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Exhibit 2.02
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
BCG ACQUISITION CORP.
(a Delaware corporation),
BOULDER CAPITAL GROUP, INC.
(a Colorado corporation)
and
XXX X. XXXXXX and XXXX X. XXXXXXXX
Dated as of February 14, 1998
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Table Of Contents
Page
1. THE MERGER...............................................................................................2
1.1 DELIVERY AND FILING OF ARTICLES OF MERGER.......................................................2
1.2 MERGER EFFECTIVE DATE...........................................................................2
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION...........................................................................2
2. MERGER CONSIDERATION.....................................................................................3
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION...............................................3
2.2 EXCHANGE PROCEDURES.............................................................................3
2.3 NO FRACTIONAL SHARES............................................................................4
2.4 ALLOCATION OF MERGER CONSIDERATION..............................................................4
2.5 EARN-OUT CONSIDERATION..........................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE....................................................6
3.1 COMPUTATION.....................................................................................6
3.2 DISPUTES........................................................................................7
3.3 STOCKHOLDERS' REPRESENTATIVE....................................................................7
4. INDEMNITY ESCROW AND 1998 SHORTFALL ESCROW...............................................................8
4.1 CREATION OF INDEMNITY ESCROW....................................................................8
4.2 DURATION AND TERMS OF THE INDEMNITY ESCROW......................................................9
4.3 INDEMNITY ESCROW VOTING AND INVESTMENT..........................................................9
4.4 1998 SHORTFALL ESCROW...........................................................................9
4.5 DURATION AND TERMS OF THE 1998 SHORTFALL ESCROW.................................................9
4.6 1998 SHORTFALL ESCROW VOTING AND INVESTMENT.....................................................9
5. CLOSING; MERGER EFFECTIVE DATE..........................................................................10
5.1 CLOSING........................................................................................10
5.2 CLOSING DATE; LOCATION.........................................................................10
5.3 EFFECTIVENESS OF MERGER........................................................................10
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS..........................................................10
6.1 CORPORATE EXISTENCE............................................................................10
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS........................................10
6.3 AUTHORITY; OWNERSHIP...........................................................................11
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS..........................................................11
6.5 CAPITAL STOCK OF EACH COMPANY..................................................................11
6.6 TRANSACTIONS IN CAPITAL STOCK..................................................................12
6.7 NO BONUS SHARES................................................................................12
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6.8 SUBSIDIARIES...................................................................................12
6.9 PREDECESSOR STATUS; ETC........................................................................13
6.10 SPIN-OFFS......................................................................................13
6.11 NO THIRD PARTY OPTIONS.........................................................................13
6.12 FINANCIAL STATEMENTS...........................................................................13
6.13 LIABILITIES AND OBLIGATIONS....................................................................14
6.14 ACCOUNTS AND NOTES RECEIVABLE..................................................................14
6.15 PERMITS........................................................................................15
6.16 REAL AND PERSONAL PROPERTY.....................................................................15
6.17 CONTRACTS AND COMMITMENTS......................................................................16
6.18 GOVERNMENT CONTRACTS...........................................................................18
6.19 TITLE TO REAL PROPERTY.........................................................................18
6.20 INSURANCE......................................................................................18
6.21 EMPLOYEES......................................................................................18
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS........................................................19
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS............................................................22
6.24 TRANSACTIONS WITH AFFILIATES...................................................................23
6.25 LITIGATION.....................................................................................23
6.26 RESTRICTIONS...................................................................................24
6.27 TAXES..........................................................................................24
6.28 INTELLECTUAL PROPERTY MATTERS..................................................................25
6.29 COMPLETENESS; NO VIOLATIONS....................................................................26
6.30 EXISTING CONDITIONS............................................................................26
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY...........................................................28
6.32 BOOKS OF ACCOUNT...............................................................................28
6.33 ENVIRONMENTAL MATTERS..........................................................................29
6.34 NO ILLEGAL PAYMENTS............................................................................30
6.35 LEASES.........................................................................................30
6.36 LEASE FUNDING..................................................................................33
6.37 DISCLOSURE.....................................................................................33
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO.................................................................34
7.1 CORPORATE EXISTENCE............................................................................34
7.2 UNICAPITAL STOCK...............................................................................34
7.3 CORPORATE POWER AND AUTHORIZATION..............................................................34
7.4 NO CONFLICTS...................................................................................34
7.5 CAPITALIZATION OF UNICAPITAL...................................................................35
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS............................................................35
7.7 TRANSACTIONS WITH AFFILIATES...................................................................35
7.8 LITIGATION.....................................................................................35
7.9 MISCELLANEOUS..................................................................................36
7.10 REGISTRATION RIGHTS............................................................................36
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8. COVENANTS OF STOCKHOLDERS AND COMPANIES.................................................................36
8.1 BUSINESS IN THE ORDINARY COURSE................................................................36
8.2 EXISTING CONDITIONS............................................................................36
8.3 MAINTENANCE OF PROPERTIES AND ASSETS...........................................................36
8.4 EMPLOYEES AND BUSINESS RELATIONS...............................................................36
8.5 MAINTENANCE OF INSURANCE.......................................................................37
8.6 COMPLIANCE WITH LAWS, ETC......................................................................37
8.7 CONDUCT OF BUSINESS............................................................................37
8.8 ACCESS.........................................................................................37
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS........................................................38
8.10 EXCLUSIVITY....................................................................................38
8.11 THIRD PARTY APPROVALS..........................................................................39
8.12 NOTICE TO BARGAINING AGENTS....................................................................39
8.13 NOTIFICATION OF CERTAIN MATTERS................................................................39
8.14 DELIVERY AND AMENDMENT OF SCHEDULES............................................................39
8.15 HSR FILING.....................................................................................40
8.16 THE REAL ESTATE VENTURE........................................................................40
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND
STOCKHOLDERS............................................................................................40
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.....................................40
9.2 EMPLOYMENT AGREEMENTS..........................................................................41
9.3 OPINION OF COUNSEL.............................................................................41
9.4 REGISTRATION STATEMENT.........................................................................41
9.5 HSR ACT........................................................................................42
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND
NEWCO
42
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.....................................42
10.2 NO LITIGATION..................................................................................42
10.3 EXAMINATION OF FINANCIAL STATEMENTS............................................................42
10.4 NO MATERIAL ADVERSE CHANGE.....................................................................42
10.5 REGULATORY REVIEW..............................................................................43
10.6 STOCKHOLDERS' RELEASE..........................................................................43
10.7 EMPLOYMENT AGREEMENTS..........................................................................43
10.8 OPINION OF COUNSEL.............................................................................43
10.9 CONSENTS AND APPROVALS.........................................................................45
10.10 GOOD STANDING CERTIFICATES.....................................................................45
10.11 REGISTRATION STATEMENT.........................................................................45
10.12 REPAYMENT OF INDEBTEDNESS; PRE-CLOSING DISTRIBUTIONS...........................................45
10.13 NET INCOME.....................................................................................45
10.14 HSR ACT........................................................................................45
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10.15 RELEASE OF SECURITY INTERESTS..................................................................45
11. COVENANTS OF UNICAPITAL.................................................................................45
11.1 LEASES.........................................................................................45
11.2 UNICAPITAL STOCK OPTIONS.......................................................................46
11.3 INFORMATION FILING.............................................................................46
11.4 RELEASE FROM GUARANTEES; INDEBTEDNESS..........................................................46
11.5 HSR FILING.....................................................................................46
12. INDEMNIFICATION; SURVIVAL...............................................................................47
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS........................................................47
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS.......................................................48
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO........................................................48
12.4 THIRD PARTY CLAIMS.............................................................................48
12.5 LIMITATIONS ON INDEMNIFICATION.................................................................50
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.....................................................51
13. TERMINATION OF AGREEMENT................................................................................52
13.1 TERMINATION BY UNICAPITAL......................................................................52
13.2 TERMINATION BY THE STOCKHOLDERS................................................................53
13.3 AUTOMATIC TERMINATION..........................................................................53
13.4 LIQUIDATED DAMAGES.............................................................................53
14. NONCOMPETITION AND NONSOLICITATION......................................................................54
14.1 NONCOMPETITION.................................................................................54
14.2 DAMAGES........................................................................................54
14.3 REASONABLE RESTRAINT...........................................................................55
14.4 SEVERABILITY; REFORMATION......................................................................55
14.5 INDEPENDENT COVENANT...........................................................................55
14.6 MATERIALITY....................................................................................55
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION...............................................................55
15.1 STOCKHOLDERS...................................................................................55
15.2 UNICAPITAL.....................................................................................56
15.3 DAMAGES........................................................................................56
16. LOCK-UP AGREEMENTS......................................................................................56
16.1 AGREEMENT......................................................................................56
16.2 INTENDED THIRD PARTY BENEFICIARIES.............................................................57
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK........................................................................................57
17.1 INVESTMENT INTENT..............................................................................57
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17.2 COMPLIANCE WITH LAW............................................................................57
17.3 ECONOMIC RISK; SOPHISTICATION..................................................................58
17.4 INFORMATION SUPPLIED...........................................................................58
18. SECURITIES LEGENDS......................................................................................58
19. GENERAL.................................................................................................59
19.1 COOPERATION....................................................................................59
19.2 SUCCESSORS AND ASSIGNS.........................................................................59
19.3 ENTIRE AGREEMENT...............................................................................59
19.4 COUNTERPARTS...................................................................................60
19.5 BROKERS AND AGENTS.............................................................................60
19.6 EXPENSES.......................................................................................60
19.7 NOTICES........................................................................................60
19.8 GOVERNING LAW..................................................................................61
19.9 EXERCISE OF RIGHTS AND REMEDIES................................................................62
19.10 TIME...........................................................................................62
19.11 REFORMATION AND SEVERABILITY...................................................................62
19.12 REMEDIES CUMULATIVE............................................................................62
19.13 CAPTIONS.......................................................................................62
20. DEFINITIONS.............................................................................................62
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION (the
"Agreement") is made as of the 14th day of February, 1998, between UNICAPITAL
CORPORATION, a Delaware corporation ("UniCapital"); BCG ACQUISITION CORP., a
Delaware corporation ("Newco"); Boulder Capital Group, Inc., a Colorado
corporation (the "Company") and Xxx X. Xxxxxx and Xxxx X. Xxxxxxxx (collectively
referred to as the "Stockholders"), who are all of the stockholders of the
Company. Certain capitalized terms used herein are defined in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement;
WHEREAS, Newco was duly incorporated on January 26, 1998 under the laws
of the State of Delaware solely for the purpose of completing this transaction,
and is a wholly-owned subsidiary of UniCapital; and
WHEREAS, the Company is a corporation organized and existing under the
laws of its respective state of incorporation; and
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of such corporations and
their respective stockholders that Newco merge with and into the Company
pursuant to this Agreement and the applicable pro visions of the laws of the
respective states of incorporation of Newco and the Company and such transaction
being herein called the "Merger" and the Company, Newco and UniCapital being
hereinafter collectively referred to as the "Constituent Corporations"); and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of a number of similar agreements between UniCapital
and certain other corporations and partnerships and the IPO and that such single
transaction (the "Unified Transaction") shall fall within the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
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1. THE MERGER
1.1 DELIVERY AND FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause Articles of Merger, in substantially the form of Annex I
attached hereto with such changes therein as may be required by applicable state
laws (the "Articles of Merger"), to be executed and delivered to the Secretary
of State of the state of incorporation of Newco and the Company on or before the
Merger Effective Date.
1.2 MERGER EFFECTIVE DATE. The "Merger Effective Date" shall be the
date specified in Section 5.3. At the Merger Effective Date, the Articles of
Merger shall either be filed for immediate effectiveness with the Secretary of
State of the applicable state of incorporation of Newco and the Company or
become effective if filed with such Secretary of State prior to such date. On
the Merger Effective Date upon the effectiveness of the Merger, Newco shall be
merged with the Company, in accordance with the Articles of Merger, and the
separate existence of Newco shall cease. The Company, as the entity surviving
the Merger, is hereinafter sometimes referred to as the "Surviving Corporation."
The Merger shall have the effects specified in the laws of the state of
incorporation of the Surviving Corporation.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Certificate of Incorporation of the Company, as
amended and restated in the Articles of Merger, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law;
(b) the Bylaws of the Company shall be the Bylaws of the
Surviving Corporation and shall remain so until thereafter duly amended;
(c) the Surviving Corporation shall have a Board of
Directors consisting of one member, who shall be Xxxxxx New commencing upon the
effectiveness of the Merger and who shall hold office subject to the laws of the
state of incorporation and the Certificate of Incorporation and Bylaws of the
Surviving Corporation; and
(d) the officers of the Company immediately prior to the
Merger Effective Date shall continue as the officers of the Surviving
Corporation in the same capacity or capacities, each of such officers to serve,
subject to the provisions of the Certificate of Incorporation and Bylaws of the
Surviving Corporation, until such officer's successor is elected and qualified;
provided, that the Chairman of the Board (if any), the Treasurer and the
Secretary of the Company shall not succeed to the corresponding offices of the
Surviving Corporation, but instead (i) the sole director of the Surviving
Corporation shall be the Chairman of the Board of the Surviving Corporation,
(ii) the Treasurer of Newco shall be the Treasurer of the Surviving Corporation
and (iii) the Secretary of Newco shall remain the Secretary of the Surviving
Corporation.
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2. MERGER CONSIDERATION
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION.
(a) Upon the effectiveness of the Merger, all of the shares
of capital stock of the Company issued and outstanding immediately prior to the
effectiveness of the Merger ("Company Stock") shall, by virtue of the Merger and
without any action on the part of the holder thereof but subject to the
effectiveness of the Merger, automatically be converted into the right to
receive, without interest,
(i) an aggregate of $7,050,000 in cash,
(ii) an aggregate of 371,053 shares of common
stock, par value $.001 per share, of UniCapital ("UniCapital Stock") (the
consideration referred to in clauses (i) and (ii), all of which is to be
distributed to the Stockholders on the Merger Effective Date in the percentages
set forth on Annex II, subject to Article 4 hereof, is referred to in this
Agreement as the "Effective Date Consideration"); provided, however, in the
event that the aggregate value (based on the IPO Price of the UniCapital Stock)
of the 371,053 shares of UniCapital Stock is less than $5,565,795 then the
Company shall issue additional shares to the Stockholders so that the aggregate
value of the shares of UniCapital Stock equals $5,565,795 (with appropriate
adjustment to the cash and stock components of the Effective Date Consideration
so as to eliminate fractional shares), and
(iii) the Earn-Out Consideration as described in
Section 2.5, to be distributed to the Stockholders within five business days
after the date the portion of the Earn-Out Consideration with respect to a given
calendar year (if any) is finally determined pursuant to Section 2.5 in the
percentages set forth on Annex II.
(b) Upon the effectiveness of the Merger, each share of
capital stock of Newco issued and outstanding immediately prior to the
effectiveness of the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, automatically be converted into one
fully paid and non-assessable share of common stock of the Surviving
Corporation, all of which converted common stock shall constitute all of the
outstanding shares of capital stock of the Surviving Corporation immediately
after the effectiveness of the Merger.
(c) The Effective Date Consideration and the Earn-Out
Consideration are referred to together in this Agreement as the "Merger
Consideration."
2.2 EXCHANGE PROCEDURES. On the Merger Effective Date, upon surrender
to UniCapital of certificates representing all of the outstanding shares of
Company Stock ("Certificates"), each Stockholder shall, subject to Article 4, be
entitled to receive, in exchange therefor, such Stockholder's pro rata share of
the cash portion of the Effective Date
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Consideration, calculated in accordance with Annex II, and a certificate
representing that number of whole shares of UniCapital Stock which such holder
has the right to receive in respect of the Certificates surrendered, calculated
in accordance with Annex II, and each Certificate so surrendered shall forthwith
be canceled. On the Merger Effective Date or as promptly thereafter as is
practicable, and subject to and in accordance with the provisions of Article 4,
UniCapital shall cause to be distributed to the Indemnity Escrow Agent (as
defined in Article 4) a certificate or certificates representing the Escrow
Shares (as defined in Article 4), which shall be registered in the name of the
Indemnity Escrow Agent as nominee for the Stockholders and shall be held in
accordance with the provisions of Article 4 and the Indemnity Escrow Agreement
referred to therein.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and any
holder of Company Stock entitled hereunder to receive a fractional share of
UniCapital Stock but for this Section 2.3 will be entitled hereunder to receive
no such fractional share but a cash payment in lieu thereof in an amount equal
to such fraction multiplied by $19.00.
2.4 ALLOCATION OF MERGER CONSIDERATION. The parties agree that they
will not take a position on any income tax return, before any governmental
agency charged with the collection of any income tax, or in any judicial
proceeding that is in any way inconsistent with the allocation (if any) of the
Merger Consideration to the Company made by UniCapital following the Closing.
2.5 EARN-OUT CONSIDERATION.
(a)
(i) If the consolidated earnings before taxes
(the "EBT") of the Company for the twelve months ending December 31, 1998,
increased by amounts in respect of those items set forth on Schedule 2.5 that
affected net income during the period from January 1, 1998 through the Closing
Date, decreased by the amount of UniCapital corporate overhead allocated to the
Company and the amount earned from New Programs for the period from the Closing
Date through December 31, 1998 (the "Adjusted 1998 EBT"), exceeds the
consolidated EBT of the Company for the twelve months ending December 31, 1997,
increased by the add-backs set forth on Schedule 2.5 and inclusive of the amount
earned from New Programs in 1997 (the "Adjusted 1997 EBT"), then the
Stockholders shall be entitled to receive one-half of the difference between the
Adjusted 1998 EBT and the Adjusted 1997 EBT. Notwithstanding the foregoing, the
Stockholders shall be entitled to receive that portion of the Adjusted 1998 EBT
attributable to New Programs.
(ii) For each $1.00 by which the Adjusted 1998
EBT falls short of Adjusted 1997 EBT, the Stockholders shall remit to UniCapital
from the 1998 Shortfall Escrow, within 10 days after notice of such
determination, $6.00 in shares of UniCapital Stock, valued at the IPO Price (the
"1998 Shortfall"), but not to exceed $3,600,000.
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(b) If the consolidated EBT of the Company for the year
ending December 31, 1999, decreased by the amount of UniCapital corporate
overhead allocated to the Company and the amount earned from New Programs (the
"Adjusted 1999 EBT", and together with the Adjusted 1997 EBT and the Adjusted
1998 EBT, the "Company EBT"), exceeds the greater of Adjusted 1998 EBT and
Adjusted 1997 EBT, then the Stockholders shall be entitled to receive one-half
of the difference between (i) the Adjusted 1999 EBT and (ii) the greater of the
Adjusted 1998 EBT and the Adjusted 1997 EBT. Notwithstanding the foregoing, the
Stockholders shall be entitled to receive 100% of the Adjusted 1999 EBT
attributable to New Programs.
(c) The Stockholders shall be entitled to receive the (x)
EBT of the Company for the year ending December 31, 2000 attributable to New
Programs adjusted for the amount of UniCapital corporate overhead allocated to
the Company and (y) three (3) times the Company's share of the average EBT of
the Real Estate Venture for the fiscal years ending December 31, 1998, 1999 and
2000.
(d) The EBT of the Company for the years ending December 31,
1998, December 31, 1999 and December 31, 2000 shall be computed using generally
accepted accounting principles and practices as applied in the audited financial
statements of the Company included in the Registration Statement. The allocation
of UniCapital overhead shall be made on a pro rata basis applied consistently
among UniCapital subsidiaries. To the extent gain-on-sale treatment was accorded
any Lease, whether in the add-backs set forth on Schedule 2.5 or in any year,
income from the payment stream on such Lease shall not be included in the EBT of
the Company for any subsequent year.
In calculating EBT in any year for the New Programs and
the Real Estate Venture, income attributable to the New Programs and the Real
Estate Venture shall be reduced by all expenses attributable to the New Programs
and the Real Estate Venture and that portion of the Company overhead and the
allocated UniCapital overhead that bears the same relationship to the New
Programs and the Real Estate Venture as the total amount of Company overhead and
allocated UniCapital overhead bears to the total EBT for the year in question.
(e) The amounts (if any) that the Stockholders become
entitled to receive pursuant to Sections 2.5(a), 2.5(b) and/or 2.5(c) are
referred to herein as the "Earn-Out Consideration." The Earn-Out Consideration
shall be paid one-half in cash and one-half in shares of UniCapital Stock.
(f) Company EBT shall be determined within forty-five days
following December 31 of such year.
(g) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholders dispute the determination of Company EBT, then the
Stockholders' Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20
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business days after notification of the determination of Company EBT. If
UniCapital and the Stockholders' Representative cannot resolve any such dispute
which would affect the Earn-Out Consideration, then such dispute shall be
resolved by an Independent Accounting Firm (as defined in Section 3.2). The
Independent Accounting Firm shall be directed to consider only those agreements,
contracts, commitments or other documents (or summaries thereof) that were
either (i) delivered or made available to Price Waterhouse LLP in connection
with the transactions contemplated hereby, or (ii) reviewed by Price Waterhouse
LLP during the course of determining Company EBT. The determination of the
Independent Accounting Firm shall be made as promptly as practicable and shall
be final and binding upon the parties, absent manifest error which error may
only be corrected by such Independent Accounting Firm. The costs of the
Independent Accounting Firm shall be borne by the party (either UniCapital or
the Stockholders as a group) whose determination of Company EBT was further from
the determination of the Independent Accounting Firm. Pending resolution of any
such dispute by the Independent Accounting Firm, only the amount of the Earn-Out
Consideration as determined by Price Waterhouse LLP shall be paid by UniCapital.
Once Company EBT is finally determined, the Earn-Out Consideration attendant
thereto not previously paid, if any, shall be paid in accordance with this
Section 2.5; provided that in the event the Stockholders' determination of EBT
was closer to the determination of the Independent Accounting Firm than
UniCapital's determination of EBT, the Stockholders shall receive such Earn-Out
Consideration plus interest which shall accrue at the rate of 10% per annum on
any such Earn-Out Consideration that is resolved in the Stockholders favor from
the date the Earn-Out Consideration was first payable to the date on which the
Earn-Out Consideration is received by the Stockholders.
(h) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
.
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP") and
consistent with previous practice, a consolidated balance sheet of the Company
(the "Closing Date Balance Sheet") as of the end of business on the day prior to
the Closing Date (as defined in Section 5). If the aggregate stockholders'
equity of the Company as shown on the Closing Date Balance Sheet is less than
the aggregate stockholders' equity as shown on the consolidated balance sheet of
the Company as at December 31, 1997 as audited by Price Waterhouse LLP, then,
subject to Section 3.2, commencing 10 business days after delivery of the
Closing Date Balance Sheet to UniCapital, the aggregate Merger Consideration
shall be adjusted downward dollar-for-dollar in the amount of any such
deficiency (the "Net Worth Deficiency"). Upon determination of the Net Worth
Deficiency, UniCapital shall be entitled to recover from the Indemnity Escrow
Property pursuant to Article 4 that portion of the Net Worth Deficiency which
does not exceed one-half of the Indemnity Escrow Property. For any amount by
which the Net Worth Deficiency exceeds one-half of the
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balance of the Indemnity Escrow Property, the Stockholders shall pay such amount
to UniCapital by wire transfer of immediately available funds an amount equal to
the Net Worth Deficiency. At its option, and at any time or from time to time
after the determination of any Net Worth Deficiency, UniCapital shall be
entitled to recover from the Indemnity Escrow Property pursuant to Article 4 all
or any portion of the amount of the Net Worth Deficiency not theretofore paid by
the Stockholders. For any amount by which any Net Worth Deficiency exceeds
one-half of the initial balance of the Indemnity Escrow Property, such portion
of the Net Worth Deficiency shall be paid by the Stockholders not later than the
25th business day after the delivery of the Closing Date Balance Sheet (or if
applicable, not later than the 5th business day after the final determination of
any Disputed Amount in accordance with Section 3.2). At its sole and exclusive
option, and at any time after such 25th business day (or if applicable, not
later than the fifth business day after the final determination of any Disputed
Amount in accordance with Section 3.2), UniCapital shall be entitled to recover
from the Indemnity Escrow Property pursuant to Article 4 all or any portion of
the amount of the Net Worth Deficiency not paid by the Stockholders as required
by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholders dispute any
item contained on the Closing Date Balance Sheet, then the Stockholders'
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 20 business days after the delivery of the Closing Date Balance Sheet to
the Stockholders. If UniCapital and the Stockholders' Representative cannot
resolve any such dispute relating to the Net Worth Deficiency, then such dispute
shall be resolved by an independent nationally recognized accounting firm which
is reasonably acceptable to UniCapital and the Stockholders' Representative (the
"Independent Accounting Firm"). The determination of the Independent Accounting
Firm shall be made as promptly as practical and shall be final and binding on
the parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. Any expenses relating to the engagement of the
Independent Accounting Firm shall be allocated between UniCapital and the
Stockholders so that the Stockholders' aggregate share of such costs shall bear
the same proportion to the total costs that the Disputed Amounts unsuccessfully
contested by the Stockholders' Representative (as finally determined by the
Independent Accounting Firm) bear to the total of the Disputed Amounts so
submitted to the Independent Accounting Firm. Pending resolution of any such
dispute by the Independent Accounting Firm, no such Disputed Amount shall be due
to UniCapital. Once any such Disputed Amount is finally determined to be due to
UniCapital, UniCapital may proceed to recover such amount in the manner set
forth in Section 3.1.
3.3 STOCKHOLDERS' REPRESENTATIVE. (a) Each Stockholder, by signing this
Agreement, designates Xxx X. Xxxxxx to be such Stockholders' representative for
purposes of this Agreement (the "Stockholders' Representative"). The
Stockholders shall be bound by any and all actions taken by the Stockholders'
Representative on their behalf.
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(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholders' Representative.
All communications or writings to be sent to Stockholders pursuant to this
Agreement may be addressed to the Stockholders' Representative and any
communication or writing so sent shall be deemed notice to all of the
Stockholders hereunder. The Stockholders hereby consent and agree that the
Stockholders' Representative is authorized to accept deliveries, including any
notice, on behalf of the Stockholders pursuant hereto.
(c) The Stockholders' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Stockholder, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Stockholders'
Representative, and in general to do all things and to perform all acts
including, without limitation, executing and delivering all agreements,
certificates, receipts, instructions and other instruments contemplated by or
deemed advisable in connection with Article 12 of this Agreement. This power of
attorney and all authority hereby conferred is granted subject to and coupled
with the interest of such Stockholder and the other Stockholders hereunder and
in consideration of the mutual covenants and agreements made herein, and shall
be irrevocable and shall not be terminated by any act of any Stockholder, by
operation of law, whether by such Stockholder's death or any other event.
(d) Notwithstanding the foregoing, the Stockholders'
Representative shall inform each Stockholder of all notices received, and of all
actions, decisions, notices and exercises of any rights, power or authority
proposed to be done, given or taken by such Stockholders' Representative, and
shall act as directed by the Stockholders holding a majority interest in the
Indemnity Escrow Property (as defined in Section 4.1(b)).
4. INDEMNITY ESCROW AND 1998 SHORTFALL ESCROW
4.1 CREATION OF INDEMNITY ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholders pursuant to Sections 12.1
and 12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof,
the following shall be delivered to UniCapital's Transfer Agent as indemnity
escrow agent (the "Indemnity Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to each Stockholder as part of the Effective Date
Consideration in accordance with Annex II, rounded up to the nearest whole share
(the "Indemnity Escrow Shares"); and
(ii) ten percent (10%) of the cash portion of
the Effective Date Consideration payable to each Stockholder in accordance with
Annex II, rounded up to the nearest whole cent (the "Indemnity Escrow Cash").
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(b) The Escrow Shares and the Escrow Cash are referred to
together as the "Indemnity Escrow Property." In addition, the Escrow Property
shall include all cash and non-cash dividends and other property at any time
received or otherwise distributed in respect of or in exchange for any or all of
the Escrow Property, all securities hereafter issued in substitution for any of
the foregoing, all certificates and instruments representing or evidencing such
securities, all cash and non-cash proceeds of all of the foregoing property
except as provided in Section 4.3 and all rights, titles, interests, privileges
and preferences appertaining or incident to the foregoing property.
4.2 DURATION AND TERMS OF THE INDEMNITY ESCROW. The Indemnity Escrow
Property shall be held and disbursed by the Indemnity Escrow Agent in accordance
with the terms of an Indemnity Escrow Agreement substantially in the form
attached hereto as Annex III. The Indemnity Escrow Agent shall hold the Escrow
Property pursuant to the Indemnity Escrow Agreement until the later of: (a) the
first anniversary of the Merger Effective Date; and (b) the resolution of any
claim for indemnification or payment that is pending on the first anniversary of
the Merger Effective Date, but only to the extent of the amount of such pending
claim.
4.3 INDEMNITY ESCROW VOTING AND INVESTMENT. The Stockholders shall be
entitled to exercise all voting powers incident to the Indemnity Escrow Shares
held by the Indemnity Escrow Agent as their nominee, but shall not be entitled
to exercise any investment or dispositive powers over such Indemnity Escrow
Shares. The Indemnity Escrow Cash shall be invested from time to time by the
Indemnity Escrow Agent as provided in the Indemnity Escrow Agreement.
4.4 1998 SHORTFALL ESCROW.
(a) At the Closing, as collateral security for the payment of
the 1998 Shortfall obligations of the Stockholders pursuant to Section
2.5(a)(ii), there shall be delivered to UniCapital's Transfer Agent as the 1998
Shortfall escrow agent (the "1998 Shortfall Escrow Agent") the number of shares
of UniCapital Stock equal to the result of dividing $3,600,000 by the IPO Price
(the "1998 Shortfall Escrow Shares"); of which each Stockholder shall contribute
a portion of the amount of UniCapital Stock such Stockholder receives as part of
the Effective Date Consideration equal to the product of the 1998 Shortfall
Escrow Shares multiplied by the percentage of Effective Date Consideration each
such Stockholder is to receive as set forth in Annex II of this Agreement.
(b) In addition, the 1998 Shortfall Escrow Shares shall
include all cash and non-cash dividends and other property at any time received
or otherwise distributed in respect of or in exchange for any or all of the 1998
Shortfall Escrow Shares, all securities hereafter issued in substitution for any
of the foregoing, all certificates and instruments representing or evidencing
such securities, all cash and non-cash proceeds of all of the foregoing property
except as provided in Section 4.7 and all rights, titles, interests, privileges
and preferences appertaining or incident to the foregoing shares.
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4.5 DURATION AND TERMS OF THE 1998 SHORTFALL ESCROW. The 1998 Shortfall
Escrow Shares shall be held and disbursed by the 1998 Shortfall Escrow Agent in
accordance with the terms of a 1998 Shortfall Escrow Agreement substantially in
the form attached hereto as Annex VI. The 1998 Shortfall Escrow Agent shall hold
the 1998 Shortfall Escrow Shares pursuant to the 1998 Shortfall Escrow Agreement
until the resolution of any claim against the 1998 Shortfall Escrow Shares by
UniCapital resulting from a 1998 Shortfall.
4.6 1998 SHORTFALL ESCROW VOTING AND INVESTMENT. The Stockholders shall
be entitled to exercise all voting powers incident to the 1998 Shortfall Escrow
Shares held by the 1998 Shortfall Escrow Agent as their nominee, but shall not
be entitled to exercise any investment or dispositive powers over the 1998
Shortfall Escrow Shares.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
underwriting agreement relating to the offer and sale of shares of UniCapital
Stock in the IPO (the "Underwriting Agreement") shall have been executed, the
parties shall take all actions necessary to effect the Merger (other than the
filing with the appropriate state authorities of the Articles of Merger, which
shall be filed and become effective on the Merger Effective Date) and to effect
the conversion and delivery of shares referred to in Article 2 hereof
(hereinafter referred to as the "Closing"); provided, that such actions shall
not include the actual completion of the Merger or the actual conversion and
delivery of the shares referred to in Article 2 hereof, which actions shall only
be taken on the Merger Effective Date as herein provided.
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
5.3 EFFECTIVENESS OF MERGER. Concurrently with the consummation of the
sale of the shares of UniCapital Stock pursuant to the Underwriting Agreement,
the Merger shall become effective and all transactions contemplated by this
Agreement, including the conversion and delivery of shares and the delivery of a
check or checks or a wire transfer in an amount equal to the cash which the
Stockholders shall be entitled to receive pursuant to the Merger referred to in
Article 2 hereof, shall occur and be deemed to be completed. The date on which
the Merger is effected shall be referred to as the "Merger Effective Date."
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, each Stockholder jointly and severally represents and warrants
to UniCapital and Newco as follows:
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6.1 CORPORATE EXISTENCE. Each of the Company, and the subsidiary of the
Company listed on Schedule 6.8 (the "Subsidiary"), is an entity duly organized,
validly existing and in good standing under the laws of its state of formation.
Each of the Company and its Subsidiary is duly qualified to do business and is
in good standing as a foreign entity in each jurisdiction where the conduct of
its business requires it to be so qualified, all of which jurisdictions are
listed on Schedule 6.1.
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Company has the corporate power, authority and legal right to execute, deliver
and perform this Agreement. The execution, delivery and performance of this
Agreement by the Company has been duly authorized by the Board of Directors and
Shareholders of the Company and no further corporate action on the part of the
Company or its stockholders is necessary to authorize this Agreement and the
performance of the transactions contemplated hereby. This Agreement has been,
and the other agreements, documents and instruments required to be delivered by
the Company in accordance with the provisions hereof (the "Company Documents")
will be, duly executed and delivered on behalf of the Company by duly authorized
officers of the Company, and this Agreement constitutes, and the Company
Documents when executed and delivered will constitute, the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
their respective terms.
6.3 AUTHORITY; OWNERSHIP. Each Stockholder has the full legal right,
power and legal capacity to enter into this Agreement. Upon the date of this
Agreement and immediately prior to the Closing Date, the Stockholder owns and
will own beneficially and of record all of the shares of capital stock of each
Company identified on Annex II as being owned by such Stockholder. The
conversion of Company Stock into UniCapital Stock and cash pursuant to the
provisions of this Agreement will transfer to UniCapital valid title in the
shares of Company Stock owned by such Stockholder, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Company and each Stockholder does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the
Company, its Subsidiary or any Stockholder is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity which is applicable
to the Company, its Subsidiary or any Stockholder, (c) the charter documents of
the Company or its Subsidiary or any securities issued by the Company or its
Subsidiary, or (d) except as otherwise set forth in Schedule 6.4, any mortgage,
indenture, agreement, contract, commitment, lease, plan, Authorization, or any
other instrument, document or understanding, oral or written, to which the
Company, its Subsidiary or any Stockholder is a party, by which the Company, its
Subsidiary or any Stockholder may have rights or by which any of the properties
or assets of the Company or its Subsidiary may be bound or affected, or give any
party with rights thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of the
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Company or its Subsidiary thereunder. Except for filing the Articles of Merger
with the Secretary of State and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 and except as aforesaid, no authorization, approval or
consent of, and no registration or filing with any Governmental Entity is
required in connection with the execution, delivery or performance of this
Agreement by any Company or any Stockholder.
6.5 CAPITAL STOCK OF EACH COMPANY.
(a) The authorized capital stock of the Company consists
solely of the shares shown on Schedule 6.5, of which only the shares shown on
such Schedule 6.5 to be issued and outstanding are issued and outstanding. All
of the issued and outstanding shares of the capital stock of the Company are
owned by the Stockholders and are free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind. All of the issued and outstanding shares of Company Stock
to be outstanding on the Merger Effective Date will have been duly authorized
and validly issued, fully paid and nonassessable, will be owned of record and
beneficially by the Stockholders and in the amounts set forth in Annex II, and
will have been offered, issued, sold and delivered by the Company in compliance
with all applicable state and federal laws concerning the offering, sale or
issuance of securities. None of such shares will have been, and none of the
shares from which they will have derived were, issued in violation of the
preemptive rights of any past or present stockholder, whether contractual or
statutory.
(b) Schedule 6.5 attached hereto also sets forth (i) as to
corporate Subsidiaries, the number and class of the authorized capital stock of
each Subsidiary and the number of shares of each Subsidiary which are issued and
outstanding, which are the only shares issued and outstanding, and (ii) as to
partnership Subsidiaries, the capital and profits percentage interest owned and
whether such partnership interest is owned as a general partner or limited
partner, all of which shares or partnership interests identified under (i) and
(ii) are owned by the persons indicated as owning such shares on Schedule 6.5,
free and clear of all liens, security interests, pledges, charges, voting
trusts, equities, restrictions, encumbrances and claims of every kind. All of
the issued and outstanding shares of Subsidiary stock or partnership interests
to be outstanding on the Merger Effective Date will have been duly authorized
and validly issued, fully paid and nonassessable (or, in the case of partnership
interests, all mandatory capital contributions will have been paid in full),
will be owned of record and beneficially by the person indicated owning such
shares or partnership interest and will have been offered, issued, sold and
delivered by each Subsidiary in compliance with all applicable state and federal
laws concerning the offering, sale or issuance of securities. None of the shares
or partnership interests of the Subsidiaries will have been, and none of the
shares or partnership interests from which they will have derived were, issued
in violation of the preemptive rights of any past or present stockholder or
partner, whether contractual or statutory.
6.6 TRANSACTIONS IN CAPITAL STOCK. Neither the Company nor any
corporate Subsidiary has acquired any treasury stock since December 31, 1995.
Except as set forth on
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Schedule 6.6, no option, warrant, call, conversion right or commitment of any
kind exists which obligates the Company or any Subsidiary to issue any of its
authorized but unissued capital stock (if a corporation) or to sell, transfer or
otherwise dispose of or alter its partnership interests (if a partnership).
Neither the Company nor any of its Subsidiary have an obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of their equity
securities or any interests therein or to pay any dividend or make any
distribution in respect thereof.
6.7 NO BONUS SHARES. None of the shares of capital stock of the Company
or its Subsidiary was, and none of the shares of Company Stock will be, issued
pursuant to awards, grants or bonuses, whether of stock or of options or other
rights.
6.8 SUBSIDIARIES. Schedule 6.8 lists the name and type of entity of the
Subsidiary. Except as set forth in Schedule 6.8, neither the Company nor its
Subsidiary currently owns, of record or beneficially, or controls, directly or
indirectly, any capital stock, any securities convertible into capital stock or
any other equity interest in any corporation, association or other business
entity. Except as set forth on Schedule 6.8, neither the Company nor its
Subsidiary is, directly or indirectly, a participant in any joint venture,
partnership or other noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Company and its Subsidiary, including the names of
all entities from whom the Company or its Subsidiary previously acquired assets
representing all or substantially all of the assets of that entity. Except as
set forth on Schedule 6.9, neither the Company nor its Subsidiary has ever been
a subsidiary or division of another corporation or other entity or been a part
of an acquisition which was later rescinded.
6.10 SPIN-OFFS. Since December 31, 1995, there has not been any sale or
spin-off of significant assets of the Company or its Subsidiary other than in
the ordinary course of business.
6.11 NO THIRD PARTY OPTIONS. Except as set forth on Schedule 6.11,
there are no existing agreements, options, commitments or rights with, of or to
any person to acquire any properties, assets or rights of the Company or its
Subsidiary or any interest therein.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the following audited financial statements of the Company:
(a) the consolidated balance sheets of the Company at December
31, 1997 (the "Audited Balance Sheet Date"), December 31, 1996 and December 31,
1995, and the related statements of income, cash flows and changes in
stockholders' equity for the fiscal years then ended, audited by Price
Waterhouse LLP and KPMG Peat Marwick LLP and Xxxxxx & Co., respectively, the
Company's independent public accountants, together with the report of such
independent public accountants thereon (the "Audited Financial Statements"); and
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(b) the unaudited consolidated balance sheets of the Company
at September 30, 1997 and September 30, 1996, and the related statements of
income and cash flows for the interim periods then ended (the "Unaudited
Financial Statements," and together with the Audited Financial Statements, the
"Financial Statements").
All of the Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved. All of the balance sheets
included in the Financial Statements, including the related notes, fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Company at the dates indicated and
such statements of income, cash flows and changes in stockholders' equity fairly
present the results of operations, cash flows and changes in stockholders'
equity of the Company for the periods indicated. The Unaudited Financial
Statements fairly present the financial position of the Company at the dates
indicated, and such statements of income, cash flows and changes in
stockholders' equity fairly present the results of operations, cash flows and
changes in stockholders' equity for the periods indicated, except for normal
recurring year-end adjustments which are not expected to be material in amount
and except for the addition of required footnotes thereto."
6.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 6.13 is an accurate list, as
of a date not more than two days prior to the date of this Agreement, of: (i)
all liabilities of the Company and its Subsidiary which are reflected on the
audited consolidated balance sheet as of the Audited Balance Sheet Date included
in the Audited Financial Statements; (ii) all liabilities incurred thereafter
other than in the ordinary course of business; (iii) all material liabilities
incurred thereafter in the ordinary course of business; and (iv) all liabilities
(A) incurred as of the Audited Balance Sheet Date that are not reflected on the
Audited Financial Statements as of the Audited Balance Sheet Date and (B) all
liabilities incurred thereafter that would not have been so reflected had such
liabilities been incurred as of the Audited Balance Sheet Date. Each of the
foregoing liabilities that has not heretofore been paid or discharged is so
noted on Schedule 6.13. For purposes of this Agreement, "liabilities" means
liabilities of any kind, character or description, whether accrued, absolute,
secured or unsecured, contingent or otherwise.
(b) For each such liability for which the amount is not fixed
or is contested, Schedule 6.13 shall include a summary description of the
liability, together with copies of all relevant non-privileged documentation
relating thereto, detail of all amounts claimed and any other action or relief
sought, the names of the claimant and all other parties to the claim, suit or
proceeding, the name of each court or agency before which such claim, suit or
proceeding is pending, the date such claim, suit or proceeding was instituted,
and a best estimate of the maximum amount, if any, which is likely to become
payable with respect to each such liability. If no estimate is provided, the
best estimate shall for purposes of this Agreement be deemed to be zero. On the
Closing Date, the Company shall deliver, and shall cause its accountants,
outside
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counsel and other representatives or agents to deliver, copies of all privileged
documents related to liabilities as listed on Schedule 6.13.
(c) All of the liabilities reflected on the unaudited
consolidated balance sheet included in the audited consolidated balance sheet as
of the Audited Balance Sheet Date included in the Audited Financial Statements
only out of or were incurred only in connection with the conduct of the
respective businesses of the Company or its Subsidiary. Except as set forth on
Schedule 6.13 and except for liabilities not required to be set forth thereon
pursuant to Section 6.13(a), the Company or its Subsidiary have no liabilities
or obligations with respect to their respective businesses, whether direct or
indirect, matured or unmatured, absolute contingent or otherwise, and there is
no condition, situation or set of circumstances which would reasonably be
expected to result in any such liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Company and
its Subsidiary (including, without limitation, receivables from and advances to
employees and Stockholders) other than those arising out of Leases
(collectively, the "Accounts Receivable"). Schedule 6.14 includes an aging of
all Accounts Receivable showing amounts due in 30-day aging categories. On the
Closing Date, the Stockholders will deliver to UniCapital a complete and
accurate list, as of a date not more than two days prior to the Closing Date, of
the Accounts Receivable. All Accounts Receivable represent valid obligations
arising from bona fide business transactions in the ordinary course of business
consistent with past practice. The Accounts Receivable are, and as of the
Closing Date and the Merger Effective Date will be, collectible net of any
respective reserves shown on the Company's and its Subsidiary's books and
records (which reserves are adequate and calculated consistent with past
practice). Subject in the case of Accounts Receivable reflected on the Company's
or its Subsidiary's balance sheet to such reserves reflected on such balance
sheet, each of the Accounts Receivable will be collected in full within ninety
(90) days after the day on which it first became due and payable. There is no
contest, claim, counterclaim, defense or right of set-off, other than rebates
and returns in the ordinary course of business, under any contract with any
obligor of any Account Receivable relating to the amount or validity of such
Account Receivable. The allowance for collection losses on the audited
consolidated balance sheet as of the Audited Balance Sheet Date included in the
Audited Financial Statements has been determined in accordance with GAAP
consistent with past practice.
6.15 PERMITS. Each material Permit, together with the name of the
Governmental Entity issuing such Permit is set forth on Schedule 6.15. Such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such transactions, the
Surviving Corporation will have all of the Company's right, title and interest
in the Permits.
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6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Audited
Balance Sheet Date, of all the real and personal property (which in the case of
personal property had an original cost in excess of $25,000) owned or leased by
the Company (including its Subsidiary) where the Company or its Subsidiary is a
lessee or sublessee, including true and correct copies of leases for equipment
and properties on which are situated buildings, warehouses and other structures
used in the operation of the business of the Company (including its Subsidiary)
and including an indication as to which assets were formerly owned by any
Stockholder or affiliate (which term, as used herein, shall have the meaning
ascribed thereto in Rule 144(a)(1) promulgated under the Securities Act of 1933,
as amended (the "Securities Act")) of the Company and its Subsidiary. Except as
set forth on Schedule 6.16, all of the Company's and its Subsidiary's buildings,
leasehold improvements, structures, facilities, equipment and other material
items of tangible property and assets are in good operating condition and
repair, subject to normal wear and maintenance, are usable in the regular and
ordinary course of business and conform to all applicable laws, ordinances,
codes, rules and regulations, and Authorizations relating to their construction,
use and operation. All leases set forth on Schedule 6.16 have been duly
authorized, executed and delivered and constitute the legal, valid and binding
obligations of the Company (or its Subsidiary) and, to the knowledge of the
Stockholders, no other party to any such lease is in default thereunder and such
leases constitute the legal, valid and binding obligations of such other
parties. All fixed assets used by the Company (including its Subsidiary) in the
operation of its business are either owned by the Company (or its Subsidiary) or
leased under an agreement set forth on Schedule 6.16. The Company and the
Stockholders have heretofore delivered to UniCapital copies of all title reports
and title insurance policies received or held by the Company (including its
Subsidiary). The Company and the Stockholders have indicated on Schedule 6.16 a
summary description of all plans or projects involving the opening of new
operations, expansion of any existing operations or the acquisition of any real
property or existing business to which management of the Company (or its
Subsidiary) has devoted any significant effort or expenditure in the two-year
period prior to the date of this Agreement which, if pursued by the Company (or
its Subsidiary) would require additional expenditures of significant efforts or
capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company and its Subsidiary other than Leases (the
"Contracts"), to which the Company or its Subsidiary is a party or is bound, or
by which any of their respective assets are bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
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(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$25,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $25,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof or exceeding $25,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$25,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company, or its Subsidiary, or any
successor thereto, or to the knowledge of the Company and each Stockholder, any
employee of the Company, or its Subsidiary, or any successor thereto, from
engaging or competing in any manner or in any business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service xxxx or copyright or to any ideas, technical assistance or other
know-how of or used by the Company and its Subsidiary;
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(n) agreement, contract, commitment, arrangement or
understanding to which the Company or its Subsidiary, on the one hand, and any
affiliate, officer, director or stockholder of the Company or its Subsidiary, on
the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
Each of the Contracts listed on Schedule 6.17, or not required to be listed
therein because of the amount thereof, is valid and enforceable in accordance
with its terms; the Company and its Subsidiary are, and to the knowledge of the
Company and each Stockholder, all other parties thereto are, in compliance with
the provisions thereof. Neither the Company nor its Subsidiary is, and to the
knowledge of the Company and each Stockholder, no other party thereto is, in
default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained therein; and no event has occurred
which with or without the giving of notice or lapse of time, or both, would
constitute a default thereunder. Except as disclosed on Schedule 6.4, none of
the rights of the Company or its Subsidiary under any Contract will be impaired
by the consummation of the transactions contemplated hereby, and all such rights
will be enforceable by the applicable Surviving Corporation after the Merger
Effective Date without the consent or agreement of any other party. The Company
has delivered accurate and complete copies of each Contract to UniCapital, other
than non-recourse debt instruments of the Company or its Subsidiary, which have
been made available to UniCapital. No Contract obligates any party to obtain any
consent in connection with the transactions contemplated hereby.
6.18 GOVERNMENT CONTRACTS. Neither the Company nor its Subsidiary is
now or has ever been a party to any contract with any Governmental Entity
subject to price redetermination or renegotiation.
6.19 TITLE TO REAL PROPERTY. The Company and its Subsidiary have good
and insurable title to all real property owned and used in their business,
subject to no mortgage, pledge, lien, conditional sales agreement, encumbrance
or charge, except for:
(a) liens, if any, reflected on Schedules 6.13 and 6.16 as
securing specified liabilities (with respect to which no material default
exists);
(b) liens for current taxes and assessments not yet due or in
default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions
to title shown of record in the offices of the county clerks in which the
properties, assets and leasehold estates are located which, in UniCapital's sole
judgment, do not adversely affect UniCapital's intended use of such properties.
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6.20 INSURANCE. The assets, properties and operations of the Company
and its Subsidiary are insured under various policies of general liability and
other forms of insurance, all of which are described in Schedule 6.20, which
discloses for each policy the risks insured against, coverage limits, deductible
amounts, all outstanding claims thereunder, and whether the terms of such policy
provide for retrospective premium adjustments. All such policies are in full
force and effect in accordance with their terms, no notice of cancellation has
been received, and there is no existing default or event which, with the giving
of notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which, in relation to the business and assets of the
Company and its Subsidiary, are consistent with the normal or customary industry
practice and all premiums due and all premiums to date have been paid in full.
Neither the Company nor its Subsidiary have been refused any insurance, nor has
the Company's or its Subsidiary's coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past five years. Schedule 6.20 also contains a true and
complete description of all outstanding bonds and other surety arrangements
issued or entered into in connection with the business, assets and liabilities
of the Company or its Subsidiary.
6.21 EMPLOYEES. Schedule 6.21 contains the following with respect to
the Company and its Subsidiary:
(a) a list of all employees of the Company and its Subsidiary
(including name, title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of the Company and the Stockholders, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the Company and the
Stockholders, threatened before the National Labor Relations Board or similar
body in any foreign country; (iv) there is no employment handbook, personnel
policy manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Company or its Subsidiary are not covered
by any collective bargaining agreement; (vi) the Company and its Subsidiary have
provided or will timely provide prior to Closing all notices required by law to
be given prior to Closing to all local, state, federal or national labor,
wage-payment, equal employment opportunity, unemployment insurance and related
agencies; (vii) the Company and its Subsidiary have paid or properly accrued in
the ordinary course of business all wages and compensation due to employees,
including all vacations or vacation pay, holidays or holiday pay,
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sick days or sick pay, and bonuses; and (viii) the transactions contemplated by
this Agreement will not create liability under any Laws of any Governmental
Entity respecting reductions in force or the impact on employees on plant
closing or sales of businesses. All employees of the Company and its Subsidiary
are legally able to work in the United States.
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Company or its Subsidiary. "Benefit
Plan" means each "employee pension benefit plan" (as defined in Section 3(2) of
ERISA, hereinafter a "Pension Plan"), "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other
plan or arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Company or its Subsidiary or their
respective affiliates or any other person or entity that, together with the
Company or its Subsidiary, is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code (each, together with the Company or its Subsidiary,
a "Commonly Controlled Entity") for the benefit of any present or former
officer, employee or director. The Company and its Subsidiary have no intent or
commitment to create any additional Benefit Plan or amend any Benefit Plan so as
to increase benefits thereunder. The Company and its Subsidiary have not created
any Benefit Plan or declared or paid any bonus compensation in contemplation of
the transactions contemplated by this Agreement. A current, accurate and
complete copy of each Benefit Plan has been made available to UniCapital. Except
as disclosed on Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Company and the Stockholders, no
condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company, nor its
Subsidiary, nor any Commonly Controlled Entity, nor any trustee or agent has
been or is presently engaged in any prohibited transactions as defined by
Section 406 of ERISA or Section 4975 of the Code for which an exemption is not
applicable which could subject the Company or its Subsidiary to the tax or
penalty imposed by Section 4975 of the Code or Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Company and the
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Stockholders, no condition exists which could subject the Company or its
Subsidiary to a penalty under Section 4071 of ERISA;
(e) neither the Company, its Subsidiary nor any Commonly
Controlled Entity is or has ever been party to any "multi-employer plan," as
that term is defined in Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Company and the Stockholders, threatened
against any Benefit Plan, the Company, its Subsidiary, any Commonly Controlled
Entity or any trustee or agent of any Benefit Plan; and
(h) with respect to each Benefit Plan to which the Company,
its Subsidiary or any Commonly Controlled Entity is a party which constitutes a
group health plan subject to Section 4980B of the Code, each such Benefit Plan
substantially complies, and in each case has substantially complied, with all
applicable requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except for
premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty Corporation
nor the Company, nor its Subsidiary, nor any Commonly Controlled Entity has
instituted proceedings to terminate any Pension Plan and the Pension Benefit
Guaranty Corporation has not informed the Company or its Subsidiary of its
intent to institute proceedings to terminate any Pension Plan;
(iii) full payment has been made of all amounts which
the Company, its Subsidiary or any Commonly Controlled Entity was required to
have paid as a contribution to the Pension Plans as of the last day of the most
recent fiscal year of each of the Pension Plans ended prior to the date of this
Agreement, and none of the Pension Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
such Pension Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Company and the
Stockholders, the actuarial assumptions utilized, where appropriate, in
connection with determining the funding of each Pension Plan which is a defined
benefit pension plan (as set forth in the actuarial report for
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such Pension Plan) are reasonable. Copies of the most recent actuarial reports
have been furnished to UniCapital. Based on such actuarial assumptions, as of
the Audited Balance Sheet Date, the fair market value of the assets or
properties held under each such Pension Plan exceeds the actuarially determined
present value of all accrued benefits of such Pension Plan (whether or not
vested) determined on an ongoing Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and neither the Company nor its
Subsidiary has received any claim or notice that any such Benefit Plan is not in
compliance with, all applicable laws and orders and prohibited transaction
exemptions, including without limitation, to the extent applicable, the
requirements of ERISA;
(vi) neither the Company, nor its Subsidiary nor any
Commonly Controlled Entity is in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust agreement or
insurance contract;
(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in the Benefit Plans and their beneficiaries in accordance with the
terms of the Benefit Plans;
(viii) each Benefit Plan may be amended or modified
by the Company or, its Subsidiary or any Commonly Controlled Entity at any time
without liability except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions contemplated
by this Agreement will not (in and of itself): (A) entitle any employee of the
Company or its Subsidiary to severance pay, unemployment compensation or any
other payment; (B) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee; (C) result in any liability
under Title IV of ERISA; (D) result in any prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code for which an exemption is not
available; or (E) result (either alone or in conjunction with any other event)
in the payment or series of payments by the Company, its Subsidiary or any of
their affiliates to any person of an "excess parachute payment" within the
meaning of Section 280G of the Code;
(xi) with respect to each Benefit Plan that is funded
wholly or partially through an insurance policy, all premiums required to have
been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Merger Effective Date
will have been paid on or before the Merger Effective Date and, as of the Merger
Effective Date, there will be no liability of the Company, its Subsidiary or any
Commonly Controlled Entity under any insurance policy or ancillary agreement
with respect to
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such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring prior to the Merger Effective Date;
(xii) (A) each Benefit Plan that constitutes a
"Welfare Plan", and for which contributions are claimed by the Company, its
Subsidiary or any Commonly Controlled Entity as deductions under any provision
of the Code, is in material compliance with all applicable requirements
pertaining to such deduction;
(B) with respect to any welfare benefit fund
(within the meaning of Section 419 of the Code) related to a welfare benefit
plan, there is no disqualified benefit (within the meaning of Section 4976(b) of
the Code) that would result in the imposition of a tax under Section 4976(a) of
the Code; and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so exempt and no event or condition exists which
would adversely affect any such determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Merger Effective Date have been
made or will be made prior to the Merger Effective Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company and its
Subsidiary have complied with each, and are not in violation of any, law,
ordinance, or governmental or regulatory rule or regulation, whether federal,
state, local or foreign ("Regulations"), to which the Company's or its
Subsidiary's business, operations, assets or properties is subject. The Company
and its Subsidiary own, hold, possess or lawfully use in the operation of their
respective business all franchises, licenses, permits, easements, rights,
applications, filings, registrations and other authorizations ("Authorizations")
which are in any manner necessary for them to conduct their respective business
as now or previously conducted or for the ownership and use of the assets owned
or used by such company in the conduct of the business of such company, free and
clear of all liens, charges, restrictions and encumbrances and in compliance
with all Regulations. All such Authorizations are listed and described in
Schedule 6.23. Neither the Company nor its Subsidiary is in default, nor has the
Company or its Subsidiary received any notice of any claim of default, with
respect to any such Authorization. All such Authorizations are renewable by
their terms or in the ordinary course of business without the need to comply
with any special qualification procedures or to pay any amounts other than
routine filing fees. None of such Authorizations will be adversely affected by
consummation of the transactions contemplated hereby. No Stockholder and no
director, officer, employee or former employee of
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the Company, its Subsidiary or any affiliates of any such company, or any other
person, firm or corporation, owns or has any proprietary, financial or other
interest (direct or indirect) in any Authorization which such company owns,
possesses or uses in the operation of the business of such company as now or
previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. Except as disclosed on Schedule
6.24, no Stockholder and no director, officer or employee of the Company or its
Subsidiary, or any member of his or her immediate family or any other of its,
his or her affiliates, owns or has a 5% or more ownership interest in any
corporation or other entity that is or was during the last three years a party
to, or in any property which is or was during the last three years the subject
of, any contract, agreement or understanding, business arrangement or
relationship with the Company or its Subsidiary.
6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Stockholders, threatened against the Company or
its Subsidiary or which relates to the transactions contemplated by this
Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Stockholders, threatened
against the Company or its Subsidiary or which relates to such company.
(c) Neither the Company nor the Stockholders know of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) Except as set forth on Schedule 6.25, neither the Company
nor its Subsidiary is a party to or subject to the provisions of any judgment,
order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority.
6.26 RESTRICTIONS. Neither the Company nor its Subsidiary is a party to
any indenture, agreement, contract, commitment, lease, plan, license, permit,
authorization or other instrument, document or understanding, oral or written,
or subject to any charter or other corporate restriction or any judgment, order,
writ, injunction, decree or award which materially adversely affects or
materially restricts or, so far as the Company or any of the Stockholders can
now reasonably foresee, may in the future materially adversely affect or
materially restrict, the business, operations, assets, properties, prospects or
condition (financial or otherwise) of the Company and its Subsidiary after
consummation of the transactions contemplated hereby.
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6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company and its
Subsidiary (the "Tax Returns") with respect to any federal, state, local or
foreign taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions (including without limitation all income
tax, unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (the "Taxes") have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all such Tax Returns properly reflect the
liabilities of the Company and its Subsidiary for Taxes for the periods,
property or events covered thereby. All Taxes, including without limitation
those which are called for by the Tax Returns, required to be paid, withheld or
accrued by the Company and its Subsidiary and any deficiency assessments,
penalties and interest have been timely paid, withheld or accrued. The accruals
for Taxes contained in the audited consolidated balance sheet as of the Audited
Balance Sheet Date included in the Audited Financial Statements are adequate to
cover the Tax liabilities of the Company and its Subsidiary as of that date and
include adequate provision for all deferred Taxes, and nothing has occurred
subsequent to that date to make any of such accruals inadequate. The Company's
and its Subsidiary's Tax basis in their assets for purposes of determining their
future amortization, depreciation and other federal income tax deductions are
accurately reflected on such Company's or Subsidiary's Tax books and records.
Neither the Company nor its Subsidiary is or has at any time ever been a party
to a Tax sharing, Tax indemnity or Tax allocation agreement, and neither the
Company nor its Subsidiary has assumed any Tax liability of any other person or
entity under contract. Neither the Company nor its Subsidiary has received any
notice of assessment or proposed assessment in connection with any Tax Returns
and there are not pending tax examinations of or tax claims asserted against the
Company or its Subsidiary or any of their assets or properties. The Company and
its Subsidiary have not extended, or waived the application of, any statute of
limitations of any jurisdiction regarding the assessment or collection of any
Taxes. There are now (and as of immediately following the Closing there will be)
no Liens (other than any Lien for current Taxes not yet due and payable) on any
of the assets or properties of the Company or its Subsidiary relating to or
attributable to Taxes. To the knowledge of the Company and the Stockholders,
there is no basis for the assertion of any claim relating to or attributable to
Taxes which, if adversely determined, would result in any Lien on the assets of
the Company or its Subsidiary or otherwise have an adverse effect on the Company
or its Subsidiary or their respective business, operations, assets, properties,
prospects or condition (financial or otherwise). Neither the Company nor the
Stockholders have any knowledge of any basis for any additional assessment of
any Taxes. All Tax payments related to employees, including income tax
withholding, FICA, FUTA, unemployment and worker's compensation, required to be
made by the Company and its Subsidiary have been fully and properly paid,
withheld, accrued or recorded. There are no contracts, agreements, plans or
arrangements, including but not limited to the provisions of this Agreement,
covering any employee or former employee of the Company or its Subsidiary that,
individually or collectively, could give rise to any payment (or portion
thereof) that would not be deductible pursuant to
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Sections 280G, 404 or 162 of the Code. Two correct and complete copies of (a)
all Tax examinations, (b) all extensions of statutory limitations and (c) all
federal, state and local income tax returns and franchise tax returns of the
Company (including, if filed separately, its Subsidiary) for the last five
fiscal years, or such shorter period of time as any of them shall have existed,
have heretofore been delivered by the Company and the Stockholders to
UniCapital. The Company and its Subsidiary currently utilize the accrual method
of accounting for income tax purposes and, except as set forth on Schedule 6.27,
have not changed its method of accounting for income tax purposes in the past
five years.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) Neither the Company nor its Subsidiary have utilized or
currently utilize any patent, trademark, trade name, service xxxx, copyright,
software, trade secret or know-how except for those listed on Schedule 6.28 (the
"Intellectual Property"), all of which are owned by the Company and its
Subsidiary free and clear of any liens, claims, charges or encumbrances. The
Intellectual Property constitutes all such assets, properties and rights which
are used or held for use in, or are necessary for, the conduct of the business
of the Company and its Subsidiary.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Company and its Subsidiary.
(c) Neither the Company nor its Subsidiary infringe upon or
unlawfully or wrongfully use any patent, trademark, trade name, service xxxx,
copyright or trade secret owned or claimed by another. No action, suit,
proceeding or investigation has been instituted or, to the knowledge of the
Company and the Stockholders, threatened relating to any, patent, trademark,
trade name, service xxxx, copyright or trade secret formerly or currently used
by the Company or its Subsidiary. None of the Intellectual Property is subject
to any outstanding order, decree or judgment. Neither the Company nor its
Subsidiary have agreed to indemnify any person or entity for or against any
infringement of or by the Intellectual Property.
(d) No present or former employee of the Company or its
Subsidiary and no other person or entity owns or has any proprietary, financial
or other interest, direct or indirect, in whole or in part, in any patent,
trademark, trade name, service xxxx or copyright, or in any application
therefor, or in any trade secret, which the Company or its Subsidiary owns,
possesses or uses in its operations as now or heretofore conducted. Schedule
6.28(d) lists all confidentiality or non-disclosure agreements currently in
force and effect to which the Company and its Subsidiary or any of their
employees is a party.
(e) Schedule 6.28 sets forth a complete and accurate list of
all items of Intellectual Property, including, without limitation, unregistered
and duly registered in, filed in or issued by the United States Copyright Office
or the United States Patent and Trademark Office,
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any offices in the various states of the United States and any offices in other
jurisdictions and information related to such registration.
(f) All rights of the Company in the Intellectual Property
shall vest in the applicable Surviving Corporation pursuant to the transactions
contemplated hereby without any consent or other approval.
(g) All Intellectual Property in the form of computer software
that is utilized by the Company or its Subsidiary in the operation of their
respective business is capable of processing date data between and within the
twentieth and twenty-first centuries, or can be rendered capable of processing
such data within six months by the expenditure of no more than $250,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of the Company
(and corporate Subsidiary), as well as the certificate of limited partnership
and partnership agreement of any partnership Subsidiary and the copies of all
leases, instruments, agreements, licenses, permits, certificates or other
documents which are included on schedules attached hereto or which have been
delivered or which have been made available to UniCapital in connection with the
transactions contemplated hereby, all as amended to date, are complete and
correct; neither the Company (including its Subsidiary) nor, to the knowledge of
the Stockholders, any other party to any of the foregoing is in material default
thereunder; and, except as set forth in the schedules and docu ments attached to
this Agreement, the rights and benefits of the Company (including its
Subsidiary) thereunder will not be materially and adversely affected by the
transactions contemplated hereby, and the execution of this Agreement and the
performance of the obligations hereunder will not result in a material violation
or breach or constitute a material default under any of the terms or provisions
thereof. Except as set forth on Schedule 6.29, none of such leases, instruments,
agreements, contracts, licenses, permits, certificates or other documents
requires notice to, or the consent or approval of, any governmental agency or
other third party to any of the transactions contemplated hereby to remain in
full force and effect. The consummation of the transactions contemplated hereby
will not give rise to any right of termination, cancellation or acceleration or
result in the loss of any right or benefit thereunder.
6.30 EXISTING CONDITIONS. Since the Audited Balance Sheet Date, neither
the Company nor its Subsidiary have:
(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
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(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of the Company, its Subsidiary or any
interest therein;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except in the ordinary course of business
consistent with past practice;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, except in the
ordinary course of business consistent with past practice;
(e) declared, set aside or paid any dividend or made or agreed
to make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its shares of capital stock or other ownership interests;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise),
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
(j) made any advance (excluding advances for ordinary and
necessary business expenses) or loan to any of its employees, or, except in the
ordinary course of business,
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consistent with past practices, increased the salaries or other compensation of
any of its employees, or made any increase in, or any addition to, other
benefits to which any of its employees may be entitled;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles;
(l) except for the establishment of the Real Estate Venture,
as disclosed on Schedule 6.30(l), entered into any transaction other than in the
ordinary course of business consistent with past practice;
(m) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(n) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as Schedule
6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company (including its Subsidiary) has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company and its
Subsidiary and a description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
and its Subsidiary accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of such company. Neither the Company
nor its Subsidiary have engaged in any transaction, maintained any bank account
or used any of the funds of such company except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books and
records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company and its Subsidiary have
secured, and are in compliance with, all Environmental Permits, with respect to
any premises on which their
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respective business is operated, all of which Environmental Permits shall vest
in the Surviving Corporation upon consummation of the transactions contemplated
hereby. The Company and its Subsidiary are in compliance with all Environmental
Laws.
(b) Neither the Company nor its Subsidiary have received any
communication from any Governmental Entity that alleges that the Company or its
Subsidiary is not in compliance with any Environmental Laws or Environmental
Permits.
(c) Neither the Company nor its Subsidiary have entered into
or agreed to any court decree or order, and neither the Company not its
Subsidiary is subject to any judgment, decree or order, relating to compliance
with any Environmental Law or to investigation or cleanup of a Hazardous
Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Company and the Stockholders,
threatened to or against any assets or properties of the Company or its
Subsidiary pursuant to any Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company or its Subsidiary.
(f) Neither the Company nor its Subsidiary have received a
CERCLA 104(e) information request or have been named a potentially responsible
party for any National Priorities List site under CERCLA or any site under
analogous state law or received an analogous notice or request from any non-U.S.
Governmental Entity, which notice, request or any resulting inquiry or
litigation has not been fully and finally resolved without possibility of
reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
or its Subsidiary and any former aboveground or underground tanks on any
property owned, operated or leased by the Company or its Subsidiary have been
removed in accordance with all Environmental Laws and no residual contamination,
if any, remains at such sites in excess of applicable standards.
(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by the Company or its Subsidiary and there are no such
articles, containers or equipment containing PCBs, and there is no asbestos
containing material in a condition or location currently constituting a
violation of any Environmental Law at, on, under or within any property owned,
operated or leased by the Company or its Subsidiary.
(i) The Company and the Stockholders have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in
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their possession that have been prepared by or on behalf of the Company or its
Subsidiary during the past five years.
6.34 NO ILLEGAL PAYMENTS. Neither the Company nor its Subsidiary and,
to the knowledge of the Company and the Stockholders, nor any affiliate,
officer, agent or employee thereof, directly or indirectly, has, during the past
five years, on behalf of or with respect to the Company, its Subsidiary or any
affiliate thereof, (a) made any unlawful domestic or foreign political
contributions, (b) made any payment or provided services which were not legal to
make or provide or which the Company, its Subsidiary or any affiliate thereof or
any such officer, agent or employee should have known were not legal for the
payee or the recipient of such services to receive, (c) received any payment or
any services which were not legal for the payer or the provider of such services
to make or provide, (d) made any payment to any person or entity, or agent or
employee thereof, in connection with any Lease (as hereinafter defined) to
induce such person or entity to enter into a Lease transaction, (e) had any
transactions or payments related to the Company or its Subsidiary which are not
recorded in their accounting books and records or (f) had any off-book bank or
cash accounts or "slush funds" related to the Company or its Subsidiary.
6.35 LEASES. Schedule 6.35 hereto sets forth the Company's and its
Subsidiary's lease financing arrangements as of the Audited Balance Sheet Date
(which, together with all other lease/financing arrangements entered into by the
Company or its Subsidiary between such date and the Closing Date, are referred
to herein as the "Leases"). The term "Lease Documents" means the lease
arrangements and financing contracts evidencing the Leases described in Schedule
6.35, together with all related documents and agreements including, without
limitations, master lease agreements, schedules or other addenda to such Leases,
certificates of delivery and acceptance, UCC financing statements, remarketing
agreements, residual guaranty agreements, insurance policies, guaranty
agreements and other credit supports. The term "Equipment" means all equipment,
inventory and other property described as being leased or financed pursuant to a
Lease, or in which the Company or its Subsidiary is granted a security interest
pursuant to a Lease. The term "Obligor" means any lessee party or other party
obligated to pay or perform any obligations under or in respect of a Lease or
the Equipment covered by a Lease (excluding the lessor party thereunder, but
otherwise including, without limitation, any guarantor of a Lease or any vendor,
manufacturer or similar party under a remarketing agreement, residual guaranty
or similar agreement). The term "Scheduled Payments" means the monthly or
periodic rental payments or installments of principal and interest under the
terms of the Leases.
(a) There is no restriction or limitation in any of the Lease
Documents or otherwise, restricting the Company from executing this Agreement,
terminating the Lease Documents, or entering into the transactions contemplated
by this Agreement, other than consents which have been, or prior to the Closing
will have been, obtained.
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(b) The Company or its Subsidiary own the Equipment covered by
each Lease or has a vested and perfected first priority security interest in the
Equipment. All Equipment is located in the United States.
(c) With respect to each Lease, only one chattel paper
original of such Lease exists and is held by the Company or its Subsidiary or
the secured lenders of the Company or its Subsidiary.
(d) Each Lease is in full force and effect in accordance with
its terms, and there has been no occurrence which would or might permit any
Obligor to terminate such Lease or suspend or reduce any payments or obligations
due or to become due in respect of such Lease or the related Lease Documents by
reason of default by the lessor party under such Lease. None of the Obligors in
respect of a Lease or the related Lease Documents is the subject of a
bankruptcy, insolvency or similar proceeding.
(e) Except for the delinquency in the payment of any Scheduled
Payment that is not more than 90 days past due and except as set forth in
Schedule 6.35(e), there does not exist any default in the payment of any
Scheduled Payments due under any Lease or the related Lease Documents, and there
does not exist any other default, breach, violation or event permitting
acceleration, termination or repossession under any Lease or the related Lease
Documents or any event which, to the knowledge of the Company and the
Stockholders, with notice and the expiration of any applicable grace or cure
period, would constitute such a default, breach, violation or event permitting
acceleration, termination or repossession under such Lease or the related Lease
Documents.
(f) Neither the Company nor its Subsidiary have acted in a
manner which (nor has any such company failed to act where such failure to act)
would alter or reduce any of such company's rights or benefits under any
manufacturer's or vendors' warranties or guarantees with respect to any
Equipment.
(g) The Company has complied with all requirements of any
federal, state or local law, including without limitation, usury laws,
applicable to each Lease.
(h) Each Lease has the following characteristics:
(i) such Lease was originated in the United States
and the Scheduled Payments thereunder are payable in U.S. dollars by Obligors
domiciled in the United States;
(ii) the lessee party under such Lease has
unconditionally accepted the Equipment covered by such Lease;
(iii) at least one Scheduled Payment has been made by
the Obligor under each such Lease; and
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(iv) no Obligor in respect of such Lease is an
affiliate of the Company or its Subsidiary.
(i) Each Lease and the related Lease Documents are valid,
binding, legally enforceable and non-cancelable obligations of the parties
thereto, enforceable in accordance with their respective terms, except as such
enforceability may be subject to the effect of general principles of equity.
Each Lease is a business obligation of the lessee thereunder and is not a
"consumer transaction" under any applicable federal or state regulation.
(j) To the knowledge of the Stockholders, no Lease or related
Lease Document is the subject of a fraudulent scheme by any Obligor or any
supplier of Equipment.
(k) Each item of Equipment is subject to a Lease.
(l) Each Lease is a fixed rate lease contract.
(m) No Lease or related Lease Document is subject to any right
of rescission, set-off, counterclaim, abatement or defense, including without
limitation any defense of usury, nor will the operation of any of the terms of
any Lease or any related Lease Document or the exercise of any right or remedy
thereunder render such Lease or any related Lease Document or the obligations
thereunder unenforceable, or subject the same to any right of rescission,
set-off, counterclaim, abatement or defense. No Obligor has asserted any legally
enforceable right of rescission, set-off, counterclaim, abatement or defense to
its obligations under a Lease or any related Lease Document.
(n) As to the Leases and the related Lease Documents, (i) none
has been amended or modified (a) to extend the maturity date for a period of
longer than one year, or (b) to alter the amount or time of payment of any
amount due thereunder, unless as to (a) and (b) such extension or alteration is
reasonably expected to result in a net economic benefit to the Company or any
Subsidiary; (ii) no indulgences or waivers have been granted in respect of the
obligations of any Obligor under any Lease; and (iii) neither the Company nor
its Subsidiary have advanced any monies on behalf of any Obligor.
(o) Each Lease requires the Obligor thereunder at its own cost
and expense to maintain the Equipment leased thereunder in good repair,
condition and working order, and, to the knowledge of the Stockholders, each
Obligor under a Lease is currently in compliance with such requirement.
(p) Each Lease requires the Obligor thereunder (i) to pay all
fees, taxes (except income taxes), and other charges or liabilities arising with
respect to the Equipment leased thereunder or the use thereof, (ii) to keep the
Equipment free and clear of any and all liens, security interests and other
encumbrances, other than security interests of the Company or its Subsidiary,
(iii) to hold harmless the lessor thereunder and its successors and assigns
against the
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imposition of any fees, charges, liabilities and encumbrances, (iv) to bear all
risk of loss associated with the Equipment covered by or securing the
obligations under such Lease during the term of such Lease and (v) to maintain
at the cost of the Obligor public liability and casualty insurance in respect of
such Equipment covered by such Lease.
(q) Each Lease prohibits without the lessor's prior written
consent any relocation of the Equipment covered by such Lease and requires the
Obligor to execute such agreements and documents as may reasonably be requested
by the lessor in connection with any such relocation.
(r) Each Lease involves either the lease of tangible personal
property owned by the Company or its Subsidiary or the loan of money secured by
a security interest in tangible personal property owned by the Obligor
thereunder.
(s) Neither the Company nor its Subsidiary have received any
notice challenging its ownership or the priority of its security interest in the
Equipment covered by each Lease, and there are no proceedings pending before any
court or governmental entity or, to the knowledge of the Company and the
Stockholders, threatened by any Obligor or other party, (i) asserting the
invalidity of any Lease or the related Lease Documents, (ii) seeking to prevent
payment or performance by any Obligor of any Lease or any of the terms of the
related Lease Documents, or (iii) seeking any determination or ruling that might
adversely affect the validity or enforceability of any Lease or any of the terms
or provisions of the related Lease Documents.
(t) As to each Lease, there are no agreements or
understandings between the Company or its Subsidiary and the Obligors in respect
of such Lease or otherwise binding on any such company other than as expressly
set forth in the Lease and the related Lease Documents.
6.36 LEASE FUNDING. The Company and its Subsidiary are in compliance
with all of the terms and covenants of, and are not in default or breach under,
each agreement, contract, understanding or arrangement with any funding source
for the Leases.
6.37 DISCLOSURE. The Company has delivered, or in the case of the
Leases and Lease Documents, made available to UniCapital true and complete
copies of each agreement, contract, commitment or other document (or, in the
case of any such document not in the possession of reasonably available to the
Company or a Stockholder, accurate and complete summaries thereof) that is
referred to in the schedules to this Agreement or that has been requested by
UniCapital or its representatives. Without limiting any exclusion, exception or
other limitation contained in any of the representations and warranties made
herein, this Agreement and the schedules hereto and all other documents and
information prepared or certified by the Stockholders to the Company and
provided to UniCapital and its representatives pursuant hereto do not and will
not include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements herein and therein not misleading. If any
Stockholders become aware of any fact or circumstance that would change a
representation or warranty of any
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Stockholder in this Agreement or any representation made on behalf of the
Company (including its Subsidiary), then the Stockholders shall immediately give
notice of such fact or circumstance to UniCapital. However, such notification
shall not relieve the Company or any of the Stockholders of their respective
obligations under this Agreement, and at the sole option of UniCapital, the
truth and accuracy of any and all warranties and representations of the
Stockholders, at the date of this Agreement and at the Closing, shall be a
precondition to the consummation of this transaction.
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and as
follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Immediately prior to the
effectiveness of the Merger, each of UniCapital and Newco is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the conduct of its business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Stockholders on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale, will be legally equivalent in all respects to the majority of UniCapital
Stock issued and outstanding as of the date hereof. The UniCapital Stock to be
issued upon the conversion of Company Stock pursuant to the terms of this
Agreement will be free and clear of all liens, encumbrances and claims of every
kind, other than restrictions upon transfer contained herein and other than any
liens, encumbrances or claims arising other than by the actions of UniCapital or
Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with the provisions hereof (the "UniCapital
Documents") have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by UniCapital and Newco and
constitutes, and the UniCapital Documents when executed and delivered will
constitute, the legal, valid and binding obligations of UniCapital and Newco
enforceable against UniCapital and Newco in accordance with their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term,
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condition or provision of, or require the consent of any other person under (a)
any existing law, ordinance, or governmental rule or regulation to which
UniCapital or Newco is subject, (b) any judgment, order, writ, injunction,
decree or award of any Governmental Entity that is applicable to UniCapital or
Newco, (c) the charter documents of UniCapital or Newco, or (d) any mortgage,
indenture, agreement, contract, commitment, lease, plan, Authorization, or other
instrument, document or understanding, oral or written, to which UniCapital or
Newco is a party, by which UniCapital or Newco may have rights or by which any
of the properties or assets of UniCapital or Newco may be bound or affected, or
give any party with rights thereunder the right to terminate, modify, accelerate
or otherwise change the existing rights or obligations of UniCapital or Newco
thereunder. Except for filing the Articles of Merger, filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and except as aforesaid, no
authorization, approval or consent of, and no registration or filing with, any
Governmental Entity is required in connection with the execution, delivery or
performance of this Agreement by UniCapital or Newco.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing of the IPO by the offering price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and Newco
have complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of such company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital of Newco any of their affiliates, or
any other person, firm or corporation, owns or has any proprietary, financial or
other interest (direct or indirect) in any Authorization which UniCapital or
Newco owns, possesses or uses in the operation of the business of UniCapital and
Newco as now or previously conducted.
7.7 TRANSACTIONS WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or Newco, or any member of his or her immediate family or any other
of its, his or her affiliates, owns or has a 5% or more ownership interest in
any corporation or other entity that is or was during the last three years a
party to, or in any property which is or was during the last three years the
subject of, any
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contract, agreement or understanding, business arrangement or relationship with
UniCapital or Newco.
7.8 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of UniCapital and Newco, threatened against UniCapital or Newco which
relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 7.8, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of UniCapital or Newco, threatened against
UniCapital or Newco or which relates to UniCapital or Newco.
(c) Neither UniCapital nor Newco is a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority."
7.9 MISCELLANEOUS. Prior to the consummation of the Merger, UniCapital
and Newco have no material properties or assets and are not party to any
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.9
hereto.
7.10 REGISTRATION RIGHTS. As of the date hereof and as of the Merger
Effective Date, no officer, director or shareholder of UniCapital will have been
granted any registration rights with respect to the registration of any shares
of capital stock of UniCapital.
8. COVENANTS OF STOCKHOLDERS AND COMPANIES
The following covenants shall apply during the period from and after
the date hereof through the Closing Date:
8.1 BUSINESS IN THE ORDINARY COURSE. Except as otherwise contemplated
in Section 8.15, the Company shall, and the Stockholders shall cause the Company
to, conduct its business and the business of its Subsidiary solely in the
ordinary course and consistent with past practice.
8.2 EXISTING CONDITIONS. The Company shall not, and the Stockholders
shall not suffer the Company or its Subsidiary to, cause or permit to occur any
of the events or occurrences described in Section 6.30 hereof.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. Except as otherwise
contemplated in Section 8.15, the Company shall, and the Stockholders shall
cause the Company and its
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Subsidiary to, maintain and service their properties and assets in order to
preserve their value and usefulness in the conduct of their respective business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Stockholders shall cause the Company and its Subsidiary to, use commercially
reasonable efforts to keep available the services of their current employees and
agents and to maintain their relations and goodwill with their suppliers,
customers, distributors and any others with whom or with which they have
business relations.
8.5 MAINTENANCE OF INSURANCE. The Company shall, and the Stockholders
shall cause the Company and its Subsidiary to, notify UniCapital of any material
changes in the terms of the insurance policies and binders referred to on
Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Company shall, and the Stockholders
shall cause the Company and its Subsidiary to, comply with all laws, ordinances,
rules, regulations and orders applicable to such company or its business,
operations, properties or assets, noncompliance with which might materially
affect such company.
8.7 CONDUCT OF BUSINESS. The Company shall, and the Stockholders shall
cause the Company and its Subsidiary to, use its reasonable commercial efforts
to conduct their business in such a manner that on the Closing Date and on the
Merger Effective Date the representations and warranties of the Stockholders
contained in this Agreement shall be true, as though such representations and
warranties were made on and as of each such date (except to the extent such
representations or warranties expressly speak as of a specific date), and the
Company shall, and the Stockholders shall cause the Company and its Subsidiary
to, use reasonable commercial efforts to cause all of the conditions to the
obligations of UniCapital and the Stockholders under this Agreement to be
satisfied on or prior to the Closing Date. The Company shall and the
Stockholders shall cause the Company and its Subsidiary to, maintain credit
underwriting standards consistent with past practice. The Company shall, and the
Stockholders shall cause the Company and its Subsidiary to, maintain residual
value accounting methodology consistent with past practice.
8.8 ACCESS. Upon reasonable prior notice, the Company shall, and the
Stockholders shall cause the Company and its Subsidiary to, give to UniCapital's
officers, employees, counsel, accountants and other representatives free and
full access to and the right to inspect, during normal business hours, all of
the premises, properties, assets, records, contracts and other documents
relating to such company and shall permit them to consult with the officers,
employees, accountants, counsel and agents of such company for the purpose of
making such investigation of such company as UniCapital shall desire to make,
provided that such investigation shall not unreasonably interfere with such
company's business operations, and provided further that UniCapital shall not
contact or consult with any non-officer employees of the Company or its
Subsidiary without the Company's or its Subsidiary's prior consent, which shall
not be unreasonably withheld. Furthermore, the Company shall, and the
Stockholders shall
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cause the Company and its Subsidiary to, furnish to UniCapital all such
documents and copies of documents and records and information with respect to
the affairs of such company and copies of any working papers relating thereto as
UniCapital shall from time to time reasonably request. No information or
knowledge obtained in any investigation pursuant to this Section 8.8 or
otherwise shall affect or be deemed to modify any representation or warranty
contained in this Agreement or the conditions to the obligations of the parties
to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Company, nor
its Subsidiary and no Stockholder shall give notice to third parties or
otherwise make any press release or other public statement concerning this
Agreement or the transactions contemplated hereby. Neither the Company nor its
Subsidiary and no Stockholders shall grant any interview, publish any article,
report or statement, or respond to any press inquiry or other inquiry of any
third party relating to this Agreement, the business of the Company and its
Subsidiary, the business (current and proposed) of UniCapital, the Registration
Statement (as defined below), the IPO or any other matter connected with any of
the foregoing without the express prior written approval of UniCapital, and all
inquiries and questions with respect to any of the foregoing shall be
coordinated through Xxxxxx New, Chief Executive Officer of UniCapital. The
Company, its Subsidiary and each Stockholder shall coordinate all communications
with the employees and agents of any such company through UniCapital prior to
making any such communication. Notwithstanding the foregoing, (i) the Company,
any Subsidiary or any Stockholder may communicate, whether orally or in writing,
with any parties from whom any consents, approvals or waivers are necessary or
advisable, or to whom notice is necessary or advisable, and (ii) this Section
8.9 shall not be interpreted to prevent the Company, its Subsidiary or any
Stockholder from disclosing information as compelled by a court order, provided
however, that prior to disclosing any information concerning this Agreement or
the transaction contemplated hereby in response to any such court order, the
Company or Stockholder as applicable, shall provide UniCapital with prompt
notice of the court order so that UniCapital may take whatever action it deems
appropriate to prohibit such disclosure.
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, neither the Company, nor its Subsidiary nor
the Stockholders and none of their affiliates shall, and each of them shall
cause its respective employees, agents and representatives (including, without
limitation, any investment banking, legal or accounting firm retained by it or
them and any individual member or employee of the foregoing) (each, an "Agent")
not to, (a) initiate, solicit or seek, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its shareholders or any of them) with
respect to a merger, acquisition, consolidation, recapitalization, liquidation,
dissolution or similar transaction involving, or any purchase of all or any
portion of the assets or any equity securities of, the Company or its Subsidiary
(any such proposal or offer being hereinafter referred to as an "Acquisition
Proposal"), or (b) engage in any negotiations concerning, or provide any
confidential information or data to, or have any substantive discussions with,
any person relating to an Acquisition Proposal, (c) otherwise cooperate in any
effort or attempt to make, implement or accept an Acquisition Proposal, or (d)
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enter into or consummate any agreement or understanding with any person or
entity relating to an Acquisition Proposal, except for the Merger contemplated
hereby. If the Company, its Subsidiary or Stockholder, or any of their
respective Agents, have provided any person or entity (other than UniCapital)
with any confidential information or data relating to an Acquisition Proposal,
then they shall request the immediate return thereof. The Company, its
Subsidiary and the Stockholders shall notify UniCapital immediately if any
inquiries, proposals or offers related to an Acquisition Proposal are received
by, any confidential information or data is requested from, or any negotiations
or discussions related to an Acquisition Proposal are sought to be initiated or
continued with, it or any individual or entity referred to in the first sentence
of this Section 8.10. The covenant contained in this Section 8.10 shall not
survive any termination of this Agreement pursuant to Sections 13.1, 13.2 or
13.3.
8.11 THIRD PARTY APPROVALS. Prior to the Closing Date, the Company and
its Subsidiary shall satisfy any requirement for notice and approval of the
transactions contemplated by this Agreement under applicable agreements with
third parties, and shall provide UniCapital with satisfactory evidence of such
third party approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Company and its Subsidiary shall satisfy any requirement for notice of the
transactions contemplated by this Agreement under any applicable collective
bargaining agreement, and shall provide UniCapital with proof that any required
notice has been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Company and the
Stockholders shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to any Stockholder or the Company the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in Article 6 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of any Stockholder or the Company to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by such person hereunder.
(b) UniCapital shall give prompt notice to each Stockholder of
(i) the occurrence or non-occurrence of any event known to UniCapital the
occurrence of non-occurrence of which would be likely to cause any
representation or warranty contained in Article 7 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of UniCapital to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
(c) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 8.14, (ii) modify the conditions set forth in Sections 9 and 10 or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
8.14 DELIVERY AND AMENDMENT OF SCHEDULES.
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(a) The Stockholders covenant and agree that they shall
deliver final and binding copies of all schedules to this Agreement not later
than four business days after execution of this Agreement. From the date of
delivery of such schedules until and including the Closing Date, UniCapital
shall have the right to review such schedules and to accept or reject any of
them, in whole or in part, in its reasonable discretion. In the event that
UniCapital rejects a schedule or any part thereof, the Stockholders shall have
the right to revise and resubmit such schedule. Notwithstanding anything to the
contrary herein contained, only schedules accepted by UniCapital in its
reasonable discretion on or prior to the Closing Date shall be deemed to be a
part of this Agreement in accordance with Section 19.3 hereof.
(b) Each party hereto agrees that, with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the continuing obligation until the Merger Effective Date to
supplement or amend promptly the schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
schedules, provided, that no amendment or supplement to a schedule that
constitutes or reflects a material adverse change in the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the
Company or the Subsidiary (a "Material Adverse Amendment") may be made unless
UniCapital consents to such Material Adverse Amendment; provided, further,
however, that if the amendment or supplement relates to changes in facts or
circumstances occurring subsequent to the date of this Agreement, then such
amendment shall be accepted by UniCapital subject to the provisions of Sections
12.2 and 12.5 hereof. No amendment of or supplement to a schedule shall be made
later than 48 hours prior to the anticipated effectiveness of the Registration
Statement defined in Section 9.4. Only (i) the schedules attached to this
Agreement at the time of its execution and (ii) amended schedules as accepted
under the standards and provisions of this Section 8.14, shall be deemed to be a
part of this Agreement in accordance with Section 19.3 hereof.
8.15 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, the Company shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide
UniCapital with all information reasonably requested and required by it to
satisfy any filing requirements it may have under such act.
8.16 THE REAL ESTATE VENTURE. Neither the Company nor the Subsidiary
shall extend the Letter of Intent (which expired on or about January 26, 1998)
or enter into a new letter of intent, or enter into any definitive binding
agreement, concerning the Real Estate Venture without the prior written consent
of UniCapital, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, UniCapital acknowledges that it is aware of the business terms in
the letter of intent (which expired on or about January 26, 1998) and it
authorizes the Company to continue its efforts in developing a definitive
agreement that encompasses, and preparing to launch the Real Estate Venture
along, such business terms.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND STOCKHOLDERS
The obligations of the Company and the Stockholders hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as
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of the Closing Date and as of the Merger Effective Date as though such
representations and warranties had been made as of such times; all of the terms,
covenants and conditions of this Agreement to be complied with and performed by
UniCapital and Newco on or before the Closing Date shall have been duly complied
with and performed; and a certificate to the foregoing effect dated the Merger
Effective Date and signed by a duly authorized agent, the President or any Vice
President of UniCapital shall have been delivered to the Stockholders.
9.2 EMPLOYMENT AGREEMENTS. The Surviving Corporation shall have
executed and delivered Employment Agreements, in the form of Annex IV attached
hereto, to each of the persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Stockholders shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein;
(c) the shares of UniCapital Stock to be received by the
Stockholders on the Merger Effective Date shall be duly and validly authorized
and issued, fully paid and nonassessable; and
(d) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation of
Bylaws of UniCapital or Newco.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration Statement shall have been declared
effective by the SEC not later than June 30, 1998, UniCapital and the
underwriters named therein shall have executed the Underwriting Agreement and
the underwriters named therein shall have agreed to acquire, subject to the
conditions set forth in the Underwriting Agreement, the shares of UniCapital
Stock covered by the Registration Statement. There shall have been no stop-order
issued (that remains in effect) by the SEC with respect to the Registration
Statement.
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9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholders shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholders contained in this Agreement shall be true on
and as of the Closing Date and as of the Merger Effective Date with the same
effect as though such representations and warranties had been made on and as of
such dates, except for matters expressly disclosed in the certificate or a
schedule thereto (which shall not serve to modify any representation or warranty
made herein or in any other document or otherwise in information supplied by the
Company or any Stockholder); and each and all of the agreements of the
Stockholders and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited consolidated
balance sheet of the Company and its Subsidiary as of the end of the calendar
month most recently completed prior to the Closing Date, and the unaudited
consolidated statements of income, cash flows and stockholders' equity of the
Company for the periods then ended, which statements shall have disclosed no
material adverse change in the financial condition of the Company or its
Subsidiary or the results of their respective operations from the financial
statements originally furnished by the Company as set forth in Schedule 6.12.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company or its Subsidiary shall have occurred, and neither the
Company nor its Subsidiary shall have suffered any material loss or damage to
any of its properties or assets, whether or not covered by insurance, since the
Audited Balance Sheet Date, which change, loss or damage materially affects or
impairs the ability of such company to conduct its business as now conducted or
as
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proposed to be conducted; and UniCapital shall have received on the Closing Date
a certificate signed by the Stockholders and dated the Merger Effective Date to
such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company and its Subsidiary including, but not limited to,
environmental and land use practices, import and export laws, compliance with
contracts and federal, state and local laws and regulations governing the
respective operations of such companies, which review reflects compliance with
all applicable laws governing each company, disclosing no material actual or
probable violations, compliance problems, required capital expenditures or other
substantive environmental, real estate and land use related concerns and which
review is otherwise satisfactory in all respects to UniCapital, in its sole
discretion.
10.6 STOCKHOLDERS' RELEASE. At the Closing Date, the Stockholders shall
have delivered to UniCapital an instrument dated the Merger Effective Date
releasing the Company and its Subsidiary from any and all claims of Stockholders
against the Company or its Subsidiary, except for claims for benefits accrued by
the Stockholders pursuant to any Benefit Plan.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex
IV attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
Xxxxxxxx Xxxxx & Xxxxxxx, P.C., counsel to the Company and the Stockholders,
dated the Merger Effective Date, in form and substance satisfactory to
UniCapital, to the effect that, with respect to the Company and its Subsidiary
(including, without limitation, the Company):
(a) the Company and its Subsidiary has been duly organized and
is validly existing and in good standing under the laws of the state of its
incorporation or formation;
(b) to the knowledge of such counsel, the Company and its
Subsidiary is duly authorized, qualified and licensed under all applicable laws,
regulations, ordinances or orders of public authorities to carry on its business
in the places and in the manner now conducted;
(c) the authorized and outstanding capital stock of the
Company and any corporate Subsidiary is as represented by the Stockholders in
this Agreement and each share of such stock has been duly and validly authorized
and issued, is fully paid and nonassessable and was not issued in violation of
the preemptive rights of any stockholder;
(d) to the knowledge of such counsel, all of the partnership
interests of each partnership Subsidiary have been duly and validly authorized
and issued, all mandatory capital contributions will have been paid in full, and
the interests were not issued in violations of the preemptive rights of any
partner;
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(e) neither the Company nor any Subsidiary has any outstanding
options, warrants, calls, conversion rights or other commitments of any kind to
issue or sell any of its capital stock, if a corporation, or partnership
interests, if a partnership;
(f) to the knowledge of such counsel, this Agreement has been
duly authorized, executed and delivered by the Company and the Stockholders and
constitutes a valid and binding agreement of the Company and the Stockholders
enforceable in accordance with its terms, except as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization, arrangement and
other similar laws relating to or affecting the rights of creditors and except
(i) as the same may be subject to the effect of general principles of equity and
(ii) that no opinion need be expressed as to the enforceability of
indemnification provisions included herein;
(g) upon consummation of the Merger contemplated by this
Agreement, UniCapital will receive good title to the Company Stock, free and
clear of all liens, security interests, pledges, charges, voting trusts,
equities, restrictions, encumbrances and claims of every kind;
(h) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.23, neither the Company nor its Subsidiary is in violation
of or default under any law or regulation, or under any order of any court,
commission, board, bureau, agency or instrumentality wherever located and there
are no claims, actions, suits or proceedings pending, or threatened against or
affecting any such company, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality wherever located;
(i) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.17, neither the Company nor its Subsidiary is in default
under any of its material contracts or agreements or has received notice of such
default;
(j) no notice to, consent, authorization, approval or order of
any court or governmental agency or body or of any other third party is required
(which has not been obtained) in connection with the execution, delivery or
consummation of this Agreement by the Company or any Stockholders or for the
transfer to UniCapital of the Company Stock; and
(k) the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or constitute a
default under any of the terms or provisions of the Company's or any corporate
Subsidiary's charter documents or the bylaws or any Contract or Lease listed on
Schedules 6.17 and 6.35.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
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10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. Stockholders shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of incorporation and the Subsidiary's state of incorporation or
formation, unless waived by UniCapital, in each state in which the Company is
authorized to do business, showing that the Company and its Subsidiary is in
good standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for such company for all periods prior to the dates
of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the SEC with respect to the Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS; PRE-CLOSING DISTRIBUTIONS. Prior to
the Closing Date, the Stockholders shall have repaid to the Company (including
its Subsidiary) in full all amounts owing by the Stockholders to such entities.
10.13 NET INCOME. The Company (including its Subsidiary) shall have
consolidated after tax net income for the twelve months ended December 31, 1997
as included in UniCapital's unaudited pro forma combined (prior to pro forma and
offering adjustments) income statement for the twelve months ended December 31,
1997 included in the Registration Statement.
10.14 HSR ACT. The waiting period applicable to the consummation of the
unified Transaction under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 shall have expired or been terminated.
10.15 RELEASE OF SECURITY INTERESTS. The Stockholders shall have duly
released their security interests in the assets of the Company and the
Subsidiary, and each Stockholder shall have delivered to UniCapital a properly
completed and fully executed UCC-3 filing statement for the release of each such
security interest for filing immediately following the Closing.
11. COVENANTS OF UNICAPITAL
11.1 LEASES. At the Merger Effective Date, the Surviving Corporation
shall enter into lease arrangements with each of the persons or entities listed
in Schedule 11.1 with respect to the corresponding properties or assets listed
on Schedule 11.1 in accordance with the terms and
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conditions of the form of lease agreement attached hereto as Annex V.
11.2 UNICAPITAL STOCK OPTIONS. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall make available options to purchase that number of
shares of UniCapital Stock having a fair market value on the effective date of
the Registration Statement, based upon the IPO price per share set forth in the
Underwriting Agreement ("IPO Price"), equal to 6.25% of the Effective Date
Consideration (valuing the UniCapital Stock to be issued as part of the
Effective Date Consideration at the IPO Price to be granted to those
non-Stockholder employees of the Surviving Corporation after the Closing as are
designated by the principal executive officer of the Surviving Corporation who
is entering into an Employment Agreement pursuant to Section 9.2 hereof (or such
other officer designated by the Surviving Corporation and acceptable to
UniCapital). Not later than seven days prior to the effective date of the
Registration Statement, the officer designating the recipients of such options
shall provide to UniCapital a written list of the names of those designated
recipients who will receive options exercisable at the IPO Price and the
relative percentages of the 6.25% option pool provided under this Section 11.2
to be awarded to each recipient, as well as the percentage of options, if any,
to be reserved for future issuance. Any options reserved for future issuance
shall be granted at an exercise price equal to the fair market value of
UniCapital Stock as of the date of grant. All options shall be granted in
accordance with UniCapital's policies, and authorized and issued under the terms
of UniCapital's principal stock option plan for the benefit of employees of
UniCapital and its subsidiaries.
11.3 INFORMATION FILING. To the extent the Unified Transaction is a
transaction that falls within Section 351 of the Code, UniCapital shall file all
information required to be filed by it pursuant to Treasury Regulation
Section 1.351-3(b).
11.4 RELEASE FROM GUARANTEES; INDEBTEDNESS. Not later than 120 days
following the Merger Effective Date, UniCapital shall cause the Stockholders to
be released from any and all personal guarantees of the indebtedness or other
obligations of the Company at the Closing Date set forth on Schedule 11.4 that
they personally guaranteed for the benefit of the Company with all such
guarantees of indebtedness being assumed by UniCapital; provided, that, in the
event that the beneficiary of any such guarantee is unwilling to permit the
substitution of UniCapital's guarantee for the Stockholder's guarantee or the
assumption by UniCapital of the indebtedness, or in the event that the lender
with respect to the indebtedness to which such guarantee relates accelerates
such indebtedness whether or not prior to such 120 day period because of the
consummation of the transactions contemplated hereby, UniCapital shall repay up
to that amount of recourse indebtedness set forth on Schedule 11.4. The failure
of the Company to obtain the consent of its lenders to the change of control of
the Company or the substitution of a UniCapital guaranty or the assumption by
UniCapital of the indebtedness set forth on Schedule 11.4 shall not be deemed a
breach hereunder.
11.5 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, UniCapital shall use
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its reasonable best efforts to (a) file all information required to be filed by
it pursuant to such act and (b) provide the Company with all information
reasonably requested and required by it to satisfy any filing requirements it
may have under such act.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, each Stockholder jointly and
severally covenants and agrees that such Stockholder will indemnify, defend,
protect and hold harmless UniCapital, Newco and the Surviving Corporation and
their respective officers, stockholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement until the Expiration Date
(as defined in Section 12.6) from and against all claims, damages, losses,
liabilities, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively, "Losses") incurred
by UniCapital, Newco or the Surviving Corporation as a result of or arising from
(a) any breach of the representations and warranties made by the Stockholders
set forth herein or on the schedules or certificates delivered in connection
herewith, (b) any nonfulfillment of any covenant or agreement on the part of the
Stockholders or the Company under this Agreement, (c) the business, operations
or assets of the Company and its Subsidiary prior to the Merger Effective Date
or the actions or omissions of the Company's or its Subsidiary's directors,
officers, stockholders, employees, agents or partners prior to the Merger
Effective Date, other than Losses arising from matters expressly disclosed in
the Financial Statements, this Agreement or the Schedules to this Agreement, or
(d) any liability under the Securities Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or other federal or state law or regulation, at
common law or otherwise, arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact relating to the Company
(including its Subsidiary) or the Stockholders contained in any preliminary
prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto (including any additional
registration statement filed pursuant to Rule 462(b) under the Securities Act),
which statement was provided or was based upon information or documents provided
to UniCapital or its counsel by the Company (including its Subsidiary) or the
Stockholders, or (ii) any omission or alleged omission to state therein a
material fact relating to the Company (including its Subsidiary) or the
Stockholders required to be stated therein or necessary to make the statements
therein not misleading, which information was not provided to UniCapital or its
counsel by the Company (including its Subsidiary) or the Stockholders; provided,
however, that such indemnity shall not inure to the benefit of UniCapital, Newco
or the Surviving Corporation to the extent that such untrue statement (or
alleged untrue statement) was made in, or such omission (or alleged omission)
occurred in, any preliminary prospectus and the Stockholders provided, in
writing, corrected information to UniCapital for inclusion in the final
prospectus, and such information was not so included.
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12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, notwithstanding any disclosure
made in this Agreement or in the schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, each Stockholder
jointly and severally covenants and agrees that such Stockholder will indemnify,
defend, protect and hold harmless UniCapital, Newco and the Surviving
Corporation and their respective officers, stockholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, employees, successors
and assigns at all times from and after the date of this Agreement, from and
against all Losses incurred by UniCapital, Newco or the Surviving Corporation as
a result of or incident to: (a) the existence of liabilities of the Company
(including its Subsidiary) in excess of the liabilities set forth on Schedule
6.13, to the extent of such excess; (b) the failure of the Company, its
Subsidiary or the Stockholders to file all required Form 5500's prior to the
Merger Effective Date; (c) the litigation matters listed on Schedule 6.25; (d)
the tax matters listed on Schedule 6.27; (e) the delinquent accounts identified
on Schedule 6.35(e); (f) any Material Adverse Amendments pursuant to Section
8.14 hereof; (g) the Company's role as a general partner in the Limited
Partnership that arose on or before the Closing Date or that relates to events
that occurred on or before the Closing Date; and (h) those Scheduled Payments
delinquent for 90 days or longer as of the Closing Date net of applicable
reserves reflected on the balance sheet of the Company immediately prior to the
preparation of the Closing Date Balance Sheet.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, covenant and agree that they will indemnify, defend, protect and hold
harmless the Stockholders and their respective heirs, personal representatives
and successors at all times from and after the date of this Agreement from and
against all Losses incurred by the Stockholders as a result of or arising from
(a) any breach of the representations and warranties made by UniCapital and
Newco set forth herein or on the schedules or certificates attached hereto, (b)
any nonfulfillment of any agreement on the part of UniCapital under this
Agreement, or (c) any liability under the Securities Act, the Exchange Act or
other federal or state law or regulation, at common law or otherwise, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact relating to UniCapital (including all of the companies, other than
the Company, acquired by UniCapital as part of the Unified Transaction, but only
to the extent that UniCapital is actually indemnified by such other companies
for such liability) contained in any preliminary prospectus, the Registration
Statement or any prospectus forming a part thereof, or any amendment thereof or
supplement thereto (including any registration statement filed pursuant to Rule
462(b) under the Securities Act), or arising out of or based upon any omission
or alleged omission to state therein a material fact relating to UniCapital
(including all of the companies, other than the Company, acquired by UniCapital
as part of the Unified Transaction, but only to the extent that UniCapital is
actually indemnified by such other companies for such liability) required to be
stated therein or necessary to make the statements therein not misleading, which
liability is not the subject of indemnification of UniCapital, Newco and the
Surviving Corporation pursuant to Section 12.1(c) above.
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12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent the Indemnifying Party has actually paid
any amount to the Indemnified Party in respect of any Loss in connection with
such Third Party Claim, the Indemnifying Party shall have a right of subrogation
with respect to such Third Party Claim to the extent of such payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party and provided further that
selection for these purposes of Xxxxxxxx Xxxxx & Xxxxxxx, P.C., absent any
actual or reasonably likely conflict of interest with respect to parties or
defenses, shall not be objected to by UniCapital), any Third Party Claim as the
Indemnifying Party pursues the same in good faith and diligently and so long as
the Third Party Claim does not relate to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital, Newco or
the Surviving Corporation. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnified Party's possession or
control. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense (unless there is a conflict of interest that prevents counsel for
the Indemnifying Party from representing the Indemnified Party, in which case
the Indemnifying Party will reimburse the Indemnified Party for the expenses of
its counsel). After the Indemnifying Party has notified the Indemnified Party of
its intention to undertake to defend or settle any such asserted liability, and
for so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except to the extent such participation is requested
by the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed
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by the Indemnifying Party for reasonable additional legal expenses and
out-of-pocket expenses, and except in the case of a Third Party Claim relating
to an actual or potential Loss to which Section 12.4(e) applies in which the
Indemnified Party is UniCapital, Newco or the Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim or matter, except with the written consent of the Indemnified Party.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, Newco or the
Surviving Corporation as the Indemnified Party (notice of which opinion shall be
given in writing to the Indemnifying Party), any Third Party Claim seeks
material prospective relief which could have a material adverse effect on any
such Indemnified Party or any subsidiary, then such Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such
Third Party Claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense (including, but not limited to, fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation and all counseling or engineering fees and expenses
related thereto) shall be included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified Party elects to exercise
such right, then the Indemnifying Party shall have the right to participate in,
but not control, the defense of such Third Party Claim at the sole cost and
expense of the Indemnifying Party.
12.5 LIMITATIONS ON INDEMNIFICATION.
(a) To the extent of any amount that UniCapital actually
receives as a result of a Net Worth Deficiency that is directly attributable to
an Indemnifiable Decrease, UniCapital shall not be entitled to any indemnity
under Article 12. An "Indemnifiable Decrease" shall be equal to the amount of
any Net Worth Deficiency that consists of a liability for which UniCapital would
otherwise be entitled to indemnity under Article 12 but that has been (a)
accrued or (b) actually paid (so long as it was not previously accrued on or
before December 31, 1997) during the Interim Net Worth Period. The "Interim Net
Worth Period" shall mean the period beginning on January 1, 1998 and ending on
the Closing Date. No amounts under (a) or (b) that have not been reflected on
the Company's (or its Subsidiary's) financial statements under generally
accepted accounting principles applied consistently with previous practice shall
be deemed to be an Indemnifiable Decrease.
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(b) No Indemnified Party shall assert any claim (other than a
Third Party Claim) for indemnification hereunder until such time as the
aggregate of all claims which such Indemnified Party may have against an
Indemnifying Party plus any Indemnifiable Decrease shall exceed $141,000, (the
"Basket Limitation") at which time an Indemnified Party shall be entitled to
seek indemnification for all claims pursuant to this Article 12, but only to the
extent such claims, in the aggregate, exceed the Basket Limitation. For purposes
of the preceding sentence, UniCapital, Newco and the Surviving Corporation shall
be considered to be a Single Indemnifying and Indemnified Party and the
Stockholders shall be considered as a single Indemnifying and Indemnified Party.
Notwithstanding the foregoing, on each date on which any Earn-Out Consideration
is paid, the Basket Limitation shall be increased by that amount (the "Basket
Adjustment") equal to one percent (1%) of any such Earn-Out Consideration,
without prejudice to UniCapital's receipt of or right to received
indemnification for claims exceeding the amount of the Basket Limitation in
effect at the time of such claims were brought. If the Basket Limitation is
adjusted pursuant to the preceding sentence after such time as any Indemnified
Party, pursuant to this Article 12, has collected an amount in excess (such
excess amount is referred to as the "Excess Indemnity") of the Basket Limitation
(prior to giving effect to the applicable Basket Adjustment), then such
Indemnified Party, within 10 business days after the final determination of such
Earn-Out Consideration, shall pay to the Indemnifying Party an amount equal to
the lesser of applicable Basket Adjustment or the Excess Indemnity. In addition,
notwithstanding any provision of this Agreement to the contrary, for the
purposes of preventing a double recovery the Stockholders shall not be obligated
to indemnify UniCapital or any other indemnified party pursuant to Section 12.1
or 12.2 with respect to any particular act, omission, condition or event if and
to the extent that the loss resulting or arising from such act, omission,
condition or event has, directly or indirectly, been taken into account in the
computation of any Net Worth Deficiency provided for in Section 3.1.
Notwithstanding any other term of this Agreement, in no event shall any
Stockholder be liable under this Article 12 for an amount which exceeds the
aggregate value (determined at the Merger Effective Date) of the Merger
Consideration received by such Stockholder under this Agreement. Notwithstanding
anything to the contrary contained in this Agreement, the limitations upon
indemnification contained in this Section 12.5 shall not apply to Losses arising
out of any of the following: (i) any breach of the representations and
warranties of the Stockholders contained in Sections 6.3, 6.5, 6.14, 6.27 and
6.33 hereof, (ii) litigation net of applicable reserves reflected on the
consolidated balance sheet of the Company at the Audited Balance Sheet Date;
(iii) any Material Adverse Amendment pursuant to Section 8.14 hereof; or (iv)
the Company's role as a general partner in the Limited Partnership that arose on
or before the Closing Date or that relates to events that occurred on or before
the Closing Date. Notwithstanding any other provision of this Article 12, the
total liability for Losses incurred by UniCapital, Newco or the Surviving
Corporation for which Xxxx Xxxxxxxx shall indemnify, defend, protect and hold
harmless UniCapital, Newco or the Surviving Corporation shall not exceed the
Merger Consideration paid or to be paid to Xx. Xxxxxxxx.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or
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other instrument delivered pursuant to this Agreement, shall survive for a
period of one year from the Merger Effective Date (which date is hereinafter
called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended on or prior to the Merger Effective Date, which shall be
deemed to be the Expiration Date for purposes of this clause (a) and claims
arising from a breach of the representations and warranties contained in such
Section 6.27;
(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely within the twenty-first century shall have been
processed and UniCapital's consolidated financial statements for the fiscal year
in which the last such transaction to be processed occurred have been audited,
which shall be deemed to be the Expiration Date for purposes of this clause (b)
and claims arising from a breach of the representations and warranties contained
in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Merger Effective
Date, which shall be deemed the Expiration Date for purposes of this clause (c)
and claims arising from a breach of the representations and warranties contained
in such Section 6.33;
(d) solely for purposes of Section 12.1(d) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for purposes of this clause (d) and claims arising under such
laws;
(e) the representations and warranties of the Stockholders
contained in Section 6.5 hereof shall survive the Merger Effective Date without
time limitation; and
(f) any representations and warranties which serve as a basis
of the indemnity obligations of the Stockholders under Section 12.2 shall
survive the Merger Effective Date without time limitation; provided, however,
that the representations and warranties contained in Section 6.35(e) regarding
delinquent accounts identified on Schedule 6.35(e) shall survive until the final
resolution of such delinquent accounts.
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13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Stockholders in the observance or due
and timely performance of any of the covenants, agreements or conditions
contained herein, and the curing of such default shall not have been made on or
before the Closing Date and shall not reasonably be expected to occur or (b) if
UniCapital in its sole judgment determines that any condition exists which has
made or could reasonably be expected to make any of the representations or
warranties contained in Article 6 hereof untrue in any material respect or (c)
if UniCapital in its sole judgment determines that information disclosed on the
schedules to the Agreement delivered pursuant to Section 8.14 has or could
reasonably be expected to have a material adverse effect on the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company or its Subsidiary.
13.2 TERMINATION BY THE STOCKHOLDERS. Prior to the initial filing of
the Registration Statement with the SEC, the Stockholders may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (i) in accordance with Section 17.4(b) or (ii) if a material default
shall be made by UniCapital in the observance or due and timely performance of
any of the covenants, agreements or conditions contained herein, and the curing
of such default shall not have been made on or before such initial filing. From
and after the initial filing of the Registration Statement with the SEC, the
Stockholders shall have no right to terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, between the Closing Date and the Merger Effective
Date, the Underwriting Agreement is terminated pursuant to the terms thereof; or
(c) if the Merger Effective Date has not occurred within 10
business days after the Closing Date.
(d) upon the date that the number of shares of UniCapital
Stock to be issued (other than as Earn-Out Consideration) to the persons who
will transfer property to UniCapital in the Unified Transaction can be
determined as a fixed number of shares, unless those same persons shall own
immediately after the Unified Transaction eighty percent (80%) or more of the
UniCapital Stock that will be issued and outstanding immediately after the
Unified Transaction.
13.4 LIQUIDATED DAMAGES. If the Merger fails to occur because of the
default of the Company or the Stockholders, then, in addition to the other
remedies available to UniCapital at
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law for fraud, in equity or pursuant to this Agreement, the Stockholders shall
pay to UniCapital the sum of $500,000 as liquidated damages. It is hereby agreed
that UniCapital's damages in the event of a termination or default by the
Company hereunder are uncertain and impossible to ascertain and that the
foregoing constitutes a reasonable liquidation of such damages and is intended
not as penalty but as liquidated damages.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of the Company,
its Subsidiary and their respective businesses, each Stockholder covenants that,
for the period ending two years after the Closing Date, such Stockholder will
not, directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as a partner, principal, agent, representative, consultant or
otherwise with, or use or permit such Stockholder's name to be used in
connection with, any business or enterprise which is engaged directly or
indirectly in competition anywhere in the United States with the business
conducted by UniCapital, the Surviving Corporation or any of its or their
respective subsidiaries or affiliates or with any business engaged in
originating, servicing or securitizing leases or other specialty financing
products or services (the "Restricted Business"). Each Stockholder recognizes
that the Restricted Business is expected to be conducted throughout the United
States and that more narrow geographical limitations of any nature on this
non-competition covenant (and the non-solicitation covenant set forth in
subsection (b)) are therefore not appropriate. The foregoing restriction shall
not be construed to prohibit the ownership by a Stockholder as a passive
investment of not more than five percent of any class of securities of any
corporation which is engaged in any of the foregoing businesses having a class
of securities registered pursuant to Section 12 of the Exchange Act.
(b) Each Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers of the Restricted Business, or (ii) solicit the employment of any
person who is employed by UniCapital, the Surviving Corporation or any of its or
their respective subsidiaries or affiliates in the Restricted Business during
such period.
(c) Each Stockholder recognizes and acknowledges that by
reason of such Stockholder's relationship to the Company, such Stockholder has
had access to confidential information relating to the Restricted Business. Each
Stockholder acknowledges that such confidential information is a valuable and
unique asset and covenants that such Stockholder will not disclose any such
confidential information after the Closing Date to any person for any reason
whatsoever.
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14.2 DAMAGES. Each Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholders agree that,
in the event of a breach by them of any of the foregoing covenants, such
covenants may be enforced by UniCapital or the Surviving Corporation by, without
limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The Parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholders
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Company), and
that any violation will result in irreparable injury to UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Stockholder
against the Company, the Company's Subsidiary, the Surviving Corporation or
UniCapital, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of such covenants. The parties
specifically agree that the period of two years stated above shall be computed
by excluding from such computation any time during which any Stockholder is in
violation of any provision of this Article 14 and any time during which there is
pending in any court of competent jurisdiction any action (including any appeal
from any judgment) brought by any person, whether or not a party to this
Agreement, in which action UniCapital or the Surviving Corporation seek to
enforce the agreements and covenants of the Stockholders or in which any person
contests the validity of such agreements and covenants or their enforceability
or seeks to avoid their performance or enforcement.
14.6 MATERIALITY. The Stockholders hereby acknowledge and agree that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital and Newco of the businesses of the Company and
its Subsidiary.
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15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
have in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company and its Subsidiary, such as
lists of customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of the Company's and its Subsidiary's
respective businesses. The Stockholders agree that they will not disclose any
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except to authorized
representatives of UniCapital or as may be required by law or order of a court
of competent jurisdiction unless the Stockholders can show that such information
has become known to the public generally through no fault of the Stockholders.
Prior to disclosing any confidential information required by law or order of a
court of competent jurisdiction, the Stockholders shall provide UniCapital with
prompt notice of the disclosure requirement so that UniCapital may take whatever
action it deems appropriate to prohibit such disclosure. In the event of a
breach or threatened breach by the Stockholders of the provisions of this
Section 15.1, UniCapital and the Surviving Corporation shall be entitled to an
injunction restraining Stockholders from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting
UniCapital and the Surviving Corporation from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to
certain confidential information solely of the Company and its Subsidiary in
connection with their respective businesses. UniCapital agrees that, prior to
the Closing Date, it will not disclose any such confidential information to any
person, firm, corporation, association, or other entity for any purpose or
reason whatsoever without prior written consent of the Stockholders except as
may be required by law or order of a court of competent jurisdiction unless the
UniCapital can show that such information has become known to the public
generally through no fault of UniCapital. Prior to disclosing any confidential
information required by law or order of a court of competent jurisdiction,
UniCapital shall provide the Stockholders with prompt notice of the disclosure
requirement so that the Stockholders may take whatever action they deem
appropriate to prohibit such disclosure. In the event of a breach or threatened
breach by UniCapital of the provisions of this Section 15.2, the Stockholders
shall be entitled to an injunction restraining UniCapital from disclosing, in
whole or in part, such confidential information. Nothing contained herein shall
be construed as prohibiting the Stockholders from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholders
agree that, in the event of a breach by any of them of the
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foregoing covenant, the covenant may be enforced against them by injunctions and
restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Stockholder hereby
agrees that, without the prior written consent of Xxxxxx Xxxxxxx & Co.
Incorporated on behalf of such underwriters, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the final prospectus contained in the Registration Statement relating to the IPO
(the "Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of UniCapital Stock or such other securities, in cash or
otherwise. In addition, each Stockholder agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the underwriters that
may participate in the IPO, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of UniCapital Stock or any security convertible into or exercisable
or exchangeable for Common Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. Each Stockholder agrees that
the foregoing shall be binding upon their transferees, successors, assigns,
heirs, and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Stockholder acknowledges and agrees that such
underwriters and Xxxxxx Xxxxxxx & Co. Incorporated are intended third party
beneficiaries of the provisions of this Article 16, and that Xxxxxx Xxxxxxx &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Article 16. The Stockholders also acknowledge and agree that none of the
companies to be acquired as part of the Unified Transaction shall have any
rights as intended third-party beneficiaries under this Agreement.
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
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17.1 INVESTMENT INTENT. The Stockholders acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Stockholders represent and warrant that the shares of UniCapital Stock to be
acquired by the Stockholders pursuant to this Agreement are being acquired
solely for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholders covenant, warrant and
represent that none of the shares of UniCapital Stock issued to such
Stockholders will be offered, sold, assigned, pledged, hypothecated, transferred
or otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC
thereunder, and except after full compliance with any applicable state
securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholders further represent and warrant
that they (a) fully understand the nature, scope and duration of the limitations
on transfer contained in this Agreement and (b) have such knowledge and
experience in financial and business matters that they are capable of evaluating
the merits and risks of the proposed investment and therefore have the capacity
to protect their own interests in connection with the acquisition of the
UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Stockholders represent and warrant that they have had
an adequate opportunity to ask questions and receive answers from the officers
of UniCapital concerning UniCapital, its business, operations, plans and
strategy, and the background and experience of its officers and directors. The
Stockholders represent and warrant that they have asked any and all questions
that they may have in the nature described in the preceding sentence and that
all such questions have been answered to their satisfaction.
(b) Each Stockholder represents and warrants that he has
received the draft Registration Statement, including the draft preliminary
prospectus that forms a part thereof, delivered to him on or about February 14,
1998 that describes, among other things, UniCapital, the Merger, the other
acquisitions proposed to be undertaken by UniCapital simultaneously with the
Merger and the target companies of such other acquisitions. Each Stockholder
represents and warrants that he has reviewed such draft Registration Statement
and draft preliminary prospectus and has had adequate opportunity to ask
questions of and receive answers to his satisfaction from the officers of
UniCapital concerning the matters described therein.
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18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Stockholders hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Stockholders and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholders will cooperate and use their best efforts to have the officers,
directors and employees of Company prior to the Closing Date cooperate with
UniCapital on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to all
periods prior to the Closing Date.
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the Company,
the successors of UniCapital, and the heirs and legal representatives of the
Stockholders.
19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Company, UniCapital and Newco and
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supersedes any prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement, upon execution, constitutes a valid and
binding agreement of the parties hereto, enforceable in accordance with its
terms, and may be modified or amended only by a written instrument executed by
the Stockholders (subject to the limitations set forth below), the Company,
UniCapital and Newco acting through their respective officers, duly authorized
by their respective Boards of Directors; provided, that the Stockholder who owns
a majority of the outstanding shares of capital stock of the Company shall have
the authority to approve and execute any amendment to this Agreement on behalf
of all of the Stockholders and without the necessity of such majority
Stockholder obtaining consent or authorization from any other Stockholder,
unless such amendment relates to any representation or warranty made by a
Stockholder other than such majority Stockholder which may only be amended by
the written agreement of such person; and provided further, that no Stockholder
shall have any power or authority to modify or amend this Agreement in any
respect from and after the initial filing of the Registration Statement with the
SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and Newco, on the one hand, and the Stockholders,
on the other hand, agrees to indemnify the other against all loss, liability,
cost damages or expense arising out of or related to claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and Newco and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments thereto. Whether or not the transactions herein
contemplated shall be consummated, the Stockholders will pay the fees, expenses
and disbursements of the Stockholders and the Company and their respective
agents, representatives, accountants and counsel incurred in connection with the
subject matter of this Agreement and any amendments hereto and all other costs
and expenses incurred in the performance of this Agreement by the Stockholders
and the Company and in compliance with all conditions to be performed by the
Stockholders and the Company under this Agreement.
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
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(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
One Oxford Centre, Thirty-Second Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(b) If to the Stockholders, addressed to them in care
of the Stockholders' Representative at:
Xxx X. Xxxxxx
Boulder Capital Group, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
P.O. Box 19587
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxx, Esquire
Xxxxxxxx Xxxxx & Xxxxxxx, P.C.
0000 00xx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax is transmitted to the telefax number specified in this Section 19.7
(or in accordance with the latest unrevoked written direction from such party),
and the appropriate confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
19.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
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20. DEFINITIONS
20.1 "1998 Shortfall" is defined in Section 2.5(a)(ii).
20.2 "1998 Shortfall Escrow Agent" is defined in Section 4.4(a).
20.3 "1998 Shortfall Escrow Shares" is defined in Section 4.4(a).
20.4 "1999 EBT" is defined in Section 2.5(b).
20.5 "Accounts Receivable" is defined in Section 6.14.
20.6 "Acquisition Proposal" is defined in Section 8.10.
20.7 "Adjusted 1997 EBT" is defined in Section 2.5(a).
20.8 "Adjusted 1998 EBT" is defined in Section 2.5(a).
20.9 "Agent" is defined in Section 8.10.
20.10 "Agreement" is defined in the preamble to this Agreement.
20.11 "Articles of Merger" is defined in Section 1.1.
20.12 "Audited Balance Sheet Date" is defined in Section 6.12(a).
20.13 "Audited Financial Statements" are defined in Section 6.12(a).
20.14 "Authorizations" are defined in Section 6.23.
20.15 "Basket Adjustment" is defined in Section 12.5(b).
20.16 "Basket Limitation" is defined in Section 12.5(b).
20.17 "Benefit Plan" is defined in Section 6.22.
20.18 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
20.19 "Certificates" are defined in Section 2.2.
20.20 "Closing" is defined in Section 5.1(b).
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20.21 "Closing Date" is defined in Section 5.2.
20.22 "Closing Date Balance Sheet" are defined in Section 3.1.
20.23 "Code" is defined in the recitals to this Agreement.
20.24 "Commonly Controlled Entity" is defined in Section 6.22.
20.25 "Company" is defined in the preamble to this Agreement.
20.26 "Company Documents" are defined in Section 6.2.
20.27 "Company EBT" is defined in Section 2.5(b).
20.28 "Company Stock" is defined in Section 2.1(a).
20.29 "Constituent Corporations" are defined in the recitals to
this Agreement.
20.30 "Contracts" are defined in Section 6.17.
20.31 "Disputed Amounts" are defined in Section 3.2.
20.32 "EBT" is defined in Section 2.5(a).
20.33 "Earn-Out Consideration" is defined in Section 2.5(c).
20.34 "Earn-Out Escrow Cash" is defined in Section 4.1(b).
20.35 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
20.36 "Effective Date Consideration" is defined in Section 2.1(a).
20.37 "Environmental Laws" mean any and all applicable treaties,
laws, regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C.
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Section 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., and any similar or implementing state or local law and all
amendments or regulations promulgated thereunder.
20.38 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
Newco, the Surviving Corporation, any Governmental Entity or any other person or
entity on the basis of any violation of any Environmental Laws or pursuant to
any requirement imposed under any Environmental Laws (including any sampling,
testing, investigation, removal, treatment or remediation undertaken by
UniCapital, Newco or the Surviving Corporation so as to avoid any claim or
violation or to comply with any requirement and all counseling or engineering
fees and expenses related thereto), and arising from pre-Closing operations,
events, circumstances or conditions at, on, under or emanating from, or as a
result of any pre-Closing off-site disposal of Hazardous Substances from, any
property currently or formerly owned, operated or leased by the Company or its
Subsidiary.
20.39 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the Company or its Subsidiary.
20.40 "Equipment" is defined in Section 6.35.
20.41 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.42 "Exchange Act" is defined in Section 12.1.
20.43 "Expiration Date" is defined in Section 12.6.
20.44 "Financial Statements" are defined in Section 6.12(b).
20.45 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.46 "GAAP" is defined in Section 3.1.
20.47 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
20.48 "Hazardous Substances" mean all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials,
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and all other materials or chemicals regulated pursuant to any Environmental
Law, including materials listed in 49 C.F.R. ss. 172.101 and materials defined
as hazardous pursuant to Section 101(14) of CERCLA.
20.49 "Indemnifiable Decrease" is defined in Section 12.5(a).
20.50 "Indemnified Party" is defined in Section 12.4(a).
20.51 "Indemnifying Party" is defined in Section 12.4(a).
20.52 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.53 "Indemnity Escrow Cash" is defined in Section 4.1(a)(ii).
20.54 "Indemnity Escrow Property" is defined in Section 4.1(b).
20.55 "Indemnity Escrow Shares" are defined in Section 4.1(a)(i).
20.56 "Independent Accounting Firm" is defined in Section 3.2.
20.57 "Intellectual Property" is defined in Section 6.28(a).
20.58 "Interim Net Worth Period" is defined in Section 12.5(a).
20.59 "IPO" is defined in the recitals to this Agreement.
20.60 "IPO Price" is defined in Section 11.2.
20.61 "Lease Documents" are defined in Section 6.35.
20.62 "Leases" are defined in Section 6.35.
20.63 "liabilities" are defined in Section 6.13(a).
20.64 "Limited Partnership" means the Boulder Capital Partners I, L.P.
20.65 "Losses" are defined in Section 12.1.
20.66 "Material Adverse Amendment" is defined in Section 8.14.
20.67 "Merger Consideration" is defined in Section 2.1(c).
20.68 "Merger Effective Date" is defined in Section 5.3.
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20.69 "Merger" is defined in the recitals to this Agreement.
20.70 "Net Worth Deficiency" is defined in Section 3.1.
20.71 "Newco" is defined in the preamble to this Agreement.
20.72 "New Programs" means the Company's:
(a) Conoco Enhanced Equipment Lease Program,
(b) Tokheim/CITGO Guarantee Program,
(c) Gilbarco Equipment Lease Program,
(d) New vendor programs entered into between December 8, 1997
and the Closing Date, and
(e) Real estate/franchise finance company to be formed
between the Company and other investors prior to the
Closing Date, as further described on Schedule 6.30(l)
hereto (the "Real Estate Venture").
20.73 "Obligor" is defined in Section 6.35.
20.74 "Ordinary course" or "ordinary course of business" means the
conduct of business as conducted by the Company prior to the date of this
Agreement consistent in nature and, where relevant, amount with past practices.
20.75 "PCBs" are defined in Section 6.33(h).
20.76 "Pension Plan" is defined in Section 6.22.
20.77 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by the
Company or its Subsidiary, or held by any Stockholder that relate to the
operations of the Company or its Subsidiary.
20.78 "Prospectus" is defined in Section 16.1.
20.79 "Real Estate Venture" is defined in Section 20.72.
20.80 "Registration Statement" is defined in Section 9.4.
20.81 "Regulations" are defined in Section 6.23.
20.82 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
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20.83 "Restricted Business" is defined in Section 14.1(a).
20.84 "Scheduled Payments" are defined in Section 6.35.
20.85 "SEC" is defined in Section 9.4.
20.86 "Securities Act" is defined in Section 6.16.
20.87 "Stockholders" are defined in the preamble to this Agreement.
20.88 "Stockholders' Representative" is defined in Section 3.3.
20.89 "Subsidiary" is defined in Section 6.1.
20.90 "Surviving Corporation" is defined in Section 1.2.
20.91 "Tax Returns" are defined in Section 6.27.
20.92 "Taxes" are defined in Section 6.27.
20.93 "Third Party Claim" is defined in Section 12.4(a).
20.94 "Unaudited Financial Statements" are defined in Section 6.12(b).
20.95 "Underwriting Agreement" is defined in Section 5.1(a).
20.96 "UniCapital" is defined in the preamble to this Agreement.
20.97 "UniCapital Documents" are defined in Section 7.3.
20.98 "UniCapital Stock" is defined in Section 2.1(a).
20.99 "Unified Transactions" is defined in the recitals to this
Agreement.
20.100 "Welfare Plan" is defined in Section 6.22.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ XXXXXX NEW
----------------------------
Name: Xxxxxx New
Title: Chairman and Chief Executive Officer
BCG ACQUISITION CORP.
By: /s/ XXXXXX NEW
------------------------------
Name: Xxxxxx New
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
BOULDER CAPITAL GROUP, INC.
By: /s/ XXX X. XXXXXX
----------------------------
Name: Xxx X. Xxxxxx
Title: President
/s/ XXX X. XXXXXX
-----------------------------------
Xxx X. Xxxxxx
/s/ XXXX X. XXXXXXXX
-----------------------------------
Xxxx X. Xxxxxxxx
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ANNEXES
ANNEX I [Form of Certificate of Merger]
ANNEX II [Calculation and Composition of Consideration]
ANNEX III [Form of Indemnity Escrow Agreement]
ANNEX IV [Form of Employment Agreement]
ANNEX V [Form of Stockholder's Release]
ANNEX VI [Form of 1998 Shortfall Escrow Agreement]
SCHEDULES
SCHEDULE 2.5 [Add-Backs]
SCHEDULE 6.1 [Jurisdictions in which Company and Subsidiaries Are Qualified
to do Business]
SCHEDULE 6.4 [Violations or Conflicts]
SCHEDULE 6.5 [Issued and Outstanding Stock of the Company and Subsidiaries]
SCHEDULE 6.6 [Transactions in Capital Stock]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Companies]
SCHEDULE 6.11 [Third-Party Options]
SCHEDULE 6.12 [Company Financial Statements]
SCHEDULE 6.13 [Liabilities and Obligations]
SCHEDULE 6.14 [Accounts and Notes Receivable Aging]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts and Commitments]
SCHEDULE 6.20 [Insurance Policies and Surety Arrangements]
SCHEDULE 6.21 [Employee Information]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.27 [Taxes]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(d) [Confidentiality and Non-Disclosure Agreements]
SCHEDULE 6.29 [Notice and Consents]
SCHEDULE 6.30 [Absence of Changes]
SCHEDULE 6.30(l) [Real Estate Venture]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 6.35 [Leases]
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SCHEDULE 6.35(e) [Delinquency in Scheduled Payments]
SCHEDULE 7.8 [UniCapital and Newco Litigation]
SCHEDULE 7.9 [UniCapital and Newco Agreements]
SCHEDULE 9.2 [Employment Agreement for Xxx X. Xxxxxx]
SCHEDULE 11.1 [Lease Arrangements with Certain Persons]
SCHEDULE 11.4 [Personal Guarantees of the Indebtedness of the Company]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.02 to the Commission supplementally upon request
therefor.
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