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Exhibit 2.12
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
WAG ACQUISITION CORP.
(a Delaware corporation),
THE ▇▇▇▇▇▇ ASSET GROUP, INC.
(a Massachusetts corporation)
and
THE STOCKHOLDERS OF SUCH COMPANY
LISTED ON THE SIGNATURE PAGE HEREOF
Dated as of February 14, 1998
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Table Of Contents
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Page
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1. THE MERGER...............................................................................................2
1.1 Delivery and Filing of Certificate of Merger....................................................2
1.2 Merger Effective Date...........................................................................2
1.3 Certificate of Incorporation, Bylaws, Board of Directors and Officers of the
Surviving Corporation...........................................................................2
2. MERGER CONSIDERATION.....................................................................................3
2.1 Conversion of Capital Stock; Merger Consideration...............................................3
2.2 Exchange Procedures.............................................................................4
2.3 No Fractional Shares............................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE....................................................6
3.1 Computation.....................................................................................6
3.2 Disputes........................................................................................6
3.3 Stockholders' Representative....................................................................7
4. INDEMNITY ESCROW.........................................................................................8
4.1 Creation of Escrow..............................................................................8
4.2 Duration and Terms..............................................................................8
4.3 Voting and Investment...........................................................................8
5. CLOSING; MERGER EFFECTIVE DATE...........................................................................8
5.1 Closing.........................................................................................9
5.2 Closing Date; Location..........................................................................9
5.3 Effectiveness of Merger.........................................................................9
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS...........................................................9
6.1 Corporate Existence.............................................................................9
6.2 Corporate Power; Authorization; Enforceable Obligations.........................................9
6.3 Authority; Ownership...........................................................................10
6.4 Validity of Contemplated Transactions..........................................................10
6.5 Capital Stock of The Company...................................................................10
6.6 Transactions in Capital Stock..................................................................11
6.7 No Bonus Shares................................................................................11
6.8 Subsidiaries...................................................................................11
6.9 Predecessor Status; etc........................................................................11
6.10 Spin-offs by Company...........................................................................11
6.11 No Third Party Options.........................................................................11
6.12 Financial Statements...........................................................................11
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6.13 Liabilities and Obligations....................................................................12
6.14 Accounts and Notes Receivable..................................................................13
6.15 Permits........................................................................................13
6.16 Real and Personal Property.....................................................................13
6.17 Contracts and Commitments......................................................................14
6.18 Government Contracts...........................................................................15
6.19 Title to Real Property.........................................................................16
6.20 Insurance......................................................................................16
6.21 Employees......................................................................................16
6.22 Employee Benefit Plans and Arrangements........................................................17
6.23 Compliance with Law; Authorizations............................................................20
6.24 Transactions With Affiliates...................................................................21
6.25 Litigation.....................................................................................21
6.26 Restrictions...................................................................................21
6.27 Taxes..........................................................................................21
6.28 Intellectual Property Matters..................................................................23
6.29 Completeness; No Violations....................................................................24
6.30 Existing Condition.............................................................................24
6.31 Deposit Accounts; Powers of Attorney...........................................................25
6.32 Books of Account...............................................................................26
6.33 Environmental Matters..........................................................................26
6.34 No Illegal Payments............................................................................27
6.35 Leases.........................................................................................27
6.36 Lease Funding..................................................................................30
6.37 Disclosure.....................................................................................31
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO........................................................31
7.1 Corporate Existence............................................................................31
7.2 UniCapital Stock...............................................................................31
7.3 Corporate Power and Authorization..............................................................31
7.4 No Conflicts...................................................................................32
7.5 Capitalization of UniCapital...................................................................32
7.6 Compliance With Law; Authorization.............................................................32
7.7 Transaction with Affiliates....................................................................33
7.8 Litigation.....................................................................................33
7.9 Miscellaneous..................................................................................33
7.10 Registration Rights............................................................................33
8. COVENANTS OF STOCKHOLDERS AND COMPANIES.................................................................33
8.1 Business in the Ordinary Course................................................................34
8.2 Existing Condition.............................................................................34
8.3 Maintenance of Properties and Assets...........................................................34
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8.4 Employees and Business Relations...............................................................34
8.5 Maintenance of Insurance.......................................................................34
8.6 Compliance with Laws, etc......................................................................34
8.7 Conduct of Business............................................................................34
8.8 Access.........................................................................................34
8.9 Press Releases and Other Communications........................................................35
8.10 Exclusivity....................................................................................35
8.11 Third Party ...................................................................................36
8.12 Notice to Bargaining Agents....................................................................36
8.13 Notification of Certain Matters................................................................36
8.14 Amendment of Schedules.........................................................................37
8.15 HSR Filing.....................................................................................37
8.16 Pre-Closing Dispositions.......................................................................37
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS.................................37
9.1 Representations and Warranties; Performance of Obligations.....................................37
9.2 Employment Agreements..........................................................................38
9.3 Opinion of Counsel.............................................................................38
9.4 Registration Statement.........................................................................38
9.5 HSR Act........................................................................................38
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND NEWCO....................................39
10.1 Representations and Warranties; Performance of Obligations.....................................39
10.2 No Litigation..................................................................................39
10.3 Examination of Financial Statements............................................................39
10.4 No Material Adverse Change.....................................................................39
10.5 Regulatory Review..............................................................................39
10.6 Stockholders' Release..........................................................................40
10.7 Employment Agreements..........................................................................40
10.8 Opinion of Counsel.............................................................................40
10.9 Consents and Approvals.........................................................................41
10.10 Good Standing Certificates.....................................................................41
10.11 Registration Statement.........................................................................41
10.12 Repayment of Indebtedness; Pre-Closing Distributions...........................................41
10.13 Net Income.....................................................................................42
10.14 HSR Act........................................................................................42
11. COVENANTS OF UNICAPITAL........................................................................42
11.1 UniCapital Stock Options.......................................................................42
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11.2 Information Filing.............................................................................42
11.3 Release From Guarantees; Indebtedness..........................................................42
11.4 HSR Filing.....................................................................................43
12. INDEMNIFICATION; SURVIVAL......................................................................43
12.1 General Indemnification by Stockholders........................................................43
12.2 Specific Indemnification by Stockholders.......................................................44
12.3 Indemnification by UniCapital and Newco........................................................44
12.4 Third Party Claims.............................................................................45
12.5 Limitations on Indemnification.................................................................46
12.6 Survival of Representations and Warranties.....................................................47
13. TERMINATION OF AGREEMENT.......................................................................48
13.1 Termination by UniCapital......................................................................48
13.2 Termination by the Stockholders................................................................49
13.3 Automatic Termination..........................................................................49
13.4 Liquidated Damages.............................................................................49
14. NONCOMPETITION AND NONSOLICITATION......................................................................50
14.1 Noncompetition.................................................................................50
14.2 Damages........................................................................................50
14.3 Reasonable Restraint...........................................................................51
14.4 Severability; Reformation......................................................................51
14.5 Independent Covenant...........................................................................51
14.6 Materiality....................................................................................51
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION......................................................51
15.1 Stockholders...................................................................................51
15.2 UniCapital.....................................................................................52
15.3 Damages........................................................................................52
16. LOCK-UP AGREEMENTS.............................................................................52
16.1 Agreement......................................................................................52
16.2 Intended Third Party Beneficiaries.............................................................53
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON UNICAPITAL STOCK.................................53
17.1 Investment Intent..............................................................................53
17.2 Compliance with Law............................................................................53
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17.3 Economic Risk; Sophistication..................................................................54
17.4 Information Supplied...........................................................................54
18. SECURITIES LEGENDS.............................................................................54
19. GENERAL........................................................................................55
19.1 Cooperation....................................................................................55
19.2 Successors and Assigns.........................................................................55
19.3 Entire Agreement...............................................................................55
19.4 Counterparts...................................................................................56
19.5 Brokers and Agents.............................................................................56
19.6 Expenses.......................................................................................56
19.7 Notices........................................................................................56
19.8 Governing Law..................................................................................57
19.9 Exercise of Rights and Remedies................................................................58
19.10 Time...........................................................................................58
19.11 Reformation and Severability...................................................................58
19.12 Remedies Cumulative............................................................................58
19.13 Captions.......................................................................................58
20. DEFINITIONS....................................................................................58
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF
CONTRIBUTION (the "Agreement") is made as of the 14th day of February, 1998,
between UNICAPITAL CORPORATION, a Delaware corporation ("UniCapital"); WAG
ACQUISITION CORP., a Delaware corporation ("Newco"); THE ▇▇▇▇▇▇ ASSET GROUP,
INC., a Massachusetts corporation (the "Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ (collectively referred to as the "Stockholders"), who are
all of the stockholders of the Company. Certain capitalized terms used herein
are defined in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement; and
WHEREAS, Newco was duly incorporated on January 23, 1998 under the laws
of the State of Delaware solely for the purpose of completing this transaction,
and is a wholly-owned subsidiary of UniCapital; and
WHEREAS, the Company is a corporation organized and existing under the
laws of the Commonwealth of Massachusetts; and
WHEREAS, the Company is a general partner of The ▇▇▇▇▇▇ Asset
Associates, a New York general partnership (the "Partnership") whose assets
exceed its liabilities and in which the Company holds a 25% interest; and
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of such corporations and
their respective stockholders that Newco merge with and into the Company
pursuant to this Agreement and the applicable pro visions of the laws of the
respective states of incorporation of the Company and Newco (such transaction
being herein called the "Merger" and the Company, Newco and UniCapital being
hereinafter collectively referred to as the "Constituent Corporations"); and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of a number of similar agreements between UniCapital
and certain other corporations and partnerships and the IPO and that such single
transaction (the "Unified Transaction") shall fall within the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code");
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY AND FILING OF CERTIFICATE OF MERGER. The Constituent
Corporations will cause a Certificate of Merger, in substantially the form of
Annex I attached hereto with such changes therein as may be required by
applicable state laws (the "Certificate of Merger"), to be executed and
delivered to the Secretary of State of the state of incorporation of Newco and
the Company on or before the Merger Effective Date.
1.2 MERGER EFFECTIVE DATE. The "Merger Effective Date" shall be the
date specified in Section 5.3. At the Merger Effective Date, the Certificate of
Merger shall either be filed for immediate effectiveness with the Secretary of
State of the applicable state of incorporation of Newco and the Company or
become effective upon the Merger Effective Date if filed with such Secretary of
State prior to such date. On the Merger Effective Date upon the effectiveness of
the Merger, Newco shall be merged with and into the Company, in accordance with
the Certificate of Merger, and the separate existence of Newco shall cease. The
Company, as the entity surviving the Merger, is hereinafter sometimes referred
to as the "Surviving Corporation." The Merger shall have the effects specified
in the laws of the state of incorporation of the Surviving Corporation.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Certificate of Incorporation of the Company, amended
as set forth in the Certificate of Merger, shall remain the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law;
(b) the Bylaws of the Company shall remain the Bylaws of the
Surviving Corporation and shall remain so until thereafter duly amended;
(c) in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation, the Surviving Corporation shall have a
Board of Directors consisting of one member, who shall be ▇▇▇▇▇▇ New commencing
upon the effectiveness of the Merger and who shall hold office subject to the
laws of the state of incorporation and the Certificate of Incorporation and
Bylaws of the Surviving Corporation; and
(d) the officers of the Resulting Company immediately prior to
the Merger Effective Date shall continue as the officers of the Surviving
Corporation in the same capacity or capacities, each of such officers to serve,
subject to the provisions of the Certificate
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of Incorporation and Bylaws of the Surviving Corporation, until his successor is
elected and qualified; provided, that the Chairman of the Board (if any), the
Treasurer and the Secretary of the Resulting Company shall not succeed to the
corresponding offices of the Surviving Corporation, but instead (i) the sole
director of the Surviving Corporation shall be the Chairman of the Board of the
Surviving Corporation, (ii) the Treasurer of Newco shall be Treasurer of the
Surviving Corporation and (iii) the Secretary of Newco shall be the Secretary of
the Surviving Corporation.
2. MERGER CONSIDERATION
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION.
(a) Upon the effectiveness of the Merger, all of the shares of
capital stock of the Resulting Company issued and outstanding immediately prior
to the effectiveness of the Merger ("Company Stock") shall, by virtue of the
Merger and without any action on the part of the holder thereof but subject to
the effectiveness of the Merger, automatically be converted into the right to
receive, without interest,
(i) an aggregate of $20,998,500 in cash,
(ii) an aggregate of 1,105,184 shares of common
stock, par value $.001 per share, of UniCapital ("UniCapital Stock") (the
consideration referred to in clauses (i) and (ii), all of which is to be
distributed to the Stockholders on the Merger Effective Date in the percentages
set forth on Annex II, subject to Article 4 hereof, is referred to in this
Agreement as the "Effective Date Consideration"); provided, however, in the
event that the aggregate value (based on the IPO price of the UniCapital Stock)
of the 1,105,184 shares of UniCapital Stock is less than $16,577,760, then the
Company shall issue additional shares to the Stockholders so that the aggregate
value of the shares of UniCapital Stock equals $16,577,760 (with appropriate
adjustment to the cash and stock components of the Effective Date Consideration
so as to eliminate fractional shares), and
(iii) the Earn-Out Consideration as described in
Section 2.5, to be distributed to the Stockholders within five business days
after each date of determination of a portion of the Earn-Out Consideration with
respect to a given calendar year (if any) in the percentages set forth on Annex
II.
(b) Upon the effectiveness of the Merger, each share of
capital stock of Newco issued and outstanding immediately prior to the
effectiveness of the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, automatically be converted into one
fully paid and non-assessable share of common stock of the Surviving
Corporation, all of which converted common stock shall constitute all of the
outstanding shares of capital stock of the Surviving Corporation immediately
after the effectiveness of the Merger.
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(c) The Effective Date Consideration and the Earn-Out
Consideration are referred to together in this Agreement as the "Merger
Consideration."
2.2 EXCHANGE PROCEDURES. On the Merger Effective Date, upon surrender
to UniCapital of certificates representing all of the outstanding shares of
Company Stock ("Certificates"), each Stockholder shall, subject to Article 4, be
entitled to receive, in exchange therefor, such Stockholder's pro rata share of
the cash portion of the Effective Date Consideration, calculated in accordance
with Annex II, and a certificate representing that number of whole shares of
UniCapital Stock which such holder has the right to receive in respect of the
Certificates surrendered, calculated in accordance with Annex II, and each
Certificate so surrendered shall forthwith be canceled. On the Merger Effective
Date or as promptly thereafter as is practicable, and subject to and in
accordance with the provisions of Article 4, UniCapital shall cause to be
distributed to the Indemnity Escrow Agent (as defined in Article 4) a
certificate or certificates representing the Escrow Shares (as defined in
Article 4), which shall be registered in the name of the Indemnity Escrow Agent
as nominee for the Stockholders and shall be held in accordance with the
provisions of Article 4 and the Indemnity Escrow Agreement referred to therein.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and any
holder of Company Stock entitled hereunder to receive a fractional share of
UniCapital Stock but for this Section 2.3 will be entitled hereunder to receive
no such fractional share but a cash payment in lieu thereof in an amount equal
to such fraction multiplied by $19.00.
2.4 ALLOCATION OF MERGER CONSIDERATION. The parties agree that they
will not take a position on any income tax return, before any governmental
agency charged with the collection of any income tax, or in any judicial
proceeding that is in any way inconsistent with the allocation (if any) of the
Merger Consideration made by UniCapital following the Closing.
2.5 EARN-OUT CONSIDERATION.
(a) If the earnings before taxes (the "EBT") of the Company
for the twelve months ending December 31, 1998, increased by amounts in respect
of those items set forth on Schedule 2.5 that affected net income during the
period beginning on January 1, 1998 and ending on the Closing Date, and
decreased by the amount of UniCapital corporate overhead allocated to the
Company for the period beginning on the Closing Date and ending on December 31,
1998 (the "Adjusted 1998 EBT"), exceeds the EBT of the Company for the twelve
months ending December 31, 1997 inclusive of the add-backs set forth on Schedule
2.5 (the "Adjusted 1997 EBT"), then the Stockholders shall be entitled to
receive one-half of the difference between the Adjusted 1998 EBT and the
Adjusted 1997 EBT.
(b) If the EBT of the Company for the year ending December 31,
1999, adjusted for the amount of UniCapital corporate overhead allocated to the
Company (the
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"Adjusted 1999 EBT", and together with Adjusted 1997 EBT and Adjusted 1998 EBT,
the "Company EBT"), exceeds the greater of Adjusted 1998 EBT and Adjusted 1997
EBT, then the Stockholders shall be entitled to receive one-half of the
difference between (i) the Adjusted 1999 EBT and (ii) the greater of the
Adjusted 1998 and the Adjusted 1997 EBT.
(c) The EBT of the Company for the years ending December 31,
1998 and December 31, 1999 shall be computed using generally accepted accounting
principles and practices as applied in the audited financial statements of the
Company included in the Registration Statement. The allocation of UniCapital
overhead shall be made on a pro rata basis applied consistently among UniCapital
subsidiaries. To the extent gain-on-sale treatment was accorded any Lease,
whether in the add-backs set forth on Schedule 2.5 or in any year, income from
the payment stream on such Lease shall not be included in the EBT of the Company
for any subsequent year.
(d) The amounts (if any) that the Stockholders become entitled
to receive pursuant to Sections 2.5(a) and/or 2.5(b) are referred to herein as
the "Earn-Out Consideration." The Earn-Out Consideration shall be paid one-half
in cash and one-half in shares of UniCapital Stock, valued at the average of the
closing prices per share of UniCapital Stock for the 20 trading days preceding
December 31 of the year to which the portion of Earn-Out Consideration in
question applies.
(e) Company EBT shall be determined within forty-five days
following December 31 of such year.
(f) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholders dispute the determination of Company EBT, then the
Stockholders' Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20 business days after notification of the
determination of Company EBT. If UniCapital and the Stockholders' Representative
cannot resolve any such dispute which would affect the Earn-Out Consideration,
then such dispute shall be resolved by an Independent Accounting Firm (as
defined in Section 3.2). The Independent Accounting Firm shall be directed to
consider only those agreements, contracts, commitments or other documents (or
summaries thereof) that were either (i) delivered or made available to Price
Waterhouse LLP in connection with the transactions contemplated hereby, or (ii)
reviewed by Price Waterhouse LLP during the course of determining Company EBT.
The determination of the Independent Accounting Firm shall be made as promptly
as practicable and shall be final and binding upon the parties, absent manifest
error which error may only be corrected by such Independent Accounting Firm. The
costs of the Independent Accounting Firm shall be borne by the party (either
UniCapital or the Stockholders as a group) whose determination of Company EBT
was further from the determination of the Independent Accounting Firm. Pending
resolution of any such dispute by the Independent Accounting Firm, only the
amount of the Earn-Out Consideration as determined by Price Waterhouse LLP shall
be paid by UniCapital. Once Company EBT is finally determined, the Earn-Out
Consideration attendant thereto not previously paid, if any, shall be paid in
accordance
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with this Section 2.5; provided that in the event the Stockholders'
determination of EBT was closer to the determination of the Independent
Accounting Firm than UniCapital's determination of EBT, the Stockholders shall
receive such Earn-Out Consideration plus interest which shall accrue at the rate
of 10% per annum on any such Earn-Out Consideration that is resolved in the
Stockholders favor from the date the Earn-Out Consideration was first payable
until the date on which the Earn-Out Consideration is received by the
Stockholders.
(g) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP") and
consistent with previous practice, a balance sheet of the Company (the "Closing
Date Balance Sheets") as of the end of business on the day prior to the Closing
Date (as defined in Section 5). If the aggregate stockholders' equity of the
Company as shown on the Closing Date Balance Sheets is less than the aggregate
stockholders' equity as shown on the consolidated balance sheets of the Company
as at December 31, 1997 as audited by Price Waterhouse LLP, then, subject to
Section 3.2, commencing 10 business days after delivery of the Closing Date
Balance Sheets to UniCapital, the aggregate Merger Consideration shall be
adjusted downward dollar-for-dollar in the amount of any such deficiency (the
"Net Worth Deficiency"). Upon determination of the Net Worth Deficiency,
UniCapital shall be entitled to recover from the Indemnity Escrow pursuant to
Article 4 that portion of the Net Worth Deficiency which does not exceed
one-half of the balance of the Indemnity Escrow. For any amount by which any Net
Worth Deficiency exceeds one-half of the initial balance of the Escrow Property,
such portion of the Net Worth Deficiency shall be paid by the Stockholders not
later than the 25th business day after the delivery of the Closing Date Balance
Sheet (or if applicable, not later than the fifth business day after the final
determination of any Disputed Amount in accordance with Section 3.2). At its
sole and exclusive option, and at any time after such 25th business day (or if
applicable, not later than the fifth business day after the final determination
of any Disputed Amount in accordance with Section 3.2), UniCapital shall be
entitled to recover from the Escrow Property pursuant to Article 4 all or any
portion of the amount of the Net Worth Deficiency not paid by the Stockholders
as required by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholders dispute any
item contained on the Closing Date Balance Sheets, then the Stockholders'
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 10 business days after the delivery of the Closing Date Balance Sheets to
the Stockholders. If UniCapital and the Stockholders' Representative cannot
resolve any such dispute relating to the Net Worth Deficiency, then such dispute
shall be resolved by an independent nationally recognized accounting firm which
is reasonably acceptable to UniCapital
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and the Stockholders' Representative (the "Independent Accounting Firm"). The
determination of the Independent Accounting Firm shall be made as promptly as
practical and shall be final and binding on the parties, absent manifest error
which error may only be corrected by such Independent Accounting Firm. Any
expenses relating to the engagement of the Independent Accounting Firm shall be
allocated between UniCapital and the Stockholders so that the Stockholders'
aggregate share of such costs shall bear the same proportion to the total costs
that the Disputed Amounts unsuccessfully contested by the Stockholders'
Representative (as finally determined by the Independent Accounting Firm) bear
to the total of the Disputed Amounts so submitted to the Independent Accounting
Firm. Pending resolution of any such dispute by the Independent Accounting Firm,
no such Disputed Amount shall be due to UniCapital. Once any such Disputed
Amount is finally determined to be due to UniCapital, UniCapital may proceed to
recover such amount in the manner set forth in Section 3.1.
3.3 STOCKHOLDERS' REPRESENTATIVE. (a) Each Stockholder, by signing this
Agreement, designates ▇▇▇▇▇ ▇▇▇▇▇▇ (or, in the event that ▇▇▇▇▇ ▇▇▇▇▇▇ is unable
or unwilling to serve, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇) to be such Stockholders'
representative for purposes of this Agreement (the "Stockholders'
Representative"). The Stockholders shall be bound by any and all actions taken
by the Stockholders' Representative on their behalf.
(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholders' Representative.
All communications or writings to be sent to Stockholders pursuant to this
Agreement may be addressed to the Stockholders' Representative and any
communication or writing so sent shall be deemed notice to all of the
Stockholders hereunder. The Stockholders hereby consent and agree that the
Stockholders' Representative is authorized to accept deliveries, including any
notice, on behalf of the Stockholders pursuant hereto.
(c) The Stockholders' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Stockholder, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Stockholders'
Representative, and in general to do all things and to perform all acts
including, without limitation, executing and delivering all agreements,
certificates, receipts, instructions and other instruments contemplated by or
deemed advisable in connection with Article 12 of this Agreement. This power of
attorney and all authority hereby conferred is granted subject to and coupled
with the interest of such Stockholder and the other Stockholders hereunder and
in consideration of the mutual covenants and agreements made herein, and shall
be irrevocable and shall not be terminated by any act of any Stockholder, by
operation of law, whether by such Stockholder's death or any other event.
(d) Notwithstanding the foregoing, the Stockholder
Representative shall inform each Stockholder of all notices received, and all
actions, decisions, notices and exercises
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of any rights, power or authority proposed to be done, given or taken by such
Stockholder Representative, and shall act as directed by the Stockholders
holding a majority interest in the Escrow Property (as defined in Section
4.1(b)).
4. INDEMNITY ESCROW
4.1 CREATION OF ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholders pursuant to Sections 12.1
and 12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof,
the following shall be delivered to UniCapital's Transfer Agent as indemnity
escrow agent (the "Indemnity Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to each Stockholder as part of the Effective Date
Consideration in accordance with Annex II, rounded up to the nearest whole share
(the "Escrow Shares"); and
(ii) ten percent (10%) of the cash portion of the
Effective Date Consideration payable to each Stockholder in accordance with
Annex II, rounded up to the nearest whole cent (the "Escrow Cash").
(b) The Escrow Shares and the Escrow Cash are referred to
together as the "Escrow Property." In addition, the Escrow Property shall
include all cash and non-cash dividends and other property at any time received
or otherwise distributed in respect of or in exchange for any or all of the
Escrow Property, all securities hereafter issued in substitution for any of the
foregoing, all certificates and instruments representing or evidencing such
securities, all cash and non-cash proceeds of all of the foregoing property and
except as provided in Section 4.3 all rights, titles, interests, privileges and
preferences appertaining or incident to the foregoing property.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex III. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Merger
Effective Date; and (b) the resolution of any claim for indemnification or
payment that is pending on the first anniversary of the Merger Effective Date,
but only to the extent of the amount of such pending claim.
4.3 VOTING AND INVESTMENT. The Stockholders shall be entitled to
exercise all voting powers incident to the Escrow Shares held by the Indemnity
Escrow Agent as their nominee, but shall not be entitled to exercise any
investment or dispositive powers over such Escrow Shares.
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The Escrow Cash shall be invested from time to time by the Indemnity Escrow
Agent as provided in the Indemnity Escrow Agreement.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
underwriting agreement relating to the offer and sale of shares of UniCapital
Stock in the IPO (the "Underwriting Agreement") shall have been executed, the
parties shall take all actions necessary to effect the Merger (other than the
filing with the appropriate state authorities of the Certificate of Merger,
which shall be filed and become effective on the Merger Effective Date) and to
effect the conversion and delivery of shares referred to in Article 2 hereof
(hereinafter referred to as the "Closing"); provided, that such actions shall
not include the actual completion of the Merger or the actual conversion and
delivery of the shares referred to in Article 2 hereof, which actions shall only
be taken on the Merger Effective Date as herein provided.
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
5.3 EFFECTIVENESS OF MERGER. Concurrently with the consummation of the
sale of the shares of UniCapital Stock pursuant to the Underwriting Agreement,
the Merger shall become effective and all transactions contemplated by this
Agreement, including the conversion and delivery of shares and the wire transfer
or delivery of a check or checks in an amount equal to the cash which the
Stockholders shall be entitled to receive pursuant to the Merger referred to in
Article 2 hereof, shall occur and be deemed to be completed. The date on which
the Merger is effected shall be referred to as the "Merger Effective Date."
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, each Stockholder who is a stockholder of the Company, jointly
and severally, represents and warrants to UniCapital and the Surviving
Corporation, as follows:
6.1 CORPORATE EXISTENCE. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the conduct of its
business requires it to be so qualified, all of which jurisdictions are listed
on Schedule 6.1. The Company has no subsidiaries. Upon the Closing Date, the
dissolution and liquidation of the Partnership shall be effective.
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6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Company has the corporate power, authority and legal right to execute, deliver
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Company has been duly authorized by the
Board of Directors and Stockholders of such Company and no further corporate
action on the part of the Company or its stockholders is necessary to authorize
this Agreement and the performance of the transactions contemplated hereby. This
Agreement has been, and the other agreements, documents and instruments required
to be delivered by the Company in accordance with the provisions hereof (the
"Company Documents") will be, duly executed and delivered on behalf of the
Company by duly authorized officers of the Company, and this Agreement
constitutes, and the Company Documents when executed and delivered will
constitute, the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their respective terms.
6.3 AUTHORITY; OWNERSHIP. Each Stockholder has the full legal right,
power and authority to enter into this Agreement. Upon the date of this
Agreement and immediately prior to the Closing Date, each Stockholder (or his
heirs or legal representatives upon an assignment by operation of law) owns and
will own beneficially and of record all of the shares of capital stock of each
Company identified on Annex II as being owned by such Stockholder. The
conversion of Company Stock into UniCapital Stock and cash pursuant to the
provisions of this Agreement will transfer to UniCapital valid title in the
shares of Company Stock owned by such Stockholder, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Company and each Stockholder does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the Company
or any Stockholder is subject, (b) any judgment, order, writ, injunction, decree
or award of any Governmental Entity which is applicable to the Company or
Stockholder, (c) the charter documents of the Company or any securities issued
by the Company, or (d) any mortgage, indenture, agreement, contract, commitment,
lease, plan, Authorization, or other instrument, document or understanding, oral
or written, to which the Company or Stockholder is a party, by which the Company
or Stockholder may have rights or by which any of the properties or assets of
the Company may be bound or affected, or give any party with rights thereunder
the right to terminate, modify, accelerate or otherwise change the existing
rights or obligations of the Company thereunder. Except for filing the
Certificate of Merger with the applicable Secretary of States and filings under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and except as
aforesaid, no authorization, approval or consent of, and no registration or
filing with, any Governmental Entity is required in connection with the
execution, delivery or performance of this Agreement by the Company or any
Stockholder.
6.5 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company consists solely of the shares shown on Schedule 6.5, of which only the
shares shown on such
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Schedule 6.5 to be issued and outstanding are issued and outstanding. All of the
issued and outstanding shares of the capital stock of the Company are owned by
the Stockholders as set forth on Schedule 6.5, and are free and clear of all
liens, security interests, pledges, charges, voting trusts, restrictions,
encumbrances and claims of every kind. All of the issued and outstanding shares
of Company Stock to be outstanding on the Merger Effective Date will have been
duly authorized and validly issued, fully paid and nonassessable, will be owned
of record and beneficially by the Stockholders (or his heirs or legal
representatives upon an assignment by operation of law) and in the amounts set
forth in Annex II, and will have been offered, issued, sold and delivered by the
Company in compliance with all applicable state and federal laws concerning the
offering, sale or issuance of securities. None of such shares will have been
issued in violation of the preemptive rights of any past or present stockholder,
whether contractual or statutory.
6.6 TRANSACTIONS IN CAPITAL STOCK. The Company has not acquired any
treasury stock since December 31, 1995. No option, warrant, call, conversion
right or commitment of any kind exists which obligates the Company to issue any
of its authorized but unissued capital stock. The Company has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof.
6.7 NO BONUS SHARES. None of the shares of capital stock of the Company
was, and none of the shares of Company Stock will be, issued pursuant to awards,
grants or bonuses, whether of stock or of options or other rights.
6.8 SUBSIDIARIES. The Company has no subsidiaries. Except as set forth
in Schedule 6.8, the Company currently does not own, of record or beneficially,
or control, directly or indirectly, any capital stock, any securities
convertible into capital stock or any other equity interest in any corporation,
association or other business entity. Except as set forth on Schedule 6.8, the
Company is not, directly or indirectly, a participant in any joint venture,
partnership or other noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Company, including the names of all entities from
whom the Company previously acquired assets representing all or substantially
all of the assets of such entity. Except as set forth on Schedule 6.9, the
Company has not ever been a subsidiary or division of another corporation or
been a part of an acquisition which was later rescinded.
6.10 SPIN-OFFS BY COMPANY. Since December 31, 1995, there has not been
any sale or spin-off of significant assets of the Company other than in the
ordinary course of business.
6.11 NO THIRD PARTY OPTIONS. There are no existing agreements, options,
commitments or rights with, of or to any person to acquire any properties,
assets or rights of the
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Company or any interest therein, except in the ordinary course of business
consistent with past practice.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the balance sheets of the Company (the "Audited Balance Sheet") at December
31, 1997 (the "Audited Balance Sheet Date") and at December 31, 1995 and
December 31, 1996, and the related statements of income, cash flows and changes
in stockholders' equity for the fiscal years then ended, certified by Price
Waterhouse LLP, together with the report of such independent public accountants
thereon (the "Audited Financial Statements")
All of the Audited Financial Statements have been prepared in accordance with
GAAP consistently applied throughout the periods involved. All of the balance
sheets included in the Audited Financial Statements, including the related
notes, fairly present the financial position, assets and liabilities (whether
accrued, absolute, contingent or otherwise) of the Company at the dates
indicated and such statements of income, cash flows and changes in stockholders'
equity fairly present the results of operations, cash flows and changes in
stockholders' equity of the Company on a consolidated basis for the periods
indicated.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 6.13 is an accurate list, as
of a date not more than two days prior to the date of this Agreement, of: (i)
all liabilities of the Company which are reflected on the audited balance sheet
as of the Audited Balance Sheet Date included in the Audited Financial
Statements; (ii) all liabilities incurred thereafter other than in the ordinary
course of business (including, without limitation, liabilities to be assumed by
the Company upon dissolution and liquidation of the Partnership); (iii) all
material liabilities incurred thereafter in the ordinary course of business; and
(iv) all liabilities (A) incurred as of the Audited Balance Sheet Date that are
not reflected on the Audited Balance Sheet and (B) all liabilities incurred
thereafter that would not have been so reflected had such liabilities been
incurred as of the Audited Balance Sheet Date. Each of the foregoing liabilities
that has not heretofore been paid or discharged is so noted on Schedule 6.13.
For purposes of this Agreement, "liabilities" means liabilities of any kind,
character or description, whether accrued, absolute, secured or unsecured,
contingent or otherwise.
(b) For each such liability for which the amount is not fixed
or is contested, Schedule 6.13 shall include a summary description of the
liability, together with copies of all relevant non-privileged documentation
relating thereto, detail of all amounts claimed and any other action or relief
sought, the names of the claimant and all other parties to the claim, suit or
proceeding, the name of each court or agency before which such claim, suit or
proceeding is pending, the date such claim, suit or proceeding was instituted,
and a best estimate of the maximum amount, if any, which is likely to become
payable with respect to each such liability. If no estimate is provided, the
best estimate shall for purposes of this Agreement be deemed to be zero. On the
Closing Date, the Company shall deliver, and shall cause its accountants,
outside
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counsel and other representatives or agents to deliver, copies of all privileged
documents related to liabilities as listed on Schedule 6.13.
(c) All of the liabilities reflected on the Audited Balance
Sheet arose only out of or were incurred only in connection with the conduct of
the business of the Company. Except as set forth on Schedule 6.13 and except for
liabilities not required to be set forth thereon pursuant to Section 6.13(a),
the Company has no liabilities or obligations with respect to its businesses,
whether direct or indirect, matured or unmatured, absolute contingent or
otherwise, and there is no condition, situation or set of circumstances which
would reasonably be expected to result in any such liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Company
(including, without limitation, receivables from and advances to employees and
Stockholders) other than those arising out of Leases (collectively, the
"Accounts Receivable"). Schedule 6.14 includes an aging of all Accounts
Receivable showing amounts due in 30-day aging categories. On the Closing Date,
the Stockholders will deliver to UniCapital a complete and accurate list, as of
a date not more than two days prior to the Closing Date, of the Accounts
Receivable. All Accounts Receivable represent valid obligations arising from
bona fide business transactions in the ordinary course of business consistent
with past practice. The Accounts Receivable are, and as of the Closing Date and
the Merger Effective Date will be, collectible net of any respective reserves
shown on the Company's books and records (which reserves are adequate and
calculated consistent with past practice). Subject in the case of Accounts
Receivable reflected on the Company's balance sheet to such reserves reflected
on such balance sheet, each of the Accounts Receivable will be collected in full
within ninety (90) days after the day on which it first became due and payable.
There is no contest, claim, counterclaim, defense or right of set-off, other
than rebates and returns in the ordinary course of business, under any contract
with any obligor of any Account Receivable relating to the amount or validity of
such Account Receivable. The allowance for collection losses on the Audited
Balance Sheet has been determined in accordance with GAAP consistent with past
practice.
6.15 PERMITS. Each material Permit, together with the name of the
Governmental Entity issuing such Permit is set forth on Schedule 6.15. Such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such transactions, the
Surviving Corporation will have all of the Company's right, title and interest
in the Permits.
6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Audited
Balance Sheet Date, of all the real and personal property (which in the case of
personal property had an original cost in excess of $25,000) owned or leased by
the Company where the Company is a lessee or sublessee,
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including an indication as to which assets were formerly owned by any
Stockholder or affiliate (which term, as used herein, shall have the meaning
ascribed thereto in Rule 144(a)(1) promulgated under the Securities Act of 1933,
as amended (the "Securities Act")) of the Company and the Company has delivered
true and correct copies of leases, where the Company is a lessee or sublessee,
for equipment and properties on which are situated buildings, warehouses and
other structures used in the operation of the business of the Company. Except as
set forth on Schedule 6.16, where the Company is a lessee or sublessee, all of
the Company's buildings, leasehold improvements, structures, facilities,
equipment and other material items of tangible property and assets are in good
operating condition and repair, subject to normal wear and maintenance, are
usable in the regular and ordinary course of business and conform to all
applicable laws, ordinances, codes, rules and regulations, and Authorizations
relating to their construction, use and operation. All leases set forth on
Schedule 6.16 have been duly authorized, executed and delivered and constitute
the legal, valid and binding obligations of the Company and, to the knowledge of
the Stockholders, no other party to any such lease is in default thereunder and
such leases constitute the legal, valid and binding obligations of such other
parties. All fixed assets used by the Company in the operation of its business
are either owned by the Company or leased under an agreement set forth on
Schedule 6.16. The Company and the Stockholders have heretofore delivered to
UniCapital copies of all title reports and title insurance policies received or
held by the Company. The Company and the Stockholders have indicated on Schedule
6.16 a summary description of all plans or projects involving the opening of new
operations, expansion of any existing operations or the acquisition of any real
property or existing business to which management of the Company has devoted any
significant effort or expenditure in the two-year period prior to the date of
this Agreement which, if pursued by the Company would require additional
expenditures of significant efforts or capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company other than Leases (the "Contracts"), to
which the Company is a party or is bound, or by which any of its assets are
bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$25,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $25,000 or more;
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(d) agreement, contract, commitment, arrangement or
understanding containing minimum requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof and exceeding $25,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$25,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any successor thereto, or
to the knowledge of Company and each Stockholder, any employee of the Company or
any successor thereto, from engaging or competing in any manner or in any
business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or other
know-how of or used by the Company;
(n) agreement, contract, commitment, arrangement or
understanding to which the Company, on the one hand, and any affiliate, officer,
director or stockholder of the Company, on the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
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Each of the Contracts listed in the Schedule 6.17, or not required to be listed
therein because of the amount thereof, is valid and enforceable in accordance
with its terms; the Company is, and to the knowledge of the Company and each
Stockholder, all other parties thereto are, in compliance with the provisions
thereof. The Company is not, and to the knowledge of the Company and each
Stockholder, no other party thereto is, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein; and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. None of
the rights of the Company under any Contract will be impaired by the
consummation of the transactions contemplated hereby, and all such rights will
be enforceable by the Surviving Corporation after the Merger Effective Date
without the consent or agreement of any other party. The Company has delivered
accurate and complete copies of each Contract to UniCapital. No Contract
obligates any party to obtain any consent in connection with the transactions
contemplated hereby.
6.18 GOVERNMENT CONTRACTS. The Company is not now or has ever been a
party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
6.19 TITLE TO REAL PROPERTY. The Company has good and insurable title
to all real property owned and used in its business, subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge, except for:
(a) liens, if any, reflected on Schedules 6.13 and 6.16 as
securing specified liabilities (with respect to which no material default
exists);
(b) liens for current taxes and assessments not yet due or in
default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions
to title shown of record in the offices of the county clerks in which the
properties, assets and leasehold estates are located which, in UniCapital's sole
judgment, do not adversely affect UniCapital's intended use of such properties.
6.20 INSURANCE. The assets, properties and operations of the Company
are insured under various policies of general liability and other forms of
insurance, all of which are described in Schedule 6.20, which discloses for each
policy the risks insured against, coverage limits, deductible amounts, all
outstanding claims thereunder, and whether the terms of such policy provide for
retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which, in relation to the business and assets of the
Company, are consistent with the normal or customary industry practice and all
premiums due to date have been paid in full. The Company has not been refused
any insurance, nor has the
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Company's coverage been limited, by any insurance carrier to which it has
applied for insurance or with which it has carried insurance during the past
five years. Schedule 6.20 also contains a true and complete description of all
outstanding bonds and other surety arrangements issued or entered into in
connection with the business, assets and liabilities of the Company.
6.21 EMPLOYEES. Schedule 6.21 contains the following with respect to
the Company:
(a) a list of all employees of the Company (including name,
title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of the Company and the Stockholders, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the Company and the
Stockholders, threatened before the National Labor Relations Board or similar
body in any foreign country; (iv) there is no employment handbook, personnel
policy manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Company are not covered by any collective
bargaining agreement; (vi) the Company has provided or will timely provide prior
to Closing all notices required by law to be given prior to Closing to all
local, state, federal or national labor, wage-payment, equal employment
opportunity, unemployment insurance and related agencies; (vii) the Company has
paid or properly accrued in the ordinary course of business all wages and
compensation due to employees, including all vacations or vacation pay, holidays
or holiday pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in force or the impact on employees on
plant closing or sales of businesses. All employees of the Company are legally
able to work in the United States.
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Company. "Benefit Plan" means each
"employee pension benefit plan" (as defined in Section 3(3) of ERISA,
hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other plan or
arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed
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to, or required to be maintained or contributed to, by the Company or its
affiliates or any other person or entity that, together with the Company, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
(each, together with the Company, a "Commonly Controlled Entity") for the
benefit of any present or former officer, employee or director. The Company has
no intent or commitment to create any additional Benefit Plan or amend any
Benefit Plan so as to increase benefits thereunder. The Company has not created
any Benefit Plan or declared or paid any bonus compensation in contemplation of
the transactions contemplated by this Agreement. A current, accurate and
complete copy of each Benefit Plan has been made available to UniCapital. Except
as disclosed on Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Company and the Stockholders, no
condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company, nor any
Commonly Controlled Entity, nor any trustee or agent has been or is presently
engaged in any prohibited transactions as defined by Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not applicable which could
subject the Company to the tax or penalty imposed by Section 4975 of the Code or
Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Company and the Stockholders, no condition exists which could
subject the Company to a penalty under Section 4071 of ERISA;
(e) neither the Company nor any Commonly Controlled Entity is
or has ever been party to any "multi-employer plan," as that term is defined in
Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Company and the Stockholders, threatened
against any Benefit Plan, the Company, any Commonly Controlled Entity or any
trustee or agent of any Benefit Plan; and
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(h) with respect to each Benefit Plan to which the Company or
any Commonly Controlled Entity is a party which constitutes a group health plan
subject to Section 4980B of the Code, each such Benefit Plan substantially
complies, and in each case has substantially complied, with all applicable
requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except for
premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty Corporation
nor the Company nor any Commonly Controlled Entity has instituted proceedings to
terminate any Pension Plan and the Pension Benefit Guaranty Corporation has not
informed the Company of its intent to institute proceedings to terminate any
Pension Plan;
(iii) full payment has been made of all amounts which
the Company or any Commonly Controlled Entity was required to have paid as a
contribution to the Pension Plans as of the last day of the most recent fiscal
year of each of the Pension Plans ended prior to the date of this Agreement, and
none of the Pension Plans has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such Pension
Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Company and the
Stockholders, the actuarial assumptions utilized, where appropriate, in
connection with determining the funding of each Pension Plan which is a defined
benefit pension plan (as set forth in the actuarial report for such Pension
Plan) are reasonable. Copies of the most recent actuarial reports have been
furnished to UniCapital. Based on such actuarial assumptions, as of the Audited
Balance Sheet Date, the fair market value of the assets or properties held under
each such Pension Plan exceeds the actuarially determined present value of all
accrued benefits of such Pension Plan (whether or not vested) determined on an
ongoing Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and the Company has not received
any claim or notice that any such Benefit Plan is not in compliance with, all
applicable laws and orders and prohibited transaction exemptions, including
without limitation, to the extent applicable, the requirements of ERISA;
(vi) neither the Company nor any Commonly Controlled
Entity is in default in performing any of its contractual obligations under any
of the Benefit Plans or any related trust agreement or insurance contract;
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(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in Benefit Plan and their beneficiaries in accordance with the
terms of Benefit Plan;
(viii) each Benefit Plan may be amended or modified
by the Company or Commonly Controlled Entity at any time without liability
except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions contemplated
by this Agreement will not (in and of itself): (A) entitle any employee of the
Company to severance pay, unemployment compensation or any other payment; (B)
accelerate the time of payment or vesting, or increase the amount of
compensation due to any such employee; (C) result in any liability under Title
IV of ERISA; (D) result in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code for which an exemption is not available; or
(E) result (either alone or in conjunction with any other event) in the payment
or series of payments by the Company or any of its affiliates to any person of
an "excess parachute payment@ within the meaning of Section 280G of the Code;
(xi) with respect to each Benefit Plan that is funded
wholly or partially through an insurance policy, all premiums required to have
been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Merger Effective Date
will have been paid on or before the Merger Effective Date and, as of the Merger
Effective Date, there will be no liability of the Company or any Commonly
Controlled Entity under any insurance policy or ancillary agreement with respect
to such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring prior to the Merger Effective Date;
(xii) (A) each Benefit Plan that constitutes a
"Welfare Plan," within the meaning of Section 3(1) of ERISA, and for which
contributions are claimed by the Company or any Commonly Controlled Entity as
deductions under any provision of the Code, is in material compliance with all
applicable requirements pertaining to such deduction;
(B) with respect to any welfare benefit fund
(within the meaning of Section 419 of the Code) related to a welfare benefit
plan, there is no disqualified benefit (within the meaning of Section 4976(b) of
the Code) that would result in the imposition of a tax under Section 4976(a) of
the Code; and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so
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exempt and no event or condition exists which would adversely affect any such
determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Merger Effective Date have been
made or will be made prior to the Merger Effective Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company has complied with
each, and is not in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign
("Regulations"), to which the Company's business, operations, assets or
properties is subject. Th Company owns, holds, possesses or lawfully uses in the
operation of its business all franchises, licenses, permits, easements, rights,
applications, filings, registrations and other authorizations ("Authorizations")
which are in any manner necessary for it to conduct its business as now or
previously conducted or for the ownership and use of the assets owned or used by
the Company in the conduct of the business of the Company, free and clear of all
liens, charges, restrictions and encumbrances and in compliance with all
Regulations. All such Authorizations are listed and described in Schedule 6.23.
The Company is not in default, nor has the Company received any notice of any
claim of default, with respect to any such Authorization. All such
Authorizations are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees. None of such Authorizations
will be adversely affected by consummation of the transactions contemplated
hereby. No Stockholder and no director, officer, employee or former employee of
the Company or any affiliates of the Company, or any other person, firm or
corporation, owns or has any proprietary, financial or other interest (direct or
indirect) in any Authorization which the Company owns, possesses or uses in the
operation of the business of the Company as now or previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
6.24, no Stockholder and no director, officer or employee of the Company, or any
member of his or her immediate family or any other of its, his or her
affiliates, owns or has a 5% or more ownership interest in any corporation or
other entity that is or was during the last three years a party to, or in any
property which is or was during the last three years the subject of, any
contract, agreement or understanding, business arrangement or relationship with
the Company.
6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Stockholders, threatened against the Company or
which relates to the transactions contemplated by this Agreement.
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(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Stockholders, threatened
against the Company or which relates to the Company.
(c) Neither the Company nor any Stockholder knows of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) The Company is not a party to or subject to the provisions
of any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority.
6.26 RESTRICTIONS. The Company is not a party to any indenture,
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially adversely affects or materially restricts or,
so far as the Company or any of the Stockholders can now reasonably foresee, may
in the future materially adversely affect or materially restrict, the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company after consummation of the transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company (the
"Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (singly a "Tax", and collectively, the "Taxes")
have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such Tax Returns are required to be filed, and all such
Tax Returns properly reflect the liabilities of the Company for Taxes for the
periods, property or events covered thereby. All Taxes, including without
limitation those which are called for by the Tax Returns, required to be paid,
withheld or accrued by the Company and any deficiency assessments, penalties and
interest have been timely paid, withheld or accrued. The accruals for Taxes
contained in the Audited Balance Sheet are adequate to cover the Tax liabilities
of the Company as of that date and include adequate provision for all deferred
Taxes, and nothing has occurred subsequent to that date to make any of such
accruals inadequate. The Company's Tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is accurately reflected on the Company's Tax books and records. The
Company is not nor has at any time ever been a party to a Tax sharing, Tax
indemnity or Tax allocation agreement, and the Company has not assumed any Tax
liability of any other
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person or entity under contract. The Company has not received any notice of
assessment or proposed assessment in connection with any Tax Returns and there
are not pending tax examinations of or tax claims asserted against the Company
or any of its assets or properties. The Company has not extended, or waived the
application of, any statute of limitations of any jurisdiction regarding the
assessment or collection of any Taxes. There are now (and as of immediately
following the Closing there will be) no Liens (other than any Lien for current
Taxes not yet due and payable) on any of the assets or properties of the Company
relating to or attributable to Taxes. To the knowledge of the Company and the
Stockholders, there is no basis for the assertion of any claim relating to or
attributable to Taxes which, if adversely determined, would result in any Lien
on the assets of the Company or otherwise have an adverse effect on the Company
or its business, operations, assets, properties, prospects or condition
(financial or otherwise). Neither the Company nor the Stockholders have any
knowledge of any basis for any additional assessment of any Taxes. All Tax
payments related to employees, including income tax withholding, FICA, FUTA,
unemployment and worker's compensation, required to be made by the Company have
been fully and properly paid, withheld, accrued or recorded. There are no
contracts, agreements, plans or arrangements, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Company that, individually or collectively, could give rise to any payment (or
portion thereof) that would not be deductible pursuant to Sections 280G, 404 or
162 of the Code. Two correct and complete copies of (a) all Tax examinations,
(b) all extensions of statutory limitations and (c) all federal, state and local
income tax returns and franchise tax returns of the Company for the last five
fiscal years, or such shorter period of time as any of them shall have existed,
have heretofore been delivered by the Company and the Stockholders to
UniCapital. The Company made an election to be taxed under the provisions of
Subchapter S of the Code within 75 days of its original organization and has at
no time been taxed under the provisions of Subchapter C of the Code. The Company
has a taxable year ended December 31 and the Company has not made an election to
retain a fiscal year other than December 31 under Section 444 of the Code. The
Company does not have any net recognized built-in gain within the meaning of
Section 1374 of the Code. The Company currently utilizes the accrual method of
accounting for income tax purposes and has not changed its method of accounting
for income tax purposes in the past five years.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) The Company has not utilized or currently utilizes any
patent, trademark, trade name, service ▇▇▇▇, copyright, software, trade secret
or know-how except for those listed on Schedule 6.28 (the "Intellectual
Property"), all of which are owned by the Company free and clear of any liens,
claims, charges or encumbrances. The Intellectual Property constitutes all such
assets, properties and rights which are used or held for use in, or are
necessary for, the conduct of the business of the Company.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Company.
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(c) The Company does not infringe upon or unlawfully or
wrongfully use any patent, trademark, trade name, service ▇▇▇▇, copyright or
trade secret owned or claimed by another. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the Company and the
Stockholders, threatened relating to any, patent, trademark, trade name, service
▇▇▇▇, copyright or trade secret formerly or currently used by the Company. None
of the Intellectual Property is subject to any outstanding order, decree or
judgment. The Company has not agreed to indemnify any person or entity for or
against any infringement of or by the Intellectual Property.
(d) No present or former employee of the Company and no other
person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any patent, trademark, trade name,
service ▇▇▇▇ or copyright, or in any application therefor, or in any trade
secret, which the Company owns, possesses or uses in its operations as now or
heretofore conducted. Schedule 6.28 lists all confidentiality or non-disclosure
agreements to which the Company or any of its employees is a party.
(e) Schedule 6.28 sets forth a complete and accurate list of
all registrable items of Intellectual Property duly registered in, filed in or
issued by the United States Copyright Office or the United States Patent and
Trademark Office, any appropriate offices in the various states of the United
States and any offices in other jurisdictions.
(f) All rights of the Company in the Intellectual Property
shall vest in the Surviving Corporation pursuant to the transactions
contemplated hereby without any consent or other approval.
(g) All Intellectual Property in the form of computer software
that is utilized by any Company in the operations of its business is capable of
processing date data between and within the twentieth and twenty-first
centuries, or can be rendered capable of processing such data within three
months by the expenditure of no more than $100,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of the
Company, and the copies of all leases, instruments, agreements, licenses,
permits, certificates or other documents which are included on schedules
attached hereto or which have been delivered or which have been made available
to UniCapital in connection with the transactions contemplated hereby, are
complete and correct; neither the Company nor, to the knowledge of the
Stockholders, any other party to any of the foregoing is in material default
thereunder; and, except as set forth in the schedules and docu ments attached to
this Agreement, the rights and benefits of the Company thereunder will not be
materially and adversely affected by the transactions contemplated hereby, and
the execution of this Agreement and the performance of the obligations hereunder
will not result in a material violation or breach or constitute a material
default under any of the terms or provisions thereof. Except as set forth on
Schedule 6.29, none of such leases, instruments, agreements, contracts,
licenses, permits, certificates or other documents requires notice to, or the
consent or approval of,
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any governmental agency or other third party to any of the transactions
contemplated hereby to remain in full force and effect. The consummation of the
transactions contemplated hereby will not give rise to any right of termination,
cancellation or acceleration or result in the loss of any right or benefit
thereunder.
6.30 EXISTING CONDITION. Since the Audited Balance Sheet Date, the
Company has not:
(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of any Company or any interest therein,
except in the ordinary course of business consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except in the ordinary course of business
consistent with past practice;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, except in the
ordinary course of business consistent with past practice;
(e) declared, set aside or paid any dividend or made or agreed
to make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its shares of capital stock or other ownership interests;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
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(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise)
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
(j) except as set forth on Schedule 6.30, increased the
salaries or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its employees or
made any increase in, or any addition to, other benefits to which any of its
employees may be entitled;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles;
(l) entered into any transaction other than in the ordinary
course of business consistent with past practice;
(m) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(n) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as Schedule
6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
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(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company and a
description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions and the
assets and liabilities of the Company. The Company has not engaged in any
transaction, maintained any bank account or used any of the funds of the Company
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company has secured, and is in
compliance with, all Environmental Permits, with respect to any premises on
which its business is operated, all of which Environmental Permits shall vest in
the Surviving Corporation upon consummation of the transactions contemplated
hereby. The Company is in compliance with all Environmental Laws.
(b) Neither the Company nor any Stockholder has received any
communication from any Governmental Entity that alleges that the Company is not
in compliance with any Environmental Laws or Environmental Permits.
(c) Th Company has not entered into or agreed to any court
decree or order, and the Company is not subject to any judgment, decree or
order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Company and the Stockholders,
threatened to or against any assets or properties of the Company pursuant to any
Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company.
(f) The Company has not received a CERCLA 104(e) information
request or has been named a potentially responsible party for any National
Priorities List site under CERCLA or any site under analogous state law or
received an analogous notice or request from any non-U.S. Governmental Entity,
which notice, request or any resulting inquiry or litigation has not been fully
and finally resolved without possibility of reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
and any former aboveground or underground tanks on any property owned, operated
or leased by the Company have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
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(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by any Company and there are no such articles, containers or
equipment containing PCBs, and there is no asbestos containing material in a
condition or location currently constituting a violation of any Environmental
Law at, on, under or within any property owned, operated or leased by the
Company.
(i) The Company and the Stockholders have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in their possession that have been prepared by
or on behalf of the Company during the past five years.
6.34 NO ILLEGAL PAYMENTS. Neither the Company nor, to the knowledge of
the Company and the Stockholders, any affiliate, officer, agent or employee
thereof, directly or indirectly, has, during the past five years, on behalf of
or with respect to the Company or any affiliate thereof, (a) made any unlawful
domestic or foreign political contributions, (b) made any payment or provided
services which were not legal to make or provide or which the Company or any
affiliate thereof or any such officer, agent or employee should have known were
not legal for the payee or the recipient of such services to receive, (c)
received any payment or any services which were not legal for the payer or the
provider of such services to make or provide, (d) made any payment to any person
or entity, or agent or employee thereof, in connection with any Lease (as
hereinafter defined) to induce such person or entity to enter into a Lease
transaction, (e) had any transactions or payments related to the Company which
are not recorded in their accounting books and records or (f) had any off-book
bank or cash accounts or "slush funds" related to the Company.
6.35 LEASES. Schedule 6.35 hereto sets forth the Company's lease
financing arrangements as of the Audited Balance Sheet Date (which, together
with all other lease/financing arrangements entered into by the Company between
such date and the Closing Date, are referred to herein as the "Leases"). The
term "Lease Documents" means the lease arrangements and financing contracts
evidencing the Leases arrangements described in Schedule 6.35, together with all
related documents and agreements including, without limitations, master lease
agreements, schedules or other addenda to such Leases, certificates of delivery
and acceptance, UCC financing statements, remarketing agreements, residual
guaranty agreements, insurance policies, guaranty agreements and other credit
supports. The term "Equipment" means all equipment, inventory and other property
described as being leased or financed pursuant to a Lease, or in which the
Company is granted a security interest pursuant to a Lease. The term "Obligor"
means any lessee party or other party obligated to pay or perform any
obligations under or in respect of a Lease or the Equipment covered by a Lease
(excluding the lessor party thereunder, but otherwise including, without
limitation, any guarantor of a Lease or any vendor, manufacturer or similar
party under a remarketing agreement, residual guaranty or similar
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agreement). The term "Scheduled Payments" means the monthly or periodic rental
payments or installments of principal and interest under the terms of the
Leases.
(a) There is no restriction or limitation in any of the Lease
Documents or otherwise, restricting the Company from executing this Agreement or
entering into the transactions contemplated by this Agreement, other than
consents which have been, or prior to the Closing will have been, obtained.
(b) The Company owns the Equipment covered by each Lease or
has a vested and perfected first priority security interest in the Equipment.
Except as set forth on Schedule 6.35(b), all Equipment is located in the United
States.
(c) With respect to each Lease, only one chattel paper
original of such Lease exists and is held by the Company or, in the case of
Leases sold or with respect to which the lease payments thereunder have been
assigned by the Company in the ordinary course of business consistent with past
practice, by such assignee.
(d) Each Lease is in full force and effect in accordance with
its terms, and, to the knowledge of the Company or any Stockholder, there has
been no occurrence which would or might permit any Obligor to terminate such
Lease or suspend or reduce any payments or obligations due or to become due in
respect of such Lease or the related Lease Documents by reason of default by the
lessor party under such Lease. To the knowledge of the Company or any
Stockholder, none of the Obligors in respect of a Lease or the related Lease
Documents is the subject of a bankruptcy, insolvency or similar proceeding.
(e) Except for the delinquency in the payment of any Scheduled
Payment that is not more than 90 days past due, there does not exist any default
in the payment of any Scheduled Payments due under any lease or the related
Lease Documents, and there does not exist any other default, breach, violation
or event permitting acceleration, termination or repossession under any Lease or
the related Lease Documents or any event which, to the knowledge of the Company
and the Stockholders, with notice and the expiration of any applicable grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration, termination or repossession under such Lease or the
related Lease Documents.
(f) The Company has not acted in a manner which (nor has the
Company failed to act where such failure to act) would alter or reduce any of
the Company's rights or benefits under any manufacturer's or vendors' warranties
or guarantees with respect to any Equipment.
(g) The Company has complied with all requirements of any
federal, state or local law, including without limitation, usury laws,
applicable to each Lease.
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(h) Each Lease has the following characteristics:
(i) such Lease was originated in the United States
and the Scheduled Payments thereunder are payable in U.S. dollars by Obligors
domiciled in the United States;
(ii) the lessee party under such Lease has
unconditionally accepted the Equipment covered by such Lease ;
(iii) at least one Scheduled Payment has been made by
the Obligor under each such Lease; and
(iv) no Obligor in respect of such Lease is an
affiliate of the Company.
(i) Each Lease and the related Lease Documents are valid,
binding, legally enforceable and non-cancelable obligations of the parties
thereto, enforceable in accordance with their respective terms, except as the
same may be subject to the effect of general principles of equity. Each Lease is
a business obligation of the lessee thereunder and is not a "consumer
transaction" under any applicable federal or state regulation.
(j) No Lease or related Lease Document is the subject of a
fraudulent scheme by any Obligor or any supplier of Equipment.
(k) Each item of Equipment is subject to a Lease.
(l) Each Lease is a fixed rate lease contract.
(m) No Lease or related Lease Document is subject to any
legally enforceable right of rescission, set-off, counterclaim, abatement or
defense, including without limitation any defense of usury, nor will the
operation of any of the terms of any Lease or any related Lease Document or the
exercise of any right or remedy thereunder render such Lease or any related
Lease Document or the obligations thereunder unenforceable, or subject the same
to any right of rescission, set-off, counterclaim, abatement or defense. No
Obligor has asserted any legally enforceable right of rescission, set-off,
counterclaim, abatement or defense to its obligations under a Lease or any
related Lease Document.
(n) As to the Leases and the related Lease Documents, (i) none
has been amended or modified (a) to extend the maturity date for a period of
longer than one year, or (b) to alter the amount or time of payment of any
amount due thereunder, unless as to (a) and (b) such extension or alteration is
anticipated to result in a net economic benefit to the Company; (ii) no
indulgences or waivers have been granted in respect of the obligations of any
Obligor under any Lease, and (iii) the Company has not advanced any monies on
behalf of any Obligor.
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(o) Each Lease requires the Obligor thereunder at its own cost
and expense to maintain the Equipment leased thereunder in good repair,
condition and working order, and, to the knowledge of the Stockholders, each
Obligor under a Lease is currently in compliance with such requirement.
(p) Each Lease requires the Obligor thereunder (i) to pay all
fees, taxes (except income taxes), and other charges or liabilities arising with
respect to the Equipment leased thereunder or the use thereof, (ii) to keep the
Equipment free and clear of any and all liens, security interests and other
encumbrances, other than security interests of the applicable Company, (iii) to
hold harmless the lessor thereunder and its successors and assigns against the
imposition of any fees, charges, liabilities and encumbrances, (iv) to bear all
risk of loss associated with the Equipment covered by or securing the
obligations under such Lease during the term of such Lease and (v) to maintain
at the cost of the Obligor public liability and casualty insurance in respect of
such Equipment covered by such Lease.
(q) Each Lease prohibits without the lessor's prior written
consent any relocation of the Equipment covered by such Lease and requires the
Obligor to execute such agreements and documents as may reasonably be requested
by the lessor in connection with any such relocation.
(r) Each Lease involves either the lease of tangible personal
property owned by the Company or the loan of money secured by a security
interest in tangible personal property owned by the Obligor thereunder.
(s) The Company has not received any notice challenging its
ownership or the priority of its security interest in the Equipment covered by
each Lease, and there are no proceedings pending before any court or
governmental entity or, to the knowledge of the Company and the Stockholders,
threatened by any Obligor or other party, (i) asserting the invalidity of any
Lease or the related Lease Documents, (ii) seeking to prevent payment or
performance by any Obligor of any Lease or any of the terms of the related Lease
Documents, or (iii) seeking any determination or ruling that might adversely
affect the validity or enforceability of any Lease or any of the terms or
provisions of the related Lease Documents.
(t) As to each Lease, there are no agreements or
understandings between the Company and the Obligors in respect of such Lease or
otherwise binding on the Company other than as expressly set forth in the Lease
and the related Lease Documents.
6.36 LEASE FUNDING. The Company is in compliance with all of the terms
and covenants of, and is not in default or breach under, each agreement,
contract, understanding or arrangement with any funding source for the Leases.
6.37 DISCLOSURE. The Company has delivered, or in the case of the
Leases and Lease Documents, made available to, UniCapital true and complete
copies of each agreement, contract,
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commitment or other document (or, in the case of any such document not in the
possession of reasonably available to the Company or a Stockholder, accurate and
complete summaries thereof) that is referred to in the schedules to this
Agreement or that has been requested by UniCapital or its representatives.
Without limiting any exclusion, exception or other limitation contained in any
of the representations and warranties made herein, this Agreement and the
schedules hereto and all other documents and information prepared or certified
by the Stockholders to the Company or any Subsidiary and provided to UniCapital
and its representa tives pursuant hereto do not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein not misleading. If any Stockholders become
aware of any fact or circumstance that would change a representation or warranty
of any Stockholder in this Agreement or any representation made on behalf of the
Company, then the Stockholders shall immediately give notice of such fact or
circumstance to UniCapital. However, such notification shall not relieve the
Company or any of the Stockholders of their respective obligations under this
Agreement, nor shall it affect UniCapital's rights pursuant to Section 10.1.
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and as
follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Immediately prior to the
effectiveness of the Merger, each of UniCapital and Newco will be duly qualified
to do business and will be in good standing as a foreign corporation in each
jurisdiction where the conduct of its business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Stockholders on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale, will be legally equivalent in all respects to the majority of UniCapital
stock issued and outstanding as of the date hereof. The UniCapital Stock to be
issued upon the conversion of Company Stock pursuant to the terms of this
Agreement will be free and clear of all liens, encumbrances and claims of every
kind, other than restrictions upon transfer contained herein and other than any
liens, encumbrances or claims arising other than by the actions of UniCapital or
Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with
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the provisions hereof (the "UniCapital Documents") have been duly authorized by
all necessary corporate action. This Agreement has been duly executed and
delivered by UniCapital and Newco and constitutes, and the UniCapital Documents
when executed and delivered will constitute, the legal, valid and binding
obligations of UniCapital and Newco enforceable against UniCapital and Newco in
accordance with their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of any
other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or Newco is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity that is applicable
to UniCapital or Newco, (c) the charter documents of UniCapital or Newco, or (d)
any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which UniCapital or Newco is a party, by which UniCapital or Newco may have
rights or by which any of the properties or assets of UniCapital or Newco may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of UniCapital or Newco thereunder. Except for filing the Articles of
Merger and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, and except as aforesaid, no authorization, approval or consent of, and no
registration or filing with, any Governmental Entity is required in connection
with the execution, delivery or performance of this Agreement by UniCapital or
Newco.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing of the IPO by the offering price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATION. Each of UniCapital and Newco
have complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of the Company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital of Newco any of their affiliates, or
any other person, firm or corporation, owns or has any proprietary, financial or
other interest
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8. COVENANTS OF STOCKHOLDERS AND COMPANIES
(direct or indirect) in any Authorization which UniCapital or Newco owns,
possesses or uses in the operation of the business of UniCapital and Newco as
now or previously conducted.
7.7 TRANSACTION WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or Newco, or any member of his or her immediate family or any other
of its, his or her affiliates, owns or has a 5% or more ownership interest in
any corporation or other entity that is or was during the last three years a
party to, or in any property which is or was during the last three years the
subject of, any contract, agreement or understanding, business arrangement or
relationship with UniCapital or Newco.
7.8 LITIGATION.
(a) No litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory official, body or authority is pending or, to the knowledge of
UniCapital and Newco, threatened against UniCapital or Newco which relates to
the transactions contemplated by this Agreement.
(b) No litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory official, body or authority is pending or, to the knowledge of
UniCapital or Newco, threatened against UniCapital or Newco or which relates to
UniCapital or Newco.
(c) Neither UniCapital nor Newco is not a party to or subject
to the provisions of any judgment, order, writ, injunction, decree or award of
any court, arbitrator or governmental or regulatory official, body or authority.
7.9 MISCELLANEOUS. Prior to the consummation of the Merger, UniCapital
and Newco have no material properties or assets and are not party to any
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.9
hereto.
7.10 REGISTRATION RIGHTS. As of the date hereof and as of the Merger
Effective Date, no officer, director or shareholder of UniCapital will have been
granted any registration rights with respect to the registration of any shares
of capital stock of UniCapital.
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The following covenants shall apply during the period from and after
the date hereof through the Closing Date:
8.1 BUSINESS IN THE ORDINARY COURSE. Except as contemplated in Section
8.15, the Company shall, and the Stockholders shall cause the Company to,
conduct its business solely in the ordinary course and consistent with past
practice.
8.2 EXISTING CONDITION. The Company shall not nor shall any Stockholder
suffer the Company to, cause or permit to occur any of the events or occurrences
described in Section 6.30 hereof.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. Except as otherwise
contemplated in Section 8.15, the Company shall, and the Stockholders shall
cause the Company to, maintain and service its properties and assets in order to
preserve their value and usefulness in the conduct of its respective business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Stockholders shall cause the Company to, use its commercially reasonably efforts
to keep available the services of its current employees and agents and to
maintain its relations and goodwill with its suppliers, customers, distributors
and any others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Company shall, and the Stockholders
shall cause the Company to, notify UniCapital of any material changes in the
terms of the insurance policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Company shall, and the Stockholders
shall cause the Company to, comply with all laws, ordinances, rules, regulations
and orders applicable to such Company or its business, operations, properties or
assets, noncompliance with which might materially affect the Company.
8.7 CONDUCT OF BUSINESS. The Company shall, and the Stockholders shall
cause the Company to, use its reasonable commercial efforts to conduct its
business in such a manner that on the Closing Date and on the Merger Effective
Date the representations and warranties of the Stockholders contained in this
Agreement shall be true, as though such representations and warranties were made
on and as of each such date (except to the extent that such representations and
warranties expressly speak as of a specific date), and the Company shall, and
the Stockholders shall cause the Company to, use commercially reasonable efforts
to cause all of the conditions to the obligations of UniCapital and the
Stockholders under this Agreement to be satisfied on or prior to the Closing
Date.
8.8 ACCESS. Upon reasonable prior notice, the Company shall, and the
Stockholders shall cause the Company to, give to UniCapital's officers,
employees, counsel, accountants and
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other representatives free and full access to and the right to inspect, during
normal business hours, all of the premises, properties, assets, records,
contracts and other documents relating to the Company and shall permit them to
consult with the officers, employees, accountants, counsel and agents of the
Company for the purpose of making such investigation of the Company as
UniCapital shall desire to make, provided that such investigation shall not
unreasonably interfere with such Company's business operations, and provided
further that UniCapital shall not contract or consult with any non-officer
employees of the Company without the Company's prior consent, which shall not be
unreasonably withheld. Furthermore, the Company shall, and the Stockholders
shall cause the Company to, furnish to UniCapital all such documents and copies
of documents and records and information with respect to the affairs of the
Company and copies of any working papers relating thereto as UniCapital shall
from time to time reasonably request. No information or knowledge obtained in
any investigation pursuant to this Section 8.8 or otherwise shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the parties to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Company nor
any Stockholder shall give notice to third parties or otherwise make any press
release or other public statement concerning this Agreement or the transactions
contemplated hereby. No Company and no Stockholder shall grant any interview,
publish any article, report or statement, or respond to any press inquiry or
other inquiry of any third party relating to this Agreement, the business of the
Company, the business (current and proposed) of UniCapital, the Registration
Statement (as defined below), the IPO or any other matter connected with any of
the foregoing without the express prior written approval of UniCapital, and all
inquiries and questions with respect to any of the foregoing shall be
coordinated through ▇▇▇▇▇▇ New, Chief Executive Officer of UniCapital. The
Company and each Stockholder shall coordinate all communications with the
employees and agents of the Company through UniCapital prior to making any such
communication. Notwithstanding the foregoing, this Section 8.9 shall not be
interpreted to prevent the Company or any Stockholder from disclosing
information as compelled by a court order, provided however, that prior to
disclosing any information concerning this Agreement or the transaction
contemplated hereby in response to any such court order, the Company or
Stockholder, as applicable, shall provide UniCapital with prompt notice of the
court order so that UniCapital may take whatever action it deems appropriate to
prohibit such disclosure.
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, the Company, no Stockholder and none of their
affiliates shall, and each of them shall cause its respective employees, agents
and representatives (including, without limitation, any investment banking,
legal or accounting firm retained by it or them and any individual member or
employee of the foregoing) (each, an "Agent") not to, (a) initiate, solicit or
seek, directly or indirectly, any inquiries or the making or implementation of
any proposal or offer (including, without limitation, any proposal or offer to
its shareholders or any of them) with respect to a merger, acquisition,
consolidation, recapitalization, liquidation, dissolution or similar transaction
involving, or any purchase of all or any portion of the assets or any equity
securities of, the Company (any such proposal or offer being hereinafter
referred to as an "Acquisition
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Proposal"), or (b) engage in any negotiations concerning, or provide any
confidential information or data to, or have any substantive discussions with,
any person relating to an Acquisition Proposal, (c) otherwise cooperate in any
effort or attempt to make, implement or accept an Acquisition Proposal, or (d)
enter into or consummate any agreement or understanding with any person or
entity relating to an Acquisition Proposal, except the Merger contemplated
hereby. If the Company or Stockholder, or any of their respective Agents, have
provided any person or entity (other than UniCapital) with any confidential
information or data relating to an Acquisition Proposal, then they shall request
the immediate return thereof. The Company and the Stockholders shall notify
UniCapital immediately if any inquiries, proposals or offers related to an
Acquisition Proposal are received by, any confidential information or data is
requested from, or any negotiations or discussions related to an Acquisition
Proposal are sought to be initiated or continued with, it or any individual or
entity referred to in the first sentence of this Section 8.10. The covenant
contained in this Section 8.10 shall not survive any termination of this
Agreement pursuant to Section 13.1, 13.2 or 13.3.
8.11 THIRD PARTY APPROVALS. Prior to the Closing Date, the Company
shall satisfy any requirement for notice and approval of the transactions
contemplated by this Agreement under applicable agreements with third parties,
and shall provide UniCapital with satisfactory evidence of such third party
approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Company shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement, and shall provide UniCapital with proof that any required notice has
been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Company and the
Stockholders shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to any Stockholder or the Company the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in Article 6 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of any Stockholder or the Company to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by such person hereunder.
(b) UniCapital shall give prompt notice to each Stockholder of
(i) the occurrence or non-occurrence of any event known to UniCapital the
occurrence of non-occurrence of which would be likely to cause any
representation or warranty contained in Article 7 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of UniCapital to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
(c) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such
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notice, which modification may only be made pursuant to Section 8.14, (ii)
modify the conditions set forth in Sections 9 and 10 or (iii) limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Merger
Effective Date to supplement or amend promptly the schedules with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in the
schedules, which may include supplemental disclosure to a representation or
warranty with respect to which no disclosure was made previously ("New
Disclosure"), provided that no amendment or supplement to a schedule or New
Disclosure that constitutes or reflects a material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company (a "Material Adverse Amendment") may be made unless
UniCapital consents to such Material Adverse Amendment; provided further,
however, that if the amendment, supplement or New Disclosure relates to changes
in facts or circumstances occurring subsequent to the date of this Agreement and
such amendment, supplement or New Disclosure constitutes or reflects a Material
Adverse Amendment, then such amendment, supplement or New Disclosure shall be
accepted by UniCapital subject to the provisions of Section 12.2 and 12.5
hereof. No amendment of or supplement to a Schedule or New Disclosure shall be
made later than 48 hours prior to the anticipated effectiveness of the
Registration Statement defined in Section 9.4. Only (i) the Schedules attached
to this Agreement at the time of its execution and (ii) amended Schedules,
supplements or New Disclosure as accepted under the standards and provisions of
this Section 8.14 shall be deemed to be a part of this Agreement in accordance
with Section 19.3 hereof.
8.15 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, the Company shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide
UniCapital with all information reasonably requested and required by it to
satisfy any filing requirements it may have under such act.
8.16 PRE-CLOSING DISPOSITIONS. The Company and the Stockholders shall
cause the Partnership to be dissolved and liquidated by or as of the Closing
Date.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND
THE STOCKHOLDERS
The obligations of the Company and the Stockholders hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
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9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as of the Closing Date and as of the Merger Effective Date as
though such representations and warranties had been made as of such times; all
of the terms, covenants and conditions of this Agreement to be complied with and
performed by UniCapital and Newco on or before the Closing Date shall have been
duly complied with and performed; and a certificate to the foregoing effect
dated the Merger Effective Date and signed by a duly authorized agent, the
President or any Vice President of UniCapital shall have been delivered to the
Stockholders.
9.2 EMPLOYMENT AGREEMENTS. The Surviving Corporation shall have
executed and delivered Employment Agreements, in the form of Annex IV attached
hereto, to each of the persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Stockholders shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein;
(c) the shares of UniCapital Stock to be received by the
Stockholders on the Merger Effective Date shall be duly authorized, fully paid
and nonassessable; and
(d) the execution, delivery and performance of this Agreement
and the consummation of any of the transactions contemplated hereby will not
conflict with, or result in a breach or violation of, the Certificate of
Incorporation or Bylaws of UniCapital or Newco.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration Statement shall have been declared
effective by the SEC not later than June 30, 1998, UniCapital and the
underwriters named therein shall have executed the Underwriting Agreement and
the underwriters named therein shall have agreed to acquire, subject to the
conditions set forth in the Underwriting Agreement, the shares of UniCapital
Stock covered by the Registration Statement. There shall have been no stop-order
issued (that remains in effect) by the SEC with respect to the Registration
Statement.
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9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND
NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholders shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholders contained in this Agreement shall be true on
and as of the Closing Date and as of the Merger Effective Date with the same
effect as though such representations and warranties had been made on and as of
such dates, except for matters expressly disclosed in the certificate or a
schedule thereto (which shall not serve to modify any representation or warranty
made herein or in any other document or otherwise in information supplied by the
Company or any Stockholder); and each and all of the agreements of the
Stockholders and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited balance sheets
of the Company as of the end of the then most recently completed calendar month,
and the unaudited statements of income, cash flows and stockholders' equity of
the Company for the periods then ended, which statements shall have disclosed no
material adverse change in the financial condition of the Company or the results
of its respective operations from the financial statements originally furnished
by the Company as set forth in Schedule 6.12.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company shall have occurred, and no Company shall have
suffered any material loss or damage to any of its properties or assets, whether
or not covered by insurance, since the Audited Balance Sheet Date, which change,
loss or damage materially affects or impairs the ability of the Company to
conduct its business as now conducted or as proposed to be conducted; and
UniCapital shall have
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received on the Closing Date a certificate signed by the Stockholders and dated
the Merger Effective Date to such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company including, but not limited to, environmental and land
use practices, import and export laws, compliance with contracts and federal,
state and local laws and regulations governing the respective operations of the
Company, which review reflects compliance with all applicable laws governing the
Company, disclosing no material actual or probable violations, compliance
problems, required capital expenditures or other substantive environmental, real
estate and land use related concerns and which review is otherwise satisfactory
in all respects to UniCapital, in its sole discretion.
10.6 STOCKHOLDERS' RELEASE. At the Closing Date, the Stockholders shall
have delivered to UniCapital an instrument dated the Merger Effective Date
releasing the Company from any and all claims of Stockholders against the
Company.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex
IV attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood, counsel to the Stockholders, dated the Merger Effective
Date, in form and substance satisfactory to UniCapital stating substantially
that with respect to the Company:
(a) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as now conducted and, to the knowledge of such counsel,
as proposed to be conducted by the Company, and is duly qualified to transact
business in each jurisdiction in which it is required to do so by reason of its
ownership or leasing of real property located in such jurisdiction or
maintaining an office in such jurisdiction and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
real property requires it to be so, except to the extent that the failure to be
duly qualified or in good standing would not have a material adverse effect on
the Company;
(b) all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and non-assessable,
free and clear of all liens, encumbrances, equities or adverse claims;
(c) the Agreement (including each other agreement contemplated
thereby) has been duly authorized, executed and delivered by each of the parties
thereto other than UniCapital and Newco, constitutes a legally valid and binding
obligation of each such party other than UniCapital and Newco, and is
enforceable against each such party other than UniCapital and Newco in
accordance with its terms, subject to (i) the effect of bankruptcy, insolvency,
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reorganization, receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally and (ii) the effect of general
principles of equity, whether applied by a court of law or equity, and provided
that no opinion is expressed herein with respect to the enforceability of
Article 14 or Section 13.4 hereof or of Section 7 of the Employment Agreement
attached hereto as Annex IV;
(d) the execution and delivery by each party other than
UniCapital and Newco of, and the performance by each party other than UniCapital
and Newco of its obligations under, the Agreement (including each other
agreement contemplated hereby) will not contravene any provision of applicable
law or the Certificate of Incorporation or Bylaws of the Company, each as
amended as of the date of this opinion, or, to the best of our knowledge, result
in a breach or default under any agreement or other instrument binding upon the
Company (which default is material to the Company) or, to the best of our
knowledge, violate any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency of the United States of America or any state thereof is required for the
performance by each party other than UniCapital and Newco of its obligations
under the Agreement or the transactions contemplated therein, except for the
effectiveness of the Registration Statement and except for such approval as may
be required under the HSR Act; and
(e) after due inquiry, we do not know of any legal or
governmental proceedings pending or to our knowledge threatened to which the
Company is a party or to which any of the properties of the Company is subject.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. Stockholders shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of incorporation and, unless waived by UniCapital, in each state
in which the Company is authorized to do business, showing that the Company is
in good standing and authorized to do business and that all state franchise
and/or income tax returns and taxes for the Company for all periods prior to the
dates of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been
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no stop-order issued (that remains in effect) by the SEC with respect to the
Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS; PRE-CLOSING DISTRIBUTIONS. Prior to
the Closing Date, the Stockholders shall have (i) repaid to the Company
(including its Subsidiaries) in full all amounts owing by the Stockholders to
such entities and (ii) completed all transactions contemplated by Section 8.15.
10.13 NET INCOME. After taking into account all transactions
contemplated by Section 8.15, the Company shall have aggregate after tax net
income for the twelve months ended December 31, 1997 as included in UniCapital's
unaudited pro forma combined (prior to pro forma and offering adjustments)
income statement for the twelve months ended December 31, 1997 included in the
Registration Statement.
10.14 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 shall have expired or been terminated.
11. COVENANTS OF UNICAPITAL
11.1 UNICAPITAL STOCK OPTIONS. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall make available options to purchase that number of
shares of UniCapital Stock having a fair market value on the effective date of
the Registration Statement, based upon the IPO price per share set forth in the
Underwriting Agreement, equal to 6.25% of the Effective Date Consideration
(valuing the UniCapital Stock to be issued as part of the Effective Date
Consideration at the IPO price per share for the purposes of this Section 11.1)
to be granted to those non-Stockholder key employees of the Surviving
Corporation after the Closing as are designated by the principal executive
officer of the Surviving Corporation who is entering into an Employment
Agreement pursuant to Section 9.2 hereof (or such other officer designated by
the Surviving Corporation and acceptable to UniCapital). Not later than seven
days prior to the effective date of the Registration Statement, the officer
designating the recipients of such options shall provide to UniCapital a written
list of the names of those designated recipients who will receive options
exercisable at the IPO price and the relative percentages of the 6.25% option
pool provided under this Section 11.1 to be awarded to each recipient, as well
as the percentage of options, if any, to be reserved for future issuance. Any
options reserved for future issuance shall be granted at an exercise price equal
to the fair market value of UniCapital Stock as of the date of grant. All
options shall be granted in accordance with UniCapital's policies, and
authorized and issued under the terms of UniCapital's principal stock option
plan for the benefit of employees of UniCapital and its subsidiaries.
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11.2 INFORMATION FILING. To the extent the Unified Transaction is a
transaction that falls within Section 351 of the Code, UniCapital shall file all
information required to be filed by it pursuant to Treasury Regulation
ss.1.351-3(b).
11.3 RELEASE FROM GUARANTEES; INDEBTEDNESS. Not later than 120 days
following the Merger Effective Date, UniCapital shall cause the Stockholders to
be released from any and all guarantees of any indebtedness or other obligations
set forth on Schedule 11.3 that they personally guaranteed for the benefit of
the Company or any Subsidiary, with all such guarantees (a) on indebtedness
being assumed by UniCapital; provided, that, in the event that the beneficiary
of any such guarantee is unwilling to permit the assumption by UniCapital of the
obligations under such guarantee, or in the event that the lender with respect
to the indebtedness to which such guarantee relates accelerates such
indebtedness whether or not prior to such 120 day period because of the
consummation of the transactions contemplated hereby, UniCapital shall repay up
to that amount of recourse indebtedness set forth on Schedule 11.3. The failure
of the Company or its Subsidiaries to obtain the consent of its lenders or of
the beneficiary of the aforementioned guarantee to the assignment to UniCapital
of the indebtedness or obligation set forth on Schedule 11.3 shall not be deemed
a breach hereunder.
11.4 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, UniCapital shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide the
Company with all information reasonably required and requested by it to satisfy
any filing requirements it may have under such act.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, each Stockholder, jointly and
severally, covenants and agrees that such Stockholder will indemnify, defend,
protect and hold harmless UniCapital, Newco and the Surviving Corporation and
their respective officers, stockholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement until the Expiration Date
(as defined in Section 12.6) from and against all claims, damages, losses,
liabilities, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively, "Losses") incurred
by UniCapital, Newco or the Surviving Corporation as a result of or arising from
(a) any breach of the representations and warranties made by the Stockholders
set forth herein or on the schedules or certificates delivered in connection
herewith, (b) any nonfulfillment of any covenant or agreement on the part of the
Stockholders or the Company under this Agreement, (c) the business, operations
or assets of the Company prior to the Merger Effective Date or the actions or
omissions of the Company's directors, officers, stockholders, employees or
agents prior to the Merger Effective Date, other than Losses arising from
matters expressly disclosed in the
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Financial Statements, this Agreement or the Schedules to this Agreement, or (d)
any liability under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or other federal or state law or regulation, at
common law or otherwise, arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact relating to the Company or the
Stockholders contained in any preliminary prospectus, the Registration Statement
or any prospectus forming a part thereof, or any amendment thereof or supplement
thereto (including any additional registration statement filed pursuant to Rule
462(b) under the Securities Act), which statement was provided or was based upon
information or documents provided to UniCapital or its counsel by the Company or
the Stockholders, or (ii) any omission or alleged omission to state therein a
material fact relating to the Company or the Stockholders required to be stated
therein or necessary to make the statements therein not misleading, which
information was not provided to UniCapital or its counsel by the Company or the
Stockholders; provided, however, that such indemnity shall not inure to the
benefit of UniCapital, Newco or the Surviving Corporation to the extent that
such untrue statement (or alleged untrue statement) was made in, or such
omission (or alleged omission) occurred in, any preliminary prospectus and the
Stockholders provided, in writing, corrected information to UniCapital for
inclusion in the final prospectus, and such information was not so included.
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS. Subject to the
applicable limitations contained in Section 12.5 hereof, notwithstanding any
disclosure made in this Agreement or in the schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, each Stockholder,
jointly and severally, covenants and agrees that such Stockholder will
indemnify, defend, protect and hold harmless UniCapital, Newco and the Surviving
Corporation and their respective officers, stockholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, employees, successors
and assigns at all times from and after the date of this Agreement, from and
against all Losses incurred by UniCapital, Newco or the Surviving Corporation as
a result of or incident to: (a) the existence of liabilities of the Company
incurred or attributable to periods prior to the Merger Effective Date in excess
of the liabilities set forth on Schedule 6.13, to the extent of such excess; (b)
the failure of the Company or the Stockholders to file all required Form 5500's
prior to the Merger Effective Date; (c) the litigation matters listed on
Schedule 6.25; (d) any Material Adverse Amendments or New Disclosure made
pursuant to Section 8.14 hereof; and (e) those Scheduled Payments delinquent for
90 days or longer as of the Closing Date net of applicable reserves reflected on
the balance sheet of the Company immediately prior to the preparation of the
Closing Date Balance Sheet.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, covenant and agree that they will indemnify, defend, protect and hold
harmless the Stockholders at all times from and after the date of this Agreement
from and against all Losses incurred by the Stockholders as a result of or
arising from (a) any breach of the representations and warranties made by
UniCapital and Newco set forth herein or on the schedules or certificates
attached hereto, (b) any nonfulfillment of any agreement on the part of
UniCapital under this Agreement, or (c) any liability under the Securities Act,
the Exchange Act or other federal or state law or regulation, at
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common law or otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact relating to UniCapital (including
all of companies, other than the Company, acquired as part of the Unified
Transaction, but only to the extent that UniCapital is actually indemnified by
such other companies for such liability) contained in any preliminary
prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto (including any registration
statement filed pursuant to Rule 462(b) under the Securities Act), or arising
out of or based upon any omission or alleged omission to state therein a
material fact relating to UniCapital (including all of companies, other than the
Company, acquired as part of the Unified Transaction) required to be stated
therein or necessary to make the statements therein not misleading, which
liability is not the subject of indemnification of UniCapital, Newco and the
Surviving Corporation pursuant to Section 12.1(c) above.
12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent that the Indemnifying Party has actually
paid any amount to the Indemnified Party in respect of any Loss in connection
with such Third Party Claim, the Indemnifying Party shall have a right of
subrogation with respect to such Third Party Claim to the extent of such
payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party, and provided further, that
the selection for these purposes of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇, absent any actual
or reasonably likely conflict of interest with respect to parties or defenses,
shall not be objected to by UniCapital), any Third Party Claim as the
Indemnifying Party pursues the same in good faith and diligently and so long as
the Third Party Claim does not relate to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital, Newco or
the Surviving Corporation. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense
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thereof and in any settlement thereof. Such cooperation shall include, but shall
not be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. Notwithstanding the foregoing, the
Indemnified Party shall have the right to participate in any matter through
counsel of its own choosing at its own expense (unless there is a conflict of
interest that prevents counsel for the Indemnifying Party from representing the
Indemnified Party, in which case the Indemnifying Party will reimburse the
Indemnified Party for the expenses of its counsel). After the Indemnifying Party
has notified the Indemnified Party of its intention to undertake to defend or
settle any such asserted liability, and for so long as the Indemnifying Party
diligently pursues such defense, the Indemnifying Party shall not be liable for
any additional legal expenses incurred by the Indemnified Party in connection
with any defense or settlement of such asserted liability, except to the extent
such participation is requested by the Indemnifying Party, in which event the
Indemnified Party shall be reimbursed by the Indemnifying Party for reasonable
additional legal expenses and out-of-pocket expenses, and except in the case of
a Third Party Claim relating to an actual or potential Loss to which Section
12.4(e) applies in which the Indemnified Party is UniCapital, Newco or the
Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, Newco or the
Surviving Corporation as the Indemnified Party (notice of which opinion shall be
given in writing to the Indemnifying Party), any Third Party Claim seeks
material prospective relief which could have a material adverse effect on any
such Indemnified Party or any subsidiary, then such Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such
Third Party Claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense (including, but not limited to, fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation and all counseling or engineering fees and expenses
related thereto) shall be included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified Party elects to exercise
such right, then the Indemnifying Party shall have the right to participate in,
but not control, the defense of such Third Party Claim at the sole cost and
expense of the Indemnifying Party.
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12.5 LIMITATIONS ON INDEMNIFICATION.
(a) To the extent of the amount UniCapital actually receives
as a result of a Net Worth Deficiency that is directly attributable to an
Indemnifiable Decrease, UniCapital shall not be entitled to any indemnity under
Article 12. An "Indemnifiable Decrease" shall be equal to the amount of the Net
Worth Deficiency that consists of a liability for which UniCapital would
otherwise be entitled to indemnity under Article 12 but that has been (a)
accrued, or (b) actually paid (so long as it was not previously accrued on or
before December 31, 1997), during the Interim Net Worth Period. The "Interim Net
Worth Period" shall mean the period beginning on January 1, 1998 and ending on
the Closing Date. Any amounts under (a) or (b) that have not been reflected on
the Company's financial statements under generally accepted accounting
principles applied consistently with previous practice shall be deemed to be an
Indemnifiable Decrease.
(b) No Indemnified Party shall assert any claim (other than a
Third Party Claim) for indemnification hereunder until such time as the
aggregate of all claims which such Indemnified Party may have against an
Indemnifying Party plus any Indemnifiable Decrease shall exceed an amount equal
to $419,970 (the "Basket Limitation"), at which time an Indemnified Party shall
be entitled to seek indemnification for all claims pursuant to this Article 12,
but only to the extent such claims, in the aggregate, exceed the Basket
Limitation. Notwithstanding the foregoing, on each date on which any Earn-Out
Consideration is paid, the Basket Limitation shall be increased by that amount
equal to one percent (1%) of any such Earn-Out Consideration, without prejudice
to UniCapital's receipt of or right to receive indemnification for claims
exceeding the amount of the Basket Limitation in effect at the time such claims
were brought. Notwithstanding the foregoing, on each date on which any Earn-Out
Consideration is paid, the Basket Limitation shall be increased by that amount
(the "Basket Adjustment") equal to one percent (1%) of any such Earn-Out
Consideration, without prejudice to UniCapital's receipt of or right to receive
indemnification for claims exceeding the amount of the Basket Limitation in
effect at the time such claims were brought. If the Basket Limitation is
adjusted pursuant to the preceding sentence after such time as any Indemnified
Party, pursuant to this Article 12, has collected an amount in excess (such
excess amount is referred to as the "Excess Indemnity") of the Basket Limitation
(prior to giving effect to the applicable Basket Adjustment), then such
Indemnified Party, within 10 business days after the final determination of such
Earn-Out Consideration, shall pay to the Indemnifying Party an amount equal to
the lesser of applicable Basket Adjustment or the Excess Indemnity. In addition,
notwithstanding any provision of this Agreement to the contrary, for the
purposes of preventing a double recovery the Stockholders shall not be obligated
to indemnify UniCapital or any other indemnified party pursuant to Section 12.1
or 12.2 with respect to any particular act, omission, condition or event if and
to the extent that the loss resulting or arising from such act, omission,
condition or event has, directly or indirectly, been taken into account in the
computation of any Net Worth Deficiency provided for in Section 3.1.
Notwithstanding any other term of this Agreement, in no event shall any
Stockholder be liable under this Article 12 for an amount which exceeds the
aggregate value
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(determined at the Merger Effective Date) of the Merger Consideration received
by such Stockholder under this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the limitations upon indemnification
contained in this Section 12.5 shall not apply to Losses arising out of (i) any
breach of the representations and warranties of the Stockholders contained in
Sections 6.3, 6.5, 6.14, 6.27 and 6.33 hereof, (ii) litigation net of applicable
reserves reflected on balance sheets of the Company at the Audited Balance Sheet
Date; and (iii) a Material Adverse Amendment or a New Disclosure made pursuant
to Section 8.14 hereof.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
survive for a period of one year from the Merger Effective Date (which date is
hereinafter called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended on or prior to the Merger Effective Date, which shall be
deemed to be the Expiration Date for purposes of this clause (a) and claims
arising from a breach of the representations and warranties contained in such
Section 6.27;
(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely within the twenty-first century shall have been
processed and UniCapital's consolidated financial statements for the fiscal year
in which the last such transaction to be processed occurred have been audited,
which shall be deemed to be the Expiration Date for purposes of this clause (b)
and claims arising from a breach of the representations and warranties contained
in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Merger Effective
Date, which shall be deemed the Expiration Date for purposes of this clause (c)
and claims arising from a breach of the representations and warranties contained
in such Section 6.33;
(d) solely for purposes of Section 12.1(c) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for purposes of this clause (d) and claims arising under such
laws;
(e) the representations and warranties of the Stockholders
contained in Section 6.5 hereof shall survive the Merger Effective Date without
time limitation; and
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(f) any representations and warranties which serve as a basis
of the indemnity obligations of the Stockholders under Section 12.2 shall
survive the Merger Effective Date without time limitation.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Stockholders in the observance or due
and timely performance of any of the covenants, agreements or the satisfaction
of conditions contained herein, and the curing of such default shall not have
been made on or before the Closing Date and shall not reasonably be expected to
occur or (b) if UniCapital in its sole judgment determines that any condition
exists which has made or could reasonably be expected to make any of the
representations or warranties contained in Article 6 hereof untrue in any
material respect or (c) if UniCapital in its sole judgment determines that
information disclosed on the schedules to the Agreement delivered pursuant to
Section 8.14 has or could reasonably be expected to have a material adverse
effect on the business, operations, assets, properties, prospects or condition
(financial or otherwise) of the Company.
13.2 TERMINATION BY THE STOCKHOLDERS. Prior to the initial filing of
the Registration Statement with the SEC, the Stockholders may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (a) in accordance with Section 17.4(b) or (b) if a material default
shall be made by UniCapital or Newco in the observance or due and timely
performance of any of the covenants, agreements or the satisfaction of
conditions contained herein, and the curing of such default shall not have been
made on or before such initial filing. Notwithstanding the foregoing, from and
after the initial filing of the Registration Statement with the SEC, the
Stockholders shall have no right to terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, between the Closing Date and the Merger Effective
Date, the Underwriting Agreement is terminated pursuant to the terms thereof;
(c) if the Merger Effective Date has not occurred within 10
business days after the Closing Date; or
(d) upon the date that the number of shares of UniCapital
Stock to be issued (other than as Earn-Out Consideration) to the persons who
will transfer property to
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UniCapital in the Unified Transaction can be determined as a fixed number of
shares, unless those same persons shall own immediately after in the Unified
Transaction eighty percent (80%) or more of the UniCapital Stock that will be
issued and outstanding immediately after the Unified Transaction.
13.4 LIQUIDATED DAMAGES. If the Merger fails to occur because of the
default of the Company or the Stockholders, then, in addition to the other
remedies available to UniCapital at law for fraud, in equity or pursuant to this
Agreement, the Stockholders shall pay to UniCapital the sum of $500,000 as
liquidated damages. It is hereby agreed that UniCapital's damages in the event
of a termination or default by Company hereunder are uncertain and impossible to
ascertain and that the foregoing constitutes a reasonable liquidation of such
damages and is intended not as penalty but as liquidated damages.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of the
Companies and their respective businesses, each Stockholder covenants that, for
the period ending two years after the Closing Date, such Stockholder will not,
directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as a partner, principal, agent, representative, consultant or
otherwise with, or use or permit such Stockholder's name to be used in
connection with, any business or enterprise which is engaged directly or
indirectly in competition anywhere in the United States with the business
conducted by UniCapital, the Surviving Corporation or any of its or their
respective subsidiaries or affiliates or with any business engaged in
originating, servicing or securitizing leases or other specialty financing
products or services (the "Restricted Business"). Each Stockholder recognizes
that the Restricted Business is expected to be conducted throughout the United
States and that more narrow geographical limitations of any nature on this
non-competition covenant (and the non-solicitation covenant set forth in
subsection (b)) are therefore not appropriate. The foregoing restriction shall
not be construed to prohibit the ownership by a Stockholder as a passive
investment of not more than five percent of any class of securities of any
corporation which is engaged in any of the foregoing businesses having a class
of securities registered pursuant to Section 12 of the Exchange Act.
(b) Each Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers of the Restricted Business, or (ii) solicit the employment of any
person who is employed by UniCapital, the Surviving Corporation or any of its or
their respective subsidiaries or affiliates in the Restricted Business during
such period.
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(c) Each Stockholder recognizes and acknowledges that by
reason of such Stockholder's relationship to the Companies, such Stockholder has
had access to confidential information relating to the Restricted Business. Each
Stockholder acknowledges that such confidential information is a valuable and
unique asset and covenants that such Stockholder will not disclose any such
confidential information after the Closing Date to any person for any reason
whatsoever, except as may be required by law or order of a court of competent
jurisdiction or unless the Stockholders can show that such information has
become known to the public generally through no fault of the Stockholders
14.2 DAMAGES. Each Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholders agree that,
in the event of a breach by them of any of the foregoing covenants, such
covenants may be enforced by UniCapital or the Surviving Corporation by, without
limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The Parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholders
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Companies),
and that any violation will result in irreparable injury to UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Stockholder
against any Company, any Company's Subsidiaries, the Surviving Corporation or
UniCapital, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of such covenants. The parties
specifically agree that the period of two years stated above shall be computed
by excluding from such computation any time during which any Stockholder is in
violation of any provision of this Article 14 and any time during which there is
pending in any court of competent jurisdiction any action (including any appeal
from any judgment) brought by any person, whether or not a party to this
Agreement, in which action UniCapital or the Surviving Corporation seek to
enforce the agreements and covenants of the Stockholders or in which
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any person contests the validity of such agreements and covenants or their
enforceability or seeks to avoid their performance or enforcement.
14.6 MATERIALITY. The Stockholders hereby acknowledge and agree that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital and Newco of the businesses of the Companies.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
have in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company and the Company's business. The Stockholders
agree that, prior to the Closing Date, or following a termination of this
Agreement under Section 13 (notwithstanding such termination), they will not
disclose any confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except to
authorized representatives of UniCapital or as may be required by law or order
of a court of competent jurisdiction or unless the Stockholders can show that
such information has become known to the public generally through no fault of
the Stockholders. Prior to disclosing any confidential information required by
law or order of a court of competent jurisdiction, the Stockholders shall
provided UniCapital with prompt notice of the disclosure requirement so that
UniCapital may take whatever action it deems appropriate to prohibit such
disclosure. In the event of a breach or threatened breach by the Stockholders of
the provisions of this Section 15.1, UniCapital and the Surviving Corporation
shall be entitled to an injunction restraining Stockholders from disclosing, in
whole or in part, such confidential information. Nothing herein shall be
construed as prohibiting UniCapital and the Surviving Corporation from pursuing
any other available remedy for such breach or threatened breach, including the
recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to
certain confidential information solely of the Company in connection with its
business. UniCapital agrees that, prior to the Closing Date, or following a
termination of this Agreement under Section 13 (notwithstanding such
termination), it will not disclose any such confidential information to any
person, firm, corporation, association, or other entity for any purpose or
reason whatsoever without prior written consent of the Stockholders, except as
may be required by law or order of a court of competent jurisdiction or unless
UniCapital can show that such information has become known to the public
generally through no fault of UniCapital. In the event of a breach or threatened
breach by UniCapital of the provisions of this Section 15.2, the Stockholders
shall be entitled to an injunction restraining UniCapital from disclosing, in
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whole or in part, such confidential information. Nothing contained herein shall
be construed as prohibiting the Stockholders from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholders
agree that, in the event of a breach by any of them of the foregoing covenant,
the covenant may be enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Stockholder hereby
agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated on behalf of such underwriters, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the final prospectus contained in the Registration Statement relating to the IPO
(the "Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer (except to
heirs or legal representatives by operation of law) or dispose of, directly or
indirectly, any shares of UniCapital Stock or any securities convertible into or
exercisable or exchangeable for UniCapital Stock or (b) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of UniCapital Stock, whether any such
transaction described in clause (a) or (b) above is to be settled by delivery of
UniCapital Stock or such other securities, in cash or otherwise. In addition,
each Stockholder agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the underwriters that may participate in
the IPO, it will not, during the period commencing on the date of this Agreement
and ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of UniCapital
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. Each Stockholder agrees that
the foregoing shall be binding upon their transferees, successors, assigns,
heirs, and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Stockholder acknowledges and agrees that such
underwriters and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated are intended third party
beneficiaries of the provisions of this Article 16, and that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of
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securities if such transfer would constitute a violation or breach of this
Article 16. Except as set forth in this Article 16, there are no intended
third-party beneficiaries under this Agreement.
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
17.1 INVESTMENT INTENT. The Stockholders acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Stockholders represent and warrant that the shares of UniCapital Stock to be
acquired by the Stockholders pursuant to this Agreement are being acquired
solely for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholders covenant, warrant and
represent that none of the shares of UniCapital Stock issued to such
Stockholders will be offered, sold, assigned, pledged, hypothecated, transferred
or otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC
thereunder, and except after full compliance with any applicable state
securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholders further represent and warrant
that they (a) fully understand the nature, scope and duration of the limitations
on transfer contained in this Agreement and (b) have such knowledge and
experience in financial and business matters that they are capable of evaluating
the merits and risks of the proposed investment and therefore have the capacity
to protect their own interests in connection with the acquisition of the
UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Stockholders represent and warrant that they have had
an adequate opportunity to ask questions and receive answers from the officers
of UniCapital concerning UniCapital, its business, operations, plans and
strategy, and the background and experience of its officers and directors. The
Stockholders represent and warrant that they have asked any and all questions
that they may have in the nature described in the preceding sentence and that
all such questions have been answered to their satisfaction.
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(b) Each Stockholder represents and warrants that he has
received the draft Registration Statement, including the draft preliminary
prospectus that forms a part thereof, delivered to him on or about February 14,
1998, that describes, among other things, UniCapital, the Merger, the other
acquisitions proposed to be undertaken by UniCapital simultaneously with the
Merger and the target companies of such other acquisitions. Each Stockholder
represents and warrants that he has reviewed such draft Registration Statement
and draft preliminary prospectus and has had adequate opportunity to ask
questions of and receive answers to his satisfaction from the officers of
UniCapital concerning the matters described therein.
18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Stockholders hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Stockholders and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholders will cooperate and use their best efforts to have the officers,
directors and employees of Company prior to the Closing Date
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cooperate with UniCapital on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings, arrangements or disputes of any nature with respect to
matters pertaining to all periods prior to the Closing Date.
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the Resulting
Company, the successors of UniCapital, and the heirs and legal representatives
of the Stockholders.
19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Companies, UniCapital and Newco and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Stockholders (subject to the limitations
set forth below), the Company, UniCapital and Newco acting through their
respective officers, duly authorized by their respective Boards of Directors;
provided, that the Stockholders who own a majority of the outstanding shares of
capital stock of the Company shall have the authority to approve and execute any
amendment to this Agreement on behalf of all of the Stockholders and without the
necessity of such Stockholders holding a majority of the outstanding shares of
capital stock of the Company obtaining consent or authorization from any other
Stockholder, unless such amendment relates to any representation or warranty
made by a Stockholder other than such Stockholders holding a majority of the
outstanding shares of capital stock of the Company which may only be amended by
the written agreement of such person; and provided further, that no Stockholder
shall have any power or authority to modify or amend this Agreement in any
respect from and after the initial filing of the Registration Statement with the
SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and Newco, on the one hand, and the Stockholders,
on the other hand, agrees to indemnify the other against all loss, liability,
cost damages or expense arising out of or related to claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and
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Newco and their respective agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement and any
amendments thereto. Whether or not the transactions herein contemplated shall be
consummated, the Stockholders will pay the fees, expenses and disbursements of
the Stockholders and the Company and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments hereto and all other costs and expenses incurred in
the performance of this Agreement by the Stockholders and the Company and in
compliance with all conditions to be performed by the Stockholders and the
Company under this Agreement.
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
One Oxford Centre, Thirty-Second Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Stockholders, addressed to them in care
of the Stockholders' Representative at:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
Two ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax is transmitted to the telefax number specified in this Section 19.7
(or in accordance with the latest unrevoked written direction from such party),
and the appropriate confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
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19.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
20. DEFINITIONS
20.1 "Accounts Receivable" is defined in Section 6.14.
20.2 "Acquisition Proposal" is defined in Section 8.10.
20.3 "Adjusted 1997 EBT" is defined in Section 2.5(a).
20.4 "Adjusted 1998 EBT" is defined in Section 2.5(a).
20.5 "Agent" is defined in Section 8.10.
20.6 "Agreement" is defined in the preamble to this Agreement.
20.7 "Audited Balance Sheet Date" is defined in Section 6.12(a).
20.8 "Audited Financial Statements" are defined in Section 6.12(a).
20.9 "Authorizations" are defined in Section 6.23.
20.10 "Basket Limitation" is defined in Section 12.5(b).
20.11 "Benefit Plan" is defined in Section 6.22.
20.12 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
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20.13 "Certificates" are defined in Section 2.2.
20.14 "Certificate of Merger" is defined in Section 1.1.
20.15 "Closing" is defined in Section 5.1(b).
20.16 "Closing Date" is defined in Section 5.2.
20.17 "Closing Date Balance Sheets" are defined in Section 3.1.
20.18 "Code" is defined in the recitals to this Agreement.
20.19 "Commonly Controlled Entity" is defined in Section 6.22.
20.20 "Company" is defined in the preamble to this Agreement.
20.21 "Company Documents" are defined in Section 6.2.
20.22 "Company EBT" is defined in Section 2.5(b).
20.23 "Company Stock" is defined in Section 2.1(a).
20.24 "Constituent Corporations" are defined in the recitals to this
Agreement.
20.25 "Contracts" are defined in Section 6.17.
20.26 "Disputed Amounts" are defined in Section 3.2.
20.27 "EBT" is defined in Section 2.5(a).
20.28 "Earn-Out Consideration" is defined in Section 2.5(c).
20.29 "Earn-Out Escrow Cash" is defined in Section 4.1(b).
20.30 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
20.31 "Effective Date Consideration" is defined in Section 2.1(a).
20.32 "Environmental Laws" mean any and all applicable treaties, laws,
regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened
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Release of or exposure to Hazardous Substances, including CERCLA, the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
20.33 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
Newco, the Surviving Corporation, any Governmental Entity or any other person or
entity on the basis of any violation of any Environmental Laws or pursuant to
any requirement imposed under any Environmental Laws (including any sampling,
testing, investigation, removal, treatment or remediation undertaken by
UniCapital, Newco or the Surviving Corporation so as to avoid any claim or
violation or to comply with any requirement and all counseling or engineering
fees and expenses related thereto), and arising from pre-Closing operations,
events, circumstances or conditions at, on, under or emanating from, or as a
result of any pre-Closing off-site disposal of Hazardous Substances from, any
property currently or formerly owned, operated or leased by the Companies.
20.34 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the applicable Company.
20.35 "Equipment" is defined in Section 6.35.
20.36 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.37 "Escrow Cash" is defined in Section 4.1(a).
20.38 "Escrow Shares" are defined in Section 4.1(a).
20.39 "Escrow Property" is defined in Section 4.1(b).
20.40 "Exchange Act" is defined in Section 12.1.
20.41 "Expiration Date" is defined in Section 12.6.
20.42 "Financial Statements" are defined in Section 6.12(b).
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20.43 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.44 "GAAP" is defined in Section 3.1.
20.45 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
20.46 "Hazardous Substances" mean all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials or
chemicals regulated pursuant to any Environmental Law, including materials
listed in 49 C.F.R. ss. 172.101 and materials defined as hazardous pursuant to
Section 101(14) of CERCLA.
20.47 "Indemnifiable Decrease" is defined in Section 12.5(a).
20.48 "Indemnified Party" is defined in Section 12.4(a).
20.49 "Indemnifying Party" is defined in Section 12.4(a).
20.50 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.51 "Independent Accounting Firm" is defined in Section 3.2.
20.52 "Intellectual Property" is defined in Section 6.28(a).
20.53 "IPO" is defined in the recitals to this Agreement.
20.54 "Interim Net Worth Period" is defined in Section 12.5(a).
20.55 "Lease Documents" are defined in Section 6.35.
20.56 "Leases" are defined in Section 6.35.
20.57 "liabilities" are defined in Section 6.13(a).
20.58 "Losses" are defined in Section 12.1.
20.59 "Material Adverse Amendment" is defined in Section 8.4.
20.60 "Merger Consideration" is defined in Section 2.1(c).
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20.61 "Merger Effective Date" is defined in Section 5.3.
20.62 "Merger" is defined in the recitals to this Agreement.
20.63 "Net Worth Deficiency" is defined in Section 3.1.
20.64 "Newco" is defined in the preamble to this Agreement.
20.65 "1999 EBT" is defined in Section 2.5(b).
20.66 "Obligor" is defined in Section 6.35.
20.67 "Ordinary course" or "ordinary course of business" means the
conduct of business as conducted by the Company prior to the date of this
Agreement consistent in nature and, where relevant, amount, with past practices.
20.68 "PCBs" are defined in Section 6.33(h).
20.69 "Pension Plan" is defined in Section 6.22.
20.70 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by any
Company, or held by any Stockholder that relate to the operations of any
Company.
20.71 "Prospectus" is defined in Section 16.1.
20.72 "Registration Statement" is defined in Section 9.4.
20.73 "Regulations" are defined in Section 6.23.
20.74 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
20.75 "Restricted Business" is defined in Section 14.1(a).
20.76 "Scheduled Payments" are defined in Section 6.35.
20.77 "SEC" is defined in Section 9.4.
20.78 "Securities Act" is defined in Section 6.16.
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20.79 "Stockholders" are defined in the preamble to this Agreement.
20.80 "Stockholders' Representative" is defined in Section 3.3.
20.81 "Subsidiary" is defined in Section 6.1.
20.82 "Surviving Corporation" is defined in Section 1.2.
20.83 "Tax Returns" are defined in Section 6.27.
20.84 "Taxes" are defined in Section 6.27.
20.85 "Third Party Claim" is defined in Section 12.4(a).
20.86 "Underwriting Agreement" is defined in Section 5.1(a).
20.87 "UniCapital" is defined in the preamble to this Agreement.
20.88 "UniCapital Documents" is defined in Section 7.3.
20.89 "UniCapital Stock" is defined in Section 2.1(a).
20.90 "Unified Transaction" is defined in the recitals to this
Agreement.
20.91 "Welfare Plan" is defined in Section 6.22.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ New
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Name: ▇▇▇▇▇▇ New
Title: Chairman and Chief Executive Officer
WAG ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ New
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Name: ▇▇▇▇▇▇ New
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE ▇▇▇▇▇▇ ASSET GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇
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ANNEXES
ANNEX I [Form of Certificate of Merger]
ANNEX II [Calculation and Composition of Consideration]
ANNEX III [Form of Indemnity Escrow Agreement]
ANNEX IV [Form of Employment Agreement]
SCHEDULES
SCHEDULE 2.5 [Add-Backs]
SCHEDULE 6.1 [Jurisdictions in which Company and Subsidiaries
Are Qualified to do Business]
SCHEDULE 6.5 [Issued and Outstanding Stock of the Company and
Subsidiaries]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Companies]
SCHEDULE 6.12 [Company Financial Statements]
SCHEDULE 6.13 [Liabilities and Obligations]
SCHEDULE 6.14 [Accounts and Notes Receivable Aging]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts and Commitments]
SCHEDULE 6.20 [Insurance]
SCHEDULE 6.21 [Employee Information]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.29 [Notice and Consents]
SCHEDULE 6.30 [Absence of Changes]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 6.35 [Leases]
SCHEDULE 7.9 [UniCapital and Newco Agreements]
SCHEDULE 9.2 [Employment Agreements]
SCHEDULE 11.3 [Personal Guarantees of the Indebtedness of the
Company]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.12 to the Commission supplementally upon request
therefor.