EXECUTION COPY
Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and among
THE XXXXX GROUP, INC.,
as Buyer,
and
NEXTERA ENTERPRISES, INC.
and
SIBSON & COMPANY, LLC,
as Sellers
TABLE OF CONTENTS
Page
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INTRODUCTION .............................................................................. 1
ARTICLE I PURCHASE AND SALE OF ASSETS................................................ 1
Section 1.1. Purchase and Sale........................................................... 1
Section 1.2. Buyer Not Successor to Seller; Excluded Liabilities......................... 3
Section 1.3. Purchase Price.............................................................. 5
Section 1.4. Closing..................................................................... 9
Section 1.5. Instruments of Conveyance and Transfer...................................... 9
Section 1.6. Post-Closing Assurances..................................................... 10
Section 1.7. Transfer of Acquired Assets; Consents and Authorizations.................... 10
ARTICLE II REPRESENTATIONS AND WARRANTIES............................................. 10
Section 2.1. Representations and Warranties of Seller.................................... 10
(a) Organization, Standing and Power................................................. 10
(b) Authority; Binding Agreements.................................................... 11
(c) Corporate Structure.............................................................. 11
(d) Conflicts; Consents.............................................................. 11
(e) Financial Information; No Undisclosed Liabilities................................ 12
(f) Absence of Changes............................................................... 12
(g) Assets, Property and Related Matters; Real Property.............................. 14
(h) Patents, Trademarks and Similar Rights........................................... 15
(i) Insurance........................................................................ 16
(j) Agreements, Etc.................................................................. 17
(k) Litigation, Etc.................................................................. 17
(l) Compliance; Governmental Authorizations.......................................... 17
(m) Labor Relations; Employees....................................................... 18
(n) Accounts Receivable and Work-in-Progress......................................... 22
(o) Clients and Customers............................................................ 22
(p) Accounts Payable................................................................. 23
(q) Related Party Transactions....................................................... 23
(r) Taxes............................................................................ 23
(s) Disclosure....................................................................... 24
(t) Brokers.......................................................................... 24
(u) Information Technology........................................................... 24
(v) Nextera UK Limited............................................................... 24
Section 2.2. Representations and Warranties by Buyer......................................25
i
(a) Organization, Standing and Power................................................. 25
(b) Authority; Binding Agreements.................................................... 25
(c) Conflicts; Consents.............................................................. 25
(d) Xxxxx UK......................................................................... 25
(e) Brokers.......................................................................... 25
Section 2.3. Survival.................................................................... 26
ARTICLE III ADDITIONAL AGREEMENTS...................................................... 26
Section 3.1. Expenses.................................................................... 26
Section 3.2. Conduct of Business......................................................... 26
Section 3.3. Further Assurances.......................................................... 26
Section 3.4. Additional Limitations...................................................... 26
Section 3.5. Access and Information; Notification of Certain Matters..................... 27
Section 3.6. Confidentiality; Non-Competition............................................ 27
Section 3.7. Public Announcements........................................................ 28
Section 3.8. Use of Name................................................................. 29
Section 3.9. Certain Tax Matters......................................................... 29
Section 3.10. Software License............................................................ 30
Section 3.11. Collection of Accounts Receivable........................................... 30
Section 3.12. Certain UK Matters.......................................................... 31
ARTICLE IV CONDITIONS PRECEDENT....................................................... 31
Section 4.1. Conditions to Obligations of Buyer.......................................... 31
(a) Representations and Warranties................................................... 31
(b) No Actions or Court Orders....................................................... 32
(c) Consents, Amendments and Terminations............................................ 32
(d) Xxxx of Sale and Assignment...................................................... 32
(f) Transition Services Agreement.................................................... 32
(g) UK Asset Transfer Agreement...................................................... 32
(h) Certificates..................................................................... 32
(i) Opinion of Counsel............................................................... 32
(k) Due Diligence.................................................................... 32
(m) Financing........................................................................ 32
(n) FIRPTA Certificate............................................................... 32
(o) Tax Certificate.................................................................. 32
(p) Certain Releases................................................................. 32
(q) Other Documents.................................................................. 33
Section 4.2. Conditions to Obligations of Seller......................................... 33
(a) Representations and Warranties................................................... 33
ii
(b) No Actions or Court Orders....................................................... 33
(c) Assignment, Trademark Assignment and Transition Services Agreement............... 33
(d) UK Asset Transfer Agreement...................................................... 33
(e) Certificate...................................................................... 33
(f) Opinion of Counsel............................................................... 33
(g) Releases from Employment Contracts............................................... 33
(h) Other Documents.................................................................. 33
ARTICLE V INDEMNITY.................................................................. 34
Section 5.1. Indemnification............................................................. 34
Section 5.2. Limitations................................................................. 37
Section 5.3. No Election; Set-Off........................................................ 37
ARTICLE VI MISCELLANEOUS.............................................................. 38
Section 6.1. Entire Agreement............................................................ 38
Section 6.2. Termination................................................................. 38
Section 6.3. Definitions................................................................. 38
Section 6.4. Descriptive Headings; Certain Interpretations............................... 42
Section 6.5. Notices..................................................................... 43
Section 6.6. Counterparts................................................................ 44
Section 6.7. Benefits of Agreement....................................................... 44
Section 6.8. Amendments and Waivers...................................................... 44
Section 6.9. Assignment.................................................................. 44
Section 6.10. Enforceability.............................................................. 44
Section 6.11. GOVERNING LAW............................................................... 44
Section 6.12. CONSENT TO JURISDICTION..................................................... 45
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Exhibits to Asset Purchase Agreement
Exhibit A Xxxx of Sale
Exhibit B Assignment and Assumption
Exhibit C UK Asset Transfer Agreement
Exhibit D Transition Services Agreement
Exhibit E Certificate of Officer of Sellers
Exhibit F Opinion of Counsel to Sellers
Exhibit G Certificate of Officer of Buyer
Exhibit H Opinion of Counsel to Buyer
Exhibit I Assignment
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Schedules to Asset Purchase Agreement
Schedule 1.1(a)(iv) Transferred Offices Leases
Schedule 1.1(a)(v) Computers, Equipment, Furniture
Schedule 1.1(a)(vi) Furnishings, Fixtures, etc.
Schedule 1.1(a)(ix) Accounts Receivable
Schedule 1.1(a)(xi) Supplier Contracts
Schedule 1.1(b)(x) Excluded Accounts Receivable
Schedule 1.2(a) Assumed Liabilities
Schedule 1.2(b) Unassumed Liabilities
Schedule 1.3(f) Purchase Price Allocation
Schedule 2.1 UK Disclosure Schedule
Schedule 2.1(d)(ii) Consents
Schedule 2.1(d)(v) Governmental Consents and Filings
Schedule 2.1(e)(i) Financial Statements
Schedule 2.1(e)(ii) Budget
Schedule 2.1(e)(iii) UK 2000 Accounts
Schedule 2.1(f) Changes
Schedule 2.1(g)(i)(A) Liens
Schedule 2.1(g)(i)(B) Lien Search Information
Schedule 2.1(g)(ii) Subleases
Schedule 2.1(h)(i) Intellectual Property
Schedule 2.1(h)(ii) License Agreements
Schedule 2.1(i) Insurance
Schedule 2.1(j) Agreements
Schedule 2.1(k) Litigation
Schedule 2.1(1)(i) Compliance
Schedule 2.1(l)(ii) Permits
Schedule 2.1(m)(i)(a) US Employees
Schedule 2.1(m)(i)(b) UK Employees
Schedule 2.1(m)(vi) Plans
Schedule 2.1(m)(xiii) Certain Bonuses
Schedule 2.1(m)(xiv) Consultants, Advisers
Schedule 2.1(n) Accounts and Notes Receivable and Work-in-Progress
Schedule 2.1(o)(i) Clients and Customers
Schedule 2.1(o)(ii) Client Contracts
Schedule 2.1(o)(iii) Backlog Statements
Schedule 2.1(p) Accounts Payable
Schedule 2.1(q) Related Party Transactions
Schedule 3.10 Licensed Software
Schedule 4.2(g) Required Employee Releases
v
ASSET PURCHASE AGREEMENT, dated as of January 30, 2002 (the
"Agreement"), by and among The Xxxxx Group, Inc., a Delaware
corporation ("Buyer"), and Nextera Enterprises, Inc., a Delaware
corporation ("Nextera") and Sibson & Company, LLC, a Delaware
limited liability company ("Sibson & Company" and, collectively
with Nextera, "Sellers")
INTRODUCTION
Sellers, directly and indirectly through their Subsidiaries, are
engaged in providing executive compensation and benefits, human resources
consulting and other services under the "Sibson" name in the United States and
under the "Sibson" and "Nextera" names in the United Kingdom (the "Business")
and Sellers and their Subsidiaries own certain assets that relate to the
Business. Subject to the terms and conditions of this Agreement, Sellers desire
to sell to Buyer, and Buyer desires to purchase from Sellers and their
Subsidiaries, substantially all of the assets, tangible and intangible,
associated with the Business.
In consideration of the mutual benefits to be derived from this
Agreement and of the representations, warranties, conditions, agreements and
promises contained herein and other good and valuable consideration, the parties
agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
SECTION 1.1. Purchase and Sale. (a) Sellers shall, on their own
behalf and on behalf of their Subsidiaries, sell, convey, transfer and assign,
or shall procure the sale, conveyance, transfer and assignment, to Buyer or its
designated Affiliates, and Buyer or its designated Affiliates shall purchase
from Sellers and their Subsidiaries, on the Closing Date (as defined in Section
1.4), the Acquired Assets. "Acquired Assets" means, except for the Excluded
Assets (as hereinafter defined), the following properties, assets (tangible or
intangible), and rights of Sellers and their Subsidiaries used or held in
connection with the Business:
(i) all Intellectual Property used or held for use in connection
with the Business, and all goodwill associated therewith;
(ii) all technologies, methods, formulations, software (including
documentation and object and source code listings), trade and business
secrets, know-how, inventions, package designs and other processes or
proprietary information used, under development or held for use in the
Business;
(iii) all information, customer lists, price lists,
identification of suppliers, correspondence, data, drawings, recorded
knowledge, customer files, account histories, sales literature and
commercial materials relating to the Business; all sales data and other
information relating to selling and providing the services relating to
the Business; and all accounting information relating to the Business;
(iv) the leasehold interests in real property set forth on
Schedule 1.1(a)(iv) (the "Transferred Office Leases") and any security
deposits made in connection therewith;
(v) the computers, equipment, furniture and machinery listed on
Schedule 1.1(a)(v) hereto;
(vi) the furnishings, leasehold improvements and similar tangible
property located in the offices subject to the Transferred Office Leases
and in the London office premises of the Business, including such
property listed on Schedule 1.1(a)(vi);
(vii) all books, records, personnel files, production data,
publications, computer files, databases, data, manuals and other
materials relating to the Business;
(viii) all supplies and inventories used or held in connection
with the Business;
(ix) all accounts and other receivables and indebtedness owed to
Sellers and their Subsidiaries related to the Business, and all prepaid
expenses (excluding any prepaid expense relating to Taxes), deposits
(including security deposits) and any other current assets related to
the Business, including those listed on Schedule 1.1(a)(ix);
(x) the contracts and arrangements pursuant to which the Business
provides goods and services to its clients and customers, including
those listed on Schedule 2.1(o)(ii), and all such contracts and
arrangements entered into after the date hereof and prior to the Closing
Date;
(xi) the contracts and agreements listed on Schedule 1.1(a)(xi)
hereto with vendors and suppliers of the Business;
(xii) all Permits used for or held in relation to the Business;
(xiii) all rights and claims, including refunds, with respect to
all Assumed Liabilities (as defined in Section 1.2(a) below);
(xiv) all goodwill relating to the Business; and
(xv) all claims, counterclaims, credits, causes of action, choses
in action, rights of recovery and rights of setoff against third parties
to the extent related to the other Acquired Assets.
(b) Buyer shall not acquire pursuant to this Agreement any of the
Excluded Assets. "Excluded Assets" means:
(i) any assets of Sellers and their Subsidiaries not related to
the Business;
(ii) cash;
(iii) any interests in real property other than (A) the
Transferred Office Leases and the security deposits made in connection
therewith and (B) with respect to the
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premises leased by Nextera UK Limited (the "UK Lease"), the license to
be granted by Nextera UK Limited pursuant to the UK Asset Transfer
Agreement;
(iv) any contracts and agreements with vendors and suppliers of
the Business other than the contracts and agreements listed on Schedule
1.1(a)(xi);
(v) any assets of employee benefit plans;
(vi) the cash surrender value of the split-dollar life insurance
policies on the lives of the Sibson principals, as well as any other
insurance policies;
(vii) any capital stock, membership interests or other equity
interests in Sellers and their Subsidiaries, including Sibson
International, LLC, a Delaware limited liability company ("Sibson
International"), Sibson AP, LLC, a Delaware limited liability company
("Sibson AP LLC"), Sibson UK Holdings Limited, a private limited company
organized and existing under the laws of England and Wales ("Sibson UK
Holdings"), The Alexander Corporation Limited, a private limited company
organized and existing under the laws of England and Wales ("The
Alexander Corporation"), Nextera UK Limited, a private limited company
organized and existing under the laws of England and Wales ("Nextera UK
Limited"), Nextera Interactive UK Limited, a limited liability company
organized under the laws of England and Wales ("Nextera UK
Interactive"), Scanada, Inc., a Delaware corporation ("Scanada, Inc."),
and Sibson Canada Co., a Nova Scotia unlimited liability company
("Sibson Canada").
(viii) any assets of Sibson AP LLC and Sibson Canada other than
rights to the use of the "Sibson" name;
(ix) personnel files of employees of the Business not employed by
Buyer or its Affiliates after the Closing Date;
(x) the accounts receivable identified on Schedule 1.1(b)(x), in
an aggregate amount of $777,689; and
(xi) tax records relating to the Business (other than VAT records
of the Business in the United Kingdom).
SECTION 1.2. Buyer Not Successor to Sellers; Excluded
Liabilities.
(a) Sellers shall, on their own behalf and on behalf of their
Subsidiaries, sell, convey, transfer and assign, or procure the sale,
conveyance, transfer and assignment, to Buyer or its designated Affiliates, and
Buyer or its designated Affiliates shall assume from Sellers and their
Subsidiaries, on the Closing Date, the Assumed Liabilities. "Assumed
Liabilities" means (A) the current liabilities of Sellers or their Subsidiaries
identified on Schedule 1.2(a) and (B) other similar current liabilities of the
Business incurred after December 31, 2001 and prior to the Closing Date in the
ordinary course consistent with past practice without any act or omission
described in clauses (i) through (xviii) of Section 2.1(f). Except for the
Assumed Liabilities, Buyer and its Affiliates shall not be the successor to
Sellers or their Subsidiaries and Buyer and its Affiliates do not assume and
shall not become liable to pay, perform or discharge any
3
obligation or liability whatsoever of Sellers or their Subsidiaries relating to
any of the Acquired Assets (all such obligations and liabilities being,
collectively, the "Unassumed Liabilities"). Sellers and their Subsidiaries shall
retain and pay, perform and discharge when due all of the Unassumed Liabilities.
(b) The term "Unassumed Liabilities" includes, and Buyer and its
Affiliates expressly are not assuming any of, the following liabilities, whether
accrued or fixed, absolute or contingent, known or unknown, determined or
determinable, and whenever arising:
(i) any liabilities and obligations of Sellers or any Affiliate
of Sellers for Taxes (including franchise, income, single business,
sales, use, payroll, occupation, property, excise, withholding and other
Taxes attributable to Sellers being a member of an Affiliated group or
other group filing on a combined or unitary basis and any liability
arising from Sellers being a party to a tax sharing agreement);
(ii) all Taxes arising out of, relating to or in respect of the
Business, the Acquired Assets or the use thereof for any taxable period
(or any portion thereof) ending on or prior to the Closing Date;
(iii) any claims, demands, liabilities or obligations of any
nature whatsoever (including claims, demands, liabilities or obligations
in respect of Federal, state, local and foreign Taxes, advances or
loans, environmental matters, occupational safety, workers' or workmen's
compensation, grievance proceedings or actual or threatened litigation,
suits, claims, demands or governmental proceedings) which arose or were
incurred on or before the Closing Date, or which are based on events
occurring or conditions existing on or before the Closing Date, or which
are based on products sold or services performed by Sellers or their
Subsidiaries on or before the Closing Date;
(iv) any liabilities and obligations of Sellers or any Subsidiary
of Sellers under this Agreement, any xxxx of sale or related instrument
issued in connection with this Agreement or otherwise in connection with
the transactions contemplated by this Agreement;
(v) any liabilities of Sellers or any Subsidiary of Sellers not
related exclusively to the Business or the Acquired Assets;
(vi) any liabilities of Sellers or any Subsidiary of Sellers
relating to or arising out of any action or inaction by Sellers or their
Subsidiaries that would cause any of the representations or warranties
in Section 2.1(r) hereof to be inaccurate;
(vii) except as may be required by UK law with respect to the UK
Employees (as defined below), any liabilities of Sellers or any
Subsidiary of Sellers to present or former Employees (or their
dependents or beneficiaries), consultants or agents related to the
Business for any compensation, profit sharing or retirement plan
contribution, health benefit coverage or other benefits, commitments or
liabilities accrued or otherwise payable, and any liabilities or
obligations to present or former shareholders;
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(viii) any obligations or liabilities under the contracts and
agreements included in the Acquired Assets for the period prior to the
Closing Date; and
(ix) any liabilities and obligations of Sellers or their
Subsidiaries identified on Schedule 1.2(b) as Unassumed Liabilities.
SECTION 1.3. Purchase Price.
(a) Subject to the adjustments set forth in subsection (b) and
(c) of this Section 1.3, the purchase price (the "Purchase Price") for the
Acquired Assets and the non-competition covenant set forth in Section 3.6(b)
(the "Non-Competition Covenant") shall be (x) $16,000,000 (the "Initial
Installment"), (y) any additional purchase price paid under Section 1.3(c) or
Section 1.3(d), and (z) the assumption of the Assumed Liabilities. Subject to
the terms and conditions of this Agreement, at the Closing:
(i) Buyer shall deliver $14,020,000 to Sibson & Company, by wire
transfer of immediately available funds;
(ii) Buyer shall cause to be delivered to Nextera UK Limited by
bank check the amount of $700,000 pursuant to the UK Asset Transfer
Agreement (as defined below).
The further amount of $1,280,000 of the Initial Installment (the "Holdback
Amount") shall be paid to Sibson & Company in accordance with Section 1.3(b)
below.
(b) The Purchase Price shall be decreased dollar for dollar to
the extent Working Capital (as defined below) as set forth on the Closing Date
Balance Sheet (as defined below) is less than $4,000,000 and shall be increased
dollar for dollar to the extent such Working Capital is more than $4,000,000.
"Working Capital" means those receivables, prepaid expenses and other current
assets (excluding cash and cash equivalents) that are Acquired Assets less (x)
those accounts payable, accrued expenses and other current liabilities that are
Assumed Liabilities, (y) any costs and expenses related to the transactions
contemplated in this Agreement; provided, however, that for purposes of
calculating Working Capital the amount recorded in respect of each account
receivable shall be reduced by an amount equal to the greater of (A) any reserve
recorded in respect of such account receivable pursuant to Sellers' accounting
policies, and (B) (x) a reserve equal to one-third of the amount of such account
receivable if such account receivable is aged more than six months but less than
one year, and (y) by a reserve equal to the full amount of such account
receivable if such account receivable is aged one year or more; and provided
further that with respect to accounts receivable for which payment is received
within 60 days following the Closing Date (as defined below), the amount
recorded shall be the amount actually collected. For the avoidance of doubt, it
is understood and agreed that all Assumed Liabilities shall be deemed current
liabilities for purposes of determining Working Capital. Any adjustment to the
Purchase Price made pursuant to this Section 1.3(b) shall be referred to as the
"Working Capital Adjustment" and shall be subject to the following provisions:
(i) As promptly as practicable, but in no event later than 60
days after the Closing Date, Buyer shall cause to be prepared and
furnished to Nextera an audited
5
balance sheet for the Business as of the Closing Date (the "Closing Date
Balance Sheet"), including a computation of Working Capital as of such
date and a calculation of the post-closing adjustment, if any, required
pursuant to this Section 1.3(b). The Closing Date Balance Sheet shall be
prepared by Buyer in accordance with generally accepted accounting
principles ("GAAP") applied on a basis consistent with the preparation
of the Financial Statements and shall be certified upon audit by Xxxxx
Xxxxxxxx or other accounting firm of national recognition.
(ii) Nextera and its independent accountants shall have the right
for a period of 15 days after the receipt of the Closing Date Balance
Sheet to review the Closing Date Balance Sheet and to present in writing
to Buyer any objections in reasonable detail. The Closing Date Balance
Sheet shall be deemed to be acceptable to Nextera, and shall become
final and binding on all parties, except to the extent that Nextera has
made such an objection within such 15 day period. If Nextera raises any
such objection within such 15 day period, then Nextera and Buyer shall
attempt in good faith to resolve any dispute concerning the item or
items subject to such objection.
(iii) If Nextera and Buyer are unable to resolve any such dispute
within 15 days (or such longer period as Nextera and Buyer shall
mutually agree in writing) of Nextera's delivery of a written objection,
such dispute shall be resolved by an independent accounting firm of
national recognition mutually selected by Buyer and Nextera acting as
arbitrator, and such determination shall be final and binding on the
parties. Only items specified in the written objection shall be subject
to adjustment by the independent accounting firm. The fees and expenses
of the independent accounting firm shall be borne equally by Buyer, on
the one hand, and Nextera, on the other hand.
(iv) Buyer shall deliver to Sibson & Company the Holdback Amount
plus or minus the amount of the Working Capital Adjustment, if any,
promptly but in any event no later than ten days following the final
determination of the Working Capital Adjustment. If the Working Capital
Adjustment leads to a reduction of the Purchase Price by an amount
greater than the Holdback Amount, Sellers shall pay the difference to
Buyer promptly, but in any event no later than ten days following the
final determination of the Working Capital Adjustment. Overdue amounts
pursuant to this Section 1.3(b)(iv) shall bear interest at a rate of 8%
per annum.
(c) The Purchase Price shall be increased, if applicable, by the
following amount:
(1) if Average Gross Revenue (as defined below) is equal to or
greater than $34,000,000 but less than $35,000,000, by the
amount of $500,000;
(2) if Average Gross Revenue is equal to or greater than
$35,000,000 but less than $36,000,000, by the amount of
$1,000,000;
(3) if Average Gross Revenue is equal to or greater than
$36,000,000 but less than $37,000,000, by the amount of
$1,500,000;
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(4) if Average Gross Revenue is equal to or greater than
$37,000,000 but less than $38,000,000, by the amount of
$2,250,000;
(5) if Average Gross Revenue is equal to or greater than
$38,000,000 but less than $39,000,000, by the amount of
$3,000,000;
(6) if Average Gross Revenue is equal to or greater than
$39,000,000 but less than $40,000,000, by the amount of
$3,750,000;
(7) if Average Gross Revenue is equal to or greater than
$40,000,000, by the amount of $4,500,000.
"Average Gross Revenue" means the average of Gross Revenue during the one-year
periods ending January 31, 2003 and January 31, 2004. "Gross Revenue" means the
revenue (calculated according to GAAP consistently applied) of the Business
(including, for purposes of this definition, Buyer's Human Resource Innovation
business unit) less the sum of (A) deductions for bad debts related to the
Business for the applicable period and (B) $2,240,000. Any adjustment to the
Purchase Price made pursuant to this Section 1.3(c) shall be referred to as the
"Revenue Adjustment."
(d) The Purchase Price shall be increased, if applicable, by
the following amount:
(1) if Cumulative Gross Profits (as defined below) are equal
to or greater than $52,720,000, by the amount of
$15,000,000; or
(2) if Cumulative Gross Profits are less than $52,720,000 but
greater than $47,450,000, by an amount equal to the sum of
(A) $7,500,000, plus (B) the product of (x) $7,500,000,
multiplied by (y) a fraction (expressed as a decimal to
the nearest 100th), the numerator of which is the
difference between Cumulative Gross Profits and
$47,450,000, and the denominator of which is $5,270,000;
or
(3) if Cumulative Gross Profits are equal to $47,450,000, by
the amount of $7,500,000; or
(4) if Cumulative Gross Profits are less than $47,450,000, by
zero.
"Cumulative Gross Profits" means the revenue (calculated according to GAAP
consistently applied) of the Business (including, for purposes of this
definition, Buyer's Human Resource Innovation business unit) for the two year
period ending January 31, 2004 less the sum of (A) deductions for compensation
and fringe benefits for principals, senior consultants and consultants (whether
engaged as employees or independent contractors), (B) deductions for bad debts
related to the Business for the applicable two year period and (C) $1,500,000;
provided, however, there shall be no deductions for bonuses paid to management,
consultants or Employees related to the profitability of the Business, and for
selling, general and administrative expenses and/or allocated corporate
overhead. Any adjustment to the Purchase Price made pursuant to this Section
1.3(d) shall be referred to as the "Earnout Adjustment."
7
(e) The Revenue Adjustment and the Earnout Adjustment shall be
subject to the following provisions:
(i) As promptly as practicable, but in no event later than 120
days after January 31, 2004, Buyer shall cause to be prepared and
furnished to Nextera an audited statement of operations for the Business
for the two year period ending January 31, 2004 (the "Earnout Statement
of Operations"), including a computation of Average Gross Revenue and
Cumulative Gross Profits and a calculation of the post-closing
adjustments, if any, required pursuant to Section 1.3(c) and Section
1.3(d). The Earnout Statement of Operations shall be prepared by Buyer
in accordance with GAAP applied on a basis consistent with the
preparation of the Financial Statements and shall be certified upon
audit by Xxxxx Xxxxxxxx or other accounting firm of national
recognition.
(ii) Nextera and its independent accountants shall have the right
for a period of 30 days after the receipt of the Earnout Statement of
Operations to review the Earnout Statement of Operations and to present
in writing to Buyer any objections in reasonable detail. The Earnout
Statement of Operations shall be deemed to be acceptable to Nextera, and
shall become final and binding on all parties, except to the extent that
Nextera has made such an objection within such 30 day period. If Nextera
raises any such objection within such 30 day period, then Nextera and
Buyer shall attempt in good faith to resolve any dispute concerning the
item or items subject to such objection.
(iii) If Nextera and Buyer are unable to resolve any such dispute
within 30 days (or such longer period as Nextera and Buyer shall
mutually agree in writing) of Nextera's delivery of a written objection,
such dispute shall be resolved by an independent accounting firm of
national recognition mutually selected by Buyer and Nextera acting as
arbitrator, and such determination shall be final and binding on the
parties. Only items specified in the written objection shall be the
subject of adjustment by the independent accounting firm. The fees and
expenses of the independent accounting firm shall be borne equally by
Buyer, on the one hand, and Nextera, on the other hand.
(iv) The unpaid portion of the Revenue Adjustment and the Earnout
Adjustment shall bear interest at the rate of 6% per annum, calculated
from the day following the date of final determination of the Revenue
Adjustment and the Earnout Adjustment in accordance with this Section
and payable in arrears on the last business day of each calendar
quarter. Buyer shall pay (A) the full amount of the Revenue Adjustment
and fifty percent of the Earnout Adjustment with accrued interest no
later than 10 days following the date of final determination of the
Revenue Adjustment and the Earnout Adjustment; (B) the remaining fifty
percent of the Earnout Adjustment with accrued but unpaid interest no
later than the earlier of (i) 30 days following the Senior Debt maturity
date, (ii) 30 days following the repayment in full of the Senior Debt,
if paid prior to maturity, (iii) 30 days following a change in the
control of Buyer, and (iv) 30 days following the fifth anniversary of
the Closing Date. Notwithstanding the foregoing, no amounts referred to
in this Section 1.3(e)(iv), including any interest accruing pursuant to
this Section 1.3(e)(iv), shall be payable to the extent that, and for so
long as, such payment is not permitted pursuant to the Credit Agreement
relating to the Senior Debt;
8
provided, however, that amounts that are not payable by reason of this
sentence shall bear interest at the rate of 10% per annum for the period
during which they are not payable for such reason until payment is made.
(f) The Purchase Price shall be allocated among the Acquired
Assets and the Non-Competition Covenant as set forth in Schedule 1.3(f) and such
allocation shall be adjusted in a manner to be agreed upon by Buyer and Sellers
to reflect adjustments to the Purchase Price, if any, subsequent to the Closing
Date; provided, however, that the parties agree that any such adjustment shall
be consistent with the original allocation and that the amount of any Revenue
Adjustment and any Earnout Adjustment shall be treated as an adjustment to the
Purchase Price. The parties hereto agree to complete jointly and to file
separately Form 8594 with their respective Federal income Tax Returns consistent
with such final allocation for the Tax year in which the Closing Date occurs. If
such allocation is disputed by any Governmental Entity, the party receiving
notice of such dispute shall promptly notify the other party hereto of the
existence and shall cooperate with the other party in resolving such dispute.
Buyer and Sellers further agree that each party shall, and shall cause their
respective Affiliates to (as applicable), (i) report the transactions
contemplated by this Agreement for Tax purposes in accordance with the
agreed-upon allocation of the Purchase Price, pursuant to Section 1060 of the
Code and the regulations thereunder, (ii) cooperate in executing such
certifications or other documents as may be reasonably required to evidence such
allocations, and (iii) agree not to take, in any filing with or accompanying any
Tax Return reporting any part of the transaction undertaken herein, a position
inconsistent with such allocations. Buyer and Sellers shall and shall cause
their respective Affiliates to (as applicable) follow such allocation in
determining and reporting their liabilities for Federal, state, local and
foreign Tax Returns filed by them subsequent to the Closing Date.
SECTION 1.4. Closing. The closing (the "Closing") for the
consummation of the transactions contemplated by this Agreement shall take place
at the offices of Xxxxxxxxx & Xxxxxxx, 1330 Avenue of the Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or such other place or places as Sellers and Buyer shall agree,
at 10:00 A.M. (Eastern Standard Time) on the later of (a) January 29, 2002, and
(b) the date on which all conditions set forth in Article IV shall have been
satisfied or waived, or such other date and time agreed to by Sellers and Buyer
(such date of the Closing being hereinafter called the "Closing Date").
SECTION 1.5. Instruments of Conveyance and Transfer. At the
Closing:
(a) Sellers shall execute and deliver to Buyer the Xxxx of Sale,
in substantially the form of Exhibit A (the "Xxxx of Sale");
(b) Sellers and Buyer shall execute and deliver the Assignment
and Assumption, in substantially the form of Exhibit B (the "Assignment");
(c) Sellers and Buyer shall cause to be executed and delivered by
Nextera UK Limited and Xxxxx UK an asset transfer agreement in substantially the
form of Exhibit C (the "UK Asset Transfer Agreement") relating to the
acquisition by Xxxxx UK of those Acquired Assets owned and held by Nextera UK
Limited;
9
(d) the parties shall, and shall cause their Affiliates to,
execute and deliver such other instruments of transfer, conveyance and
assignment (in a form satisfactory to Sellers and Buyer) as shall be necessary
in the reasonable judgment of Buyer to transfer, convey and assign the Acquired
Assets to Buyer or its designated Affiliates.
SECTION 1.6. Post-Closing Assurances. Sellers shall, and shall
cause their Subsidiaries to, at any time and from time to time after the Closing
Date, upon the request of Buyer, do, execute, acknowledge, deliver and file, or
cause to be done, executed, acknowledged, delivered or filed, all such further
acts, deeds, transfers, conveyances, assignments or assurances as may be
reasonably required for the better transferring, conveying, assigning and
assuring to Buyer or its designated Affiliates, or for the aiding and assisting
in the reducing to possession by Buyer or its designated Affiliates of, any of
the Acquired Assets.
SECTION 1.7. Transfer of Acquired Assets; Consents and
Authorizations. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall not constitute an agreement or attempt to
transfer, sublease or assign any contract, license, lease, sales order, purchase
order or other agreement or any claim or right of any benefit arising there
under or resulting therefrom or any Permit if an attempted transfer, sublease or
assignment thereof, without the consent or authorization of any other party
thereto, would constitute a breach thereof or in any way adversely affect
Buyer's or any of its Affiliates' rights to receive the benefits thereunder. If
any attempted transfer, sublease or assignment by Sellers or their Subsidiaries
of any Acquired Assets is limited by the immediately preceding sentence and such
required consent or authorization has not been obtained, then (subject to waiver
by Buyer of any applicable conditions to the consummation of the transactions
contemplated by this Agreement) such transfer, sublease or assignment shall be
subject to any such consent or required authorization being obtained. Sellers
shall, and shall cause their Subsidiaries to, use their best commercially
reasonable efforts to obtain such consent or authorization as promptly as
practicable, and Sellers and Buyer shall cooperate (at their own expense) in any
lawful and commercially reasonable arrangement reasonably proposed by Buyer
under which Buyer or any of its Affiliates shall obtain (without infringing upon
the legal rights of such third party or outside party or violating any
applicable Law) the economic claims, right and benefits under the asset, claim
or right with respect to which the consent or authorization has not been
obtained in accordance with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. Representations and Warranties of Sellers. Except
for matters specifically disclosed by reference to the relevant Section of this
Agreement in Schedule 2.1 with respect to the Business in the United Kingdom,
Sellers jointly and severally represent and warrant to Buyer as follows:
(a) Organization, Standing and Power. Nextera is a corporation,
and Sibson & Company is a limited liability company, in each case duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Sellers and their Subsidiaries involved in the Business has
all requisite corporate power and authority to own, lease and
10
operate its properties and to carry on its business as now being conducted, and
is duly qualified to do business and is in good standing in each jurisdiction in
which such qualification is necessary because of the property owned, leased or
operated by it or because of the nature of its business as now being conducted,
except where the failure, individually or in the aggregate, to be so qualified
or in good standing could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), assets, liabilities,
operations or prospects of the Business.
(b) Authority; Binding Agreements. The execution and delivery of
this Agreement and the Related Instruments and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Sellers and their
Subsidiaries. Sellers have all requisite corporate power and authority to enter
into this Agreement and the Related Instruments and to consummate the
transactions contemplated hereby and thereby and this Agreement and the Related
Instruments have been, or upon execution and delivery thereof will be, duly
executed and delivered by Sellers. This Agreement and the Related Instruments
are, or upon execution and delivery thereof will be, the valid and binding
obligations of Sellers or, enforceable against Sellers in accordance with their
respective terms.
(c) Corporate Structure. Nextera owns 100% of the membership
interests of Sibson & Company, and Sibson & Company owns 100% of the membership
interests of Sibson International. Sibson International owns all of the issued
shares of Sibson UK Holdings, and Sibson UK Holdings owns all of the issued
shares of Nextera UK Limited and The Alexander Corporation. Except for holding
the equity interests described in the preceding sentence, Sibson International
and Sibson UK Holdings have conducted no business since their formation. There
are no outstanding options, warrants, rights, commitments, or preemptive rights
or agreements of any kind for the issuance and sale of, or rights convertible
into, and additional equity of any class or kind of Sibson & Company, Sibson
International, Sibson UK Holdings or Nextera UK Limited. On January 1, 2000, The
Alexander Corporation transferred all of its business activity, workforce and
assets to Nextera UK Limited, and since that date The Alexander Corporation has
not conducted any business activity of any kind. On August 1, 2001, Nextera UK
Interactive transferred all of its business activity, workforce and assets to
Nextera UK Limited, and since that date Nextera UK Interactive has not conducted
any business activity of any kind. Except for matters that are not material to
the conduct, condition (financial or otherwise), operations or prospects of the
Business, all of the assets used or held for use in connection with the Business
are held directly by Sibson & Company or Nextera UK Limited.
(d) Conflicts; Consents. The execution and delivery of this
Agreement and the Related Instruments, the consummation of the transactions
contemplated hereby or thereby and compliance by Sellers or their Subsidiaries
with any of the provisions hereof or thereof do not and will not (i) conflict
with or result in a breach of the certificate of incorporation, by-laws or other
constitutive documents of Sellers or any Subsidiary of Sellers, (ii) conflict
with or result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the provisions of any note, bond,
real estate lease, mortgage, indenture, material license, personal property
lease, franchise, Permit, agreement or other instrument or obligation to which
Sellers or any Subsidiary of Sellers is a party, or by which Sellers or any
Subsidiary of Sellers or any of their respective properties or assets may be
bound or affected, except for such conflict, breach or
11
default as to which requisite waivers or consents shall be obtained before the
Closing Date (which waivers or consents are set forth in Schedule 2.1(d)(ii)),
(iii) violate any Law applicable to Sellers, any Subsidiary of Sellers or any of
their respective properties or assets, (iv) result in the creation or imposition
of Lien upon any property or assets used or held in connection with the
Business, (v) except as set forth in Schedule 2.1(d)(v) require the consent or
approval by, or any notification of or filing with, any Governmental Entity.
(e) Financial Information; No Undisclosed Liabilities.
(i) The following financial statements (the "Financial
Statements") of the Business are contained in Schedule 2.1(e)(i):
(A) the unaudited balance sheets as of December 31, 1999,
2000 and 2001; and
(B) the unaudited statements of operations for the three
years ended December 31, 1999, 2000 and 2001.
The Financial Statements have been prepared in accordance with GAAP
consistently applied, present fairly the financial condition and results
of operations of the Business and are true and correct in all material
respects. There are no liabilities or obligations of Sellers or their
Subsidiaries related to the Business or the Acquired Assets of any kind
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than (x) liabilities disclosed or
provided for in the Financial Statements and (y) liabilities incurred in
the ordinary course of business consistent with past practice since the
date of the Financial Statements that are not material to the Business,
taken as a whole.
(ii) Schedule 2.1(e)(ii) contains the operating budget of the
Business for calendar years 2001, 2002 and 2003. Such operating budget
was previously supplied by Sellers to Buyer, subject to the
understanding that (i) projections have been made in good faith by the
management of the Sellers and in the view of the Sellers' management are
reasonable in light of all information known to Sellers and their
Subsidiaries, and (ii) no representation or warranty is made as to
whether the projected results will be realized.
(iii) The financial statements of Nextera UK Limited for the year
ended December 31, 2001 (the "UK Accounts") are contained in Schedule
2.1(e)(iii), and the UK Accounts comply with the provisions of the UK
Companies Xxx 0000 as applicable and have been prepared in accordance
with the requirements of all relevant statutes and with United Kingdom
generally accepted accounting principle and practices and are true and
accurate in all respects so far as they are statements of fact and not
estimates, and give a true and fair view of all the assets and
liabilities (whether present or future, actual or contingent) and of the
state of affairs, financial position and results of the Business in the
United Kingdom as at and up to December 31, 2001.
(f) Absence of Changes. Except as set forth in Schedule 2.1(f),
since December 31, 2000, Sellers and their Subsidiaries have operated the
Business in the ordinary
12
course consistent with past practice and there has not been in connection with
or related to the Business:
(i) any material adverse change in the condition (financial or
otherwise), assets, liabilities, operations or prospects of the
Business;
(ii) any obligation or liability (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) incurred by
Sellers or their Subsidiaries, other than obligations under customer
contracts, current obligations and liabilities incurred in the ordinary
course of business and consistent with past practice;
(iii) any payment, discharge or satisfaction of any claim or
obligation of Sellers or their Subsidiaries, except in the ordinary
course of business and consistent with past practice;
(iv) any sale, assignment, pledge, encumbrance, transfer or other
disposition of any tangible asset of Sellers or their Subsidiaries,
except for obsolete equipment disposed of in the ordinary course of
business consistent with past practice, or any sale, assignment,
transfer or other disposition of any, licenses, franchises, or any other
intangible assets of Sellers and their Subsidiaries;
(v) any creation of any material claim or other encumbrance on
any property of Sellers or their Subsidiaries;
(vi) any material write-down of the value of any asset of Sellers
or their Subsidiaries or any material write-off as uncollectible of any
accounts or notes receivable or any portion thereof;
(vii) any cancellation of any debts or claims or any amendment,
termination or waiver of any rights of value to Sellers or their
Subsidiaries;
(viii) any capital expenditure or commitment or addition to
property, plant or equipment of Sellers or their Subsidiaries,
individually or in the aggregate, in excess of $50,000;
(ix) any increase in the compensation of Employees of Sellers or
their Subsidiaries (including any increase pursuant to any bonus,
pension, profit-sharing or other benefit or compensation plan, policy or
arrangement or commitment), or any increase in any such compensation or
bonus payable to any officer, shareholder, director, consultant or agent
of Sellers or their Subsidiaries having an annual salary or remuneration
in excess of $100,000;
(x) any material damage, destruction or loss (whether or not
covered by insurance) affecting any asset or property of Sellers or
their Subsidiaries;
(xi) any change in the Tax or accounting methods or Tax or
accounting practices followed by Sellers or their Subsidiaries or any
change in depreciation or amortization policies or rates;
13
(xii) any adverse change in employee relations which has or is
reasonably likely to have an adverse effect on the productivity, the
financial condition, results of operations or business of Sellers or any
of their Subsidiaries or the relationships between Sellers' and their
Subsidiaries' Employees and management;
(xiii) (A) any amendment, cancellation or termination of any
contract, commitment, agreement, lease, transaction or Permit relating
to the Acquired Assets or the Business or (B) except for this Agreement
and the other agreements entered into in connection herewith, any entry
into any contract, commitment, agreement, lease, transaction or Permit,
including any employment, consulting or retainer agreements, proposal
letters or similar documents, except in the cases of the foregoing
clauses (A) and (B), the amendment, cancellation or termination or the
entering into, of contracts or commitments for the provision of
consulting services in the ordinary course of business consistent with
past practices;
(xiv) except as provided in this Agreement or the other
agreements contemplated hereby or as described in the Schedules hereto,
the incurrence by Sellers or any of their Subsidiaries of any obligation
or liability, except any obligation or liability incurred in the
ordinary course of business, or increase or change in any assumptions
underlying or methods of calculating any doubtful account contingency or
other reserves of Sellers or any of their Subsidiaries;
(xv) any failure to pay or satisfy when due any obligation or
liability of Sellers or any of their Subsidiaries, except where the
failure would not have a material adverse effect on the Business;
(xvi) any disposition or lapsing of any Intellectual Property
owned by Sellers or their Subsidiaries, or any disposition or disclosure
by Sellers or their Subsidiaries to any person of any Intellectual
Property owned by Sellers or their Subsidiaries not theretofore a matter
of public knowledge, other than as would not have a material adverse
effect on the Business;
(xvii) any transfer or disposition of any asset or property
relating to the Business from Sellers or the Related Entities to any
other Subsidiary of Sellers;
(xviii) any agreement or action not otherwise referred to in
items (i) through (xvi) above entered into or taken that is material to
the Business; or
(xix) any agreement or commitment, whether in writing or
otherwise, to take any of the actions specified in the foregoing items
(i) through (xvii).
(g) Assets, Property and Related Matters; Real Property.
(i) Except as set forth on Schedule 2.1(g)(i)(A), Sellers and
their Subsidiaries have good title to all of the Acquired Assets, free
and clear of all Liens, and except as set forth on Schedule
2.1(g)(i)(A), no security agreement, financing statement or other public
notice with respect to all or any part of the Acquired Assets is on file
or of record in any government or public office, and neither Sellers nor
any of their subsidiaries has
14
consented to the filing of any such statement or notice with respect to
the Acquired Assets. The information contained in Schedule 2.1(g)(i)(B)
is true and complete in all respects. The tangible property included in
the Acquired Assets is in good operating condition and repair, subject
to ordinary wear and tear. The Acquired Assets constitute all of the
properties, interests, assets and rights of Sellers and their
Subsidiaries related to the Business, except for the Excluded Assets,
and constitute all those necessary to continue to operate the Business
consistent with current and historical practice. At the Closing, Sellers
will transfer to Buyer or Buyer's designated Affiliates good title to
all of the Acquired Assets, free and clear of all Liens.
(ii) Sellers and their Subsidiaries do not own any real property
used in connection with the Business. With respect to each of the
Transferred Office Leases and the UK Lease, (A) Sellers or their
Subsidiaries are the owner and holder of all the leasehold interests and
estates purported to be granted by such leases, (B) all such leases are
in full force and effect and constitute valid and binding obligations of
the parties thereto, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other Law of general applicability relating to or
affecting creditors' rights and to general equitable principles, and (C)
Sellers have made available to Buyer true and complete copies of all
such leases. There exists no default, or any event which upon notice or
the passage of time, or both, would give rise to any default, in the
performance by Sellers or their Subsidiaries or by any lessor under any
lease. Except as set forth in Schedule 2.1(g)(ii), neither Sellers or
their Subsidiaries nor any other person has granted any oral or written
right to anyone other than Sellers or their Subsidiaries to lease,
sublease or otherwise occupy any of the properties subject to the
Transferred Office Leases or the UK Lease through the end of the
applicable lease periods.
(iii) To the knowledge of Sellers and their Subsidiaries, the
real property subject to the Transferred Office Leases and the UK Lease
and all appurtenances and improvements, as used, constructed or
maintained by Sellers or their Subsidiaries at any time, conform to
applicable Law. To the knowledge of Sellers and their Subsidiaries, the
use of the buildings and structures located on such real property or any
appurtenances or equipment does not violate any restrictive covenants or
encroach on any property owned by others. No condemnation proceeding is
pending or, to the knowledge of Sellers and their Subsidiaries,
threatened which would preclude or impair the use of any such property
by Sellers or their Subsidiaries for the uses for which they are
intended.
(iv) Schedule 1.1(a)(v) and Schedule 1.1(a)(vi) set forth, in
reasonable detail, for each of the tangible assets identified thereon,
the facility of Seller at which such asset is located and, as of
December 31, 2001, the original cost, accumulated depreciation and net
book value of such asset.
(h) Patents, Trademarks and Similar Rights. Sellers and their
Subsidiaries own or have valid license rights to all Intellectual Property used
in the Business as presently conducted (the "Necessary Intellectual Property").
The Acquired Assets include all Necessary Intellectual Property or Sellers' and
their Subsidiaries' licenses to use such Necessary Intellectual Property.
Schedule 2.1(h)(i) sets forth all registrations in respect of Intellectual
15
Property rights owned by Sellers and their Subsidiaries and a description of all
material unregistered Intellectual Property rights owned by Sellers and their
Subsidiaries in connection with the Business. The registrations listed on
Schedule 2.1(h)(i) have been duly maintained and have not been cancelled,
expired or allowed to lapse.
(i) To the knowledge of Sellers and their Subsidiaries, no
Intellectual Property included in the Acquired Assets infringes any
rights owned or held by any other person. There is no pending or, to the
knowledge of Sellers or their Subsidiaries, threatened claim or
litigation against Sellers or their Subsidiaries contesting their right
exclusively to use any Intellectual Property included in the Acquired
Assets or contesting Sellers' and their Subsidiaries' right to use any
Intellectual Property pursuant to Sellers' and their Subsidiaries'
licenses therefor. To the knowledge of Sellers and their Subsidiaries,
no person is infringing the rights of Sellers or their Subsidiaries in
any Intellectual Property included in the Acquired Assets. No product or
service sold by Sellers or their Subsidiaries in connection with the
Business violates or infringes any Intellectual Property right owned or
held by any other person.
(ii) Schedule 2.1(h)(ii) lists all material license agreements
for Intellectual Property among the Acquired Assets either licensed by
Sellers or their Subsidiaries as licensor to third parties or licensed
by third parties to Sellers and their Subsidiaries as licensee. Sellers
have delivered or made available to Buyer correct and complete copies of
the license agreements listed in such Schedule.
(iii) Sellers have taken reasonable measures to protect and
preserve the security, confidentiality, value and ownership of the
Know-How and other confidential information included in the Necessary
Intellectual Property. To the knowledge of Sellers, none of the Know-How
is part of the public domain or knowledge, nor, to the knowledge of
Sellers, has the Know-How been used by, disclosed or divulged to, or
appropriated by or for the benefit of any person other than Sellers and
their Subsidiaries or otherwise to the detriment of the Business.
(iv) To the knowledge of Sellers and their Subsidiaries, Sellers
or their Subsidiaries have licensed or otherwise possess the right to
use all computer software programs and applications, databases and
system or user documentation in use on or in connection with any
computer that is part of the Acquired Assets or server hosted for
Sellers or their Subsidiaries for which the hosting agreement is among
Acquired Assets ("Internal Use Software") as such Internal Use Software
is used in connection with the Business either (1) by means of
individually purchased or otherwise lawfully and validly acquired
licenses that authorize the use of such Internal Use Software together
with all other copies of such software used by Sellers or their
Subsidiaries, or (2) by means of ownership of intellectual property
rights in software through development by Employees, work made for hire
arrangements or assignment by third parties. Sellers believe they can
obtain on commercially reasonable terms any additional rights in such
Internal Use Software necessary for the Business.
(i) Insurance. Schedule 2.1(i) contains a true and complete list
of all policies of casualty, liability, theft, fidelity, life and other forms of
insurance related to the Business held
16
by Sellers or their Subsidiaries. True and complete copies of such policies have
been delivered or made available for inspection and copy by Buyer. All insurance
policies are in the name of Sellers or their Subsidiaries and all premiums with
respect to such policies are currently paid. Sellers or their Subsidiaries have
not received notice of cancellation or termination of any such policy, nor have
they been denied or had revoked or rescinded any policy of insurance, nor
borrowed against any such policies. No claim under any such policy is pending.
(j) Agreements, Etc. Schedule 2.1(j) contains a true and complete
list of all written or oral contracts, agreements and other instruments related
to the Business to which any of Sellers or any of their Subsidiaries is a party
(i) relating to indebtedness for money borrowed or capital leases, (ii) of
duration of six months or more from the date hereof and not cancelable without
penalty, (iii) relating to commitments in excess of $25,000, (iv) relating to
the employment or compensation of any director, officer, Employee, consultant or
other agent of Sellers or any of their Subsidiaries, (v) relating to the sale or
other disposition of any assets, properties or rights, (vi) relating to the
lease or similar arrangement of any machinery, equipment, motor vehicles,
furniture, fixture or similar property, (vii) between either Seller or between
either of Sellers and any of their Subsidiaries, (viii) that restricts the
operation of the Business anywhere in the world, (ix) relating to the grant of
options with respect to any property, real or personal, where any of Sellers or
any of their Subsidiaries is the grantor thereunder, (x) relating to commission
arrangements with others, or (xi) that is otherwise material to Sellers or any
of their Subsidiaries or entered into other than in the ordinary course of
business. Sellers and their Subsidiaries are not in default under any such
agreement or instrument where such default could, individually or in the
aggregate with defaults under other agreements or instruments, have a material
adverse effect on the condition (financial or otherwise), assets, liabilities,
operations or prospects of the Business and, to the knowledge of Sellers and
their Subsidiaries, all such agreements or instruments are in full force and
effect. Sellers have furnished to Buyer true and complete copies of all
documents described in Schedule 2.1(j). Except for liabilities specifically
identified on Schedule 1.2(a) hereto, there are no liabilities or commitments
outstanding or accrued under the agreements listed on Schedule 1.1(a)(xi)
hereto.
(k) Litigation, Etc. Except as set forth on Schedule 2.1(k),
since August 30, 1998, there have not been, nor are there, any suits, actions,
claims, investigations or legal or administrative or arbitration proceedings
related to the Business, pending or, to the knowledge of Sellers and their
Subsidiaries, threatened, whether at law or in equity, or before or by any
Governmental Entity. Since August 30, 1998, there have not been, nor are there
any judgments, decrees, injunctions or orders of any Governmental Entity or
arbitrator against Sellers or any of their Subsidiaries or any of their
respective assets or properties related to the Business.
(l) Compliance; Governmental Authorizations.
(i) Except as set forth on Schedule 2.1(l)(i), Sellers and their
Subsidiaries have complied and are in compliance with all Law (including
any Law relating to disposal of materials, environmental protection and
occupational safety and health) related to the Business. Sellers and
their Subsidiaries have all Federal, state, local and foreign Permits
necessary to conduct the Business as presently conducted, which Permits
(and any exceptions thereto) are set forth in Schedule 2.1(l)(ii). Such
Permits are in full force and effect, no violations are or have been
recorded in respect of any thereof, no
17
proceeding is pending or, to the knowledge of Sellers and their
Subsidiaries, threatened, to revoke or limit any thereof, and Sellers
and their Subsidiaries know of no basis for any such proceeding.
(ii) There are no conditions relating to Sellers or any of their
Subsidiaries or relating to Sellers' and their Subsidiaries' ownership,
use or maintenance of any real property in respect of the Business
previously owned or operated by Sellers or any of their Subsidiaries,
and Sellers and their Subsidiaries do not know and have no reason to
know of any such condition in respect of such real property not related
to the ownership, use or maintenance, that could lead to any liability
for violation of any Law relating to pollution or protection of the
environment or any other applicable environmental, health or safety Law.
Sellers and their Subsidiaries have complied with all applicable
environmental, health or safety Law.
(m) Labor Relations; Employees.
(i) Schedules 2.1(m)(i)(a) and (b) set forth a list of each
individual employed by the Business in the United States and Canada (the
"US Employees") and in the United Kingdom (the "UK Employees" and,
collectively with the US Employees, the "Employees") as of the date
indicated thereon, including details of title, date of hire, salary or
wage rate, bonus payments, other benefit payments, date of birth,
commissions for the most recent past fiscal year, accrued leave and
severance and/or stay bonus obligations and the location at which such
Employee is employed. Schedules 2.1(m)(i)(a) and (b) also set forth for
each Employee the applicable hourly or other fee or billing rate charged
to clients and customers of the Business, the number of billable hours
recorded during the previous 12 months, and such Employee's billable
hours target.
(ii) Sellers and their Subsidiaries are not, in relation to the
Employees, a party to any labor contract, collective bargaining
agreement, contract, letter of understanding or any other agreement with
any labor union or other labor organization. As of the Closing Date and
since August 30, 1998, Sellers and their Subsidiaries have not
experienced, related to the Business, any pending or threatened labor
disputes or unfair labor practice proceedings with, or any work slow
downs, work stoppages, strike or charges of unfair labor practices by,
any present or former employee of the Business due to labor
disagreement, and there have been no labor union organizing activities
in connection with the operation of the Business since August 30, 1998.
(iii) Without limiting the generality of the foregoing:
(A) in respect of the US Employees, (1) no unfair labor
practice charge or complaint is currently pending against Sellers
or any of their Subsidiaries with any Governmental Entity, (2) no
person has made any claim or charge, nor have Sellers or any of
their Subsidiaries received any written notice or communication
stating an intention to make any claim or charge against Sellers
or any of their Subsidiaries under any Law relating to
discrimination with respect to employment, (3) no claim or charge
is pending or, to the knowledge of Sellers and their
Subsidiaries, threatened against Sellers or any of their
Subsidiaries in
18
connection with the Fair Labor Standards Act, Title VII of the
Civil Rights Act, the Americans with Disabilities Act, the
Occupational Safety and Health Act, Executive Order No. 11246,
the Family and Medical Leave Act, and the Age Discrimination in
Employment Act or any similar Law, and (4) Sellers and their
Subsidiaries have not received notice of the intent of any
Governmental Entity responsible for the enforcement of labor or
employment Law to conduct an investigation with respect to or
relating to Sellers or any of their Subsidiaries, and no such
investigation is in progress.
(B) in respect of the UK Employees, no existing or former
employee has in the last 12 months made any claim or charge, nor
have Sellers or any of their Subsidiaries received any written
notice or other communication stating or suggesting an intention
on the part of one or more employees or any Governmental Entity
to make any claim or charge or to commence any investigation
under any Law relating to the employment of the UK Employees,
including the UK Employment Rights Xxx 0000, the UK Transfer of
Undertakings (Protection of Employment) Regulations ("TUPE"), the
UK Sex Discrimination Act, the UK Race Relations Xxx 0000, the UK
Disability Discrimination Act 1996 and the UK Data Protection Xxx
0000.
(iv) Sellers and their Subsidiaries have complied, and are in
compliance as of the Closing Date, with all applicable Law that relates
to the employment of Employees of the Business, including, but not
limited to, any Law relating to wages, hours, overtime compensation,
unemployment insurance, workers' compensation, discrimination in
employment and collective bargaining, and Sellers and their Subsidiaries
are not liable for any material arrears of wages, Taxes, or penalties
for failure to comply with any of the foregoing.
(v) As of the Closing Date, Sellers and their Subsidiaries have
not taken any action requiring compliance with the Worker Adjustment and
Retraining Notification Act or any similar Law with respect to the US
Employees.
(vi) In respect of the US Employees, Schedule 2.1(m)(vi) sets
forth a list of each U.S. or non-U.S. pension, retirement, savings,
deferred compensation, and profit-sharing plan and each stock option,
stock appreciation, stock purchase, performance share, bonus or other
incentive plan, fringe benefit, life insurance, long- or short-term
disability, severance plan, health, group insurance or other welfare
plan, or other similar plan, including any "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") related to the Business and
sponsored, maintained, contributed to or required to be contributed to
by Sellers or any of their Subsidiaries, under which any of Sellers or
any of their Subsidiaries have any current or future obligation or
liability or under which any US Employee, former US employee (or
beneficiary of any US Employee or former US employee), consultant or
director of Sellers or any of their Subsidiaries have or may have any
current or future rights (the term "US plan" shall include any contract,
agreement, policy or understanding, each such plan being hereinafter
referred to individually as a
19
"US Plan" and, collectively with the plans and Incentive Arrangements
referred to at Section 2.1(m)(vii), and "the Plans").
(vii) Schedule 2.1(m)(vii) sets forth of list of each UK share
incentive, share option, profit sharing, bonus or other incentive
arrangements ("UK Incentive Arrangements"), long or short term
disability, pension plans ("UK Pension Plans"), severance plans, health,
group insurance or other employee benefit plan for or affecting any UK
Employee or former UK Employees (or beneficiary of any UK Employee or
former UK Employee) who are or were engaged in the Business, together
with full details of all awards allocated and options granted and the
total potential liability of Sellers and the Related Entities in respect
of any awards and options made under any Incentive Arrangements. Sellers
and the Related Entities are not liable for any National Insurance
contributions arising out of the grant, exercise or release of such
awards and options which are not fully provided for in the Audited
Accounts. In respect of all UK Incentive Arrangements, long or short
term disability, pension plans, severance plans, health, group insurance
or other employee benefit plan for or affecting any UK Employees or
former UK Employees who are or were engaged in the Business, Sellers and
the Related Entities have properly operated PAYE and National Insurance
contributions systems by making such deductions as are required by UK
law from all payments made or deemed to be or treated as made by it or
on its behalf and by duly accounting to the Inland Revenue for all sums
so deducted and for all other amounts for which it is required to
account under the PAYE and National Insurance contributions systems.
(viii) Sellers have delivered to Buyer true and complete copies
of (A) each of the Plan for which a Plan document exists (and, if
applicable, related trust agreements, annuity contracts, and insurance
contracts), (B) a summary of each unwritten Plan, (C) the summary plan
description for each Plan, (D) the latest annual report, if any,
required to be prepared in connection with each Plan (including Form
5500 and any attachments thereto), and (E) the most recent IRS
determination letter (if any) for each Plan (and any similar document in
respect of non-U.S. Plans), and such determination letter (and any
similar document in respect of any non-U.S. Plans), if favorable, has
not been revoked.
(ix) Each US Plan intended to be Tax qualified under Sections
401(a), 401(f), or 403(a) of the Code is, and has been determined by the
IRS at all times to be, Tax qualified and the trust or trusts thereunder
are qualified and exempt from Federal income Tax under Sections 401(a),
401(f), 403(a), and 501(a) of the Code, respectively, and, since such
determination, no amendment to or failure to amend, written or unwritten
interpretation of, or change in employee participation or coverage
under, any such US Plan or any other circumstance that adversely affects
the US Plan's Tax qualified status.
(x) No US Plan constitutes, or has since the enactment of ERISA
constituted, a "multiemployer plan," as defined in Section 3(37) of
ERISA.
(xi) No US Plan is subject to the provisions of Section 412 of
the Code or Part 3 of Subtitle B of Title I of ERISA. No US Plan is
subject to Title IV of ERISA. During the past five years, neither
Sellers nor any of their Subsidiaries contributed to or was obliged to
contribute to an employee pension plan that was subject to Title IV of
ERISA.
20
(xii) So far as Sellers and their Subsidiaries are aware, there
are no actions, claims, lawsuits or arbitrations (other than routine
claims for benefits) pending, or, to the knowledge of Sellers and their
Subsidiaries, threatened, with respect to any of the Plan or the assets
of any of the Plans, and Sellers and their Subsidiaries have no
knowledge of any facts which could give rise to any such actions,
claims, lawsuits or arbitrations (other than routine claims for
benefits). Sellers and their Subsidiaries have satisfied all material
funding, compliance and reporting requirements for all Plans.
(xiii) The consummation of the transactions contemplated by this
Agreement will not (A) entitle any Employee of Sellers or any of their
Subsidiaries to severance pay or termination benefits for which Buyer or
any of its Subsidiaries may become liable, (B) accelerate the time of
payment or vesting, or increase the amount of compensation due to any
such Employee or former employee of Sellers or any of their Subsidiaries
for which Buyer or any of its Affiliates may become liable, (C) except
as set forth on Schedule 2.1(m)(xiii), entitle any Employee to any
success fee, bonus or other similar special compensation, or (D)
obligate Buyer or any of its Affiliates to pay or otherwise be liable
for any compensation, vacation days, contributions or other benefits to
any Employee, consultant or agent of Sellers or any of their
Subsidiaries for periods before the Closing Date.
(xiv) Schedule 2.1(m)(xiv) sets forth all persons (other than the
Employees), retained or engaged by Sellers or their Subsidiaries for the
purpose of providing services to customers or clients of the Business,
together with the total compensation paid to each such person during the
previous 12 months and a description of the services provided by each
such person. Sellers have provided to Buyer true and complete copies of
all contracts and agreements pursuant to which such persons have been
engaged or retained by Sellers or their Subsidiaries.
(xv) Neither the Sellers nor their Subsidiaries has given any
undertaking or assurance to any UK Employee or to any widow, widower,
child or dependant of any UK Employee as to the introduction,
improvement or increase of any benefit of a kind listed in Schedule
2.1(m)(vii).
(xvi) All lump sum death in service benefits which are not money
purchase benefits and which are payable under the UK Pension Plans upon
the death of any person whilst in employment are insured fully under a
policy with a well known insurance company and, to the knowledge of
Sellers and their Subsidiaries, there are no grounds on which that
company might avoid liability under that policy. All other benefits
payable under the UK Pension Plans are money purchase benefits. In this
paragraph 'money purchase benefits' has the same meaning as in section
181(1) of the UK Xxxxxxx Xxxxxxx Xxx 0000.
(xvii) Contributions paid to the UK Pension Plans are not paid in
arrears and all contributions and other amounts which have fallen due
for payment have been paid punctually. To the knowledge of Sellers and
their Subsidiaries, no fee, charge or expense relating to or in
connection with the UK Pension Plans has been incurred but not paid.
21
(xviii)The Sellers and their Subsidiaries (i) have observed and
performed those provisions of the Sibson UK Retirement Plan which apply
to it including any requirements necessary to obtain or retain Inland
Revenue approval; and, (ii) may (without the consent of any person or
further payment) terminate their liability to contribute to the Sibson
UK Retirement Plan at any time subject only to giving such notice (if
any) as is expressly provided for in the documentation containing the
current provisions governing the Sibson UK Retirement Plan.
(n) Accounts Receivable and Work-in-Progress. Schedule 2.1(n)
contains a true aged list of unpaid accounts and notes receivable and
work-in-progress owing to Sellers or their Subsidiaries related to the Business
as of December 31, 2001, this Agreement, all of which are collectible in the
ordinary course of business, subject to reserves set forth on such Schedule.
(o) Clients and Customers.
(i) Schedule 2.1(o)(i) contains (A) a true and complete list of
the clients and customers of the Business for each of the years ended
during the period from January 1, 1998 through December 31, 2001 and, as
of the date hereof, any additions or deletions of clients and customers
from such month end to the date of this Agreement, and (B) the name of
the Employee principally responsible for providing services to and, if
different, billing each such client and customer to whom the Business
provided services during 2000 and 2001.
(ii) Schedule 2.1(o)(ii) contains (A) a true and complete list of
all contracts, agreements, retainers and accepted proposal letters
pursuant to which the Business provides goods or services to its clients
and customers (the "Client Contracts") in excess of $50,000 and (B) a
true and correct description of (x) the terms and conditions of each
oral Client Contract, (y) any and all disputes or defaults arising under
or with respect to the Client Contracts in connection with which a
client or customer has threatened, or is expected to, terminate its
contract with Sellers or their Subsidiaries or claim for damages, and
(z) all loans or advances made by Sellers or their Subsidiaries to or on
behalf of clients and customers of the Business, which description
includes the date of such loan or advance and the principal balance
outstanding as of the date of this Agreement under each such loan or
advance. The Client Contracts are valid and enforceable in accordance
with their respective terms with respect to the parties thereto, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the
enforcement of creditors' rights generally and by general equitable
principles. To the knowledge of Sellers and their Subsidiaries, no
client or customer of the Business has threatened to terminate, fail to
renew or adversely modify any relationship with the Business.
(iii) Schedule 2.1(o)(iii) sets forth as of December 31, 2000 and
as of December 31, 2001 a statement of the backlog of firm orders and
pipeline orders for the sale or lease of services relating to the
Business for which revenues have not been recognized by Sellers or their
Subsidiaries (the "Backlog Statements"). The Backlog Statements have
been prepared in good faith using Sellers' standard procedures and
22
criteria consistently applied. All proposals, contracts and commitments
reflected in the Backlog Statements are included in the Acquired Assets.
(iv) There are no existing or, to the knowledge of Sellers and
their Subsidiaries, threatened service liability, warranty or other
similar claims, or any reasonable basis upon which a material claim of
such nature could be based, against Sellers or their Subsidiaries for
services which are defective or fail to meet any service warranties.
Since December 31, 2000, no claim has been asserted against Sellers or
their Subsidiaries for renegotiation or price redetermination of any
Business transaction, and, to the knowledge of Sellers and their
Subsidiaries, there are no facts known to Sellers and their Subsidiaries
upon which any such claim could be based.
(p) Accounts Payable. Schedule 2.1(p) contains a true and
complete list of all accounts payable of Sellers and their Subsidiaries in
respect of the Business as of the date hereof, including a breakdown in each
case of the name of the creditor, the amount payable and the date on which such
account became payable. The Assumed Liabilities listed on Schedule 1.2(a) all
were incurred in the ordinary course in connection with the Business, and
Sellers have provided Buyer with all relevant documentation relating thereto.
(q) Related Party Transactions. Except as set forth on Schedule
2.1(q), no current or former partner, director, officer, Employee or shareholder
of Sellers or their Affiliates or any relative with a relationship of not more
remote than first cousin of any of the foregoing, is presently, or during the
twelve month period ending on the date hereof has been, (i) a party to any
transaction related to the Business with Sellers or any of their Affiliates
(including any contract, agreement or other arrangement providing for the
furnishing of services by, or rental of real or personal property from, or
otherwise requiring payments to, any such partner, director, officer, Employee
or shareholder) or (ii) to the knowledge of Sellers and their Subsidiaries, the
direct or indirect owner of an interest in any corporation, firm, association or
business organization which is a competitor, supplier or customer of the
Business, nor does any such person receive income from any source other than
Sellers and their Subsidiaries which relates to the Business or should properly
accrue to the Business.
(r) Taxes. Each of Sellers and their Subsidiaries has timely
filed or caused to be filed all Tax Returns that are required to have been filed
by it and all such Tax Returns are true, correct and complete in all material
respects. Each of Sellers and their Subsidiaries has paid all Taxes due, whether
or not shown on any Tax Return, except for any Taxes which such party is
contesting in good faith and for which adequate reserves have been established
in accordance with GAAP. Except with respect to Taxes not yet due and payable,
none of the Acquired Assets is subject to any Lien arising in connection with
the failure or alleged failure to pay any Tax. The charges, accruals and
reserves for Taxes of Sellers and their Subsidiaries for any pre-Closing Tax
period (including any Tax period for which no Tax Return has yet been filed)
reflected on the books of Sellers and their Subsidiaries (excluding any
provision for deferred Taxes) as disclosed to Buyer, are adequate to cover such
Taxes. None of the Acquired Assets is "tax-exempt use property" within the
meaning of Section 168(h) of the Code. To the knowledge of Sellers and their
Subsidiaries, no event has occurred that could impose upon Buyer any transferee
liability for any Taxes due or to become due from Sellers and their
Subsidiaries. There are no outstanding waivers or agreements extending the
application of any statute of
23
limitations of any jurisdiction for any period with respect to Sellers and their
Subsidiaries regarding the assessment or collection of any Tax. Sellers have
made available to Buyer true and complete copies of all Tax Returns filed by or
on behalf of Sellers and their Subsidiaries for each of the past three taxable
years. Each of Sibson & Company, Sibson International and Sibson UK Holdings has
been treated as a disregarded entity for U.S. Federal income Tax and, if
applicable, state income Tax purposes from December 31, 2000 through the Closing
Date.
(s) Disclosure. All information furnished by Sellers and their
Subsidiaries to Buyer for purposes of or in connection with this Agreement or
any of the transactions contemplated hereby is, taken as whole and in light of
the circumstances under which such information is furnished, true and accurate
in all material respects on the date as of which such information is furnished,
and true and accurate in all material respects on the date as of which such
information is stated or certified. It is understood that the foregoing is
limited to the extent that (i) projections have been made in good faith by the
management of the Sellers and in the view of the Sellers' management are
reasonable in light of all information known to Sellers and their Subsidiaries,
and (ii) no representation or warranty is made as to whether the projected
results will be realized.
(t) Brokers. Other than Xxxxxxxx Xxxxxxxx & Co., for whom Sellers
are paying all fees and expenses, no agent, broker, investment banker, person or
firm acting on behalf of Sellers or their Affiliates or under the authority of
Sellers or their Affiliates are or will be entitled to any broker's or finder's
fee or any other commission or similar fee directly or indirectly from any of
the parties hereto in connection with any of the transactions contemplated
hereby.
(u) Information Technology. For the purpose of this Section
2.1(u), all computer servers, database servers, mainframe computers or other
computers used principally to process data for multiple users owned or leased by
Sellers or their Subsidiaries or hosted for Sellers or their Subsidiaries in
connection with the Business; all internal data networks; all leased or owned
data telecommunications lines or virtual private networks of Sellers and their
Subsidiaries used or held for use in connection with the Business; and all
Internal Use Software operated on any of the foregoing shall be termed,
collectively, the "Central IT Resources." For the purpose of clarity, the term
"Central IT Resources" will not be deemed to include single-user resources such
as personal computers limited to one principal user at a time. Sellers have
delivered to Buyer a complete and accurate description of the components,
architecture and operation of the Central IT Resources, and complete and
accurate copies of the records of Sellers and their Subsidiaries respecting
material episodes during which the Central IT Resources were unavailable,
inaccessible or not operational to the degree reasonably necessary for the
efficient, prompt and accurate conduct of the Business, except for scheduled
maintenance or periods of no demand. Sellers are not aware of any reason Sellers
or their Subsidiaries would not be able to obtain on commercially reasonable
terms any additional Central IT Resources necessary for conducting the Business
as currently conducted.
(v) Nextera UK Limited. There are no suits, actions, claims,
investigations or legal or administrative or arbitration proceedings related to
the transfer of the UK Employees to Xxxxx UK, and no such suits, actions,
claims, investigations or legal or administrative or
24
arbitration proceedings have been threatened. The representations and warranties
of Nextera UK Limited in the UK Asset Transfer Agreement are true and correct.
SECTION 2.2. Representations and Warranties by Buyer. Buyer
represents and warrants to Sellers as follows:
(a) Organization, Standing and Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Buyer is duly qualified to do business and is in good standing in each
jurisdiction in which such qualification is necessary because of the property
owned, leased or operated by it or because of the nature of its business as now
being conducted, except where the failure, individually or in the aggregate, to
be so qualified or in good standing could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), assets,
liabilities, operations or prospects of Buyer and its subsidiaries taken as a
whole.
(b) Authority; Binding Agreements. The execution and delivery of
this Agreement and the Related Instruments to which Buyer is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Buyer.
Buyer has all requisite corporate power and authority to enter into this
Agreement and the Related Instruments to which Buyer is a party and to
consummate the transactions contemplated hereby and thereby and this Agreement
and the Related Instruments to which Buyer is a party have been, or upon
execution and delivery thereof will be, duly executed and delivered by Buyer.
This Agreement and the Related Instruments to which Buyer is a party are, or
upon execution and delivery thereof will be, the valid and binding obligations
of Buyer, enforceable against Buyer in accordance with their respective terms.
(c) Conflicts; Consents. The execution and delivery of this
Agreement and the Related Instruments to which Buyer is a party, the
consummation of the transactions contemplated hereby and thereby and compliance
by Buyer with the provisions hereof and thereof do not and will not (i) conflict
with or result in a breach of the certificate of incorporation, by-laws, or
other constitutive documents of Buyer, (ii) conflict with or result in a default
(or give rise to any right of termination, cancellation or acceleration) under
any of the provisions of any note, bond, lease, mortgage, indenture, license,
franchise, Permit, agreement or other instrument or obligation to which Buyer is
a party or by which Buyer may be bound, (iii) violate any Law applicable to
Buyer or Buyer's properties or assets or (iv) require the consent or approval
by, or any notification of or filing with, any Governmental Entity is required
in connection with the execution, delivery and performance by Buyer of this
Agreement or the consummation of the transactions contemplated hereby.
(d) Xxxxx UK. The representations and warranties made by Xxxxx UK
in the UK Asset Transfer Agreement are true and correct.
(e) Brokers. Other than BNY Capital Markets, Inc., for whom Buyer
is paying all fees and expenses, no agent, broker, investment banker, person or
firm acting on behalf of Buyer or under the authority of Buyer is or will be
entitled to any broker's or finder's
25
fee or any other commission or similar fee directly or indirectly from any of
the parties hereto in connection with any of the transactions contemplated
hereby.
SECTION 2.3. Survival. The representations and warranties
contained in this Agreement (including the Schedules hereto), the Related
Instruments, the UK Asset Transfer Agreement and in any document, instrument or
certificate executed and delivered in connection herewith and therewith shall
survive the consummation of the transactions contemplated hereby and shall
terminate on third anniversary of the Closing Date, except that the
representations and warranties set forth in Section 2.1(g) and Section 2.1(l)
shall survive forever or until the applicable statute of limitations, if earlier
and the representations and warranties set forth in Section 2.1(r) shall survive
until 30 days after the expiration of the applicable statute of limitations
(including extensions thereof).
ARTICLE III
ADDITIONAL AGREEMENTS
SECTION 3.1. Expenses. Except as provided in this Section 3.1,
each party hereto shall bear its own costs and expenses incurred in connection
with the transactions contemplated hereby.
SECTION 3.2. Conduct of Business. From the date hereof until the
Closing Date, except as otherwise consented to by Buyer in writing, Sellers
shall, and shall cause their Subsidiaries to, operate the Business only in the
ordinary course of business consistent with past practice and, without limiting
the generality of the foregoing, Sellers shall not, and shall cause their
Subsidiaries not to, without the prior written consent of Buyer, directly or
indirectly, cause, take or permit any state of affairs, action or omission
described in clauses (i) through (xviii) of Section 2.1(f).
SECTION 3.3. Further Assurances. Each of the parties hereto
agrees to use all commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Law, to consummate and make effective the
transactions contemplated by this Agreement as expeditiously as practicable and
to ensure that the conditions set forth in Article IV hereof are satisfied,
insofar as such matters are within the control of any of them.
SECTION 3.4. Additional Limitations. From the date hereof until
the earlier of (i) the Closing Date and (ii) the date this Agreement is
terminated in accordance with Section 6.2, Sellers shall not, and shall cause
their Subsidiaries not to, permit any partner, director, officer or agent of
Sellers or their Subsidiaries to, directly or indirectly, solicit or initiate,
enter into or conduct, discussions concerning, or exchange information
(including by way of furnishing information concerning Sellers or their
Subsidiaries or the Business) or enter into any negotiations concerning, or
respond to any inquiries or solicit, receive, entertain or agree to any
proposals for, the acquisition of the Business, the Acquired Assets, or any
substantial part thereof. In addition, during such time period, Sellers shall
not, and shall cause their Subsidiaries not to, authorize, direct or knowingly
permit any Employee, consultant or agent of Sellers or
26
their Subsidiaries to do any of the foregoing and Sellers shall notify Buyer of
the identity of any person who approaches Sellers or their Subsidiaries with
respect to any of the foregoing.
SECTION 3.5. Access and Information; Notification of Certain
Matters.
(a) From the date hereof until the first to occur of the Closing
Date and the termination of this Agreement, Sellers shall, and shall cause their
Subsidiaries to, permit Buyer and its representatives to make such investigation
of the business, operations and properties of the Business as Buyer deems
necessary or desirable in connection with the transactions contemplated hereby.
Such investigation shall include access to the respective directors, officers,
Employees, consultants, agents and representatives (including legal counsel and
independent accountants) of Sellers and their Subsidiaries, clients and
customers of the Business, and the properties, books, records and commitments of
the Business. Sellers shall, and shall cause their Subsidiaries to, furnish
Buyer and its representatives with such financial, operating and other data and
information, and copies of documents with respect to the Business or any of the
transactions contemplated hereby, as Buyer shall from time to time request. Such
access and investigation shall be made upon reasonable notice and at reasonable
places and times. Such access and information shall not in any way affect or
diminish any of the representations or warranties hereunder or Buyer's rights to
indemnification in respect of any breach thereof. Without limiting the
foregoing, during such period, Sellers shall keep Buyer informed as to the
operations of the Business and shall consult with Buyer with respect thereto as
appropriate.
(b) After the Closing Date, Buyer shall provide Sellers and their
representatives with access to such financial information and similar records of
the Business included in the Acquired Assets for any period prior to the Closing
Date as shall be necessary for Sellers and their representatives to prepare
Sellers' or their Subsidiaries' Tax Returns for calendar 2001, and that portion
of 2002 prior to the Closing, to amend Tax Returns for any period prior to the
Closing or to defend against Tax audits. Such access shall be made during
ordinary business hours upon reasonable notice and at reasonable places and
times.
(c) From the date hereof and through the Closing, Sellers, on the
one hand, and Buyer, on the other hand, shall give prompt notice of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty made by such person in this
Agreement or in any Exhibit or Schedule hereto to be untrue or inaccurate in any
respect as of the date hereof or as of the Closing Date, and (ii) any failure of
any such party, or any of its respective Affiliates, to comply with or satisfy
any covenant, condition or agreement required to be complied with or satisfied
by it under this Agreement or any Schedule or Exhibit hereto; provided, however,
that such disclosure shall not be deemed to cure any breach of representation,
warranty, covenant or agreement or to satisfy any condition. Sellers shall
promptly notify Buyer of any default, the commencement or threat of any action,
and any development or event that occurs before the Closing that could in any
way materially affect Sellers, the Acquired Assets or the Business.
SECTION 3.6. Confidentiality; Non-Competition.
(a) Until Closing, Buyer and Sellers each agree that all
financial or other information about Buyer, Sellers or the Business, or other
information of a confidential or
27
proprietary nature, disclosed to the other at any time in connection with the
proposed transaction shall be kept confidential by the party receiving such
information and shall not be disclosed to any person or used by the receiving
party (other than to its agents or employees or in connection with the
transactions contemplated by this Agreement) except: (i) with the prior written
consent of the disclosing party; (ii) as may be required by applicable Law or
court process; (iii) such information which may have been acquired or obtained
by such party other than through disclosure by the other party in connection
with the transaction contemplated by this Agreement; (iv) such information which
is or becomes generally available to the public other than as a result of a
violation of this provision; or (v) disclosures by Buyer to Persons providing
financing to Buyer or its Affiliates. Sellers shall continue to be bound by, and
shall cause their Affiliates to comply with, the terms of this paragraph (a)
after the Closing Date.
(b) Sellers hereby acknowledge and recognize Sellers' possession
of confidential or proprietary information and the highly competitive nature of
the Business and accordingly agrees that, in consideration of Buyer entering
into this Agreement and the other transactions contemplated hereby and the
premises contained herein, neither Sellers nor any other company or business
Affiliated or associated with the Sellers will, from and after the date of the
Closing Date for a period of five years after the date of the Closing Date, for
any reason whatsoever, either individually or as stockholder, partner, agent or
principal of another business firm, (i) directly or indirectly engage in the
North America or Europe in any business involving, directly or indirectly, the
provision of executive compensation, benefits, human resources consulting and
other services currently provided under the "Sibson" name, including services
relating to management performance and rewards, employee performance and
rewards, employee effectiveness, integration services, change management, talent
management, sales force and call center effectiveness and human capital
management (a "Competitive Business"), (ii) assist others in engaging in any
Competitive Business in the manner described in the foregoing clause (i), or
(iii) induce employees of Buyer or any other Affiliate of or a company
associated with Buyer or former employees of Sellers involved in the Business to
terminate their employment with Buyer or such Affiliate or associated company,
as the case may be, or solicit (or, for a period of one year following the
Closing, hire) any employees of Buyer or any other Affiliate of or a company
associated with Buyer or former employees of Sellers or their Subsidiaries
involved in the Business to work with Sellers or any company or business
Affiliated or associated with Sellers. Without limitation of the foregoing,
Sellers shall, and cause their Subsidiaries to, take reasonable efforts to
maintain and, at Buyer's request, to enforce existing non-compete,
non-solicitation and confidentiality agreements with present or former employees
of the Business who do not become employees of Buyer following the Closing.
SECTION 3.7. Public Announcements. Buyer, on the one hand, and
Sellers, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, press releases or
other public statements, if any, with respect to the transactions contemplated
by this Agreement, and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Law or court process.
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SECTION 3.8. Use of Name; UK Trademark; Passing Off.
(a) Sellers acknowledge and agree that the names "The Sibson
Consulting Group" and "Sibson" or any combination or derivation thereof are an
Acquired Asset. Sellers shall, and shall cause each of their Subsidiaries to, as
soon as practicable and in no event later than 30 days after the Closing Date,
change their names and the names of their business groups so that such names do
not include any combination or derivation of "The Sibson Consulting Group" or
"Sibson".
(b) Sellers shall procure that Castor LLC, the registered
proprietor of the word only trade xxxx XXXXXX registered in the United Kingdom
No. 2106044 in classes 35, 36, 38, 41 and 42 (the "UK Trade Xxxx") owned by
Sibson & Company, LLC, shall at the Closing Date deliver to Buyer (i) a duly
executed assignment in the form attached hereto as Exhibit I, together with an
authority from Castor LLC in favor of the Buyer or its designated agent to file
a notice to surrender the UK Trade Xxxx at the United Kingdom Patent Office; and
(ii) the consent of Castor LLC in a form reasonably satisfactory to Buyer to the
application by Buyer to register the name SIBSON as a trade xxxx in the United
Kingdom in classes 35, 36, 38, 41 and 42 (the "New UK Trade Xxxx"), each in the
form attached to such assignment and duly signed by Castor LLC. Sellers
undertake to keep Buyer fully informed and to provide all such assistance as
Buyer may reasonably require to enable Buyer to apply for and obtain a United
Kingdom registration for the New UK Trade Xxxx. Buyer shall reimburse Sellers
for their reasonable expenses in providing such assistance.
(c) Sellers shall, and shall cause their Subsidiaries to, provide
such assistance as Buyer may reasonably request in relation to any infringement,
unfair competition, dilution, passing off or similar claim that Buyer may bring
in the future against any third party based on a use of the "Sibson" name.
(d) Notwithstanding anything to the contrary in this Agreement
(or any other document ancillary to it), Sellers shall not be required to take
any steps or do any thing in relation to the UK Trade Xxxx (including the
production or presentation of original documents) which will give rise to any
obligation to pay stamp duty in respect of any transaction involving the UK
Trade Xxxx xxxxx to the date of this Agreement. In the event that lodgement with
the United Kingdom Trade Xxxx Registry of any document relating to the UK Trade
Xxxx in respect of any such prior transaction give rise to any liability to pay
stamp duty, the Buyers shall discharge such liability and any interest and
penalties attributable thereto.
SECTION 3.9. Certain Tax Matters.
(a) All transfer taxes, stamp or other duties or governmental
charges, and all recording or filing fees or similar costs, imposed or levied by
reason of the transfer of the Acquired Assets ("Transfer Taxes"), shall be borne
by in equal parts by Buyer, on the one hand, and Sellers, on the other hand.
Buyer and Sellers will reasonably cooperate to lawfully minimize such Transfer
Taxes. In the case of Transfer Taxes for which Buyer or any of its Affiliates is
liable to the pertinent Taxing authority, Sellers shall at the Closing pay to
Buyer the amount of such Transfer Taxes as reasonably estimated by Buyer, with
subsequent additional payments by Sellers to Buyer or refunds of previous
amounts paid by Sellers in the event it is subsequently
29
determined that the amount of the subject Transfer Taxes was more or less than
the estimated amounts. For the avoidance of doubt, it is understood and agreed
that Section 4.1(b) of the UK Asset Transfer Agreement governs in respect of VAT
potentially arising from the transactions contemplated by the UK Asset Transfer
Agreement.
(b) Sellers will cause to be included in their income Tax Returns
and the income Tax Returns of their Subsidiaries for all periods or portions
thereof ending on or before the Closing Date, all transactions and Tax items
relating to the Acquired Assets and the operations of the Business during such
periods or portions thereof. Sellers shall be responsible for, and shall
indemnify and hold Buyer harmless from and against, all Taxes with respect to
such transactions and Tax items and all other Taxes arising from the Acquired
Assets and the operations of the Business during such periods or portions
thereof.
(c) Buyer shall be responsible for, and shall indemnify and hold
Sellers harmless from and against, all Taxes (other than Transfer Taxes) arising
from the Acquired Assets and the operations of the Business for all periods and
portions of periods beginning after the Closing Date.
(d) Sellers, on the one hand, and Buyer, on the other hand, will
(i) each provide the other with such assistance as may reasonably be requested
by either of them in connection with the preparation of any Tax Return, audit or
other examination by any Taxing authority or judicial or administrative
proceeding relating to liability for Taxes, (ii) each retain and provide the
other with any records or other information that may be relevant to such Tax
Return, audit or examination, proceeding or determination, and (iii) each
provide the other with any final determination of any such audit or examination,
proceeding or determination that affects any amount required to be shown on any
Tax Return of the other for any period.
(e) The covenants contained in this Section 3.9 shall survive
until 30 days after the expiration of the applicable statute of limitations
(including extensions thereof).
SECTION 3.10. Software License. Sellers hereby grant to Buyer and
its Affiliates, effective as of the Closing Date, a worldwide, fully paid up,
royalty-free, perpetual, irrevocable and non-exclusive license to use the
computer programs and software listed on Schedule 3.10 hereto (the "Licensed
Software"). The foregoing license shall not include the right to sublicense the
Licensed Software to any person that is not an Affiliate of Buyer.
SECTION 3.11. Collection of Accounts Receivable. At the Closing,
Buyer will acquire hereunder, and thereafter Buyer or its designated Affiliates
shall have the right and authority to collect for Buyer's or its designated
Affiliates' account, all receivables, letters of credit and other items which
constitute a part of the Acquired Assets. Sellers shall, and shall cause their
Subsidiaries to, promptly after receipt of any payment by Sellers or their
Subsidiaries in respect of any of the foregoing, properly endorse and deliver to
Buyer or its designated Affiliates any letters of credit, documents, cash or
checks received on account of or otherwise relating to any such receivables,
letters of credit or other items, and Buyer and its Affiliates shall have the
right and authority to endorse, without recourse, the name of Sellers or any of
its Subsidiaries on any check or similar negotiable instrument received by Buyer
or any of its Affiliates constituting Acquired Assets transferred, conveyed and
assigned to Buyer or any of its
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Affiliates hereunder. After the Closing, (i) Sellers shall, and shall cause
their Subsidiaries to, promptly transfer or deliver to Buyer or its designated
Affiliates any cash or other property that Sellers may or any of their
Subsidiaries may receive in respect of any deposit, prepaid expense, claim,
contract, license, lease, commitment, sales order, purchase order, letter of
credit or receivable of any character, or any other item, constituting a part of
the Acquired Assets, and (ii) Buyer shall, and shall cause its Subsidiaries to,
promptly transfer or deliver to Sellers any cash or other property that Sellers
may or any of their Subsidiaries may receive in respect of any of the accounts
receivable set forth on Schedule 1.1(b)(x). At Buyer's request, at or following
the Closing, Sellers shall, and shall cause their Subsidiaries to, cooperate
with Buyer in sending joint notices to customers and clients of the Business
notifying such customers and clients of the transfer of the Business to Buyer
and requesting payment of outstanding accounts receivable included in the
Acquired Assets directly to Buyer or Buyer's designated Affiliates.
SECTION 3.12. Certain UK Matters. Sellers shall take, and shall
cause Nextera UK Limited to take, all action, and shall cause Nextera UK Limited
to do all things necessary and proper to consummate and make effective, and to
comply with the provisions of the UK Asset Transfer Agreement and all
transactions contemplated thereby.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Obligations of Buyer. The obligations
of Buyer to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver of the following conditions unless waived
by Buyer:
(a) Representations and Warranties. The representations and
warranties of Sellers contained herein that are qualified by materiality or
subject to thresholds shall be true and correct in all respects and the
representation and warranties of Sellers that are not so qualified contained
herein shall be true and correct in all material respects as of the date hereof
and as of the Closing Date as if made on and as of the Closing Date, and Sellers
shall have performed and complied with all covenants and agreements required to
be performed or complied with by Sellers on or prior to the Closing Date. As of
the Closing Date, there shall have been no material adverse change in the
condition (financial or otherwise), assets, liabilities, operations or prospects
of the Business.
(b) No Actions or Court Orders. No Governmental Entity or other
person shall have instituted or commenced any action or proceeding which
challenges or questions the validity or legality of the transactions
contemplated hereby and which could reasonably be expected to (i) have a
material adverse effect on the condition (financial or otherwise), business,
assets, operations or prospects of Buyer or Sellers if the transaction
contemplated hereby are consummated, or (ii) materially affect the right or
ability of Buyer to own, operate, possess or transfer the Acquired Assets or the
Business. There shall have been no determination by Buyer, acting in good faith,
that the consummation of the transactions contemplated hereby has become
inadvisable or impractical by reason of the institution or threat by any person
or Governmental Entity of litigation, and there shall not be in effect any Law
of any Governmental Entity which makes illegal or enjoins the transactions
contemplated by this Agreement.
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(c) Consents, Amendments and Terminations. Buyer shall have
received duly executed and delivered copies of all waivers, consents,
terminations and approvals contemplated by Section 2.1(d), all in form and
substance reasonably satisfactory to Buyer.
(d) Xxxx of Sale and Assignment. Sellers shall have delivered to
Buyer the Xxxx of Sale conveying the personal property included in the Acquired
Assets and the Assignment, each duly executed by Sellers.
(e) [Reserved].
(f) Transition Services Agreement. Sellers shall have duly
executed and delivered to Buyer the Transition Services Agreement in
substantially the form of Exhibit D.
(g) UK Asset Transfer Agreement. Nextera UK Limited shall have
duly executed and delivered to Xxxxx UK, the UK Asset Transfer Agreement and the
further agreements, instruments and other documents contemplated thereby.
(h) Certificates. Buyer shall have received a certificate of an
officer of Sellers in substantially the form of Exhibit E.
(i) Opinion of Counsel. Buyer shall have received the opinion
dated as of the Closing Date of Maron & Sandler, counsel to Sellers, in
substantially the form of Exhibit F.
(j) [Reserved].
(k) Due Diligence. Buyer and its representatives shall have
completed a due diligence review of the condition (financial or otherwise),
assets, liabilities, operations and prospects of, and any other matters relating
to, Sellers and their Subsidiaries and the results of such due diligence shall
be satisfactory to Buyer in its sole discretion.
(l) [Reserved].
(m) Financing. Buyer shall have obtained on terms satisfactory to
Buyer a credit facility from a bank or other financial institution(s) in an
amount sufficient to permit Buyer to finance the payment of the Initial
Installment.
(n) FIRPTA Certificate. Each Seller shall have delivered a
certificate, as described in Treasury Regulations Section 1.1445-2, certifying
that such Seller is not a foreign person as defined in Section 1445(f)(3) of the
Code.
(o) Tax Certificate. Sellers shall have delivered any Tax
clearance certificates and any other Tax certificates, consents or approvals, if
any, required by any jurisdiction.
(p) Certain Releases. Seller shall have received and delivered to
Buyer releases from the Liens set forth on Schedule 2.1(g)(i), and such releases
shall be in form and substance satisfactory to Buyer.
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(q) Other Documents. Buyer shall have received such other
documents, certificates or instruments as it may reasonably request.
SECTION 4.2. Conditions to Obligations of Sellers. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions unless
waived by Sellers:
(a) Representations and Warranties. The representations and
warranties of Buyer contained herein that are qualified by materiality or
subject to thresholds shall be true and correct in all respects and the
representations and warranties of Buyer that are not so qualified contained
herein shall be true and correct in all material respects as of the date hereof
and as of the Closing Date as if made on and as of the Closing Date, and Buyer
shall have performed and complied with all covenants and agreements required to
be performed or complied with by Buyer on or prior to the Closing Date.
(b) No Actions or Court Orders. No Governmental Entity or other
person shall have instituted or commenced any action or proceeding which
challenges or questions the validity or legality of the transactions
contemplated hereby and which could reasonably be expected to have a materially
adverse effect on Sellers if the transaction contemplated hereby are
consummated. There shall have been no determination by Sellers, acting in good
faith, that the consummation of the transactions contemplated hereby has become
inadvisable or impractical by reason of the institution or threat by any person
or Governmental Entity of litigation, and there shall not be in effect any Law
of any Governmental Entity which makes illegal or enjoins the transactions
contemplated by this Agreement.
(c) Assignment, Trademark Assignment and Transition Services
Agreement. Buyer shall have delivered to Sellers the Assignment and the
Transition Services Agreement, each duly executed by Buyer.
(d) UK Asset Transfer Agreement. Xxxxx UK shall have duly
executed and delivered to Nextera UK Limited the UK Asset Transfer Agreement and
the further agreements, instruments and other documents contemplated thereby.
(e) Certificate. Sellers shall have received a certificate of an
officer of Buyer in substantially the form of Exhibit G.
(f) Opinion of Counsel. Sellers shall have received the opinion
dated as of the Closing Date of Xxxxxxxxx & Xxxxxxx, counsel of Buyer, in
substantially the form of Exhibit H.
(g) Releases from Employment Contracts. Sellers shall have
received releases from their employment agreements with those Employees of the
Business listed on Schedule 4.2(g) whom Buyer has indicated that it intends to
employ or engage following the Closing.
(h) Other Documents. Sellers shall have received such other
documents, certificates or instruments as they may reasonably request.
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ARTICLE V
INDEMNITY
SECTION 5.1. Indemnification.
(a) Sellers shall jointly and severally indemnify and hold
harmless Buyer, and its respective Affiliates, directors, officers, employees
and other agents and representatives from and against any and all liabilities,
judgments, claims, settlements, losses, damages, fees, Liens, Taxes, penalties,
obligations and expenses (collectively, "Losses") incurred or suffered by any
such person arising from, by reason of or in connection with:
(i) any breach of any representation, warranty or agreement of
Sellers contained in this Agreement or any certificate or other document
delivered by Sellers or their Subsidiaries hereunder;
(ii) the non-fulfillment by Sellers or their Subsidiaries of any
covenant or agreement made by Sellers in this Agreement;
(iii) any condition existing relating to product or environmental
liability prior to the Closing Date;
(iv) the failure of Sellers or any Subsidiary of the Sellers to
comply with any Tax Law applicable to the transactions contemplated by
this Agreement;
(v) except for the Assumed Liabilities, any and all liabilities
or obligations of the Business, including any and all Unassumed
Liabilities and any interest or penalties thereon;
(vi) any act or omission of Sellers or their Subsidiaries in
respect of Employees at any time up to and including the Closing Date or
any other event or occurrence having its origin on or before the Closing
Date and for which Buyer or any of its Affiliates (or any of their
respective employees, agents or officers) may incur liability pursuant
to TUPE;
(vii) any salaries, wages, accrued vacation, bonuses,
commissions, termination, severance or other benefits, retirement,
pension or health entitlement or other compensation, emoluments or
benefits relating to periods prior to the Closing Date;
(viii) any termination or severance benefits payable to
administrative employees at the Princeton, Rochester and Raleigh
facilities of the Business that are terminated no later than 180 days
following the Closing Date;
(ix) any obligations, rents or other liabilities under or in
respect of any Transferred Office Lease arising with respect to or
otherwise relating to any period prior to the Closing Date;
(x) any defect in title arising from transfers of assets among
Sellers or any of the Related Entities;
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(xi) any and all actions, suits, proceedings, demands, judgments,
costs and legal and other expenses incident to any of the matters
referred to in clauses (i) through (x) of this Section 5.1(a).
(b) Buyer shall indemnify and hold harmless Sellers, and their
respective Affiliates, directors, officers, employees and other agents and
representatives, from and against any and all Losses incurred or suffered by any
such person arising from, by reason of or in connection with:
(i) any breach of any representation, warranty or agreement of
Buyer contained in this Agreement or any certificate or other document
delivered by Buyer hereunder;
(ii) the non-fulfillment by Buyer of any covenant or agreement
made by it in this Agreement;
(iii) all Assumed Liabilities;
(iv) liabilities and obligations arising out of the Business on
Acquired Assets to the extent attributable to actions or omissions of
Buyer in connection with the conduct of the Business by Buyer after the
Closing;
(v) any obligations, rents or other liabilities under or in
respect of any Transferred Office Lease arising with respect to or
otherwise relating to any period after the Closing Date;
(vi) the employment of the UK Employees on or after the Closing
Date, and any event or occurrence having its origin after the Closing
Date and for which Seller or their Subsidiaries (or any of their
respective employees, agents or officers) may incur liability pursuant
to TUPE;
(vii) any and all actions, suits, proceedings, demands,
judgments, costs and legal and other expenses incident to any of the
matters referred to in clauses (i) through (vi) of this Section 5.1(b).
(c) In the event that subsequent to the Closing Date any person
or entity entitled to indemnification under this Agreement (an "Indemnified
Party") asserts a claim for indemnification or receives notice of the assertion
of any claim or of the commencement of any action or proceeding by any entity
who is not a party to this Agreement against such Indemnified Party, for which a
party to this Agreement is required to provide indemnification under this
Agreement (an "Indemnifying Party"), the Indemnified Party shall, if a claim in
respect thereof is to be made against the Indemnifying Party under this Section
5.1, promptly notify the Indemnifying Party in writing of the claim or the
commencement of that action, provided, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
the Indemnified Party unless the Indemnifying Party is materially prejudiced in
its ability to defend such action. With respect to third party claims for which
indemnification is claimed hereunder, the Indemnifying Party shall be entitled
to participate in and, if (i) in the judgment of the Indemnified Party such
claim can properly be resolved by
35
money damages alone and the Indemnifying Party has the financial resources to
pay such damages and (ii) the Indemnifying Party admits that this indemnity
fully covers the claim or litigation, the Indemnifying Party shall be entitled
to direct the defense of any claim at its expense, but such defense shall be
conducted by legal counsel reasonably satisfactory to the Indemnified Party, and
to settle and compromise any such claim or action for money damages alone;
provided, however, that if the Indemnified Party has elected to be represented
by separate counsel pursuant to the proviso below, or if such settlement or
compromise does not include an unconditional release of the Indemnified Party
for any liability arising out of such claim or action, such settlement or
compromise shall be effected only with the consent of the Indemnified Party,
which consent shall not be unreasonably withheld. It shall not be unreasonable
for the Indemnified Party to withhold consent to any settlement that does not
contain such an unconditional release of the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party under this Section 5.1 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation or of assistance as
contemplated by this Section 5.1; provided, however, that the Indemnified Party
shall have the right to employ counsel to represent it if, in the opinion of
counsel to the Indemnified Party, it is advisable for the Indemnified Party to
be represented by separate counsel due to actual or potential conflicts of
interest, and in that event the fees and expenses of such separate counsel shall
be paid by the Indemnifying Party; provided, however, that in no event shall the
Indemnifying Party be responsible for the fees of more than one counsel to the
Indemnified Party. The Indemnified Party and the Indemnifying Party shall each
render to each other such assistance as may reasonably be requested in order to
ensure the proper and adequate defense of any such claim or proceeding.
(d) The parties hereto agree that any indemnification payments
made pursuant to this Agreement shall be treated for Tax purposes as an
adjustment to the Purchase Price, unless otherwise required by applicable Law.
Adjustments for indemnification payments relating to the Acquired Assets or the
Business in the United Kingdom shall be allocated to the Acquired Assets located
in the United Kingdom, and adjustments for indemnification payments relating to
the Acquired Assets or the Business in the United States shall be allocated to
the Acquired Assets located in the United States.
(e) The amount of any indemnification or reimbursement payment
required pursuant to this Agreement shall be (A) reduced by (x) the amount of
any insurance recoveries actually received by the Indemnified Party and (y) any
net Tax benefit actually realized by the Indemnified Party and (B) increased to
take account of any net Tax cost incurred by the Indemnified Party arising from
the receipt of any payment hereunder (grossed up for such increase). In the
event that any claim for indemnification asserted hereunder is, or may be, the
subject of Sellers' or any party's hereto insurance or other right to
indemnification or contribution from any third party (a "Third Party
Contributor"), the Indemnified Party agrees to promptly notify the applicable
insurance carrier of such claim and tender defense thereof to such carrier, and
shall also promptly notify any potential Third Party Contributor. Each
Indemnified Party shall pursue, at the cost and expense of the Indemnifying
Party, such claims diligently and reasonably cooperate, at the cost and expense
of the Indemnifying Party, with each such insurance carrier and Third Party
Contributor, and make no claim for indemnification hereunder for a period of
thirty days after making a claim for such insurance or contribution. If
insurance
36
coverage or contribution is denied, or if no resolution of an insurance or
contribution claim shall have occurred within such thirty days, the Indemnified
Party may proceed for indemnification hereunder, and such Indemnifying Party
shall be subrogated to the rights of the Indemnified Party against such
insurance carrier. For the purposes of this Agreement, an Indemnified Party
shall be deemed to have actually realized a net Tax benefit or incurred a net
Tax cost to the extent that, and at such time as, the amount of Taxes payable by
such Indemnified Party is reduced below or increased above, as the case may be,
the amount of Taxes that such Indemnified Party would be required to pay but for
the accrual or receipt of, suffering or incurrence of, or payment of such
damages, each as the case may be.
SECTION 5.2. Limitations.
(a) The indemnification and reimbursement obligations arising out
of Section 5.1(a)(i) or Section 5.1(b)(i) hereunder shall expire on the third
anniversary of the Closing Date (the "Expiration Date"), except (i) as to any
claims for, or any claims that may result in, any liability, judgment, claim,
settlement, loss, damage, fee, Lien, Tax, penalty, obligation or expense for
which indemnity may be sought hereunder of which the Indemnifying Party has
received written notice from the Indemnified Party on or before the Expiration
Date or (ii) as to any representation or warranty expressly surviving such
period as set forth in Section 2.3.
(b) The total indemnification obligations of Sellers (other than
for claims relating to Unassumed Liabilities or relating to or arising out of
fraud or Section 3.6 (collectively the "Excluded Claims")) to Buyer pursuant to
this Article V shall not exceed the Purchase Price in the aggregate.
Notwithstanding anything to the contrary set forth in this Agreement, the
indemnification obligations of Sellers with respect to Excluded Claims shall not
count towards, or be subject to, the limitations set forth in the first sentence
of this paragraph (b) or the $100,000 deductible set forth in Section 5.2(c),
and there shall be no limitation on such indemnification obligations. The total
indemnification obligations of Buyer to Sellers pursuant to this Article V
(other than for claims in respect of Assumed Liabilities) shall not exceed (x)
with respect to obligations or liabilities arising from or in connection with a
failure of the closing to occur or any termination of this Agreement, an
aggregate amount of $300,000, and (y) in respect of other indemnification
obligations, an aggregate amount of $2,000,000. For purposes of calculating the
total indemnification obligations of the parties pursuant to this Article V, (i)
legal fees and expenses incurred by an Indemnifying Party in the defense of an
Indemnified Party against a third party claim shall be included and (ii) costs
and expenses incurred or reimbursed by an Indemnifying Party in connection with
the pursuit of insurance or third party indemnification or contribution claims
pursuant to Section 5.1(e) shall be excluded.
(c) Neither party to this Agreement shall be entitled to
indemnification pursuant to Sections 5.1(a)(i) or Section 5.1(b)(i), unless the
aggregate Losses to such party with respect to all such claims for
indemnification exceed $100,000, in which case the other party shall be
obligated, subject to the limitations set forth in paragraphs (a) and (b) of
this Section 5.2, to pay in full the aggregate amount of such Losses.
SECTION 5.3. No Election; Set-Off. In the absence of fraud, the
indemnification rights provided in this Article V shall be the sole and
exclusive remedy available
37
to any of the parties to this Agreement for any misrepresentation, breach of
warranty or failure to fulfill any covenant or agreement contained herein or in
the Xxxx of Sale, the Assignment, the UK Asset Transfer Agreement or the further
agreements and instruments delivered pursuant to this Agreement; provided,
however, that injunctive relief shall be available for claims arising under
Sections 3.5(b) and 3.6. Notwithstanding anything to the contrary in this
Agreement, Buyer shall be entitled to set off and withhold any amounts owing to
Buyer under Section 1.3(b) and the amount of any Losses for which Buyer has made
a claim for indemnification pursuant to this Article V against any amounts due
to Seller or their Subsidiaries, including any amounts due pursuant to Sections
1.3(b), 1.3(c) and 1.3(d) hereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Entire Agreement. This Agreement and the Schedules
and Exhibits hereto contain the entire agreement among the parties with respect
to the transactions contemplated by this Agreement and supersede all prior
agreements or understandings among the parties.
SECTION 6.2. Termination.
(a) This Agreement shall terminate on the earlier to occur of any
of the following events:
(i) the mutual written agreement of Buyer and Nextera;
(ii) by written notice of Buyer to Sellers or of Sellers to
Buyer, if the Closing shall not have occurred prior to the close of
business on ____________, 2002;
(iii) by written notice of Buyer to Sellers, if either Seller
shall have materially breached any of its representations, warranties or
agreements contained herein; or
(iv) by written notice of Sellers to Buyer, if Buyer shall have
materially breached any of its representations, warranties or agreements
contained herein.
(b) Nothing in this Section shall relieve any party of any
liability for a breach of this Agreement prior to the termination hereof. Except
as aforesaid, upon the termination of this Agreement, all rights and obligations
of the parties under this Agreement shall terminate, except their obligations
under Sections 3.1, 3.6, 3.7, 3.9, Article V and this Section 6.2.
SECTION 6.3. Definitions.
(a) The following terms shall have the following meanings for
purposes of this Agreement:
"Affiliate" means, with respect to any person, any person which,
directly or indirectly, controls, is controlled by, or is under common control
with, the specified person.
38
"Code" means the Internal Revenue Code of 1986, as amended.
"control" as applied to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
that person, whether through ownership of voting securities or otherwise.
"Copyrights" means all copyrights, copyright applications and copyright
registrations and foreign counterparts thereof, including all rights to computer
software programs (including object and source code, program documentation,
disks, tapes, manuals, guides and other materials with respect thereto) and
rights to databases of any kind under the Law of any jurisdiction.
"Governmental Entity" means shall mean any Federal, state, local or
foreign government or any court of competent jurisdiction, legislature,
governmental agency, administrative agency or commission or other governmental
authority or instrumentality anywhere in the world.
"Intellectual Property" means Patents, Trademarks, Copyrights, and
Know-How.
"Know-How" means all inventions, discoveries, trade secrets,
improvements, formulae, practices, processes, methods, technology, know-how,
ideas, compositions, customer data and confidential or proprietary information,
whether or not patentable and whether or not reduced to practice, including any
of the foregoing in the process of development.
"Law" means any Federal, state, local and foreign law, statute, rule,
regulation, ordinance or interpretation or any order, writ, judgment, injunction
or decree, as amended, updated or revised from time to time.
"Lien" means any lien (statutory or otherwise), claim, charge, option,
security interest, pledge, mortgage, restriction, financing statement or similar
encumbrance of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any lease having substantially the same
effect as any of the foregoing and any assignment or deposit arrangement in the
nature of a security device).
"Patents" means patents, design patents, patent applications, patent
disclosures, and improvements thereto, utility models and similar related rights
under the Law of any jurisdiction and all registrations, applications and
foreign counterparts thereof, and any foreign equivalents, additions, divisions,
continuations, continuations in-part, substitutions, reissues, extensions and
renewals of any of the foregoing.
"Permits" means any governmental licenses, permits, approvals,
registrations, certificates of occupancy and license and permit applications.
"person" means any individual, group, corporation, partnership or other
organization or entity (including any Governmental Entity).
"Related Entities" means Sibson International, Sibson AP LLC, Sibson UK
Holdings, The Alexander Corporation, Nextera UK Limited, Nextera UK Interactive,
Scanada, Inc., and Sibson Canada.
39
"Related Instruments" means the Xxxx of Sale, the Assignment, the UK
Asset Transfer Agreement and the Transitional Services Agreement.
"Xxxxx UK" means Sibson Xxxxx UK Limited, a limited liability company
organized under the laws of England and Wales and a wholly-owned Subsidiary of
Buyer.
"Senior Debt" means the term loans drawn by Buyer pursuant to the Credit
Agreement by and among Buyer, as Borrower, the Lenders party thereto, and XX
Xxxxxx Chase Bank, as Administrative and Collateral Agent and Arranger, for
purposes of financing the transactions contemplated hereby.
"Subsidiary" means, with respect to any person, any person which,
directly or indirectly, is controlled by the specified person.
"Tax" means any and all Federal, state, local, foreign and other taxes,
levies, fees, imposts, duties, governmental fees and charges of whatever kind
(including any interest, penalties or additions to the tax imposed in connection
therewith or with respect thereto), whether or not imposed on Sellers or their
Subsidiaries, including, without limitation, taxes imposed on, or measured by,
income, franchise, profits, gross income or gross receipts, and also ad valorem,
value added, sales, use, service, real or personal property, capital stock,
stock transfer, license, payroll, withholding, employment, social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, environmental,
transfer and gains taxes and customs duties.
"Tax Return" means returns, reports, information statements and other
documentation (including any additional or supporting materials) filed or
maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment or collection of any Tax and shall
include an amended returns required as a result of examination adjustments made
by the Internal Revenue Service or other Tax authority.
"Trademarks" means trademarks, trade names, trade dress, logos, service
marks, service names, domain names and any other source identifiers, and all
registrations, applications for registration, renewals and foreign counterparts
thereof and all goodwill associated therewith.
(b) The following terms are defined in the following Sections of
this Agreement:
Term Section
---- -------
Acquired Assets 1.1
Agreement Preamble
Assignment 1.5(b)
Assumed Liabilities 1.2(a)
Average Gross Revenue 1.3(c)
Backlog Statements 2.1(o)(iii)
Xxxx of Sale 1.5(a)
Business Preamble
40
Term Section
---- -------
Buyer Preamble
Central IT Resources 2.1(u)
Client Contracts 2.1(o)(ii)
Closing 1.4
Closing Date 1.4
Closing Date Balance Sheet 1.3(b)(i)
Closing Date Customer List 4.1(e)
Competitive Business 3.6(b)
Cumulative Gross Profits 1.3(d)
Earnout Adjustment 1.3(d)
Earnout Statement of Operations 1.3(d)(i)
Employee 2.1(m)(i)
Employment Agreements 4.1(l)
ERISA 2.1(m)(vi)
Excluded Assets 1.1(b)
Excluded Claims 5.2(b)
Expiration Date 5.2(a)
Financial Statements 2.1(e)(i)
GAAP 1.3(b)(i)
Gross Revenue 1.3(c)
Holdback Amount 1.3(a)
Indemnified Party 5.1(c)
Indemnifying Party 5.1(c)
Initial Installment 1.3(a)
Internal Use Software 2.1(h)(iv)
Licensed Software 3.10
Losses 5.1(a)
Month End 4.1(e)
Necessary Intellectual Property 2.1(h)
New UK Trade Xxxx 3.8(b)
Nextera Preamble
Nextera UK Limited 1.1(b)(vii)
Nextera UK Interactive 1.1(b)(vii)
Non-Competition Covenant 1.3(a)
Plan 2.1(m)(vi)
Purchase Price 1.3(a)
Revenue Adjustment 1.3(c)
00
Xxxx Xxxxxxx
---- -------
Xxxxxxx Inc. 1.1(b)(vii)
Sellers Preamble
Sibson AP LLC 1.1(b)(vii)
Sibson Canada 1.1(b)(vii)
Sibson & Company Preamble
Sibson International 1.1(b)(vii)
The Alexander Corporation 1.1(b)(vii)
Third Party Contributor 5.1(e)
Transfer Taxes 3.9(a)
Transferred Office Leases 1.1(a)(iv)
TUPE 2.1(m)(iii)
UK Accounts 2.1(e)(iii)
UK Asset Transfer Agreement 1.5(c)
UK Employees 2.1(m)(i)
UK Incentive Arrangements 2.1(m)(vii)
UK Lease 1.1(b)(iii)
UK Pension Plans 2.1(m)(vii)
UK Trade Xxxx 3.8(b)
Unassumed Liabilities 1.2(a)
US Employees 2.1(m)(i)
Working Capital 1.3(b)
Working Capital Adjustment 1.3(b)
SECTION 6.4. Descriptive Headings; Certain Interpretations.
(a) Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
(b) Whenever any party makes any representation, warranty or
other statement to such party's knowledge, such party will be deemed to have
made due inquiry into the subject matter of such representation, warranty or
other statement. References to the knowledge of Sellers shall mean the knowledge
of any of Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxx Xxxxx,
Xxxxx Post, Xxxxx Xxxxxxxx, Xxxxx Xxxxx, and the respective office leaders and
practice leaders of the Business.
(c) Except as otherwise expressly provided in this Agreement, the
following rules of interpretation apply to this Agreement: (i) the singular
includes the plural and the plural includes the singular; (ii) "or" and "any"
are not exclusive and "include" and "including" are not limiting; (iii) a
reference to any agreement or other contract includes permitted supplements and
amendments; (iv) a reference to a person includes its permitted successors and
assigns; (v) a
42
reference to generally accepted accounting principles (or GAAP)
refers to United States generally accepted accounting principles; and (vi) a
reference in this Agreement to an Article, Section, Exhibit or Schedule is to
the Article, Section, Exhibit or Schedule of this Agreement.
SECTION 6.5. Notices. All notices, requests and other
communications to any party hereunder shall be in writing and sufficient if
delivered personally or sent by telecopy (with confirmation of receipt) or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Buyer, to:
THE XXXXX COMPANY
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx, President and Chief Executive Officer
with a copy to:
THE XXXXX COMPANY
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, General Counsel
and with a copy to:
XXXXXXXXX & XXXXXXX
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq. and Xxxxxxx Xxxxxxxxx, Esq.
If to Sellers to:
NEXTERA ENTERPRISES, INC.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000-0000
Facsimile:
Attention: Chief Executive Officer
43
with a copy to:
MARON & SANDLER
000 Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or to such other address or telecopy number as the party to whom notice is to be
given may have furnished to the other party in writing in accordance herewith.
Each such notice, request or communication shall be effective when received if
delivered personally, upon receipt of the transmission report if delivered by
facsimile or, if given by mail, when delivered at the address specified in this
Section or on the fifth business day following the date on which such
communication is posted, whichever occurs first.
SECTION 6.6. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
SECTION 6.7. Benefits of Agreement. All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
Agreement is for the sole benefit of the parties hereto and not for the benefit
of any third party.
SECTION 6.8. Amendments and Waivers. No modification, amendment
or waiver of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
SECTION 6.9. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by any party
hereto without the prior written consent of the other parties hereto, provided,
however, that Buyer may, without prior consent of Sellers, assign any and all of
its rights or obligations under this Agreement to any Affiliate of Buyer or to
any Person providing financing to Buyer or any of its Affiliates.
SECTION 6.10. Enforceability. It is the desire and intent of the
parties hereto that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the Law. Accordingly, if any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudication is made.
SECTION 6.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS.
44
SECTION 6.12. CONSENT TO JURISDICTION. THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT OF THE UNITED STATES OF
AMERICA SITTING IN NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT THEY MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THE PARTIES HEREBY CONSENT TO THE SERVICE OF PROCESS IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY NOTICE IN THE MANNER SPECIFIED IN SECTION
6.5.
[CONTINUED ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed and delivered as of the day and year first above written.
THE XXXXX GROUP, INC.
By:
---------------------------------
Name:
Title:
NEXTERA ENTERPRISES, INC.
By:
---------------------------------
Name:
Title:
SIBSON & COMPANY LLC
By:
---------------------------------
Name:
Title:
46
