SECURITIES PURCHASE AGREEMENT
BETWEEN
BOSS INVESTMENT LLC
and
BUILDING ONE SERVICES CORPORATION
Dated as of March 22, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................... 1
ARTICLE II ISSUANCE OF DEBENTURES; AMENDED OFFER........................... 6
2.1 Issuance of Debentures............................................... 6
2.2 Closing.............................................................. 6
2.3 Offer................................................................ 6
2.4 Warrants and Company Stock Options................................... 7
2.5 Company Actions...................................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 8
3.1 Organization......................................................... 8
3.2 Capitalization....................................................... 8
3.3 Subsidiaries......................................................... 9
3.4 Authority............................................................ 10
3.5 Consents and Approvals; No Violations................................ 10
3.6 SEC Documents; Financial Statements; Other Financial Information..... 10
3.7 Company Acquisitions................................................. 11
3.8 Information Supplied................................................. 12
3.9 Absence of Certain Changes or Events................................. 12
3.10 Litigation........................................................... 13
3.11 Contracts............................................................ 13
3.12 Compliance with Laws................................................. 13
3.13 Environmental Matters................................................ 13
3.14 Absence of Changes in Benefit Plans; Labor Relations................. 14
3.15 Employment Matters; Affiliate Transactions........................... 15
3.16 ERISA Compliance..................................................... 15
3.17 Taxes................................................................ 17
3.18 Title to Properties; Condition of Assets............................. 18
3.19 Intellectual Property................................................ 19
3.20 Non-Compete.......................................................... 19
3.21 State Takeover Statutes.............................................. 19
3.22 Brokers.............................................................. 19
3.23 Government Contracts................................................. 20
3.24 Insurance............................................................ 20
3.25 Share Retention Agreements........................................... 20
3.26 No Material Adverse Change Relative to Investment.................... 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INVESTOR...................... 21
4.1 Organization......................................................... 21
4.2 Authority............................................................ 21
4.3 Consents and Approvals; No Violations................................ 21
4.4 Information Supplied................................................. 22
4.5 Ownership of Company Common Stock.................................... 22
4.6 Financing............................................................ 22
4.7 Brokers.............................................................. 22
4.8 Investment Representations and Warranties............................ 22
ARTICLE V COVENANTS........................................................ 23
5.1 Conduct of Business.................................................. 23
5.2 No Solicitation...................................................... 25
5.3 Certain Tax Matters.................................................. 26
5.4 Other Actions........................................................ 27
5.5 Advice of Changes; Filings........................................... 27
5.6 Financial Information................................................ 27
ARTICLE VI ADDITIONAL AGREEMENTS........................................... 27
6.1 Access to Information; Confidentiality............................... 27
6.2 Reasonable Efforts; Notification..................................... 28
6.3 Fees and Expenses.................................................... 29
6.4 Public Announcements................................................. 30
6.5 NASD................................................................. 30
ARTICLE VII CONDITIONS..................................................... 30
7.1 Conditions to Each Party's Obligation................................ 30
7.2 Conditions to the Company's Obligations.............................. 31
7.3 Conditions to the Investor's Obligations............................. 31
ARTICLE VIII TERMINATION AND AMENDMENT..................................... 32
8.1 Termination.......................................................... 32
8.2 Effect of Termination................................................ 34
ARTICLE IX MISCELLANEOUS................................................... 34
9.1 Amendment............................................................ 34
9.2 Extension; Waiver.................................................... 34
9.3 Survival of Representations, Warranties and Agreements, Limitation
on Liability......................................................... 34
9.4 Notices.............................................................. 34
9.5 Indemnification...................................................... 35
9.6 Interpretation....................................................... 36
9.7 Entire Agreement; Third Party Beneficiaries.......................... 36
9.8 Governing Law........................................................ 36
9.9 Counterparts......................................................... 37
9.10 Assignment........................................................... 37
9.11 Enforcement.......................................................... 37
ii
Schedules
---------
Schedule 1.1A: 1998 Financial Statements
Schedule 3.2(b): Company Stock Options and Warrants
Schedule 3.2(c): Employee Ownership of Capital Stock
Schedule 3.3(a): Subsidiaries
Schedule 3.3(b): Stock Ownership of Subsidiaries
Schedule 3.3(d): Investments
Schedule 3.5(b): Governmental Consents
Schedule 3.5(d): Third Party Consents
Schedule 3.5(f): Loss of Permits
Schedule 3.6: Undisclosed Liabilities
Schedule 3.7: Company Acquisitions
Schedule 3.9: Absence of Certain Changes or Events
Schedule 3.10(a): Proceedings
Schedule 3.10(b): Orders
Schedule 3.11(a): Material Contracts
Schedule 3.12: Compliance with Laws
Schedule 3.13(a): Compliance with Environmental Laws
Schedule 3.13(b): Release of Hazardous Materials
Schedule 3.13(c): Environmental Litigation
Schedule 3.13(d): Assumption of Environmental Liabilities
Schedule 3.13(e): Storage Tanks
Schedule 3.14(a): Absence of Changes in Benefit Plans and Labor Relations
Schedule 3.14(b): Employment Agreements
Schedule 3.14(c): Payments to Employees
Schedule 3.14(d): Collective Bargaining Agreements
Schedule 3.14(e): Labor Unionizing Activity
Schedule 3.15(a): List of Directors, Officers and Key Employees
Schedule 3.15(b): Affiliate Transactions
Schedule 3.16(e): Welfare Benefit Plans
Schedule 3.16(f): Post-Retirement Medical and Life Insurance Benefits Coverage
Schedule 3.16(g): Acceleration of Benefits
Schedule 3.17(a): Audits of Tax Returns
Schedule 3.17(b): Net Operating Loss Carryovers
Schedule 3.17(c): Excess Parachute Payments
Schedule 3.17(d): Right to Receive Parachute Gross-Up Payments
Schedule 3.18(a): Owned Real Property
Schedule 3.20: Non-Competition Agreements
Schedule 3.24: Insurance
Schedule 3.25: Share Retention Agreements
Schedule 5.1(d): Pending Acquisitions
Schedule 5.1(k): Certain Matters with Respect to Options and Bonuses
iii
Exhibits
--------
Exhibit A: Investor Rights Agreement
Exhibit 1.1A: Commitment Letter
Exhibit 1.1B: Highly Confident Letter
Exhibit 1.1C: Form of Indenture
Exhibit 7.3(d): Form of Opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP
iv
SECURITIES PURCHASE AGREEMENT (this
"Agreement"), dated as of March 22, 1999, between
----------
BOSS INVESTMENT LLC, a limited liability company
(the "Investor"), and BUILDING ONE SERVICES
--------
CORPORATION, a Delaware corporation (the
"Company").
-------
WHEREAS, the Company currently has a pending offer to purchase up to
50% of its shares (the "Shares") of common stock, par value $.01 per share (the
------
"Common Stock"), for $25.00 per share in cash and to purchase up to 50% of its
------------
currently outstanding options.
WHEREAS, the Company desires to issue $100 million of 7 1/2%
Convertible Junior Subordinated Debentures Due 2012 to partially finance the
purchase of its Shares and the Investor is willing to purchase such notes from
the Company on the terms and conditions set forth herein.
WHEREAS, the Company desires to amend its offer to purchase its shares
to, among other things, provide for an offer price of $22.50 per share in cash.
WHEREAS, the Company and the Investor have executed and delivered an
Investor Rights Agreement (the "Investor Rights Agreement"), which sets forth
-------------------------
certain registration and other rights granted to the Investor.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
Investor and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means, with respect to any specified person, any other person
---------
who, directly or indirectly, owns or controls, is under common ownership or
control with, or is owned or controlled by, such specified person. As used in
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power to vote five percent or more of the
voting securities of such person or to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities, by contract or otherwise.
"Benefit Plans" has the meaning set forth in Section 3.16(a).
------------- ---------------
"Closing" has the meaning set forth in Section 2.2.
------- -----------
"Closing Date" has the meaning set forth in Section 2.2.
------------ -----------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission.
----------
"Commonly Controlled Entity" has the meaning set forth in Section 3.16(a).
-------------------------- ---------------
"Company Acquisitions" has the meaning set forth in Section 3.7.
-------------------- -----------
"Company Stock Options" has the meaning set forth in Section 3.2(a).
--------------------- --------------
"Contract" means any loan or credit agreement, note, bond, mortgage,
--------
indenture, lease, sublease, purchase order or other contract, agreement,
commitment, instrument, Permit, concession, franchise or license.
"Debentures" means the Company's 7 1/2% Convertible Junior Subordinated
----------
Debentures Due 2012 to be issued pursuant to this Agreement and to be governed
by the Indenture.
"Environmental Laws" means any Law, and any common law, relating to (a)
------------------
Releases or threatened Releases of Hazardous Materials into the environment; (b)
the generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Materials or (c) otherwise relating to
pollution or protection of health or safety or the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules and
------------
regulations promulgated thereunder, each as amended.
"Expense Reimbursement Event" shall mean that this Agreement is terminated
---------------------------
(a) pursuant to Section 8.1(d)(i) if the Company had knowledge of the applicable
-----------------
breach of a representation or warranty when such representation or warranty was
made, (b) pursuant to Section 8.1(d)(ii) in a situation (i) that fundamentally
------------------
affects the viability or the consummation of the transactions contemplated by
this Agreement, (ii) in which the Investor would be entitled to terminate this
Agreement pursuant to Section 8.1(d)(i) or (iii) that has resulted or is
-----------------
reasonably likely to result in a material adverse change or (c) pursuant to
Section 8.1(h).
--------------
"Financing Letters" means the commitment letter set forth in Exhibit 1.1A
----------------- ------------
and the highly confident letter set forth in Exhibit 1.1B.
------------
"GAAP" means generally accepted accounting principles.
----
"Governmental Entity" means any national, federal, state, municipal, local,
-------------------
territorial, foreign or other government or any department, commission, board,
bureau, agency, regulatory authority or instrumentality thereof, or any court,
judicial, administrative, or arbitral body or public or private tribunal.
"Hazardous Materials" means any pollutant, contaminant, hazardous,
-------------------
radioactive or toxic substance, material, constituent or waste, or any other
waste, substance, chemical or material
2
regulated under any Environmental Law, including (1) petroleum, crude oil and
any fractions thereof, (2) natural gas, synthetic gas and any mixtures thereof,
(3) asbestos and/or asbestos-containing material, (4) radon and (5)
polychlorinated biphenyls ("PCBs"), or materials or fluids containing PCBs
----
"HSR Act" Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
-------
"Indenture" means the Indenture governing the Debentures, to be entered
---------
into on the Closing Date, between the Company and the Trustee, in substantially
the form set forth in Exhibit 1.1C, together with such changes as are (i)
------------
reasonably requested by either of the parties delivering the Financing Letters
or by the Trustee and (ii) reasonably acceptable to the Investor and the
Company.
"Intellectual Property Right" means any trademark, service xxxx, trade
---------------------------
name, mask work, copyright, patent, software license, other data base,
invention, trade secret, know-how (including any registrations or applications
for registration of any of the foregoing) or any other similar type of
proprietary intellectual property right.
"Investor's Expenses" means all out-of-pocket expenses (including
-------------------
reasonable attorneys fees) paid or incurred by or on behalf of the Investor in
connection with the negotiation, execution and delivery of, the due diligence
conducted by the Investor and its affiliates and each of their respective agents
and representatives in connection with, and the consummation (to the extent
applicable) of the transactions contemplated by, (i) this Agreement, (ii) the
Merger Agreement, (iii) the Stockholders Agreement among the Investor and the
individuals identified on Schedule I thereto and (iv) the Termination Agreement,
dated as of February 7, 1999, between the Investor and the Company, and each of
the agreements, documents and instruments referred to in any of the foregoing,
including, without limitation, the indebtedness to be incurred in connection
with the transactions contemplated by this Agreement and the Merger Agreement.
"Law" means all provisions of laws, statutes, ordinances, rules, bylaws,
---
regulations, writs, Permits or Orders of any Governmental Entity.
"Leased Property" has the meaning set forth in Section 3.18(b).
--------------- ---------------
"Liens" means, with respect to any asset, (a) any mortgage, deed of trust,
-----
lien, pledge, encumbrance, charge or security interest of any kind whatsoever in
or on such asset (including the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction), (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
Lease or title retention agreement relating to such asset and (c) in the case of
securities, any purchase option, right of first refusal, call, appreciation
right or similar right of a third party with respect to such securities.
"Material Contract" means any Contract that (i) evidences or provides for
-----------------
any Indebtedness of the Company or any Subsidiary, or any of their Affiliates,
in an amount in excess of $1,000,000, or any Encumbrance securing such
Indebtedness, (ii) restricts the Company or any Subsidiary, or any of their
Affiliates, from engaging in any line of business or (iii) is otherwise material
to the business, financial condition or results of operations or prospects of
the Company and its Subsidiaries taken as a whole.
3
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
----------------
December 23, 1998, between the Investor and the Company.
"Merger Schedules" means the schedules to the Merger Agreement with
----------------
schedule numbers corresponding to the schedule numbers referred to in Article
-------
III hereof, as such Merger Schedules have been updated through February 4, 1999:
---
"1998 Financial Statements" means the consolidated financial statements of
-------------------------
the Company and its Subsidiaries for the fiscal year ended December 31, 1998, in
substantially the form set forth in Schedule 1.1A.
-------------
"Offer" means the transactions contemplated by the Offer Documents.
-----
"Offer Conditions" has the meaning set forth in Section 2.3(a).
---------------- --------------
"Offer Documents" means the amended Offer to Purchase shares of the
---------------
Company's Common Stock for the Offer Price, the related letter of transmittal
and each of the other related documents and instruments.
"Offer Price" means $22.50.
-----------
"Order" means all judgments, injunctions, orders and decrees of all
-----
Governmental Entities in Proceedings in which the person in question is a party
or by which any of its Properties is bound.
"Organizational Documents" means, with respect to any person, each
------------------------
instrument or other document that (a) defines the existence of such person,
including its certificate of limited partnership or articles or certificate of
incorporation, as filed or recorded with an applicable Governmental Entity, or
(b) governs the internal affairs of such person, including its partnership
agreement or by-laws.
"Owned Property" has the meaning set forth in Section 3.18(a).
-------------- ---------------
"Payment Event" shall mean that this Agreement shall have been terminated
------- -----
(a) pursuant to Section 8.1(d)(ii) (in a situation in which the breach of
------------------
covenant is reasonably attributable primarily to the Company's avoidance of its
obligations under this Agreement and the breach fundamentally affects (i) the
viability or the consummation of the transactions contemplated by this Agreement
or (ii) the benefits expected by the Investor immediately after the Closing from
the transactions contemplated hereby), (b) pursuant to Section 8.1(g) in the
--------------
event that the Company has failed to receive valid tenders of at least 21
million shares and, prior to the earlier of nine months after such termination,
the Company shall have entered into an agreement or arrangement providing for an
Alternative Transaction for a higher value per Share to the stockholders of the
Company (other than an Alternative Transaction which is financed solely by the
issuance of (x) debt securities that are not convertible directly or indirectly
into equity securities plus (y) warrants representing the right to acquire not
more than 7% of the outstanding shares of Common Stock giving effect to the
exercise of such warrants) or (c) pursuant to Section 8.1(h).
--------------
"Pension Plan" has the meaning set forth in Section 3.16(b).
------------ ---------------
4
"Permits" means, collectively, all franchises, approvals, clearances,
-------
permits, licenses, authorizations, Orders, registrations, certificates, and
variances obtained from, or agreements with, any Governmental Entity.
"Permitted Liens" means Liens permitted under the Indenture.
---------------
"Permitted Securities" means shares of Common Stock that will not be
--------------------
entitled to be sold in the Offer and that are required to be issued prior to the
Closing Date (a) pursuant to earnout arrangements contained in agreements
relating to acquisitions consummated prior to the date hereof if (other than
with respect to earnouts payable in connection with the acquisition by the
Company of Tri-City Electrical Contractors, Inc., Xxxxxx Electric Corporation,
Inc., Town & Country Electric, Inc., Riviera Electric Construction Co., Garfield
Electric Corporation, Indecon, Inc., SKC Electric, Inc., Xxxxxx Engineering,
Inc. or Service Management USA, Inc.) the Company has used its best efforts to
obtain a waiver so that such Shares can be issued after the Closing Date, (b)
under definitive agreements listed in Schedule 5.1(d) plus the signed LOI's
---------------
listed on Schedule 5.1(d) with Xxxx Electric, Marathon Electric and Mountain
---------------
View Electric (in an amount not to exceed the applicable number of Shares to be
issued pursuant to such agreement or LOI as set forth in Schedule 5.1(d)) or (c)
---------------
Shares issuable upon the exercise of Company Stock Options or Warrants or
pursuant to the Employee Stock Purchase Plan in the ordinary course of business.
"Proceeding" means any claim, demand, suit, action, hearing, grievance,
----------
arbitration, mediation or proceeding in any court or before any Governmental
Entity, whether at law or in equity.
"Release" has the meaning set forth in 42 U.S.C. (S) 9601(22).
-------
"Schedule 13E-4" has the meaning set forth in Section 2.3(c).
-------------- --------------
"SEC Documents" means all reports, forms, schedules and statements and
-------------
other documents required to be filed by the Company with the Commission.
"Securities Act" means the Securities Act of 1933 and the rules and
--------------
regulations promulgated thereunder, each as amended.
"Share Retention Agreement" has the meaning set forth in Section 3.25.
------------------------- ------------
"Shares" has the meaning set forth in the recitals to this Agreement
------
"Third Party" means any person or "group," as described in Rule 13d-5(b)
----- -----
promulgated under the Exchange Act, other than the Investor or any of its
Affiliates.
"Transaction Documents" means this Agreement, the Investor Rights
---------------------
Agreement, the Restated Charter (as defined in the Investor Rights Agreement),
the Indenture and the Debentures issued thereunder and the fee letter dated the
date hereof from the Company to the Investor.
5
"Trustee" means the trustee under the Indenture, which trustee shall be
-------
reasonably acceptable to the Company and the Investor.
"Warrants" has the meaning set forth in Section 3.2(a)
-------- --------------
ARTICLE II
ISSUANCE OF DEBENTURES; AMENDED OFFER
2.1 Issuance of Debentures.
At the Closing, the Company shall issue and deliver to the Investor
pursuant to the Indenture one or more Debentures in an aggregate principal
amount equal to $100 million against receipt by the Company of a wire transfer
in the amount of $100 million to an account designated by the Company at least
two business days prior to the Closing. Such Debentures shall be registered in
the names designated by the Investor to the Company at least one business day
prior to the Closing.
2.2 Closing.
The closing (the "Closing") hereunder with respect to the issuance and sale
-------
of the Debentures shall take place at the offices of X'Xxxxxxxx Graev &
Karabell, LLP, 00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx (xx at the
offices of the lenders to the Company or such other place as the parties may
agree) promptly after the satisfaction or waiver of all of the conditions set
forth in Article VIII (the date upon which the Closing occurs being referred to
------------
as the "Closing Date").
------------
2.3 Offer.
(a) As soon as practicable after the date hereof, the Company will
amend its Offer to Purchase dated February 19, 1999 to provide that the
Offer, as amended, will be at a price per Share equal to the Offer Price
(less, in the case of Shares issuable upon the conditional exercise of
Company Stock Options, the exercise price thereof) and to disclose the
terms and conditions set forth in this Agreement. No condition to the offer
(the "Offer Conditions") may be waived in whole or in part, and the Offer
----------------
shall not be terminated, without the prior written consent of the Investor
and the Company in their sole discretion. Notwithstanding the foregoing but
subject to Section 8.1(b), the Company shall, unless otherwise requested by
--------------
the Investor, and may, without the consent of the Investor, extend the
Offer periodically through the Outside Date if at the then scheduled or any
extended expiration date of the Offer any of the Offer Conditions shall not
be satisfied or waived, until such time as such conditions are satisfied or
waived.
(b) Subject to the terms and conditions of the Offer and this
Section 2.3, the Company shall accept for payment, and pay for, not less
-----------
than 21.0 million Shares and not more than 26.5 million Shares validly
tendered and not withdrawn pursuant to the Offer that the Company becomes
obligated to accept for payment, and pay for, pursuant to the Offer as soon
as practicable after the expiration of the Offer.
(c) On the date of amendment of the Offer, the Company shall file with
the SEC a Tender Offer Statement on Schedule 13E-4 (the "Schedule 13E-4")
--------------
with respect to the Offer,
6
which shall contain the Offer Documents. The Offer Documents shall comply
as to form in all material respects with the Exchange Act, and the Offer
Documents, on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation
or warranty is made by the Company with respect to written information
supplied by or on behalf of the Investor for inclusion or incorporation by
reference in the Offer Documents. The Investor and the Company each agrees
promptly to correct any written information provided by it for use in the
Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause the Schedule 13E-4 as so
corrected to be filed with the Commission and the other Offer Documents as
so corrected to be disseminated to holders of Shares, in each case as and
to the extent required by applicable Federal securities laws. The Offer
Documents shall be in form and substance reasonably satisfactory to the
Investor and the Company will not file any Offer Document with the
Commission or disseminate any Offer Document to its stockholders without
the prior written consent of the Investor. The Company agrees to provide
the Investor and its counsel any comments the Company or its counsel may
receive from the Commission or its staff with respect to the Offer
Documents promptly after the receipt of such comments and the Company will
provide to the Investor and its counsel sufficient time and the opportunity
to comment on any written or oral response to any such comments.
(d) Each Share purchased in the Offer shall automatically be cancelled
and retired and shall cease to exist.
2.4 Warrants and Company Stock Options.
Except to the extent that the acceleration of Company Stock Options is
permitted by Section 5.1(k), the outstanding Warrants and outstanding Company
--------------
Stock Options shall not be affected by the Offer and shall remain outstanding
and exercisable for Shares in accordance with their terms.
2.5 Company Actions.
The Company represents and warrants that at meetings duly called and held,
its Board of Directors, has (a) taken all necessary steps to render the
restrictions of Section 203 of the DGCL inapplicable to the transactions
contemplated by this Agreement, (b) resolved to elect not to be subject, to the
extent permitted by Law, to any state takeover law other than Section 203 of the
DGCL that may purport to be applicable to the transactions contemplated by this
Agreement and (c) determined not to accelerate the vesting of any Company Stock
Options or Warrants except as permitted by Section 5.1(k).
--------------
7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as follows (it being
understood that, except for Section 3.6, Section 3.25 and Section 3.26, the
----------- ------------ ------------
representations and warranties contained in this Article III shall be deemed to
-----------
be made as of February 4, 1999 and the Merger Schedules as modified through such
date shall serve as the applicable schedules to this Agreement):
3.1 Organization.
The Company and each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of its organization
and has all requisite corporate power and authority to carry on its business as
now being conducted. The Company and each Subsidiary is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing has not had a Material Adverse Effect (as defined in Section 9.5 of
-----------
this Agreement) that has not been cured and reasonably would not be expected to
have a Material Adverse Effect or prevent or materially delay the consummation
of the transactions contemplated by this Agreement. As soon as practicable
after the date hereof, the Company will make available to the Investor complete
and correct copies of its and each Subsidiary's Organizational Documents, as
amended to the date supplied.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
250,000,000 Shares and 500,000 shares of Convertible Non-Voting Common
Stock, par value $.001. At the close of business the business day
immediately preceding the date hereof, (i) 45,232,292 Shares were issued
and outstanding, (ii) 2,990,000 Shares were held by the Company in its
treasury, (iii) no shares of Convertible Non-Voting Common Stock were
outstanding, (iv) 3,822,971 Shares were reserved for issuance upon exercise
of outstanding options to purchase Shares ("Company Stock Options") and
---------------------
360,984 Shares were reserved for issuance upon exercise of options to
purchase Shares that the Company has agreed to grant but that have not been
granted, (v) 3,080,000 Shares were issuable upon the exercise of
outstanding warrants, rights or other options to purchase Shares
("Warrants") and (vi) 1,000,000 Shares are reserved for issuance pursuant
--------
to the Company's Employee Stock Purchase Plan. Except as set forth above,
and except for Shares issued since the close of business on the business
day immediately preceding the date hereof upon the exercise of any then
outstanding Company Stock Option or any then outstanding Warrant, since
such date no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance, issuable or outstanding. All
outstanding Shares are, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company may vote.
Except as set forth above, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or
8
undertakings of any kind to which the Company is a party or by which it is
bound obligating the Company to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other
voting securities of the Company or obligating the Company to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company.
(b) Schedule 3.2(b) sets forth a true, correct and complete list, with
---------------
respect to each Company Stock Option or Warrant, of (i) the holder thereof,
(ii) the number of Shares issuable upon exercise of each such vested
Company Stock Option or Warrant, (iii) the number of Shares issuable upon
exercise of each such unvested Company Stock Option or Warrant, (iv) the
date of grant, (v) the exercise price thereof and (vi) the vesting
schedule.
(c) Schedule 3.2(c) sets forth a true, correct and complete list of
---------------
all holders of the Company's capital stock as of the date hereof who are
employed by the Company or any Subsidiary and who, to the knowledge of the
Company, own in excess of 50,000 Shares.
3.3 Subsidiaries.
(a) Schedule 3.3(a) sets forth a list of each Subsidiary of the
---------------
Company.
(b) Except as set forth on Schedule 3.3(b), all of the outstanding
---------------
shares of capital stock of Subsidiaries are owned of record and
beneficially by the Company, free and clear of all Liens.
(c) All outstanding shares of capital stock of Subsidiaries are, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
indebtedness of any Subsidiary having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which stockholders of Subsidiaries may vote. There are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any
Subsidiary is a party or by which any of them is bound obligating the
Company or any Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of any Subsidiary or obligating the Company or any Subsidiary to
issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking other than
pursuant to the non-binding letters of intent set forth in Schedule 5.1(d).
---------------
There are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of any
Subsidiary.
(d) Except for the Company's interest in the Subsidiaries or as set
forth on Schedule 3.3(d), neither the Company nor any Subsidiary owns
---------------
directly or indirectly any interest or investment in the form of debt or
equity in, and neither the Company nor any Subsidiary is subject to any
obligation or requirement to provide for or to make any investment in, any
person (in each case, other than non-recourse interests or investments in
an amount not in excess of $500,000).
9
3.4 Authority.
The Company has the requisite corporate power and authority to execute and
deliver this Agreement and each other Transaction Document and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement, the other Transaction Documents and the other
agreements, documents and instruments referred to herein have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement, any other Transaction Document or any such other
agreement, document or instrument or to consummate the transactions so
contemplated. This Agreement and the other Transaction Documents have been duly
executed and delivered by the Company and each such document constitutes a valid
and binding obligation of the Company enforceable against the Company in
accordance with its respective terms.
3.5 Consents and Approvals; No Violations.
Except for Permits as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act and applicable foreign and
state securities or blue sky laws and the HSR Act, neither the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Organizational Documents of the
Company or any of its Subsidiaries, (b) except as set forth on Schedule 3.5(b)
---------------
require any filing with, notice to, or Permit (as defined in Section 3.12),
------------
authorization, consent or approval of, any Governmental Entity, (c) result in
the creation or imposition of any Liens upon the properties or assets of the
Company or any Subsidiary, (d) except as set forth on Schedule 3.5(d), result in
---------------
a violation or breach of, require any notice to any party pursuant to, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation, acceleration or
right of non-renewal or require any prepayment or offer to purchase any debt or
give rise to the loss of a material benefit) under, any of the terms, conditions
or provisions of any Material Contract (as defined in Section 3.11) to which the
------------
Company or any of its Subsidiaries is a party or by which the Company's or any
of its Subsidiaries' properties or assets may be bound, (e) violate any Order or
Law applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets or (f) except as set forth on Schedule 3.5(f)
---------------
result in the loss, forfeiture, revocation, termination or diminution of any
Permit.
3.6 SEC Documents; Financial Statements; Other Financial Information.
(a) The Company has filed with the Commission all SEC Documents
required to be filed on or prior to the date hereof. As of their respective
filing dates, (i) the SEC Documents complied in all material respects with
the requirements of the Securities Act, or the Exchange Act, as the case
may be, and the rules and regulations of the Commission promulgated
thereunder applicable to such SEC Documents, and (ii) as of its filing
date, none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements included in the SEC Documents complied in all material respects,
as of their respective filing dates, as to
10
form with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto, were prepared in
accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q of the Commission) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). The 1998
Financial Statements have been prepared in accordance with GAAP and fairly
present the consolidated financial position of the Company and its
Subsidiaries as of the date thereof and the results of the Company's and
its Subsidiaries' operations and cash flows for the periods then ended.
(b) Except (x) as set forth on Schedule 3.6, (y) as set forth in the
------------
consolidated balance sheet included in the 1998 Financial Statements and
(z) for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of such balance
sheet, neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by GAAP to be set forth on a balance sheet or in the
notes thereto.
3.7 Company Acquisitions.
Schedule 3.7 sets forth a true, correct and complete description of all the
------------
following information with respect to all pending and completed acquisitions by
the Company or any Subsidiary (the "Company Acquisitions"):
--------------------
(a) the name of the acquired person,
(b) in respect of the post-closing performance of the person acquired,
the potential maximum cash consideration that the Company or any Subsidiary
may be required to pay, the potential maximum value of the Shares that the
Company may be required to issue and the method for valuing such Shares and
the timing, and the formula which will determine the amount, of any cash or
stock consideration that could be payable in respect of the post-closing
performance of the person acquired,
(c) a good faith estimate of any post-closing adjustments for each
Company Acquisition, the cash portion thereof and the portion thereof
payable in Shares and the method for valuing such Shares,
(d) a schedule of the amount of cash held in escrow or otherwise
securing the indemnification obligations to the Company or any Subsidiary
in respect of such Company Acquisition or any holdback arrangement for
Shares or cash in respect of any such indemnification obligation, and
(e) a description of all indemnification claims submitted or proposed
to be submitted by the Company or any Subsidiary in respect of each such
Company Acquisition.
11
3.8 Information Supplied.
None of the information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in any documents to be
filed by the Company with the Commission or any other Governmental Entity in
connection with the transactions contemplated hereby (including, without
limitation, the Offer Documents) contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading; provided that no representation or warranty is
-------- ----
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied by the Investor specifically for inclusion
or incorporation by reference therein. The Offer Documents and any such other
documents filed by the Company with the Commission or with any other
Governmental Entity will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
3.9 Absence of Certain Changes or Events.
Except as set forth on Schedule 3.9, since December 31, 1998, the Company
------------
and its Subsidiaries (only from the date such Subsidiary was acquired by the
Company) have conducted their respective businesses only in the ordinary course
consistent with prior practice, and there has not been (a) any material adverse
change, (b) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
Company's capital stock, (c) any split, combination or reclassification of any
of the capital stock of the Company or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in substitution
for shares of capital stock of the Company, (d) any incurrence, assumption or
guarantee by the Company or any Subsidiary of any indebtedness for borrowed
money, other than in the ordinary course of business and in amounts and on terms
consistent with past practices; (e) (i) any granting by the Company or any
Subsidiary to any officer of the Company of any material increase in
compensation, (ii) any granting by the Company or any Subsidiary to any officer,
director or consultant or an employee who earned more than $200,000 in the most
recent fiscal year or is currently earning (on an annualized basis) more than
$200,000 (in salary, bonus and other cash compensation), of any material
increase in severance or termination pay or (iii) any entry by the Company or
any Subsidiary into any written or oral employment agreement, or any severance
or termination agreement or arrangement with any officer, director or consultant
or an employee who earned more than $200,000 in the most recent fiscal year or
is currently earning (on an annualized basis) more than $200,000 (in salary,
bonus and other cash compensation), (f) any damage, destruction or loss to
property, whether or not covered by insurance, that, individually or in the
aggregate, has not been cured and may be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect, (g) any material
change in accounting methods, principles or practices by the Company or any
Subsidiary other than those required by GAAP, (h) any delivery of a notice of
non-renewal or any other failure to renew Contracts between the Company or any
Subsidiary, on the one hand, and its customers, on the other hand, which are
material, individually or in the aggregate or (i) any loss of any employee who
earned more than $200,000 in the most recent fiscal year (in salary, bonus and
other cash compensation).
12
3.10 Litigation.
(a) Except as disclosed on Schedule 3.10(a), there is no Proceeding
----------------
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries which is material to the
Company and/or its Subsidiaries, taken as a whole
(b) Except as disclosed on Schedule 3.10(b), there is no Order
----------------
outstanding against the Company or any Subsidiary.
3.11 Contracts.
(a) Schedule 3.11(a) sets forth a true, correct and complete list of
----------------
all Material Contracts to which the Company or any Subsidiary is a party or
by which any of their respective assets or properties are bound.
(b) Neither the Company nor any Subsidiary, nor any of their
Affiliates, is and, to the knowledge of the Company, no other party is in
violation of or in default under (nor does there exist any condition
affecting the Company or any Subsidiary, or to the knowledge of the
Company, other parties to such Material Contracts which upon the passage of
time or the giving of notice or both would reasonably be expected to cause
such a violation of or default under) any Material Contract to which it is
a party or by which it or any of its properties or assets is bound, except
for any such violations or defaults which have not had, and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Each Material Contract constitutes a valid and
binding obligation of the Company and/or Subsidiary, or any of their
Affiliates, party thereto and, to the knowledge of the Company, each other
party thereto, enforceable against such other party in accordance with its
terms, except as enforceability may be limited by equitable principles of
bankruptcy, fraudulent conveyance or insolvency laws affecting creditors'
rights generally.
3.12 Compliance with Laws.
Neither the Company nor any Subsidiary is in violation of, and to the
knowledge of the Company none is under investigation with respect to or has been
threatened to be charged with or given notice of any violation of, in each case,
by any Governmental Entity, any applicable Law, except for violations that have
not had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule 3.12 or
-------------
except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (a) the Permits are
valid and in full force and effect, (b) neither the Company nor any Subsidiary
is in default under, and no condition exists that with notice or lapse of time
or both would constitute a default under, the Permits and (c) none of the
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby.
3.13 Environmental Matters.
(a) Except as set forth in Schedule 3.13(a), the Company and each
----------------
Subsidiary is in compliance with all applicable Environmental Laws except
for any non-compliance which has
13
not had, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(b) Except as set forth in Schedule 3.13(b), there has been no Release
----------------
or threatened Release of Hazardous Materials, in, on, under or affecting
any property owned, leased, controlled or operated by the Company or any
Subsidiary, except for releases which have not had, and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(c) Except as set forth in Schedule 3.13(c), there is no pending, or,
----------------
to the knowledge of the Company, threatened Proceeding or inquiry of or
against the Company or any Subsidiary by any Governmental Entity or other
person relating to any actual or potential violations or liability under of
Environmental Law or any actual or potential obligation to investigate or
remediate a Release or threatened Release of any Hazardous Materials except
for Proceedings which have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(d) Except in connection with the Company Acquisitions (for which the
Company is indemnified except as set forth in Schedule 3.13(d)), neither
----------------
the Company nor any Subsidiary has assumed any liabilities or obligations
arising under Environmental Laws in connection with properties or
facilities previously owned, leased or operated by the Company or any
Subsidiary or their predecessors.
(e) Except as set forth in Schedule 3.13(e), to the knowledge of the
---------------
Company, there are no underground or aboveground storage tanks,
incinerators or surface impoundments at, on or about, under or within any
property, owned, leased, controlled or operated by the Company or any
Subsidiary, and no such tanks, incinerators or impoundments have been
removed from any such property.
(f) Neither the Company nor any Subsidiary has used any waste disposal
site, or otherwise disposed of, transported, or arranged for the
transportation of, any Hazardous Materials to any place or location, with
respect to which it has incurred or, in the future, could reasonably be
expected to incur, liability under CERCLA or any other Environmental Law
which would reasonably be expected to have, individually, or in the
aggregate, a Material Adverse Effect.
3.14 Absence of Changes in Benefit Plans; Labor Relations.
(a) Except as disclosed on Schedule 3.14(a), since December 31, 1998
----------------
(or in the case of a Subsidiary, if later, the date of its acquisition by
the Company), there has not been any adoption or amendment by the Company
or any Subsidiary of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan or arrangement providing benefits to any current or former
employee, officer or director of the Company or any Subsidiary (for the
avoidance of doubt, regular salary and/or wage increases and modifications
to bonus, commission and other incentive compensation arrangements in case
with respect to non-officer
14
employees of the Company or any Subsidiary in the ordinary course of
business and consistent with past practice are excluded from the
foregoing).
(b) Except as set forth in Schedule 3.14(b), there exist no
----------------
employment, consulting, severance, termination or indemnification
agreements or arrangements between the Company or any Subsidiary and any
current or former employee, officer or director of the Company or any
Subsidiary which involve the payment on or after the date hereof of more
than $200,000 per year.
(c) Schedule 3.14(c) sets forth a true, correct and complete list of
----------------
all amounts payable or that will or may become payable to each director,
officer or employee or former director, officer or employee of the Company
or any Subsidiary pursuant to any employment, change-in-control, severance
or termination agreement or arrangement as a result of the execution and
delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement.
(d) Except as set forth in Schedule 3.14(d), there are no collective
----------------
bargaining or other labor union agreements to which the Company or any
Subsidiary is a party or by which it is bound.
(e) Except as set forth on Schedule 3.14(e), to the knowledge of the
----------------
Company, since February 1, 1997 (or in the case of a Subsidiary, if later,
the date of its acquisition by the Company), neither the Company nor any
Subsidiary has encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or
lockouts.
3.15 Employment Matters; Affiliate Transactions.
(a) Schedule 3.15(a) sets forth a true, correct and complete list of
----------------
all directors, officers and key employees of the Company and each
Subsidiary as of the date hereof and the aggregate salary, bonus and other
cash compensation paid to each such officer, director and employee of the
Company or any Subsidiary in the most recently completed fiscal year and
paid to each such person from the beginning of the current fiscal year
through the date hereof. For purposes hereof, "key employee" shall mean any
------------
person whose current salary is at least $100,000 per annum.
(b) Except as set forth on Schedule 3.15(b), all Contracts,
----------------
transactions and arrangements between the Company or its Subsidiaries, on
the one hand, and any of their respective Affiliates, directors, officers,
employees, or consultants, on the other hand, (i) were in existence at the
time that the applicable Subsidiary was acquired by the Company, (ii) to
the knowledge of the Company, were and, if applicable, are on terms
representing an arms' length negotiation and (iii) are not material to the
Company and its Subsidiaries taken as a whole.
3.16 ERISA Compliance.
(a) The Company and certain other persons or entities that, together
with the Company, are treated as single employer under Section 414(b), (c),
(m) or (o) of the Code (the Company and each such other person or entity, a
"Commonly Controlled Entity"), maintain or
--------------------------
15
contribute to "employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and other benefit plans for the benefit of any current or former
employees, officers or directors of the Company or dependents of any such
person (collectively, "Benefit Plans"). None of the following has occurred
-------------
which has had, or reasonably would be expected to have a Material Adverse
Effect: (i) any failure to administer any Benefit Plan in accordance with
its terms (ii) any failure by the Company or any Subsidiary or any Benefit
Plan to comply, or any failure of any Benefit Plan to be operated and
administered in accordance with the applicable provisions of ERISA and the
Code, (iii) any "reportable event" or "prohibited transaction" (as such
terms are defined in ERISA and the Code), (iv) any termination of any
Benefit Plan which results in a "reportable event" or (v) the consummation
of the transactions entered into pursuant to this Agreement if such
transactions result in a "reportable event."
(b) None of the Company, any Subsidiary or any Commonly Controlled
Entity has any "employee pension benefit plans" (as defined in Section 3(2)
of ERISA) that are subject to Title IV of ERISA (sometimes referred to
herein as "Pension Plans").
--------------
(c) There have been no violations of ERISA or the Code that could
reasonably be expected to have a Material Adverse Effect with respect to
the filing of applicable documents, notices or reports (including, without
limitation, annual reports filed on IRS Form 5500) relating to any Benefit
Plan maintained by the Company or any Commonly Controlled Entity with any
Governmental Authority or the furnishing of such required documents to the
participants or beneficiaries of such Benefit Plans.
(d) Neither the Company nor any Commonly Controlled Entity has within
the five year period immediately preceding the date hereof maintained,
contributed to or been obligated to contribute to any Benefit Plan that is
subject to Title IV of ERISA or Section 412 of the Code. Neither the
Company nor any Commonly Controlled Entity is required to contribute to any
"multiemployer plan" (as defined in Section 4001(a) (3) of ERISA) or has
withdrawn from any multiemployer plan where such withdrawal has resulted or
would result in any "withdrawal liability" (within the meaning of Section
4201 of ERISA) that has not been fully paid.
(e) With respect to any Benefit Plan that is an employee welfare
benefit plan, except as disclosed in Schedule 3.16(e), (i) no such Benefit
----------------
Plan is funded through a "welfare benefits fund", as such term is defined
in Section 419 (e) of the Code, (ii) each such Benefit Plan that is a
"group health plan", as such term is defined in Section 5000 (b)(1) of the
Code, complies substantially with the applicable requirements of Section
4980B(f) of the Code and (iii) except as provided in writing in such plan,
there are no understandings, agreements or undertakings, written or oral,
that would prevent any such plan (including any such plan covering retirees
or other former employees) from being amended or terminated without
liability to the Company or any Subsidiary on or at any time after the
Effective Time.
(f) Except as set forth in Schedule 3.16(f), no Benefit Plan that is a
----------------
welfare benefit plan provides for post-retirement medical or life insurance
benefits coverage to any current or former employee, officer, or director
of the Company or any Subsidiary or any dependent of any such individual
except as may be required under Section 4980B of the Code.
16
(g) Except as set forth on Schedule 3.16(g), no employee or director
----------------
of the Company or any Subsidiary will be entitled to any additional
compensation or benefits or any acceleration of the time of payment or
vesting of any compensation or benefits under any Benefit Plan in
connection with the transactions contemplated by this Agreement.
(h) All contributions due and payable in respect of any Benefit Plan
have been made in full and proper form, or adequate accruals have been
provided for in the financial statements for all other contributions or
amounts in respect of the Benefit Plans, or, in the case of any
contributory Benefit Plan, amounts have been contributed to such Benefit
Plan within the time prescribed by the Code, ERISA, or any regulations
thereunder or interpretations thereof by the Internal Revenue Service or
the Department of Labor.
(i) As of the Closing Date, there are no actions, suits, disputes,
arbitrations or claims pending (other than routine claims for benefits) or
legal, administrative or other proceedings or governmental investigations
pending or, to the knowledge of the Company and any Commonly Controlled
Entity, threatened against any Benefit Plan or against the assets of any
Benefit Plan which could reasonably be expected to have a Material Adverse
Effect.
3.17 Taxes.
(a) The Company and each Subsidiary has filed all tax returns and
reports required to be filed by it (which returns are true and complete in
all material respects) and has paid all taxes due and required to be paid
by it. The 1998 Financial Statements reflect an adequate reserve for all
taxes payable by the Company or any Subsidiary for all taxable periods and
portions thereof through the date of such financial statements and there
has been no tax liability incurred by the Company or any Subsidiary since
such date other than in the ordinary course of business. No deficiencies
for any taxes which remain outstanding have been proposed, asserted or
assessed against the Company or any Subsidiary, and no requests for waivers
of the time to assess any such taxes are pending. Except as disclosed in
Schedule 3.17(a), no income tax return of the Company or any Subsidiary has
----------------
been or is currently being examined by the United States Internal Revenue
Service or any other Governmental Entity.
(b) Schedule 3.17(b) sets forth the periods during which the Company's
----------------
and its Subsidiaries' Consolidated Federal net operating loss carryforwards
(the "NOL Carryforwards") arose and the expiration dates of the NOL
Carryforwards, identifies which portions thereof are currently limited
under Section 382 of the Code or the "separate return limitation year"
("SRLY") rules of the consolidated return regulations, and, in the case of
----
NOL Carryforwards currently limited under Section 382 of the Code, the
relevant Section 382 limitation (within the meaning of Section 382(b) (1)
of the Code). As used in this Agreement, "taxes" shall mean all Federal,
-----
state, local and foreign income, property, sales, payroll, employment,
excise, withholding and other taxes, tariffs or other governmental charges
in the nature of a tax as well as any interest, penalties and additions to
tax.
(c) Except as set forth on Schedule 3.17(c), no amount that could be
----------------
received pursuant to the Benefit Plans or any executed and delivered
agreements between the Company or any Subsidiary and any officer, director
or employee thereof in effect as of the date hereof (whether in cash or
property or the vesting of property) as a result of any of the transactions
17
contemplated by this Agreement by any employee, officer or director of the
Company or any Subsidiary who is a "disqualified individual" (as such term
is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance, change-in-control or termination agreement, other
compensation arrangement or Benefit Plan currently in effect would be an
"excess parachute payment" (as such term is defined in Section 280G(b) (1)
of the Code). No disqualified individual is entitled to receive any
additional payment from the Company, any Subsidiary, the Surviving
Corporation, or any other person referred to in Q&A 10 under proposed
Treasury Regulation Section 1.280G-1 (a "Parachute Gross-Up Payment") in
--------------------------
the event that the 20 per cent parachute excise tax of Section 4999(a) of
the Code is imposed on such person.
(d) Except as set forth in Schedule 3.17(d), neither the Board of
----------------
Directors of the Company nor the Board of Directors of any Subsidiary has
during the six months prior to the date hereof (or in the case of a
Subsidiary, if later, the date of its acquisition by the Company) granted
to any officer, director or employee of the Company or any Subsidiary any
right to receive any Parachute Gross-Up Payment.
3.18 Title to Properties; Condition of Assets.
(a) Schedule 3.18(a) sets forth a true, correct and complete list, as
----------------
of the date hereof, by location of all of the real property owned by
Company or any of its Subsidiaries (the "Owned Property"), including the
--------------
name of the owner thereof. All Owned Property is located in the United
States and, except as set forth on Schedule 3.18(a), is owned by the
----------------
Company or one of its wholly owned Subsidiaries free and clear of all Liens
except for Permitted Liens. There are no rights of first refusal or other
options to purchase any parcel of Owned Property or any portion or interest
therein.
(b) None of the real property leased by the Company (the "Leased
------
Property") is material to the Company and its Subsidiaries taken as a
--------
whole. The Company or such Subsidiary is the owner and holder of all the
leasehold estates purported to be granted by such leases.
(c) The Leased Property and the Owned Property constitute all real
property used or occupied by the Company or any Subsidiary of the Company.
(d) To the knowledge of the Company, the Company and each Subsidiary
has good and marketable title to, or valid leasehold interests in, all its
material properties and assets except for such as are no longer used in the
conduct of its businesses or as have been disposed of in the ordinary
course of business. All such assets and properties are free and clear of
all Liens except for Liens that, individually or in the aggregate, do not
interfere with the ability of the Company or any Subsidiary to conduct its
business as currently conducted and do not materially adversely affect the
value of, or the ability to sell such assets and properties.
(e) The material personal properties and assets of the Company and its
Subsidiaries are in reasonably good repair and operating condition,
ordinary wear and tear excepted and are sufficient for the conduct of the
business of the Company and Subsidiaries as presently conducted.
18
3.19 Intellectual Property.
(a) The Company and the Subsidiaries own or possess adequate licenses
or other rights to use all Intellectual Property Rights necessary to
conduct the business now operated by them, except where the failure to own
or possess such licenses or rights, individually or in the aggregate, has
not had, and would not reasonably be expected to have, a Material Adverse
Effect. To the knowledge of the Company, the Intellectual Property Rights
of the Company and the Subsidiaries do not conflict with or infringe upon
any Intellectual Property Rights of others to the extent that, if
sustained, such conflict or infringement, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
(b) All information technology (including, without limitation,
software and firmware) presently expected to be used by the Company or by
any Subsidiary after December 31, 1999 in the administration and the
operations of the Company or such Subsidiary, as the case may be,
including, without limitation, in all services and products provided by the
Company or any such Subsidiary, whether to third parties or for internal
use, or, to the knowledge of the Company after reasonable investigation,
used in combination with any information technology of its customers or
suppliers, and which is material to the conduct of the business of the
Company in the ordinary course of business , accurately processes or will
process date and time data (including, without limitation, calculating,
comparing and sequencing) from, into and between the years 1999 and 2000
and the twentieth century and the twenty-first century, including leap year
calculations and neither performance nor functionality of such technology
will be affected by dates prior to, during and after the year 2000. Neither
the Company nor any Subsidiary has any material obligations under warranty
agreements, service agreements or otherwise to remedy any information
technology defect relating to the year 2000.
3.20 Non-Compete.
Except as set forth on Schedule 3.20, neither the Company nor any
-------------
Subsidiary is subject to any agreement, covenant or understanding that restricts
the Company or any Subsidiary from entering or conducting any line of business
in any location at any time.
3.21 State Takeover Statutes.
No state takeover statute or similar statute or regulation applies or
purports to apply to this Agreement or the transactions contemplated by this
Agreement.
3.22 Brokers.
With the exception of fees payable to Friedman, Billings, Xxxxxx & Co.,
Inc., a copy of whose engagement agreement has been provided to the Investor,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of, the Company or any
Subsidiary who might be entitled to any fee or commission from the Company or
any Subsidiary or any of their respective Affiliates upon consummation of the
transactions contemplated by this Agreement.
19
3.23 Government Contracts.
(a) Neither the Company nor any Subsidiary is a party to any contract
with any Governmental Entity that is material to the Company and its
Subsidiaries taken as a whole.
(b) Neither the Company nor any Subsidiary (since the date of its
acquisition by the Company) has been suspended or debarred from bidding on
contracts or subcontracts for any agency or instrumentality of the United
States Government or any other Governmental Entity and, to the knowledge of
the Company, no suspension or debarment action has been threatened or
commenced. To the knowledge of the Company, there is no valid basis for the
Company's or any Subsidiary's suspension or debarment from bidding on
contracts or subcontracts for any agency of the United States Government or
any other Governmental Entity.
3.24 Insurance.
Schedule 3.24 accurately sets forth as of the day preceding the date hereof
-------- ----
all policies of insurance, other than title insurance policies, held by or on
behalf of the Company and all outstanding claims thereunder in excess,
individually or in the aggregate, of $100,000. All such policies of insurance
are in full force and effect, and no notice of cancellation has been received.
In the reasonable judgment of the Company, such policies are in amounts which
are adequate in relation to the business and properties of the Company, and all
premiums to date have been paid in full.
3.25 Share Retention Agreements.
The Company has received share retention agreements from the shareholders
listed in Schedule 3.25, copies of which are attached in Exhibit 3.25 (the
------------- ------------
"Share Retention Agreements") and has delivered copies of each such Share
---------------------------
Retention Agreement to the Investor. No Share Retention Agreement has been
amended, waived, supplemented or restated and each Share Retention Agreement
remains in full force and effect, enforceable in accordance with its terms
against the shareholders party thereto. The Company has not amended, waived,
supplemented or restated any contractual restrictions on transfer of any shares
of Common Stock (except (a) pursuant to the Share Retention Agreements, (b) for
a waiver with respect to a sale of up to 50% of a holder's Shares in connection
with the Offer and (c) for waivers with respect to up to 250,000 other Shares in
the aggregate) and all such restrictions are enforceable in accordance with
their terms against the shareholders party thereto.
3.26 No Material Adverse Change Relative to Investment.
Since February 4, 1999, except as set forth in Schedule 3.26, no changes
-------------
have occurred with respect to the matters covered by the representations and
warranties contained in Article III, as modified by the Merger Schedules that,
-----------
in the aggregate, has had or reasonably could be expected to have an adverse
effect on the Company and its Subsidiaries, taken as a whole, that a reasonably
prudent investor in the Investor's position would consider material relative to
the investment to be made by the Investor pursuant to this Agreement. Since
February 4, 1999, there has been no act or omission to act by the Company with
respect to its capital stock, Company Stock Options or Warrants that would cause
the representations set forth in Section 3.2 or Section 3.3 to be untrue or
inaccurate as if such representations and warranties were made as of
20
the date hereof, in each case, such that a reasonably prudent investor in the
Investor's position would consider such untruths or inaccuracies to be material
relative to the investment to be made by the Investor pursuant to this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company as follows:
4.1 Organization.
The Investor is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to carry on its business as now being conducted. The Investor is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualifications or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) could not be reasonably expected to either
prevent or materially delay its ability to perform its obligations hereunder.
The Investor has made available to the Company complete and correct copies of
its certificate of formation, operating agreement and by-laws, as amended to the
date hereof.
4.2 Authority.
The Investor has the requisite power and authority to execute and deliver
this Agreement and each other Transaction Document to which it is party, and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement, the other Transaction Documents and
the other agreements, documents and instruments referred to herein, in each case
to which the Company is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
action on the part of the Investor and no other proceedings on the part of the
Investor are necessary to authorize this Agreement, any other Transaction
Document or any such other agreement, document or instrument or to consummate
the transactions so contemplated hereby or thereby. This Agreement and the
other Transaction Documents to which the Investor is a party have been duly
executed and delivered by the Investor and each such document constitutes a
valid and binding obligation of the Investor enforceable against the Investor in
accordance with its respective terms.
4.3 Consents and Approvals; No Violations.
Except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of the Exchange Act,
applicable foreign and state securities or blue sky laws, the HSR Act, the DGCL
and state takeover laws, neither the execution, delivery or performance of this
Agreement by the Investor, nor the consummation by the Investor of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of its certificate of formation, by-laws or operating
agreement, (ii) require any filing with, notice to, or permit, authorization,
consent or approval of, any Governmental Entity
21
(except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings would not reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this
Agreement), (iii) result in a violation or breach of, require any notice to any
party pursuant to, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any Contract to which the Investor or any of its subsidiaries is a party or
by which any of them or any of their properties or assets may be bound or (iv)
violate any Order applicable to the Investor any of its properties or assets,
except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which could not, individually or in the aggregate, be reasonably
expected to either prevent or materially delay its ability to perform its
obligations hereunder.
4.4 Information Supplied.
None of the written information supplied or to be supplied by the Investor
specifically for inclusion or incorporation by reference in the Offer Documents,
as supplemented if necessary, and any other documents to be filed by the Company
with the Commission or any Governmental Entity in connection with the
transactions contemplated hereby will, on the date of its filing contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
4.5 Ownership of Company Common Stock.
As of the date hereof, the Investor does not own of record or beneficially,
a number of Shares which, in the aggregate, exceed 1% of the outstanding Shares
on the date hereof and, without the consent of the Company, which consent will
not be unreasonably withheld, the Investor shall not acquire or dispose of any
Shares until after the Closing Date except in connection with the transactions
contemplated by this Agreement.
4.6 Financing.
At the Closing, the Investor will have $100 million available to purchase
the Debentures.
4.7 Brokers.
No broker, investment banker, financial advisor, finder or other person is
entitled to any brokerage, investment banker's, financial advisor's, finder's or
other fee or commission for which the Company will be liable in connection with
the execution of this Agreement by the Investor or the performance by the
Investor of its obligations hereunder, except as otherwise set forth in this
Agreement.
4.8 Investment Representations and Warranties.
(a) The Investor is acquiring the Debentures to be acquired hereunder
for its own account, for investment and not with a view to the distribution
thereof, and without any present intention of distributing the same.
22
(b) The Investor understands that the Debentures have not been, and
will not upon issuance be, registered or qualified under the Securities
Act, or any applicable state securities laws, by reason of their issuance
in a transaction exempt from the registration or qualification requirements
of the Securities Act and such laws, and that the Debentures must be held
indefinitely unless a subsequent disposition thereof is registered or
qualified under the Securities Act and such laws or is exempt from such
registration or qualification.
(c) The Investor is an "accredited investor" within the meaning of
Rule 501(a) promulgated under the Securities Act.
(d) The Investor (A) has been furnished with or has had access to the
information that the Investor has requested from the Company, (B) has had
an opportunity to discuss with management of the Company the intended
business and financial affairs of the Company and (C) has generally such
knowledge and experience in business and financial matters so as to enable
the Investor to understand and evaluate the risks of and form an investment
decision with respect to its or his investment in the Debentures.
(e) The Investor has no need for liquidity in its investment in the
Debentures and is able to bear the economic risk of its investment in the
Debentures and the complete loss of all of such investment.
(f) The Investor understands that there is no public market for the
Debentures and that the transferability of the Debentures is restricted.
(g) The Investor recognizes that an investment in the Company involves
certain risks, and has taken full cognizance of, and understands all of,
the risk factors related to the purchase of the Debentures.
ARTICLE V
COVENANTS
5.1 Conduct of Business.
From the date hereof to the Closing Date, the Company shall, and shall
cause each Subsidiary to, carry on its business in the ordinary course
consistent with past practice and use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and preserve its relationships with customers, suppliers,
licensors, licensees and others having significant business dealings with it.
Without limiting the generality of the foregoing, from the date hereof to the
Closing Date, the Company shall not and shall cause each Subsidiary not to
(except as expressly permitted by this Agreement or with the Investor's consent,
which consent will not be unreasonably withheld):
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock (other than cash
dividends and distributions by a wholly-owned Subsidiary to the Company or
to a Subsidiary all of the capital stock of which is owned directly or
indirectly by the Company), (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution
23
for Shares of its capital stock, or (iii) purchase, redeem or otherwise
acquire any Shares or any capital stock of the Company or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, including any issuance
of securities in any mergers or acquisitions (whether pursuant to any
existing earn-outs or otherwise) other than Permitted Securities;
(c) amend its Organizational Documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets or stock of, or by any
other manner, any business or any person or (ii) any assets except for the
purchase of equipment or other assets in the ordinary course of business,
including, without the Investor's consent, any such acquisition or
agreement pursuant to any letter of intent or other arrangement pursuant to
which the Company or any Subsidiary is a party, provided that the amount
-------- ----
thereof does not exceed, individually or in the aggregate, $2,000,000,
other than as set forth on Schedule 5.1(d);
---------------
(e) sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets, except
(i) immaterial assets, (ii) in the ordinary course of business (including
for trade-ins) and (iii) where the amount of such sales does not exceed,
individually or in the aggregate, $2,000,000;
(f) except in the ordinary course of business consistent with past
practice (i) incur any Indebtedness or guarantee any such Indebtedness of
another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any Subsidiary,
guarantee any debt securities of another person, enter into any "keep well"
or other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of
the foregoing or (ii) make any loans, advances (other than advances to
Subsidiaries or among Subsidiaries) or capital contributions to, or
investments in, any other person;
(g) from the date hereof through the Closing Date, make or agree to
make any capital expenditure or expenditures with respect to property,
plant or equipment for an amount in excess of $5 million;
(h) make any material tax election or settle or compromise any
material income tax liability;
(i) pay, discharge, settle or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent consolidated financial statements (or the notes thereto) of the
Company included in the 1998 Financial Statements or incurred thereafter in
the ordinary course of business consistent with past
24
practice, or waive any material benefits of, or agree to modify any
confidentiality, standstill, non-solicitation or similar agreement to which
the Company or any Subsidiary is a party;
(j) modify, amend in any material respect or terminate any Material
Contract to which the Company or any Subsidiary is a party, or waive,
release or assign any material rights or claims (including any restrictions
on transfer of Shares issued or to be issued pursuant to Company
Acquisitions), other than in the ordinary course of business consistent
with past practice;
(k) except as set forth in Schedule 5.1(k), or as required to comply
---------------
with applicable Law or with the Investor's consent, (i) adopt, enter into,
terminate or amend any Benefit Plan or other arrangement for the benefit or
welfare of any director, officer or current or former employee, other than,
in the case of non-officer or non-key employees, in the ordinary course of
business consistent with past practice, (ii) increase in any manner the
compensation or fringe benefits of, or pay any bonus to, any director,
officer or key employee except pursuant to existing written agreements,
(iii) pay any material benefit not provided for under any Benefit Plan,
(iv) except as permitted in clause (ii), grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit
Plan (including the grant of stock options, stock appreciation rights,
stock based or stock related awards, performance units or restricted stock,
or the removal of existing restrictions in any Benefit Plans or agreement
or awards made thereunder), (v) accelerate the vesting of any Company Stock
Option or (vi) take any action to fund or in any other way secure the
payment of compensation or benefits under any employee plan, agreement,
contract or arrangement or Benefit Plan; or
(l) authorize any of, or commit or agree to take any of, the foregoing
actions.
5.2 No Solicitation.
The Company shall not and shall cause each Subsidiary and its Subsidiaries'
officers and directors not to, and each of the foregoing shall not permit their
respective agents, representatives, advisors or subsidiaries to (whether
directly or indirectly) (i) solicit, initiate or take any action knowingly
to facilitate the submission of inquiries, proposals or offers
("Acquisition Proposals") from any Third Party (as defined below) relating to
------------- ---------
(A) any acquisition or purchase of assets of the Company and its Subsidiaries
other than in the ordinary course of business consistent with past practice,
(B) the purchase of any equity security of the Company or any of its
Subsidiaries (including a self tender offer) or any security that is
convertible, exchangeable or exercisable for any equity security, (C) any
merger, consolidation, business combination, sale of substantially all assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, or (D) any other transaction the
consummation of which would, or could reasonably be expected to impede,
interfere with, prevent or materially delay the transactions contemplated by
this Agreement or which would, or could reasonably be expected to, materially
dilute the benefits to the Investor of the transactions contemplated hereby
(each of the foregoing items set forth in (A) through (D), an "Alternative
-----------
Transaction"), or agree to or endorse any Alternative Transaction, or (ii) enter
-----------
into or participate in any discussions or negotiations regarding any of the
foregoing, or furnish to any Third Party any information with respect to its
business, properties or assets or any of the foregoing, or otherwise cooperate
in any way with, or knowingly assist or participate in, facilitate or
25
encourage, any effort or attempt by any Third Party (other than the Investor) to
do or seek any of the foregoing. Subject to the provisions of the previous
sentence, the Company shall immediately cease and cause its Subsidiaries and its
and their advisors, agents and other intermediaries to cease any and all
existing activities, discussions or negotiations with any Third Party conducted
heretofore with respect to any of the foregoing, and shall use its reasonable
best efforts to cause any such parties in possession of confidential information
about the Company that was furnished by or on behalf of the Company to return or
destroy all such information in the possession of any such Third Party or in the
possession of any agent or advisor of any such Third Party; provided, however,
that the foregoing shall not prohibit the Company (either directly or indirectly
through advisors, agents or other intermediaries) from (i) furnishing
information pursuant to an appropriate confidentiality letter (which letter
shall not be less favorable to the Company in any material respect than the
Confidentiality Agreement, and a copy of which shall be provided for
informational purposes only to the Investor) concerning the Company and its
businesses, properties or assets to a Third Party who has made a bona fide
Acquisition Proposal, (ii) engaging in discussions or negotiations with such a
Third Party who has made a bona fide Acquisition Proposal, (iii) following
receipt of a bona fide Acquisition Proposal, taking and disclosing to its
stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the
Exchange Act or otherwise making disclosure to its stockholders and/or (iv)
taking any non-appealable, final action ordered to be taken by the Company by
any court of competent jurisdiction but in each case referred to in the
foregoing clauses (i) through (iv) only to the extent that the Board of
Directors of the Company shall have concluded in good faith after consultation
with outside counsel that such action is required to prevent the Board of
Directors of the Company from breaching its fiduciary duties to the stockholders
of the Company under applicable law (it being understood that the Board of
Directors of the Company may rely on the written advice of its outside counsel
in good faith and the Investor agrees not to take a contrary position to any
such written advice); provided, further, that (A) the Board of Directors of the
-------- -------
Company shall not take any of the foregoing actions until after it provides
reasonable notice to the Investor of its intent to take such action; and (B) if
the Board of Directors of the Company receives an Acquisition Proposal, to the
extent it may do so without breaching its fiduciary duties to stockholders as
advised by counsel and as determined in good faith, then the Company shall
promptly inform the Investor of the terms and conditions of such proposal and
the identity of the person making it.
5.3 Certain Tax Matters.
From the date hereof until the Closing Date, (i) the Company and each
Subsidiary will file all material tax returns and reports ("Post-Signing
------------
Returns") required to be filed; (ii) the Company and each Subsidiary will timely
-------
pay all taxes shown as due and payable on the Company's Post-Signing Returns
that are so filed; (iii) the Company and each Subsidiary will make provision for
all taxes payable by the Company for which no Post-Signing Return is due prior
to the Closing Date; and (iv) the Company will promptly notify the Investor of
any action, suit, proceeding, claim or audit pending against or with respect to
the Company and each Subsidiary in respect of any tax where there is a
reasonable possibility of a determination or decision which would reasonably be
expected to have a significant adverse effect on the Company's or any
Subsidiary's tax liabilities or tax attributes.
26
5.4 Other Actions.
(a) The Company shall not, and shall cause each Subsidiary not to,
take or omit to take any action, the taking or omission of which would
reasonably be expected to result in (i) any of the representations and
warranties of the Company set forth in this Agreement becoming untrue or
inaccurate in any material respect or (ii) any of the conditions set forth
in Section 7.2 not being satisfied (subject to the Company's right to take
-----------
actions specifically permitted by Section 5.1, Section 5.2 or Section 8.1).
----------- ----------- -----------
(b) Without limiting Section 5.4(a), prior to the Closing, the Company
--------------
shall execute and deliver the Indenture, increase the size of its board of
directors to 10 persons and cause at least three persons designated by the
Investor to be added to the Company's board of directors.
5.5 Advice of Changes; Filings.
The Company shall confer with the Investor on a regular and frequent basis
as reasonably requested by the Investor, report on operational matters and
promptly advise the Investor orally and, if requested by the Investor, in
writing of any material change with respect to the Company or any Subsidiary.
The Company shall promptly provide to the Investor (or its counsel) copies of
all filings made by the Company or any Subsidiary with any Governmental Entity
in connection with this Agreement and the transactions contemplated hereby.
5.6 Financial Information.
The Company shall furnish to the Investor all documents filed with or
submitted to the Commission by the Company simultaneously with such filing or
submission. The Company shall also furnish to the Investor as soon as available
but in any event within 30 days of each calendar month, the unaudited
consolidated and consolidating balance sheets and income statements of the
Company and its Subsidiaries, showing its financial condition as of the close of
such month and the results of operations during such month and for then elapsed
portion of the Company's fiscal year, in each case, setting forth, to the extent
available, the comparative figures for the corresponding month in the prior
fiscal year, the corresponding elapsed portion of the prior fiscal year and the
budget amount for such month (all to be prepared in accordance with GAAP
consistently applied).
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information; Confidentiality.
The Company and its Subsidiaries shall afford to the Investor, and to the
Investor's officers, employees, accountants, counsel, financial advisers and
other representatives, reasonable access during normal business hours from the
date hereof to the Closing Date to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall furnish promptly to the Investor (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the
27
requirements of Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as the Investor may reasonably
request. The Investor will hold, and will cause its officers, employees,
accountants, counsel, financial advisers and other representatives and
Affiliates to hold, any and all information received from the Company, directly
or indirectly, in confidence, according to the terms of the confidentiality
agreement dated as of November 11, 1998, between the Company and an affiliate of
the Investor (the "Confidentiality Agreement").
-------------------------
6.2 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by
this Agreement, including (i) the obtaining of all necessary actions or
non-actions, waivers, consents and approvals from Governmental Entities and
the making of all necessary registrations and filings (including filings
with Governmental Entities, if any) and the taking of all reasonable steps
as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of any of
the transactions contemplated by this Agreement, including seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, (iv) the execution and delivery of
any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and
(v) reasonably cooperating with all potential sources of financing to the
Investor in connection with the transactions contemplated by this
Agreement, and the taking of all reasonable steps as may be necessary or
advisable to consummate one or more financing transactions with such
potential sources of financing, including participating in "road shows"
with respect to the issuance of securities in one or more private
placements or transactions registered under the Securities Act. In
connection with and without limiting the foregoing, the Company and its
Board of Directors shall (i) take all action necessary to ensure that no
state takeover statute or similar statute or regulation is or becomes
applicable to this Agreement or any of other transactions contemplated by
this Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to any transaction contemplated by this
Agreement, take all action reasonably necessary to ensure that the
transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement and the
transactions contemplated by this Agreement. Nothing in this Agreement
shall be deemed to require the Investor to dispose of or hold separate any
asset or collection of assets.
(b) The Company shall give prompt notice to the Investor of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any material respect or (ii) the failure by it or
any Subsidiary to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it or
any Subsidiary under this Agreement; provided, however, that no such
-------- -------
notification shall affect
28
the representations, warranties, covenants or agreement of the parties or
the conditions to the obligations of the parties under this Agreement.
(c) The Investor shall give prompt notice to the Company of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any material respect or (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that no such notification shall affect the
-------- -------
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
6.3 Fees and Expenses.
(a) Except as otherwise provided in this Agreement or as otherwise
agreed to by the parties hereto in writing, all fees and expenses incurred
in connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses,
whether or not the transactions contemplated by this Agreement are
consummated.
(b) If a Payment Event shall occur at any time, then, within two
business days following such Payment Event, the Company shall pay to the
Investor a fee in an amount equal to $12.5 million (the "Termination Fee")
---------------
and shall reimburse the Investor for up to $3 million of the Investor's
Expenses not previously reimbursed.
(c) If an Expense Reimbursement Event shall occur at any time, then,
within two business days following such Expense Reimbursement Event, the
Company shall reimburse the Investor for up to $3 million of the Investor's
Expenses not previously reimbursed.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, if this Agreement shall have been terminated for any reason and
at the time of termination, this Agreement could have been terminated
pursuant to more than one subsection of Section 8.1, then the Investor
-----------
shall be entitled to choose which such subsection this Agreement shall have
been terminated pursuant to.
(e) The Company acknowledges that the agreements contained in this
Section 6.3 are an integral part of the transactions contemplated by this
-----------
Agreement and that, without these agreements, the Investor would not enter
into this Agreement. Accordingly, if the Company fails to pay the
Termination Fee or the Investor's Expenses and, in order to obtain such
payment, the Investor commences a suit which results in a judgment against
the Company for the Termination Fee and/or the Investor's Expenses, the
Company shall pay to the Investor all costs and expenses (including
attorneys fees and expenses) incurred by or on behalf of the Investor in
connection with such suit, together with interest on the amount of the
Termination Fee and the Investor's Expenses that are the subject of such
judgment at the prime rate of the Bankers Trust Company in effect on the
date such payment was required to be made.
29
6.4 Public Announcements.
The Investor, on the one hand, and the Company, on the other hand, will
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement and shall not issue
any such press release or make any such public statement without the prior
consent of the other party, except to the extent required by applicable Law.
6.5 NASD.
The Company agrees to use its best efforts to obtain adequate assurances
prior to Closing that the NASD will not take any action to cease quoting the
Common Stock on Nasdaq in connection with the issuance of the Debentures
(without any modification of the terms of the Debentures as set forth in the
Indenture). The Company further agrees to consult and cooperate with the
Investor and its counsel in performing its obligations under this Section 6.5.
-----------
The Company will not engage in any discussions or otherwise communicate in
writing or orally with the NASD or any of its agents or representatives with
respect to the transactions contemplated by the Transaction Documents without
the prior written consent of the Investor. The Investor agrees to cooperate and
assist the Company in connection with the foregoing.
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation.
The respective obligations of each party to consummate the transactions
contemplated by Section 2.1 are subject to the prior satisfaction or waiver,
-----------
where permissible, of the following conditions:
(a) No statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
court or Governmental Entity that prohibits or restricts the consummation
of the transactions contemplated by this Agreement or makes such
consummation illegal (each party agreeing to use commercially reasonable
efforts to have any such prohibition lifted).
(b) The waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act shall have
expired or been terminated.
(c) All consents, approvals and licenses of any Governmental Entity
required in connection with the execution, delivery and performance of this
Agreement and for the Company to continue to conduct its business in
substantially the manner now conducted, shall have been obtained, unless
the failure to obtain such consents, authorizations, orders or approvals
would not have a Material Adverse Effect after giving effect to the
transactions contemplated by this Agreement.
30
(d) The conditions set forth in the Financing Letters shall have been
satisfied or waived and the funding referred to therein shall be available
to the Company on terms and conditions and in such amounts satisfactory to
the Investor and the Company.
(e) There shall be no Proceeding pending or threatened by the National
Association of Securities Dealers, Inc. (the "NASD") to terminate the
----
NASD's quotation of the Common Stock on the Nasdaq Stock Market ("Nasdaq").
------
(f) Each of the Offer Conditions shall have been waived by the Company
and the Investor or shall have been satisfied.
7.2 Conditions to the Company's Obligations.
The obligation of the Company to consummate the transactions contemplated
by Section 2.1 are subject to the prior satisfaction or waiver of the following
-----------
conditions:
(a) All of the representations and warranties of the Investor set
forth in this Agreement shall be true and correct in all material respects
(except for those representations and warranties that are qualified as to
materiality, which shall be true and correct in all respects) as of the
Closing Date as though made on and as of such time, and the Investor shall
have performed in all material respects all covenants and agreements
required to be performed by it under this Agreement at or prior to the
Closing Date and the Company shall have received a certificate signed by an
executive officer of the Investor to the foregoing effect.
(b) The Investor and the Trustee shall have executed and delivered the
Indenture.
7.3 Conditions to the Investor's Obligations.
The obligations of the Investor to consummate the transactions contemplated
by Section 2.1 are subject to the prior satisfaction or waiver by the Investor
-----------
of the following conditions:
(a) The representations and warranties of the Company set forth in
this Agreement shall be true and correct as of the Closing Date as though
made on and as of such time except to the extent that the failure to be
true and correct has not had and could not reasonably be expected to have,
in the aggregate, an adverse effect on the Company and its Subsidiaries,
taken as a whole, that a reasonably prudent investor in the Investor's
position would consider material relative to the investment to be made by
the Investor pursuant to this Agreement, and the Company shall have
performed in all material respects all covenants and agreements required to
be performed by it under this Agreement at or prior to the Closing Date (it
being understood that any such breach may be cured to the extent permitted
by Section 8.1(d)). The Investor shall have received a certificate signed
--------------
by an executive officer of the Company to the foregoing effect.
(b) All notices required to be given prior to the Closing Date with,
and all consents, approvals, authorizations, waivers and amendments
required to be obtained prior to the Closing Date from, any third party in
connection with the consummation by the Company of the transactions
contemplated by this Agreement have been made and/or obtained.
31
(c) The Investor shall have been provided with a certificate from an
officer of the Company certifying that the conditions precedent to the
Investor's obligations set forth in this Section shall have been satisfied.
(d) The Investor shall have been provided with an opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the Company, or the general counsel of the
Company, as to the matters set forth in Exhibit 7.3(d).
--------------
(e) The Company shall have performed all of its obligations required
to be performed at or prior to the Closing pursuant to the Investor Rights
Agreement. Without limiting the foregoing, the Company shall have performed
its obligations under Section 5.4(b) of this Agreement.
--------------
(f) The Company and the Trustee shall have executed and delivered the
Indenture.
(g) The Company shall have accepted for payment not less than 21.0
million Shares and not more than 26.5 million Shares tendered in the Offer.
(h) The seven persons to serve on the Board of Directors of the
Company from and after the Closing (other than the three persons designated
by the Investor pursuant to the Investor Rights Agreement) shall be
reasonably acceptable to the Investor.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination.
This Agreement may be terminated at any time prior to the Closing Date as
follows:
(a) By mutual written consent of the Investor and the Company.
(b) By either the Investor or the Company if the Closing Date shall
not have occurred on or before the 90th day immediately following the date
hereof (the "Outside Date"); provided that the right to terminate this
------------ -------- ----
Agreement under this Section 8.1(b) shall not be available to any party
--------------
whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in the failure of the Closing Date to occur on or
before such date.
(c) By either the Investor or the Company if any Governmental Entity
shall have issued an Order or taken any other action permanently enjoining,
restraining or otherwise prohibiting the issuance of the Debentures and
such Order or other action shall have become final and nonappealable.
(d) By the Investor, if (i) any of the representations and warranties
of the Company contained in this Agreement shall fail to be true and
correct in any material respect when made or since February 4, 1999 have
become untrue or incorrect (without giving effect to the first paragraph of
Article III) except to the extent that the failure to be true and correct
-----------
has not had and could not reasonably be expected to have, in the aggregate,
an adverse affect on the
32
Company and its Subsidiaries, taken as a whole, that a reasonably prudent
investor in the Investor's position would consider material relative to the
transactions to be consummated by the Investor pursuant to this Agreement
or (ii) the Company shall have breached or failed to comply in any material
respect with any of its obligations under this Agreement, and such failure
to be true and correct, breach or failure shall continue unremedied for 15
days after the Company has received written notice from the Investor of the
occurrence of such failure to be true and correct, breach or failure;
provided, however, that in remedying any such failure to be true and
-------- -------
correct, breach or failure the Company shall not have spent any money,
incurred any liabilities or undertaken any obligations which expenditure,
incurrence or undertaking, individually or together with the breach or
failure so remedied, would itself constitute a material breach of or
failure to perform any representation, warranty or covenant of this
Agreement.
(e) By the Investor if there shall have occurred any material adverse
change since December 31, 1998.
(f) By the Company if (i) any of the representations and warranties of
the Investor contained in this Agreement shall fail to be true and correct
in any material respect, in each case either as of the date hereof or have
since become, and at the time of termination remain, untrue in any material
respect, or (ii) the Investor shall have breached or failed to comply in
any material respect with any of its obligations under this Agreement
(other than as a result of a breach by the Company of any of its
obligations under this Agreement) and such failure to be true and correct,
breach or failure shall continue unremedied for 15 days after the Investor
has received written notice from the Company of the occurrence of such
breach or failure.
(g) By the Investor if either (i) the Offer shall have been terminated
for any reason or (ii) the Offer shall have expired in accordance with its
terms and the Company shall not have accepted for payment at the Offer
Price at least 21 million Shares.
(h) By the Company if prior to the Closing Date, (i) the Company shall
have received an Acquisition Proposal, (ii) in connection with such
Acquisition Proposal, the Board of Directors of the Company shall have
concluded in good faith after consultation with outside counsel that it is
required to terminate this Agreement to prevent the Board of Directors of
the Company from breaching its fiduciary duties to its stockholders under
applicable law, (iii) the Company has complied and is in compliance with
Section 5.2, (iv) prior to being entitled to terminate this Agreement under
-----------
this Section 8.1(h), the Company shall have provided to the Investor at
--------------
least 7 days prior written notice (which notice shall set forth the terms
and conditions of such Acquisition Proposal and identify the applicable
Third Party), the Company shall have cooperated with the Investor during
such 7 day period with the intent of enabling the Investor (if it so
desires) and the Company to agree to a modification of the terms and
conditions of this Agreement and (v) the Company shall have paid to the
Investor the Termination Fee and reimbursed all of the Investor's Expenses.
(i) By the Investor if the Company shall not have received a signed
audit report from PricewaterhouseCoopers LLP in respect of the 1998
Financial Statements prior to March 31, 1999 or such audited financial
statements shall not be substantially identical to the 1998 Financial
Statements.
33
8.2 Effect of Termination.
In the event of a termination of this Agreement by either the Company or
the Investor as provided in Section 8.1, this Agreement shall forthwith become
-----------
void and there shall be no liability or obligation on the part of the Investor
or the Company or their respective officers, directors or Affiliates, except
that Section 6.1, Section 6.3, Section 6.4, Section 8.1, this Section 8.2 and
----------- ----------- ----------- ---- -----------
Article IX shall survive any such termination and except that nothing herein
----------
shall relieve any party for liability for any breach hereof.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment.
This Agreement may not be amended except by an instrument in writing signed
on behalf of all of the parties.
9.2 Extension; Waiver.
At any time prior to the Closing Date, the parties hereto, by action taken
or authorized by their respective Boards of Directors, may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (iii) subject to Section 9.1, waive
-----------
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
9.3 Survival of Representations, Warranties and Agreements, Limitation on
Liability.
The representations, warranties and covenants contained in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
execution and delivery of this Agreement, the Debentures and the Indenture, the
purchase or transfer by the Investor of any Note or portion thereof or interest
therein and the payment of any Debenture until the later of April 1, 2001 and 10
days after the delivery to the Investor of the Company's audited financial
statements for the fiscal year ending December 31, 2000, and may be relied upon
by a subsequent holder of a Debenture, regardless of any investigation made by
or on behalf of the Investor or any other holder of a Debenture at any time.
Notwithstanding anything to the contrary set forth in this Agreement, the
Company shall not be liable to the Investor for such a breach for an amount in
excess of the sum of the principal amount of the Debentures plus accrued
interest thereon.
9.4 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed),
sent by overnight courier
34
(providing proof of delivery) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to the Investor, to
Boss Investment LLC
c/o Apollo Management, L.P.
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
and, if to the Company, to
Building One Services Corporation
000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: N. Xxxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
9.5 Indemnification.
The Company hereby agrees to indemnify and hold harmless each purchaser of
Notes and its Affiliates, partners, officers, directors, employees, agents and
representatives (each, an "Indemnified Party") against any liability, obligation
-----------------
or Proceeding by any third party (including derivative actions brought through
or in the name of the Company) in connection with (a) the status or conduct of
the Company, (b) the execution, delivery and performance of this Agreement, the
Investor Rights Agreement, the Indenture or any other document or instrument
entered into in connection with the transactions contemplated hereby or thereby
or (c) the
35
Indemnified Party's role with the Company or any such transactions, in each
case, except to the extent of any willful misconduct or gross negligence of the
Indemnified Party.
9.6 Interpretation.
When a reference is made in this Agreement to an Article or a Section, such
reference shall be to an Article or a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Unless the context otherwise requires, words
importing the singular shall include the plural, and vice versa. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
------- -------- ---------
shall be deemed to be followed by the words "without limitation". The phrase
------------------
"made available" in this Agreement shall mean that the information referred to
---------------
has been made available if requested by the party to whom such information is to
be made available. As used in this Agreement, the term "subsidiary" of any
----------
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person. As used in this Agreement,
"Material Adverse Effect" means, when used in respect of the Company and its
------------------------
Subsidiaries, any effect or condition that, individually or in the aggregate
with any other effect or condition, is materially adverse to the assets,
properties, business, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole. As used in this Agreement,
"material adverse change" means, when used in respect of the Company and its
------------------------
Subsidiaries, any change or event that, individually or in the aggregate with
any other change or event, is materially adverse to the assets, properties,
business, financial condition or results of operations of the Company and its
Subsidiaries, but excluding any change resulting from general economic
conditions. As used in this Agreement, except where expressly indicated
otherwise, the phrase "knowledge" with respect to the Company, means to the
---------
actual knowledge, after due inquiry (i.e., the amount of inquiry that would be
----
undertaken by a reasonably prudent business person given like facts and
circumstances) of each of the Company's directors and officers and the President
of each Subsidiary. As used in this Agreement, the term "person" shall be
interpreted broadly and shall include any person, individual, corporation,
limited partnership, limited liability company, trust, association or other
entity or business organization of any kind or division thereof.
9.7 Entire Agreement; Third Party Beneficiaries.
This Agreement (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, and (b) is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
9.8 Governing Law.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York without regard to the conflicts of laws principles
thereof.
36
9.9 Counterparts.
This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
two or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
9.10 Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
9.11 Enforcement.
The parties agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State of New York or
in a State court located in the City of New York, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any such Federal or State court if any dispute arises out of
this Agreement or any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (iii) agrees that such
party will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a Federal court sitting
in the state of New York or a New York State court located in the City of New
York and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
37
IN WITNESS WHEREOF, the Investor and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
BOSS INVESTMENT LLC
By: _________________________________
Name:
Title:
BUILDING ONE SERVICES CORPORATION
By: _________________________________
Name:
Title:
38
