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Exhibit 2.01
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
ACR ACQUISITION CORP.
(a New York corporation),
AMERICAN CAPITAL RESOURCES, INC.
and
XXXXXXX X. XXXXXXXXXXX
and
XXXXXX X. XXXXXXX
Dated as of February 14, 1998
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TABLE OF CONTENTS
PAGE
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1. THE MERGER...............................................................................................2
1.1 Delivery and Filing of Certificate of Merger....................................................2
1.2 Merger Effective Date...........................................................................2
1.3 Certificate of Incorporation, Bylaws, Board of Directors and
Officers of the Surviving Corporation...........................................................2
2. MERGER CONSIDERATION.....................................................................................3
2.1 Conversion of Capital Stock; Merger Consideration...............................................3
2.2 Exchange Procedures.............................................................................3
2.3 No Fractional Shares............................................................................4
2.4 INTENTIONALLY OMITTED...........................................................................4
2.5 Earn-Out Consideration..........................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS'
REPRESENTATIVE...........................................................................................5
3.1 Computation.....................................................................................5
3.2 Disputes........................................................................................6
3.3 Stockholders' Representative....................................................................7
4. INDEMNITY ESCROW.........................................................................................7
4.1 Creation of Escrow..............................................................................7
4.2 Duration and Terms..............................................................................8
4.3 Voting and Investment...........................................................................8
5. CLOSING; MERGER EFFECTIVE DATE...........................................................................9
5.1 Closing.........................................................................................9
5.2 Closing Date; Location..........................................................................9
5.3 Effectiveness of Merger.........................................................................9
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS...........................................................9
6.1 Corporate Existence.............................................................................9
6.2 Corporate Power; Authorization; Enforceable Obligations........................................10
6.3 Authority; Ownership; Other Entities...........................................................10
6.4 Validity of Contemplated Transactions..........................................................10
6.5 Capital Stock of Company.......................................................................11
6.6 Transactions in Capital Stock..................................................................11
6.7 No Bonus Shares................................................................................11
6.8 Subsidiaries...................................................................................11
6.9 Predecessor Status; etc........................................................................11
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6.10 Spin-offs by Company...........................................................................12
6.11 No Third Party Options.........................................................................12
6.12 Financial Statements...........................................................................12
6.13 Liabilities and Obligations....................................................................13
6.14 Accounts and Notes Receivable..................................................................14
6.15 Permits........................................................................................14
6.16 Real and Personal Property.....................................................................14
6.17 Contracts and Commitments......................................................................15
6.18 Government Contracts...........................................................................17
6.19 Title to Real Property.........................................................................17
6.20 Insurance......................................................................................17
6.21 Employees......................................................................................17
6.22 Employee Benefit Plans and Arrangements........................................................18
6.23 Compliance with Law; Authorizations............................................................21
6.24 Transactions With Affiliates...................................................................22
6.25 Litigation.....................................................................................22
6.26 Restrictions...................................................................................22
6.27 Taxes..........................................................................................23
6.28 Intellectual Property Matters..................................................................24
6.29 Completeness; No Violations....................................................................25
6.30 Existing Condition.............................................................................25
6.31 Deposit Accounts; Powers of Attorney...........................................................27
6.32 Books of Account...............................................................................27
6.33 Environmental Matters..........................................................................27
6.34 No Illegal Payments............................................................................28
6.35 Leases.........................................................................................28
6.36 Lease Funding..................................................................................31
6.37 Disclosure.....................................................................................31
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO.................................................................32
7.1 Corporate Existence............................................................................32
7.2 UniCapital Stock...............................................................................32
7.3 Corporate Power and Authorization..............................................................32
7.4 No Conflicts...................................................................................33
7.5 Capitalization of UniCapital...................................................................33
7.6 Compliance with Law; Authorizations............................................................33
7.7 Transactions With Affiliates...................................................................34
7.8 Litigation.....................................................................................34
7.9 Miscellaneous..................................................................................34
7.10 Registration Rights............................................................................34
8. COVENANTS OF STOCKHOLDERS AND COMPANY...................................................................34
8.1 Business in the Ordinary Course................................................................35
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8.2 Existing Condition.............................................................................35
8.3 Maintenance of Properties and Assets...........................................................35
8.4 Employees and Business Relations...............................................................35
8.5 Maintenance of Insurance.......................................................................35
8.6 Compliance with Laws, etc......................................................................35
8.7 Conduct of Business............................................................................35
8.8 Access.........................................................................................36
8.9 Press Releases and Other Communications........................................................36
8.10 Exclusivity....................................................................................36
8.11 Third Party Approvals..........................................................................37
8.12 Notice to Bargaining Agents....................................................................37
8.13 Notification of Certain Matters................................................................37
8.14 Amendment of Schedules.........................................................................38
8.15 Repayment of Indebtedness; Cancellation of Contracts;
Pre-Closing Distributions......................................................................38
8.16 Delivery of Information........................................................................39
8.17 Release of Guarantees..........................................................................39
8.18 HSR Filing.....................................................................................39
9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
COMPANY AND THE STOCKHOLDERS............................................................................39
9.1 Representations and Warranties; Performance of Obligations.....................................39
9.2 Employment Agreements..........................................................................39
9.3 Opinion of Counsel.............................................................................39
9.4 Registration Statement.........................................................................40
9.5 HSR Act........................................................................................40
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF
UNICAPITAL AND NEWCO....................................................................................40
10.1 Representations and Warranties; Performance of Obligations.....................................40
10.2 No Litigation..................................................................................41
10.3 Examination of Financial Statements............................................................41
10.4 No Material Adverse Change.....................................................................41
10.5 Regulatory Review..............................................................................41
10.6 Stockholders' Release..........................................................................41
10.7 Employment Agreements..........................................................................41
10.8 Opinion of Counsel.............................................................................42
10.9 Consents and Approvals.........................................................................43
10.10 Good Standing Certificates.....................................................................43
10.11 Registration Statement.........................................................................43
10.12 Repayment of Indebtedness; Pre-Closing Distributions;
Cancellation of Contracts......................................................................43
10.13 HSR Act........................................................................................43
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10.14 Release of Guarantees..........................................................................44
11. COVENANTS OF UNICAPITAL.................................................................................44
11.1 INTENTIONALLY OMITTED..........................................................................44
11.2 UniCapital Stock Options.......................................................................44
11.3 Information Filing.............................................................................44
11.4 Indebtedness...................................................................................44
11.5 Stub Period Tax Return.........................................................................44
11.6 HSR Filing.....................................................................................45
12. INDEMNIFICATION; SURVIVAL...............................................................................45
12.1 General Indemnification by Stockholders........................................................45
12.2 Specific Indemnification by Stockholders.......................................................46
12.3 Indemnification by UniCapital and Newco........................................................46
12.4 Third Party Claims.............................................................................47
12.5 Limitations on Indemnification.................................................................48
12.6 Survival of Representations and Warranties.....................................................49
13. TERMINATION OF AGREEMENT................................................................................50
13.1 Termination by UniCapital......................................................................50
13.2 Termination by the Stockholders................................................................50
13.3 Automatic Termination..........................................................................51
13.4 Liquidated Damages.............................................................................51
14. NONCOMPETITION AND NONSOLICITATION......................................................................51
14.1 Noncompetition.................................................................................51
14.2 Damages........................................................................................52
14.3 Reasonable Restraint...........................................................................52
14.4 Severability; Reformation......................................................................52
14.5 Independent Covenant...........................................................................53
14.6 Materiality....................................................................................53
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION...............................................................53
15.1 Stockholders...................................................................................53
15.2 UniCapital.....................................................................................54
15.3 Damages........................................................................................54
16. LOCK-UP AGREEMENTS......................................................................................54
16.1 Agreement......................................................................................54
16.2 Intended Third Party Beneficiaries.............................................................55
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17. FEDERAL SECURITIES ACT AND CONTRACTUAL
RESTRICTIONS ON UNICAPITAL STOCK........................................................................55
17.1 Investment Intent..............................................................................55
17.2 Compliance with Law............................................................................55
17.3 Economic Risk; Sophistication..................................................................55
17.4 Information Supplied...........................................................................55
18. SECURITIES LEGENDS......................................................................................56
19. GENERAL.................................................................................................57
19.1 Cooperation....................................................................................57
19.2 Successors and Assigns.........................................................................57
19.3 Entire Agreement...............................................................................57
19.4 Counterparts...................................................................................57
19.5 Brokers and Agents.............................................................................57
19.6 Expenses.......................................................................................58
19.7 Notices........................................................................................58
19.8 Governing Law..................................................................................59
19.9 Exercise of Rights and Remedies................................................................59
19.10 Time...........................................................................................59
19.11 Reformation and Severability...................................................................59
19.12 Remedies Cumulative............................................................................60
19.13 Captions.......................................................................................60
20. DEFINITIONS.............................................................................................60
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION (the
"Agreement") is made as of the 14th day of February, 1998, between UNICAPITAL
CORPORATION, a Delaware corporation ("UniCapital"); ACR ACQUISITION CORP., a New
York corporation ("Newco"); AMERICAN CAPITAL RESOURCES, INC. (the "Company") and
Xxxxxxx X. Xxxxxxxxxxx and Xxxxxx X. Xxxxxxx (collectively referred to as the
"Stockholders"), who are all of the stockholders of the Company. Certain
capitalized terms used herein are defined in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement; and
WHEREAS, Newco was duly incorporated on January 26, 1998 under the laws
of the State of New York solely for the purpose of completing this transaction,
and is a wholly-owned subsidiary of UniCapital; and
WHEREAS, the Company is a corporation organized and existing under the
laws of the state of New York; and
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of such corporations and
their respective stockholders that Newco merge with and into the Company
pursuant to this Agreement and the applicable pro visions of the laws of the
respective states of incorporation of Newco and the Company (such transaction
being herein called the "Merger" and the Company, Newco and UniCapital being
hereinafter collectively referred to as the "Constituent Corporations"); and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of a number of similar agreements between UniCapital
and certain other corporations and partnerships and the IPO and that such single
transaction (the "Unified Transaction") shall fall within the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code");
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY AND FILING OF CERTIFICATE OF MERGER. The Constituent
Corporations will cause a Certificate of Merger, in substantially the form of
Annex I attached hereto with such changes therein as may be required by
applicable state laws (the "Certificate of Merger"), to be executed and
delivered to the Secretary of State of the state of incorporation of Newco and
the Company on or before the Merger Effective Date.
1.2 MERGER EFFECTIVE DATE. The "Merger Effective Date" shall be the
date specified in Section 5.3. At the Merger Effective Date, the Certificate of
Merger shall either be filed for immediate effectiveness with the Secretary of
State of the applicable state of incorporation of Newco and the Company or
become effective if filed with such Secretary of State prior to such date. On
the Merger Effective Date upon the effectiveness of the Merger, Newco shall be
merged with and into the Company, in accordance with the Certificate of Merger,
and the separate existence of Newco shall cease. The Company, as the entity
surviving the Merger, is hereinafter sometimes referred to as the "Surviving
Corporation." The Merger shall have the effects specified in the laws of the
state of incorporation of the Surviving Corporation.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Certificate of Incorporation of the Company, as
amended and restated in the Certificate of Merger shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law;
(b) the Bylaws of the Company shall be the Bylaws of the
Surviving Corporation and shall remain so until thereafter duly amended;
(c) the Surviving Corporation shall have a Board of
Directors consisting of one member, who shall be Xxxxxx New commencing upon the
effectiveness of the Merger and who shall hold office subject to the laws of the
state of incorporation and the Certificate of Incorporation and Bylaws of the
Surviving Corporation; and
(d) the officers of the Company immediately prior to the
Merger Effective Date shall continue as the officers of the Surviving
Corporation in the same capacity or capacities, each of such officers to serve,
subject to the provisions of the Certificate of Incorporation and Bylaws of the
Surviving Corporation, until such officer's successor is elected and qualified;
provided, that the Chairman of the Board (if any), the Treasurer and the
Secretary of the Company shall not succeed to the corresponding offices of the
Surviving Corporation, but
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instead (i) the sole director of the Surviving Corporation shall be the Chairman
of the Board of the Surviving Corporation, (ii) the Treasurer of Newco shall be
the Treasurer of the Surviving Corporation and (iii) the Secretary of Newco
shall be the Secretary of the Surviving Corporation.
2. MERGER CONSIDERATION
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION.
(a) Upon the effectiveness of the Merger, all of the shares
of capital stock of the Company issued and outstanding immediately prior to the
effectiveness of the Merger ("Company Stock") shall, by virtue of the Merger and
without any action on the part of the holder thereof but subject to the
effectiveness of the Merger, automatically be converted into the right to
receive, without interest,
(i) an aggregate of $20,350,000 in cash,
(ii) an aggregate of 1,071,053 shares of common
stock, par value $.001 per share, of UniCapital ("UniCapital Stock") (the
consideration referred to in clauses (i) and (ii), all of which is to be
distributed to the Stockholders on the Merger Effective Date in the percentages
set forth on Annex II, subject to Article 4 hereof, is referred to in this
Agreement as the "Effective Date Consideration"); provided, however, in the
event that the aggregate value (based on the IPO price of the UniCapital Stock)
of the 1,071,053 shares of UniCapital Stock is less than $16,065,795, then
UniCapital shall issue additional shares to the Stockholders so that the
aggregate value of the shares of UniCapital Stock equals $16,065,795 (with
appropriate adjustment to the cash and stock components of the Effective Date
Consideration so as to eliminate fractional shares), and
(iii) the Earn-Out Consideration as described in
Section 2.5, to be distributed to the Stockholders within five (5) business days
after the date the portion of the Earn-Out Consideration with respect to a given
calendar year (if any) is finally determined pursuant to Section 2.5 in the
percentages set forth on Annex II.
(b) Upon the effectiveness of the Merger, each share of
capital stock of Newco issued and outstanding immediately prior to the
effectiveness of the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, automatically be converted into one
fully paid and non-assessable share of common stock of the Surviving
Corporation, all of which converted common stock shall constitute all of the
outstanding shares of capital stock of the Surviving Corporation immediately
after the effectiveness of the Merger.
(c) The Effective Date Consideration and the Earn-Out
Consideration are referred to together in this Agreement as the "Merger
Consideration."
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2.2 EXCHANGE PROCEDURES. On the Merger Effective Date, upon surrender
to UniCapital of certificates representing all of the outstanding shares of
Company Stock ("Certificates"), each Stockholder shall, subject to Article 4, be
entitled to receive, in exchange therefor, such Stockholder's pro rata share of
the cash portion of the Effective Date Consideration, calculated in accordance
with Annex II, and, a certificate representing that number of whole shares of
UniCapital Stock which such holder has the right to receive in respect of the
Certificates surrendered, calculated in accordance with Annex II, and each
Certificate so surrendered shall forthwith be canceled. On the Merger Effective
Date or as promptly thereafter as is practicable, and subject to and in
accordance with the provisions of Article 4, UniCapital shall cause to be
distributed to the Indemnity Escrow Agent (as defined in Article 4) a
certificate or certificates representing the Escrow Shares (as defined in
Article 4), which shall be registered in the name of the Indemnity Escrow Agent
as nominee for the Stockholders and shall be held in accordance with the
provisions of Article 4 and the Indemnity Escrow Agreement referred to therein.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and the
Stockholders shall instead each receive in lieu of any such fractional share a
cash payment in lieu thereof in an amount equal to such fraction multiplied by
the IPO Price.
2.4 INTENTIONALLY OMITTED.
2.5 EARN-OUT CONSIDERATION.
(a) If the earnings before taxes (the "EBT") of the Company
for the twelve months ending December 31, 1998, increased by amounts in respect
of those items set forth on Schedule 2.5 that affected net income during the
period from January 1, 1998 through the Closing Date and decreased by the amount
of UniCapital corporate overhead allocated to the Company for the period from
the Closing Date through December 31, 1998 (the "Adjusted 1998 EBT"), exceeds
the EBT of the Company for the twelve months ending December 31, 1997, inclusive
of the add-backs set forth in Schedule 2.5 ("Adjusted 1997 EBT"), then the
Stockholders shall be entitled to receive one-half of the difference between the
Adjusted 1998 EBT and the Adjusted 1997 EBT.
(b) If the EBT of the Company for the year ending December
31, 1999, adjusted for the amount of UniCapital corporate overhead allocated to
the Company ("Adjusted 1999 EBT", and together with Adjusted 1997 EBT and
Adjusted 1998 EBT, the "Company EBT"), exceeds the greater of Adjusted 1998 EBT
and Adjusted 1997 EBT, then the Stockholders shall be entitled to receive
one-half of the difference between (i) the Adjusted 1999 EBT and (ii) the
greater of the Adjusted 1998 EBT and the Adjusted 1997 EBT.
(c) The EBT of the Company for the years ending December 31,
1998 and December 31, 1999 shall be computed using generally accepted accounting
principles and
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practices as applied in the audited financial statements of the Company included
in the Registration Statement. The allocation of UniCapital overhead shall be
made on a pro rata basis applied consistently among UniCapital subsidiaries. To
the extent gain-on-sale treatment was accorded any Lease, whether in the
add-backs set forth on Schedule 2.5 or in any year, income from the payment
stream on such Lease shall not be included in the EBT of the Company for any
subsequent year.
(d) The amounts (if any) that the Stockholders become
entitled to receive pursuant to Sections 2.5(a) and/or 2.5(b) are referred to
herein as the "Earn-Out Consideration." The Earn-Out Consideration shall be paid
one-half in cash and one-half in shares of UniCapital Stock, valued at the
average of the closing prices per share of UniCapital Stock for the 20 trading
days preceding December 31 of the year to which the portion of Earn-Out
Consideration in question applies.
(e) Company EBT shall be determined within forty-five days
following December 31 of such year.
(f) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholders dispute the determination of Company EBT, then the
Stockholders' Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20 business days after notification of the
determination of Company EBT for any year. If UniCapital and the Stockholders'
Representative cannot resolve any such dispute which would affect the Earn-Out
Consideration, then such dispute shall be resolved by an Independent Accounting
Firm (as defined in Section 3.2). The Independent Accounting Firm shall be
directed to consider only those agreements, contracts, commitments or other
documents (or summaries thereof) that were either (i) delivered or made
available to Price Waterhouse LLP in connection with the transactions
contemplated hereby, or (ii) reviewed by Price Waterhouse LLP during the course
of determining Company EBT. The determination of the Independent Accounting Firm
shall be made as promptly as practicable and shall be final and binding upon the
parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. The costs of the Independent Accounting Firm shall
be borne by the party (either UniCapital or the Stockholders as a group) whose
determination of Company EBT was further from the determination of the
Independent Accounting Firm. Pending resolution of any such dispute by the
Independent Accounting Firm only the amount of the Earn-Out Consideration as
determined by Price Waterhouse LLP shall be paid by UniCapital. Once Company EBT
is finally determined, the Earn-Out Consideration attendant thereto not
previously paid, if any, shall be paid in accordance with this Section 2.5 ;
provided that in the event the Stockholders' determination of EBT was closer to
the determination of the Independent Accounting Firm than UniCapital's
determination of EBT, the Stockholders shall receive such Earn-Out Consideration
plus interest which shall accrue at the rate of 10% per annum on any such
Earn-Out Consideration that is resolved in the Stockholders favor from the date
the Earn-Out Consideration was first payable and the date on which the Earn-Out
Consideration is received by the Stockholders.
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(g) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP") and
consistent with previous practice, a balance sheet of the Company (the "Closing
Date Balance Sheet") as of the end of business on the day prior to the Closing
Date (as defined in Section 5). If the aggregate stockholders' equity of the
Company as shown on the Closing Date Balance Sheet is less than the aggregate
stockholders' equity as shown on the balance sheet of the Company at October 31,
1997 as reviewed by KPMG Peat Marwick LLP, then, subject to Section 3.2,
commencing 20 business days after delivery of the Closing Date Balance Sheet to
UniCapital, the aggregate Merger Consideration shall be adjusted downward
dollar-for-dollar in the amount of any such deficiency (the "Net Worth
Deficiency"). Upon adjustment, if any, of the Merger Consideration in accordance
with the foregoing, UniCapital shall be entitled to recover from the Escrow
Property pursuant to Article 4 that portion of the Net Worth Deficiency which
does not exceed one-half of the balance of the Escrow Property. For any amount
by which any Net Worth Deficiency exceeds one-half of the initial balance of the
Escrow Property, such portion of the Net Worth Deficiency shall be paid by the
Stockholders not later than the 25th business day after the delivery of the
Closing Date Balance Sheet (or if applicable, not later than the 5th business
day after the final determination of any Disputed Amount in accordance with
Section 3.2). At its sole and exclusive option, and at any time after such 25th
business day (or if applicable, not later than the fifth business day after the
final determination of any Disputed Amount in accordance with Section 3.2),
UniCapital shall be entitled to recover from the Escrow Property pursuant to
Article 4 all or any portion of the amount of the Net Worth Deficiency not paid
by the Stockholders as required by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholders dispute any
item contained on the Closing Date Balance Sheet, then the Stockholders'
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 20 business days after the delivery of the Closing Date Balance Sheet to
the Stockholders. If UniCapital and the Stockholders' Representative cannot
resolve any such dispute relating to the Net Worth Deficiency, then such dispute
shall be resolved by an independent nationally recognized accounting firm which
is reasonably acceptable to UniCapital and the Stockholders' Representative (the
"Independent Accounting Firm"). The determination of the Independent Accounting
Firm shall be made as promptly as practical and shall be final and binding on
the parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. Any expenses relating to the engagement of the
Independent Accounting Firm shall be allocated between UniCapital and the
Stockholders so that the Stockholders' aggregate
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share of such costs shall bear the same proportion to the total costs that the
Disputed Amounts unsuccessfully contested by the Stockholders' Representative
(as finally determined by the Independent Accounting Firm) bear to the total of
the Disputed Amounts so submitted to the Independent Accounting Firm. Pending
resolution of any such dispute by the Independent Accounting Firm, no such
Disputed Amount shall be due to UniCapital. Once any such Disputed Amount is
finally determined to be due to UniCapital, UniCapital may proceed to recover
such amount in the manner set forth in Section 3.1.
3.3 STOCKHOLDERS' REPRESENTATIVE. (a) Each Stockholder, by signing this
Agreement, designates Xxxxxxx X. Xxxxxxxxxxx (or, in the event that Xxxxxxx X.
Xxxxxxxxxxx is unable or unwilling to serve or resigns, Xxxxxx X. Xxxxxxx) to be
such Stockholders' representative for purposes of this Agreement (the
"Stockholders' Representative"). The Stockholders shall be bound by any and all
actions taken by the Stockholders' Representative on their behalf.
(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholders' Representative.
All communications or writings to be sent to Stockholders pursuant to this
Agreement may be addressed to the Stockholders' Representative and any
communication or writing so sent shall be deemed notice to all of the
Stockholders hereunder. The Stockholders hereby consent and agree that the
Stockholders' Representative is authorized to accept deliveries, including any
notice, on behalf of the Stockholders pursuant hereto.
(c) The Stockholders' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Stockholder, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Stockholders'
Representative, and in general to do all things and to perform all acts
including, without limitation, executing and delivering all agreements,
certificates, receipts, instructions and other instruments contemplated by or
deemed advisable in connection with Article 12 of this Agreement. This power of
attorney and all authority hereby conferred is granted subject to and coupled
with the interest of such Stockholder and the other Stockholders hereunder and
in consideration of the mutual covenants and agreements made herein, and shall
be irrevocable and shall not be terminated by any act of any Stockholder, by
operation of law, whether by such Stockholder's death or any other event.
(d) Notwithstanding the foregoing, the Stockholder
Representative shall inform each Stockholder of all notices received, and of all
actions, decisions, notices and exercises of any rights, power or authority
proposed to be done, given or taken by such Stockholder Representative, and
shall act as directed by the Stockholders holding a majority interest in the
Escrow Property (as defined in Section 4.1(b)).
4. INDEMNITY ESCROW
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4.1 CREATION OF ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholders pursuant to Sections 12.1
and 12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof,
the following shall be delivered to American Stock Transfer and Trust Company as
indemnity escrow agent (the "Indemnity Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to each Stockholder as part of the Effective Date
Consideration in accordance with the percentages set forth on Annex II, rounded
up to the nearest whole share (the "Escrow Shares");
(ii) X shares of UniCapital Stock issuable to
the Stockholders as part of the Effective Date Consideration in accordance with
the percentages set forth on Annex II, rounded up to the nearest whole share
(the "Additional Escrow Shares"), where X shall be equal to 2,500,000 divided by
the IPO Price of UniCapital Stock; and
(iii) ten percent (10%) of the cash portion of
the Effective Date Consideration payable to each Stockholder in accordance with
percentages set forth on Annex II, rounded up to the nearest whole cent (the
"Escrow Cash").
(b) The Escrow Shares, the Additional Escrow Shares and the
Escrow Cash are referred to together as the "Escrow Property." In addition, (i)
the Additional Escrow Shares shall include all cash and non-cash dividends and
other property at any time received or otherwise distributed in respect of or in
exchange for any or all of the Additional Escrow Shares, all securities
hereafter issued in substitution for any of the foregoing, all certificates and
instruments representing or evidencing such securities, all cash and non-cash
proceeds of all of the foregoing property and except as provided in Section 4.3
all rights, titles, interests, privileges and preferences appertaining or
incident to the foregoing property (the "Additional Escrow Property") and (ii)
the Escrow Property shall include all cash and non-cash dividends and other
property at any time received or otherwise distributed in respect of or in
exchange for any or all of the Escrow Property, all securities hereafter issued
in substitution for any of the foregoing, all certificates and instruments
representing or evidencing such securities, all cash and non-cash proceeds of
all of the foregoing property and except as provided in Section 4.3 all rights,
titles, interests, privileges and preferences appertaining or incident to the
foregoing property.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex III. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Merger
Effective Date; or (b) the resolution of any claim for indemnification or
payment that is pending on the first anniversary of the Merger Effective Date,
but only to the extent of the amount of such pending claim; provided, however,
that the Indemnity Escrow
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Agent shall hold the Additional Escrow Property pursuant to the Indemnity Escrow
Agreement until the earlier of: (a) such time as the limitations period has run
for all tax periods ended on or prior to the Merger Effective Date; or (b) a
final and conclusive Closing Agreement has been entered into with the Internal
Revenue Service with respect to all tax periods ended on or prior to the Merger
Effective Date.
4.3 VOTING AND INVESTMENT. The Stockholders shall be entitled to
exercise all voting powers incident to the Escrow Shares AND THE ADDITIONAL
ESCROW SHARES held by the Indemnity Escrow Agent as their nominee, but shall not
be entitled to exercise any investment or dispositive powers over such Escrow
Shares AND ADDITIONAL ESCROW SHARES. The Escrow Cash shall be invested from time
to time by the Indemnity Escrow Agent as provided in the Indemnity Escrow
Agreement.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
underwriting agreement relating to the offer and sale of shares of UniCapital
Stock in the IPO (the "Underwriting Agreement") shall have been executed, the
parties shall take all actions necessary to effect the Merger (other than the
filing with the appropriate state authorities of the Certificate of Merger,
which shall be filed and become effective on the Merger Effective Date) and to
effect the conversion and delivery of shares referred to in Article 2 hereof
(hereinafter referred to as the "Closing"); provided, that such actions shall
not include the actual completion of the Merger or the actual conversion and
delivery of the shares referred to in Article 2 hereof, which actions shall only
be taken on the Merger Effective Date as herein provided.
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
5.3 EFFECTIVENESS OF MERGER. Concurrently with the consummation of the
sale of the shares of UniCapital Stock pursuant to the Underwriting Agreement,
the Merger shall become effective and all transactions contemplated by this
Agreement, including the conversion and delivery of shares and the delivery of a
check or checks in an amount equal to the cash which the Stockholders shall be
entitled to receive pursuant to the Merger referred to in Article 2 hereof,
shall occur and be deemed to be completed. The date on which the Merger is
effected shall be referred to as the "Merger Effective Date."
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
For purposes of this Article 6, each reference to a "Company" shall be
deemed to refer as well to each and all of its Subsidiaries unless the context
otherwise specifically requires. As of
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the date hereof and as of each of the Closing Date and the Merger Effective Date
each Stockholder, jointly and severally, represents and warrants to UniCapital
and Newco as follows:
6.1 CORPORATE EXISTENCE. The Company, and each subsidiary, if any, of
the Company listed on Schedule 6.8 (each, a "Subsidiary"), is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Company and each Subsidiary is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the conduct of its business requires it to be so
qualified, all of which jurisdictions are listed on Schedule 6.1.
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Company has the corporate power, authority and legal right to execute, deliver
and perform this Agreement. The execution, delivery and performance of this
Agreement by the Company have been duly authorized by its Board of Directors and
no further corporate action on the part of the Company or its stockholders is
necessary to authorize this Agreement and the performance of the transactions
contemplated hereby. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by the Company in accordance
with the provisions hereof (the "Company Documents") will be, duly executed and
delivered on behalf of the Company by its duly authorized officers, and this
Agreement constitutes, and the Company Documents when executed and delivered
will constitute, the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms.
6.3 AUTHORITY; OWNERSHIP; OTHER ENTITIES. Each Stockholder has the full
legal right, power and legal capacity or authority to enter into this Agreement.
Upon the date of this Agreement and immediately prior to the Closing Date, each
Stockholder owns and will own beneficially and of record all of the shares of
capital stock of the Company identified on Annex II as being owned by such
Stockholder. The conversion of Company Stock into UniCapital Stock and cash
pursuant to the provisions of this Agreement will transfer to UniCapital valid
title in the shares of Company Stock owned by such Stockholder, free and clear
of all liens, security interests, pledges, charges, voting trusts, equities,
restrictions, encumbrances and claims of every kind. Neither Stockholder
currently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, any securities convertible into capital stock or any other
equity interest in any corporation, association or other business entity engaged
in originating, servicing or securitizing leases or other specialty financing
products or services. The entities listed on Schedule 6.3 own no assets and have
not at any time conducted operations.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Company and each Stockholder does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the Company
or any Stockholder is subject, (b) any judgment, order, writ, injunction, decree
or award of any Governmental Entity which is applicable to the Company or any
Stockholder, (c) the charter documents of the Company or any securities issued
by the
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Company, or (d) except as set forth on Schedule 6.4, any mortgage, indenture,
agreement, contract, commitment, lease, plan, Authorization, or other
instrument, document or understanding, oral or written, to which the Company or
any Stockholder is a party, by which the Company or any Stockholder may have
rights or by which any of the properties or assets of the Company may be bound
or affected, or give any party with rights thereunder the right to terminate,
modify, accelerate or otherwise change the existing rights or obligations of the
Company thereunder. Except for filing the Certificate of Merger with the
Secretary of State and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 and except as aforesaid, no authorization, approval or
consent of, and no registration or filing with, any Governmental Entity is
required in connection with the execution, delivery or performance of this
Agreement by the Company or any Stockholder.
6.5 CAPITAL STOCK OF COMPANY. The authorized capital stock of the
Company consists solely of the shares shown on Schedule 6.5, of which only the
shares shown on such Schedule 6.5 to be issued and outstanding are issued and
outstanding. All of the issued and outstanding shares of the capital stock of
the Company are owned by the Stockholders as set forth on Annex II, and are free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. Schedule 6.5 attached
hereto sets forth the number and class of the authorized capital stock of each
Company Subsidiary and the number of shares of each Company Subsidiary which are
issued and outstanding, all of which shares are owned by the Company indicated
as owning such shares on Schedule 6.5, free and clear of all liens, security
interests, pledges, charges, voting trusts, equities, restrictions, encumbrances
and claims of every kind. All of the issued and outstanding shares of Company
Stock to be outstanding on the Merger Effective Date will have been duly
authorized and validly issued, fully paid and nonassessable, will be owned of
record and beneficially by the Stockholders and in the amounts set forth in
Annex II, and will have been offered, issued, sold and delivered by the Company
in compliance with all applicable state and federal laws concerning the
offering, sale or issuance of securities. None of such shares will have been,
and none of the shares from which they will have derived were, issued in
violation of the preemptive rights of any past or present stockholder, whether
contractual or statutory.
6.6 TRANSACTIONS IN CAPITAL STOCK. Neither the Company nor any Company
Subsidiary has acquired any treasury stock since December 31, 1995. Except as
set forth on Schedule 6.6, no option, warrant, call, conversion right or
commitment of any kind exists which obligates the Company or any Company
Subsidiary to issue any of its authorized but unissued capital stock. The
Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein or to
pay any dividend or make any distribution in respect thereof.
6.7 NO BONUS SHARES. None of the shares of capital stock of the Company
was, and none of the shares of Company Stock will be, issued pursuant to awards,
grants or bonuses, whether of stock or of options or other rights.
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6.8 SUBSIDIARIES. Schedule 6.8 lists the name of each of Company
Subsidiary. Except as set forth in Schedule 6.8, neither the Company nor any
Company Subsidiary currently owns, of record or beneficially, or controls,
directly or indirectly, any capital stock, any securities convertible into
capital stock or any other equity interest in any corporation, association or
other business entity. Except as set forth on Schedule 6.8, neither the Company
nor any Company Subsidiary is, directly or indirectly, a participant in any
joint venture, partnership or other noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Company and each Company Subsidiary, including the
names of all entities from whom the Company previously acquired assets
representing all or substantially all of the assets of that entity. Except as
set forth on Schedule 6.9, the Company has never been a subsidi ary or division
of another corporation or been a part of an acquisition which was later
rescinded.
6.10 SPIN-OFFS BY COMPANY. Since December 31, 1995, there has not been
any sale or spin-off of significant assets of the Company or any Company
Subsidiary other than in the ordinary course of business.
6.11 NO THIRD PARTY OPTIONS. Except as set forth on Schedule 6.11,
there are no existing agreements, options, commitments or rights with, of or to
any person to acquire any properties, assets or rights of the Company or any
interest therein.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the following financial statements of the Company:
(a) the balance sheet of the Company at July 31, 1997 (the
"Audited Balance Sheet Date") and July 31, 1996, and the related statements of
income, cash flows and changes in stockholders' equity for the fiscal years then
ended, certified by KPMG Peat Marwick LLP, the Company's independent public
accountants, together with the report of such independent public accountants
thereon (the "Audited Financial Statements"); and
(b) the unaudited balance sheet of the Company at December 31,
1997 (the date shall be referred to as the "Interim Balance Sheet Date" and the
balance sheet as of that date shall be referred to as the "Interim Balance
Sheet") and December 31, 1996, and the related statements of income and cash
flows for the interim periods then ended, reviewed by KPMG Peat Marwick LLP, the
Company's independent public accountants, together with the report of such
independent public accountants therein (the "Unaudited Financial Statements").
(c) the unaudited balance sheet of the Company at October 31,
1997 and October 31, 1996, and the related statements of income and cash flows
for the interim periods then ended, reviewed by KPMG Peat Marwick LLP, the
Company's independent public accountants, together with the report of such
independent public accountants therein (the
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"October 31, 1997 Financial Statements," and together with the Audited Financial
Statements and the Unaudited Financial Statements (the "Financial Statements").
All of the Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved. All of the balance sheets
included in the Audited Financial Statements, including the related notes,
fairly present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Company in accordance with GAAP
consistently applied throughout the periods involved at the dates indicated and
such statements of income, cash flows and changes in stockholders' equity fairly
present the results of operations, cash flows and changes in stockholders'
equity of the Company for the periods indicated. The Unaudited Financial
Statements fairly present the financial position of the Company at the dates
indicated, and such statements of income, cash flows and changes in
stockholders' equity fairly present the results of operations, cash flows and
changes in stockholders' equity for the periods indicated, except for normal
recurring year-end adjustments which are not expected to be material in amount
and except for the addition of required footnotes thereto.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 6.13 is an accurate list, as
of a date not more than two days prior to the date of this Agreement, of: (i)
all liabilities of the Company which are reflected on the unaudited balance
sheet as of the Interim Balance Sheet Date included in the Unaudited Financial
Statements; (ii) all liabilities incurred thereafter other than in the ordinary
course of business; (iii) all material liabilities incurred thereafter in the
ordinary course of business, excluding liabilities incurred in connection with
Leases (as defined herein) and Lease Documents (as defined herein) in the
ordinary course of business consistent with past practice and the Company's
credit underwriting standards; and (iv) all liabilities (A) incurred as of the
Interim Balance Sheet Date that are not reflected on the unaudited balance sheet
as of the Interim Balance Sheet Date and (B) all liabilities incurred thereafter
that would not have been so reflected had such liabilities been incurred as of
the Interim Balance Sheet Date, excluding liabilities incurred in connection
with Leases and Lease Documents in the ordinary course of business consistent
with past practice and the Company's credit underwriting standards. Each of the
foregoing liabilities that has not heretofore been paid or discharged is so
noted on Schedule 6.13. For purposes of this Agreement, "liabilities" means
liabilities of any kind, character or description, whether accrued, absolute,
secured or unsecured, contingent or otherwise including, but not limited to,
liabilities of any kind, character or description, whether accrued, absolute,
secured or unsecured or otherwise relating to first loss agreements, ultimate
loss agreements, deficiency agreements, residual value or residuary guarantee
agreements or any similar types of arrangements.
(b) For each such liability for which the amount is not fixed
or is contested, Schedule 6.13 shall include a summary description of the
liability, together with copies of all relevant non-privileged documentation
relating thereto, detail of all amounts claimed and any
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other action or relief sought, the names of the claimant and all other parties
to the claim, suit or proceeding, the name of each court or agency before which
such claim, suit or proceeding is pending, the date such claim, suit or
proceeding was instituted, and a best estimate of the maximum amount, if any,
which is likely to become payable with respect to each such liability. If no
estimate is provided, the best estimate shall for purposes of this Agreement be
deemed to be zero. On the Closing Date, the Company shall deliver, and shall
cause its accountants, outside counsel and other representatives or agents to
deliver, copies of all privileged documents related to liabilities as listed on
Schedule 6.13.
(c) All of the liabilities reflected on the unaudited balance
sheet included in the Interim Balance Sheet Date arose only out of or were
incurred only in connection with the conduct of the business of the Company.
Except as set forth on Schedule 6.13 and except for liabilities not required to
be set forth thereon pursuant to Section 6.13(a), the Company has no liabilities
or obligations with respect to its business, whether direct or indirect, matured
or unmatured, absolute, contingent or otherwise, and there is no condition,
situation or set of circumstances which would reasonably be expected to result
in any such liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Company
(including, without limitation, receivables from and advances to employees and
Stockholders) other than those arising out of Leases (collectively, the
"Accounts Receivable"). Schedule 6.14 includes an aging of all Accounts
Receivable showing amounts due in 30-day aging categories. On the Closing Date,
the Stockholders will deliver to UniCapital a complete and accurate list, as of
a date not more than two days prior to the Closing Date, of the Accounts
Receivable. All Accounts Receivable represent valid obligations arising from
bona fide business transactions in the ordinary course of business consistent
with past practice. The Accounts Receivable are, and as of the Closing Date and
the Merger Effective Date will be, collectible net of any respective reserves
shown on the Company's books and records (which reserves are adequate and
calculated consistent with past practice). Subject in the case of Accounts
Receivable reflected on the Company's balance sheet to such reserves reflected
on such balance sheet, each of the Accounts Receivable will be collected in full
within ninety (90) days after the day on which it first became due and payable.
There is no contest, claim, counterclaim, defense or right of set-off, other
than rebates and returns in the ordinary course of business, under any contract
with any obligor of any Account Receivable relating to the amount or validity of
such Account Receivable. The allowance for collection losses on the Interim
Balance Sheet has been determined in accordance with GAAP consistent with past
practice.
6.15 PERMITS. Each material Permit, together with the name of the
Governmental Entity issuing such Permit is set forth on Schedule 6.15. Such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such
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transactions, each Surviving Corporation will have all of the Company's right,
title and interest in the Permits.
6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Interim
Balance Sheet Date, of all the real and personal property (which in the case of
personal property had an original cost in excess of $25,000) owned or leased by
the Company (including its Company Subsidiaries) where the Company is a lessee
or sublessee, including true and correct copies of leases for equipment and
properties on which are situated buildings, warehouses and other structures used
in the operation of the business of the Company (including its Company
Subsidiaries) and including an indication as to which assets were formerly owned
by any Stockholder or affiliate (which term, as used herein, shall have the
meaning ascribed thereto in Rule 144(a)(1) promulgated under the Securities Act
of 1933, as amended (the "Securities Act")) of the Company. Except as set forth
on Schedule 6.16, all of the Company's buildings, leasehold improvements,
structures, facilities, equipment and other material items of tangible property
and assets are in good operating condition and repair, subject to normal wear
and maintenance, are usable in the regular and ordinary course of business and
conform to all applicable laws, ordinances, codes, rules and regulations, and
Authorizations relating to their construction, use and operation. All leases set
forth on Schedule 6.16 have been duly authorized, executed and delivered and
constitute the legal, valid and binding obligations of the Company (or its
Company Subsidiaries) and, to the knowledge of the Stockholders, no other party
to any such lease is in default thereunder and such leases constitute the legal,
valid and binding obligations of such other parties. All fixed assets used by
the Company (including its Company Subsidiaries) in the operation of its
business are either owned by the Company (or its Company Subsidiaries) or leased
under an agreement set forth on Schedule 6.16. The Company and the Stockholders
have heretofore delivered to UniCapital copies of all title reports and title
insurance policies received or held by each Company (including its Company
Subsidiaries). The Company and the Stockholders have indicated on Schedule 6.16
a summary description of all plans or projects involving the opening of new
operations, expansion of any existing operations or the acquisition of any real
property or existing business to which management of the Company (or its Company
Subsidiaries) has devoted any significant effort or expenditure in the two-year
period prior to the date of this Agreement which, if pursued by the Company (or
its Company Subsidiaries) would require additional expenditures of significant
efforts or capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company other than Leases and Lease Documents (the
"Contracts"), to which the Company is a party or is bound, or by which any of
its assets are bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
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(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$25,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $25,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing minimum requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof or exceeding $25,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$25,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any successor thereto, or
to the knowledge of the Company and each Stockholder, any employee of the
Company or any successor thereto, from engaging or competing in any manner or in
any business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service xxxx or copyright or to any ideas, technical assistance or other
know-how of or used by the Company;
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(n) agreement, contract, commitment, arrangement or
understanding to which the Company, on the one hand, and any affiliate, officer,
director or stockholder of the Company, on the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
Each of the Contracts listed on Schedule 6.17, or not required to be listed
therein because of the amount thereof, is valid and enforceable in accordance
with its terms; the Company is, and to the knowledge of the Company and each
Stockholder, all other parties thereto are, in compliance with the provisions
thereof. The Company is not, and to the knowledge of the Company and each
Stockholder, no other party thereto is, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein; and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. None of
the rights of the Company under any Contract will be impaired by the
consummation of the transactions contemplated hereby, and all such rights will
be enforceable by the Surviving Corporation after the Merger Effective Date
without the consent or agreement of any other party. The Company has delivered
accurate and complete copies of each Contract to UniCapital. Except as set forth
on Schedule 6.17, no Contract obligates any party to obtain any consent in
connection with the transactions contemplated hereby.
6.18 GOVERNMENT CONTRACTS. The Company is not, and since 1992 has never
been, a party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
6.19 TITLE TO REAL PROPERTY. The Company has good and insurable title
to all real property owned and used in its business, subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge, except for:
(a) liens, if any, reflected on Schedules 6.13 and 6.16 as
securing specified liabilities (with respect to which no material default
exists);
(b) liens for current taxes and assessments not yet due or in
default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions
to title shown of record in the offices of the county clerks in which the
properties, assets and leasehold estates are located which, in UniCapital's sole
judgment, do not adversely affect UniCapital's intended use of such properties.
6.20 INSURANCE. The assets, properties and operations of the Company
are insured under various policies of general liability and other forms of
insurance, all of which are described
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in Schedule 6.20, which discloses for each policy the risks insured against,
coverage limits, deductible amounts, all outstanding claims thereunder, and
whether the terms of such policy provide for retrospective premium adjustments.
All such policies are in full force and effect in accordance with their terms,
no notice of cancellation has been received, and there is no existing default or
event which, with the giving of notice or lapse of time or both, would
constitute a default thereunder. Such policies are in amounts which, in relation
to the business and assets of the Company, are consistent with the normal or
customary industry practice and all premiums due to date have been paid in full.
The Company has not been refused any insurance, nor has the Company's coverage
been limited, by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the past five years. Schedule 6.20
also contains a true and complete description of all outstanding bonds and other
surety arrangements issued or entered into in connection with the business,
assets and liabilities of the Company.
6.21 EMPLOYEES. Schedule 6.21 contains the following:
(a) a list of all employees of the Company (including name,
title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of the Company and the Stockholders, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the Company and the
Stockholders, threatened before the National Labor Relations Board or similar
body in any foreign country; (iv) there is no employment handbook, personnel
policy manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Company are not covered by any collective
bargaining agreement; (vi) the Company has provided or will timely provide prior
to Closing all notices required by law to be given prior to Closing to all
local, state, federal or national labor, wage-payment, equal employment
opportunity, unemployment insurance and related agencies; (vii) the Company has
paid or properly accrued in the ordinary course of business all wages and
compensation due to employees, including all vacations or vacation pay, holidays
or holiday pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in force or the impact on employees on
plant closing or sales of businesses. All employees of the Company are legally
able to work in the United States.
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6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Company. "Benefit Plan" means each
"employee pension benefit plan" (as defined in Section 3(2) of ERISA,
hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other plan or
arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Company or its affiliates or any other
person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (each, together with
the Company, a "Commonly Controlled Entity") for the benefit of any present or
former officer, employee or director. The Company has no intent or commitment to
create any additional Benefit Plan or amend any Benefit Plan so as to increase
benefits thereunder. The Company has not created any Benefit Plan or declared or
paid any bonus compensation in contemplation of the transactions contemplated by
this Agreement. A current, accurate and complete copy of each Benefit Plan has
been made available to UniCapital. Except as disclosed on Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Company and the Stockholders, no
condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company, nor any
Commonly Controlled Entity, nor any trustee or agent has been or is presently
engaged in any prohibited transactions as defined by Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not applicable which could
subject the Company to the tax or penalty imposed by Section 4975 of the Code or
Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Company and the Stockholders, no condition exists which could
subject the Company to a penalty under Section 4071 of ERISA;
(e) neither the Company nor any Commonly Controlled Entity is
or has ever been party to any "multi-employer plan," as that term is defined in
Section 3(37) of ERISA;
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(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Company and the Stockholders, threatened
against any Benefit Plan, the Company, any Commonly Controlled Entity or any
trustee or agent of any Benefit Plan; and
(h) with respect to each Benefit Plan to which the Company or
any Commonly Controlled Entity is a party which constitutes a group health plan
subject to Section 4980B of the Code, each such Benefit Plan substantially
complies, and in each case has substantially complied, with all applicable
requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except
for premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty
Corporation nor the Company nor any Commonly Controlled Entity has instituted
proceedings to terminate any Pension Plan and the Pension Benefit Guaranty
Corporation has not informed the Company of its intent to institute proceedings
to terminate any Pension Plan;
(iii) full payment has been made of all amounts
which the Company or any Commonly Controlled Entity was required to have paid as
a contribution to the Pension Plans as of the last day of the most recent fiscal
year of each of the Pension Plans ended prior to the date of this Agreement, and
none of the Pension Plans has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such Pension
Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Company and the
Stockholders, the actuarial assumptions utilized, where appropriate, in
connection with determining the funding of each Pension Plan which is a defined
benefit pension plan (as set forth in the actuarial report for such Pension
Plan) are reasonable. Copies of the most recent actuarial reports have been
furnished to UniCapital. Based on such actuarial assumptions, as of the Interim
Balance Sheet Date, the fair market value of the assets or properties held under
each such Pension Plan exceeds the actuarially determined present value of all
accrued benefits of such Pension Plan (whether or not vested) determined on an
ongoing Pension Plan basis;
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(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and the Company has not received
any claim or notice that any such Benefit Plan is not in compliance with, all
applicable laws and orders and prohibited transaction exemptions, including
without limitation, to the extent applicable, the requirements of ERISA;
(vi) neither the Company nor any Commonly
Controlled Entity is in default in performing any of its contractual obligations
under any of the Benefit Plans or any related trust agreement or insurance
contract;
(vii) there are no material outstanding
liabilities of any Benefit Plan other than liabilities for benefits to be paid
to participants in the Benefit Plans and their beneficiaries in accordance with
the terms of the Benefit Plans;
(viii) each Benefit Plan may be amended or
modified by the Company or Commonly Controlled Entity at any time without
liability except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions
contemplated by this Agreement will not (in and of itself): (A) entitle any
employee of the Company to severance pay, unemployment compensation or any other
payment; (B) accelerate the time of payment or vesting, or increase the amount
of compensation due to any such employee; (C) result in any liability under
Title IV of ERISA; (D) result in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code for which an exemption is not
available; or (E) result (either alone or in conjunction with any other event)
in the payment or series of payments by the Company or any of its affiliates to
any person of an "excess parachute payment" within the meaning of Section 280G
of the Code;
(xi) with respect to each Benefit Plan that is
funded wholly or partially through an insurance policy, all premiums required to
have been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Merger Effective Date
will have been paid on or before the Merger Effective Date and, as of the Merger
Effective Date, there will be no liability of the Company or any Commonly
Controlled Entity under any insurance policy or ancillary agreement with respect
to such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring prior to the Merger Effective Date;
(xii) (A) each Benefit Plan that constitutes a
Welfare Plan, and for which contributions are claimed by the Company or any
Commonly Controlled Entity as
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deductions under any provision of the Code, is in material compliance with all
applicable requirements pertaining to such deduction;
(B) with respect to any welfare benefit fund
(within the meaning of Section 419 of the Code) related to a welfare benefit
plan, there is no disqualified benefit (within the meaning of Section 4976(b) of
the Code) that would result in the imposition of a tax under Section 4976(a) of
the Code; and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so exempt and no event or condition exists which
would adversely affect any such determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Merger Effective Date have been
made or will be made prior to the Merger Effective Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company has complied with
each, and is not in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign
("Regulations"), to which such Company's business, operations, assets or
properties is subject. The Company owns, holds, possesses or lawfully uses in
the operation of its business all franchises, licenses, permits, easements,
rights, applications, filings, registrations and other authorizations
("Authorizations") which are in any manner necessary for it to conduct its
business as now or previously conducted or for the ownership and use of the
assets owned or used by it in the conduct of its business, free and clear of all
liens, charges, restrictions and encumbrances and in compliance with all
Regulations. All such Authorizations are listed and described in Schedule 6.23.
The Company is not in default, nor has the Company received any notice of any
claim of default, with respect to any such Authorization. All such
Authorizations are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees. None of such Authorizations
will be adversely affected by consummation of the transactions contemplated
hereby. No Stockholder and no director, officer, employee or former employee of
the Company or any affiliates of the Company, or any other person, firm or
corporation, owns or has any proprietary, financial or other interest (direct or
indirect) in any Authorization which the Company owns, possesses or uses in the
operation of its business as now or previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
6.24, no Stockholder and no director, officer or employee of the Company, or any
member of his or her immediate family or any other of its, his or her
affiliates, owns or has a 5% or more ownership
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interest in any corporation or other entity that is or was during the last three
years a party to, or in any property which is or was during the last three years
the subject of, any contract, agreement or understanding, business arrangement
or relationship with the Company.
6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Stockholders, threatened against the Company
which relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Stockholders, threatened
against the Company or which relates to the Company:
(c) Neither the Company nor any Stockholder knows of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) Except as set forth on Schedule 6.25, the Company is not a
party to or subject to the provisions of any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority.
6.26 RESTRICTIONS. The Company is not a party to any indenture,
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially adversely affects or materially restricts or,
so far as the Company or any of the Stockholders can now reasonably foresee, may
in the future materially adversely affect or materially restrict, the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company after consummation of the transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company (the
"Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (singly, a "Tax", and collectively, the "Taxes")
have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such Tax Returns are required to be filed, and all such
Tax Returns properly reflect the liabilities of the Company for Taxes for the
periods, property or events covered thereby. All Taxes, including without
limitation those which are called for by the Tax
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Returns, required to be paid, withheld or accrued by the Company and any
deficiency assessments, penalties and interest have been timely paid, withheld
or accrued. The accruals for Taxes contained in the Interim Balance Sheet are
adequate to cover the Tax liabilities of the Company as of that date and include
adequate provision for all deferred Taxes, and nothing has occurred subsequent
to that date to make any of such accruals inadequate. The Company's Tax basis in
its assets for purposes of determining its future amortization, depreciation and
other federal income tax deductions is accurately reflected on its Tax books and
records. The Company is not, and has not at any time been, a party to a Tax
sharing, Tax indemnity or Tax allocation agreement, and the Company has not
assumed any Tax liability of any other person or entity under contract. Except
as set forth on Schedule 6.27, the Company has not received any notice of
assessment or proposed assessment in connection with any Tax Returns and there
are not pending tax examinations of or tax claims asserted against any Company
or any of its assets or properties. The Company has not extended, or waived the
application of, any statute of limitations of any jurisdiction regarding the
assessment or collection of any Taxes. There are now (and as of immediately
following the Closing there will be) no Liens (other than any Lien for current
Taxes not yet due and payable) on any of the assets or properties of the Company
relating to or attributable to Taxes. To the knowledge of the Company and the
Stockholders, there is no basis for the assertion of any claim relating to or
attributable to Taxes which, if adversely determined, would result in any Lien
on the assets of the Company or otherwise have an adverse effect on any Company
or its business, operations, assets, properties, prospects or condition
(financial or otherwise). Except as set forth on Schedule 6.27, neither the
Company nor the Stockholders have any knowledge of any basis for any additional
assessment of any Taxes. All Tax payments related to employees, including income
tax withholding, FICA, FUTA, unemployment and worker's compensation, required to
be made by the Company have been fully and properly paid, withheld, accrued or
recorded. There are no contracts, agreements, plans or arrangements, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of the Company that, individually or collectively, could give
rise to any payment (or portion thereof) that would not be deductible pursuant
to Sections 280G, 404 or 162 of the Code. Two correct and complete copies of (a)
all Tax examinations, (b) all extensions of statutory limitations and (c) all
federal, state and local income tax returns and franchise tax returns of each
Company (including, if filed separately, its Subsidiaries) for the last five
fiscal years, or such shorter period of time as any of them shall have existed,
have heretofore been delivered by the Company and the Stockholders to
UniCapital. The Company currently utilizes the accrual method of accounting for
income tax purposes and has not changed its method of accounting for income tax
purposes in the past five years.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) The Company has never utilized nor does it currently
utilize any patent, trademark, trade name, service xxxx, copyright, software,
trade secret or know-how except for those listed on Schedule 6.28 (the
"Intellectual Property"), all of which are owned by the Company free and clear
of any liens, claims, charges or encumbrances. The Intellectual Property
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constitutes all such assets, properties and rights which are used or held for
use in, or are necessary for, the conduct of the business of the Company.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Company.
(c) The Company does not infringe upon or unlawfully or
wrongfully use any patent, trademark, trade name, service xxxx, copyright or
trade secret owned or claimed by another. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the Company and the
Stockholders, threatened relating to any, patent, trademark, trade name, service
xxxx, copyright or trade secret formerly or currently used by the Company. None
of the Intellectual Property is subject to any outstanding order, decree or
judgment. The Company has not agreed to indemnify any person or entity for or
against any infringement of or by the Intellectual Property.
(d) No present or former employee of the Company and no other
person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any patent, trademark, trade name,
service xxxx or copyright, or in any application therefor, or in any trade
secret, which the Company owns, possesses or uses in its operations as now or
heretofore conducted. Schedule 6.28(d) lists all confidentiality or
non-disclosure agreements currently in force and effect to which the Company or
any of its employees is a party.
(e) Schedule 6.28(e) sets forth a complete and accurate list
of all items of Intellectual Property duly registered in, filed in or issued by
the United States Copyright Office or the United States Patent and Trademark
Office, any offices in the various states of the United States and any offices
in other jurisdictions.
(f) All rights of the Company in the Intellectual Property
shall vest in the Surviving Corporation pursuant to the transactions
contemplated hereby without any consent or other approval.
(g) All Intellectual Property in the form of computer software
that is utilized by the Company in the operations of its business is capable of
processing date data between and within the twentieth and twenty-first
centuries, or can be rendered capable of processing such data within six months
by the expenditure of not more than $25,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of the Company
(and such Company's Subsidiaries), and the copies of all leases, instruments,
agreements, licenses, permits, certificates or other documents which are
included on schedules attached hereto or which have been delivered or which have
been made available to UniCapital in connection with the transactions
contemplated hereby, are complete and correct; neither the Company (including
its Company
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Subsidiaries) nor, to the knowledge of the Stockholders, any other party to any
of the foregoing is in material default thereunder; and, except as set forth in
the schedules and documents attached to this Agreement, the rights and benefits
of the Company (including its Company Subsidiaries) thereunder will not be
materially and adversely affected by the transactions contemplated hereby, and
the execution of this Agreement and the performance of the obligations hereunder
will not result in a material violation or breach or constitute a material
default under any of the terms or provisions thereof. Except as set forth on
Schedule 6.29, none of such leases, instruments, agreements, contracts,
licenses, permits, certificates or other documents requires notice to, or the
consent or approval of, any governmental agency or other third party to any of
the transactions contemplated hereby to remain in full force and effect. The
consummation of the transactions contemplated hereby will not give rise to any
right of termination, cancellation or acceleration or result in the loss of any
right or benefit thereunder.
6.30 EXISTING CONDITION. Except as set forth on Schedule 6.30, since
the Interim Balance Sheet Date, the Company has not:
(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or the
of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of the Company or any interest therein;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except in the ordinary course of business
consistent with past practice;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, except in the
ordinary course of business consistent with past practice.
(e) declared, set aside or paid any dividend or made or agreed
to make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its shares of capital stock or other ownership interests;
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(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise),
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or made
any advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its employees or made any increase in, or any addition to, other
benefits to which any of its employees may be entitled;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles;
(l) entered into any transaction other than in the ordinary
course of business consistent with past practice;
(m) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(n) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as Schedule
6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company (including its Company Subsidiaries) has accounts or safe deposit boxes;
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(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company and a
description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions, assets,
and liabilities of the Company. The Company has not engaged in any transaction,
maintained any bank account or used any of its funds except for transactions,
bank accounts and funds which have been and are reflected in the normally
maintained books and records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company has secured, and is in
compliance with, all Environmental Permits, with respect to any premises on
which its business is operated, all of which Environmental Permits shall vest in
the Surviving Corporation upon consummation of the transactions contemplated
hereby. The Company is in compliance with all Environmental Laws.
(b) Neither the Company nor any Stockholder has received any
communication from any Governmental Entity that alleges that the Company is not
in compliance with any Environmental Laws or Environmental Permits.
(c) The Company has not entered into or agreed to any court
decree or order, and is not subject to any judgment, decree or order, relating
to compliance with any Environmental Law or to investigation or cleanup of a
Hazardous Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Company and the Stockholders,
threatened to or against any of its assets or properties pursuant to any
Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company.
(f) The Company has not received a CERCLA 104(e) information
request, nor has it been named a potentially responsible party for any National
Priorities List site under CERCLA or any site under analogous state law or
received an analogous notice or request from
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any non-U.S. Governmental Entity, which notice, request or any resulting inquiry
or litigation has not been fully and finally resolved without possibility of
reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
and any former aboveground or underground tanks on any property owned, operated
or leased by the Company have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by the Company and there are no such articles, containers or
equipment containing PCBs, and there is no asbestos containing material in a
condition or location currently constituting a violation of any Environmental
Law at, on, under or within any property owned, operated or leased by the
Company.
(i) The Company and the Stockholders have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in their possession that have been prepared by
or on behalf of the Company during the past five years.
6.34 NO ILLEGAL PAYMENTS. The Company has not and, to the knowledge of
the Company and the Stockholders, no affiliate, officer, agent or employee
thereof, directly or indirectly, has, during the past five years, on behalf of
or with respect to the Company or any affiliate thereof, (a) made any unlawful
domestic or foreign political contributions, (b) made any payment or provided
services which were not legal to make or provide or which the Company or any
affiliate thereof or any such officer, agent or employee should have known were
not legal for the payee or the recipient of such services to receive, (c)
received any payment or any services which were not legal for the payer or the
provider of such services to make or provide, (d) made any payment to any person
or entity, or agent or employee thereof, in connection with any Lease (as
hereinafter defined) to induce the person or entity to enter into a Lease
transaction, (e) had any transactions or payments related to the Company which
are not recorded in their accounting books and records or (f) had any off-book
bank or cash accounts or "slush funds" related to the Company.
6.35 LEASES. Schedule 6.35 hereto sets forth the Company's financing
arrangements as of the Interim Balance Sheet Date (which, together with all
other financing arrangements entered into by the Company between such date and
the Closing Date, are referred to herein as the "Leases"). The term "Lease
Documents" means the finance arrangements and financing contracts evidencing the
Leases described in Schedule 6.35, together with all related documents and
agreements including, without limitations, master lease agreements, schedules or
other addenda to such Leases, certificates of delivery and acceptance, UCC
financing statements, remarketing agreements, residual guaranty agreements,
insurance policies, guaranty agreements
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and other credit supports. The term "Equipment" means all equipment, inventory
and other property described as being leased or financed pursuant to a Lease, or
in which the Company is granted a security interest pursuant to a Lease. The
term "Obligor" means any lessee party or other party obligated to pay or perform
any obligations under or in respect of a Lease or the Equipment covered by a
Lease (excluding the lessor party thereunder, but otherwise including, without
limitation, any guarantor of a Lease or any vendor, manufacturer or similar
party under a remarketing agreement, residual guaranty or similar agreement).
The term "Scheduled Payments" means the monthly, quarterly or periodic rental
payments or installments of principal and interest under the terms of the
Leases.
(a) There is no restriction or limitation in any of the Lease
Documents or otherwise, restricting the Company from executing this Agreement,
or entering into the transactions contemplated by this Agreement, other than
consents which have been, or prior to the Closing will have been, obtained.
(b) The Company owns the Equipment covered by each Lease or
has a vested and perfected first priority security interest in the Equipment.
All Equipment is located in the United States.
(c) With respect to each Lease, only one chattel paper
original of such Lease exists and is held either by the Company or its secured
lender.
(d) Except as set forth in Schedule 6.35(d), each Lease is in
full force and effect in accordance with its terms, and there has been no
occurrence which would or might permit any Obligor to terminate such Lease or
suspend or reduce any payments or obligations due or to become due in respect of
such Lease or the related Lease Documents by reason of default by the lessor
party under such Lease. None of the Obligors in respect of a Lease or the
related Lease Documents is the subject of a bankruptcy, insolvency or similar
proceeding.
(e) Except as set forth in Schedule 6.35(e) and except for the
delinquency in the payment of any Scheduled Payment that is not more than 90
days past due, there does not exist any default in the payment of any Scheduled
Payments due under any Lease or the related Lease Documents, and there does not
exist any other default, breach, violation or event permitting acceleration,
termination or repossession under any Lease or the related Lease Documents or
any event which, to the knowledge of the Company and the Stockholders, with
notice and the expiration of any applicable grace or cure period, would
constitute such a default, breach, violation or event permitting acceleration,
termination or repossession under such Lease or the related Lease Documents.
(f) The Company has not acted in a manner which (nor has it
failed to act where such failure to act) would alter or reduce any of its rights
or benefits under any manufacturer's or vendors' warranties or guarantees with
respect to any Equipment.
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(g) The Company has complied with all requirements of any
federal, state or local law, including without limitation, usury laws,
applicable to each Lease.
(h) Each Lease has the following characteristics:
(i) such Lease was originated in the United
States and the Scheduled Payments thereunder are payable in U.S. dollars by
Obligors domiciled in the United States;
(ii) Except as set forth on Schedule 6.35(h),
the lessee party under such Lease has unconditionally accepted the Equipment
covered by such Lease;
(iii) Except as set forth on Schedule 6.35(h),
at least one Scheduled Payment has been made by the Obligor under each such
Lease; and
(iv) no Obligor in respect of such Lease is an
affiliate of the Company.
(i) Each Lease and the related Lease Documents are valid,
binding, legally enforceable and non-cancelable obligations of the parties
thereto, enforceable in accordance with their respective terms. Each Lease is a
business obligation of the lessee thereunder and is not a "consumer transaction"
under any applicable federal or state regulation.
(j) To the knowledge of the Stockholders, no Lease or related
Lease Document is the subject of a fraudulent scheme by any Obligor or any
supplier of Equipment.
(k) Each item of Equipment is subject to a Lease.
(l) Each Lease is a fixed rate lease contract.
(m) No Lease or related Lease Document is subject to any
legally enforceable right of rescission, set-off, counterclaim, abatement or
defense, including without limitation any defense of usury, nor will the
operation of any of the terms of any Lease or any related Lease Document or the
exercise of any right or remedy thereunder render such Lease or any related
Lease Document or the obligations thereunder unenforceable, or subject the same
to any legally enforceable right of rescission, set-off, counterclaim, abatement
or defense. No Obligor has asserted any legally enforceable right of rescission,
set-off, counterclaim, abatement or defense to its obligations under a Lease or
any related Lease Document.
(n) As to the Leases and the related Lease Documents, (i) none
has been amended or modified (a) to extend the maturity date for a period of
longer than one year, or (b) to alter the amount or time of payment of any
amount due thereunder, unless as to (a) and (b) such extension or alteration is
reasonably expected to result in no economic loss to the Company; (ii) no
indulgences or waivers have been granted in respect of the obligations of any
Obligor
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under any Lease; and (iii) neither the Company nor its Subsidiaries have
advanced any monies on behalf of any Obligor.
(o) Each Lease requires the Obligor thereunder at its own cost
and expense to maintain the Equipment leased thereunder in good repair,
condition and working order, and, to the knowledge of the Stockholders, each
Obligor under a Lease is currently in compliance with such requirement.
(p) Each Lease requires the Obligor thereunder (i) to pay all
fees, taxes (except income taxes), and other charges or liabilities arising with
respect to the Equipment leased thereunder or the use thereof, (ii) to keep the
Equipment free and clear of any and all liens, security interests and other
encumbrances, other than security interests of the Company, (iii) to hold
harmless the lessor thereunder and its successors and assigns against the
imposition of any fees, charges, liabilities and encumbrances, (iv) to bear all
risk of loss associated with the Equipment covered by or securing the
obligations under such Lease during the term of such Lease and (v) to maintain
at the cost of the Obligor public liability and casualty insurance in respect of
such Equipment covered by such Lease.
(q) Each Lease prohibits without the lessor's prior written
consent any relocation of the Equipment covered by such Lease and requires the
Obligor to execute such agreements and documents as may reasonably be requested
by the lessor in connection with any such relocation.
(r) Each Lease involves either the lease of tangible personal
property owned by the Company or the loan of money secured by a security
interest in tangible personal property owned by the Obligor thereunder.
(s) The Company has not received any notice challenging its
ownership or the priority of its security interest in the Equipment covered by
each Lease, and there are no proceedings pending before any court or
governmental entity or, to the knowledge of the Company and the Stockholders,
threatened by any Obligor or other party, (i) asserting the invalidity of any
Lease or the related Lease Documents, (ii) seeking to prevent payment or
performance by any Obligor of any Lease or any of the terms of the related Lease
Documents, or (iii) seeking any determination or ruling that might adversely
affect the validity or enforceability of any Lease or any of the terms or
provisions of the related Lease Documents.
(t) As to each Lease, there are no agreements or
understandings between the Company and the Obligors in respect of such Lease or
otherwise binding on the Company other than as expressly set forth in the Lease
and the related Lease Documents.
6.36 LEASE FUNDING. The Company is in compliance with all of the terms
and covenants of, and is not in default or breach under, each agreement,
contract, understanding or arrangement with any funding source for the Leases.
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6.37 DISCLOSURE. The Company has delivered, or in the case of the
Leases and Lease Documents, made available, to UniCapital true and complete
copies of each agreement, contract, commitment or other document (or, in the
case of any such document not in the possession of reasonably available to the
Company or a Stockholder, accurate and complete summaries thereof) that is
referred to in the schedules to this Agreement or that has been requested by
UniCapital or its representatives. Without limiting any exclusion, exception or
other limitation contained in any of the representations and warranties made
herein, this Agreement and the schedules hereto and all other documents and
information prepared or certified by the Stockholders to the Company and
provided to UniCapital and its representatives pursuant hereto do not and will
not include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements herein and therein not misleading. If any
Stockholders become aware of any fact or circumstance that would change a
representation or warranty of any Stockholder in this Agreement or any
representation made on behalf of the Company (including its Company
Subsidiaries), then the Stockholders shall immediately give notice of such fact
or circumstance to UniCapital. However, such notification shall not relieve the
Company or any of the Stockholders of their respective obligations under this
Agreement, and at the sole option of UniCapital, the truth and accuracy of any
and all warranties and representations of the Stockholders, at the date of this
Agreement and at the Closing, shall be a precondition to the consummation of
this transaction.
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and as
follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. Immediately prior to the effectiveness
of the Merger, each of UniCapital and Newco is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
conduct of its business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Stockholders on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale, will be legally equivalent in all respects to the majority of UniCapital
Stock issued and outstanding as of the date hereof. The UniCapital Stock to be
issued upon the conversion of Company Stock pursuant to the terms of this
Agreement will be free and clear of all liens, encumbrances and claims of every
kind, other than restrictions upon transfer contained herein and other than any
liens, encumbrances or claims arising other than by the actions of UniCapital or
Newco.
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7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with the provisions hereof (the "UniCapital
Documents") have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by UniCapital and Newco and
constitutes and the UniCapital Documents when executed and delivered will
constitute the legal, valid and binding obligations of UniCapital and Newco
enforceable against UniCapital and Newco in accordance with their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of any
other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or Newco is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity that is applicable
to UniCapital or Newco, (c) the charter documents of UniCapital or Newco, or (d)
any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which UniCapital or Newco is a party, by which UniCapital or Newco may have
rights or by which any of the properties or assets of UniCapital or Newco may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of UniCapital or Newco thereunder. Except for filing the Certificate
of Merger and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 and except as aforesaid, no authorization, approval or consent of, and no
registration or filing with, any Governmental Entity is required in connection
with the execution, delivery or performance of this Agreement by UniCapital or
Newco.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing of the IPO by the IPO Price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and Newco
have complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of the Company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay
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any amounts other than routine filing fees. None of such Authorizations will be
adversely affected by consummation of the transactions contemplated hereby. No
stockholder and no director, officer, employee or former employee of UniCapital
of Newco any of their affiliates, or any other person, firm or corporation, owns
or has any proprietary, financial or other interest (direct or indirect) in any
Authorization which UniCapital or Newco owns, possesses or uses in the operation
of the business of UniCapital and Newco as now or previously conducted.
7.7 TRANSACTIONS WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or Newco, or any member of his or her immediate family or any other
of its, his or her affiliates, owns or has a 5% or more ownership interest in
any corporation or other entity that is or was during the last three years a
party to, or in any property which is or was during the last three years the
subject of, any contract, agreement or understanding, business arrangement or
relationship with UniCapital or Newco.
7.8 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of UniCapital and Newco, threatened against UniCapital or Newco which
relates to the transactions contemplated by this Agreement.
(b) No litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory official, body or authority is pending or, to the knowledge of
UniCapital or Newco, threatened against UniCapital or Newco or which relates to
UniCapital or Newco.
(c) Neither UniCapital nor Newco is a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority.
7.9 MISCELLANEOUS. Prior to the consummation of the Merger, UniCapital
and Newco have no material properties or assets and are not party to any
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.9
hereto.
7.10 REGISTRATION RIGHTS. As of the date hereof and as of the Merger
Effective Date, no officer, director or shareholder of UniCapital will have been
granted any registration rights with respect to the registration of any shares
of capital stock of UniCapital.
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8. COVENANTS OF STOCKHOLDERS AND COMPANY
For purposes of this Article 8, each reference to a "Company" shall be
deemed to refer as well to each and all of its Subsidiaries unless the context
otherwise specifically requires. The following covenants shall apply during the
period from and after the date hereof through the Closing Date.
8.1 BUSINESS IN THE ORDINARY COURSE. Except as otherwise contemplated
in Section 8.15, the Company shall, and the Stockholders shall cause the Company
to, conduct its business solely in the ordinary course and consistent with past
practice.
8.2 EXISTING CONDITION. The Company shall not, and no Stockholder shall
cause the Company to, cause or permit to occur any of the events or occurrences
described in Section 6.30 hereof.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. Except as otherwise
contemplated in Section 8.15, the Company shall, and the Stockholders shall
cause the Company to, maintain and service its properties and assets in order to
preserve their value and usefulness in the conduct of its respective business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Stockholders shall cause the Company to, use commercially reasonable efforts to
keep available the services of its current employees and agents and to maintain
its relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Company shall, and the Stockholders
shall cause the Company to, notify UniCapital of any material changes in the
terms of the insurance policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Company shall, and the Stockholders
shall cause the Company to, comply with all laws, ordinances, rules, regulations
and orders applicable to it or its business, operations, properties or assets,
noncompliance with which might materially affect it.
8.7 CONDUCT OF BUSINESS. The Company shall, and the Stockholders shall
cause the Company to, use reasonable commercial efforts to conduct its business
in such a manner that on the Closing Date and on the Merger Effective Date the
representations and warranties of the Stockholders contained in this Agreement
shall be true, as though such representations and warranties were made on and as
of each such date (except to the extent such representations or warranties
expressly speak as of a specific date), and the Company shall, and the
Stockholders shall cause the Company to, use commercially reasonable efforts to
cause all of the conditions to the obligations of UniCapital and the
Stockholders under this Agreement to be satisfied on or prior to the Closing
Date. The Company shall, and the Stockholders shall cause the Company to,
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maintain credit underwriting standards consistent with past practices.
Furthermore, the Company shall, and the Stockholders shall cause the Company to,
maintain a residual value accounting methodology consistent with past practice.
8.8 ACCESS. Upon prior reasonable notice the Company shall, and the
Stockholders shall cause the Company to, give to UniCapital's officers,
employees, counsel, accountants and other representatives free and full access
to and the right to inspect, during normal business hours, all of the premises,
properties, assets, records, contracts and other documents relating to the
Company and shall permit them to consult with its officers, employees,
accountants, counsel and agents for the purpose of making such investigation of
the Company as UniCapital shall desire to make, provided that such investigation
shall not unreasonably interfere with the Company's business operations, and
provided further that UniCapital shall not contract or consult with any
non-officer employees of the Company without the Company's prior consent, which
shall not be unreasonably withheld. Furthermore, the Company shall, and the
Stockholders shall cause the Company to, furnish to UniCapital all such
documents and copies of documents and records and information with respect to
the affairs of the Company and copies of any working papers relating thereto as
UniCapital shall from time to time reasonably request. No information or
knowledge obtained in any investigation pursuant to this Section 8.8 or
otherwise shall affect or be deemed to modify any representation or warranty
contained in this Agreement or the conditions to the obligations of the parties
to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. The Company and the
Stockholders shall not give notice to third parties or otherwise make any press
release or other public statement concerning this Agreement or the transactions
contemplated hereby. The Company and the Stockholders shall not grant any
interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Company, the business (current and proposed) of UniCapital, the
Registration Statement (as defined below), the IPO or any other matter connected
with any of the foregoing without the express prior written approval of
UniCapital, and all inquiries and questions with respect to any of the foregoing
shall be coordinated through Xxxxxx New, Chief Executive Officer of UniCapital.
The Company and each Stockholder shall coordinate all communications with the
employees and agents of the Company through UniCapital prior to making any such
communication. Notwithstanding the foregoing, this Section 8.9 shall not be
interpreted to prevent the Company or any Stockholder from disclosing
information as compelled by a court order, provided however, that prior to
disclosing any information concerning this Agreement or the transaction
contemplated hereby in response to any such court order, the Company or
Stockholder, as applicable, shall provide UniCapital with prompt notice of the
court order so that UniCapital may take whatever action it deems appropriate to
prohibit such disclosure.
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, the Company, the Stockholders and any of their
affiliates shall not, and each of them shall cause its respective employees,
agents and representatives (including, without
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limitation, any investment banking, legal or accounting firm retained by it or
them and any individual member or employee of the foregoing) (each, an "Agent")
not to, (a) initiate, solicit or seek, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its shareholders or any of them) with
respect to a merger, acquisition, consolidation, recapitalization, liquidation,
dissolution or similar transaction involving, or any purchase of all or any
portion of the assets or any equity securities of, the Company (any such
proposal or offer being hereinafter referred to as an "Acquisition Proposal"),
or (b) engage in any negotiations concerning, or provide any confidential
information or data to, or have any substantive discussions with, any person
relating to an Acquisition Proposal, (c) otherwise cooperate in any effort or
attempt to make, implement or accept an Acquisition Proposal, or (d) enter into
or consummate any agreement or understanding with any person or entity relating
to an Acquisition Proposal, except for the Merger contemplated hereby. If the
Company or any Stockholder, or any of their respective Agents, have provided any
person or entity (other than UniCapital) with any confidential information or
data relating to an Acquisition Proposal, then they shall request the immediate
return thereof. The Company and the Stockholders shall notify UniCapital
immediately if any inquiries, proposals or offers related to an Acquisition
Proposal are received by, any confidential information or data is requested
from, or any negotiations or discussions related to an Acquisition Proposal are
sought to be initiated or continued with, it or any individual or entity
referred to in the first sentence of this Section 8.10. The covenant contained
in this Section 8.10 shall not survive any termination of this Agreement
pursuant to Sections 13.1, 13.2 or 13.3.
8.11 THIRD PARTY APPROVALS. Prior to the Closing Date, the Company
shall satisfy any requirement for notice and approval of the transactions
contemplated by this Agreement under applicable agreements with third parties,
and shall provide UniCapital with satisfactory evidence of such third party
approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Company shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement, and shall provide UniCapital with proof that any required notice has
been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Company and the
Stockholders shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to any Stockholder or to the Company the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in Article 6 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of any Stockholder or the Company to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by such person hereunder.
(b) UniCapital shall give prompt notice to each Stockholder of
(i) the occurrence or non-occurrence of any event known to UniCapital the
occurrence of non-occurrence of which would be likely to cause any
representation or warranty contained in Article
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7 to be untrue or inaccurate in any material respect at or prior to the Closing
Date or the Merger Effective Date and (ii) any material failure of UniCapital to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder.
(c) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 8.14, (ii) modify the conditions set forth in Sections 9 and 10 or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Merger
Effective Date to supplement or amend promptly the schedules hereto with respect
to any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described in
the schedules, provided, that no amendment or supplement to a schedule that
constitutes or reflects a material adverse change in the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the
Company (a "Material Adverse Amendment") may be made unless UniCapital consents
to such Material Adverse Amendment ; provided, further, however, that if the
amendment or supplement relates to changes in facts or circumstances occurring
subsequent to the date of this Agreement and such amendment or supplement
constitutes or reflects a Material Adverse Amendment, then such amendment or
supplement shall be accepted by UniCapital subject to the provisions of Section
12.2 and 12.5 hereof. No amendment of or supplement to a schedule shall be made
later than 48 hours prior to the anticipated effectiveness of the Registration
Statement defined in Section 9.4. Notwithstanding anything to the contrary
contained in this Section 8.14, the Stockholders shall not be required to
supplement or amend the schedules hereto with respect to any matters hereafter
arising or discovered which individually or in the aggregate do not constitute
or reflect a material adverse change in the business, operations, assets,
properties, prospects or condition (financial or otherwise) of the Company (a
"Material Adverse Change"); provided; however, that the Stockholders shall be
required to supplement or amend the schedules no later than 48 hours prior to
the anticipated effectiveness the Registration Statement defined in Section 9.4
with respect to any matters hereafter arising or discovered, which if existing
or known at the date of this Agreement, would have been required to be set forth
or described in the schedules, regardless of whether such matters reflect or
constitute a Material Adverse Change. Only (i) the schedules attached to this
Agreement at the time of its execution and (ii) amended schedules as accepted
under the standards and provisions of this Section 8.14, shall be deemed to be a
part of this Agreement in accordance with Section 19.3 hereof.
8.15 REPAYMENT OF INDEBTEDNESS; CANCELLATION OF CONTRACTS; PRE-CLOSING
DISTRIBUTIONS. Immediately preceding the Merger Effective Date, the Company
shall have distributed to the Stockholders the property identified on Schedule
8.15 or the Stockholders shall purchase from the Company such property for its
book value. Prior to the Merger Effective
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Date, the Company shall, and the Stockholders shall cause the Company to,
terminate the contracts listed on Schedule 8.15. Immediately preceding the
Merger Effective Date, (A) the entities identified on Schedule 8.15 shall have
repaid the Company in full amounts owing by such entities to the Company and (B)
all employees of the Company identified on Schedule 6.14 shall have repaid the
Company in full all amounts owing by such persons to the Company and the
Stockholders shall have repaid to the Company in full all amounts owing by the
Stockholders to the Company.
8.16 DELIVERY OF INFORMATION. The Company shall, and the Stockholders
shall cause the Company to, provide a schedule of the Company's liabilities as
of the Merger Effective Date (or such other date) as may be requested by
UniCapital's lenders.
8.17 RELEASE OF GUARANTEES. Immediately preceding the Merger Effective
Date, the Company shall deliver to UniCapital evidence that the Company shall
have been released from all liability (including any and all guarantees) for the
obligations of the Company and Xxxxxxx X. Xxxxxxxxxxx to the FDIC described in
Schedule 10.14.
8.18 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, the Company shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide
UniCapital with all information reasonably requested and required by it to
satisfy any filing requirements it may have under such act.
9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY
AND THE STOCKHOLDERS
The obligations of the Company and the Stockholders hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as of the Closing Date and as of the Merger Effective Date as
though such representations and warranties had been made as of such times; all
of the terms, covenants and conditions of this Agreement to be complied with and
performed by UniCapital and Newco on or before the Closing Date shall have been
duly complied with and performed; and a certificate to the foregoing effect
dated the Merger Effective Date and signed by a duly authorized agent, the
President or any Vice President of UniCapital shall have been delivered to the
Stockholders.
9.2 EMPLOYMENT AGREEMENTS. The Surviving Corporation shall have
executed and delivered Employment Agreements, in the form of Annex IV attached
hereto, to each of the persons listed on Schedule 9.2 hereto.
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9.3 OPINION OF COUNSEL. The Stockholders shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein; and
(c) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation OR
Bylaws of UniCapital or Newco;
(d) the shares of UniCapital Stock to be received by the
Stockholders on the Merger Effective Date shall be duly authorized, fully paid
and nonassessable.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration Statement shall have been declared
effective by the SEC not later than June 30, 1998, UniCapital and the
underwriters named therein shall have executed the Underwriting Agreement and
the underwriters named therein shall have agreed to acquire, subject to the
conditions set forth in the Underwriting Agreement, the shares of UniCapital
Stock covered by the Registration Statement. There shall have been no stop-order
issued (that remains in effect) by the Securities and Exchange Commission with
respect to the Registration Statement.
9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
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10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholders shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholders contained in this Agreement shall be true on
and as of the Closing Date and as of the Merger Effective Date with the same
effect as though such representations and warranties had been made on and as of
such dates, except for matters expressly disclosed in the certificate or a
schedule thereto (which shall not serve to modify any representation or warranty
made herein or in any other document or otherwise in information supplied by the
Company or any Stockholder); and each and all of the agreements of the
Stockholders and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited balance sheet
of the Company as of the end of the most recently completed calendar month prior
to the Closing Date, and the unaudited statements of income, cash flows and
stockholders' equity of the Company for the periods then ended, which statements
shall have disclosed no material adverse change in the financial condition of
the Company or the results of its respective operations from the financial
statements originally furnished by the Company as set forth in Schedule 6.12.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company shall have occurred, and the Company shall not have
suffered any material loss or damage to any of its properties or assets, whether
or not covered by insurance, since the Interim Balance Sheet Date, which change,
loss or damage materially affects or impairs the ability of the Company to
conduct its business as now conducted or as proposed to be conducted; and
UniCapital shall have received on the Closing Date a certificate signed by the
Stockholders and dated the Merger Effective Date to such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company including, but not limited to, environmental and land
use practices, import and export laws, compliance with contracts and federal,
state and local laws and regulations governing the respective operations of the
Company, which review reflects compliance with all applicable laws governing the
Company, disclosing no material actual or probable violations, compliance
problems, required capital expenditures or other substantive environmental, real
estate and land use related concerns and which review is otherwise satisfactory
in all respects to UniCapital, in its sole discretion.
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10.6 STOCKHOLDERS' RELEASE. At the Closing Date, each Stockholder shall
have executed and delivered to UniCapital a Stockholder's Release in the form of
Annex VI attached hereto.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex
IV attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
Xxxxxx & Rich, P.C., counsel to the Stockholders, dated the Merger Effective
Date, in form and substance satisfactory to UniCapital, to the effect that:
(a) the Company has been duly organized and is validly
existing and in good standing under the laws of the state of its incorporation;
(b) to the knowledge of such counsel, the Company is duly
authorized, qualified and licensed under all applicable laws, regulations,
ordinances or orders of public authorities to carry on its business in the
places and in the manner now conducted;
(c) the authorized and outstanding capital stock of the
Company is as represented by the Stockholders in this Agreement and each share
of such stock has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of the preemptive rights of any
stockholder;
(d) to the knowledge of such counsel, the Company does not
have any outstanding options, warrants, calls, conversion rights or other
commitments of any kind to issue or sell any of its capital stock;
(e) this Agreement has been duly authorized, executed and
delivered by the Company and the Stockholders and constitutes a valid and
binding agreement of the Company and the Stockholders enforceable in accordance
with its terms, except as such enforceability may be subject to bankruptcy,
moratorium, insolvency, reorganization, arrangement and other similar laws
relating to or affecting the rights of creditors and except (i) as the same may
be subject to the effect of general principles of equity and (ii) that no
opinion need be expressed as to the enforceability of indemnification provisions
included herein;
(f) upon consummation of the Merger contemplated by this
Agreement, UniCapital will receive good title to the Company Stock, free and
clear of all liens, security interests, pledges, charges, voting trusts,
equities, restrictions, encumbrances and claims of every kind;
(g) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.23, the Company is not in violation of or default under any
law or regulation, or under any order of any court, commission, board, bureau,
agency or instrumentality wherever
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located and there are no claims, actions, suits or proceedings pending, or
threatened against or affecting the Company, at law or in equity, or before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality wherever located;
(h) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.17, the Company is not in default under any of its material
contracts or agreements or has received notice of such default;
(i) no notice to, consent, authorization, approval or order of
any court or governmental agency or body or of any other third party is required
in connection with the execution, delivery or consummation of this Agreement by
any Stockholders or for the transfer to UniCapital of the Company Stock; and
(j) the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or constitute a
default under any of the terms or provisions of the Company's charter documents
or the bylaws or any Contract or Lease listed on Schedules 6.17 and 6.35.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. Stockholders shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of incorporation and, unless waived by UniCapital, in each state
in which the Company is authorized to do business, showing that the Company is
in good standing and authorized to do business and that all state franchise
and/or income tax returns and taxes for the Company for all periods prior to the
dates of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the Securities and Exchange Commission with respect to the
Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS; PRE-CLOSING DISTRIBUTIONS;
CANCELLATION OF CONTRACTS. Immediately preceding the Merger Effective Date (A)
the entities identified on Schedule 8.15 shall have repaid the Company in full
amounts owing by such entities to the
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Company and (B) all employees of the Company identified on Schedule 6.14 shall
have repaid the Company in full all amounts owing by such persons to the Company
and the Stockholders shall have (i) repaid to the Company in full all amounts
owing by the Stockholders to the Company and (ii) completed all transactions
contemplated by Section 8.15.
10.13 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 shall have expired or been terminated.
10.14 RELEASE OF GUARANTEES. UniCapital shall have received evidence
that the Company shall have been released from all liability (including any and
all guarantees) for the obligations of the Company and Xxxxxxx X. Xxxxxxxxxxx to
the FDIC described in Schedule 10.14.
11. COVENANTS OF UNICAPITAL
11.1 INTENTIONALLY OMITTED.
11.2 UNICAPITAL STOCK OPTIONS. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall make available options to purchase that number of
shares of UniCapital Stock having a fair market value on the effective date of
the Registration Statement, based upon the IPO price per share set forth in the
Underwriting Agreement, equal to 6.25% of the Effective Date Consideration
(valuing the UniCapital Stock to be issued as part of the Effective Date
Consideration at the IPO price per share for the purposes of this Section 11.2)
to be granted to those non-Stockholder key employees of the Surviving
Corporation after the Closing as are designated by the principal executive
officer of the Surviving Corporation who is entering into an Employment
Agreement pursuant to Section 9.2 hereof (or such other officer designated by
the Surviving Corporation and acceptable to UniCapital). Not later than seven
days prior to the effective date of the Registration Statement, the officer
designating the recipients of such options shall provide to UniCapital a written
list of the names of those designated recipients who will receive options
exercisable at the IPO price and the relative percentages of the 6.25% option
pool provided under this Section 11.2 to be awarded to each recipient, as well
as the percentage of options, if any, to be reserved for future issuance. Any
options reserved for future issuance shall be granted at an exercise price equal
to the fair market value of UniCapital Stock as of the date of grant. All
options shall be granted in accordance with UniCapital's policies, and
authorized and issued under the terms of UniCapital's principal stock option
plan for the benefit of employees of UniCapital and its subsidiaries.
11.3 INFORMATION FILING. To the extent the Unified Transaction is a
transaction that falls within Section 351 of the Code, UniCapital shall file all
information required to be filed by it pursuant to Treasury Regulation Section
1.351-3(b).
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11.4 INDEBTEDNESS. The failure of the Company to obtain the consent of
its lenders to the change of control of the Company or the substitution of a
UniCapital guaranty or the assumption by UniCapital of the indebtedness set
forth on Schedule 11.4 shall not be deemed a breach hereunder.
11.5 STUB PERIOD TAX RETURN. UniCapital shall cause Buck & Sturmer
Company ("ABuck & Sturmer") to timely prepare federal and state income tax
returns required to be filed by the Company for the tax period ended on the
Merger Effective Date. UniCapital agrees to timely file such returns prepared by
Buck & Sturmer; provided, however, that UniCapital shall not be required to file
such returns as prepared by Buck & Sturmer if it does not believe in its sole
discretion that such returns are true, correct and complete and that such
returns properly reflect the liabilities of the Company for Taxes for the
periods covered thereby.
11.6 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, UniCapital shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide the
Company with all information reasonably requested and required by it to satisfy
any filing requirements it may have under such act.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, each Stockholder jointly and
severally, covenants and agrees that such Stockholder will indemnify, defend,
protect and hold harmless UniCapital, Newco and the Surviving Corporation and
their respective officers, stockholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement until the Expiration Date
(as defined in Section 12.6) from and against all claims, damages, losses,
liabilities, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively, "Losses") incurred
by UniCapital, Newco or the Surviving Corporation as a result of or arising from
(a) any breach of the representations and warranties made by the Stockholders
set forth herein or on the schedules or certificates delivered in connection
herewith, (b) any nonfulfillment of any covenant or agreement on the part of the
Stockholders or the Company under this Agreement, (c) the business, operations
or assets of the Company prior to the Merger Effective Date or the actions or
omissions of the Company's directors, officers, stockholders, employees or
agents prior to the Merger Effective Date, other than Losses arising from
matters expressly disclosed in the Financial Statements, this Agreement or the
Schedules to this Agreement, or (d) any liability under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or other
federal or state law or regulation, at common law or otherwise, arising out of
or based upon (i) any untrue statement or alleged untrue statement of a material
fact relating to the Company (including its Subsidiaries) or the Stockholders
contained in any preliminary
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prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto (including any additional
registration statement filed pursuant to Rule 462(b) under the Securities Act),
which statement was provided or was based upon information or documents provided
to UniCapital or its counsel by the Company (including its Subsidiaries) or the
Stockholders, or (ii) any omission or alleged omission to state therein a
material fact relating to the Company (including its Subsidiaries) or the
Stockholders required to be stated therein or necessary to make the statements
therein not misleading, which information was not provided to UniCapital or its
counsel by the Company (including its Subsidiaries) or the Stockholders;
provided, however, that such indemnity shall not inure to the benefit of
UniCapital, Newco or the Surviving Corporation to the extent that such untrue
statement (or alleged untrue statement) was made in, or such omission (or
alleged omission) occurred in, any preliminary prospectus and the Stockholders
provided, in writing, corrected information to UniCapital for inclusion in the
final prospectus, and such information was not so included.
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, notwithstanding any disclosure
made in this Agreement or in the schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, each Stockholder
jointly and severally, covenants and agrees that such Stockholder will
indemnify, defend, protect and hold harmless UniCapital, Newco and the Surviving
Corporation and their respective officers, stockholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, employees, successors
and assigns at all times from and after the date of this Agreement, from and
against all Losses incurred by UniCapital, Newco or the Surviving Corporation as
a result of or incident to: (a) the existence of liabilities of the Company
(including its Subsidiaries) in excess of the liabilities set forth on Schedule
6.13 (excluding liabilities incurred in connection with Leases and Lease
Documents in the ordinary course of business consistent with past practice and
the Company's credit underwriting standards), to the extent of such excess; (b)
the failure of the Company or the Stockholders to file all required Form 5500's
prior to the Merger Effective Date; (c) the litigation matters listed on
Schedule 6.25; (d) the tax matters listed on Schedule 6.27; (e) those Scheduled
Payments delinquent for more than 90 days as of the Closing Date ("Delinquent
Accounts"), net of applicable reserves reflected on the balance sheet of the
Company immediately prior to the preparation of the Closing Date Balance Sheet;
provided, however, that this Section 12.2(e) shall not apply to any Delinquent
Accounts which at any time during the one year period after the Closing Date are
not more than 90 days past due; (f) those matters listed in Schedule 6.35(d);
and (g) a Material Adverse Amendment pursuant to Section 8.14 hereof.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, covenant and agree that they will indemnify, defend, protect and hold
harmless the Stockholders at all times from and after the date of this Agreement
from and against all Losses incurred by the Stockholders as a result of or
arising from (a) any breach of the representations and warranties made by
UniCapital and Newco set forth herein or on the schedules or certificates
attached hereto, (b) any nonfulfillment of any agreement on the part of
UniCapital under this Agreement, or (c) any
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liability under the Securities Act, the Exchange Act or other federal or state
law or regulation, at common law or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to
UniCapital (including all of the companies, other than the Company, acquired by
UniCapital as part of the Unified Transaction, but only to the extent that
UniCapital is actually indemnified by such other companies for such liability)
contained in any preliminary prospectus, the Registration Statement or any
prospectus forming a part thereof, or any amendment thereof or supplement
thereto (including any registration statement filed pursuant to Rule 462(b)
under the Securities Act), or arising out of or based upon any omission or
alleged omission to state therein a material fact relating to UniCapital
(including all of the companies, other than the Company, acquired by UniCapital
as part of the Unified Transaction, but only to the extent that UniCapital is
actually indemnified by such other companies for such liability) required to be
stated therein or necessary to make the statements therein not misleading, which
liability is not the subject of indemnification of UniCapital, Newco and the
Surviving Corporation pursuant to Section 12.1(c) above.
12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent the Indemnifying Party has actually paid
any amount to the Indemnified Party in respect of any Loss in connection with
such Third Party Claim, the Indemnifying Party shall have a right of subrogation
with respect to such Third Party Claim to the extent of such payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party and provided further that
selection for these purposes of Xxxxxx & Rich, absent any actual or reasonably
likely conflict of interest with respect to parties or defenses, shall not be
objected to by UniCapital), any Third Party Claim as the Indemnifying Party
pursues the same in good faith and diligently and so long as the Third Party
Claim does not relate to an actual or potential Loss to which Section 12.4(e)
applies in which the Indemnified Party is UniCapital, Newco or the Surviving
Corporation. If the Indemnifying Party undertakes to
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defend or settle, it shall promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in the defense thereof and in any settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records or information reasonably
requested by the Indemnifying Party that are in the Indemnified Party's
possession or control. Notwithstanding the foregoing, the Indemnified Party
shall have the right to participate in any matter through counsel of its own
choosing at its own expense (unless there is a conflict of interest that
prevents counsel for the Indemnifying Party from representing the Indemnified
Party, in which case the Indemnifying Party will reimburse the Indemnified Party
for the expenses of its counsel). After the Indemnifying Party has notified the
Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability, except to the extent such
participation is requested by the Indemnifying Party, in which event the
Indemnified Party shall be reimbursed by the Indemnifying Party for reasonable
additional legal expenses and out-of-pocket expenses, and except in the case of
a Third Party Claim relating to an actual or potential Loss to which Section
12.4(e) applies in which the Indemnified Party is UniCapital, Newco or the
Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, Newco or the
Surviving Corporation as the Indemnified Party (notice of which opinion shall be
given in writing to the Indemnifying Party), any Third Party Claim seeks
material prospective relief which could have a material adverse effect on any
such Indemnified Party or any subsidiary, then such Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such
Third Party Claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense (including, but not limited to, fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation and all counseling or engineering fees and expenses
related thereto) shall be included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified Party elects to exercise
such right, then the Indemnifying Party shall have the right
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to participate in, but not control, the defense of such Third Party Claim at the
sole cost and expense of the Indemnifying Party.
12.5 LIMITATIONS ON INDEMNIFICATION. (a) To the extent of any amount
that UniCapital actually receives as a result of a Net Worth Deficiency that is
directly attributable to an Indemnifiable Decrease, UniCapital shall not be
entitled to any indemnity under Article 12. An "Indemnifiable Decrease" shall be
equal to the amount of any Net Worth Deficiency that consists of a liability for
which UniCapital would otherwise be entitled to indemnity under Article 12 but
that has been (a) accrued or (b) actually paid (so long as it was not previously
accrued on or before December 31, 1997) during the Interim Net Worth Period. The
"Interim Net Worth Period" shall mean the period beginning on January 1, 1998
and ending on the Closing Date. No amounts under (a) or (b) that have not been
reflected on the Company's (or its Subsidiaries') financial statements under
generally accepted accounting principles applied consistently with previous
practice shall be deemed to an Indemnifiable Decrease.
(b) No Indemnified Party shall assert any claim (other than a
Third Party Claim) for indemnification hereunder until such time as the
aggregate of all claims which such Indemnified Party may have against an
Indemnifying Party plus any Indemnifiable Decrease shall exceed $407,000 (the
"Basket Limitation"), at which time an Indemnified Party shall be entitled to
seek indemnification for all claims pursuant to this Article 12, but only to the
extent such claims, in the aggregate, exceed the Basket Limitation. For purposes
of the preceding sentence, UniCapital, Newco and the Surviving Corporation shall
be considered to be a single Indemnifying and Indemnified Party and the
Stockholders shall be considered to be a single Indemnifying and Indemnified
Party. Notwithstanding the foregoing, on each date on which any Earn-Out
Consideration is paid, the Basket Limitation shall be increased by that amount
(the "Basket Adjustment") equal to one percent (1%) of any such Earn-Out
Consideration, without prejudice to UniCapital's receipt of or right to receive
indemnification for claims exceeding the amount of the Basket Limitation in
effect at the time such claims were brought. If the Basket Limitation is
adjusted pursuant to the preceding sentence after such time as any Indemnified
Party, pursuant to this Article 12, has collected an amount in excess (such
excess amount is referred to as the "Excess Indemnity") of the Basket Limitation
(prior to giving effect to the applicable Basket Adjustment), then such
Indemnified Party, within 10 business days after the final determination of such
Earn-Out Consideration, shall pay to the Indemnifying Party an amount equal to
the lesser of applicable Basket Adjustment or the Excess Indemnity. In addition,
notwithstanding any provision of this Agreement to the contrary, for the
purposes of preventing a double recovery the Stockholders shall not be obligated
to indemnify UniCapital or any other indemnified party pursuant to Section 12.1
or 12.2 with respect to any particular act, omission, condition or event if and
to the extent that the loss resulting or arising from such act, omission,
condition or event has, directly or indirectly, been taken into account in the
computation of any Net Worth Deficiency provided for in Section 3.1.
Notwithstanding any other term of this Agreement, in no event shall any
Stockholder be liable under this Article 12 for an amount which exceeds the
aggregate value (determined at the Merger Effective Date) of the Merger
Consideration received by such Stockholder under this Agreement. Notwithstanding
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anything to the contrary contained in this Agreement, the limitations upon
indemnification contained in this Section 12.5 shall not apply to Losses arising
out of any of the following (i) any breach of the representations and warranties
of the Stockholders contained in Sections 6.3, 6.5, 6.14, 6.27 and 6.33 hereof;
(ii) any items identified on Schedule 6.27, (iii) litigation net of applicable
reserves reflected on the balance sheet of the Company at the Interim Balance
Sheet Date; (iv) those matters listed in Schedule 6.35(d) or (v) a Material
Adverse Amendment pursuant to Section 8.14.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
survive for a period of one year from the Merger Effective Date (which date is
hereinafter called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended on or prior to the Merger Effective Date, which shall be
deemed to be the Expiration Date for purposes of this clause (a) and claims
arising from a breach of the representations and warranties contained in such
Section 6.27;
(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely within the twenty-first century shall have been
processed and UniCapital's consolidated financial statements for the fiscal year
in which the last such transaction to be processed occurred have been audited,
which shall be deemed to be the Expiration Date for purposes of this clause (b)
and claims arising from a breach of the representations and warranties contained
in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Merger Effective
Date, which shall be deemed the Expiration Date for purposes of this clause (c)
and claims arising from a breach of the representations and warranties contained
in such Section 6.33;
(d) solely for purposes of Section 12.1(d) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for purposes of this clause (d) and claims arising under such
laws;
(e) the representations and warranties of the Stockholders
contained in Section 6.5 hereof shall survive the Merger Effective Date without
time limitation; and
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(f) except as otherwise provided in this Section 12.6, any
representations and warranties which serve as a basis of the indemnity
obligations of the Stockholders under Section 12.2 shall survive the Merger
Effective Date without time limitation.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Stockholders in the observance or due
and timely performance of any of the covenants, agreements or conditions
contained herein, and the curing of such default shall not have been made on or
before the Closing Date and shall not reasonably be expected to occur, (b) if
UniCapital in its sole judgment determines that any condition exists which has
made or could reasonably be expected to make any of the representations or
warranties contained in Article 6 hereof untrue in any material respect or (c)
if UniCapital in its sole judgment determines that information disclosed on the
schedules to the Agreement delivered pursuant to Section 8.14 has or could
reasonably be expected to have a material adverse effect on the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company.
13.2 TERMINATION BY THE STOCKHOLDERS. Prior to the initial filing of
the Registration Statement with the SEC, the Stockholders may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (a) in accordance with Section 17.4(b) or (b) if a material default
shall be made by UniCapital in the observance or due and timely performance of
any of the covenants, agreements or conditions contained herein, and the curing
of such default shall not have been made on or before such initial filing. From
and after the initial filing of the Registration Statement with the SEC, the
Stockholders shall have no right to terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, between the Closing Date and the Merger Effective
Date, the Underwriting Agreement is terminated pursuant to the terms thereof;
(c) if the Merger Effective Date has not occurred within 10
business days after the Closing Date; or
(d) upon the date that the number of shares of UniCapital
Stock to be issued (other than as Earn-Out Consideration) to the persons who
will transfer property to UniCapital in the Unified Transaction can be
determined as a fixed number of shares, unless those same
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persons shall own immediately after the Unified Transaction eighty percent (80%)
or more of the UniCapital Stock that will be issued and outstanding immediately
after the Unified Transaction.
13.4 LIQUIDATED DAMAGES. If the Merger fails to occur because of the
default of the Company or the Stockholders, then, in addition to the other
remedies available to UniCapital at law for fraud, in equity or pursuant to this
Agreement, the Stockholders shall pay to UniCapital the sum of $500,000 as
liquidated damages. It is hereby agreed that UniCapital's damages in the event
of a termination or default by the Company hereunder are uncertain and
impossible to ascertain and that the foregoing constitutes a reasonable
liquidation of such damages and is intended not as penalty but as liquidated
damages.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of the
Companies and their respective businesses, each Stockholder covenants that, for
the period ending two years after the Closing Date, such Stockholder will not,
directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as a partner, principal, agent, representative, consultant or
otherwise with, or use or permit such Stockholder's name to be used in
connection with, any business or enterprise which is engaged directly or
indirectly in competition anywhere in the United States with the business
conducted by UniCapital, the Surviving Corporation or any of its or their
respective subsidiaries or affiliates or with any business engaged in
originating, servicing or securitizing leases or other specialty financing
products or services (the "Restricted Business"). Each Stockholder recognizes
that the Restricted Business is expected to be conducted throughout the United
States and that more narrow geographical limitations of any nature on this
non-competition covenant (and the non-solicitation covenant set forth in
subsection (b)) are therefore not appropriate. Provided, however, that as to
Xxxxxx X. Xxxxxxx, the Restricted Business shall be restricted only as to
include the business of the Company as conducted on the date hereof or within
the two years after the Closing Date. The foregoing restriction shall not be
construed to prohibit the ownership by a Stockholder as a passive investment of
not more than five percent of any class of securities of any corporation which
is engaged in any of the foregoing businesses having a class of securities
registered pursuant to Section 12 of the Exchange Act.
(b) Each Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers of the Restricted Business, or (ii) solicit the employment of any
person who is employed by UniCapital, the Surviving Corporation or any of its or
their respective subsidiaries or affiliates in the Restricted Business during
such period.
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(c) Each Stockholder recognizes and acknowledges that by
reason of such Stockholder's relationship to the Company, such Stockholder has
had access to confidential information relating to the Restricted Business. Each
Stockholder acknowledges that such confidential information is a valuable and
unique asset and covenants that such Stockholder will not disclose any such
confidential information after the Closing Date to any person for any reason
whatsoever.
14.2 DAMAGES. Each Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholders agree that,
in the event of a breach by them of any of the foregoing covenants, such
covenants may be enforced by UniCapital or the Surviving Corporation by, without
limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholders
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Company), and
that any violation will result in irreparable injury to UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Stockholder
against the Company, the Company's Subsidiaries, the Surviving Corporation or
UniCapital, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of such covenants. The parties
specifically agree that the period of two years stated above shall be computed
by excluding from such computation any time during which any Stockholder is in
violation of any provision of this Article 14 and any time during which there is
pending in any court of competent jurisdiction any action (including any appeal
from any judgment) brought by any person, whether or not a party to this
Agreement, in which action UniCapital or the Surviving Corporation seek to
enforce the agreements and covenants of the Stockholders or in which any person
contests the validity of such agreements and covenants or their enforceability
or seeks to avoid their performance or enforcement.
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14.6 MATERIALITY. The Stockholders hereby acknowledge and agree that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital and Newco of the business of the Company.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
have in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company and the Company's business. The Stockholders
agree that they will not disclose any confidential information to any person,
firm, corporation, association or other entity for any purpose or reason
whatsoever, except to authorized representatives of UniCapital or as may be
required by law or order of a court of competent jurisdiction, unless the
Stockholders can show that such information has become known to the public
generally through no fault of the Stockholders. Prior to disclosing any
confidential information required by law or order of a court of competent
jurisdiction, the Stockholders shall provide UniCapital with prompt notice of
the disclosure requirement so that UniCapital may take whatever action it deems
appropriate to prohibit such disclosure. In the event of a breach or threatened
breach by the Stockholders of the provisions of this Section 15.1, UniCapital
and the Surviving Corporation shall be entitled to an injunction restraining
Stockholders from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting UniCapital and the
Surviving Corporation from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to
certain confidential information solely of the Company in connection with their
respective businesses. UniCapital agrees that, prior to the Closing Date or if
this Agreement is terminated, it will not disclose any such confidential
information to any person, firm, corporation, association, or other entity for
any purpose or reason whatsoever without prior written consent of the
Stockholders, except to authorized representatives of UniCapital or as may be
required by law or order of a court of competent jurisdiction, unless UniCapital
can show that such information has become known to the public generally through
no fault of UniCapital.
In the event of a breach or threatened breach by UniCapital of the provisions
of this Section 15.2, the Stockholders shall be entitled to an injunction
restraining UniCapital from disclosing, in whole or in part, such confidential
information. Nothing contained herein shall be construed as prohibiting the
Stockholders from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
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15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholders
agree that, in the event of a breach by any of them of the foregoing covenant,
the covenant may be enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Stockholder hereby
agrees that, without the prior written consent of Xxxxxx Xxxxxxx & Co.
Incorporated on behalf of such underwriters, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the final prospectus contained in the Registration Statement relating to the IPO
(the "Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of UniCapital Stock or such other securities, in cash or
otherwise. In addition, each Stockholder agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the underwriters that
may participate in the IPO, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of UniCapital Stock or any security convertible into or exercisable
or exchangeable for Common Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. Each Stockholder agrees that
the foregoing shall be binding upon their transferees, successors, assigns,
heirs, and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Stockholder acknowledges and agrees that such
underwriters and Xxxxxx Xxxxxxx & Co. Incorporated are intended third party
beneficiaries of the provisions of this Article 16, and that Xxxxxx Xxxxxxx &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Article 16. The Stockholders also acknowledge and agree that none of the
companies to be acquired as part of the Unified Transaction shall have any
rights as intended third-party beneficiaries under this Agreement.
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17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
17.1 INVESTMENT INTENT. The Stockholders acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Stockholders represent and warrant that the shares of UniCapital Stock to be
acquired by the Stockholders pursuant to this Agreement are being acquired
solely for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholders covenant, warrant and
represent that none of the shares of UniCapital Stock issued to such
Stockholders will be offered, sold, assigned, pledged, hypothecated, transferred
or otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC
thereunder, and except after full compliance with any applicable state
securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholders further represent and warrant
that they (a) fully understand the nature, scope and duration of the limitations
on transfer contained in this Agreement and (b) have such knowledge and
experience in financial and business matters that they are capable of evaluating
the merits and risks of the proposed investment and therefore have the capacity
to protect their own interests in connection with the acquisition of the
UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Stockholders represent and warrant that they have had
an adequate opportunity to ask questions and receive answers from the officers
of UniCapital concerning UniCapital, its business, operations, plans and
strategy, and the background and experience of its officers and directors. The
Stockholders represent and warrant that they have asked any and all questions
that they may have in the nature described in the preceding sentence and that
all such questions have been answered to their satisfaction.
(b) Each Stockholder represents and warrants that such
Stockholder has received the draft Registration Statement, including the draft
preliminary prospectus that forms a part thereof, delivered to such Stockholder
on or about February 14, 1998 that describes, among other things, UniCapital,
the Merger, the other acquisitions proposed to be undertaken by UniCapital
simultaneously with the Merger and the target companies of such other
acquisitions. Each Stockholder represents and warrants that such Stockholder has
reviewed such draft Registration Statement and draft preliminary prospectus and
has had adequate opportunity to ask
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questions of and receive answers to such Stockholder's satisfaction from the
officers of UniCapital concerning the matters described therein.
18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Stockholders hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Stockholders and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholders will cooperate and use their best efforts to have the officers,
directors and employees of Company prior to the Closing Date cooperate with
UniCapital on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to all
periods prior to the Closing Date.
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of UniCapital, and the heirs and legal representatives of the
Stockholders.
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19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Company, UniCapital and Newco and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Stockholders (subject to the limitations
set forth below), the Company, UniCapital and Newco acting through their
respective officers, duly authorized by their respective Boards of Directors;
provided, that the Stockholder who owns a majority of the outstanding shares of
capital stock of the Company shall have the authority to approve and execute any
amendment to this Agreement on behalf of all of the Stockholders and without the
necessity of such majority Stockholder obtaining consent or authorization from
any other Stockholder, unless such amendment relates to any representation or
warranty made by a Stockholder other than such majority Stockholder which may
only be amended by the written agreement of such person; and provided further,
that no Stockholder shall have any power or authority to modify or amend this
Agreement in any respect from and after the initial filing of the Registration
Statement with the SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and Newco, on the one hand, and the Stockholders,
on the other hand, agrees to indemnify the other against all loss, liability,
cost damages or expense arising out of or related to claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and Newco and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments thereto. Whether or not the transactions herein
contemplated shall be consummated, the Stockholders will pay the fees, expenses
and disbursements of the Stockholders and the Company and their respective
agents, representatives, accountants and counsel incurred in connection with the
subject matter of this Agreement and any amendments hereto and all other costs
and expenses incurred in the performance of this Agreement by the Stockholders
and the Company and in compliance with all conditions to be performed by the
Stockholders and the Company under this Agreement.
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
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(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx
Xxxxxx, Xxxxx & Xxxxxxx LLP
One Oxford Centre, Thirty-Second Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(b) If to the Stockholders, addressed to them in care of the
Stockholders' Representative at:
Xxxxxxx X. Xxxxxxxxxxx
0 Xxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxx
Winick & Rich, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax
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is transmitted to the telefax number specified in this Section 19.7 (or in
accordance with the latest unrevoked written direction from such party), and the
appropriate confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
19.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
20. DEFINITIONS
20.1 "Accounts Receivable" is defined in Section 6.14.
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20.2 "Acquisition Proposal" is defined in Section 8.10.
20.3 "Additional Escrow Property" is defined in Section 4.1(b).
20.4 "Additional Escrow Shares" is defined in Section 4.1(a).
20.5 "Adjusted 1997 EBT" is defined in Section 2.5(a).
20.6 "Adjusted 1998 EBT" is defined in Section 2.5(a).
20.7 "Agent" is defined in Section 8.10.
20.8 "Agreement" is defined in the preamble to this Agreement.
20.9 "Audited Balance Sheet Date" is defined in Section 6.12(a).
20.10 "Audited Financial Statements" are defined in Section 6.12(a).
20.11 "Authorizations" are defined in Section 6.23.
20.12 "Basket Adjustment" is defined in Section 12.5.
20.13 "Basket Limitation" is defined in Section 12.5(b)
20.14 "Benefit Plan" is defined in Section 6.22.
20.15 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
20.16 "Certificates" are defined in Section 2.2.
20.17 "Certificate of Merger" is defined in Section 1.1.
20.18 "Closing" is defined in Section 5.1(b).
20.19 "Closing Date" is defined in Section 5.2.
20.20 "Closing Date Balance Sheet" is defined in Section 3.1.
20.21 "Code" is defined in the recitals to this Agreement.
20.22 "Commonly Controlled Entity" is defined in Section 6.22.
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20.23 "Company" is defined in the preamble to this Agreement.
20.24 "Company Documents" are defined in Section 6.2.
20.25 "Company EBT" is defined in Section 2.5(b).
20.26 "Company Stock" is defined in Section 2.1(a).
20.27 "Constituent Corporations" are defined in the recitals to this
Agreement.
20.28 "Contracts" are defined in Section 6.17.
20.29 "Delinquent Accounts" are defined in Section 12.2(e)
20.30 "Disputed Amounts" are defined in Section 3.2.
20.31 "EBT" is defined in Section 2.5(a).
20.32 "Earn-Out Consideration" is defined in Section 2.5(c).
20.33 "Earn-Out Escrow Cash" is defined in Section 4.1(b).
20.34 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
20.35 "Effective Date Consideration" is defined in Section 2.1(a).
20.36 "Environmental Laws" mean any and all applicable treaties, laws,
regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
20.37 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up
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brought, prosecuted or undertaken by UniCapital, Newco, the Surviving
Corporation, any Governmental Entity or any other person or entity on the basis
of any violation of any Environmental Laws or pursuant to any requirement
imposed under any Environmental Laws (including any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation so as to avoid any claim or violation or to comply
with any requirement and all counseling or engineering fees and expenses related
thereto), and arising from pre-Closing operations, events, circumstances or
conditions at, on, under or emanating from, or as a result of any pre-Closing
off-site disposal of Hazardous Substances from, any property currently or
formerly owned, operated or leased by the Company.
20.38 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the Company.
20.39 "Equipment" is defined in Section 6.35.
20.40 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.41 "Escrow Cash" is defined in Section 4.1(a).
20.42 "Escrow Property" is defined in Section 4.1(b).
20.43 "Escrow Shares" are defined in Section 4.1(a).
20.44 "Exchange Act" is defined in Section 12.1.
20.45 "Expiration Date" is defined in Section 12.6.
20.46 "Financial Statements" are defined in Section 6.12(b).
20.47 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.48 "GAAP" is defined in Section 3.1.
20.49 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
20.50 "Hazardous Substances" mean all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials or
chemicals regulated pursuant to any Environmental Law, including
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materials listed in 49 C.F.R. ss. 172.101 and materials defined as hazardous
pursuant to Section 101(14) of CERCLA.
20.51 "Indemnifiable Decrease" is defined in Section 12.5(a).
20.52 "Indemnified Party" is defined in Section 12.4(a).
20.53 "Indemnifying Party" is defined in Section 12.4(a).
20.54 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.55 "Independent Accounting Firm" is defined in Section 3.2.
20.56 "Intellectual Property" is defined in Section 6.28(a).
20.57 "Interim Net Worth Period" as defined in Section 12.5(a).
20.58 "Interim Balance Sheet" is defined is Section 6.12(b).
20.59 "Interim Balance Sheet Date" is defined in Section 6.12(b).
20.60 "IPO" is defined in the recitals to this Agreement.
20.61 "IPO Price" means the per share price that the UniCapital Stock
is sold to the underwriters in the IPO prior to the deduction of any discounts
or expenses.
20.62 "Lease Documents" are defined in Section 6.35.
20.63 "Leases" are defined in Section 6.35.
20.64 "Liabilities" are defined in Section 6.13(a).
20.65 "Losses" are defined in Section 12.1.
20.66 "Material Adverse Amendment" is defined in Section 8.4.
20.67 "Merger" is defined in the recitals to this Agreement.
20.68 "Merger Consideration" is defined in Section 2.1(c).
20.69 "Merger Effective Date" is defined in Section 5.3.
20.70 "Net Worth Deficiency" is defined in Section 3.1.
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20.71 "Newco" is defined in the preamble to this Agreement.
20.72 "1999 EBT" is defined in Section 2.5(b).
20.73 "Obligor" is defined in Section 6.35.
20.74 "Ordinary course" or "ordinary course of business" means the
conduct of business as conducted by the Company prior to the date of this
Agreement consistent in nature and, where relevant, amount with past practices.
20.75 "PCBs" are defined in Section 6.33(h).
20.76 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by the
Company, or held by any Stockholder that relate to the operations of the
Company.
20.77 "Pension Plan" is defined in Section 6.22.
20.78 "Prospectus" is defined in Section 16.1.
20.79 "Registration Statement" is defined in Section 9.4.
20.80 "Regulations" are defined in Section 6.23.
20.81 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
20.82 "Restricted Business" is defined in Section 14.1(a).
20.83 "Scheduled Payments" are defined in Section 6.35.
20.84 "SEC" is defined in Section 9.4.
20.85 "Securities Act" is defined in Section 6.16.
20.86 "Stockholders" are defined in the preamble to this Agreement.
20.87 "Stockholders' Representative" is defined in Section 3.3.
20.88 "Subsidiary" is defined in Section 6.1.
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20.89 "Surviving Corporation" is defined in Section 1.2.
20.90 "Tax Returns" are defined in Section 6.27.
20.91 "Taxes" are defined in Section 6.27.
20.92 "Third Party Claim" is defined in Section 12.4(a).
20.93 "Unaudited Financial Statements" are defined in Section 6.12(b).
20.94 "Underwriting Agreement" is defined in Section 5.1(a).
20.95 "UniCapital" is defined in the preamble to this Agreement.
20.96 "UniCapital Documents" are defined in Section 7.3.
20.97 "UniCapital Stock" is defined in Section 2.1(a).
20.98 "Unified Transaction" is defined in the recitals to this
Agreement
20.99 "Welfare Plan" is defined in Section 6.22.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ XXXXXX NEW
------------------------------
Name: Xxxxxx New
Title: Chairman and Chief Executive Officer
ACR ACQUISITION CORP.
By: /s/ XXXXXX NEW
------------------------------
Name: Xxxxxx New
Title: President and Chief Executive Officer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AMERICAN CAPITAL RESOURCES, INC.
By: /s/ XXXXXXX X. XXXXXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: President
THE STOCKHOLDERS
/s/ XXXXXXX X. XXXXXXXXXXX
---------------------------------------
Xxxxxxx X. Xxxxxxxxxxx
/s/ XXXXXX X. XXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxx
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ANNEXES
ANNEX I [Form of Certificate of Merger]
ANNEX II [Composition of Consideration]
ANNEX III [Form of Indemnity Escrow Agreement]
ANNEX IV [Form of Employment Agreement]
ANNEX V [INTENTIONALLY OMITTED]
ANNEX VI [Form of Stockholder's Release]
SCHEDULES
SCHEDULE 2.5 [Add-Backs]
SCHEDULE 6.1 [Jurisdictions in which Company and Subsidiaries Are Qualified
to do Business]
SCHEDULE 6.3 [Other Entities]
SCHEDULE 6.4 [Consents]
SCHEDULE 6.5 [Issued and Outstanding Stock of the Company and Subsidiaries]
SCHEDULE 6.6 [Transactions in Capital Stock]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Companies]
SCHEDULE 6.11 [Third Party Options]
SCHEDULE 6.12 [Company Financial Statements]
SCHEDULE 6.13 [Liabilities and Obligations]
SCHEDULE 6.14 [Accounts and Notes Receivable Aging]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts]
SCHEDULE 6.20 [Insurance]
SCHEDULE 6.21 [Employee Information]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.27 [Taxes]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(d) [Confidentiality and Non-Disclosure Agreements]
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SCHEDULE 6.28(e) [Registered Intellectual Property]
SCHEDULE 6.29 [Notice and Consents]
SCHEDULE 6.30 [Absence of Changes]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 6.35 [Leases]
SCHEDULE 7.9 [UniCapital and Newco Agreements]
SCHEDULE 8.15 [Business in the Ordinary Course]
SCHEDULE 9.2 [Employment Agreements]
SCHEDULE 10.14 [Release of Guarantees]
SCHEDULE 11.4 [Personal Guarantees of the Indebtedness of the Company]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.01 to the Commission supplementally upon request
therefor.
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