shall survive the giving or
making of any judgment or order in relation to all or any of such other
obligations.
Section 12.5. Confirmations. Borrowers and each holder of any portion
of the Obligations agree from time to time, upon written request received by it
from the other, to confirm to the other in writing (with a copy of each such
confirmation to Agent) the aggregate unpaid principal amount of the Loan or
Loans and other Obligations then outstanding.
Section 12.6. Adjustment; Setoff.
(a) If any Lender (a "Benefited Lender") shall at any time receive any
payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by setoff,
pursuant to events or proceedings of the nature referred to in Section 10.1(e)
or Section 10.1(f) hereof, or otherwise) in a greater proportion than any such
payment to and collateral received by any other Lender in respect of such other
Lender's Loans or interest thereon, such Benefited Lender shall purchase for
cash from the other Lenders such portion of each such other Lender's Loans, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each Lender; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. Borrowers agree that each
Lender so purchasing a portion of another Lender's Loans may exercise all rights
of payment (including, without limitation, rights of setoff) with respect to
such portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Borrowers, any
such notice being expressly waived by Borrowers, upon the occurrence and during
the continuance of an Event of Default, to set off and apply against any
Obligations, whether matured or unmatured, of Borrowers to such Lender, any
amount owing from such Lender to Borrowers, at or at any time
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after, the happening of any of the above-mentioned events, and the aforesaid
right of setoff may be exercised by such Lender against Borrowers or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor of
Borrowers, or against anyone else claiming through or against, Borrowers or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of setoff shall not have been exercised
by such Lender prior to the making, filing or issuance, or service upon such
Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Lender agrees promptly
to notify in writing Borrowers and Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
(c) Borrowers expressly agree that to the extent any Borrower makes a
payment or payments and such payment or payments, or any part thereof, are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or are required to be repaid to a trustee, receiver, or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then to
the extent of such payment or repayment, the Indebtedness to the Lenders or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if said payment or payments had not been made.
Section 12.7. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 12.8. Binding Effect; Assignment; Addition and Substitution of
Lenders.
(a) This Agreement shall be binding upon, and inure to the benefit of,
Holdings, Borrowers, Agent, the Lenders, all future holders of the Notes and
their respective successors and assigns; provided, however, that neither
Holdings nor any Borrower may assign its rights or obligations hereunder or in
connection herewith or any interest herein (voluntarily, by operation of law or
otherwise) without the prior written consent of Agent and all of the Lenders.
(b) Each Lender may at any time sell to one or more banks or other
entities ("Participants") participating interests in all or any portion of its
rights and obligations under the Loan Documents (including all or any portion of
its Commitment and Loans and related outstanding Obligations) (in respect of any
Lender, its "Credit Exposure"). In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, and Borrowers and Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Each Borrower agrees that if amounts
outstanding under this Agreement or any of the Loan Documents are due or unpaid,
or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and the Loan
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Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any other Loan
Document, provided, however, that such right of setoff shall be subject to the
obligation of such Participant to share with the Lenders, and the Lenders agree
to share with such Participant, as provided in Section 12.6. Each Borrower also
agrees that each Participant shall be entitled to the benefits of Section 3.6
and 4.7 with respect to its participation in the Loans outstanding from time to
time, provided that such Participant's benefits under Sections 3.6 and 4.7 shall
be limited to the benefits that the primary Lender would be entitled to
thereunder. Each Lender agrees that any agreement between such Lender and any
such Participant in respect of such participating interest shall not restrict
such Lender's right to approve or agree to any amendment, restatement,
supplement or other modification to, waiver of, or consent under, this Agreement
or any of the Loan Documents except to the extent that any of the forgoing would
(i) extend the final scheduled maturity of any Loan or Note in which such
participant is participating (it being understood that amending the definitions
of Scheduled Term A Repayments (other than the Term A Loan Maturity Date),
Scheduled Term B Repayments (other than the Term B Loan Maturity Date) or
Scheduled Acquisition Repayments (other than the Acquisition Loan Maturity Date)
or amending the other mandatory prepayment provisions or financial covenants
shall not constitute an extension of the final scheduled maturity of any Loan or
Note) or extend the stated maturity of any Letter of Credit in which such
participant is participating beyond the Revolver Termination Date or beyond the
Rollover LC Termination Date in the case of any Rollover Letter of Credit, or
reduce the rate or extend the time of payment of interest or fees on any such
Loan, Note or Letter of Credit (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that
waivers or modifications of conditions precedent, covenants, Events of Default
or Unmatured Events of Default or of a mandatory reduction in Commitments shall
not constitute a change in the terms of such participation, and that an increase
in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Loan Documents) supporting the Loans and/or Letters
of Credit hereunder in which such participant is participating.
(c) Any Lender may at any time assign to one or more Eligible Assignees
(treating for all purposes under Section 12.8(c) any fund that invests in bank
loans and any other fund that invests in bank loans and is managed by the same
investment advisor of such fund or by an Affiliate of such investment advisor as
a single Eligible Assignee), including an Affiliate thereof (each an
"Assignee"), all or any part of its Credit Exposure pursuant to an Assignment
and Assumption Agreement, provided that (i) it assigns its Credit Exposure in an
amount not less than $5,000,000 (or if less the entire amount of Lender's Credit
Exposure) and (ii) any assignment of all or any portion of any Lender's Credit
Exposure to an Assignee other than another Lender shall require the prior
written consent of Agent and, provided no Unmatured Event of Default or Event of
Default then exists and is continuing, Borrowers (the consent of Borrowers or
Agent not to be unreasonably withheld or delayed), and provided further, that
notwithstanding the foregoing limitations in clauses (i) and (ii), any Lender
may at any time assign all or any part of its Credit Exposure to (x) any
Affiliate of such Lender, (y) in the case of any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and
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is managed by the same investment advisor of such Lender or by an Affiliate of
such investment advisor or (z) any other Lender; and provided, further, that
notwithstanding the foregoing, the sale or assignment by any Eligible Assignee
(which acquired an interest in the Credit Exposure of a Lender in an amount less
than $5,000,000 pursuant to the immediately preceding proviso) to any Person
which is not a Lender or an Affiliate of such Eligible Assignee or, in the case
of any Eligible Assignee that is a fund that invests in bank loans, any other
fund that invests in bank loans and is managed by the same investment advisor of
such Eligible Assignee or by an Affiliate of such investment advisor, shall, if
all the Affiliates of such Lender (and, in the case of any Lender that is a fund
that invests in bank loans, all other funds that invest in bank loans and are
managed by the same investment advisor of such Lender or by an Affiliate of such
investment advisor) have a Credit Exposure in the aggregate of $5,000,000 or
more, be subject to the minimum assignment requirement of $5,000,000. Upon
execution of an Assignment and Assumption Agreement and the payment of a
nonrefundable assignment fee of $3,500 in immediately available funds to Agent
at its Payment Office in connection with each such assignment, written notice
thereof by such transferor Lender to Agent and the recording by Agent of such
assignment and the resulting effect upon the Loans, the Revolving Commitment and
Term A Commitment of the assigning Lender and the Assignee, the Assignee shall
have, to the extent of such assignment, the same rights and benefits as it would
have if it were a Lender hereunder and the holder of the Obligations (provided
that Borrowers and Agent shall be entitled to continue to deal solely and
directly with the assignor Lender in connection with the interests so assigned
to the Assignee until written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to Borrowers and Agent by the assignor Lender and the
Assignee) and, if the Assignee has expressly assumed, for the benefit of
Borrowers, some or all of the transferor Lender's obligations hereunder, such
transferor Lender shall be relieved of its obligations hereunder to the extent
of such assignment and assumption, and except as described above, no further
consent or action by Borrowers, the Lenders or Agent shall be required. At the
time of each assignment pursuant to this Section 12.8(c) to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) United States Federal income
tax purposes, the respective Assignee shall provide to Borrowers and Agent the
appropriate IRS Forms (and, if applicable a Section 4.7(d)(ii) Certificate)
described in Section 4.7(d). Each Assignee shall take such Credit Exposure
subject to the provisions of this Agreement and to any request made, waiver or
consent given or other action taken hereunder, prior to the receipt by Agent and
Borrowers of written notice of such transfer, by each previous holder of such
Credit Exposure. Such Assignment and Assumption Agreement shall be deemed to
amend this Agreement and Schedule 1.1(a) hereto, to the extent, and only to the
extent, necessary to reflect the addition of such Assignee as a Lender and the
resulting adjustment of all or a portion of the rights and obligations of such
transferor Lender under this Agreement, the Maximum Commitment, the
determination of its Pro Rata Share, Term A Pro Rata Share, Term B Pro Rata
Share or Revolver Pro Rata Share, as applicable (rounded to twelve decimal
places), the Loans, any outstanding Letters of Credit and any new Notes to be
issued, at Borrowers' expense, to such Assignee, and no further consent or
action by Borrowers or the Lenders shall be required to effect such amendments.
(d) Each Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee any and all
financial information in such Lender's possession concerning Holdings or any of
its Subsidiaries which has been
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delivered to such Lender by or on behalf of Holdings or any Borrower pursuant to
this Agreement or which has been delivered to such Lender by Holdings or any of
its Subsidiaries in connection with such Lender's credit evaluation of Borrowers
prior to entering into this Agreement; provided that such Transferee or
prospective Transferee agrees to treat any such information as confidential in
accordance with Section 12.15.
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time pledge or assign all or any portion of its rights
under this Agreement and the other Loan Documents (including, without
limitation, the Notes held by it) to any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board without notice to, or the consent of,
Agent or Borrowers, and any Lender that is a fund that invests in bank loans
may, without notice to, or the consent of, Agent or Borrowers, pledge all or any
portion of its rights under this Agreement and the other Loan Documents
(including, without limitation, the Notes held by it) to any trustee for, or any
other representative of, holders of obligations owed, or securities issued, by
such fund, as security for such obligations or securities; provided that any
foreclosure or similar action by such trustee shall be subject to the provisions
of this Section concerning assignments. No such pledge or assignment shall
release the transferor Lender from its obligations hereunder.
Section 12.9. CONSENT TO JURISDICTION; MUTUAL WAIVER OR JURY TRIAL.
(A) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM
WITH OFFICES ON THE DATE HEREOF AT 111 EIGHTH STREET, NEW YORK, NEW YORK
10011 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE
SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT
PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK
CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
AGENT UNDER THIS AGREEMENT. EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH CREDIT PARTY, AT ITS ADDRESS
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SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH CREDIT PARTY IN ANY OTHER
JURISDICTION.
(B) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OR JURISDICTION,
INCLUDING WITHOUT LIMITATION THOSE REFERRED TO IN CLAUSE (A) ABOVE, IN
RESPECT TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 12.10. GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF
SAID STATE, INCLUDING SECTIONS 5-1401 and 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS
RULES.
Section 12.11. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 12.12. Registry. Each Borrower hereby designates Agent to serve
as such Borrower's agent, solely for purposes of this Section 12.12 to maintain
a register (the "Register") on which it will record the Commitment from time to
time of each of the Lenders, the Loans made by each of the Lenders and each
repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation shall not
affect any Borrower's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Commitments of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitment shall
not be effective until such transfer is
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recorded on the Register maintained by Agent with respect to ownership of such
Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitments and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitment and Loans shall be recorded by Agent on the Register only upon the
acceptance by Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.8(c). Coincident with the delivery
of such an Assignment and Assumption Agreement to Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount then owing to such assignor or transferor Lender
shall be issued to the assigning or transferor Lender and/or the new Lender.
Borrowers agree to jointly and severally indemnify Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which may
be imposed on, asserted against or incurred by Agent in performing its duties
under this Section 12.12, except as resulting primarily from the gross
negligence, bad faith or willful misconduct of Agent.
Section 12.13. Headings. The Table of Contents and Article and Section
headings used in this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement.
Section 12.14. Termination of Agreement. This Agreement shall terminate
when the Commitment of each Lender has terminated and all outstanding
Obligations (other than any unasserted contingent or indemnification
obligations) and Loans have been paid in full and all Letters of Credit have
expired or been terminated; provided, however, that the rights and remedies of
Agent and each Lender with respect to any representation and warranty made by
any Credit Party pursuant to this Agreement or any other Loan Document, and the
indemnification provisions contained in this Agreement and any other Loan
Document, shall be continuing and shall survive any termination of this
Agreement or any other Loan Document. Upon such termination, all Liens created
under the Loan Documents shall automatically terminate and Agent agrees to
execute such lien release documentation as Borrowers may reasonably request at
Borrowers' sole cost and expense.
Section 12.15. Confidentiality. Each of the Lenders severally agrees to
keep confidential all non-public information pertaining to Holdings, Borrowers
and their Subsidiaries which is provided to it by any such parties in accordance
with such Lender's customary procedures for handling confidential information of
this nature and in a prudent fashion, and shall not disclose such information to
any Person except (i) to the extent such information is public when received by
such Lender or becomes public thereafter due to the act or omission of any party
other than a Lender, (ii) to the extent such information is independently
obtained from a source other than Holdings, Borrowers or their Subsidiaries and
such information from such source is not, to such Lender's knowledge, subject to
an obligation of confidentiality or, if such information is subject to an
obligation of confidentiality, that disclosure of such information is permitted,
(iii) to an Affiliate of such Lender (who will in turn be required to maintain
confidentiality as if it were a Lender party to this Agreement), counsel,
auditors, examiners of any regulatory authority having jurisdiction over such
Lender, accountants and other consultants retained by Agent or any Lender, (iv)
in connection with any litigation regarding this Agreement or any Loan Document
or the enforcement of the rights of any Lender or Agent under this
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Agreement or any other Loan Document, (v) to the extent required by any
applicable statute, rule or regulation or court order (including , without
limitation, by way of subpoena) or pursuant to the request of any Governmental
Authority having jurisdiction over any Lender or Agent; provided, however, that
in such event, if the Lender(s) are able to do so, the Lender shall provide
Borrowers with prompt notice of such requested disclosure so that Borrowers may
seek a protective order or other appropriate remedy, and, in any event, the
Lenders will endeavor in good faith to provide only that portion of such
information which, in the reasonable judgment of the Lender(s), is relevant and
legally required to be provided, or (vi) to the extent disclosure to other
entities is appropriate in connection with any proposed or actual assignment or
grant of a participation by any of the Lenders of interests in this Agreement
and/or any of the other Loan Documents to such other financial institutions (who
will in turn be required to maintain confidentiality as if they were Lenders
parties to this Agreement). In no event shall Agent or any Lender be obligated
or required to return any such information or other materials furnished by
Holdings or any Borrower.
Section 12.16. Concerning the Collateral and the Loan Documents.
(a) Authority. Each Lender (on its own behalf and on behalf of any
Affiliate of such Lender which is a Secured Creditor) authorizes and directs BT
to act as collateral agent and to enter into the Loan Documents relating to the
Collateral for the benefit of the Lenders and the other Secured Creditors. Each
Lender (on its own behalf and on behalf of any Affiliate of such Lender which is
a Secured Creditor) agrees that any action taken by the Agent, the Collateral
Agent or the Required Lenders (or, where required by the express terms, hereof,
a different proportion of the Lenders) in accordance with the provisions hereof
or of the other Loan Documents, and the exercise by the Agent, the Collateral
Agent or the Required Lenders (or, where so required, such different proportion)
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders and the other Secured Creditors. Without limiting the generality of
the foregoing, the Agent and the Collateral Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the other Secured Creditors with respect to all payments and
collections arising in connection herewith and with the Loan Documents relating
to the Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by any Credit
Party, (iii) act as collateral agent for the Lenders and the other Secured
Creditors for purposes stated therein to the extent such perfection is required
under the Loan Documents, provided, however, the Agent and the Collateral Agent
hereby appoints, authorizes and directs each Lender and the other Secured
Creditors to act as collateral sub-agent for the Agent, the Collateral Agent and
the Lenders for purposes of the perfection of all security interests and Liens
with respect to each Credit Party's respective deposit accounts maintained with,
and cash and Cash Equivalents held by, such Lender or such other Secured
Creditor; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents, and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to the Agent or the Lenders with respect to the Collateral under
the Loan Documents relating thereto, applicable law or otherwise.
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(b) Release of Collateral.
(i) The Agent and each Lender (on its own behalf and on behalf
of any Affiliate of such Lender that is a Secured Creditor) hereby
directs the Agent and the Collateral Agent to release, in accordance
with the terms hereof, any Lien held by the Agent or the Collateral
Agent, under the Security Documents:
(A) against all of the Collateral, upon final and
indefeasible payment in full in cash of the Loans and Obligations
(other than unasserted contingent and indemnification obligations
which expressly survive termination) and termination of all
Commitments and termination hereof;
(B) against any part of the Collateral sold or disposed of
by Holdings or any of its Subsidiaries to the extent such sale or
disposition is permitted hereby (or permitted pursuant to a
waiver or consent of a transaction otherwise prohibited hereby);
(C) against any Collateral acquired by any Borrower or any
of its Subsidiaries after the Closing Date and at least 80% of
the purchase price therefor is within 120 days of the acquisition
thereof financed with Purchase Money Indebtedness secured by a
Lien permitted by clause (ix) of the definition of Customary
Permitted Liens.
(D) so long as no Unmatured Event of Default or Event of
Default has occurred and is continuing, in the sole discretion of
the Agent upon the request of any Borrower, against any part of
the Collateral with a fair market value of less than $1,000,000
in the aggregate during the term of this Agreement as such fair
market value may be certified to the Agent by such Borrower in an
officer's certificate reasonably acceptable in form and substance
to the Agent; and
(E) against a part of the Collateral which release does not
require the consent of all of the Lenders as set forth in Section
12.1(a)(ii), if such release is consented to by the Required
Lenders;
provided, however, that (y) the Agent and the Collateral Agent shall not be
required to execute any such document on terms which, in its opinion, would
expose it to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (z) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of any Borrower or any of its Subsidiaries in
respect of) all interests retained by Borrowers and/or any of their
Subsidiaries, including (without limitation) the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(ii) Each Lender (on its own behalf and on behalf of any
Affiliate of such Lender that is a Secured Creditor) hereby directs the
Agent and the Collateral Agent (and the Agent and the Collateral Agent
agree) to execute and deliver or file such termination and partial
release statements and such other things as are necessary to release
Liens to be released pursuant to this Section 12.16 promptly upon the
effectiveness of any such release or enter into intercreditor
agreements contemplated or permitted herein.
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(c) No Obligation. Neither the Agent nor the Collateral Agent shall
have any obligation whatsoever to any Lender or any other Secured Creditor or to
any other Person to assure that the Collateral exists or is owned by any Credit
Party or is cared for, protected or insured or has been encumbered or that the
Liens granted to the Agent and the Collateral Agent herein or pursuant to the
Loan Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent or the Collateral Agent
in any of the Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission or event related thereto, Agent and the
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent's and the Collateral Agent's own interests in the
Collateral as one of the Lenders and that the Agent and the Collateral Agent
shall not have any duty or liability whatsoever to any Lender, provided, that,
notwithstanding the foregoing, the Agent and the Collateral Agent shall be
responsible for its grossly negligent actions or actions constituting
intentional misconduct.
Section 12.17. Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which Holdings, Borrowers, Agent and each of
the Lenders shall have signed a counterpart of this Agreement (whether the same
or different counterparts) and shall have delivered the same to the Agent at the
Notice Office (or to Agent's counsel as directed by such counsel) or, in the
case of the Lenders, shall have given to Agent or telephonic (confirmed in
writing), written, telex or facsimile notice (actually received) at such office
or the office of Agent's counsel that the same has been signed and mailed to it.
Agent will give Borrowers and each Lender prompt written notice of the
occurrence of the Effective Date.
ARTICLE XIII
NATURE OF BORROWERS' OBLIGATIONS
Section 13.1. Nature of Obligations. Notwithstanding anything to the
contrary contained elsewhere in this Agreement, it is understood and agreed by
the various parties to this Agreement that all obligations to repay principal
of, interest on, and all other amounts with respect to, all Term Loans,
Revolving Loans, Acquisition Loans, Swingline Loans, Rollover LC Obligations and
LC Obligations and all other Obligations pursuant to this Agreement and under
any Note (including, without limitation, all fees, indemnities and taxes in
connection therewith or in connection with the related Revolving Loan
Commitments, Term Loan Commitments or Acquisition Loan Commitments (if any))
shall constitute the joint and several obligations of NATG and LISN. In addition
to the direct obligations of the respective Borrowers with respect to
Obligations as described above, all such Obligations shall be guaranteed
pursuant to, and in accordance with the terms of, the Guaranty.
Section 13.2. Independent Obligation. The obligations of each Borrower
with respect to the Obligations are independent of the obligations of the other
Borrower or any other guarantor, and a separate action or actions may be brought
and prosecuted against each Borrower, whether or not the other Borrower or any
other guarantor is joined in any such action or actions. Each Borrower waives,
to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by either Borrower or other circumstance which operates to toll any
statute of limitations as to
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such Borrower shall, to the fullest extent permitted by law, operate to toll the
statute of limitations as to each Borrower.
Section 13.3. Authorization. Each Borrower authorizes Agent and the
Lenders without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) exercise or refrain from exercising any rights against the other
Borrower or any guarantor or others or otherwise act or refrain from
acting;
(b) release or substitute the other Borrower, endorsers, guarantors or
other obligors;
(a) settle or compromise any of the Obligations of the other Borrower
or any other Credit Party, any security therefor or any liability
(including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all or any
part thereof to the payment of any liability (whether due or not) of
either Borrower to its creditors other than the Lenders;
(b) apply any sums paid by the other Borrower or any other Person,
howsoever realized to any liability or liabilities of such Borrower or
other Person regardless of what liability or liabilities of such Borrower
or other Person remain unpaid; and/or
(c) consent to or waive any breach of, or act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise, by the other Borrower or any other Person.
Section 13.4. Reliance. It is not necessary for Agent or any other
Lender to inquire into the capacity or powers of either Borrower or any of its
Subsidiaries or the officers, directors, members, partners or agents acting or
purporting to act on its behalf, and any Obligations made or created in reliance
upon the professed exercise of such powers shall constitute the joint and
several obligations of the Borrowers hereunder.
Section 13.5. Contribution; Subrogation. Neither Borrower shall have
any rights of contribution or subrogation with respect to the other Borrower as
a result of payments made by it hereunder, in each case unless and until all
Obligations have been repaid in full in cash.
[signature pages follow]
149
<PAGE> 151
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
ORIUS CORP.
By: /s/ William J. Mercurio
------------------------------------------
Name: William J. Mercurio
----------------------------------------
Title: President and C.E.O.
---------------------------------------
NATG HOLDINGS, INC.
By: /s/ William J. Mercurio
------------------------------------------
Name: William J. Mercurio
----------------------------------------
Title: President and C.E.O.
---------------------------------------
LISN, LLC
By: /s/ William J. Mercurio
------------------------------------------
Name: William J. Mercurio
----------------------------------------
Title: President and C.E.O.
---------------------------------------
<PAGE> 152
BANKERS TRUST COMPANY,
in its individual capacity and as Agent
By: /s/ Robert R. Telesca
------------------------------------------
Name: Robert R. Telesca
----------------------------------------
Title: Assistant Vice President
---------------------------------------
<PAGE> 153
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ James D. Cockey
------------------------------------------
Name: James D. Cockey
----------------------------------------
Title: Principal
---------------------------------------
<PAGE> 154
SUNTRUST BANK, ATLANTA,
as a Lender
By: /s/ Randolph A. Parrish
------------------------------------------
Name: Randolph A. Parrish
----------------------------------------
Title: Vice President
---------------------------------------
By: /s/ Richard C. Wilson
------------------------------------------
Name: Richard C. Wilson
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 155
BANQUE NATIONALE DE PARIS,
as a Lender
By: /s/ Stephanie Rogers
------------------------------------------
Name: Stephanie Rogers
----------------------------------------
Title: Vice President
---------------------------------------
By: /s/ Serge Desrayaud
------------------------------------------
Name: Serge Desrayaud
----------------------------------------
Title: Vice President and Team Leader
---------------------------------------
<PAGE> 156
BAVARIA TRR CORPORATION,
as a Lender
By: /s/ Frank B. Bilotta
------------------------------------------
Name: Frank B. Bilotta
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 157
FIRST UNION NATIONAL BANK
as a Lender
By: /s/ Douglas A. Nickel
------------------------------------------
Name: Douglas A. Nickel
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 158
HELLER FINANCIAL, INC.,
as a Lender
By: /s/ K. Craig Gallehugh
------------------------------------------
Name: K. Craig Gallehugh
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 159
NATIONAL CITY BANK,
as a Lender
By: /s/ Joseph D. Robison
------------------------------------------
Name: Joseph D. Robison
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 160
KZH STERLING LLC,
as a Lender
By: /s/ Peter Chin
------------------------------------------
Name: Peter Chin
----------------------------------------
Title: Authorized Agent
---------------------------------------
<PAGE> 161
UNION PLANTERS BANK,
as a Lender
By: /s/ Tom Thurpson
------------------------------------------
Name: Tom Thurpson
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 162
VAN KAMPEN SENIOR FLOATING RATE FUND,
as a Lender
By: /s/ Darvin D. Pierce
------------------------------------------
Name: Darvin D. Pierce
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 163
VAN KAMPEN PRIME RATE INCOME TRUST,
as a Lender
By: Van Kampen Investment Advisory Corp.
By: /s/ Darvin D. Pierce
------------------------------------------
Name: Darvin D. Pierce
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 164
WACHOVIA BANK, N.A.,
as a Lender
By: /s/ William N. Paty
------------------------------------------
Name: William N. Paty
----------------------------------------
Title: Senior Vice President
---------------------------------------
<PAGE> 165
PPM SPYGLASS FUNDING TRUST,
as a Lender
By: /s/ Kelly C. Walker
------------------------------------------
Name: Kelly C. Walker
----------------------------------------
Title: Authorized Agent
---------------------------------------
<PAGE> 166
FREMONT INVESTMENT & LOAN,
as a Lender
By: /s/ Maria Chachere
------------------------------------------
Name: Maria Chachere
----------------------------------------
Title: Vice President
---------------------------------------
<PAGE> 167
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS..................................................................................1
Section 1.1. Definitions......................................................................................1
Section 1.2. Accounting Terms; Financial Statements..........................................................41
ARTICLE II
AMOUNT AND TERMS OF CREDIT.......................................................................................41
Section 2.1. The Commitments.................................................................................41
Section 2.2. Notes...........................................................................................45
Section 2.3. Minimum Amount of Each Borrowing; Maximum Number of Borrowings..................................46
Section 2.4. Borrowing Options...............................................................................47
Section 2.5. Notice of Borrowing.............................................................................47
Section 2.6. Conversion or Continuation......................................................................48
Section 2.7. Disbursement of Funds...........................................................................48
Section 2.8. Pro Rata Borrowings.............................................................................49
Section 2.9. Letter of Credit................................................................................50
ARTICLE III
INTEREST AND FEES................................................................................................57
Section 3.1. Interest........................................................................................57
Section 3.2. Fees............................................................................................58
Section 3.3. Computation of Interest and Fees; Changes in Margins and Fees...................................59
Section 3.4. Interest Periods................................................................................59
Section 3.5. Compensation for Funding Losses.................................................................60
Section 3.6. Increased Costs, Illegality, Etc................................................................61
Section 3.7. Replacement of Affected Lenders.................................................................64
ARTICLE IV
REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS...............................................................64
Section 4.1. Voluntary Reduction of Commitments..............................................................64
Section 4.2. Mandatory Reductions of Commitments.............................................................65
Section 4.3. Voluntary Prepayments...........................................................................66
Section 4.4. Mandatory Prepayments...........................................................................67
Section 4.5. Application of Prepayments......................................................................70
Section 4.6. Method and Place of Payment.....................................................................72
Section 4.7. Net Payments....................................................................................73
ARTICLE V
CONDITIONS OF CREDIT.............................................................................................75
Section 5.1. Conditions Precedent to the Initial Borrowing...................................................75
Section 5.2. Conditions Precedent to All Credit Events.......................................................84
Section 5.3. Conditions Precedent to All Acquisition Revolving Loan Credit Events............................85
</TABLE>
i
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<TABLE>
<S> <C>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES...................................................................................89
Section 6.1. Corporate Status................................................................................89
Section 6.2. Corporate Power and Authority...................................................................89
Section 6.3. No Violation....................................................................................90
Section 6.4. Governmental and Other Approvals................................................................90
Section 6.5. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections.................90
Section 6.6. Litigation......................................................................................93
Section 6.7. True and Complete Disclosure....................................................................93
Section 6.8. Use of Proceeds; Margin Regulations.............................................................93
Section 6.9. Taxes...........................................................................................94
Section 6.10. Compliance With ERISA..........................................................................94
Section 6.11. Security Documents.............................................................................95
Section 6.12. Documents......................................................................................96
Section 6.13. Ownership of Property..........................................................................96
Section 6.14. Capitalization.................................................................................97
Section 6.15. Subsidiaries...................................................................................97
Section 6.16. Compliance With Law, Etc.......................................................................98
Section 6.17. Investment Company Act.........................................................................98
Section 6.18. Public Utility Holding Company Act.............................................................98
Section 6.19. Environmental Matters..........................................................................98
Section 6.20. Labor Relations................................................................................99
Section 6.21. Intellectual Property, Licenses, Franchises and Formulas.......................................99
Section 6.22. Certain Fees..................................................................................100
Section 6.23. Transactions..................................................................................100
Section 6.24. Y2K...........................................................................................100
Section 6.25. Subordination.................................................................................100
ARTICLE VII
AFFIRMATIVE COVENANTS...........................................................................................101
Section 7.1. Financial Statements...........................................................................101
Section 7.2. Certificates; Other Information................................................................102
Section 7.3. Notices........................................................................................103
Section 7.4. Conduct of Business and Maintenance of Existence...............................................104
Section 7.5. Payment of Obligations.........................................................................104
Section 7.6. Inspection of Property, Books and Records......................................................105
Section 7.7. ERISA..........................................................................................105
Section 7.8. Maintenance of Property, Insurance.............................................................107
Section 7.9. Environmental Laws.............................................................................107
Section 7.10. Interest Rate Protection......................................................................108
Section 7.11. Use of Proceeds...............................................................................108
Section 7.12. Additional Security; Further Assurances.......................................................108
Section 7.13. End of Fiscal Years; Fiscal Quarters..........................................................110
Section 7.14. Y2K...........................................................................................110
Section 7.15. Vanke Redemption..............................................................................110
Section 7.16. Ownership of Subsidiaries.....................................................................110
</TABLE>
ii
<PAGE> 169
<TABLE>
<S> <C>
Section 7.17. LISN Mergers..................................................................................110
Section 7.18. Waiver to Existing Turnkey Agreements.........................................................110
ARTICLE VIII
NEGATIVE COVENANTS..............................................................................................111
Section 8.1. Liens..........................................................................................111
Section 8.2. Indebtedness...................................................................................112
Section 8.3. Guaranties.....................................................................................114
Section 8.4. Consolidation, Merger, Purchase or Sale of Assets, etc.........................................115
Section 8.5. Dividends or Other Distributions...............................................................118
Section 8.6. Limitation on Certain Restrictions on Subsidiaries.............................................119
Section 8.7. Issuance of Capital Stock......................................................................120
Section 8.8. Loans and Investments..........................................................................120
Section 8.9. Transactions with Affiliates...................................................................121
Section 8.10. Sale-Leasebacks...............................................................................122
Section 8.11. Intentionally Omitted.........................................................................122
Section 8.12. Lines of Business.............................................................................122
Section 8.13. Fiscal Year...................................................................................123
Section 8.14. Limitation on Voluntary Payments and Certain Modifications....................................123
Section 8.15. Accounting Changes............................................................................123
Section 8.16. Limitation on Creation of Subsidiaries........................................................124
Section 8.17. Powers of Attorney............................................................................124
ARTICLE IX
FINANCIAL COVENANTS.............................................................................................124
Section 9.1. Capital Expenditures...........................................................................124
Section 9.2. Interest Coverage Ratio........................................................................125
Section 9.3. Leverage Ratio.................................................................................126
Section 9.4. Adjusted Fixed Charge Coverage Ratio...........................................................127
Section 9.5. Maintenance of Consolidated Net Worth..........................................................127
ARTICLE X
EVENTS OF DEFAULT...............................................................................................127
Section 10.1. Events of Default.............................................................................127
Section 10.2. Rights Not Exclusive..........................................................................131
ARTICLE XI
THE AGENT.......................................................................................................131
Section 11.1. Appointment...................................................................................131
Section 11.2. Nature of Duties..............................................................................131
Section 11.3. Exculpation, Rights Etc.......................................................................132
Section 11.4. Reliance......................................................................................132
Section 11.5. Indemnification...............................................................................132
Section 11.6. Agent In Its Individual Capacity..............................................................133
Section 11.7. Notice of Default.............................................................................133
Section 11.8. Holders of Obligations........................................................................133
Section 11.9. Resignation by Agent..........................................................................133
</TABLE>
iii
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<TABLE>
<S> <C>
Section 11.10. Other Titles.................................................................................134
ARTICLE XII
MISCELLANEOUS...................................................................................................134
Section 12.1. No Waiver; Modifications in Writing...........................................................134
Section 12.2. Further Assurances............................................................................136
Section 12.3. Notices, Etc..................................................................................136
Section 12.4. Costs, Expenses and Taxes; Indemnification....................................................137
Section 12.5. Confirmations.................................................................................139
Section 12.6. Adjustment; Setoff............................................................................139
Section 12.7. Execution in Counterparts.....................................................................140
Section 12.8. Binding Effect; Assignment; Addition and Substitution of Lenders..............................140
Section 12.9. CONSENT TO JURISDICTION; MUTUAL WAIVER OR JURY TRIAL..........................................143
Section 12.10. GOVERNING LAW................................................................................144
Section 12.11. Severability of Provisions...................................................................144
Section 12.12. Registry.....................................................................................144
Section 12.13. Headings.....................................................................................145
Section 12.14. Termination of Agreement.....................................................................145
Section 12.15. Confidentiality..............................................................................145
Section 12.16. Concerning the Collateral and the Loan Documents.............................................146
Section 12.17. Effectiveness................................................................................148
ARTICLE XIII
NATURE OF BORROWERS' OBLIGATIONS................................................................................148
Section 13.1. Nature of Obligations.........................................................................148
Section 13.2. Independent Obligation........................................................................148
Section 13.3. Authorization.................................................................................149
Section 13.4. Reliance......................................................................................149
Section 13.5. Contribution; Subrogation.....................................................................149
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C>
Exhibit 1.1(a) Form of Rollover Letter of Credit
Exhibit 2.1(c) Form of Swing Line Loan Participation Certificate
Exhibit 2.2(a)(1) Form of Term A Note
Exhibit 2.2(a)(2) Form of Term B Note
Exhibit 2.2(a)(3) Form of Revolving Note
Exhibit 2.2(a)(4) Form of Swing Line Note
Exhibit 2.5 Form of Notice of Borrowing
Exhibit 2.6 Form of Notice of Conversion or Continuation
Exhibit 2.9 Form of Letter of Credit Request
Exhibit 4.7(d) Form of Section 4.7(d)(ii) Certificate
Exhibit 5.1(b) Form of Security Agreement
Exhibit 5.1(b)(v) Form of Perfection Certificate
Exhibit 5.1(c) Form of Pledge Agreement
Exhibit 5.1(d) Form of Control Agreement
</TABLE>
iv
<PAGE> 171
<TABLE>
<S> <C>
Exhibit 5.1(e)(1) Form of Holdings Guaranty
Exhibit 5.1(e)(2) Form of Subsidiary Guaranty
Exhibit 5.1(f) Form of Collateral Assignment of Leases
Exhibit 5.1(i) Form of Officer's Certificate
Exhibit 5.1(j) Form of Secretary's Certificate
Exhibit 5.1(r) Form of Appointment of Agent
Exhibit 5.1(aa) Form of Solvency Certificate
Exhibit 7.2(b) Form of Officer's Certificate Pursuant to Section 7.2(b)
Exhibit 12.8(c) Form of Assignment and Assumption Agreement
</TABLE>
<TABLE>
<CAPTION>
SCHEDULES
---------
<S> <C>
Schedule 1.1(a) Commitments
Schedule 1.1(b) Rollover Letters of Credit
Schedule 6.3 Approvals and Consents
Schedule 6.5(a) Pro Forma Balance Sheet
Schedule 6.5(c) Undisclosed Liabilities
Schedule 6.5(d) Indebtedness
Schedule 6.9 Tax Status
Schedule 6.11(c) Real Property
Schedule 6.12 Waivers
Schedule 6.14 Capitalization
Schedule 6.15 Capitalization of Subsidiaries
Schedule 6.19 Environmental
Schedule 6.22 Certain Fees
Schedule 7.8 Insurance
Schedule 8.1(c) Existing Liens
Schedule 8.2(n) Existing Earn-Out Obligations
Schedule 8.3 Guaranties
Schedule 8.6(a) Existing Restrictions on Subsidiaries
Schedule 8.8 Existing Investments
Schedule 12.3 Notice Addresses
</TABLE>
v
<PAGE> 1
EXHIBIT 10.2
[EXECUTION COPY]
================================================================================
-----------------------------------------------------
ORIUS CORP.
INVESTOR RIGHTS AGREEMENT
-----------------------------------------------------
DATED AS OF NOVEMBER 8, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE NO.
--------
SECTION 1. COVENANTS, REPRESENTATIONS AND WARRANTIES..........................4
SECTION 2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES.....................4
2A. Restrictions on Transfer...........................................4
2B. First Refusal Right................................................5
2C. Participation Rights...............................................5
2D. Permitted Transfers................................................7
2E. Termination of Restrictions........................................7
SECTION 3. SALE OF THE COMPANY................................................8
3A. Approved Sale......................................................8
3B. Required Actions...................................................8
3C. Conditions to Stockholders' Obligations............................8
3D. Rule 506 Transaction...............................................9
3E. Expenses of Approved Sale..........................................9
SECTION 4. LIMITED PREEMPTIVE RIGHTS..........................................9
4A. Offering...........................................................9
4B. Election Notice...................................................10
4C. Expiration of Offering Period.....................................10
4D. Termination.......................................................10
SECTION 5. PUBLIC OFFERING...................................................10
SECTION 6. LEGEND............................................................11
SECTION 7. TRANSFER..........................................................11
SECTION 8. BOARD OF DIRECTORS................................................11
8A. Composition of the Board..........................................11
8B. Board Meeting Expenses............................................13
SECTION 9. DEMAND REGISTRATIONS..............................................13
9A. Requests for Registration.........................................13
9B. Long-Form Registrations...........................................13
9C. Short-Form Registrations..........................................13
9D. Priority on Demand Registrations..................................14
9E. Restrictions on Demand Registrations..............................14
i
<PAGE> 3
9F. Selection of Underwriters.........................................14
9G. Other Registration Rights.........................................14
9H. Demand Registration Expenses......................................14
SECTION 10. PIGGYBACK REGISTRATIONS...........................................15
10A. Right to Piggyback................................................15
10B. Piggyback Expenses................................................15
10C. Priority on Primary Registrations.................................15
10D. Other Registrations...............................................15
10E. Postponement or Withdrawal........................................15
SECTION 11. HOLDBACK AGREEMENTS...............................................16
11A. Agreement of Holders of Registrable Securities....................16
11B. Company Agreement.................................................16
SECTION 12. REGISTRATION PROCEDURES...........................................16
SECTION 13. REGISTRATION EXPENSES.............................................19
13A. Company Expenses..................................................19
13B. Reimbursement.....................................................19
SECTION 14. INDEMNIFICATION...................................................19
14A. Indemnification Obligation of the Company.........................19
14B. Indemnification of the Company....................................20
14C. Indemnification Procedures........................................20
14D. Other Indemnification Provisions..................................20
SECTION 15. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.......................21
SECTION 16. DEFINITIONS.......................................................21
SECTION 17. MISCELLANEOUS.....................................................26
17A. Transfers in Violation of Agreement...............................26
17B. Amendment and Waiver..............................................26
17C. Severability......................................................26
17D. Entire Agreement..................................................27
17E. No Inconsistent Agreements........................................27
17F. Adjustments Affecting Registrable Securities......................27
17G. Successors and Assigns............................................27
17H. Counterparts......................................................27
17I. Remedies..........................................................27
17J. Notices...........................................................28
17K. Governing Law.....................................................29
ii
<PAGE> 4
17L. Descriptive Headings..............................................29
iii
<PAGE> 5
SCHEDULES
Schedule of Existing Orius Stockholders
Schedule of Coinvestors
Schedule of WS Investors
Schedule of Former LISN Shareholders
Schedule of New Stockholders
iv
<PAGE> 6
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered
into as of November 8, 1999, and the terms set forth in this Agreement shall
become effective upon the Effective Time (as defined in the Reorganization
Agreement (defined below)) by and among (i) Orius Corp., a Florida corporation
(the "Company"), (ii) each of the Persons listed on the attached "Schedule of
Existing Orius Stockholders" who executes this Agreement in the space provided
below for such Person (collectively, the "Existing Orius Stockholders"), (iii)
Willis Stein & Partners II, L.P., a Delaware limited partnership, and Willis
Stein & Partners Dutch, L.P., a Delaware limited partnership (collectively,
"WS"), (iv) each of the Persons listed on the attached "Schedule of Former LISN
Shareholders" who executes this Agreement in the space provided below for such
Person (collectively, the "Former LISN Shareholders"), (v) each of the Persons
listed on the attached "Schedule of Coinvestors", as supplemented from time to
time by notice from Willis Stein to the Company at any time at or prior to the
Closing, who executes this Agreement in the space provided below for such
Person, (collectively, the "Coinvestors"), (vi) each other Person set forth from
time to time on the attached "Schedule of New Stockholders" who at any time,
acquires securities of the Company and, as a condition thereto, executes a
counterpart of this Agreement or otherwise agrees to be bound by this Agreement
(such Persons being referred to collectively as the "New Stockholders"), and
(vii) LISN Holdings, Inc., an Ohio corporation ("LISN"). WS and each of the
Coinvestors are referred to herein collectively as the "Investors" and
individually as an "Investor". The Existing Orius Stockholders, the Former LISN
Shareholders, the Investors, the Coinvestors and the New Stockholders are
referred to herein collectively as the "Stockholders" and individually as a
"Stockholder". Capitalized terms used herein are defined in Section 15 hereof.
The Company, LISN, the Existing Orius Stockholders (in each
case by execution of a joinder agreement), the Former LISN Shareholders (in each
case by execution of a joinder agreement) and WS are parties to the Agreement
and Plan of Reorganization dated as of the date hereof (as amended from time to
time, the "Reorganization Agreement"). Pursuant to the Reorganization Agreement
and the other agreements referred to therein, and the consummation of the
transactions contemplated by the Reorganization Agreement and such other
agreements, the Existing Orius Stockholders, the Former LISN Shareholders and
the Investors will all, as of the Effective Time, be holders of equity
securities of the Company.
LISN, certain of the Former LISN Shareholders, WS and certain
of the Coinvestors are parties to a Shareholders Agreement dated as of May 28,
1999 and a Registration Agreement dated as of such date (collectively, the
"Existing LISN Agreements") and desire to enter into similar agreements with
respect to the Company securities that they will receive in connection with the
LISN Merger (as defined in the Reorganization Agreement). Orius and the Existing
Orius Stockholders execute this Agreement to induce LISN, WS and the other
Coinvestors to enter into the Reorganization Agreement and to consummate the
transactions contemplated thereby. Pursuant to this Agreement, the parties
hereto have agreed, among other things, (i) to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Stockholder Shares and (ii) to
provide for certain rights and obligations in respect thereto.
<PAGE> 7
NOW, THEREFORE, the parties to this Agreement hereby agree as
follows, effective as of the Effective Time:
SECTION 1. COVENANTS, REPRESENTATIONS AND WARRANTIES
Each Stockholder covenants, represents and warrants that, (i)
as of the Effective Time, such Stockholder will continue to be the record and
beneficial owner of the Stockholder Shares issued to such Stockholder in the
transactions contemplated in the Reorganization Agreement (and, in the case of
each Former Orius Stockholder, such Stockholder will continue to be the record
and beneficial owner of the Orius common stock which such Stockholder held
immediately prior to such transactions and which such Stockholder did not
surrender to the Company in an exchange pursuant to the Reorganization
Agreement), in each case free and clear of all liens, charges or encumbrances
(except (x) Liens to secure obligations under an Orius Put Agreement and an
Orius Call Agreement with respect to those Stockholder Shares which are subject
to such agreements, and (y) to the extent that any such Stockholder Shares are
subject to cancellation by the Company pursuant to indemnification obligations
of such Stockholder under Section 7 of the Reorganization Agreement); (ii) this
Agreement has been duly authorized, executed and delivered by such Stockholder
and constitutes the valid and binding obligation of such Stockholder,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties and general principles of
equity; and (iii) such Stockholder has not granted and is not a party to any
proxy, voting trust or voting agreement or any agreement which is inconsistent
with, conflicts with or violates any provision of this Agreement. No holder of
Stockholder Shares shall grant any proxy or become party to any voting trust,
voting agreement or any agreement which is inconsistent with, conflicts with or
violates any provision of this Agreement.
PROVISIONS RELATING TO TRANSFER; SALE OF THE COMPANY;
PUBLIC OFFERING; PREEMPTIVE RIGHTS
SECTION 2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES
2A. RESTRICTIONS ON TRANSFER. No holder of Stockholder Shares
shall sell, transfer, assign, pledge or otherwise directly or indirectly dispose
of (a "Transfer") any interest in its Stockholder Shares, except pursuant to and
in accordance with the provisions of Section 2B, 2C or 3 or pursuant to a Public
Sale or an Exempt Transfer (as defined in Section 2D). At least thirty days
prior to making any Transfer of any Stockholder Shares (other than a Public Sale
or an Exempt Transfer), the transferring Stockholder (the "Transferring
Stockholder") shall deliver a written notice (the "Sale Notice") to the Company
and the other Stockholders (the "Other Stockholders"). The Sale Notice shall
disclose in reasonable detail the proposed number or principal amount, as
applicable, of each type or class of Stockholder Shares (the "Transfer Shares")
to be transferred, the proposed terms and conditions of the Transfer, including
proposed price by class or type of each of such Stockholder Shares to be
transferred, and the identity of the prospective transferee(s). Such prospective
transferee(s) must be reasonably acceptable to the holders of a majority of the
WS
-4-
<PAGE> 8
Shares, provided that any such transferee will be deemed to be acceptable to
such holders unless such holders provide notice to the contrary to the
Transferring Stockholder within 10 days of receipt of the Sale Notice by the
Other Stockholders. The purchase price specified in any Sale Notice shall be
payable solely in cash at the closing of the transaction, and no Stockholder
Shares may be pledged without the prior written consent of the holders of a
majority of the WS Shares, which consent may not be unreasonably withheld. No
Transfer shall be consummated prior to the earlier of (i) the date on which the
parties to the Transfer have been finally determined pursuant to Section 2B or
2C and (ii) the date of expiration of the 30-day period (the "Election Period")
following the delivery to the Company and the Other Stockholders of the Sale
Notice applicable to such Transfer.
2B. FIRST REFUSAL RIGHT. The Company may elect to purchase all
or any portion of the Transfer Shares at the price and on the terms specified in
the Sale Notice by delivering written notice of such election to the
Transferring Stockholder and the holders of Investor Shares as soon as practical
but in any event within ten (10) days after the delivery of the Sale Notice. If
the Company has not elected to purchase all of such Transfer Shares within such
10-day period, then unless the holders of a majority of the WS Shares direct
otherwise by written notice to the Company, the holders of Investor Shares may
elect to purchase all, but not less than all, of such Transfer Shares which the
Company has not elected to purchase (the "Available Shares"), at the price and
on the terms and conditions specified in the Sale Notice by delivering written
notice of such election to the Transferring Stockholder as soon as practical but
in any event within twenty (20) days after delivery of the Sale Notice. If more
than one holder of Investor Shares elects to purchase the Available Shares, the
Available Shares will be allocated among such electing holders pro rata
according to the number of Stockholder Shares on a Fully Diluted Basis owned by
such electing holders. If the Company or the holders of Investor Shares have
elected to purchase any Transfer Shares pursuant to this Section 2B, such
Transfer(s) shall be consummated as soon as practical after the delivery of the
election notice(s) to the Transferring Stockholder, but in any event within
fifteen (15) days after the expiration of the Election Period. To the extent
that the Company and the holders of Investor Shares have not elected to
purchase, collectively, all of the Transfer Shares, the Transferring Stockholder
may, during the 90-day period following the expiration of the Election Period
(but not at any time thereafter) and subject to the provisions of Section 2C
below, transfer pursuant to this Section 2B all of the Transfer Shares specified
in the Sale Notice to the transferee(s) identified in the Sale Notice for (i) an
amount of cash no less than the price specified in the Sale Notice and (ii)
other terms no more favorable to the transferee(s) thereof than specified in the
Sale Notice. Notwithstanding anything herein to the contrary, as used in this
Section 2B, the term "Transfer Shares" shall in no event include Investor
Transfer Shares unless such Transfer Shares are being transferred by an Investor
to any other Stockholder (other than an Investor).
2C. PARTICIPATION RIGHTS.
(i) Each Stockholder may elect to participate in a Transfer of
any class of Investor Transfer Shares contemplated in a Sale Notice by
delivering written notice of such election to the Transferring Stockholder
within thirty (30) days after delivery of the Sale Notice. If any Other
Stockholders elect to participate in such Transfer (such Other Stockholders
being referred to as the "Participating Stockholders"), each of the Transferring
Stockholder and the Participating Stockholders shall be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number of
Stockholder Shares of such class (with each series or class of Common Stock
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<PAGE> 9
being considered one and the same class for this purpose) (the "Participating
Shares") equal to the product of (A) the quotient determined by dividing the
number of Stockholder Shares of such class held by such Person, by the number of
Stockholder Shares held by the Transferring Stockholder and the Participating
Stockholders and (B) the aggregate number of Transfer Shares of such class to be
sold in the contemplated Transfer; provided each Other Stockholder selling
shares of Common Stock in such Transfer shall be entitled to include in such
Transfer, in addition to such shares of Common Stock, a Proportionate Amount of
shares of Preferred Stock and Junior Notes (and in such event the shares of
Preferred Stock and Junior Notes which an Other Stockholder elects to include in
such Transfer, in accordance with this proviso, shall be deemed to be
Participating Shares).
(ii) For purposes of this Section 2C:
(a) Common Stock issuable upon exercise of employee
stock options which have not vested and become
exercisable, and Common Stock held subject to
vesting (i.e., to the extent subject to possible
repurchase by the Company at less than fair market
value), shall be deemed not to be Stockholder
Shares;
(b) for purposes of determining the amount of each class
and type of Stockholder Shares which any Stockholder
is entitled to include in any Transfer, all
Stockholder Shares held by any Permitted Transferee
of any Other Stockholder shall be deemed held by
such Other Stockholder himself or itself (and not by
such transferee), provided that such Other
Stockholder may assign its rights under this Section
2C to its Permitted Transferees in respect of the
Stockholder Shares that it previously transferred to
such transferees;
(c) in any Transfer which includes more than one class
of Stockholder Shares, the price allocable to each
class of Stockholder Shares for purposes of the
foregoing shall be determined by allocating the
aggregate purchase price so that (x) the price
allocable to each Junior Notes is not less than the
Liquidation Value thereof at such time, and (y) the
price allocable to each share of Preferred Stock is
not less than the sum of (1) the Liquidation Value
thereof at such time, plus (2) the price payable in
such transaction in respect of each share of Common
Stock (and/or fraction thereof) multiplied by the
number of shares of Common Stock which would be
issued upon conversion of such share of Preferred
Stock if all conditions set forth in the Company's
certificate of incorporation to the conversion of
such share were satisfied and such share of
Preferred Stock were converted at such time; and
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<PAGE> 10
(d) "Proportionate Amount" means, for each share of
Common Stock included in such Transfer, shares of
Preferred Stock and Junior Notes in the initial
principal amount of $ .1
(iii) Each Transferring Stockholder will use reasonable
efforts to obtain the agreement of the prospective transferee(s) to the
participation of the Participating Stockholders in any contemplated Transfer,
and shall not consummate any such Transfer unless each Participating Shareholder
is permitted to sell Participating Shares in such Transfer in the amount and on
the terms set forth in this Section 2C (provided that if the prospective
transferee declines to allow the participation of any Participating Stockholder,
as an alternative the Transferring Stockholder may consummate the proposed
Transfer so long as contemporaneously therewith the Transferring Stockholder
purchases from such Participating Stockholder all of such Participating
Stockholder's Participating Shares at the same price and on the same terms as
the Transferring Stockholder transferred Stockholder Shares to such transferee).
Each Participating Stockholder transferring Participating Shares pursuant to
this Section 2C shall pay (x) its own expenses incurred by such Participating
Stockholder in connection with the Transfer and (y) its pro rata share
(according to holdings of Common Stock) of the expenses incurred by the
Transferring Stockholder in connection with such transfer, and each such
Stockholder shall be obligated to join in any indemnification or other
obligations that the Transferring Stockholder agrees to provide in connection
with such transfer (other than any such obligations that relate specifically to
a particular Participating Stockholder, such as indemnification with respect to
representations and warranties given by a Participating Stockholder regarding
such Stockholder's title to and ownership of Participating Shares).
2D. PERMITTED TRANSFERS. The restrictions set forth in this
Section 2 shall not apply to the following transfers to the following
transferees:
(i) subject to the paragraphs below, any Transfer of
Stockholder Shares by any Stockholder to any of its Affiliates,
(ii) in the case of an individual, a Transfer of Stockholder
Shares by any Stockholder pursuant to the laws of descent and distribution or
among such Stockholder's Family Group,
(iii) Transfer of Stockholder Shares to Orius pursuant to an
Orius Put Agreement, an Orius Call Agreement and/or a Pledge and Voting
Agreement,
(iv) an Approved Sale, and
(v) in the case of any Stockholder which is not an
individual, to a successor corporation or other successor entity as a result of
a merger or consolidation with, or a sale of all or
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(1) The Company's Chief Financial Officer is authorized by all parties hereto to
insert numbers in these blanks upon final determination of all amounts pursuant
to Section 1E of the Reorganization Agreement. The amounts inserted shall
reflect the proportions in which Common Stock, Preferred Stock and Junior Notes
are issued pursuant to the Reorganization Agreement to Orius Stockholders
pursuant to the Securities Only Joinder Agreements in exchange for shares of
Orius Common Stock (as such capitalized terms are defined in the Reorganization
Agreement).
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<PAGE> 11
substantially all of the assets of, such Stockholder or a transfer to one or
more of its Affiliates or, if a general or limited partnership, in connection
with the liquidation and dissolution of such partnership.
Not less than 20 days prior to any Transfer of Stockholder Shares pursuant to
the foregoing clause (i) or (ii) of the previous sentence, the proposed
transferee will deliver a written notice to the Company, which notice will
disclose in reasonable detail the identity of such transferee. No Transfer shall
be permitted pursuant to clause (i) above of this Section 2D unless such
transferee shall be acceptable to the holders of a majority of WS Shares. In
addition, notwithstanding anything to the contrary herein, the restrictions
contained in this Agreement will continue to be applicable to the Stockholder
Shares following any Transfer, and the transferee of such Stockholder Shares
shall agree in writing to be bound by the provisions of this Agreement.
Notwithstanding the foregoing, no party hereto shall avoid the provisions of
this Agreement by making one or more transfers to one or more Permitted
Transferees and then disposing of all or any portion of such party's interest in
any such Permitted Transferee. Any Transfer permitted pursuant to this Section
2D is referred to herein as an "Exempt Transfer".
2E. TERMINATION OF RESTRICTIONS. The restrictions set forth in
this Section 2 shall continue with respect to each Stockholder Share until the
earlier of (i) the date on which such Stockholder Share has been transferred in
a Public Sale and (ii) the consummation of a Change of Control.
SECTION 3. SALE OF THE COMPANY
3A. APPROVED SALE. If the holders of a majority of WS Shares
approve a Sale of the Company (an "Approved Sale"), each holder of Stockholder
Shares will vote for, consent to and will not object or otherwise impede
consummation of the Approved Sale.
3B. REQUIRED ACTIONS. If the Approved Sale is structured as
(A) a merger or consolidation, each holder of Stockholder Shares shall waive any
dissenter's rights, appraisal rights or similar rights in connection with such
merger or consolidation, (B) a sale of stock, each holder of Stockholder Shares
shall agree to sell all of its Stockholder Shares and rights to acquire
Stockholder Shares on the terms and conditions so approved, or (C) as a sale of
assets, each holder of Stockholder Shares shall vote in favor of such sale and
any subsequent liquidation of the Company or other distribution of the proceeds
therefrom. Each holder of Stockholder Shares shall take all necessary or
desirable actions in connection with the consummation of the Approved Sale
reasonably requested by the holders of a majority of the WS Shares. In
furtherance of the foregoing, (I) each holder of Stockholder Shares will take
all necessary or desirable actions reasonably requested by the holders of a
majority of the WS Shares in connection with the consummation of the Approved
Sale of the Company and (II) each holder of Stockholder Shares will make the
same representations, warranties, indemnities and agreements as to each other
holder, including without limitation, voting to approve such transaction and
executing the applicable purchase agreement (the "Company Reps"). In any
Approved Sale, each holder of Stockholder Shares shall not be required to make
indemnification payments in connection with any Approved Sale except pro rata in
accordance with such holder's ownership of Common Stock (or, after payment of
indemnification
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<PAGE> 12
payments in an amount in excess of the net proceeds received in such Approved
Sale in respect of Common Stock, pro rata in accordance with such holder's
ownership of Preferred Stock or, after payment of indemnification payments in an
amount in excess of the net proceeds received in such Approved Sale in respect
of Preferred Stock, pro rata in accordance with such holder's ownership of
Junior Notes), unless the applicable agreements relating to such Approved Sale
require the other holders of such Stockholder Shares to indemnify such holder
against, and hold such holder harmless from, amounts for which such holder may
become liable in excess of the maximum amount contemplated by the first clause
of this sentence; provided that the foregoing limitation shall not apply to any
indemnity by a Stockholder for breach by such Stockholder of any representation
or warranty relating solely to the authorization, execution or delivery by such
Stockholder of the relevant agreements or as to such Stockholder's ownership of
securities sold by such Stockholder thereunder or for breach of any agreement by
such Stockholder relating solely to its own conduct; and provided, further that
in no event shall any Stockholder be liable in respect of any indemnity
obligations pursuant to any Approved Sale in an aggregate amount in excess of
the total consideration payable to such Stockholder in such Approved Sale.
3C. CONDITIONS TO STOCKHOLDERS' OBLIGATIONS. The obligations
of the holders of Stockholder Shares with respect to an Approved Sale are
subject to the satisfaction of the following conditions: (i) upon the
consummation of the Approved Sale, each holder of Stockholder Shares will
receive the same form of consideration and the same portion of the aggregate
consideration that such holders of Stockholder Shares would have received if
such aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences set forth in the Certificate
of Incorporation as in effect immediately prior to such Approved Sale; (ii) if
any holders of a class of Stockholder Shares are given an option as to the form
and amount of consideration to be received, each holder of such class of
Stockholder Shares will be given the same option; and (iii) each holder of then
currently exercisable rights to acquire shares of a class of Stockholder Shares
will be given an opportunity to exercise such rights prior to the consummation
of the Approved Sale and participate in such sale as holders of such class of
Stockholder Shares.
3D. RULE 506 TRANSACTION. If the Company or the holders of the
Company's securities enter into any negotiation or transaction for which Rule
506 (or any similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), the holders of
Stockholder Shares will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501) reasonably acceptable to
the Company. If any holder of Stockholder Shares appoints a purchaser
representative designated by the Company, the Company will pay the fees of such
purchaser representative, but if any holder of Stockholder Shares declines to
appoint the purchaser representative designated by the Company such holder will
appoint another purchaser representative, and such holder will be responsible
for the fees of the purchaser representative so appointed.
3E. EXPENSES OF APPROVED SALE. Holders of Stockholder Shares
will bear their pro rata share (based upon holdings on a Fully Diluted Basis) of
the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the
extent such costs are incurred for the benefit of all holders of Stockholder
Shares and are not otherwise paid by the Company or the acquiring party.
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<PAGE> 13
For purposes of this Section 3E, costs incurred in exercising reasonable efforts
to take all necessary actions in connection with the consummation of an Approved
Sale in accordance with Section 3A shall be deemed to be for the benefit of all
holders of Stockholder Shares. Costs incurred by any holder of Stockholder
Shares on its own behalf will not be considered costs of the transaction
hereunder and will be the responsibility of such holder.
SECTION 4. LIMITED PREEMPTIVE RIGHTS
4A. OFFERING. If the Company issues or sells or authorizes the
issuance or sale of any of its equity securities or any securities containing
options or rights to acquire equity securities (other than as a dividend on the
then outstanding Common Stock or pursuant to exercise, conversion or exchange of
securities or rights previously issued by the Company subject to this Section 4
or, outstanding on the date hereof or issued in accordance with this clause) to
WS or any of its Affiliates ("New Securities"), the Company shall offer to each
holder of Stockholder Shares of the same class and type as the New Securities
being issued or sold a percentage of such New Securities equal to the percentage
result of the quotient determined by dividing (A) the number of Stockholder
Shares held by such holder, by (B) the number of outstanding Stockholder Shares
on a Fully Diluted Basis. Each such holder of Stockholder Shares shall be
entitled to purchase such New Securities at the most favorable price and on the
most favorable terms as such New Securities are to be offered to WS or any
Affiliate of WS; provided that if WS, or any Affiliate of WS participating in
such purchase of New Securities, is required in connection therewith also to
purchase other securities of the Company, the holders of Stockholder Shares
exercising their rights pursuant to this Section shall also be required to
purchase such other securities on the same economic terms and conditions as
those on which WS or such Affiliate of WS participating in such purchase is
required to purchase such other securities (e.g., such holder shall be required
to purchase the same types and classes of other securities, in the same
proportions relative to their purchases of New Securities and at the same unit
prices). For example, if the Company offers to sell to WS shares of Common Stock
and requires that, as part of such purchase, WS also purchase a Proportionate
Amount of Preferred Stock and Junior Notes, Stockholders exercising rights to
purchase shares of Common Stock pursuant to this Section 4A would be obligated
also to purchase the corresponding Proportionate Amount of Preferred Stock and
Junior Notes, in each case at the same price per share of Preferred Stock and
per dollar in principal amount of Junior Notes as paid by WS. Each holder of
Stockholder Shares participating in such purchase shall also be obligated to
execute agreements in the form presented to such holder by the Company, so long
as such agreements are substantially similar to those to be executed by WS
(without taking into consideration any rights which WS may obtain which do not
entitle WS to a higher economic return on the New Securities than the economic
return to which the other Stockholders participating in such transaction will be
entitled with respect to New Securities). The purchase price for all New
Securities offered to each holder of Stockholder Shares shall be payable in cash
by wire transfer of immediately available funds to an account designated by the
Company.
4B. ELECTION NOTICE. In order to exercise its purchase rights
hereunder, each holder of Stockholder Shares must deliver a written notice (an
"Election Notice") to the Company describing its election hereunder. Such
Election Notice must be delivered to the Company during the 30-day period (the
"Offering Period") following such holder's receipt of written notice from the
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<PAGE> 14
Company describing in reasonable detail the type, class and number of New
Securities being offered, the purchase price thereof, the payment terms and such
holder's percentage allotment.
4C. EXPIRATION OF OFFERING PERIOD. Upon the expiration of the
Offering Period and during the 90-day period immediately thereafter, the Company
shall be entitled to sell to WS or any Affiliate of WS such New Securities which
any holder of Stockholder Shares has not elected to purchase on terms and
conditions no more favorable to WS or any Affiliate of WS than those offered to
holders of Stockholder Shares pursuant to Section 4A. Any New Securities offered
or sold by the Company to WS or any Affiliate of WS after such 90-day period
must be reoffered to each holder of Stockholder Shares pursuant to the terms of
this Section 4.
4D. TERMINATION. The rights under this Section 4 shall
terminate upon consummation of a Public Offering or a Sale of the Company.
SECTION 5. PUBLIC OFFERING
In the event that the Board and the holders of a majority of
the WS Shares approve an initial Public Offering, the holders of Stockholder
Shares will use reasonable efforts to take all necessary or desirable actions in
connection with the consummation of such Public Offering. In the event that such
Public Offering is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the existing capital structure of
the Company will adversely affect the marketability of the offering, each holder
of Stockholder Shares will consent to and vote for a recapitalization,
reorganization and/or exchange of the Stockholder Shares into securities that
the managing underwriters, the Board and the holders of a majority of WS Shares
(in consultation with the Existing Orius Stockholders so long as they remain
involved in the Company's business) find acceptable and will take all other
necessary or desirable actions in connection with the consummation of the
recapitalization, reorganization and/or exchange; provided that the resulting
securities reflect and are consistent with the rights and preferences among the
outstanding classes of securities set forth in the Certificate of Incorporation
and the terms of the Junior Notes as in effect immediately prior to such
recapitalization, reorganization or exchange.
SECTION 6. LEGEND
Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
Transfer) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS PURSUANT TO AN INVESTOR RIGHTS
AGREEMENT DATED AS OF NOVEMBER 8,1999, AMONG THE ISSUER OF
SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S
STOCKHOLDERS. A COPY OF SUCH INVESTOR RIGHTS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE
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<PAGE> 15
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE
COMPANY'S CHIEF FINANCIAL OFFICER."
The Company shall imprint such legend on certificates
evidencing Stockholder Shares outstanding prior to the date hereof. The legend
set forth above shall be promptly removed from the certificates evidencing any
shares which cease to be Stockholder Shares.
SECTION 7. TRANSFER
Prior to Transferring any Stockholder Shares (other than in a
Public Sale or in an Approved Sale) to any person or entity, the Transferring
Stockholder shall cause the prospective transferee to execute and deliver to the
Company and the other Stockholders a counterpart of this Agreement.
SECTION 8. BOARD OF DIRECTORS; VOTING
8A. COMPOSITION OF THE BOARD. From and after the effectiveness
of this Agreement and until the provisions of this Section 8 cease to be
effective, each Stockholder shall vote all of his, her or its Stockholders
Shares and any other voting securities of the Company over which such
Stockholder has voting control and shall take all other necessary or desirable
actions within his, her or its control (whether in the capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary and desirable
actions within its control (including, without limitation, calling special board
and stockholder meetings), so that:
(i) the authorized number of directors on the Company's
board of directors (the "Board") shall be established at seven directors or such
higher number as may be designated by WS by written notice to the Company;
(ii) the following persons shall be elected to the Board:
(a) the Company's chief executive officer, who initially
shall be William J. Mercurio (the "CEO Director");
(b) one person designated by the holders of a majority
of the Existing Orius Stockholders Shares, which
person must be a senior executive of the Company or
of any of the Company's Subsidiaries and must be
reasonably satisfactory to the holders of a majority
of the WS Shares, and who initially shall be William
G. Mullen (the "Executive Director");
(c) one person designated by the holders of a majority
of the WS Shares, which person must be a senior
executive of the Company or of any of
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<PAGE> 16
the Company's Subsidiaries and must be reasonably
satisfactory to the CEO Director, and who initially
shall be Donald J. Vanke (the "WS Nominated
Director"); and
(d) four (or at any such time as the authorized number
of directors on the Board exceeds seven, a number of
representatives equal to such authorized number less
three) persons designated by the holders of a
majority of the WS Shares, who initially shall be
Avy H. Stein, Robert C. Froetscher, Gregory M. Barr
(who shall remain a designee of the holders of a
majority of the WS Shares pursuant to this paragraph
(d) until such time as Chisholm Partners III, L.P.
("Chisholm") owns less than 50% of the Stockholder
Shares held by Chisholm at the Effective Time) and
Jack E. Reich (collectively, the "WS Directors", and
each individually, a "WS Director");
(iii) the composition of the board of directors of each of the
Company's Subsidiaries (each, a "Sub Board") shall be as determined by the
Board, and initially shall be the same as in existence as of the date hereof,
provided that, effective immediately upon the Effective Time, a representative
designated by the holders of a majority of the WS Shares shall replace the
representative on any Sub Board heretofore designated by HIG Cable, Inc. or any
Affiliate of HIG Cable, Inc.;
(iv) the removal from the Board or Sub Board (with or without
cause) of the Executive Director shall be only upon the written request of the
holders of a majority of the Existing Orius Stockholders Shares and the removal
of the WS Nominated Director shall be only upon the written request of the
holders of a majority of the WS Shares; provided that if the CEO Director,
Executive Director or the WS Nominated Director ceases to be an employee of the
Company and its Subsidiaries, such person shall be removed as a director upon
termination of such person's employment;
(v) in the event that any person designated as a director
hereunder for any reason ceases to serve as a member of the Board or a Sub Board
during such person's term of office, the resulting vacancy on the Board or the
Sub Board shall be filled by a representative designated by the person or
persons originally entitled to designate such director pursuant to Section
8A(ii) above; and
(vi) if any party fails to designate a representative to fill
a directorship pursuant to the terms of this Section 8A, the election of a
person to such directorship shall be accomplished in accordance with the
Company's bylaws and applicable law.
8B. BOARD MEETING EXPENSES. The Company shall pay all
out-of-pocket expenses incurred by each director in connection with attending
regular and special meetings of the Board, any Sub Board and any committee
thereof.
8C. OTHER VOTING MATTERS. Each Investor hereby agrees that
such Investor will vote, or cause to be voted, all voting Stockholder Shares
over which such Investor has the power to vote or direct the voting, either in
person or by proxy, whether at a stockholders meeting, or by
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written consent, in the manner in which the holders of a majority of the WS
Shares directs in connection with the approval of any amendment or amendments to
the Company's articles of incorporation or bylaws, the merger, share exchange,
combination or consolidation of the Company with any other Person or Persons,
the sale, lease or exchange of all or substantially all of the property and
assets of the Company and its Subsidiaries on a consolidated basis, and the
reorganization, recapitalization, liquidation, dissolution or winding-up of any
of the Company and its Subsidiaries; provided, however that no such action shall
(a) be inconsistent with the terms of this Agreement, or (b) have a material
adverse effect on any Stockholder's rights or interests in respect of any
Stockholder Shares, if such effect would be borne disproportionately by such
Stockholder relative to the effect on the rights or interests of other
Stockholders in respect of holdings of Stockholder Shares of the same class.
PROVISIONS RELATING TO REGISTRATION OF STOCKHOLDER SHARES
SECTION 9. DEMAND REGISTRATIONS
9A. REQUESTS FOR REGISTRATION. At any time the holders of a
majority of the WS Registrable Securities may request registration under the
Securities Act (a "Demand Registration") of all or any portion of its
Registrable Securities on Form S-1 or any similar long-form registration
("Long-Form Registrations") or, if available, on Form S-2 or S-3 or any similar
short-form registration ("Short-Form Registrations"). Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range for such
offering. Within ten days after receipt of any such request, the Company will
give written notice of such requested registration to all other holders of
Registrable Securities and, subject to Section 9D below, will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the receipt
of the Company's notice.
9B. LONG-FORM REGISTRATIONS. The holders of a majority of the
WS Registrable Securities will be entitled to request an unlimited number of
Long-Form Registrations in which the Company will pay all Registration Expenses.
9C. SHORT-FORM REGISTRATIONS. In addition to the Long-Form
Registrations provided pursuant to Section 9B, the holders of a majority of the
WS Registrable Securities will be entitled to request unlimited Short-Form
Registrations in which the Company will pay all Registration Expenses. Demand
Registrations will be Short-Form Registrations whenever the Company is permitted
to use any applicable short form. After the Company has become subject to the
reporting requirements of the Securities Exchange Act, the Company will use its
best efforts to make Short- Form Registrations available for the sale of
Registrable Securities.
9D. PRIORITY ON DEMAND REGISTRATIONS. The Company will not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of the
WS Registrable Securities. If a Demand Registration is an underwritten offering
and the managing underwriters advise the Company in writing that in their
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opinion the number of Registrable Securities and, if permitted hereunder, other
securities requested to be included in such offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold in an
orderly manner in such offering within a price range reasonably acceptable to
the holders of a majority of the Registrable Securities initially requesting
registration, the Company will include in such registration, if any, (i) first,
the Registrable Securities requested to be included in such registration by the
holders thereof, pro rata among such holders on the basis of the number of
shares of Registrable Securities owned by each such holder, and (ii) second, the
other securities requested to be included which in the opinion of such
underwriters can be sold in an orderly manner within the price range of such
offering.
9E. RESTRICTIONS ON DEMAND REGISTRATIONS. The Company will not
be obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration. The Company may postpone for
up to six months the filing or the effectiveness of a registration statement for
a Demand Registration if the Company's board of directors determines that such
Demand Registration would reasonably be expected to have an adverse effect on
any proposal or plan by the Company or any of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction; provided that, in
such event, the holders of Registrable Securities initially requesting such
Demand Registration will be entitled to withdraw such request.
9F. SELECTION OF UNDERWRITERS. The holders of a majority of
the WS Registrable Securities will have the right to select the investment
banker(s) and manager(s) to administer the offering, subject to the Company's
approval which will not be unreasonably withheld.
9G. OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement, the Company will not grant to any Persons the right to request the
Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without the
prior written consent of the holders of a majority of the WS Registrable
Securities.
9H. DEMAND REGISTRATION EXPENSES. The Registration Expenses in
connection with any Demand Registration will be paid by the Company, including
the reimbursement of the holders of Registrable Securities included in such
registration for the reasonable fees and disbursements of one counsel chosen by
the holders of a majority of the Registrable Securities included in such
registration.
SECTION 10. PIGGYBACK REGISTRATIONS
10A. RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its securities under the Securities Act (other than (i) in
connection with the Company's initial public offering of Common Stock, (ii)
pursuant to a Demand Registration or (iii) pursuant to a registration on Form
S-4 or S-8 or any successor or similar forms) and the registration form to be
used may be used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company will give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and will
use its reasonable best efforts to include in such registration all Registrable
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Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company's notice.
10B. PIGGYBACK EXPENSES. The Registration Expenses of the
holders of Registrable Securities will be paid by the Company in all Piggyback
Registrations.
10C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering in an orderly manner
within a price range acceptable to the Company, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, and (iii) third, other
securities requested to be included in such registration.
10D. OTHER REGISTRATIONS. If the Company has previously filed
a registration statement with respect to Registrable Securities pursuant to
Section 9 or pursuant to this Section 10, and if such previous registration has
not been withdrawn or abandoned, the Company will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4 or S-8 or any successor form), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least six months has elapsed from the effective date of
such previous registration.
10E. POSTPONEMENT OR WITHDRAWAL. Notwithstanding the
foregoing, the Company may postpone or withdraw any registration statement
referred to in this Section 10 without incurring any liability to holders of
Registrable Securities.
SECTION 11. HOLDBACK AGREEMENTS
11A. AGREEMENT OF HOLDERS OF REGISTRABLE SECURITIES. Each
holder of Registrable Securities will not effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities, options or rights convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 180-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration (except as part of such underwritten
registration), unless the underwriters managing the registered public offering
otherwise agree.
11B. COMPANY AGREEMENT. The Company will (i) not effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and during the 180-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise
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agree, and (ii) cause each holder of shares of Common Stock, or any securities
convertible into or exchangeable or exercisable for shares of Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
SECTION 12. REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, the
Company will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
reasonably possible:
(i) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and thereafter use its best efforts to cause such registration statement to
become effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
the counsel selected by the holders of a majority of the Registrable Securities
initiating such registration statement copies of all such documents proposed to
be filed, which documents will be subject to review of such counsel);
(ii) notify each holder of Registrable Securities of the
effectiveness of each Registration Statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of either (i) not less than six months (subject to extension pursuant to Section
15) or, if such registration statement relates to an underwritten offering, such
longer period as in the opinion of counsel for the underwriters a prospectus is
required by law to be delivered in connection with sales of Registrable
Securities by an underwriter or dealer or (ii) such shorter period as will
terminate when all of the securities covered by such registration statement have
been disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement (but in any
event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; provided that the Company
shall not be obligated to maintain the effectiveness of any registration
statement for a period of more than twenty-four months from the date on which
the such registration statement initially becomes effective.
(iii) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such
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seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(v) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the discovery of the happening
of any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of any such
seller, the Company will prepare and furnish to such seller a reasonable number
of copies of a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made;
(vi) cause all such Registrable Securities to be listed on
each securities exchange or market on which similar securities issued by the
Company are then listed;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(viii) enter into such customary agreements (including
underwriting agreements in customary form) as may be requested by the
underwriters and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);
(ix) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve
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<PAGE> 22
months beginning with the first day of the Company's first full calendar quarter
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(xi) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Securities included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(xii) obtain one or more comfort letters, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the Company's independent public accountants
in customary form and covering such matters of the type customarily covered by
comfort letters as the holders of a majority of the Registrable Securities being
sold reasonably request (provided that such Registrable Securities constitute at
least 10% of the securities covered by such registration statement); and
(xiii) as required by the Securities Act or by an underwriter,
provide a legal opinion of the Company's outside counsel, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
SECTION 13. REGISTRATION EXPENSES
13A. COMPANY EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and all independent
certified public accountants, underwriters (excluding discounts and commissions)
and other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the NASD
automated quotation system.
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13B. REIMBURSEMENT. In connection with each Demand
Registration and each Piggyback Registration, the Company will reimburse the
holders of Registrable Securities covered by such registration for the
reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the Registrable Securities initially requesting such registration.
In connection with each Demand Registration and each Piggyback Registration, the
Company shall reimburse the holders of Registrable Securities included in such
registration for the reasonable fees and disbursements of each additional
counsel retained by any holder of Registrable Securities for the purpose of
rendering any legal opinion required by the Company or the managing
underwriter(s) to be rendered on behalf of such holder in connection with any
underwritten Demand Registration or Piggyback Registration.
SECTION 14. INDEMNIFICATION
14A. INDEMNIFICATION OBLIGATION OF THE COMPANY. The Company
agrees to indemnify and hold harmless, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses caused by (i) any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or, (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except in so far as the same are caused by or contained in any
information furnished in writing to the Company by or on behalf of such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities.
14B. INDEMNIFICATION OF THE COMPANY. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify and hold harmless the Company, its directors
and officers and each other Person who controls the Company (within the meaning
of the Securities Act) against any losses, claims, damages, liabilities and
expenses caused by (i) any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by or on behalf of such holder; provided that the obligation to
indemnify will be individual to each holder and will be limited to the net
amount of proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
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<PAGE> 24
14C. INDEMNIFICATION PROCEDURES. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that the failure to give prompt notice shall not impair any Person's
right to indemnification hereunder to the extent such failure has not adversely
affected the indemnifying party) and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
14D. OTHER INDEMNIFICATION PROVISIONS. The indemnification
provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party or
any officer, director or controlling Person of such indemnified party and will
survive the transfer of securities. The Company and any other indemnifying party
with respect to the matters set forth in Sections 9 through 14 of this Agreement
also agree to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
SECTION 15. PARTICIPATION IN UNDERWRITTEN
REGISTRATIONS
No Person may participate in any registration hereunder which
is underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s), provided that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Company to include in any
registration) and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements. Each Person that is
participating in any registration hereunder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 12(v) above, such Person will forthwith discontinue the disposition of
its Registrable Securities pursuant to the registration statement until such
Person's receipt of the copies of a supplemented or amended prospectus as
contemplated by such Section 12(v). In the event the Company shall give any such
notice, the applicable time period mentioned in Section 12(ii) during which a
Registration Statement is to remain effective shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to this Section 15 to and including the date when each seller of
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 12(v).
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SECTION 16. REINCORPORATION
In the event that holders of a majority of the WS Shares elect
to cause the Company to reincorporate in the State of Delaware effective at any
time on or after March 1, 2000, the Company and all holders of Stockholder
Shares will use reasonable efforts to take all necessary or desirable actions in
connection with the consummation of such reincorporation of the Company. In such
event, (i) the Company will organize a new, wholly-owned Subsidiary in the State
of Delaware ("Newco"), with a certificate of incorporation which is in all
material respects identical to that of the Company as in effect at such time
(with such changes thereto as are appropriate to reflect the different state of
incorporation), including the terms of the Series A Preferred, the Series B
Preferred, the Series C Participating Preferred, the Series D Preferred, the
Common Stock and the Class B Common as are set forth therein (provided that if,
at such time no shares of Series A Preferred are then outstanding, the terms of
such stock may be deleted therefrom, and if at such time no shares of Series B
Preferred are then outstanding, the terms of such stock may be deleted
therefrom, and if at such time no shares of Class B Common are then outstanding,
the terms of the Common Stock may be revised to delete all reference thereto),
(ii) the Company shall enter into an agreement to merge the Company with and
into such Subsidiary, with such Subsidiary to survive such merger, (iii) each
holder of Stockholder Shares shall consent to and vote for such merger and agree
to exchange all Junior Notes for junior subordinated notes issued by Newco
containing the same terms as those set forth in the Junior Notes, with aggregate
principal amount equal to the aggregate principal amount of the Junior Notes
exchanged therefor, and with accrued and unpaid interest thereon equal to the
accrued and unpaid interest on the Junior Notes exchanged therefor (the "Newco
Junior Notes"), and will take all other necessary or desirable actions in
connection with the consummation of the reincorporation of the Company as a
Delaware corporation, and (iv) the Company shall cause Newco to issue to the
holders of Junior Notes the Newco Junior Notes in exchange therefor or, at its
election, to assume all of the Company's obligations under the Junior Notes,
provided that the securities issued by Newco in exchange for or upon conversion
of Stockholder Shares reflect and are consistent with the rights and preferences
among the outstanding classes of Stockholder Shares set forth in the Certificate
of Incorporation and the terms of the Junior Notes as in effect immediately
prior to such merger. Upon consummation of any such merger, Newco shall execute
a counterpart signature page to this Agreement to acknowledge its assumption of
all of the obligations of the Company hereunder, the "Stockholder Shares" as
referred to herein shall mean and include the securities issued upon conversion
of or in exchange for the Stockholder Shares in connection with such merger, as
well as the Newco Junior Notes, and this Agreement shall remain in full force
and effect in respect of each such holder of Stockholder Shares and Newco.
SECTION 17. DEFINITIONS
"Affiliate" of a Stockholder means any other person, entity or
investment fund controlling, controlled by or under common control with the
Stockholder and, in the case of a Stockholder which is a partnership, any
partner of the Stockholder.
"Agreement" has the meaning set forth in the Preamble.
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"Approved Sale" has the meaning set forth in Section 3A.
"Available Shares" has the meaning set forth in Section 2B.
"Certificate of Incorporation" means the Company's certificate
of incorporation in effect at the time as of which any determination is being
made.
"Change of Control" means a Sale of the Company after which a
person or group of related Persons, other than any holder of Stockholder Shares
immediately prior to the consummation of such Sale of the Company (and other
than any of such holder's Affiliates), owns directly or indirectly capital stock
of the Company possessing the voting power to elect a majority of the Board.
"class", in respect of Stockholder Shares, means Stockholder
Shares which constitute either Common Stock, Preferred Stock or Junior Notes or
any securities exchanged therefor.
"Class B Common" means the Company's Class B Common Stock, par
value $.01 per share.
"Closing" has the meaning set forth in the Reorganization
Agreement.
"Coinvestors" has the meaning set forth in the Preamble.
"Common Stock" means either the Company's Common Stock, par
value $0.01 per share or the Class B Common.
"Company Reps" has the meaning set forth in Section 3B.
"Company" has the meaning set forth in the Preamble.
"Demand Registration" has the meaning set forth in Section 9A.
"Election Notice" has the meaning set forth in Section 4B.
"Election Period" has the meaning set forth in Section 2A.
"Exempt Transfer" has the meaning set forth in Section 2D.
"Existing LISN Agreements" has the meaning given such term in
the Preamble.
"Existing Orius Stockholders" has the meaning set forth in the
Preamble.
"Existing Orius Stockholders Shares" means (i) any Stockholder
Shares issued to the Existing Orius Stockholders pursuant to the Reorganization
Agreement or any transaction contemplated therein, (ii) any Stockholder Shares
otherwise held from time to time by any Existing Orius Stockholder and (iii) any
equity securities issued or issuable directly or indirectly with respect to the
Stockholders Shares referred to in clause (i) or (ii) above by way of stock
dividend or stock
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split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
"Family Group" with respect to any Stockholder, means such
Stockholder's spouse, siblings and descendants (whether or not adopted) and any
trust, family limited partnership or limited liability company solely for the
benefit of such Stockholder and/or such Stockholder's spouse, siblings and/or
descendants.
"Former LISN Shareholders' Shares" means (i) any Stockholder
Shares issued to the Former LISN Shareholders pursuant to the Reorganization
Agreement or any transaction contemplated therein, (ii) any shares of
Stockholder Shares otherwise held from time to time by any Former LISN
Shareholders and (iii) any equity securities issued or issuable directly or
indirectly with respect to any shares of stock referred to in clause (i) or (ii)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.
"Fully Diluted Basis" means, without duplication, (i) all
shares of Common Stock outstanding at the time of determination plus (ii) all
shares of Common Stock issuable directly or indirectly upon conversion of all
outstanding convertible securities, including without limitation the Preferred
Stock, or the exercise or exchange of all outstanding option, warrant or similar
right, whether or not such convertible security, right or option, warrant or
similar right is then convertible, exercisable or exchangeable.
"Independent Third Party" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a Fully Diluted Basis (a "5% Owner"), who is not
controlling, controlled by or under common control with any such 5% Owner and
who is not the spouse or descendent (by birth or adoption) of any such 5% Owner
or a trust for the benefit of such 5% Owner and/or such other Persons.
"Investor Shares" means (i) any Stockholder Shares acquired by
any Investors pursuant to the Reorganization Agreement or any transaction
contemplated therein (including without limitation pursuant to the LISN Merger,
as defined in the Reorganization Agreement, or pursuant to the Note Exchange
Agreement, as defined in the Reorganization Agreement), (ii) any Stockholder
Shares otherwise held from time to time by any Investors and (iii) any
securities issued or issuable directly or indirectly with respect to the
Stockholder Shares referred to in clause (i) or (ii) by way of dividend or split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
"Investor Transfer Shares" means the Transfer Shares
identified in a Sale Notice distributed by a holder of Investor Shares.
"Investor" or "Investors" has the meaning set forth in the
Preamble.
"Junior Notes" means the Company's 12% Junior Subordinated
Notes issued pursuant to the Reorganization Agreement on the date hereof or
issued in exchange for or in respect of other Junior Notes.
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"Liquidation Value" means, with respect to any Junior Notes,
the outstanding principal amount thereof plus accrued and unpaid interest
thereon, and with respect to any Preferred Stock means the maximum amount to be
paid to the holders thereof upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company, including any accrued and unpaid
dividends thereon.
"Long-Form Registrations" has the meaning set forth in Section
9A.
"New Securities" has the meaning set forth in Section 4A.
"New Stockholders" has the meaning set forth in the Preamble.
"Offering Period" has the meaning set forth in Section 4B.
"Other Registrable Securities" means (i) any shares of Common
Stock issued to Stockholders (other than WS) pursuant to the Reorganization
Agreement, (ii) any shares of Common Stock issued to Stockholders (other than
WS), (iii) any shares of Common Stock issued or issuable upon conversion of
other Stockholder Shares issued to Stockholders (other than WS) pursuant to the
Reorganization Agreement and (iv) any equity securities issued or issuable
directly or indirectly with respect to the securities referred to in any of
clauses (i) through (iii) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.
"Other Stockholders" has the meaning set forth in Section 2A.
"Participating Shares" has the meaning set forth in Section
2C.
"Participating Stockholders" has the meaning set forth in
Section 2C.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section
10A.
"Preferred Stock" means the Company's Series C Participating
Preferred Stock, par value $.01 per share, and the Company's Series D Preferred
Stock, par value $.01 per share.
"Public Offering" means a public offering and sale of
Stockholder Shares pursuant to an effective registration statement under the
Securities Act.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 adopted under the Securities Act.
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"Registrable Securities" means, collectively, the WS
Registrable Securities and the Other Registrable Securities. As to any
particular shares constituting Registrable Securities, such shares will cease to
be Registrable Securities when they have been (x) effectively registered under
the Securities Act and disposed of in accordance with the registration statement
covering them, or (y) sold to the public through a broker dealer or market maker
pursuant to Rule 144 under the Securities Act. For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Securities whenever such
Person has the right to acquire directly or indirectly such Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.
"Registration Agreement" has the meaning set forth in the
Reorganization Agreement.
"Registration Expenses" has the meaning set forth in Section
13A.
"Reorganization Agreement" has the meaning set forth in the
Preamble.
"Sale Notice" has the meaning set forth in Section 2A.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power to elect a majority of the Board (whether by merger, consolidation
or sale or transfer of the Company's capital stock) or (ii) all or substantially
all of the Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental
body or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"Short-Form Registrations" has the meaning set forth in
Section 9A.
"Stockholder Shares" means (i) any Common Stock, Preferred
Stock or Junior Notes held by any Stockholder (including any such securities of
the Company held by any Person having control over or in control of such
Stockholder) as of the Closing or at any time thereafter, (ii) any capital stock
or other equity securities issued or issuable directly or indirectly with
respect to the securities referred to in clause (i) above by way of dividend or
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares constituting
Stockholder Shares, such shares shall cease to be Stockholder Shares when they
have been (x) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (y) sold to the
public through a broker,
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<PAGE> 30
dealer or market maker pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act.
"Stockholder" or "Stockholders" has the meaning set forth in
the Preamble.
"Transfer Shares" has the meaning set forth in Section 2A.
"Transfer" has the meaning set forth in Section 2A.
"Transferring Stockholder" has the meaning set forth in
Section 2A.
"WS Registrable Securities" means (i) any shares of Common
Stock issued to WS pursuant to the Reorganization Agreement, (ii) any shares of
Common Stock otherwise acquired by WS, (iii) any shares of Common Stock issued
or issuable upon conversion other WS Shares, and (iv) any equity securities
issued or issuable directly or indirectly with respect to the securities
referred to in any of clauses (i) through (iii) above by way of stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.
"WS Shares" means (i) any Stockholder Shares acquired by WS
pursuant to the LISN Merger or the Investment Agreement or otherwise pursuant to
the Reorganization Agreement, (ii) any Stockholder Shares otherwise held from
time to time by WS and (iii) any securities issued or issuable directly or
indirectly with respect to the Stockholder Shares referred to in clause (i) or
(ii) by way of dividend or split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For all
purposes hereof, the holders of a majority of the WS Shares shall be determined
on a Fully Diluted Basis, taking into account only WS Shares.
"WS" has the meaning set forth in the Preamble.
Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Reorganization Agreement.
SECTION 18. MISCELLANEOUS
18A. TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Transfer on
its books or treat any purported transferee of such Stockholder Shares as the
owner of such shares for any purpose.
18B. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company, the
holders of a majority of the outstanding shares of Common Stock voting as a
class on a per share basis (excluding Investor Shares) and the holders of a
majority of the Investor Shares (provided that the holders of Investor Shares
agree that in the event that such amendment or waiver by its terms unreasonably
treats any holder or group of holders of Investor Shares adversely
-27-
<PAGE> 31
relative to other holders of Investor Shares, then such amendment or waiver will
require the consent of a majority of Stockholder Shares held by such holder or
group of holders of Investor Shares so adversely and unreasonably treated).
18C. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
18D. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document, the Reorganization Agreement and the documents referenced
therein embody the complete agreement and understanding among the parties hereto
with respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way. Each
Existing Orius Stockholder acknowledges and agrees that as of the Effective time
the Stockholders Agreement, dated February 26, 1999, as amended (the
"Stockholders Agreement") by and among the Company and the parties named therein
and the Registration Agreement, dated February 26, 1999, as amended (the
"Registration Agreement") by and among the Company and the parties named therein
are terminated and will no longer be of any force or effect, and, as of the
Effective Time, each Existing Orius Stockholder expressly waives all of his, her
or its rights under the Stockholders Agreement and the Registration Agreement.
LISN and each Former LISN Shareholder acknowledges and agrees that, as of the
Effective Time, the Existing LISN Agreements are terminated and will no longer
be of any further force and effect, and, as of the Effective Time, each Former
LISN Shareholder (including WS for purposes of this Section 17D) expressly
waives all of his, her and its rights under each of the Existing LISN
Agreements.
18E. NO INCONSISTENT AGREEMENTS. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
18F. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would adversely
affect the marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
18G. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Stockholder Shares and the respective successors and
assigns of each of them, so long as they hold Stockholder Shares.
-28-
<PAGE> 32
18H. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
18I. REMEDIES. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that the Company and any Stockholder shall have the right to
injunctive relief, in addition to all of its rights and remedies at law or in
equity, to enforce the provisions of this Agreement. Nothing contained in this
Agreement shall be construed to confer upon any Person who is not a signatory
hereto any rights or benefits, as a third party beneficiary or otherwise.
18J. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or received by certified
mail, return receipt requested, or sent by reputable overnight courier service
(charges prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated in the Reorganization Agreement and to any
subsequent holder of Stockholder Shares at such address as indicated by the
Company's records (and in the case of any Existing Stockholder Share, with a
copy to White and Williams LLP, 1800 One Liberty Place, Philadelphia,
Pennsylvania 19103-7395, attention: M. Melvin Shralow) or at such address or to
the attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, three business days after deposit in the
U.S. mail and one business day after deposit with a reputable overnight courier
service. The Company's address is:
Orius Corp.
1401 Forum Way, Ste 400
West Palm Beach, FL 33401
Fax: (561) 687-8080
Attention: Chief Executive Officer
with a copy to (prior to the Effective Time):
---------------------------------------------
(which shall not constitute notice to the Company)
Akerman, Senterfitt & Eidson, P.A.
450 East Las Olas Blvd.
Fort Lauderdale, FL 33301
Fax: (954) 463-2224
Attn: Donn A. Beloff
with a copy to (after the Effective Time):
---------------------------------------------
(which shall not constitute notice to the Company)
Willis Stein Partners II, L.P.
227 West Monroe, Ste. 4300
Chicago, IL 60606
Fax: (312) 422-2424
Attn: Robert C. Froetscher
-29-
<PAGE> 33
and
---
Kirkland & Ellis
200 East Randolph Dr.
Chicago, IL 60601
Fax: (312) 861-2000
Attn: John A. Weissenbach
18K. GOVERNING LAW. THE CORPORATE LAW OF FLORIDA WILL GOVERN
ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS;
PROVIDED THAT UPON CONSUMMATION OF THE REINCORPORATION MERGER REFERRED TO IN
SECTION 16, THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL ISSUES CONCERNING THE
RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES CONCERNING
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF
LAW PROVISION OR RULE (WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE STATE OF ILLINOIS.,
18L. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-30-
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have executed this
Investor Rights Agreement on the day and year first above written.
THE COMPANY:
ORIUS CORP.
By: /s/ WILLIAM J. MERCURIO
----------------------------------------
Its:
LISN:
LISN HOLDINGS, INC.
By: /s/ DONALD J. VANKE
----------------------------------------
Its:
WS:
WILLIS STEIN & PARTNERS II, L.P.
By: Willis Stein & Partners Management II, L.P.
Its: General Partner
By: Willis Stein & Partners Management II, L.L.C.
By: /s/ ROBERT C. FROETSCHER
----------------------------------------
Name: Robert C. Froetscher
Title: Managing Director
WILLIS STEIN & PARTNERS DUTCH, L.P.
By: Willis Stein & Partners Management II, L.P.
Its: General Partner
By: Willis Stein & Partners Management II, L.L.C.
By: /s/ ROBERT C. FROETSCHER
----------------------------------------
Name: Robert C. Froetscher
Title: Managing Director
[END OF SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT. COUNTERPART SIGNATURE
PAGES FOR THE OTHER STOCKHOLDERS TO BE ATTACHED SEPARATELY PURSUANT TO SECTION
18H.]
<PAGE> 35
SCHEDULE OF FORMER LISN SHAREHOLDERS
<TABLE>
<CAPTION>
FORMER LISN
-----------
SHAREHOLDERS STOCKHOLDER SHARES
------------ ------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Donald L. Sanneman
James S. Hivnor
Donald J. Vanke
James S. Hivnor Revocable
Electing Small Business Trust
(Dated December 25, 1998)
Donald J. Vanke Revocable
Electing Small Business Trust
(Dated December 25, 1998)
</TABLE>
<PAGE> 36
SCHEDULE OF COINVESTORS
<TABLE>
<CAPTION>
COINVESTORS STOCKHOLDER SHARES
----------- ------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Chisholm Partners III, L.P.
Kennedy Plaza Partners
Fleet Venture Resources,
Inc.
Fleet Equity Partners VI,
L.P.
BancBoston Ventures Inc.
Indosuez LISN Partners
</TABLE>
<PAGE> 37
SCHEDULE OF WS INVESTORS
<TABLE>
<CAPTION>
INVESTORS STOCKHOLDER SHARES
--------- ------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Willis Stein & Partners II, L.P.
Willis Stein & Partners Dutch,
L.P.
</TABLE>
<PAGE> 38
SCHEDULE OF NEW STOCKHOLDERS
<TABLE>
<CAPTION>
NEW STOCKHOLDERS STOCKHOLDER SHARES
---------------- ------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 39
SCHEDULE OF EXISTING ORIUS STOCKHOLDERS
<TABLE>
<CAPTION>
SCHEDULE OF EXISTING STOCKHOLDERS SHARES
-------------------- -------------------
ORIUS STOCKHOLDERS
------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
William J. Mercurio
Robert J. Garrett
Joseph P. Powers
Thomas M. Strahan
G.M.S. Consultants Group, Inc.
Mercurio & Associates, P.A.
Bernard E. Czarnecki
Jeffery J. Ebersole
Robert Mullen
Douglas Hoffman
Kenneth Childress
Duane Johnson
Dennis Dixon
Timothy Light
Donald Vetter
Joseph Rudin
Michael Wallace
James Fred Robertson
Raymond L. Galtelli
Larry Bonadeo, Trustee of the
Dominic Bonadeo Gift Trust
Larry Bonadeo, Trustee of the
Cassie Bonadeo Gift Trust
Larry Bonadeo, Trustee of the
Anthony Bonadeo Gift Trust
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
SCHEDULE OF EXISTING STOCKHOLDERS SHARES
-------------------- -------------------
ORIUS STOCKHOLDERS
------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Larry Bonadeo, Trustee of the
Angela Bonadeo Gift Trust
Larry Bonadeo, Trustee of the
Elizabeth Bonadeo Gift Trust
Les Smith
Jeff Williams
Frank Williams
Debbie Stingley
John Ziegler
Richard Follet
William Jones
Gary Morris
Randy Roll
Larry Bonadeo
Rosemarie Mulholland
P. Nicholas Johnson
Rodney James Johnson
Glynda J. Apgar
Robert M. Apgar
Steven M. Casey
D. Blayne Schorr
William Oldham
William Gerard Mullen Trust
David Mai
Timothy Goodbrake
Robert Agres
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
SCHEDULE OF EXISTING STOCKHOLDERS SHARES
-------------------- -------------------
ORIUS STOCKHOLDERS
------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Martin Kobs
Frank Back
E. Scott Kasprowicz
Gary W. Stephens
The William Gerard Mullen
Irrevocable Family Trust
Zackary Taylor Wilson
Grandchild Trust
Nathaniel Ryan Wilson
Grandchild Trust
Jeremiah Lee Wilson Grandchild
Trust
Matthew Patrick Wilson
Grandchild Trust
Rickey Gene Soto Grandchild
Trust
Barbara Ann Powers
Kathleen M. and Joseph G.
Bonnevier as Trustee of the
Powers Grandchildren's Trust
Dated July 7, 1999
Kelly Marie Powers
Sean Patrick Powers
Rachael L. Garrett Irrevocable
Trust Dated July 19, 1999
Lisa Garrett Moye Irrevocable
Trust Dated July 19, 1999
Elizabeth A. Garrett Irrevocable
Trust Dated July 19, 1999
Rachael L. Garrett
</TABLE>
<PAGE> 42
<TABLE>
<CAPTION>
SCHEDULE OF EXISTING STOCKHOLDERS SHARES
-------------------- -------------------
ORIUS STOCKHOLDERS
------------------
Common Stock Preferred Stock Junior Notes
------------ --------------- ------------
<S> <C> <C> <C>
Lisa Garret Moye
Elizabeth A. Garrett
J. L. Garrett, Jr.
Larry Bonadeo, Trustee of the
Dominic Bonadeo Gift Grust
Larry Bonadeo, Trustee of the
Cassie Bonadeo Gift Trust Dated
July 19, 1999
Larry Bonadeo, Trustee of the
Anthony Bonadeo Gift Trust
Dated July 19, 1999
Larry Bonadeo, Trustee of the
Elizabeth Bonadeo Gift Trust
Dated July 19, 1999
Larry Bonadeo, Trustee of the
Angelo Bonadeo Gift Trust
Dated July 19, 1999
The Kara Mulholland Irrevocable
Trust Agreement
The Megan Mulholland Irrevocable
Trust Agreement
The John M. Mercurio
Irrevocable Trust Agreement
Michelle Mercurio Irrevocable
Trust Agreement
The Rosemarie Mulholland
Irrevocable Trust Agreement
The Czarnecki Irrevocable Trust
William J. Mercurio and Danielle
Mercurio
Scott Kasprowicz 1999 Grantor
Retained Annuity Trust
</TABLE>
<PAGE> 43
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
BancBoston Ventures, Inc.
- ------------------------------------
Name of Entity
/s/ Theresa A. Nibi
- ------------------------------------
Signature
Print Name: Theresa A. Nibi
-------------------------
Title: Director
------------------------------
Taxpayer I.D. No.: 046013165
------------------
Telephone No.: 617-434-6913
----------------------
Address:
175 Federal Street, 10th Floor
- ------------------------------------
Boston, MA 02110
- ------------------------------------
- ------------------------------------
<PAGE> 44
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Chisholm Partners III, L.P.
- ------------------------------------
Name of Entity
/s/ GREGORY M. BARR
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 45
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Fleet Venture Resources, Inc.
- ------------------------------------
Name of Entity
/s/ GREGORY M. BARR
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 46
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Fleet Equity Partners, VI, L.P.
- ------------------------------------
Name of Entity
/s/ GREGORY M. BARR
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 47
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Kennedy Plaza Partners
- ------------------------------------
Name of Entity
/s/ GREGORY M. BARR
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 48
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Indosuez LISN Partners
By Indosuez CM II, Inc.
Its Managing General Partner
- ------------------------------------
Name of Entity
/s/ MICHAEL WALSH B. GRABOWSKI
- ------------------------------------
Signature
Print Name: Michael Walsh Bertrand Grabowski
----------------------------------
Title: Vice President Vice President
---------------------------------------
Taxpayer I.D. No.: 13-4089831
------------------
Telephone No.: 202-278-2816
----------------------
Address:
c/o Credit Agricole Indosuez
- ------------------------------------
1211 Avenue of The Americas
- ------------------------------------
New York, NY 10036
- ------------------------------------
<PAGE> 49
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ABU DHABI INVESTMENT AUTHORITY
- ------------------------------------
Name of Entity
/s/ HAMZA AMIRI
- ------------------------------------
Signature
Print Name: Hamza Amiri
-------------------------
Title: Deputy Director
------------------------------
Taxpayer I.D. No.: N/A
------------------
Telephone No.: 971-626-6063
----------------------
Address:
P.O. Box 3600
- ------------------------------------
Corniche Street
- ------------------------------------
Abu Dhabi
- ------------------------------------
United Arab Emirates
<PAGE> 50
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
BANCAMERICA CAPITAL INVESTORS II, L.P.
By: Bancamerica Capital Management II, L.P.
Its: General Partner
By: BACM II GP, LLC
Its: General Partner
By:
---------------------------------
Its: Authorized Member
<PAGE> 51
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
DB Capital Investors, L.P.
- ------------------------------------
Name of Entity
/s/ JOSEPH T. WOOD
- ------------------------------------
Signature
Print Name: Joseph T. Wood
-------------------------
Title: Managing Director
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.: 21-250-1053
----------------------
Address:
230 Liberty Street
- ------------------------------------
New York, NY 10006
- ------------------------------------
- ------------------------------------
<PAGE> 52
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
GS PRIVATE EQUITY PARTNERS- GS PRIVATE EQUITY PARTNERS II, L.P.
CONNECTICUT, L.P. By: GS PEP II Advisors, L.L.C., General
By: GS PEP II Advisors, L.L.C., General Partner
Connecticut, L.L.C., General Partner By: GSAM Gen-Par, L.L.C., Managing
By: GSAM Gen-Par, L.L.C., Managing Member By::
Member
By: /s/ David B. Ford By: /s/ David B. Ford
------------------------------------ ------------------------------------
Name: David Ford Name: David Ford
--------------------------------- ---------------------------------
Title: Director Title: Director
--------------------------------- ---------------------------------
GS PRIVATE EQUITY PARTNERS II GS PRIVATE EQUITY PARTNERS II-
OFFSHORE, L.P. DIRECT INVESTMENT FUND, L.P.
By: GS PEP II Offshore, Advisors, Inc., By: GS PEP II Direct Investment
General Partner Advisors, L.L.C., General Partners
By: GSAM Gen-Par, L.L.C., Managing
Member
By: /s/ David B. Ford By: /s/ David B. Ford
------------------------------------ ------------------------------------
Name: David Ford Name: David Ford
--------------------------------- ---------------------------------
Title: Director Title: Director
--------------------------------- ---------------------------------
GS PRIVATE EQUITY PARTNERS III, L.P. GS PRIVATE EQUITY PARTNERS III
OFFSHORE, L.P.
By: GS PEP II Advisors, L.L.C., General By: GS PEP III Offshore Advisors, Inc.,
Partner General Partner
By: GSAM Gen-Par, L.L.C., Managing
Member
By: /s/ David B. Ford By: /s/ David B. Ford
------------------------------------ ------------------------------------
Name: David Ford Name: David Ford
--------------------------------- ---------------------------------
Title: Director Title: Director
--------------------------------- ---------------------------------
<PAGE> 53
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Nassau Capital Partners III, L.P.
By Nassau Capital L.L.C.
Its General Partner
- ------------------------------------
Name of Entity
/s/ JOHN G. QUIGLEY
- ------------------------------------
Signature
Print Name: John G. Quigley
-------------------------
Title: Member
------------------------------
Taxpayer I.D. No.: 22-3648372
------------------
Telephone No.: (609) 924-3555
----------------------
Address:
22 Chambers Street, 4th Floor
- ------------------------------------
Princeton, NJ 08542
- ------------------------------------
- ------------------------------------
<PAGE> 54
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(COINVESTORS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Coinvestor" and an
"Investor" under that certain Investor Rights Agreement dated as of November 8,
1999, and effective as of the Effective Time (as such term is defined in the
Investor Rights Agreement), by and among Orius Corp. and the stockholders of
Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
NAS Partners I L.L.C.
- ------------------------------------
Name of Entity
/s/ JOHN G. QUIGLEY
- ------------------------------------
Signature
Print Name: John G. Quigley
-------------------------
Title: Member
------------------------------
Taxpayer I.D. No.: 22-3380204
------------------
Telephone No.: (609) 924-3555
----------------------
Address:
22 Chambers Street, 4th Floor
- ------------------------------------
Princeton, N.J. 08542
- ------------------------------------
- ------------------------------------
<PAGE> 55
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Richard Almasy
- ------------------------------------
Print name
/s/ Richard Almasy
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 56
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Robert Gardner
- ------------------------------------
Print name
/s/ Robert Gardner
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 57
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
James Gillan
- ------------------------------------
Print name
/s/ James Gillan
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 58
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Dennis A. Hendrix
- ------------------------------------
Print name
/s/ Dennis A. Hendrix
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 59
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
James S. Hiunor
Electing Small Business Trust (effective 12/25/98)
- ------------------------------------
Name of Entity
/s/ James S. Hiunor, TRUSTEE
- ------------------------------------
Signature
Print Name: James S. Hiunor
-------------------------
Title: TRUSTEE
------------------------------
Taxpayer I.D. No.: 34-7091855
------------------
Telephone No.: 419-625-2538
----------------------
Address:
1919 Cedar Point Rd.
- ------------------------------------
Sandusky, OH 44870
- ------------------------------------
- ------------------------------------
<PAGE> 60
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Gordon Kurtz
- ------------------------------------
Print name
/s/ Gordon Kurtz
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 61
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Donald L. Sanneman
- ------------------------------------
Print name
/s/ Donald L. Sanneman
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 62
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
James R. Sharp
- ------------------------------------
Print name
/s/ James R. Sharp
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 63
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
Kevin L. Sowell
- ------------------------------------
Print name
/s/ Kevin L. Sowell
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 64
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
- ------------------------------------
Print name
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Donald J. Vanke Electing
Small Business Trust
- ------------------------------------
Name of Entity
/s/
- ------------------------------------
Signature
Print Name: Donald J. Vanke
-------------------------
Title: TRUSTEE
------------------------------
Taxpayer I.D. No.: 34-7091856
------------------
Telephone No.: (440) 846-0855
----------------------
Address:
13792 Peppercreek Dr
- ------------------------------------
Strongsville, OH 44136
- ------------------------------------
- ------------------------------------
<PAGE> 65
COUNTERPART SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
(FORMER LISN SHAREHOLDERS)
By executing this counterpart signature page below, the undersigned agrees
to be subject to all of the rights and obligations of a "Former LISN
Shareholder" and an "Stockholder" under that certain Investor Rights Agreement
dated as of November 8, 1999, and effective as of the Effective Time (as such
term is defined in the Investor Rights Agreement), by and among Orius Corp. and
the stockholders of Orius Corp. from time to time a party thereto.
IF THE UNDERSIGNED IS AN INDIVIDUAL:
James Wantuck
- ------------------------------------
Print name
/s/ James Wantuck
- ------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ------------------------------------
Name of Entity
- ------------------------------------
Signature
Print Name:
-------------------------
Title:
------------------------------
Taxpayer I.D. No.:
------------------
Telephone No.:
----------------------
Address:
- ------------------------------------
- ------------------------------------
- ------------------------------------
<PAGE> 66
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ ROBERT E. AGRES
ROBERT E. AGRES
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 9934 NW 6th Manor
-------------------------------
Parklord FL 33076
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 67
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
GLYNDA J. APGAR
- ----------------------------------------
Print Name
/s/ GLYNDA J. APGAR
- ----------------------------------------
Signature
Address: 3902 Majestic Trail
-------------------------------
Houston TX 77059
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 68
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
ROBERT M. APGAR
- ----------------------------------------
Print Name
/s/ ROBERT M. APGAR
- ----------------------------------------
Signature
Address: 3902 Majestic Trail
-------------------------------
Houston, TX 77059
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 69
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ FRANK O. BACK
FRANK O. BACK
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 221 Franklin St.
-------------------------------
Bonson, MI 49028
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 70
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
RICKEY GENE SOTO GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ JOHN R. BEARD
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827343
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63131
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 71
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
MATTHEW PATRICK WILSON GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ JOHN R. BEARD
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827338
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 72
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
JEREMIAH LEE WILSON GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard, Trustee
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-627340
----------------------
Telephone Number: (314)-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 73
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
NATHANIEL RYAN WILSON GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ JOHN R. BEARD
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827341
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 74
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ZACHARY TAYLOR WILSON GRANDCHILD TRUST
- ----------------------------------------
Name of Entity
/s/ JOHN R. BEARD
- ----------------------------------------
Signature
Print Name: JOHN R. BEARD, TRUSTEE
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827342
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 75
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
THE WILLIAM GERARD MULLEN IRREVOCABLE FAMILY TRUST
- ----------------------------------------
Name of Entity
/s/ John R. Beard
- ----------------------------------------
Signature
Print Name: John R. Beard
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 43-6827336
----------------------
Telephone Number: 314-991-8550
-----------------------
Address: 265 Runnymede
-------------------------------
St. Louis, MO 63141
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 76
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DOLORAS BONADEO
DOLORAS BONADEO
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 23351 Mapleridge
-------------------------------
Southfield, MI 48075
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 77
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ LARRY BONADEO
LARRY BONADEO
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 6983 SW Cinnamon CT
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 78
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ATTORNEY BONADEO GIFT TRUST
- ----------------------------------------
Name of Entity
/s/ LARRY BONADEO
- ----------------------------------------
Signature
Print Name: LARRY BONADEO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282818
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 SW Cinnanion Ct.
-------------------------------
Stuart, FL. 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 79
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
CASSIE BONADEO GIFT TRUST
- ----------------------------------------
Name of Entity
/s/ LARRY BONADEO
- ----------------------------------------
Signature
Print Name: LARRY BONADEO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282821
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 SW Cinnamon CT
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 80
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Dominic Banadeo Gift Trust
- ----------------------------------------
Name of Entity
/s/ Larny Banedeo
- ----------------------------------------
Signature
Print Name: Larny Banedeo
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282820
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 S.W. Cinnamon Ct.
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 81
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ELIZABETH BONADEO GIFT TRUST
- ----------------------------------------
Name of Entity
/s/ LARRY BONADEO
- ----------------------------------------
Signature
Print Name: LARRY BONADEO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282819
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 S.W. Cinnamon Ct.
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 82
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
------------------------------
- ----------------------------------------
- ----------------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ANGELO BONADEO GIFT TRUST
- ----------------------------------------
Name of Entity
/s/ LARRY BONADEO
- ----------------------------------------
Signature
Print Name: LARRY BONADEO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: 65-6282817
----------------------
Telephone Number: 561-781-0186
-----------------------
Address: 6983 SW Cinnamon Ct
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 83
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
POWERS GRANDCHILDREN'S TRUST
- ----------------------------------------
Name of Entity
/s/ JOSEPH P. BONNEVIER
/s/ KATHLEEN M. BONNEVIER
- ----------------------------------------
Signature
Print Name: JOSEPH G. BONNEVIER
KATHLEEN M. BONNEVIER
-----------------------------
Title: Trustees
----------------------------------
Taxpayer I.D. No.: 58-6402685
----------------------
Telephone Number: 703-281-6430
-----------------------
Address: 1727 Larkmeade Dr.
-------------------------------
Vienna, VA 22181
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 84
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
STEVEN E. CASEY
- ----------------------------------------
Name of Entity
/s/ STEVEN E. CASEY
- ----------------------------------------
Signature
Address: 4138 Pine Crest Trail
-------------------------------
Houston, TX 77059
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 85
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
JOHN CHAVERERE
- ----------------------------------------
Name of Entity
/s/ JOHN CHAVERERE
- ----------------------------------------
Signature
Address: 4611 Astible Cir
-------------------------------
Alworth, GA 30102
-------------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 86
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
KITTY J. CHEVERERE
- ----------------------------------------
Name of Entity
/s/ KITTY J. CHEVERERE
- ----------------------------------------
Signature
Address: 250 Eldorado Way N221
-------------------------------
Webster, TX 77598
-------------------------------
Title
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 87
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
KENNETH CHILDRESS
- ----------------------------------------
Name of Entity
/s/ KENNETH CHILDRESS
- ----------------------------------------
Signature
Address: 921 Ferngate Lane
-------------------------------
Creve Coeur, MO 63141
-------------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 88
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
BERNARD CZARNECKI
- ----------------------------------------
Name of Entity
/s/ BERNARD CZARNECKI
- ----------------------------------------
Signature
Address: 12109 W. Lake Rd.
-------------------------------
E. Springfield PA 16411
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 89
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DENNIS H. DIXON
DENNIS DIXON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1867 Town Place
-------------------------------
Snellville, Georgia 30078
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 90
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ JEFFERY J. EBERSOLE
JEFFERY J. EBERSOLE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: W4637 Cty Rd EH
-------------------------------
Elkhart Lake, WI
-------------------------------
53020
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 91
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ RICHARD FOLLETT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1954 Park Side Drive
------------------------------
Elizabeth, PA
------------------------------
15037
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 92
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ JOSEPH FUNSTON
JOSEPH FUNSTON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 22101 Pickford
-------------------------------
Detroit, MI 48219
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 93
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
/s/ RAYMOND GALTELLI
RAYMOND L. GALTELLI
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 5312 Graycliff Dr
-------------------------------
Greensboro, NC 27406
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
/s/ RAYMOND L. GALTELLI
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 94
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
C-138
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
LISA L. GARRETT MOYE IRREVOCABLE TRUST
- ----------------------------------------
Name of Entity
/s/ J.L. GARRETT
- ----------------------------------------
Signature
Print Name: J.L. GARRETT
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd.
-------------------------------
Apopka, FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 95
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ LISA GARRETT MOYE
Lisa Garrett Moye
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1006 N. Elm St.
------------------------------
#2
------------------------------
Greensboro, NC 27401
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 96
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
C-137
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
RACHEL L. GARRETT IRREVOCABLE TRUST
- ----------------------------------------
Name of Entity
/s/ J.L. GARRETT
- ----------------------------------------
Signature
Print Name: J.L. GARRETT
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd
-------------------------------
Apopka FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 97
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ RACHAEL L. GARRETT
Rachael L. Garrett C-140
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 820 Renaissance Pointe
------------------------------
#109
------------------------------
Altamonte Springs, FL 32714
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 98
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
C-143
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 602 E. Welch Rd.
-------------------------------
Apopka, FL 32712
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 99
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
C-139
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
------------------------------
------------------------------
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
ELIZABETH A. GARRETT IRREVOCABLE TRUST
- ----------------------------------------
Name of Entity
/s/ J. L. GARRETT
- ----------------------------------------
Signature
Print Name: J. L. GARRETT
-----------------------------
Title: TRUSTEE
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: 407-886-4649
-----------------------
Address: 602 E. Welch Rd.
-------------------------------
Apopka FL 32712
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 100
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ ELIZABETH A. GARRETT
ELIZABETH A. GARRETT C-142
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 817 Pink Camelia Ct
-------------------------------
Apopka FL 32712
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 101
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ ROBERT J. GARRETT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 817 Pink Camelia Ct.
------------------------------
Apopka, FL 32712
------------------------------
------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 102
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 12109 W. Lake Rd.
-------------------------------
E. Springfield PA. 16411
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
/s/ JOHN E. GOMOLCHAK
- ----------------------------------------
Signature
Print Name: JOHN E. GOMOLCHAK
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: 814-864-4550
-----------------------
Address: 3854 Walker Blvd
-------------------------------
Erie PA 16509
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 103
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
TIMOTHY GOODBRAKE
- ----------------------------------------
Name of Entity
/s/ TIMOTHY GOODBRAKE
- ----------------------------------------
Signature
Address: 12202 Jefferson Copp Dr.
-------------------------------
Alpharetta, GA 30005
-------------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 104
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
DOUGLAS HOFFMAN
- ----------------------------------------
Name of Entity
/s/ DOUGLAS HOFFMAN
- ----------------------------------------
Signature
Address: 401 DeClark St.
-------------------------------
Beaver Dam, WI 53916
-------------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 105
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
DUANE JOHNSON
- ----------------------------------------
Name of Entity
/s/ DUANE JOHNSON
- ----------------------------------------
Signature
Address: 5146 Annendale Dr.
-------------------------------
Erie, PA 16506
-------------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 106
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ P. NICHOLAS JOHNSON
P. Nicholas Johnson
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 14000 Goodall Rd.
-------------------------------
Lake Oswego, OR 97034
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 107
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ RODNEY JAMES JOHNSON
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 310 Iron Mountain
-------------------------------
Lake Oswego, OR 97034
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 108
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ WILLIAM J. JONES
William J. Jones
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 4156 SE Westfield St
-------------------------------
Stuart FL 34997
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 109
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION, PARTNERSHIP
OR TRUST:
SCOTT KASPROWICZ 1999 GRANTOR
RETAINED ANNUNITY TRUST
- ----------------------------------------
Name of Entity
/s/ E. SCOTT KASPROWICZ
- ----------------------------------------
Signature
Print Name: E. SCOTT KASPROWICZ
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: N/A
----------------------
Telephone Number: 703-620-1611
-----------------------
Address: 10704 Regency Crest Dr.
-------------------------------
Vienna, VA 22181
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 110
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
E. SCOTT KAJAROWICZ
- ----------------------------------------
Print Name
/s/ E. SCOTT KAJAROWICZ
- ----------------------------------------
Signature
Address: 10704 Regency Crest Dr.
-------------------------------
Vienna, VA. 22181
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 111
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 414 Horseshoe Lane N
-------------------------------
Winter Haven, FL 33881
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 112
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ TIMOTHY LIGHT
TIMOTHY LIGHT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 32 16 Yale Blvd.
-------------------------------
St. Charles MO 63301
-------------------------------
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 113
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DAVID F. MAI
DAVID F. MAI
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1189 Cunningham Creek Dr.
-------------------------------
Jacksonville, FL 32259
-------------------------------
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 114
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
THE JOHN M. MERCURIO IRREVOCABLE TRUST AGREEMENT
- ------------------------------------------------
Name of Entity
/s/ NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: Norma Mercurio
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 115
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
THE MICHELLE MERCURIO IRREVOCABLE TRUST AGREEMENT
- -------------------------------------------------
Name of Entity
/s/ NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: Norma Mercurio
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied For
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 116
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DANIELLE MERCURIO
Danielle Mercurio
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 117
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ WILLIAM J. MERCURIO, JR.
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 118
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ WILLIAM J. MERCURIO
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 119
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ GARY MORRIS
Gary Morris
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 14999 Colver Rd
-------------------------------
West Springfield, PA 16443
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 120
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
The Kara Mulholland Irrevocable
Trust Agreement
- ----------------------------------------
Name of Entity
/s/ Norma Mercurio
- ----------------------------------------
Signature
Print Name: Norma Mercurio
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 121
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
THE MEGAN MULHOLLAND IRREVOCABLE
TRUST AGREEMENT
- ----------------------------------------
Name of Entity
/s/ NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 122
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
THE ROSEMARIE MULHOLLAND IRREVOCABLE
TRUST AGREEMENT
- ----------------------------------------
Name of Entity
/s/ NORMA MERCURIO
- ----------------------------------------
Signature
Print Name: NORMA MERCURIO
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: Applied for
----------------------
Telephone Number: (561) 627-1096
-----------------------
Address: 12268 Channel Dr.
-------------------------------
North Palm Beach, FL 33408
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 123
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ ROSEMARIE MULHOLLAND
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1128 Country Club Dr.
-------------------------------
No. Palm Beach, FL
-------------------------------
33408
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 124
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ ROBERT MULLEN
Robert Mullen
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 320 23rd Ave
-------------------------------
Moline, IL 61265
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 125
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
WILLIAM GERARD MULLEN TRUST DATE 12/15/99
- ----------------------------------------
Name of Entity
WILLIAM MULLEN TRUSTEE
- ----------------------------------------
Signature
Print Name: WILLIAM MULLEN
-----------------------------
Title: Trustee
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: 561-687-8300
-----------------------
Address: 1401 Forum Way Suite 400
-------------------------------
West Palm Beach, FL 33401
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 126
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
/s/ GLENN E. MULLEN
Glenn E. Mullen
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 601 Circlewood Dr
-------------------------------
Venice FL 34293
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 127
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
WILLIAM H. OLDHAM
- ----------------------------------------
Print Name
/s/ WILLIAM H. OLDHAM
- ----------------------------------------
Signature
Address: 5770 Diamond Ridge Way
-------------------------------
Nampa, Idaho 83686
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 128
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ JOSEPH PATRICK POWERS
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1527 SW 1ST Ave
-------------------------------
Boca Raton, FL 33432
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 129
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ KELLY MARIE POWERS
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 3179 California Street
-------------------------------
San Francisco, CA 94115
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 130
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ BARBARA ANN POWERS
C-132
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 17763 Crooked Oak Ave
-------------------------------
Boca Raton, FL 33487
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 131
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ JOSEPH P. POWERS
JOSEPH P. POWERS
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 17763 Crooked Oak Ave
-------------------------------
Boca Raton, FL 33487
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 132
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
JAMES FORD ROBERTSON
- ----------------------------------------
Name of Entity
/s/ JAMES FORD ROBERTSON
- ----------------------------------------
Signature
Address: 4361 Yorkshire Ct
-------------------------------
Loganville, Ga 30052
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 133
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ RANDALL L. ROLL
Randall L. Roll
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 606 8th Ave SW
-------------------------------
Conover, NC 28613
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 134
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ JOSEPH RUDIN
JOSEPH RUDIN
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 2199 Oberhelman Rd.
-------------------------------
Foristell, MO 63348
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 135
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS AN INDIVIDUAL:
D. BLAYNE SCHORR
- ----------------------------------------
Name of Entity
/s/ D. BLAYNE SCHORR
- ----------------------------------------
Signature
Address: 1105 W. Edgewood
-------------------------------
Friendswood TX 77546
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 136
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ LES SMITH
Les Smith
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 4841 SW Golfview Dr.
-------------------------------
Palm City, FL 34990
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 137
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
SIGN HERE
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
GARY W. STEPHENS
- ----------------------------------------
Name of Entity
/s/ GARY W. STEPHENS
- ----------------------------------------
Signature
Address: 15120 SW 141st Ave
-------------------------------
Tigaro, OR 97224
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 138
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DEBRA J. STINGLEY
DEBRA J. STINGLEY
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 8077 SW Yachtsmans Dr.
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 139
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1115 Normandy Trace Rd
-------------------------------
Tampa, Fl 33602
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 140
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ DONALD K. VETTER
DONALD VETTER
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 230 New Ballwin Rd.
-------------------------------
Ballwin, MO. 63021
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 141
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ MICHAEL L. WALLACE
Michael L. Wallace
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 1947 S. Carolina Ave N.E.
-------------------------------
St. Petersburg, FL 33702
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 142
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE /s/ FRANKLYN W. WILLIAMS
FRANKLYN W. WILLIAMS
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address: 5313 S Miles Grant Rd K204
-------------------------------
Stuart, FL 34997
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
- ----------------------------------------
Name of Entity
- ----------------------------------------
Signature
Print Name:
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.:
----------------------
Telephone Number:
-----------------------
Address:
-------------------------------
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 143
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
SIGN HERE
The undersigned agrees to be bound by the terms of the Reorganization Agreement
and agrees to all of the provisions thereof, as well as the terms and agreements
above, and makes the representations and warranties set forth above.
Address:
-------------------------------
-------------------------------
-------------------------------
IF THE UNDERSIGNED IS A CORPORATION,
PARTNERSHIP OR TRUST:
JERRY R. WOOD & SABRA M. WOOD
TRUSTEES OF THE JERRY R. WOOD AND
SABRA M. WOOD LOVING TRUST
- ----------------------------------------
Name of Entity
/s/ JERRY R. WOOD
- ----------------------------------------
Signature
Print Name: JERRY R. WOOD
-----------------------------
Title:
----------------------------------
Taxpayer I.D. No.: ###-##-####
----------------------
Telephone Number: 636-978-3578
-----------------------
Address: 1854 Alois Ave
-------------------------------
O'Fallon, MO 63366
-------------------------------
-------------------------------
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) REPRESENTING THE ORIUS COMMON OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATE(S) AND DOCUMENTS TRANSMITTED
HEREWITH.)
<PAGE> 1
EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made as
of the 15th day of December, 1999 by and between ORIUS CORP., a Florida
corporation (the "Company") and JOSEPH P. POWERS (the "Executive").
Recitals
WHEREAS, Executive and the Company's predecessor are parties to that
certain Employment Agreement dated February 26, 1999 (the "Prior Agreement"):
WHEREAS, on the date of this Agreement, the Company will effect a corporate
reorganization (the "Reorganization") pursuant to which the Company will be
recapitalized and combined with LISN, Holdings, Inc., an Ohio corporation;
WHEREAS, in connection with the Reorganization, the Parties desire to
terminate the Prior Agreement and replace and supercede the Prior Agreement with
this Agreement; and
WHEREAS, in connection with the Reorganization, the Company, through its
Board of Directors, desires to retain the services of Executive, and Executive
desires to be retained by the Company, on the terms and conditions set forth in
this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants of
the parties herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs Executive to serve in the
capacities described herein and Executive hereby accepts such employment and
agrees to perform the services described herein upon the terms and conditions
hereinafter set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement
shall commence on the date hereof and shall terminate at the close of business
on February 28, 2003 (the "Term") subject to earlier termination in accordance
with the other terms and conditions set forth herein. As of the date hereof, the
Company and Executive agree that the Prior Agreement is terminated and replaced
and superceded in its entirety by this Agreement.
<PAGE> 2
3. DUTIES. Executive shall serve as and have the title of Vice President
of the Company. The Executive's principal place of employment shall be in West
Palm Beach, Florida. Executive agrees to devote his full business time, energy,
skills and best efforts to such employment while so employed. Nothing in this
Agreement shall preclude Executive from engaging, so long as, in the reasonable
determination of the Board of Directors, such activities do not interfere with
his duties and responsibilities hereunder, in charitable and community affairs,
from managing any passive investment made by him or from serving, subject to the
prior approval of the Board of Directors, as a member of the board of directors
or as a trustee of any other corporation, association or entity.
4. COMPENSATION.
(a) Base Compensation. The Company shall pay Executive, and Executive
agrees to accept, base compensation at the rate of $230,000 per year, payable in
equal installments no less frequently than monthly, through the Term of this
Agreement ("Base Compensation"). The Base Compensation specified in this Section
4(a) may be increased annually during the Term of this Agreement in the sole
discretion of the Compensation Committee of the Board of Directors.
5. FRINGE BENEFITS.
(a) Generally. Executive shall be eligible for fringe benefits pursuant to
any insurance, pension or other employee fringe benefit plan approved by the
Board of Directors that now or hereafter may be made available to employees of
the Company and for which Executive will qualify according to his eligibility
under the provisions thereof.
(b) Health and Disability Insurance. Executive shall be entitled to
participate in such health and disability insurance plans that the Company
offers to other executive officers of the Company from time to time.
(c) Vacation, Holidays and Illness. During the Term of this Agreement,
Executive shall be entitled to such number of days off for vacation, holidays,
illness or any other purposes as currently provided to the Executive in
accordance with the Company's past practice and custom.
6. EXPENSES. Except as otherwise agreed to herein, the Executive shall be
reimbursed for all usual expenses incurred on behalf of the Company, in
accordance with Company practices and procedures, provided that:
(a) Each such expenditure is of a nature deductible under Section 162 of
the Internal Revenue Code on the Federal income tax return of the Company as a
business expense and not as deductible compensation to Executive; and
2
<PAGE> 3
(b) Executive furnishes the Company with adequate documentary evidence
required by the Code or any regulation promulgated thereunder for the
substantiation of such expenditures as a deductible business expense of the
Company and not as deductible compensation to Executive.
Executive agrees that, if at any time, any payment made to Executive by the
Company as a business expense reimbursement shall be disallowed in whole as a
deductible expense to the Company by the appropriate taxing authorities,
Executive shall reimburse the Company to the full extent of such disallowance.
7. TERMINATION. The term of Executive's employment under this Agreement
may be terminated prior to expiration of the term provided in Section 2 hereof
only in accordance with the following paragraphs:
(a) For Cause. This Agreement may be immediately terminated by the Company
for Cause (as herein defined). For purposes of this Agreement, the term "Cause"
shall mean the termination of the Executive by the Board of Directors of the
Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) a material breach by the Executive of any provision of this
Agreement, or the willful and continued failure of Executive substantially to
perform his duties under his employment with the Company;
(ii) Executive's willful misconduct in connection with the performance
of his duties as an employee or officer of the Company;
(iii) performance by the Executive of any act of fraud or material
misrepresentation or a material act of misappropriation which results or is
intended to result in Executive's personal enrichment at the expense of the
Company;
(iv) conviction of the Executive of any crime which constitutes a
felony offense involving violence (but not involving a motorized vehicle) or
fraud, embezzlement, theft or business activities;
(v) the entry of a judgment or order enjoining or preventing the
Executive from such activities as are essential for the Executive to perform his
services as required by this Agreement unless such judgment or order is the
subject of an appeal or other proceedings to set it aside or modify it and such
proceedings are timely filed and being pursued with due diligence; or
(vi) Executive has engaged in willful and deliberate conduct or
activities intended to materially damage the business of the Company, it being
understood that neither conduct or activities pursuant to the Executive's
exercise of his good faith business judgment nor unintentional physical damage
to properties by the Executive shall be a ground for such a determination.
3
<PAGE> 4
(b) Mutual. Executive's employment under this Agreement may be terminated
upon mutual written agreement of the Company and the executive.
(c) Death. In the event of the death of Executive, this Agreement shall
terminate immediately.
(d) Disability. If, during Executive's employment under this Agreement,
Executive shall become permanently disabled and unable to perform his duties as
required herein ("Disability") for a consecutive period of one hundred eighty
(180) days, then the Company may, upon thirty (30) days written notice to
Executive, terminate Executive's employment under this Agreement.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives), Base Compensation through a date which is one (1) year after
the date of Death or the date of termination for Disability as provided in
Paragraph 7(d), respectively.
9. SEVERANCE. In the event of the termination of Executive's employment
under this Agreement for any reason other than Executive's death or Disability,
the Company shall provide the payments and benefits to Executive as indicated
below:
(a) With Cause or Voluntary Termination by Executive. If Executive is
terminated for Cause (as defined in Section 7(a) of this Agreement), or if
Executive voluntarily terminates his employment with the Company for any reason
other than because of the relocation of the Company's executive offices outside
the West Palm Beach, Florida area, the Company shall be obligated only to
continue to pay to Executive his Base Compensation, if any, earned up to the
date of termination and shall reimburse the Executive for any expenses to which
the Executive is due reimbursement by the Company under Section 6 hereof. In
addition, Company shall pay vested benefits, if any, owed to Executive under any
plan provided for Executive under Paragraph 5 hereof in accordance with the
terms of such plan as in effect on the date of termination of employment under
this Paragraph 9(a).
(b) Without Cause. In the event that the Company shall terminate the
Executive without cause (of if Executive voluntarily terminates his employment
with the Company because of the relocation of the Company's executive offices
outside the West Palm Beach, Florida area), the Company shall be obligated to
continue to pay full compensation and benefits to the Executive through and
including February 28, 2003 as if the Executive had not been so terminated.
10. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that
he will have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. For the period of time which is the greater of (i) the fourth
anniversary of the date hereof or (ii) one year after the Executive is no longer
4
<PAGE> 5
employed by the Company ("Confidentiality Period"), Executive agrees not to
disclose or use any confidential information, including without limitation,
information regarding research, developments, product designs or specifications,
manufacturing processes, "know-how," prices, suppliers, customers, costs or any
knowledge or information with respect to confidential or trade secrets of the
Company, it being understood that such confidential information does not include
information that is publicly available unless such information became publicly
available as a result of a breach of this Agreement. Executive acknowledges and
agrees that all notes, records, reports, sketches, plans, unpublished memoranda
or other documents belonging to the Company, but held by Executive, concerning
any information relating to the Company's business, whether confidential or not,
are the property of the Company and will be promptly delivered to it upon
Executive's leaving the employ of the Company. Executive also agrees to execute
such confidentiality agreements that the Board may adopt and may modify from
time to time, as a standard form to be executed by all employees of the Company,
to the extent such standard forms are not materially more restrictive than the
provisions of this Agreement.
11. NON-SOLICITATION. At all times during the term of this Agreement, and
thereafter during the Noncompete Period (as defined below), Executive shall not,
directly or indirectly, induce, influence, combine or conspire with, or attempt
to induce, influence, combine or conspire with, any of the officers, employees,
agents, consultants, customers or supplies of the Company to terminate their
employment, or other relationship, with or compete against the Company or any
future subsidiaries, parents or affiliates of the Company in the cable industry
(the "Business").
12. NON-COMPETITION. Executive acknowledges that his services and
responsibilities are unique in character and are of particular significance to
the Company, that the Company engages in a competitive business with a national
market and that Executive's continued and exclusive service to the Company under
this Agreement is of a high degree of importance to the Company. Therefore,
subject to the last sentence of this Paragraph 12, for one year after the
Executive is no longer employed by the Company (the "Noncompete Period"),
Executive shall not, directly or indirectly, engage in the Business, or in any
other business which, at the time of Executive's termination, the Company is
actively engaged in, except as an employee or agent of the Company, and shall
not, directly or indirectly, as owner, partner, joint venturer, employee,
broker, agent, corporate officer, principal, licensor, shareholder (unless as
owner of no more than three percent (3%) of the issued and outstanding capital
stock of such entity if such stock is publicly traded) or in any other capacity
whatsoever, engage in or have any connection with any business which is
competitive with the Business, and which operates anywhere in the United States
where the Company is doing or has done business within the prior three (3)
years. In the event Executive is terminated by the Company without Cause prior
to the expiration of the term of this Agreement, the Noncompete Period shall be
modified such that it expires on the date of such involuntary termination.
5
<PAGE> 6
13. RESTRICTIVE COVENANTS.
(a) If, in any judicial proceedings, a court shall refuse to enforce any
of the covenants included in Paragraphs 10, 11, or 12 hereof, then such
unenforceable covenant shall be amended to relate to such lesser period or
geographical area as shall be enforceable. In the event the Company should bring
any legal action or other proceeding against Executive for enforcement of this
Agreement, the calculation of the Noncompete Period, if any, shall not include
the period of time commencing with the filing of legal action or other
proceeding to enforce this Agreement through the date of final judgment or final
resolution including all appeals, if any, of such legal action or other
proceeding unless the Company is receiving the practical benefits of Paragraphs
10, 11, and 12 during such time.
(b) Executive hereby acknowledges that the restrictions on his activity as
contained in this Agreement are required for the Company's reasonable protection
and is a material inducement to the Company to enter into this Agreement.
Executive hereby agrees that in the event of the violation by him of any of the
provisions of this Agreement, the Company will be entitled to institute and
prosecute proceedings at law or in equity to obtain damages with respect to such
violation or to enforce the specific performance of this Agreement by Executive
or to enjoin Executive from engaging in any activity in violation hereof. The
prevailing party in any litigation brought to enforce the restrictive provisions
contained in this Agreement shall be entitled to reimbursement from the
nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
(c) Notwithstanding anything to the contrary contained herein, in the
event that Executive engages in any material conduct prohibited by Paragraphs
10, 11, or 12 hereof for any reason whatsoever, Executive shall not receive any
of the severance benefits he otherwise would be entitled to receive pursuant to
Paragraph 9 hereof.
14. REMEDIES. The Executive acknowledges that the Company would be
irreparably injured by a violation of Paragraphs 10, 11 or 12 and agrees that
the Company shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of Paragraphs 10, 11 or 12 or any other
appropriate remedy, without bond or other security being required. The Executive
understands and acknowledges that his failure to provide services to the Company
in accordance with the terms of this Agreement will result in financial injury
to the Company, and the Company will be entitled to damages for any such failure
arising from reasons entirely or partly within Executive's control.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
the addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Executive: To the address set forth below his signature on the
signature page hereof.
6
<PAGE> 7
If to the Company:
Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, Florida 33401
16. REPURCHASE PROVISIONS.
(a) Prior to a Public Offering (as that term is defined in that certain
Investor Rights Agreement of the Company dated as of November 8, 1999), in the
event the Executive is either terminated for Cause (as defined in Section 7(a)
of this Agreement) or resigns from employment with the Company ("Repurchase
Termination"), all of the Executive's shares of common stock and preferred stock
and the subordinated promissory notes issued by the Company (which equity
securities and promissory notes Executive received pursuant to the
Reorganization), whether held by Executive or transferred by Executive to one or
more transferees (collectively, the "Executive Securities") shall be subject to
repurchase by the Company as set forth in this Paragraph 16 (the "Repurchase
Option").
(b) Following any Repurchase Termination the Company shall have the right,
but not the obligation, to purchase all, but not less than all, of the Executive
Securities for the book value of such securities.
(c) The Board of Directors of the Company may elect to exercise the
Repurchase Option by delivering written notice (the "Repurchase Notice") to the
holder or holders of such stock within forty-five (45) days after the date of
the Repurchase Termination. The Repurchase Notice will set forth the number of
shares of the Executive Securities to be acquired from each holder, the
aggregate consideration to be paid for such shares and the time and place for
the closing of the transaction.
(d) The closing of the purchase of the Executive Securities pursuant to
the Repurchase Option shall take place on the date designated by the Company in
the Repurchase Notice, which date shall not be more than forty-five (45) days
nor less than two (2) business days after the delivery of the Repurchase Notice.
The Company shall pay for the Executive Securities to be purchased pursuant to
the Repurchase Option by delivery of (i) a check or wire transfer of funds, (ii)
a subordinated note or notes payable prior to the first anniversary of the
closing of such purchase and bearing interest at a rate per annum equal to the
prime rate of interest as announced by Citibank, N.A., or (iii) both (i) and
(ii), in the aggregate amount of the purchase price for such shares; provided
that the Company shall use reasonable efforts to make all such repurchases with
a check or wire transfer of funds unless prohibited by law or by its lenders (in
writing). Any notes issued by the Company pursuant to this Paragraph 16(d) shall
be subject to any restrictive covenants to which the Company is subject at the
time of such purchase. The Company shall be entitled to receive customary
representations and warranties as to title from the sellers regarding such sale
and to require all sellers' signatures be guaranteed. The Company may elect to
assign its right to purchase to the stockholders of the Company (which rights to
purchase shall be distributed pro rata to all
7
<PAGE> 8
stockholders (other than the Executive), based upon the number of votes held by
such stockholders). In the event the Company elects to assign its rights to the
other stockholders of the Company (other than the Executive) such other
stockholders shall have the same right as the Company to purchase stock pursuant
to the Repurchase Notice.
(e) Notwithstanding anything to the contrary contained in this Agreement,
all repurchases of the Executive Securities by the Company hereunder shall be
subject to applicable restrictions contained in the Delaware General Corporation
Law and in the Company's and its direct and indirect subsidiaries' debt and
equity financing agreements. If any such restrictions prohibit the repurchase of
the Executive Securities hereunder which the Company is otherwise entitled or
required to make, the Company may make such repurchases as soon as it is
permitted to do so under such restrictions, but in any event within 180 days of
the Repurchase Termination.
(f) Notwithstanding anything to the contrary contained in this Agreement,
the Company's right to repurchase the Executive Securities shall terminate upon
the consummation of a Public Offering.
17. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the Company and
Executive, and the Company and Executive hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises, understandings or
commitments between the parties hereof.
(b) No future oral statements, promises or commitments with respect to the
subject matter hereof, or other purported modification hereof, shall be binding
upon the parties hereto unless the same is reduced to writing and signed by each
party hereto.
18. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties. Neither party may assign his or its rights
or obligations under this Agreement without the prior written consent of the
other party.
19. TERMINATION. All of the provisions of this Agreement shall terminate
after the expiration of the Term of this Agreement, except that (i) Paragraphs
10 and 11 shall only terminate upon the expiration of the Confidentiality Period
(ii) Paragraph 12 (except as set forth in the last sentence thereof) shall only
terminate upon the expiration of the Noncompete Period and (iii) Paragraph 16
shall only terminate upon a Public Offering.
20. MISCELLANEOUS.
(a) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or the interpretation of this
Agreement.
8
<PAGE> 9
(b) The failure of any party to enforce any provision of this Agreement
shall in no manner affect the right to enforce the same, and the waiver by any
party of any breach of any provision of this Agreement shall not be construed to
be a waiver by such party of any succeeding breach of such provision or a waiver
by such party of any breach of any other provision.
(c) All written notices required in this Agreement shall be sent postage
prepaid by certified or registered mail, return receipt requested or by
overnight delivery service against receipt or by overnight delivery service
against receipt.
(d) In the event any one or more of the provisions of this Agreement shall
for any reason be held invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired, and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable valid, and
enforceable provision which comes closest to the intent of the parties.
(e) The prevailing party in any litigation brought to enforce the
provisions contained in this Agreement shall be entitled to reimbursement from
the nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
(f) This Agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which together shall constitute
one and the same instrument.
* * * * *
9
<PAGE> 10
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Employment Agreement as of the day and year first above written.
COMPANY:
ORIUS CORP.
By: /s/ William J. Mercurio
----------------------------
Its: President
---------------------------
EXECUTIVE:
/s/ Joseph P. Powers
-------------------------------
Joseph P. Powers
Address:
17763 Crooked Oak Avenue
Boca Raton, Florida 33487
10
<PAGE> 1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 15th day of
December, 1999 by and between ORIUS CORP., a Florida corporation (the "Company")
and ROBERT AGRES (the "Executive").
Recitals
WHEREAS, Executive has been employed by the Company as its chief financial
officer;
WHEREAS, on the date of this Agreement, the Company will effect a corporate
reorganization (the "Reorganization") pursuant to which the Company will be
recapitalized and combined with LISN Holdings, Inc., an Ohio corporation; and
WHEREAS, in connection with the Reorganization, the Company, through its
Board of Directors, desires to retain the services of Executive, and Executive
desires to be retained by the Company, on the terms and conditions set forth in
this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants of
the parties herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs Executive to serve in the
capacities described herein and Executive hereby accepts such employment and
agrees to perform the services described herein upon the terms and conditions
hereinafter set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement
shall commence on the effective date hereof and shall terminate at the close of
business on December 15, 2001 (the "Term") subject to earlier termination in
accordance with the other terms and conditions set forth herein.
3. DUTIES. Executive shall serve as and have the title of Chief Financial
Officer of the Company. The Executive's principal place of employment shall be
in West Palm Beach, Florida. Executive agrees to devote his full business time,
energy, skills and best efforts to such employment while so employed. Nothing in
this Agreement shall preclude Executive from engaging, so long as, in the
reasonable determination of the Board of Directors, such activities do not
interfere with his duties and responsibilities hereunder, in charitable and
community affairs, from managing any passive investment made by him or from
serving, subject to the prior approval of the Board of
<PAGE> 2
Directors, as a member of the board of directors or as a trustee of any other
corporation, association or entity.
4. COMPENSATION.
(a) Base Compensation. The Company shall pay Executive, and Executive
agrees to accept, base compensation at the rate of $195,000 per year, payable in
equal installments no less frequently than monthly, through the Term of this
Agreement ("Base Compensation"). The Base Compensation specified in this Section
4(a) may be increased annually during the Term of this Agreement in the sole
discretion of the Compensation Committee of the Board of Directors.
5. FRINGE BENEFITS.
(a) Generally. Executive shall be eligible for fringe benefits pursuant to
any insurance, pension or other employee fringe benefit plan approved by the
Board of Directors that now or hereafter may be made available to employees of
the Company and for which Executive will qualify according to his eligibility
under the provisions thereof.
(b) Health and Disability Insurance. Executive shall be entitled to
participate in such health and disability insurance plans that the Company
offers to other executive officers of the Company from time to time.
(c) Vacation, Holidays and Illness. During the Term of this Agreement,
Executive shall be entitled to such number of days off for vacation, holidays,
illness or any other purposes as currently provided to the Executive in
accordance with the Company's past practice and custom.
6. EXPENSES. Except as otherwise agreed to herein, the Executive shall be
reimbursed for all usual expenses incurred on behalf of the Company, in
accordance with Company practices and procedures, provided that:
(a) Each such expenditure is of a nature deductible under Section 162 of
the Internal Revenue Code on the Federal income tax return of the Company as a
business expense and not as deductible compensation to Executive; and
(b) Executive furnishes the Company with adequate documentary evidence
required by the Code or any regulation promulgated thereunder for the
substantiation of such expenditures as a deductible business expense of the
Company and not as deductible compensation to Executive.
Executive agrees that, if at any time, any payment made to Executive by the
Company as a business expense reimbursement shall be disallowed in whole as a
deductible expense to the Company by the appropriate taxing authorities,
Executive shall reimburse the Company to the full extent of such disallowance.
2
<PAGE> 3
7. TERMINATION. The term of Executive's employment under this Agreement
may be terminated prior to expiration of the term provided in Section 2 hereof
only in accordance with the following paragraphs:
(a) For Cause. This Agreement may be immediately terminated by the Company
for Cause (as herein defined). For purposes of this Agreement, the term "Cause"
shall mean the termination of the Executive by the Board of Directors of the
Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) a material breach by the Executive of any provision of this
Agreement, or the willful and continued failure of Executive substantially to
perform his duties under his employment with the Company;
(ii) Executive's willful misconduct in connection with the performance
of his duties as an employee or officer of the Company;
(iii) performance by the Executive of any act of fraud or material
misrepresentation or a material act of misappropriation which results or is
intended to result in Executive's personal enrichment at the expense of the
Company;
(iv) conviction of the Executive of any crime which constitutes a
felony offense involving violence (but not involving a motorized vehicle) or
fraud, embezzlement, theft or business activities;
(v) the entry of a judgment or order enjoining or preventing the
Executive from such activities as are essential for the Executive to perform his
services as required by this Agreement unless such judgment or order is the
subject of an appeal or other proceedings to set it aside or modify it and such
proceedings are timely filed and being pursued with due diligence; or
(vi) Executive has engaged in willful and deliberate conduct or
activities intended to materially damage the business of the Company, it being
understood that neither conduct or activities pursuant to the Executive's
exercise of his good faith business judgment nor unintentional physical damage
to properties by the Executive shall be a ground for such a determination.
(b) Mutual. Executive's employment under this Agreement may be terminated
upon mutual written agreement of the Company and the executive.
(c) Death. In the event of the death of Executive, this Agreement shall
terminate immediately.
(d) Disability. If, during Executive's employment under this Agreement,
Executive shall become permanently disabled and unable to perform his duties as
required herein ("Disability") for
3
<PAGE> 4
a consecutive period of one hundred eighty (180) days, then the Company may,
upon thirty (30) days written notice to Executive, terminate Executive's
employment under this Agreement.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives), Base Compensation through a date which is one (1) year after
the date of Death or the date of termination for Disability as provided in
Paragraph 7(d), respectively.
9. SEVERANCE. In the event of the termination of Executive's employment
under this Agreement for any reason other than Executive's death or Disability,
the Company shall provide the payments and benefits to Executive as indicated
below:
(a) With Cause or Voluntary Termination by Executive. If Executive is
terminated for Cause (as defined in Section 7(a) of this Agreement), or if
Executive voluntarily terminates his employment with the Company for any reason
other than because of the relocation of the Company's executive offices outside
the West Palm Beach, Florida area, the Company shall be obligated only to
continue to pay to Executive his Base Compensation, if any, earned up to the
date of termination and shall reimburse the Executive for any expenses to which
the Executive is due reimbursement by the Company under Section 6 hereof. In
addition, Company shall pay vested benefits, if any, owed to Executive under any
plan provided for Executive under Paragraph 5 hereof in accordance with the
terms of such plan as in effect on the date of termination of employment under
this Paragraph 9(a).
(b) Without Cause. In the event that the Company shall terminate the
Executive without cause (or if Executive voluntarily terminates his employment
with the Company because of the relocation of the Company's executive offices
outside the West Palm Beach, Florida area), the Company shall be obligated to
continue to pay full compensation and benefits to the Executive through and
including December 15, 2001 as if the Executive had not been so terminated.
10. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that
he will have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. For the period of time which is the greater of (i) the third
anniversary of the date hereof or (ii) one year after the Executive is no longer
employed by the Company ("Confidentiality Period"), Executive agrees not to
disclose or use any confidential information, including without limitation,
information regarding research, developments, product designs or specifications,
manufacturing processes, "know-how," prices, suppliers, customers, costs or any
knowledge or information with respect to confidential or trade secrets of the
Company, it being understood that such confidential information does not include
information that is publicly available unless such information became publicly
available as a result of a breach of this Agreement. Executive acknowledges and
agrees that all notes, records, reports, sketches, plans, unpublished memoranda
or other documents belonging to the Company, but held
4
<PAGE> 5
by Executive, concerning any information relating to the Company's business,
whether confidential or not, are the property of the Company and will be
promptly delivered to it upon Executive's leaving the employ of the Company.
Executive also agrees to execute such confidentiality agreements that the Board
may adopt and may modify from time to time, as a standard form to be executed by
all employees of the Company, to the extent such standard forms are not
materially more restrictive than the provisions of this Agreement.
11. NON-SOLICITATION. At all times during the term of this Agreement, and
thereafter during the Noncompete Period (as defined below), Executive shall not,
directly or indirectly, induce, influence, combine or conspire with, or attempt
to induce, influence, combine or conspire with, any of the officers, employees,
agents, consultants, customers or supplies of the Company to terminate their
employment, or other relationship, with or compete against the Company or any
future subsidiaries, parents or affiliates of the Company in the cable industry
(the "Business").
12. NON-COMPETITION. Executive acknowledges that his services and
responsibilities are unique in character and are of particular significance to
the Company, that the Company engages in a competitive business with a national
market and that Executive's continued and exclusive service to the Company under
this Agreement is of a high degree of importance to the Company. Therefore,
subject to the last sentence of this Paragraph 12, for one year after the
Executive is no longer employed by the Company (the "Noncompete Period"),
Executive shall not, directly or indirectly, engage in the Business, or in any
other business which, at the time of Executive's termination, the Company is
actively engaged in, except as an employee or agent of the Company, and shall
not, directly or indirectly, as owner, partner, joint venturer, employee,
broker, agent, corporate officer, principal, licensor, shareholder (unless as
owner of no more than three percent (3%) of the issued and outstanding capital
stock of such entity if such stock is publicly traded) or in any other capacity
whatsoever, engage in or have any connection with any business which is
competitive with the Business, and which operates anywhere in the United States
where the Company is doing or has done business within the prior three (3)
years. In the event Executive is terminated by the Company without Cause prior
to the expiration of the term of this Agreement, the Noncompete Period shall be
modified such that it expires on the date of such involuntary termination.
13. RESTRICTIVE COVENANTS.
(a) If, in any judicial proceedings, a court shall refuse to enforce any
of the covenants included in Paragraphs 10, 11, or 12 hereof, then such
unenforceable covenant shall be amended to relate to such lesser period or
geographical area as shall be enforceable. In the event the Company should bring
any legal action or other proceeding against Executive for enforcement of this
Agreement, the calculation of the Noncompete Period, if any, shall not include
the period of time commencing with the filing of legal action or other
proceeding to enforce this Agreement through the date of final judgment or final
resolution including all appeals, if any, of such legal action or other
proceeding unless the Company is receiving the practical benefits of Paragraphs
10, 11 and 12 during such time.
5
<PAGE> 6
(b) Executive hereby acknowledges that the restrictions on his activity as
contained in this Agreement are required for the Company's reasonable protection
and is a material inducement to the Company to enter into this Agreement.
Executive hereby agrees that in the event of the violation by him of any of the
provisions of this Agreement, the Company will be entitled to institute and
prosecute proceedings at law or in equity to obtain damages with respect to such
violation or to enforce the specific performance of this Agreement by Executive
or to enjoin Executive from engaging in any activity in violation hereof. The
prevailing party in any litigation brought to enforce the restrictive provisions
contained in this Agreement shall be entitled to reimbursement from the
nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
(c) Notwithstanding anything to the contrary contained herein, in the
event that Executive engages in any material conduct prohibited by Paragraphs
10, 11, or 12 hereof for any reason whatsoever, Executive shall not receive any
of the severance benefits he otherwise would be entitled to receive pursuant to
Paragraph 9 hereof.
14. REMEDIES. The Executive acknowledges that the Company would be
irreparably injured by a violation of Paragraphs 10, 11 or 12 and agrees that
the Company shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of Paragraphs 10, 11 or 12 or any other
appropriate remedy, without bond or other security being required. The Executive
understands and acknowledges that his failure to provide services to the Company
in accordance with the terms of this Agreement will result in financial injury
to the Company, and the Company will be entitled to damages for any such failure
arising from reasons entirely or partly within Executive's control.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
the addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Executive: To the address set forth below his signature on the
signature page hereof.
If to the Company:
Orius Corp.
1401 Forum Way, Suite 400
West Palm Beach, Florida 33401
6
<PAGE> 7
16. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the Company and
Executive, and the Company and Executive hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises, understandings or
commitments between the parties hereof.
(b) No future oral statements, promises or commitments with respect to the
subject matter hereof, or other purported modification hereof, shall be binding
upon the parties hereto unless the same is reduced to writing and signed by each
party hereto.
17. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties. Neither party may assign his or its rights
or obligations under this Agreement without the prior written consent of the
other party.
18. TERMINATION. All of the provisions of this Agreement shall terminate
after the expiration of the Term of this Agreement, except that (i) Paragraphs
10 and 11 shall only terminate upon the expiration of the Confidentiality Period
and (ii) Paragraph 12 (except as set forth in the last sentence thereof) shall
only terminate upon the expiration of the Noncompete Period.
19. MISCELLANEOUS.
(a) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or the interpretation of this
Agreement.
(b) The failure of any party to enforce any provision of this Agreement
shall in no manner affect the right to enforce the same, and the waiver by any
party of any breach of any provision of this Agreement shall not be construed to
be a waiver by such party of any succeeding breach of such provision or a waiver
by such party of any breach of any other provision.
(c) All written notices required in this Agreement shall be sent postage
prepaid by certified or registered mail, return receipt requested or by
overnight delivery service against receipt or by overnight delivery service
against receipt.
(d) In the event any one or more of the provisions of this Agreement shall
for any reason be held invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired, and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable valid, and
enforceable provision which comes closest to the intent of the parties.
(e) The prevailing party in any litigation brought to enforce the
provisions contained in this Agreement shall be entitled to reimbursement from
the nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
7
<PAGE> 8
(f) This Agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which together shall constitute
one and the same instrument.
* * * * *
8
<PAGE> 9
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
COMPANY:
ORIUS CORP.
By: /s/ William J. Mercurio
--------------------------------
Its: President
EXECUTIVE:
/s/ Robert Agres
-----------------------------------
Robert Agres
Address:
9934 NW 65th Manor
Parkland, Florida 33076
9
<PAGE> 1
EXHIBIT 10.6
[EXECUTION COPY]
SENIOR MANAGEMENT AGREEMENT
THIS SENIOR MANAGEMENT AGREEMENT (the "Agreement") is made as
of November 8, 1999, between Orius Corp., a Florida corporation (the "Company"),
and William J. Mercurio ("Executive").
WHEREAS, the Company and Executive have entered into an
employment agreement, dated as of February 26, 1999 (the "Prior Agreement");
WHEREAS, the Company has entered into an Agreement and Plan of
Reorganization, dated as of the date of this Agreement, by and among the
Company, LISN Holdings, Inc. ("LISN"), Orius Merger Sub and certain stockholders
of the Company and of LISN named herein (the "Reorganization Agreement"); and
WHEREAS, subject to and effective upon the closing of the
transactions contemplated by the Reorganization Agreement and related agreements
(the "Closing"), the Company and Executive desire to enter into this Agreement
and to replace and supercede the Prior Agreement with this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. Subject to and effective upon the Closing, the
Company shall employ Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the date hereof and ending as provided in Paragraph 6 hereof
(the "Employment Period"). Effective upon the Closing, the Prior Agreement shall
be superceded by this Agreement and shall be of no further force or effect.
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the
Company's President, Chief Executive Officer and Chairman of the board of
directors (the "Board") and shall have the normal duties, responsibilities and
authority of the President, Chief Executive Officer and Chairman of the Board
(including general and active charge of the business and affairs of the Company
and day-to-day operations of the Company and its Subsidiaries), and shall report
to and take direction from the Board.
(b) During the Employment Period, Executive shall report to
the Board and shall devote his best efforts and his full business time and
attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and
<PAGE> 2
its Subsidiaries. Executive shall perform his duties and responsibilities to the
Company and its Subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner. This Paragraph 2(b)
shall not preclude Executive, outside normal business hours, from engaging in
appropriate civic, charitable and like activities and from managing his personal
investment portfolio and, subject to Board approval, engaging in other business
ventures unrelated to the business of the Company. Executive shall perform his
duties in the West Palm Beach, Florida area unless he otherwise consents in
writing, and any requirement by the Company to relocate the Company's executive
offices outside the West Palm Beach, Florida area shall entitle Executive, at
his sole option and upon not less than thirty (30) days notice to the Company,
to terminate the Employment Period for Good Reason pursuant to Paragraph 6(b),
whereupon he shall be entitled to receive the same compensation as if the
Company had terminated the Employment Period without Cause.
(c) For purposes of this Agreement, "Subsidiaries" shall mean
any corporation or other entity of which the securities or other ownership
interests having the voting power to elect a majority of the board of directors
or other governing body are, at the time of determination, owned by the Company,
directly or through one of more Subsidiaries.
3. Compensation and Benefits.
(a) During the Employment Period, Executive's base salary
shall be $470,000 per annum or such increased rate as the Board may designate
from time to time (the "Base Salary"), which salary shall be reviewed at least
annually and be payable in bi-weekly installments in accordance with the
Company's general payroll practices, provided that the Base Salary shall be
adjusted as of each March 1, during the term of this Agreement, beginning March
1, 2000, to reflect the increase, if any, that occurred in the Revised Consumer
Price Index, U.S. City Average (1984 = 100) published by the Bureau of Labor
Statistics of the United States Department of Labor (the "Price Index") (or, if
publication of such Price Index is terminated, any substantially equivalent
successor thereto). Annual adjustments shall be made by determining the
percentage increase in the Price Index over the previous twelve-month period
ending December 31. This percentage shall be applied to the then-existing Base
Salary to determine the dollar amount of the annual Base Salary increase;
provided, however, that if the percentage increase in the Price Index for any
twelve-month period during the Employment Period is less than five percent (5%),
the annual Base Salary shall be increased a minimum of five percent (5%) for
such twelve-month period. Notwithstanding the foregoing, the Board of Directors
may, in its sole discretion, during the term of this Agreement, increase
Executive's Base Salary in an amount greater than his Base Salary would
otherwise be adjusted hereunder. In addition, during the Employment Period,
Executive shall be entitled to participate in all of the Company's employee
benefit programs for which senior executive employees of the Company and its
Subsidiaries are generally eligible. In particular, Section 4 describes that
certain purchase and sale of Executive Shares (as defined below) which shall be
made available to Executive.
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<PAGE> 3
(b) In addition to the Base Salary, the Board shall award a
bonus ("Bonus") to Executive in an amount not to exceed the Executive's Base
Salary following the end of each fiscal year during the Employment Period based
upon the Company's EBITDA performance for each fiscal year, as follows:
<TABLE>
<CAPTION>
EBITDA PERFORMANCE BONUS
- ------------------------------------------------- -----------------------
<S> <C>
Less than: prior fiscal year's EBITDA times 1.125 None
Prior fiscal year's EBITDA times 1.125 50% of Base Salary*
Plan EBITDA 75% of Base Salary**
Equal to or greater than Plan EBITDA times 1.10 100% of Base Salary
</TABLE>
* If the Company achieves EBITDA greater than the EBITDA of the Company
for the prior fiscal year times 1.125 but less than Plan EBITDA, then
Executive shall receive a pro rata portion of the difference between a
Bonus equal to 50% of Base Salary and a Bonus equal to 75% of Base
Salary.
** If the Company achieves EBITDA greater than Plan EBITDA but less than
an amount equal to Plan EBITDA times 1.10, then Executive shall receive
a pro rata portion of the difference between a Bonus equal to 75% of
Base Salary and a Bonus equal to 100% of Base Salary.
Payments under this Paragraph 3(b) shall be made within 14 days after the
receipt of the Company's audited annual financial statements from the Company's
accountants for the applicable year. For purposes of this Agreement, "EBITDA"
with respect to the Company and its Subsidiaries shall mean for any period (A)
net income for such period (before determination of such bonus), plus (B)
interest expense for such period, plus (C) depreciation and amortization expense
for such period, plus (D) tax expense in respect of the income taken into
account in the foregoing clause (A), plus (or minus) (E) extraordinary losses
(or gains) incurred in such period; provided that EBITDA for any fiscal year
shall not take into account any of the foregoing items attributable to
businesses acquired by the Company or its Subsidiaries during such fiscal year
(whether by purchase of assets or stock, merger, consolidation or similar
transaction), but such EBITDA shall be taken into account in determining the
Plan EBITDA and Executive's achievement of Bonus for subsequent fiscal years.
For purposes of this Agreement, "Plan EBITDA" means the EBITDA target mutually
agreed to by the Board and Executive prior to the start of any fiscal year
during the Employment Period. For the fiscal year commencing January 1, 2000 and
ending December 31, 2000, the Executive and Company agree that the Plan EBITDA
is $112,100,000.
(c) In addition to the compensation and benefits described
elsewhere in this Agreement, Executive may, at the sole discretion of the Board
(or any committee thereof), be entitled to receive such additional bonus or
bonuses in such amounts as may be determined by the Board (or any committee
thereof) in its sole discretion.
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<PAGE> 4
(d) In addition to the Base Salary, reimbursement of
expenses and any bonuses payable to Executive pursuant to this Paragraph,
Executive shall be entitled to the following benefits during the Employment
Period, unless otherwise modified by the Board (provided that any such
modification does not materially alter Executive's compensation and benefits
package taken as a whole):
(i) hospitalization insurance, medical insurance and
disability insurance of such coverage as reasonably determined by the
Board (but in no event less than the coverage provided to other
management employees of the Company); provided that all health
insurance and other benefit plans that Executive participated in under
this Paragraph 3 shall continue at the Company's expense for the
benefit of his dependents who were covered under such plans for a
period of one year after Executive's death; and provided further and
Executive shall be entitled to continue such health insurance and other
benefit plans at his expense following termination of his employment
for any reason other than for Cause (as defined) below until Executive
becomes eligible for Medicare.
(ii) disability and life insurance in a principal amount not
less than $1,000,000;
(iii) a minimum of five weeks' paid vacation during each
twelve-month period of this Agreement with full salary and benefits,
provided that Executive shall not take more than three (3) weeks
consecutive of vacation, and provided further that Executive shall be
entitled to carry forward up to two (2) unused vacation weeks from one
twelve-month period to the next;
(iv) reimbursement for all reasonable expenses incurred by
Executive in the course of performing his duties and responsibilities
under this Agreement which are consistent with the Company's policies
in effect from time to time with respect to travel, entertainment and
other business expenses, including, without limitation, reimbursement
of Executive for membership dues in business and professional
organizations and clubs on a basis reasonably consistent with that in
effect between Executive and the Company before the date of this
Agreement, subject in each case to the Company's requirements with
respect to reporting and documentation of such expenses;
(v) reimbursement (up to a maximum of $10,000 per year) for
personal legal expenses incurred by Executive, subject to the Company's
requirements with respect to reporting and documentation of such
expenses;
(vi) reimbursement (up to a maximum of $3,000 per year) for
personal accounting expenses incurred by Executive, subject to the
Company's requirements with respect to reporting and documentation of
such expenses;
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<PAGE> 5
(vii) reimbursement of reasonable moving and relocation
expenses if Executive is required to relocate by the Board and
Executive consents to such relocation, subject to the Company's
requirements with respect to reporting and documentation of such
expenses; and
(viii) an annual automobile allowance in the amount of $9,000,
which allowance (a) may be applied by the Company toward the leasing of
an automobile by the Company for Executive or (b) may be given directly
to Executive to reimburse Executive for (x) the purchase or leasing of
an automobile as the Company and Executive may agree and (y)
reimbursement of Executive for his out-of-pocket expenses of operating
an automobile (including fuel costs).
(e) All amounts payable to Executive as compensation
hereunder shall be subject to customary withholding by the Company.
4. Purchase and Sale of Executive Shares.
(a) As soon as practicable after the adjustments
contemplated by Section 1E of the Reorganization Agreement, Executive will
purchase from the Company, and the Company will sell to Executive a number of
Common Shares (equal to .75% of the number of issued and outstanding Common
Shares of the Company as of the Closing) at a price per Common Share equal to
the Orius Common Value Per Share, as finally determined pursuant to Section 1E
of the Reorganization Agreement. The Company will deliver to Executive the
certificates representing such Executive Shares, and Executive will deliver to
the Company a limited recourse promissory note in form and substance to be
reasonably agreed to by the parties, in the aggregate amount of the purchase
price of the Common Shares purchased pursuant to this Paragraph (the "Note").
Upon the purchase of the Common Shares contemplated by this Paragraph 4,
Executive shall execute and deliver to the Company a pledge agreement with
respect to such Common Shares in a form and substance reasonably satisfactory to
the Executive and the Company.
(b) Within 30 days after Executive purchases any Executive
Shares from the Company, Executive will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code, as
amended, and the regulations promulgated thereunder in the form of Exhibit A
attached hereto.
(c) In connection with the purchase and sale of the
Executive Shares hereunder, Executive represents and warrants to the Company
that:
(i) The Executive Shares to be acquired by Executive
pursuant to this Agreement will be acquired for Executive's own account
and not with a view to, or intention of, distribution thereof in
violation of the Securities Act, or any applicable state securities
laws, and the Executive Shares will not be disposed of in contravention
of the Securities Act or any applicable state securities laws.
-5-
<PAGE> 6
(ii) Executive is an executive officer of the Company, is
sophisticated in financial matters and is able to evaluate the risks
and benefits of the investment in the Executive Shares.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Shares for an indefinite period of time and
Executive understands and acknowledges that because the Executive
Shares have not been registered under the Securities Act they cannot be
sold unless they are subsequently registered under the Securities Act
or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Executive Shares and has had full access to such other information
concerning the Company as he has requested.
(v) This Agreement and each of the other agreements
contemplated hereby constitutes the legal, valid and binding obligation
of Executive, enforceable in accordance with its terms, and the
execution, delivery and performance of this Agreement and such other
agreements by Executive does not and will not conflict with, violate or
cause a breach of any agreement, contract or instrument to which
Executive is a party or any judgment, order or decree to which
Executive is subject, including, without limitation, those agreements
referred to on Exhibit C attached hereto.
(vi) Except as disclosed on Exhibit C hereto, executive is
not a party to or bound by any other employment agreement, noncompete
agreement or confidentiality agreement.
(vii) Executive is and will be at the Effective Time a
resident of the State of Florida.
(d) As an inducement to the Company to issue the Executive
Shares to Executive, and as a condition thereto, Executive acknowledges and
agrees that the issuance of the Executive Shares to Executive shall not entitle
Executive to remain in the employment of the Company or affect the right of the
Company to terminate Executive's employment at any time for any reason.
(e) Vesting of Executive Shares.
(i) Time Vesting Shares. Except as otherwise provided in
(e)(iii) below, fifty percent (50%) of the Executive Shares (the "Time
Vesting Shares") will become vested in accordance with the following
schedule, if and only if as of each such date Executive is still
employed by the Company:
<TABLE>
<CAPTION>
Cumulative Percentage of
Date Executive Shares to be Vested
---- -----------------------------
<S> <C>
First Anniversary of the Closing 25%
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
Second Anniversary of the Closing 50%
Third Anniversary of the Closing 75%
Fourth Anniversary of the Closing 100%
</TABLE>
(ii) Performance-Vesting Shares. Except as otherwise provided
in e(iii) below, fifty percent (50%) of the Executive Shares shall vest
on the fifth anniversary of the Closing so long as the Executive has
remained continuously employed by the Company or its Subsidiaries as of
such date (the "Performance-Vesting Shares"), provided that vesting
will accelerate with respect to twenty-five percent of Executive's
Performance-Vesting Shares on each of the vesting dates set forth in
e(i) above if the Company has achieved the performance target set by
the Board of Directors for the then most recently completed fiscal year
of the Company (it being agreed that the Executive's performance target
for the fiscal year ending December 31, 2000 is the Company's
achievement of EBITDA in the amount of $112,100,000). Notwithstanding
the foregoing, all of the Executive's Performance-Vesting Shares which
have not yet become vested shall vest on the fifth anniversary of the
Closing.
(iii) All Executive Shares which have not become vested shall
become vested immediately (i) upon the sale by Willis Stein & Partners
II, L.P. and Willis Stein & Partners Dutch, L.P. (together, the
"Investor") of one half or more of the Common Shares held as of the
Closing by the Investor (ii) if, prior to an initial public offering of
the Company's Common Shares, a Person or group of Persons (other than
any Person or group of Persons who are stockholders of the Company
immediately after the consummation of the transactions contemplated by
the Reorganization Agreement) has acquired the number of shares
necessary to elect a majority of the Company's Board of Directors, or
(iii) a Change-in-Control. Executive Shares which have become vested
are referred to herein as "Vested Shares," and all other Executive
Shares are referred to herein as "Unvested Shares."
(f) Repurchase Option.
(i) In the event Executive ceases to be employed by the
Company for any reason (the "Termination") all of the Unvested Shares
(whether held by Executive or one or more of Executive's transferees),
will be subject to repurchase, in each case by the Company pursuant to
the terms and conditions set forth in this Section 4 (the "Repurchase
Option").
(ii) In the event of a Termination, the purchase price for
each Unvested Share will be Executive's Original Cost for such
Executive Share.
(iii) The Company or its designee may elect to purchase all or
any portion of the Unvested Shares by delivering written notice (the
"Repurchase Notice") to the Executive within 180 days after the
Termination. The Repurchase Notice will set forth the number of
Unvested Shares to be acquired from the Executive, the aggregate
consideration to be paid for such Unvested Shares and the time and
place for the closing of the transaction.
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<PAGE> 8
(iv) The closing of the purchase of the Executive Shares
pursuant to the Repurchase Option shall take place on the date
designated by the Company in the Repurchase Notice, which date shall
not be more than five days after the delivery of the later of either
such notice to be delivered. The Company will pay for the Executive
Shares to be purchased by it pursuant to the Repurchase Option by first
offsetting amounts outstanding under any bona fide debts owed by
Executive to the Company or its Subsidiaries; upon full repayment of
such bona fide debts, the Company will make payment by a check or wire
transfer of funds in the aggregate amount of the remaining purchase
price for such Executive Shares. The Company and the Investor will be
entitled to receive reasonable and customary representations and
warranties from the sellers regarding such sale and to require all
sellers' signatures be guaranteed.
(v) Notwithstanding anything to the contrary contained in
this Agreement, all repurchases of Executive Shares by the Company
shall be subject to applicable restrictions contained in the Delaware
General Corporation Law, and in the Company's Investor Rights
Agreement. If any such restrictions prohibit the repurchase of
Executive Shares hereunder which the Company is otherwise entitled or
required to make, the Company may make such repurchases as soon as it
is permitted to do so under such restrictions; provided that if, and to
the extent, the Company has not completed such repurchase within one
year after the date of a Termination, the Company's right to repurchase
Executive Shares pursuant to the Repurchase Option hereunder shall
expire.
(vi) The Vested Shares shall not be subject to the Repurchase
Option hereunder, provided that if within the 60 days immediately
following Executive's termination hereunder the Executive fails to pay
in full all amounts owing under the Note, the Vested Shares shall be
subject to the terms and conditions of the Repurchase Option.
(g) Restrictions on Transfer of Executive Shares.
(i) Transfer of Vested Shares. Executive shall not transfer
any Vested Share except in accordance with the Investor Rights
Agreement with respect to Executive's other Shareholder Shares (as
defined in the Investor Rights Agreement).
(ii) Transfer of Unvested Shares. Executive shall not
Transfer any Unvested Shares under any circumstances.
(h) Termination of Restrictions. The restrictions on the
Transfer of Executive Shares set forth in this Section 4 will continue with
respect to each Executive Share until the date on which such Executive Share has
been transferred in a transaction permitted by the Investor Rights Agreement.
(i) Additional Restrictions on Transfer of Executive Shares.
-8-
<PAGE> 9
(i) Legend. The certificates representing the Executive
Shares will bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON _________________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET
FORTH IN A SENIOR MANAGEMENT AGREEMENT BETWEEN THE COMPANY AND AN
EXECUTIVE OF THE COMPANY DATED AS OF NOVEMBER [8], 1999 AND THAT
CERTAIN INVESTOR RIGHTS AGREEMENT, DATED AS OF NOVEMBER [8], 1999, BY
AND AMONG THE COMPANY EXECUTIVE AND OTHER STOCKHOLDERS OF THE COMPANY.
A COPY OF SUCH AGREEMENTS MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(ii) Execution of Other Agreements Acknowledgment. In
connection with Executive's (or a permitted transferee's) Transfer of
Executive Shares in accordance with the terms and conditions contained
in this Agreement, Executive or such permitted transferee shall cause
the prospective transferee to be bound by the then applicable terms and
conditions relating to Common Shares (if any) contained in this
Agreement, the Investor Rights Agreement, and any other agreements
executed by Executive and other holders of Common Shares relating to
such Common Shares in the aggregate, and to execute and deliver to the
Company and the other holders of Common Shares (i) counterparts of the
Investor Rights Agreement and applicable Other Agreements and (ii) an
acknowledgment that such prospective transferee shall be bound by the
provisions of this Agreement relating to equity securities. By the
execution and delivery of this Agreement, and the counterpart signature
page to the Investor Rights Agreement, the Executive acknowledges and
agrees that the Executive Shares are "Shareholder Shares" (as defined
in the Investor Rights Agreement) and that all rights, obligations, and
restrictions which apply to the Shareholder Shares under the Investor
Rights Agreement apply equally to the Executive Shares.
5. Board Membership. With respect to all regular elections
of directors during the Employment Period and in accordance with the terms and
conditions of the Investor Rights Agreement, the Company shall nominate, and use
its reasonable best efforts to cause the election of, Executive to serve as a
member of the Board and as the Board's Chairman. Executive shall have all of the
duties and responsibilities as are commensurate with the position of director of
the Company and shall be entitled to reimbursement of all travel and related
expenses incurred by Executive in
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<PAGE> 10
attending any Board meetings outside the West Palm Beach, Florida area. Upon the
termination of the Employment Period, Executive shall resign as a director of
the Company and any of its Subsidiaries, as the case may be.
6. Term.
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on February 28, 2003; provided that
(i) the Employment Period shall terminate prior to such date immediately upon
Executive's death or disability (as defined below), (ii) the Employment Period
may be terminated by the Company at any time prior to such date for Cause (as
defined below) or without Cause and (iii) the Employment Period may be
terminated by Executive at any time prior to such date with or without Good
Reason. Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive.
(b) (1) If the Employment Period is terminated by the
Company without Cause or by Executive for Good
Reason on or prior to February 28, 2003 (it being
agreed and understood that if the Executive and the
Company do not mutually agree to extend the
Employment Period beyond February 28, 2003 for any
reason that the Employment Period will be deemed to
have expired naturally on February 28, 2003 and
Executive will not be deemed to have been
terminated by the Company without Cause nor shall
Executive be entitled to resign or deemed to have
resigned for Good Reason), the Company shall pay
Executive (x) until the second anniversary of the
date of such termination (the "Severance Period")
his Base Salary payable in regular installments and
(y) a pro rata portion of the Bonus attributable to
the fiscal year that Executive would have earned
had he been employed for the entire fiscal year in
which he is terminated (such fiscal year, the "Year
of Termination") (it being agreed and understood
that "pro rata portion" shall be equal to the
product of (i) a fraction, the numerator of which
is the number of full weeks during which Executive
was employed by the Company during the Year of
Termination prior to such termination, and the
denominator of which is fifty-two and (ii) the
amount of Bonus that Executive would have received
in accordance with Paragraph 3(b) above had
Executive been employed for the entire Year of
Termination, and it being further agreed and
understood that the pro rata portion of the Bonus
as determined in accordance with this Paragraph
6(b)(1)(y) (if any) shall be paid at the time such
Bonus would have been paid had Executive continued
to be employed by the Company for the entire Year
of Termination, as provided in Paragraph 3(b)) (the
"Severance Payments"). Notwithstanding anything
herein to the contrary, in the
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<PAGE> 11
event that the Employment Period expires on
February 28, 2003 in accordance with the terms
hereof, (x) the Company may in its sole discretion
elect to (but in no event shall the Company be
obligated to) make Severance Payments to Executive
for one year following such termination of the
Employment Period (the "Optional Severance Period")
and, in consideration of such Severance Payments,
Executive hereby agrees to be subject to the
restrictions set forth in Paragraph 9 below during
the Optional Severance Period. Executive shall be
entitled to the compensation provided by this
Paragraph 6(b) if and only if Executive has
executed and delivered to the Company the General
Release substantially in form and substance as set
forth in Exhibit B (the "General Release") attached
hereto and only so long as Executive has not
breached the provisions of Paragraphs 7, 8 and 9
hereof.
(2) Executive's employment hereunder may be terminated
by the Corporation for disability. In such event,
Executive shall be paid six months of Base Salary
in regular installments (and Executive will not be
entitled to the Severance Payments), and Executive
shall be entitled to continue participation, at the
Company's expense, in the Company's health
insurance and other benefit plans that Employee
participated in under Paragraph 3 hereof. For
purposes of this Agreement, "disability" is defined
to mean that, as a result of Executive's incapacity
due to physical or mental illness:
(i) Executive shall have been absent from his
duties as an officer of the Company on a
substantially full-time basis for four (4)
consecutive months; and
(ii) Within thirty (30) days after the Company
notifies Executive in writing that it intends
to replace him, Executive shall not have
returned to the performance of his duties as
an officer of the Company on a full-time
basis.
(c) If the Employment Period is terminated by the Company
for Cause, or by Executive without Good Reason or expires and is not renewed
hereunder, Executive shall only be entitled to receive his Base Salary, and any
accrued vacation through the date of termination or expiration.
(d) Except as otherwise expressly provided herein, all of
Executive's rights to salary, bonuses, fringe benefits and other compensation
hereunder which accrue or become payable after the termination or expiration of
the Employment Period shall cease upon such termination or expiration; provided
that following the termination of Executive's employment with the Company
-11-
<PAGE> 12
by the Company without Cause or by Executive for Good Reason, Executive shall
have the health care coverage in the Company's then existing group medical
insurance plan Executive would be entitled to under COBRA for a period required
under applicable law or, if less, the end of the Severance Period, at the
Company's sole cost.
(e) For purposes of this Agreement, "Cause" shall mean (i)
the commission of (A) a crime that (I) is a felony or (II) involves moral
turpitude and has resulted in or is reasonably likely to result in material
economic harm to the Company or (B) any other act or omission with respect to
the Company or any of its Subsidiaries that (I) involves dishonesty, breach of
obligation of loyalty to the Company or fraud and (II) has resulted in or is
reasonably likely to result in material economic harm to the Company; (ii)
chronic drug or alcohol abuse or other repeated misconduct causing the Company
or any of its Subsidiaries material economic harm, (iii) substantial and
repeated failure to perform duties as reasonably directed by the Board which is
not cured to the Board's reasonable satisfaction within 15 days after written
notice thereof to Executive, (iv) gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries or (v) any other material
breach of this Agreement which is not cured to the Board's reasonable
satisfaction within 15 days after written notice thereof to Executive.
(f) For purposes of this Agreement, "Good Reason" shall mean
(i) the relocation of the Company's executive offices outside the West Palm
Beach, Florida area, (ii) the Company's material breach of this Agreement or
(iii) without Executive's express written consent the assignment to Executive of
duties materially inconsistent with Employee's positions with the Company as set
forth in this Agreement (including status, offices, titles and reporting
requirements, authority, duties or responsibilities as contemplated by Paragraph
2(a)).
7. Confidential Information. Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries concerning the business or
affairs of the Company and its Subsidiaries ("Confidential Information") are the
property of the Company and its Subsidiaries. Therefore, Executive agrees that
he shall not disclose to any unauthorized person or use for his own purposes any
Confidential Information without the prior written consent of the Board, unless
and to the extent that the Confidential Information becomes generally known to
and available for use by the public other than as a result of Executive's acts
or omissions or as requested or required by law or court order (provided that
Executive shall notify the Company promptly of such request or requirement so
that the Company may seek an appropriate protective order). Executive shall
deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company and its Subsidiaries which he may then possess or have under his
control.
8. Inventions and Patents. Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all
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<PAGE> 13
similar or related information (whether or not patentable) which relate to the
Company's or any of its Subsidiaries' actual business, research and development
or existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company and its Subsidiaries ("Work
Product") belong to the Company and its Subsidiaries. Executive shall promptly
disclose such Work Product to the Board and, at the Company's expense, perform
all actions reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
9. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid
to Executive hereunder, Executive acknowledges that in the course of his
employment with the Company and its Subsidiaries he has and shall become
familiar with the Company's trade secrets and with other Confidential
Information concerning the Company and its Subsidiaries and that his services
have been and shall be of special, unique and extraordinary value to the Company
and its Subsidiaries. Therefore, Executive agrees that until the later of (i)
such time as the Company ceases to make Severance Payments to Executive in
accordance with the terms and conditions of this Agreement (whether during the
Severance Period or the Optional Severance Period) and (ii) the second
anniversary of the end of the Employment Period if Executive resigns without
Good Reason or is terminated for Cause (the "Noncompete Period"), he shall not
directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries, as such
businesses exist or are in process on the date of the termination or expiration
of the Employment Period, within any geographical area in which the Company or
its Subsidiaries engage at any time during the Employment Period in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 3% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not
directly or indirectly through another entity (i) induce or attempt to induce
any employee of the Company or any Subsidiary to leave the employ of the Company
or such Subsidiary, or in any way interfere with the relationship between the
Company or any Subsidiary and any employee thereof, (ii) hire any person who was
a management or supervisory employee of the Company or any Subsidiary at any
time during the Employment Period or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any statement which is
intended or reasonably calculated to disparage or discredit the Company or its
Subsidiaries).
(c) If, at the time of enforcement of this Paragraph 9, a
court shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing,
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<PAGE> 14
the parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law. Executive
acknowledges that the restrictions contained in this Paragraph 9 are reasonable
and that he has reviewed the provisions of this Agreement with his legal
counsel.
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this Paragraph 9, the Company, in addition
and supplementary to other rights and remedies existing in its favor, shall be
entitled to specific performance and/or injunctive or other equitable relief
from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
In addition, in the event of a breach or violation by Executive of this
Paragraph 9, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
10. Definitions.
"Beneficial Owner" means a beneficial owner within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
"Change in Control" means after an initial public offering of
the Company's common stock, (A) any Person, other than any Person who is a
Beneficial Owner of the Company's securities immediately following the Closing
(an "Existing Owner"), becomes the beneficial owner, directly or indirectly, of
securities of the Company representing the greater of (I) 25% or more of the
combined voting power of the Company's then outstanding securities and (II) the
greatest combined voting power of the Company's securities then held by any
Existing Owner; (B) during any two-year period, individuals who at the beginning
of such period constitute the Board (including, for this purpose, any director
who after the beginning of such period filled a vacancy on the Board caused by
the resignation, mandatory retirement, death, or disability of a director and
whose election or appointment was approved by a vote of at least two-thirds of
the directors then in office who were directors at the beginning of such period)
cease for any reason to constitute a majority thereof; (C) notwithstanding
clauses (A) or (E) of this paragraph, the Company consummates a merger or
consolidation of the Company with or into another corporation, the result of
which is that the Persons who were stockholders of the Company at the time of
the execution of the agreement to merge or consolidate own less than 80% of the
total equity of the corporation surviving or resulting from the merger or
consolidation or of a corporation owning, directly or indirectly, 100% of the
total equity of such surviving or resulting corporation; or (D) the sale in one
or a series of transactions of all or substantially all of the assets of the
Company; (E) any Person has commenced a tender or exchange offer, or entered
into an agreement or received an option to acquire beneficial ownership of 25%
or more of the total number of voting shares of the Company, unless the Board
has made a reasonable good-faith determination that such action does not
constitute and will not constitute a material change in the Persons having
control of the Company; or (F) there is a change of control in the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A
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<PAGE> 15
of Regulation 14A promulgated under the Exchange Act other than in circumstances
specifically covered by clauses (A) through (E) above.
"Common Shares"means shares of Orius Corp.'s common stock, par
value $.01 per share.
"Executive Shares" will continue to be Executive Shares in the
hands of any holder other than Executive (except for the Company and the
Investor and except for transferees in a Public Sale), and except as otherwise
provided herein, each such other holder of Executive Shares will succeed to all
rights and obligations attributable to Executive as a holder of Executive Shares
hereunder. Executive Shares will also include Shares issued with respect to
Executive Shares by way of a Share distribution, Share split or other
recapitalization. Notwithstanding the foregoing, all Unvested Shares shall
remain Unvested Shares after any Transfer thereof.
"Investor Rights Agreement" means that certain agreement dated
the date hereof by and among Orius Corp. and those shareholders listed on the
signature pages attached thereto.
"Original Cost" means with respect to each Common Share
purchased hereunder, the amount paid with respect to each Common Share pursuant
to Section 4 above (as proportionately adjusted for all subsequent Common Share
splits, Common Share dividends and other recapitalizations).
"Person" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Public Sale" means any sale pursuant to a registered public
offering under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Subsidiary" means any corporation of which Holdings owns
securities having a majority of the ordinary voting power in electing the board
of directors directly or through one or more subsidiaries.
"Transfer" means to sell, transfer, assign, pledge or
otherwise dispose of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law).
11. Enforcement. If, at the time of enforcement of Section 7
or 9 of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum duration, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
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<PAGE> 16
the court shall be allowed to revise the restrictions contained herein to cover
the maximum duration, scope and area permitted by law. Because Executive's
services are unique and because Executive has access to Confidential
Information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement. Therefore, in the event a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security).
12. Representations. Each of Executive and the Company hereby
represents and warrants to the other that (i) the execution, delivery and
performance of this Agreement by such party do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which such party is a party or by which he or it is
bound, and (ii) upon the execution and delivery of this Agreement by each of
Executive and the Company, this Agreement shall be the valid and binding
obligation of such party, enforceable in accordance with its terms. Executive
further represents and warrants to the Company that he is not a party to or
bound by any employment agreement, noncompete agreement or confidentiality
agreement with any other person or entity other than the Prior Agreement.
Executive hereby acknowledges and represents that he has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
13. Survival. Paragraphs 3, 4, 6 and 7 through 22 shall
survive and continue in full force in accordance with their terms
notwithstanding the expiration or termination of the Employment Period.
14. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, sent by reputable
overnight courier service or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:
Notices to Executive:
William J. Mercurio
12268 Channel Drive
North Palm Beach, FL 33408
with a copy to:
Hogan & Hartson LLP
Columbia Square
555 Thirteenth St., NW
Washington, D.C. 20004-1109
Attention: William C. Schmidt
-16-
<PAGE> 17
Notices to the Company:
Orius Corp.
1401 Forum Way Suite 400
West Palm Beach, FL 33401
Attn: President
With a copy to:
Willis Stein & Partners
227 West Monroe, Suite 4300
Chicago, Illinois 60606
Attn: Robert C. Froetscher
and
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attn: John A. Weissenbach
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
15. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
16. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
17. No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party.
-17-
<PAGE> 18
18. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
19. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the Company and
their respective heirs, successors and assigns, except that Executive may not
assign his rights or delegate his duties or obligations hereunder without the
prior written consent of the Company.
20. CHOICE OF LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF FLORIDA OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF FLORIDA.
21. Amendment and Waiver. The provisions of this Agreement may
be amended or waived only with the prior written consent of the Company (as
approved by the Board) and Executive, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.
22. Indemnification. Company hereby agrees to indemnify and
hold Executive harmless to the maximum extent permitted by law as designated in
the Company's Certificate of Incorporation, which provision shall not be amended
during the Employment Period without Executive's prior written consent.
* * * * *
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<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this
Senior Management Agreement as of the date first written above.
ORIUS CORP.
By: /s/ JOSEPH P. POWERS
-------------------------------------
Its: Vice President
-------------------------------------
/s/ WILLIAM J. MERCURIO
----------------------------------------
William J. Mercurio
<PAGE> 20
EXHIBIT A
[DATE]
ELECTION TO INCLUDE Shares IN GROSS
INCOME PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned purchased shares of Common Stock, par value
$.01 per share (the "Shares"), of Orius Corp. (the "Company") on November___,
1999. Under certain circumstances, the Company has the right to repurchase
certain of the Shares at cost from the undersigned (or from the holder of the
Shares, if different from the undersigned) should the undersigned cease to be
employed by the Company's subsidiaries or upon certain other events. Hence, the
Shares are subject to a substantial risk of forfeiture and are non-transferable.
The undersigned desires to make an election to have the Shares taxed under the
provision of Code ss.83(b) at the time he purchased the Shares.
Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Shares (described below), to report as taxable income for
calendar year ____ the excess (if any) of the Shares' fair market value on
__________ over purchase price thereof.
The following information is supplied in accordance with
Treasury Regulation ss.1.83-2(e):
1. The name, address and social security number of the
undersigned:
William J. Mercurio
12268 Channel Drive
North Palm Beach, FL 33408
SSN: [ ]
2. A description of the property with respect to which the
election is being made: ________ Common Shares of the Company.
3. The date on which the property was transferred: _________.
The taxable year for which such election is made: calendar ___.
4. The restrictions to which the property is subject: If
during the first four years after _________, the undersigned ceases to be
employed by the Company's subsidiaries, the unvested portion of the Shares will
be subject to repurchase by the Company at cost. 10% of the Shares become vested
on each of the first four anniversary dates of November____, 1999, and another
10%
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<PAGE> 21
of the Shares become vested after each of the first five fiscal years during the
date of the employment period if certain performance criteria of the Company are
achieved.
5. The fair market value on _________ of the property with
respect to which the election is being made, determined without regard to any
lapse restrictions: $___ per Common Share.
6. The amount paid for such property: $___ per Common Share.
A copy of this election has been furnished to the Secretary of
the Company pursuant to Treasury Regulations ss.1.83-2(e)(7).
Dated: _____________________ ____________________________________
William J. Mercurio
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<PAGE> 22
EXHIBIT B
GENERAL RELEASE
I, William J. Mercurio, in consideration of and subject to the
performance by Orius Corp., a Delaware corporation (together with its
subsidiaries, the "Company"), of its material obligations under the Employment
Agreement, dated as of _________, 1999 (the "Agreement"), do hereby release and
forever discharge as of the date hereof the Company and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its direct or indirect owners (collectively, the "Released
Parties") to the extent provided below.
1. I understand that any payments or benefits paid or granted to me under
Paragraph 6(b) of the Agreement represent, in part, consideration for
signing this General Release and are not salary, wages or benefits to
which I was already entitled. I understand and agree that I will not
receive the payments and benefits specified in Paragraph 6(b) of the
Agreement unless I execute this General Release and do not revoke this
General Release within the time period permitted hereafter or breach
this General Release.
2. Except as provided in Paragraphs 4 and 11 below, I knowingly and
voluntarily release and forever discharge the Company and the other
Released Parties from any and all claims, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts,
compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys' fees, or
liabilities of any nature whatsoever in law and in equity, both past
and present (through the date of this General Release) and whether
known or unknown, suspected, or claimed against the Company or any of
the Released Parties which I, my spouse, or any of my heirs, executors,
administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation from, the Company
(including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act
of 1967, as amended (including the Older Workers Benefit Protection
Act); the Equal Pay Act of 1963, as amended; the Americans with
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the
Civil Rights Act of 1866, as amended; the Worker Adjustment Retraining
and Notification Act; the Employee Retirement Income Security Act of
1974; any applicable Executive Order Programs; the Fair Labor Standards
Act; or their state or local counterparts; or under any other federal,
state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company; or any claim for
wrongful discharge, breach of contract, infliction of emotional
distress, defamation; or any claim for costs, fees, or other expenses,
including attorneys' fees incurred in these matters) (all of the
foregoing collectively referred to herein as the "Claims").
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<PAGE> 23
3. I represent that I have made no assignment or transfer of any right,
claim, demand, cause of action, or other matter covered by Paragraph 2
above.
4. This General Release does not waive or release any rights or claims
that I may have (a) under the Age Discrimination in Employment Act of
1967 which arise after the date I execute this General Release or (b)
for benefits to which he may be entitled under any employee plan or
agreement. I acknowledge and agree that my separation from employment
with the Company in compliance with the terms of the Agreement shall
not serve as the basis for any claim or action (including, without
limitation, any claim under the Age Discrimination in Employment Act of
1967).
5. In signing this General Release, I acknowledge and intend that it shall
be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. I expressly consent that this General Release
shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly
limits the effectiveness of a general release of unknown, unsuspected
and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. I acknowledge and agree
that this waiver is an essential and material term of this General
Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I
should bring a Claim seeking damages against the Company, or in the
event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve
as a complete defense to such Claims. I further agree that I am not
aware of any pending charge or complaint of the type described in
Paragraph 2 as of the execution of this General Release.
6. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at
any time to be an admission by the Company, any Released Party or
myself of any improper or unlawful conduct.
7. I agree that I will forfeit all amounts payable by the Company pursuant
to the Agreement if I challenge the validity of this General Release. I
also agree that if I violate this General Release by suing the Company
or the other Released Parties, I will pay all costs and expenses of
defending against the suit incurred by the Released Parties, including
reasonable attorneys' fees, and return all payments received by me
pursuant to the Agreement.
8. I agree that this General Release is confidential and agree not to
disclose any information regarding the terms of this General Release,
except to my immediate family and any tax, legal or other counsel I
have consulted regarding the meaning or effect hereof or as required by
law, and I will instruct each of the foregoing not to disclose the same
to anyone.
9. Any non-disclosure provision in this General Release does not prohibit
or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts
-5-
<PAGE> 24
and circumstances by the Securities and Exchange Commission (SEC), the
National Association of Securities Dealers, Inc. (NASD), any other
self-regulatory organization or governmental entity.
10. I agree to reasonably cooperate with the Company in any internal
investigation or administrative, regulatory, or judicial proceeding. I
understand and agree that my cooperation may include, but not be
limited to, making myself available to the Company upon reasonable
notice for interviews and factual investigations; appearing at the
Company's request to give testimony without requiring service of a
subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents
which are or may come into my possession all at times and on schedules
that are reasonably consistent with my other permitted activities and
commitments. I understand that in the event the Company asks for my
cooperation in accordance with this provision, the Company will
reimburse me solely for reasonable travel expenses, including lodging
and meals, upon my submission of receipts.
11. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect
any rights or claims arising out of any breach by the Company or by any
Released Party of the Agreement.
12. Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under
applicable law, but if any provision of this General Release is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
(a) I HAVE READ IT CAREFULLY;
(b) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED;
(c) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
-6-
<PAGE> 25
(d) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND
I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE
CHOSEN NOT TO DO SO OF MY OWN VOLITION;
(e) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO
CONSIDER IT AND THE CHANGES MADE SINCE THE _______________ __, _____
VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE
REQUIRED 21-DAY PERIOD;
(f) THE CHANGES TO THE AGREEMENT SINCE _______________ ___, _____ EITHER
ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.
(g) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE
TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;
(h) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY
AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT; AND
(i) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED
BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.
DATE: ___________ __, ______ ______________________________
William J. Mercurio
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<PAGE> 26
EXHIBIT B
The Prior Agreement
-8-
<PAGE> 1
EXHIBIT 10.7
[ORIUS CORP. LETTERHEAD]
[ORIUS LOGO]
CONFIDENTIAL MEMORANDUM
TO: Bill Mullen
FROM: Bill Mercurio
VIA: FACSIMILE (314) 272-2022
SUBJECT: CATV Group President - Revised
DATE: September 24, 1999
- --------------------------------------------------------------------------------
In connection with our recent conversation regarding your appointment as
President of the CATV Group, I would like to clarify the following points:
1. Salary - $200,000 per year with an increase to $225,000 six (6)
months after the effective date of your appointment.
2. Bonus - Based on the CATV group's results for the year 2000. The
Incentive Plan is attached to this memorandum. (The CATV group's
budget will be finalized within sixty (60) days.)
3. Employment Agreement
(A) Extend Agreement through June 30, 2002
(B) Existing Employment Agreement provision regarding
forfeiture of shares issued in acquisition will
terminate on June 30, 2001, and therefore are not
subject to the extension indicated in (A) above,
(C) Shares purchased for cash in February 1999 (at $24.20
per share - before splits) are not subject to the
forfeiture provision indicated above,
(D) Upon expiration of the Extended Employment Agreement,
you have the option to remain on the Company's group
plan for twelve (12) years, providing you reimburse the
Company for 50% of the cost.
<PAGE> 2
CATV Group President
September 24, 1999
Page 2 of 2 Pages
4. Stock Option Plan - effective with the date of your appointment
you will be granted an option to purchase 50,000 shares of Orius
Corp. Common Stock at $14.09 per share. In addition, at the first
and second anniversary of your employment (2000 and 2001) you will
be granted additional options at the prevailing market price at
that time. However, each grant will not be less than 15,000
shares.
5. Responsibilities - You will be responsible for all the operations
of the CATV Group including management of resources,
administration including systems, preparation of business plans,
marketing, and execution of our operational integration process as
required. In addition, you will report directly to Joe Powers.
6. Relocation - It is expected that you will be relocated to the
Corporate Headquarters within ninety (90) days. The Company will
reimburse you for reasonable relocation expenses in accordance
with Company policy.
7. Other - It is understood that all of the above is subject to
approval by the Compensation Committee of the Board of Directors.
If this does not accurately reflect our discussion, please contact me
immediately for clarification. I appreciated your willingness to accept a very
significant role at Orius, which will further assist our Company to achieve its
strategic goals.
/rd
<PAGE> 3
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") dated as of June 30, 1998 is entered into
by and between U.S. CABLE INC., a Wisconsin corporation (the "Company"), and
WILLIAM G. MULLEN (the "Executive").
Recitals
The Company, through it's Board of Directors, desires to retain the
services of Executive, and Executive desires to be retained by the Company, on
the terms and conditions set forth in this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants
of the parties herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. EMPLOYMENT. The company hereby employs Executive to serve in the capacities
described herein and Executive hereby accepts such employment and agrees to
perform the services described herein upon the terms and conditions hereinafter
set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement shall
commence on the date hereof and shall terminate at the close of business on
June 29, 2001, subject to earlier termination in accordance with the other terms
and conditions set forth herein.
3. DUTIES. Executive shall serve as and have the title of President of the
Company. The Executive's principal place of employment shall be in O'Fallon,
Missouri. Executive agrees to devote his full business time, energy, skills and
best efforts to such employment while so employed. Nothing in this Agreement
shall preclude Executive from engaging, so long as, in the reasonable
determination of the Board of Directors, such activities do not interfere with
his duties and responsibilities hereunder, in charitable and community affairs,
from managing any passive investment made by him or from serving, subject to the
prior approval of the Board of Directors, as a member of the board of directors
or as a trustee of any other corporation, association or entity.
4. COMPENSATION.
(a) Base Compensation. The Company shall pay Executive, and Executive
agrees to accept, base compensation at the rate of $140,000.00 (One Hundred
Forty Thousand) per year, payable in equal installments no less frequently than
monthly, through the term of this Agreement ("Base Compensation"). The Base
Compensation specified in this Section 4(a) may be increased annually during the
term of this Agreement in the sole discretion of the Compensation Committee of
the Board of Directors.
<PAGE> 4
5. FRINGE BENEFITS.
(a) Generally. The Company is a wholly-owned subsidiary of its parent
corporation (the "Parent"). Executive shall be eligible for fringe benefits
pursuant to any insurance, pension or other employee fringe benefit plan
approved by the Board of Directors of the Parent that now or hereafter may be
made available to employees of the Parent and/or its subsidiaries and for which
Executive will qualify according to his eligibility under the provisions
thereof. The Parent will adopt a bonus plan for the senior executives of each of
its subsidiaries. The Executive shall be entitled to participate in such bonus
plan.
(b) Health and Disability Insurance. Executive shall be entitled to
participate in health and disability insurance plans that the Company offers to
other executive officers of the Company from time to time. The Company shall
offer such programs as are reasonable for comparably sized businesses.
(c) Vacation Holidays and Illness. During the term of this Agreement.
Executive shall be entitled to days off for vacation (not less than four (4)
weeks per year). holidays, illness or where appropriate purposes.
(d) Other Benefits. During the term of his employment by the Company,
Executive shall be provided with the full-time use of a motor vehicle selected
by the Company's Board of Directors but at least comparable to the motor vehicle
used by Executive as of the date of this Agreement, and the Company shall pay
all reasonable operating expenses associated therewith.
6. EXPENSES. Except as otherwise agreed to herein, the Executive shall be
reimbursed for all usual expenses incurred on behalf of the Company, in
accordance with Company practices and procedures, provided that:
(a) Each such expenditure is of a nature deductible under Section 162
of the Internal Revenue Code on the Federal income tax return of the Company as
a business expense and not as deductible compensation to Executive; and
(b) Executive furnishes the Company with adequate documentary evidence
required by the Code or any regulation promulgated thereunder for the
substantiation of such expenditures as a deductible business expense of the
Company and not as deductible compensation to Executive.
Executive agrees that, if at any time, any payment made to Executive by the
Company as a business expense reimbursement shall be disallowed in whole as a
deductible expense to the Company by the appropriate wing authorities, Executive
shall reimburse the Company to the fall extent of such disallowance. This
paragraph shall not apply to the fringe benefits set forth in Sections 5(a) -
5(d) hereof.
2
<PAGE> 5
7. TERMINATION. The term of Executive's employment under this Agreement may be
terminated prior to expiration of the term provided in Section 2 hereof only in
accordance with the following paragraphs.
(a) For Cause. This Agreement may be immediately terminated by the
Company for Cause (as herein defined). For purposes of this Agreement. the term
"Cause" shall mean the termination of the Executive by the Board of Directors of
the Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) a material breach by the Executive of any provision of this
Agreement, or the willful and continued failure of Executive to perform his
duties under his employment with the Company; if such breach or failure to
perform is capable of cure. Executive shall be give notice and such breach or
failure to perform shall not be deemed a basis for Cause if cured within 48
hours after written notice is received by Executive specifying the alleged
breach or failure to perform in reasonable detail;
(ii) Executive's willful misconduct in connection with the
performance of his duties as an employee or officer of the Company;
(iii) performance by the Executive of any act of fraud or material
misrepresentation or a material act of misappropriation which results or is
intended to result in Executive's personal enrichment at the expense of the
Company;
(iv) conviction of the Executive of any crime which constitutes; a
felony offense involving violence (but not involving a motorized vehicle) or
fraud, embezzlement, theft or business activities;
(v) the entry of a judgment or order enjoining or preventing the
Executive from such activities as are essential for the Executive to perform his
services as required by this Agreement unless such judgment or order is the
subject of an appeal or other proceedings to set it aside or modify it and such
proceedings are timely filed and being pursued with due diligence; or
(vi) Executive has engaged in willful and deliberate conduct or
activities intended to materially damage the business of the Company, it being
understood that neither conduct or activities pursuant to the Executive's
exercise of his good faith business judgment nor unintentional physical damage
to properties by the Executive shall be a ground for such a determination.
(b) Mutual. Executive's employment under this Agreement may be
terminated upon mutual written agreement of the Company and the executive.
(c) Death. In the event of the death of Executive, this Agreement shall
terminate immediately.
(d) Disability. If, during Executive's employment under this Agreement,
Executive shall become permanently disabled and unable to perform his duties as
required herein
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<PAGE> 6
("Disability") for a consecutive period of one hundred eighty (180) days, then
the Company, upon thirty (30) days written notice to Executive, terminate
Executive's employment under this Agreement.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives). Base Compensation through a date which is one (1) year after
the date of termination for Disability as provided in Paragraph 7(d),
respectively.
9. SEVERANCE. In the event of the termination of Executive's employment under
this Agreement for any reason other than Executive's death or Disability, the
Company shall provide the payments and benefits to Executive as indicated below:
(a) With Cause or Voluntary Termination by Executive. If Executive is
terminated for Cause (as defined in Section 7(a) of this Agreement), or if
Executive voluntarily terminates his employment with the Company, the Company
shall be obligated only to continue to pay to Executive his Base Compensation,
if any, earned up to the date of termination and shall reimburse the Executive
for any expenses to which the Executive is due reimbursement by the Company
under Section 6 hereof. In addition, Company shall pay vested benefits, if any,
owed to Executive under any plan provided for Executive under Paragraph 5
hereof in accordance with the terms of such plan as in effect on the date of
termination of employment under this Paragraph 9(a).
(b) Without Cause. In the event that the Company shall terminate the
Executive without cause, the Company shall be obligated to continue to pay full
compensation and benefits to the Executive through and including June 29, 2001
as if the Executive had not been so terminated.
10. CONFIDENTIAL INFORMATION. Executive recognized and acknowledges that he
will have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. For the period of time which is the greater of (i) the fourth
anniversary of the date hereof or (ii) one year after the Executive is no
longer employed by the Company ("Confidentiality Period"), Executive agrees not
to disclose or use any confidential information, including without limitation,
information regarding research, suppliers, customers, costs or any knowledge or
information with respect to confidential or trade secrets of the Company, it
being understood that such confidential information dos not include information
that is publicly available unless such information became publicly available as
a result of a breach of this Agreement. Executive acknowledges and agrees that
all notes, records, reports, sketches, plans unpublished memoranda or other
documents belonging to the Company, but held by Executive, concerning any
information relating to the Company's business, whether confidential or not,
are the property of the Company and will be promptly delivered to ut upon
Executive's leaving the employ of the Company. Executive also agrees to execute
such confidentiality agreements that the Board may adopt, and may modify from
time to time as a
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standard form to be executed by all employees of the Company, to the extent
such standard forms are not materially more restrictive than the provisions of
this Agreement.
11. NON-SOLICITATION. At all times during the term of this Agreement, and
thereafter during his period of non-competition, Executive shall not,
directly or indirectly, induce, influence, combine or conspire with, or attempt
to induce, influence, combine or conspire with any of the offices, employees,
agents, consultants, customers or supplies of the Company to terminate their
employment, or other relationship, with or compete against the Company or any
present or future subsidiaries, parents or affiliates of the Company in the
cable industry (the "Business").
12. NON-COMPETITION. Executive acknowledges that his services and
responsibilities are unique in character and are of particular significance to
the Company, that the Company engages in a competitive business with a national
market and that Executive's continued and exclusive service to the Company
under this Agreement is of a high degree of importance to the Company.
Therefore, for the period of time which is the greater of (i) the fourth
anniversary of the date hereof or (ii) one year after the Executive is no
longer employed by the Company (the "Noncompete Period"), Executive shall not,
directly or indirectly, engage in the Business, or in any other business which,
at the time of Executive's termination, the Company or any of its subsidiaries,
parents or affiliates is actively engaged in, except as an employee or agent of
the Company, and shall not, directly or indirectly, as owner, partner, joint
venturer, employee, broker, agent, corporate officer, principal, licensor,
shareholder (unless as owner of no more than three percent (3%) of the issued
and outstanding capital stock of such entity if such stock is publicly traded)
or in any other capacity whatsoever, engage in or have any connection with any
business which is competitive with the Business, and which operates anywhere in
the United States where the Company or any of its subsidiaries, parents or
affiliates is doing or has done business within the prior three (3) years. The
provisions of this Paragraph 12 shall not apply if Executive is terminated
without cause pursuant to Paragraph 9(b) hereof.
13. RESTRICTIVE COVENANTS.
(a) If, in any judicial proceedings, a court shall refuse to
enforce any of the covenants included in Paragraphs 10, 11, 94 12 hereof, then
such unenforceable covenant shall be amended to relate to such lesser period or
geographical area as shall be enforceable. In the event the Company should
bring any legal action or other proceeding against Executive for enforcement of
this Agreement, the calculation of the Noncompete Period, if any, shall not
include the period of time commencing with the filing of legal action or other
proceeding to enforce this Agreement through the date of final resolution
including all appeals, if any, of such legal action or other proceeding unless
the Company is receiving the practical benefits of Paragraph 12 during such
time.
(b) Executive hereby acknowledges that the restrictions on his
activity as contained in this Agreement are required for the Company's
reasonable protection and is a material inducement to the company to enter into
this Agreement. Executive hereby agrees that in the event of the violation by
him of any of the provisions of this Agreement, the Company will be entitled to
institute and prosecute proceedings at law or in equity to obtain damages with
respect to such violation or to enforce the specific performance of this
Agreement by Executive
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<PAGE> 8
or to enjoin Executive from engaging in any activity in violation hereof. The
prevailing party in any litigation brought to enforce the restrictive
provisions contained in this Agreement shall be entitled to reimbursement from
the nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation. The existence of any claim or cause of action
by Executive against the Company predicated on this Agreement shall not
constitute a defense to the enforcement by the Company of these covenants.
(c) Notwithstanding anything to the contrary contained herein, in
the event that Executive engages in any conduct prohibited by Paragraphs 10,
11, or 12 hereof for any reason whatsoever, Executive shall not receive any of
the severance benefits he otherwise would be entitled to receive pursuant to
Paragraph 9 hereof.
14. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by registered mail to the
addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Executive: To the address set forth below his signature on this
signature page hereof.
If to the Company:
U.S. Cable Inc.
c/o North American Tel-Com Group, Inc.
1401 Forum Way, Suite 400
West Palm Beach, FL 33401
15. REPURCHASE PROVISIONS
(a) Prior to a Qualified Public Offering (as that term is defined in
that certain Stockholders Agreement of Parent dated as of March 31, 1998), in
the event the Executive is either terminated for Cause (as defined in Section
7(a) of this Agreement) or resigns from employment with the Company
("Repurchase Termination"), all of the Executive's shares of Common stock of
Parent, whether held by Executive or transferred by Executive to one or more
transferees (collectively, the "Executive Stock"), shall be subject to
repurchase by Parent as set forth in this Paragraph 15 (the "Repurchase
Option").
(b) Following any Repurchase Termination Parent shall have the right,
but not the obligation, to purchase all, but not less than all, of the
Executive Stock for the book value of such securities.
(c) The Board of Directors of Parent may elect to exercise the
Repurchase Option by delivering written notice (the "Repurchase Notice") to the
holder or holders of such stock within forty-five (45) days after the date
of the Repurchase Termination. The Repurchase Notice will set forth the number
of shares of the Executive Stock to be acquired from each holder, the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction.
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<PAGE> 9
(d) The closing of the purchase of the Executive Stock pursuant to
the Repurchase Option shall take place on the date designated by Parent in the
Repurchase Notice, which date shall not be more than forty-five (45) days nor
less than two (2) business days after the delivery of the Repurchase Notice.
Parent shall pay for the Executive Stock to be purchased pursuant to the
Repurchase Option by delivery of (i) a check or wire transfer of funds, (ii) a
subordinated note or notes payable prior to the first anniversary of the
closing of such purchase and bearing interest at a rate per annum equal to the
prime rate of interest as announced by Citibank, N.A., or (iii) both (i) and
(ii), in the aggregate amount of the purchase price for such shares; provided
that Parent shall use reasonable efforts to make all such repurchases with a
check or wire transfer of funds unless prohibited by law or by its lenders (in
writing). Any notes issued by Parent pursuant to this Paragraph 15(d) shall be
subject to any restrictive covenants to which Parent is subject at the time of
such purchase Parent shall be entitled to receive customary representations
and warranties as to title from the sellers regarding such sale and to require
all sellers' signatures be guaranteed. Parent may elect to assign its right tot
purchase to the stockholders of parent (which rights to purchase shall be
distributed pro rata to all stockholders (other than the Executive), based upon
the number of votes held by such stockholders). In the event Parent elects to
assign its rights to the other stockholders of Parent (other than the
Executive) such other stockholders shall have the same right as Parent to
purchase stock pursuant to the Repurchase Notice.
(e) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of the Executive Stock by Parent hereunder shall be
subject to applicable restrictions contained in the Florida Business Corporation
Act and in Parent's and is Subsidiaries' debt and equity financing agreements.
if any such restrictions prohibit the repurchase of the Executive Stock
hereunder which Parent is otherwise entitled or required to make, Parent make
such repurchases as soon as it is permitted to do so under such
restrictions, but in any event within 180 days of the Repurchase Termination.
(f) Notwithstanding anything to the contrary contained in this
Agreement, Parent's right to repurchase the Executive Stock shall terminate
upon the consummation of Qualified Public Offering.
16. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the Company and
Executive, and the Company and Executive hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises, understandings
or commitments between the parties hereof.
(b) No future oral statements, promises or commitments with respect
to the subject matter hereof, or other purported modification hereof, shall be
binding upon the parties hereto unless the same is reduced to writing and signed
by each party hereto.
17. ASSIGNMENT. The rights and obligations of the parties under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the parties. Neither party may assign his or its rights or
obligations under this Agreement without the prior written consent of the other
party.
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<PAGE> 10
18. TERMINATION. All of the provisions of this Agreement shall terminate after
the expiration of the Term of this Agreement, except that (i) Paragraphs 10 and
11 shall only terminate upon the expiration of the Confidentiality Period (ii)
Paragraph 12 (except as set forth in the last sentence thereof) shall only
terminate upon the expiration of the Noncompete Period and (iii) Paragraph 16
shall only terminate upon a Qualified Public Offering.
19. MISCELLANEOUS.
(a) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or the interpretation of this
Agreement.
(b) The failure of any party to enforce any provision of this
Agreement shall in no manner affect the right to enforce the same, and the
waiver by any party of any breach of any provision of this Agreement shall not
be construed to be a waiver by such party of any succeeding breach of such
provision or a waiver by such party of any breach of any other provision.
(c) All written notices required in this Agreement shall be sent
postage prepaid by certified or registered mail, return receipt requested or by
overnight delivery service against receipt or by overnight delivery service
against receipt.
(d) In the event any one or more of the provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, and enforceable provision which comes closet to the intent of the
parties.
(e) The prevailing party in any litigation brought to enforce the
provisions contained in this Agreement shall be entitled to reimbursement from
the nonprevailing party for reasonable attorney's fees and expenses incurred in
connection with such litigation.
(f) This Agreement may be executed in any number of counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument.
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<PAGE> 11
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
U.S. CABLE INC.
By: /s/ KENNETH CHILDRESS
-------------------------
Its: Secretary/Treasurer
EXECUTIVE
/s/ WILLIAM G. MULLEN
-----------------------------
William G. Mullen
Address:
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<PAGE> 1
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made as of May 28, 1999, between LISN, Inc.,
an Ohio corporation (the "Company"), and Donald J. Vanke ("Executive").
The execution and delivery of this Agreement by the Company
and Executive are mutual conditions to the recapitalization of the Company and
its affiliates pursuant to a Recapitalization Agreement of even date herewith
between the Company, LISN Holdings, Inc., Arion, Inc., Willis Stein & Partners
II, L.P., Willis Stein & Partners Dutch, L.P., Executive, Donald L. Sanneman,
James S. Hivnor, the Donald J. Vanke Revocable Electing Small Business Trust
(dated December 25, 1998) and the James S. Hivnor Revocable Electing Small
Business Trust (dated December 25, 1998) (the "Recapitalization Agreement").
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the date
hereof and ending as provided in Paragraph 5 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the
President and Chief Executive Officer of the Company and shall have the normal
duties, responsibilities and authority of the President and Chief Executive
Officer, and shall report to and take direction from the Company's board of
directors (the "Board").
(b) During the Employment Period, Executive shall report to
the Board and shall devote his best efforts and his full business time and
attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties and responsibilities to the
Company and its Subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner. This Paragraph 2(b)
shall not preclude Executive, outside normal business hours, from engaging in
appropriate civic, charitable and like activities and from managing his personal
investment portfolio and, subject to Board approval, engaging in other business
ventures unrelated to the business of the Company. Executive shall perform his
duties in the Cleveland/Lorain, Ohio area unless he otherwise consents in
writing, and any requirement by the Company to relocate the Company's executive
offices outside the Cleveland/Lorain, Ohio area shall entitle Executive, at his
sole option and upon not less than thirty (30) days notice to the Company, to
terminate the Employment Period for Good Reason pursuant to Paragraph 5(b),
whereupon he shall be entitled to
<PAGE> 2
receive the same compensation as if the Company had terminated the Employment
Period without Cause.
(c) For purposes of this Agreement, "Subsidiaries" shall mean
any corporation or other entity of which the securities or other ownership
interests having the voting power to elect a majority of the board of directors
or other governing body are, at the time of determination, owned by the Company,
directly or through one of more Subsidiaries.
3. Compensation and Benefits.
(a) During the Employment Period, Executive's base salary
shall be $300,000 per annum or such increased rate as the Board may designate
from time to time (the "Base Salary"), which salary shall be reviewed at least
annually and be payable in weekly installments in accordance with the Company's
general payroll practices. In addition, during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company and its
Subsidiaries are generally eligible.
(b) In addition to the Base Salary, the Board shall award a
bonus to Executive equal to 100% of Executive's Base Salary following the end of
each fiscal year during the Employment Period based upon: (i) for the fiscal
year ending December 31, 1999, the achievement by the Company of EBITDA of at
least $25,600,000 for the fiscal year ending December 31, 1999 and (ii) for
fiscal years ending after December 31, 1999, the achievement by the Company of
EBITDA targets mutually agreed to by the Board and Executive prior to the start
of such fiscal year. Payments under this Paragraph 3(b) shall be made within 14
days after the receipt of the Company's audited annual financial statements from
the Company's accountants for the applicable year. For purposes of this
Agreement, "EBITDA" with respect to the Company and its Subsidiaries shall mean
for any period (A) net income for such period (before determination of such
bonus), plus (B) interest expense for such period, plus (C) depreciation and
amortization expense for such period, plus (D) tax expense in respect of the
income taken into account in the foregoing clause (A), plus (or minus) (E)
extraordinary losses (or gains) incurred in such period; provided that EBITDA
shall not take into account any of the foregoing items attributable to
businesses acquired by the Company or its Subsidiaries after the date hereof
(whether by purchase of assets or stock, merger, consolidation or similar
transaction).
(c) In addition to the compensation and benefits described
elsewhere in this Agreement, Executive may, at the sole discretion of the Board
(or any committee thereof), be entitled to receive such bonus or bonuses in such
amounts as may be determined by the Board (or any committee thereof) in its sole
discretion.
(d) In addition to the Base Salary, reimbursement of expenses
and any bonuses payable to Executive pursuant to this Paragraph, Executive shall
be entitled to the following benefits during the Employment Period, unless
otherwise modified by the Board (provided that any such
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<PAGE> 3
modification does not materially alter Executive's compensation and benefits
package taken as a whole):
(i) hospitalization insurance, medical insurance and
disability insurance of such coverage as reasonably determined by the
Board (but in no event less than the coverage provided to other
management employees of the Company) and reimbursement (up to a maximum
of $10,000 per year) for medical and dental expenses incurred by
Executive and his spouse and dependants and not otherwise covered by
such insurance;
(ii) term life insurance in a principal amount equal to
Executive's Base Salary;
(iii) reimbursement (up to a maximum of $10,000 per year) for
the cost of an annual physical examination by a physician of
Executive's choice, subject to the Company's requirements with respect
to reporting and documentation of such expenses;
(iv) a maximum of six weeks vacation each year with full
salary and benefits which vacation if not taken in any one year may not
be carried forward into subsequent years;
(v) reimbursement for all reasonable expenses incurred by
Executive in the course of performing his duties and responsibilities
under this Agreement which are consistent with the Company's policies
in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company's requirements with
respect to reporting and documentation of such expenses;
(vi) reimbursement (up to a maximum of $10,000 per year) for
personal legal expenses incurred by Executive, subject to the Company's
requirements with respect to reporting and documentation of such
expenses;
(vii) reimbursement (up to a maximum of $3,000 per year) for
personal accounting expenses incurred by Executive, subject to the
Company's requirements with respect to reporting and documentation of
such expenses;
(viii) reimbursement of reasonable moving and relocation
expenses if Executive is required to relocate by the Board and
Executive consents to such relocation, subject to the Company's
requirements with respect to reporting and documentation of such
expenses; and
(ix) use of an automobile owned or leased by the Company
comparable to the automobile used by Executive as of the date of this
Agreement together with payment of all reasonable expenses incurred in
its operation, subject to the Company's requirements with respect to
reporting and documentation of such expenses and subject to
reimbursement by Executive (through payroll deduction) of Company for
personal use of such vehicle at the rate of $200 per month.
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<PAGE> 4
(e) All amounts payable to Executive as compensation
hereunder shall be subject to customary withholding by the Company.
4. Board Membership. With respect to all regular elections of
directors during the Employment Period, the Company shall nominate, and use its
reasonable best efforts to cause the election of, Executive to serve as a member
of the Board. Executive shall have all of the duties and responsibilities as are
commensurate with the position of director of the Company and shall be entitled
to reimbursement of all travel and related expenses incurred by Executive in
attending any Board meetings outside the Cleveland/Lorain, Ohio area. Upon the
termination of the Employment Period, Executive shall resign as a director of
the Company and its Subsidiaries, as the case may be.
5. Term.
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on May 27, 2001; provided that (i)
the Employment Period shall terminate prior to such date immediately upon
Executive's death or permanent mental or physical disability or incapacity (as
determined by the Board in its good faith judgment), (ii) the Employment Period
may be terminated by the Company at any time prior to such date for Cause (as
defined below) or without Cause and (iii) the Employment Period may be
terminated by Executive at any time prior to such date with or without Good
Reason. Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive.
(b) If the Employment Period is terminated by the Company
without Cause or by Executive for Good Reason prior to the second anniversary of
the date of this Agreement, Executive shall be entitled to continue to receive
his Base Salary payable in regular installments and all bonuses earned under
Paragraph 3(b) (the "Severance Payments") from the date of termination through
the longer of six months from the date of termination and the second anniversary
of this Agreement (the "Severance Period"). Notwithstanding anything herein to
the contrary, Executive shall be entitled to the compensation provided by this
Paragraph 5(b) if and only if Executive has executed and delivered to the
Company the General Release substantially in form and substance as set forth in
Exhibit A (the "General Release") attached hereto and only so long as Executive
has not breached the provisions of Paragraphs 6, 7 and 8 hereof.
(c) If the Employment Period is terminated by the Company for
Cause, by Executive without Good Reason or is terminated pursuant to Paragraph
5(a)(i) above or expires and is not renewed hereunder, Executive shall only be
entitled to receive his Base Salary and any accrued vacation through the date of
termination or expiration.
(d) Except as otherwise expressly provided herein, all of
Executive's rights to salary, bonuses, fringe benefits and other compensation
hereunder which accrue or become payable after the termination or expiration of
the Employment Period shall cease upon such termination or expiration; provided
that following the termination of Executive's employment with the Company
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<PAGE> 5
by the Company without Cause or by Executive for Good Reason, Executive shall
have the health care coverage in the Company's then existing group medical
insurance plan Executive would be entitled to under COBRA for a period required
under applicable law or, if less, the end of the Severance Period, at the
Company's sole cost.
(e) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony or other crime involving moral turpitude or the
commission of any other act or omission involving dishonesty, disloyalty or
fraud with respect to the Company or any of its Subsidiaries (as determined by a
two-thirds vote of the disinterested members of the Board in good faith), (ii)
chronic drug or alcohol abuse or other repeated conduct causing the Company or
any of its Subsidiaries substantial public disgrace or disrepute or economic
harm, (iii) substantial and repeated failure to perform duties as reasonably
directed by the Board which is not cured to the Board's reasonable satisfaction
within 15 days after written notice thereof to Executive, (iv) gross negligence
or willful misconduct with respect to the Company or any of its Subsidiaries or
(v) any other material breach of this Agreement which is not cured to the
Board's reasonable satisfaction within 15 days after written notice thereof to
Executive.
(f) For purposes of this Agreement, "Good Reason" shall mean
(i) the relocation of the Company's executive offices outside the
Cleveland/Lorain, Ohio area or (ii) the Company's material breach of Paragraphs
3 or 4 of this Agreement.
6. Confidential Information. Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries concerning the business or
affairs of the Company and its Subsidiaries ("Confidential Information") are the
property of the Company and its Subsidiaries. Therefore, Executive agrees that
he shall not disclose to any unauthorized person or use for his own purposes any
Confidential Information without the prior written consent of the Board, unless
and to the extent that the Confidential Information becomes generally known to
and available for use by the public other than as a result of Executive's acts
or omissions or as requested or required by law or court order (provided that
Executive shall notify the Company promptly of such request or requirement so
that the Company may seek an appropriate protective order). Executive shall
deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company and its Subsidiaries which he may then possess or have under his
control.
7. Inventions and Patents. Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company's or any of its Subsidiaries' actual
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and its Subsidiaries ("Work Product") belong to the Company and its
Subsidiaries. Executive shall
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<PAGE> 6
promptly disclose such Work Product to the Board and, at the Company's expense,
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).
8. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company and its Subsidiaries he has and shall become familiar with the
Company's trade secrets and with other Confidential Information concerning the
Company and its Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
Therefore, Executive agrees that, during the Employment Period and for two years
thereafter (the "Noncompete Period"), he shall not directly or indirectly own
any interest in, manage, control, participate in, consult with, render services
for, or in any manner engage in any business competing with the businesses of
the Company or its Subsidiaries, as such businesses exist or are in process on
the date of the termination or expiration of the Employment Period, within any
geographical area in which the Company or its Subsidiaries engage or plan to
engage at any time during the Employment Period in such businesses, so long as
the Company makes the Severance Payments in accordance with Paragraph 5(b).
Nothing herein shall prohibit Executive from being a passive owner of not more
than 2% of the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of such
corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to induce any
employee of the Company or any Subsidiary to leave the employ of the Company or
such Subsidiary, or in any way interfere with the relationship between the
Company or any Subsidiary and any employee thereof, (ii) hire any person who was
an employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any statement which is intended or reasonably calculated to
disparage or discredit the Company or its Subsidiaries).
(c) If, at the time of enforcement of this Paragraph 8, a
court shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive acknowledges that the restrictions
contained in this Paragraph 8 are reasonable and that he has reviewed the
provisions of this Agreement with his legal counsel.
-6-
<PAGE> 7
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this Paragraph 8, the Company, in addition
and supplementary to other rights and remedies existing in its favor, shall be
entitled to specific performance and/or injunctive or other equitable relief
from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
In addition, in the event of a breach or violation by Executive of this
Paragraph 8, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
9. Representations. Each of Executive and the Company hereby
represents and warrants to the other that (i) the execution, delivery and
performance of this Agreement by such party do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which such party is a party or by which he or it is
bound, and (ii) upon the execution and delivery of this Agreement by each of
Executive and the Company, this Agreement shall be the valid and binding
obligation of such party, enforceable in accordance with its terms. Executive
further represents and warrants to the Company that he is not a party to or
bound by any employment agreement, noncompete agreement or confidentiality
agreement with any other person or entity. Executive hereby acknowledges and
represents that he has consulted with independent legal counsel regarding his
rights and obligations under this Agreement and that he fully understands the
terms and conditions contained herein.
10. Survival. Paragraphs 6 through 20 shall survive and
continue in full force in accordance with their terms notwithstanding the
expiration or termination of the Employment Period.
11. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, sent by reputable
overnight courier service or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:
Notices to Executive:
Donald J. Vanke
13792 Peppercreek Drive
Strongsville, Ohio 44136
Notices to the Company:
LISN, Inc.
c/o Willis Stein & Partners
227 West Monroe, Suite 4300
Chicago, Illinois 60606
Attn: Robert C. Froetscher
-7-
<PAGE> 8
With a copy to:
LISN, Inc.
1240 Park Avenue
Amherst, OH 44001
Attn: President
and
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attn: John A. Weissenbach
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
12. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
13. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way
(including, without limitation, the Employment and Trade Secrets Agreement,
dated June 23, 1998, by and between the Company and Executive and the Non-
Competition and Non-Disclosure Agreement, dated September 2, 1997, by and
between Arion, Inc.
and Executive, as amended).
14. No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party.
15. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
-8-
<PAGE> 9
16. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the Company and
their respective heirs, successors and assigns, except that Executive may not
assign his rights or delegate his duties or obligations hereunder without the
prior written consent of the Company.
17. CHOICE OF LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF OHIO, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF OHIO OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF OHIO.
18. Amendment and Waiver. The provisions of this Agreement may
be amended or waived only with the prior written consent of the Company (as
approved by the Board) and Executive, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.
19. Indemnification. Company hereby agrees to indemnify and
hold Executive harmless to the maximum extent permitted by law as designated in
the Company's Regulations, which provision shall not be amended during the
Employment Period without Executive's prior written consent.
20. Arbitration. Except with respect to disputes or claims
under Paragraphs 6, 7 and 8 hereof (for which each party shall bear the cost of
his or its own attorney's fees and expenses), each party hereto agrees that the
arbitration procedure set forth in Exhibit B hereto shall be the sole and
exclusive method for resolving any claim or dispute ("Claim") arising out of or
relating to the rights and obligations acknowledged and agreed to in this
Agreement, whether such Claim arose or the facts on which such Claim is based
occurred prior to or after the effective date of adoption of this Agreement. The
parties agree that the result of any arbitration hereunder shall be final,
conclusive and binding on all of the parties. Nothing in this section shall
prohibit a party hereto from instituting litigation to enforce any Final
Determination (as defined in Exhibit B hereto). Each party hereto hereby
irrevocably submits to the jurisdiction of any United States District Court of
the Northern District of Ohio (Eastern Division), and an Ohio state court of
competent jurisdiction sitting in Lorain County, Ohio, and agrees that such
courts shall be the exclusive forum for the enforcement of any Final
Determination. Each party hereto irrevocably consents to service of process by
registered mail or personal service and waives any objection on the grounds of
personal jurisdiction, venue or inconvenience of the forum. Each party hereto
further agrees that each other party hereto may initiate litigation in any court
of competent jurisdiction to execute any judicial judgment enforcing a Final
Determination.
* * * * *
-9-
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
LISN, INC.
By: /s/ DONALD L. SANNEMAN
----------------------------
Its: Chairman
----------------------------
/s/ DONALD J. VANKE
---------------------------------
Donald J. Vanke
<PAGE> 11
EXHIBIT A
GENERAL RELEASE
I, Donald J. Vanke, in consideration of and subject to the performance
by LISN, Inc., an Ohio corporation (together with its subsidiaries, the
"Company"), of its material obligations under the Employment Agreement, dated as
of May 28, 1999 (the "Agreement"), do hereby release and forever discharge as of
the date hereof the Company and all present and former directors, officers,
agents, representatives, employees, successors and assigns of the Company and
its direct or indirect owners (collectively, the "Released Parties") to the
extent provided below.
1. I understand that any payments or benefits paid or granted to me under
Paragraph 5(b) of the Agreement represent, in part, consideration for
signing this General Release and are not salary, wages or benefits to
which I was already entitled. I understand and agree that I will not
receive the payments and benefits specified in Paragraph 5(b) of the
Agreement unless I execute this General Release and do not revoke this
General Release within the time period permitted hereafter or breach
this General Release.
2. Except as provided in Paragraph 4 below, I knowingly and voluntarily
release and forever discharge the Company and the other Released
Parties from any and all claims, controversies, actions, causes of
action, cross-claims, counter-claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other
damages, claims for costs and attorneys' fees, or liabilities of any
nature whatsoever in law and in equity, both past and present (through
the date of this General Release) and whether known or unknown,
suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors,
administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation from, the Company
(including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act
of 1967, as amended (including the Older Workers Benefit Protection
Act); the Equal Pay Act of 1963, as amended; the Americans with
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the
Civil Rights Act of 1866, as amended; the Worker Adjustment Retraining
and Notification Act; the Employee Retirement Income Security Act of
1974; any applicable Executive Order Programs; the Fair Labor Standards
Act; or their state or local counterparts; or under any other federal,
state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company; or any claim for
wrongful discharge, breach of contract, infliction of emotional
distress, defamation; or any claim for costs, fees, or other expenses,
including attorneys' fees incurred in these matters) (all of the
foregoing collectively referred to herein as the "Claims"). ------
3. I represent that I have made no assignment or transfer of any right,
claim, demand, cause of action, or other matter covered by Paragraph 2
above.
<PAGE> 12
4. I agree that this General Release does not waive or release any rights
or claims that I may have under the Age Discrimination in Employment
Act of 1967 which arise after the date I execute this General Release.
I acknowledge and agree that my separation from employment with the
Company in compliance with the terms of the Agreement shall not serve
as the basis for any claim or action (including, without limitation,
any claim under the Age Discrimination in Employment Act of 1967).
5. In signing this General Release, I acknowledge and intend that it shall
be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. I expressly consent that this General Release
shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly
limits the effectiveness of a general release of unknown, unsuspected
and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. I acknowledge and agree
that this waiver is an essential and material term of this General
Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I
should bring a Claim seeking damages against the Company, or in the
event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve
as a complete defense to such Claims. I further agree that I am not
aware of any pending charge or complaint of the type described in
Paragraph 2 as of the execution of this General Release.
6. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at
any time to be an admission by the Company, any Released Party or
myself of any improper or unlawful conduct.
7. I agree that I will forfeit all amounts payable by the Company pursuant
to the Agreement if I challenge the validity of this General Release. I
also agree that if I violate this General Release by suing the Company
or the other Released Parties, I will pay all costs and expenses of
defending against the suit incurred by the Released Parties, including
reasonable attorneys' fees, and return all payments received by me
pursuant to the Agreement.
8. I agree that this General Release is confidential and agree not to
disclose any information regarding the terms of this General Release,
except to my immediate family and any tax, legal or other counsel I
have consulted regarding the meaning or effect hereof or as required by
law, and I will instruct each of the foregoing not to disclose the same
to anyone.
9. Any non-disclosure provision in this General Release does not prohibit
or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts and circumstances by the
Securities and Exchange Commission (SEC), the National Association of
Securities Dealers, Inc. (NASD), any other self-regulatory organization
or governmental entity.
-2-
<PAGE> 13
10. I agree to reasonably cooperate with the Company in any internal
investigation or administrative, regulatory, or judicial proceeding. I
understand and agree that my cooperation may include, but not be
limited to, making myself available to the Company upon reasonable
notice for interviews and factual investigations; appearing at the
Company's request to give testimony without requiring service of a
subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents
which are or may come into my possession all at times and on schedules
that are reasonably consistent with my other permitted activities and
commitments. I understand that in the event the Company asks for my
cooperation in accordance with this provision, the Company will
reimburse me solely for reasonable travel expenses, including lodging
and meals, upon my submission of receipts.
11. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect
any rights or claims arising out of any breach by the Company or by any
Released Party of the Agreement.
12. Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under
applicable law, but if any provision of this General Release is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
(a) I HAVE READ IT CAREFULLY;
(b) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED;
(c) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
(d) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND
I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE
CHOSEN NOT TO DO SO OF MY OWN VOLITION;
(e) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO
-3-
<PAGE> 14
CONSIDER IT AND THE CHANGES MADE SINCE THE _______________ __, _____
VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE
REQUIRED 21-DAY PERIOD;
(f) THE CHANGES TO THE AGREEMENT SINCE _______________ ___, _____ EITHER
ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.
(g) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE
TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;
(h) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY
AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT; AND
(i) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED
BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.
DATE: ___________ __, ______ ______________________________
-4-
<PAGE> 15
EXHIBIT B
ARBITRATION PROCEDURE
---------------------
1. Notice of Claim. A party asserting a Claim (the "Claimant")
shall deliver written notice to each party against whom the Claim is asserted
(collectively, the "Opposing Party"), with a copy to the persons required to
receive copies of notices under the Agreement (the "Additional Notice Parties"),
specifying the nature of the Claim and requesting a meeting to resolve same. The
Additional Notice Parties shall be given reasonable notice of and invited and
permitted to attend any such meeting. If no resolution is reached within 10
business days after delivery of such notice, the Claimant or the Opposing Party
may, within 45 days after giving such notice, invoke the arbitration procedure
provided herein by delivering to each Opposing Party and the Additional Notice
Parties a Notice of Arbitration, which shall specify the Claim as to which
arbitration is sought, the nature of the Claim, the basis for the Claim, and the
nature and amount of any damages or other compensation or relief sought. Each
party agrees that no punitive damages may be sought or recovered in any
arbitration, judicial proceeding or otherwise. Failure to file a Notice of
Arbitration within 45 days shall constitute a waiver of any right to relief for
the matters asserted in the notice of claim. Any Claim shall be forever barred,
and no relief may be sought therefor, if written notice of such Claim is not
made as provided above within one year of the date such claim accrues.
2. Selection of Arbitrator. Within 20 business days of receipt
of the Notice of Arbitration, the Executive and the Board shall meet and attempt
to agree on an arbitrator to hear and decide the Claim. If the Executive and the
Board cannot agree on an arbitrator within ten business days, then they shall
request the American Arbitration Association (the "AAA") to appoint an
arbitrator experienced in the area of dispute who does not have an ongoing
business relationship with any of the parties to the dispute. If the arbitrator
selected informs the parties he cannot hear and resolve the Claim within the
time-frame specified below, the Executive and the Board shall request the
appointment of another arbitrator by the AAA subject to the same requirements.
3. Arbitration Procedure. The following procedures shall
govern the conduct of any arbitration under this section. All procedural matters
relating to the conduct of the arbitration other than those specified below
shall be discussed among counsel for the parties and the arbitrator. Subject to
any agreement of the parties, the arbitrator shall determine all procedural
matters not specified herein.
(a) Within 30 days of the service of a Notice of Arbitration,
each party shall afford the other, or its counsel, with reasonable access to
documents and persons relating directly to the issues raised in the Notice of
Arbitration. All documents produced and all copies thereof shall be maintained
as strictly confidential, shall be used for no purpose other than the
arbitration hereunder, and shall be returned to the producing party upon
completion of the arbitration. There shall be no other discovery except that, if
a reasonable need is shown, limited depositions may be allowed in the discretion
of the arbitrator, it being the expressed intention and agreement of each
-1-
<PAGE> 16
party to have the arbitration proceedings conducted and resolved as
expeditiously, economically and fairly as reasonably practicable, and with the
maximum degree of confidentiality.
(b) All written communications regarding the proceeding sent
to the arbitrator shall be sent simultaneously to each party or its counsel,
with a copy to the Additional Notice Parties. Oral communications between any of
the parties or their counsel and the arbitrator shall be conducted only when all
parties or their counsel are present and participating in the conversation.
(c) Within 20 days of selection of the arbitrator, the
Claimant shall submit to the arbitrator a copy of the Notice of Arbitration,
along with a supporting memorandum and any exhibits or other documents
supporting the Claim.
(d) Within 20 days of receipt of the Claimant's submission,
the Opposing Party shall submit to the arbitrator a memorandum supporting its
position and any exhibits or other supporting documents. If the Opposing Party
fails to respond to any of the issues raised by the Claimant within 20 days of
receipt of the Claimant's submission, then the arbitrator may find for the
Claimant on any such issue and bar any subsequent consideration of the matter.
(e) Within 20 days of receipt of the Opposing Party's
response, the Claimant may submit to the arbitrator a reply to the Opposing
Party's response, or notification that no reply is forthcoming.
(f) Within 10 days of the latest submission as provided above,
the arbitrator shall notify the parties and the Additional Notice Parties of the
date of the hearing on the issues raised by the Claim. Scheduling of the hearing
shall be within the sole discretion of the arbitrator, but in no event more than
30 days after the last submission by the parties, and shall take place within 50
miles of the corporate headquarters of the Company at a place selected by the
arbitrator or such other place as is mutually agreed. Both parties shall be
granted substantially equal time to present evidence at the hearing. The hearing
shall not exceed one business day, except for good cause shown.
(g) Within 30 days of the conclusion of the hearing, the
arbitrator shall issue a written decision to be delivered to both parties and
the Additional Notice Parties (the "Final Determination"). The Final
Determination shall address each issue disputed by the parties, state the
arbitrator's findings and reasons therefor, and state the nature and amount of
any damages, compensation or other relief awarded.
(h) The award rendered by the arbitrator shall be final and
non-appealable and judgment may be entered upon it in accordance with applicable
law in such court as has jurisdiction thereof.
4. Costs of Arbitration. As part of the Final Determination,
the arbitrator shall determine the allocation of the costs and expenses of the
arbitration, including the arbitrator's fee and
-2-
<PAGE> 17
both parties' attorneys' fees and expenses, based upon the extent to which each
party prevailed in the arbitration. In the event that any relief which is
awarded is non-monetary, then such costs and expenses shall be allocated in any
manner as may be determined by the arbitrators.
5. Satisfaction of Award. If any party fails to pay the amount
of the award, if any, assessed against it within 30 days of the delivery to such
party of the Final Determination, the unpaid amount shall bear interest from the
date of such delivery at the lesser of (i) prime lending rate announced by
Citibank N.A. plus three hundred basis points and (ii) the maximum rate
permitted by applicable usury laws. In addition, such party shall promptly
reimburse the other party for any and all costs or expenses of any nature or
kind whatsoever (including attorneys' fees) reasonably incurred in seeking to
collect such award or to enforce any Final Determination.
6. Confidentiality of Proceedings. The parties hereto agree
that all of the arbitration proceedings provided for herein, including any
notice of claim, the Notice of Arbitration, the submissions of the parties, and
the Final Determination issued by the arbitrator, shall be confidential and
shall not be disclosed at any time to any person other than the parties, their
representatives, the arbitrator and the Additional Notice Parties; provided,
however, that this provision shall not prevent the party prevailing in the
arbitration from submitting the Final Determination to a court for the purpose
of enforcing the award, subject to comparable confidentiality protections if the
court agrees; and further provided that the foregoing shall not prohibit
disclosure to the minimum extent reasonably necessary to comply with (i)
applicable law (or requirement having the force of law), court order, judgment
or decree, including, without limitation, disclosures which may be required
pursuant to applicable securities laws, and (ii) the terms of contractual
arrangements (such as financing arrangements) to which the Company or any
Additional Notice Party may be subject so long as such contractual arrangements
were not entered into for the primary purpose of permitting disclosure which
would otherwise be prohibited hereunder.
-3-
<PAGE> 1
EXHIBIT 12
ORIUS CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Pro
Forma Years Ended
-------- -------------------------------------------------------
1999(1) 1999 1998 1997 1996 1995
-------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Pre tax income $12,030 $15,033 $12,266 $4,168 $1,107 $24
------- ------- ------- ------ ------ ------
Fixed Charges
Interest expense 62,429 11,149 450 178 139 108
Estimated amount of rent expense
deemed to represent the Interest factor 595 595 136 138 120 61
Amortized finance costs 2,372 755 -- -- -- --
------- ------- ------- ------ ------ ------
Total fixed charges 77,426 12,499 586 316 259 169
------- ------- ------- ------ ------ ------
Earnings plus fixed charges $75,809 $27,532 $12,852 $4,484 $1,366 $193
======= ======= ======= ====== ====== ======
Earnings to Fixed Charges 1.18 2.20 21.93 14.19 5.27 1.14
======= ======= ======= ====== ====== ======
</TABLE>
(1) The pro forma ratio of earnings to fixed charges is based upon the
application of pro forma adjustments to the historical financial statements of
LISN, Orius and Acquired Businesses. Pro forma adjustments have been made to
reflect the sale of the notes and the application of the net proceeds which were
used to refinance portions of existing indebtedness. In addition, adjustments
to reflect the application of purchase accounting to Acquired Businesses and the
elimination of certain non recurring expenses have been reflected.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-4 of
Orius Corp. of our reports relating to the following financial statements which
appear in such Registration Statement.
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS DATE OF REPORT
-------------------- --------------
<S> <C>
Orius Corp. and Subsidiaries (Formerly LISN Holdings,
Inc.)..................................................... March 31, 2000
Orius Corp. and Subsidiaries (Formerly NATG Holdings,
Inc.)..................................................... March 31, 2000
DAS-CO of Idaho, Inc. ...................................... May 3, 1999
U.S. Cable, Inc. ........................................... April 1, 1999
Copenhagen Utilities and Construction, Inc. ................ May 20, 1999
Texel Corporation........................................... May 14, 1999
</TABLE>
We also consent to the references to us under the headings "Independent
Accountants" in such Registration Statement.
PricewaterhouseCoopers LLP
Chicago, Illinois
May 12, 2000
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-4 of Orius
Corporation of our report dated February 17, 1999 relating to the financial
statements of Schatz Underground Cable, Inc., which appears in such Registration
Statement. We also consent to the references to us under the heading
"Independent Accountants" in such Registration Statement.
/s/ MILHOUSE, MARTZ & NEAL, L.L.P.
MILHOUSE, MARTZ & NEAL, L.L.P.
Maryland Heights, Missouri 63043
May 11, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-4 or our
reports dated February 27, 1998 related to the financial statements of Channel
Communications, Inc., f/k/a Kenya Corp., which appear in such Registration
Statement. We also consent to the references to us under the headings
"Independent Accountants" in such Registration Statement.
Williams Young, LLC
/s/ Williams Young, LLC
Madison, Wisconsin
May 12, 2000
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
To Tender for Exchange
12 3/4% Senior Subordinated Notes due 2010
of
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
Pursuant to the Prospectus Dated , 2000
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 2000 UNLESS EXTENDED
(THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed and submitted to the Exchange Agent:
<TABLE>
<S> <C>
By Overnight Courier and by Hand Delivery After
By Registered or Certified Mail: 4:30 P.M., New York City Time on the Expiration
Date:
United States Trust Company of New York
P.O. Box 844, Cooper Station United States Trust Company of New York
Attn: Corporate Trust Services 770 Broadway, 13th Floor
New York, New York 10276-0844 Attn: Corporate Trust Services
New York, New York 10003
By Hand Before 4:30 P.M., New York City Time:
Facsimile Transmission:
United States Trust Company of New York
111 Broadway, Lower Level (212) 780-0592 or (212) 420-6211
Attn: Corporate Trust Window
New York, New York 10003 Confirm by Telephone (call toll-free):
(800) 548-6565
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR FACSIMILE NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT (800)
548-6565, OR BY FACSIMILE AT (212) 780-0592.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 2000 (the "Prospectus") of NATG Holdings, LLC, a Delaware limited
liability company, and Orius Capital Corp., a Delaware corporation (together,
the "Issuers"), and this Letter of Transmittal (the "Letter of Transmittal"),
that together constitute the Issuers' offer (the "Exchange Offer") to exchange
$1,000 in principal amount of its Series B 12 3/4% Senior Subordinated Notes due
2010 (the "Exchange Notes"), which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement, for each $1,000 in principal amount of its outstanding 12 3/4% Senior
Subordinated Notes due 2010 (the "Notes"), of which $150,000,000 aggregate
principal amount is outstanding. Capitalized terms used but not defined herein
have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial Owners")
a duly completed and executed form of "Instruction to Registered Holder and/or
Book-Entry Transfer Facility Participant from Beneficial Owner" accompanying
this Letter of Transmittal, instructing the undersigned to take the action
described in this Letter of Transmittal.
<PAGE> 2
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns and transfers to, or upon the
order of, the Issuers all right, title, and interest in, to and under the
Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as appropriate)
to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver the Tendered Notes to the Issuers or cause ownership of the Tendered
Notes to be transferred to, or upon the order of, the Issuers, on the books of
the registrar for the Notes and deliver all accompanying evidences of transfer
and authenticity to, or upon the order of, the Issuers upon receipt by the
Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the
undersigned is entitled upon acceptance by the Issuers of the Tendered Notes
pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise
exercise all rights of beneficial ownership of the Tendered Notes, all in
accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
undersigned and the Issuers upon the terms and subject to the conditions of the
Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal of
Tenders." All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any Beneficial Owner(s), and
every obligation of the undersigned or any Beneficial Owner(s) hereunder shall
be binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the Tendered
Notes and that the Issuers will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, and adverse
claims when the Tendered Notes are acquired by the Issuers as contemplated
herein. The undersigned and each Beneficial Owner will, upon request, execute
and deliver any additional documents reasonably requested by the Issuers or the
Exchange Agent as necessary or desirable to complete and give effect to the
transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired by
the undersigned and any Beneficial Owner(s) in the ordinary course of business
of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each
Beneficial Owner are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Issuers,
and (iv) the undersigned and each Beneficial Owner acknowledge and agree that
any person participating in the Exchange Offer with the intention or for the
purpose of distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), in connection with a secondary resale of the Exchange Notes acquired by
such person and cannot rely on the position of the Staff of the Securities and
Exchange Commission (the "Commission") set forth in the no-action letters that
are discussed in the section of the Prospectus entitled "The Exchange Offer." In
addition, by accepting the Exchange Offer, the undersigned hereby (i) represents
and warrants that, if the undersigned or any Beneficial Owner of the Notes is a
Participating
2
<PAGE> 3
Broker-Dealer, such Participating Broker-Dealer acquired the Notes for its own
account as a result of market-making activities or other trading activities and
has not entered into any arrangement or understanding with the Issuers or any
"affiliate" of the Issuers (within the meaning of Rule 405 under the Securities
Act) to distribute the Exchange Notes to be received in the Exchange Offer, and
(ii) acknowledges that, by receiving Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired as a result of market-making
activities or other trading activities, such Participating Broker-Dealer will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"Use of Guaranteed Delivery" BELOW (Box 4).
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE "Use of Book-Entry Transfer" BELOW (Box 5).
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<S> <C> <C> <C>
BOX 1
DESCRIPTION OF NOTES TENDERED
(Attach additional signed pages, if necessary)
Name(s) and Address(es) of Registered Note Aggregate Principal
Holder(s), exactly as Certificate Amount Aggregate Principal
name(s) appear(s) on Note Certificate(s) Number(s) of Represented by Amount
(Please fill in, if blank) Notes* Certificate(s) Tendered**
TOTAL
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Notes. All other tenders must be in integral
multiples of $1,000 of principal amount. Unless otherwise indicated in this column, the principal amount of
all Note Certificates identified in this Box 1 or delivered to the Exchange Agent herewith shall be deemed
tendered. See Instruction 4.
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------
BOX 2
BENEFICIAL OWNER(S)
- --------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES
BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED
NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE
UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
--------------------------------------------------------------------------
(please print)
Address:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(include Zip Code)
Tax Identification or
Social Security No.:
- --------------------------------------------------------------------------------
4
<PAGE> 5
BOX 4
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------------------------------
Name of Institution which Guaranteed Delivery:
---------------------------------------------------------
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY
BOOK-ENTRY TRANSFER.
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
--------------------------------------------------------------------------
Transaction Code Number:
--------------------------------------------------------------------------
<PAGE> 6
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
X ------------------------------------------------------ Signature Guarantee
(If required by Instruction 5)
X ------------------------------------------------------
(Signature of Registered Holder(s) or Authorized Signature
Authorized Signatory)
Note: The above lines must be signed by the registered X ------------------------------------------------------
holder(s) of Notes as their name(s) appear(s) on the Name: --------------------------------------------------
Notes or by persons(s) authorized to become registered (please print)
holder(s) (evidence of such authorization must be Title:
transmitted with this Letter of Transmittal). If ---------------------------------------------------
signature is by a trustee, executor, administrator, Name of Firm: -----------------------------------------
guardian, attorney-in-fact, officer, or other person (Must be an Eligible Institution as
acting in a fiduciary or representative capacity, such defined in Instruction 2)
person must set forth his or her full title below. See
Instruction 5.
Name(s): ---------------------------------------------- Address:
--------------------------------------------- ------------------------------------------------
Capacity:----------------------------------------------- -----------------------------------------------
---------------------------------------------- -----------------------------------------------
Street Address:---------------------------------------- (include Zip Code)
Area Code and Telephone Number:
- -------------------------------------------------------- -----------------------------------------------
(include Zip Code) Dated:------------------------------------------------
Area Code and Telephone Number:
----------------------------------------
Tax Identification or Social Security Number:
----------------------------------------
</TABLE>
BOX 7
BROKER-DEALER STATUS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
[ ] Check this box if the Beneficial Owner of the Notes is a
Participating Broker-Dealer and such Participating
Broker-Dealer acquired the Notes for its own account as a
result of market-making activities or other trading
activities. IF THIS BOX IS CHECKED, PLEASE SEND A COPY OF
THIS LETTER OF TRANSMITTAL TO ORIUS CORP., ATTENTION CHIEF
FINANCIAL OFFICER, FACSIMILE (561) 687-8080.
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
PAYORS' NAMES: NATG HOLDINGS, LLC AND ORIUS CAPITAL CORP.
Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part 1 below. See instructions if your name has
SUBSTITUTE changed.)
FORM W-9
Address
City, State and ZIP Code
List account number(s) here (optional)
DEPARTMENT OF THE TREASURY PART 1 -- PLEASE PROVIDE YOUR TAXPAYER Social Security Number
INTERNAL REVENUE SERVICE IDENTIFICATION NUMBER ("TIN") IN THE BOX AT RIGHT or TIN
AND CERTIFY BY SIGNING AND DATING BELOW
PART 2 -- Check the box if you are NOT subject to backup withholding under
the provisions of section 3406(a)(1)(C) of the Internal Revenue Code because
(1) you are exempt from backup withholding (2) you have not been notified
that you are subject to backup withholding as a result of failure to report
all interest or dividends or (3) the Internal Revenue Service has notified
you that you are no longer subject to backup withholding. [ ]
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I Part 3 --
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM Awaiting TIN [ ]
IS TRUE, CORRECT AND COMPLETE.
SIGNATURE -------------------------------- DATE
--------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE> 8
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute Form
W-9, and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant to
the procedures for book-entry transfer described in the Prospectus under the
caption "Exchange Offer -- Procedures for Tendering" (and a confirmation of such
transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New
York City time, on the Expiration Date. The method of delivery of certificates
for Tendered Notes, this Letter of Transmittal and all other required documents
to the Exchange Agent is at the election and risk of the tendering holder and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is recommended
that the Holder use an overnight or hand delivery service. In all cases,
sufficient time should be allowed to assure timely delivery. No Letter of
Transmittal or Notes should be sent to the Issuers. Neither the Issuers nor the
registrar is under any obligation to notify any tendering holder of the Issuers'
acceptance of Tendered Notes prior to the closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Notes according to
the guaranteed delivery procedures set forth below, including completion of Box
4. Pursuant to such procedures: (i) such tender must be made by or through a
firm which is a member of a recognized Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution") and the Notice
of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by mail, hand delivery or facsimile transmission) setting forth the
name and address of the holder, the certificate number(s) of the Tendered Notes
and the principal amount of Tendered Notes, stating that the tender is being
made thereby and guaranteeing that, within five New York Stock Exchange trading
days after the Expiration Date, this Letter of Transmittal together with the
certificate(s) representing the Notes and any other required documents will be
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal, as well as all other
documents required by this Letter of Transmittal and the certificate(s)
representing all Tendered Notes in proper form for transfer, must be received by
the Exchange Agent within five New York Stock Exchange trading days after the
Expiration Date. Any holder who wishes to tender Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery relating to such Notes prior to
5:00 p.m., New York City time, on the Expiration Date. Failure to complete the
guaranteed delivery procedures outlined above will not, of itself, affect the
validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by an Eligible Holder who attempted to use the guaranteed
delivery process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may execute
and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes
who is not the registered holder must arrange promptly with the registered
holder to execute and deliver this Letter of Transmittal on his or her behalf
through the execution and delivery to the registered holder of the Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner form accompanying this Letter of Transmittal.
<PAGE> 9
4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should fill
in the principal amount tendered in the column labeled "Aggregate Principal
Amount Tendered" of the box entitled"Description of Notes Tendered" (Box 1)
above. The entire principal amount of Notes delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Notes held by the holder is not tendered, then Notes for
the principal amount of Notes not tendered and Exchange Notes issued in exchange
for any Notes tendered and accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, as soon as practicable following the
Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names, it will be necessary to complete, sign and
submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued
(and any untendered principal amount of Notes is to be reissued) in the name of
the registered holder(s), then such registered holder(s) need not and should not
endorse any Tendered Notes, nor provide a separate bond power. In any other
case, such registered holder(s) must either properly endorse the Tendered Notes
or transmit a properly completed separate bond power with this Letter of
Transmittal, with the signature(s) on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be endorsed
or accompanied by appropriate bond powers, in each case, signed as the name(s)
of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Issuers, evidence satisfactory to the Issuers of their authority to so act must
be submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in
the applicable box (Box 3), the name and address to which the Exchange Notes
and/or substitute Notes for principal amounts not tendered or not accepted for
exchange are to be sent, if different from the name and address of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the taxpayer identification or social security number of the person named must
also be indicated.
7. TRANSFER TAXES. The Issuers will pay all transfer taxes, if any,
applicable to the exchange of Tendered Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Tendered Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or on any
other person) will be
<PAGE> 10
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with this Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Notes listed in this Letter of
Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
holder(s) of any Tendered Notes which are accepted for exchange must provide the
Issuers (as payor) with its correct taxpayer identification number ("TIN"),
which, in the case of a holder who is an individual, is his or her social
security number. If the Issuers are not provided with the correct TIN, the
Holder may be subject to backup withholding and a $50 penalty imposed by the
Internal Revenue Service. (If withholding results in an over-payment of taxes, a
refund may be obtained.) Certain holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
To prevent backup withholding, each holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
failure to report all interest or dividends or (ii) the Internal Revenue Service
has notified the holder that such holder is no longer subject to backup
withholding. If the Tendered Notes are registered in more than one name or are
not in the name of the actual owner, consult the "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for information on
which TIN to report.
The Issuers reserve the right in their sole discretion to take whatever
steps are necessary to comply with the Issuers' obligation regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of Tendered
Notes will be determined by the Issuers in their sole discretion, which
determination will be final and binding. The Issuers reserve the right to reject
any and all Notes not validly tendered or any Notes the Issuers' acceptance of
which would, in the opinion of the Issuers or their counsel, be unlawful. The
Issuers also reserve the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Notes as to any ineligibility of any
holder who seeks to tender Notes in the Exchange Offer. The interpretation of
the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Issuers shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within such time as the Issuers
shall determine. Neither the Issuers, the Exchange Agent nor any other person
shall be under any duty to give notification of defects or irregularities with
respect to tenders of Notes, nor shall any of them incur any liability for
failure to give such notification. Tenders of Notes will not be deemed to have
been made until such defects or irregularities have been cured or waived. Any
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Issuers reserve the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Tendered Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will be
accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder whose
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated herein for further instructions.
<PAGE> 11
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF
NOTES. Subject to the terms and conditions of the Exchange Offer, the Issuers
will accept for exchange all validly tendered Notes as soon as practicable after
the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Issuers shall be
deemed to have accepted tendered Notes when, as and if the Issuers have given
written or oral notice (immediately followed in writing) thereof to the Exchange
Agent. If any Tendered Notes are not exchanged pursuant to the Exchange Offer
for any reason, such unexchanged Notes will be returned, without expense, to the
undersigned at the address shown in Box 1 or at a different address as may be
indicated herein under "Special Delivery Instructions" (Box 3).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer -- Procedures
for Tendering -- Withdrawal of Tenders."
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
12 3/4% SENIOR SUBORDINATED NOTES DUE 2010
OF
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
PURSUANT TO THE PROSPECTUS DATED , 2000
This form must be used by a holder of 12 3/4% Senior Subordinated Notes due
2010 (the "Notes") of NATG Holdings, LLC, a Delaware limited liability company,
and Orius Capital Corp., a Delaware corporation (together, the "Issuers") who
wishes to tender Notes to the Exchange Agent pursuant to the guaranteed delivery
procedures described in "The Exchange Offer-Guaranteed Delivery Procedures" of
the Issuers' Prospectus, dated , 2000 (the "Prospectus") and in
Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Notes pursuant to such guaranteed delivery procedures must ensure that
the Exchange Agent receives this Notice of Guaranteed Delivery prior to the
Expiration Date of the Exchange Offer. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Prospectus or the Letter of
Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 2000 UNLESS EXTENDED (THE "EXPIRATION DATE").
UNITED STATES TRUST COMPANY OF NEW YORK
(THE "EXCHANGE AGENT")
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Courier and by Hand Delivery After
4:30 P.M., New York City Time on the Expiration
United States Trust Company of New York Date:
P.O. Box 844, Cooper Station United States Trust Company of New York
Attn: Corporate Trust Services 770 Broadway, 13th Floor
New York, New York 10276-0844 Attn: Corporate Trust Services
New York, New York 10003
By Hand Before 4:30 P.M., New York City Time:
United States Trust Company of New York Facsimile Transmission:
111 Broadway, Lower Level (212) 780-0592 or (212) 420-6211
Attn: Corporate Trust Window
New York, New York 10003 Confirm by Telephone (call toll-free):
(800) 548-6565
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuers, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the related Letter of Transmittal.
The undersigned hereby tenders the Notes listed below:
<TABLE>
<CAPTION>
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
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</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------------------
Signatures of Registered Holder(s)
or Authorized Signatory: Date:------------------------, 2000
--------------------------
------------------------------------------- Address:
------------------------------------------- ------------------------------------------
---------------------------------------------
Name(s) of Registered Holder(s):
---------------- Area Code and Telephone No.------------------
-------------------------------------------
- -------------------------------------------
</TABLE>
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This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become Holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
Please print name(s) and address(es)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees deposit with the Exchange
Agent of the Letter of Transmittal (or facsimile thereof), together with
the Notes tendered hereby in proper form for transfer (or confirmation of
the book-entry transfer of such Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility described in the Prospectus under the
caption "The Exchange Offer -- Guaranteed Delivery Procedures" and in the
Letter of Transmittal) and any other required documents, all by 5:00 p.m.,
New York City time, on the fifth New York Stock Exchange trading day
following the Expiration Date.
Name of firm:
- -----------------------------------
Address:
- -----------------------------------------
- ---------------------------------------------------
(Include Zip Code)
Area Code and Tel. No.
- -----------------------
- ------------------------------------------------------
(Authorized Signature)
Name:
- ----------------------------------------------
(Please Print)
Title:
- -----------------------------------------------
Dated:
- ----------------------------------------------
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
4
<PAGE> 5
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail, the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
related Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Notes referred
to herein, the signature must correspond with the name(s) written on the face of
the Notes without alteration, enlargement, or any change whatsoever. If this
Notice of Guaranteed Delivery is signed by a participant of the Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of the Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Notes or signed as the name of the participant shown on the Book-Entry
Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Issuers of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
5
<PAGE> 1
EXHIBIT 99.3
INSTRUCTIONS
TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
NATG HOLDINGS, LLC
ORIUS CAPITAL CORP.
12 3/4% SENIOR SUBORDINATED NOTES DUE 2010
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated
, 2000 (the "Prospectus") of NATG Holdings, LLC, a Delaware limited
liability company, and Orius Capital Corp., a Delaware corporation (together,
the "Issuers"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Issuers' offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 12 3/4% Senior Subordinated Notes due 2010 (the
"Notes") held by you for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 12 3/4% Senior Subordinated Notes due 2010
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[ ] TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
$ of the 12 3/4% Senior Subordinated Notes due 2010
[ ] NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized to make, on
behalf of the undersigned (and the undersigned, by its signature below, hereby
makes to you), the representations and warranties contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including but not limited to the representations that the undersigned's
principal residence is in the state of (FILL IN STATE) , the
undersigned is acquiring the Exchange Notes in the ordinary course of business
of the undersigned, the undersigned is not participating, does not participate,
and has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, the undersigned acknowledges that any person
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Act"), in connection with a
secondary resale transaction of the Exchange Notes acquired by such person and
cannot rely on the position of the Staff of the Securities and Exchange
Commission set forth in no-action letters that are discussed in the section of
the Prospectus entitled "The Exchange Offer" "Resale of the Exchange Notes," and
the undersigned is not an "affiliate," as defined in Rule 405 under the Act, of
the Issuers or any Subsidiary Guarantor; (b) to agree, on behalf of the
undersigned, as set forth in the Letter of Transmittal; and (c) to take such
other action as necessary under the Prospectus or the Letter of Transmittal to
effect the valid tender of such Notes.
[ ] Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for
its own account as a result of market-making activities or other trading
activities. IF THIS BOX IS CHECKED, PLEASE SEND A COPY OF THESE
INSTRUCTIONS TO ORIUS CORP., ATTENTION CHIEF FINANCIAL OFFICER, FACSIMILE
(561) 687-8080.
<PAGE> 2
SIGN HERE
Name of beneficial owner(s):
- --------------------------------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
Name (please print):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:
- ----------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
2
