EXHIBIT 2.9
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MERGER AGREEMENT
by and among
CENTERPOINT ADVISORS, INC.,
GRACE MERGERSUB INC.,
GRACE & COMPANY, P.C., GRACE CAPITAL, LLP
and
THE PARTNERS OF
GRACE CAPITAL, LLP
March 31, 1999
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TABLE OF CONTENTS
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PAGE
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ARTICLE I
THE MERGER.......................................................... 2
1.1 Merger....................................................... 2
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1.2 Effects of the Merger........................................ 3
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1.3 Directors and Officers of the Surviving Corporation.......... 3
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ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT................................. 3
2.1 Merger Consideration......................................... 3
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2.1.1 Basic Purchase Consideration.......................... 3
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2.1.2 Treasury Stock........................................ 3
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2.1.3 Dissenters............................................ 3
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2.1.4 Conversion of Mergersub Stock......................... 4
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2.1.5 Exchange of Certificates.............................. 4
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2.2 Post-Closing Adjustments to Basic Purchase Consideration..... 4
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2.3 Post-Closing Management of AR................................ 6
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2.4 Assignment of Uncollected AR................................. 6
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2.5 Definitions.................................................. 6
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ARTICLE III
THE CLOSING AND CONSUMMATION DATE................................... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY............ 7
4.1 Organization and Qualification............................... 7
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4.2 Company Subsidiaries......................................... 8
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4.3 Authority; Non-Contravention; Approvals...................... 8
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4.4 Capitalization............................................... 10
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4.5 Year 2000.................................................... 10
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4.6 Financial Statements......................................... 10
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4.7 Absence of Undisclosed Liabilities........................... 11
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4.8 Unbilled Fees and Expenses................................... 11
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4.9 Absence of Certain Changes or Events......................... 11
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4.10 Litigation................................................... 14
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(i)
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4.11 Compliance with Applicable Laws...................................... 14
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4.12 Licenses............................................................. 15
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4.13 Material Contracts................................................... 15
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4.14 Properties........................................................... 18
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4.15 Intellectual Property................................................ 19
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4.16 Taxes................................................................ 20
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4.17 Employee Benefit Plans; ERISA........................................ 21
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4.18 Labor Matters........................................................ 23
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4.19 Environmental Matters................................................ 24
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4.20 Insurance............................................................ 24
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4.21 Interest in Customers and Suppliers; Affiliate Transactions.......... 25
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4.22 Business Relationships............................................... 25
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4.23 Compensation......................................................... 25
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4.24 Bank Accounts........................................................ 26
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4.25 Professional Credentials............................................. 26
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4.26 Disclosure; No Misrepresentation..................................... 26
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PARTNERS............................................................. 26
5.1 Several Representations and Warranties............................... 26
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5.1.1 Capitalization................................................ 26
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5.1.2 Authority..................................................... 27
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5.1.3 Non-Contravention............................................. 27
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5.1.4 Approvals..................................................... 27
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5.1.5 Litigation.................................................... 28
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5.1.6 No Transfer................................................... 28
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5.1.7 Disclosure.................................................... 28
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5.1.8 Representations and Warranties of Seller and the Company...... 28
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5.2 Joint and Several Representations and Warranties..................... 28
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CENTERPOINT............................... 29
6.1 Organization And Qualification....................................... 29
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6.2 Capitalization....................................................... 29
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6.3 No Subsidiaries...................................................... 30
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6.4 Authority; Non-Contravention; Approvals.............................. 30
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6.5 Absence of Undisclosed Liabilities................................... 31
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6.6 Litigation........................................................... 31
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(ii)
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6.7 Compliance with Applicable Laws.............................. 32
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6.8 No Misrepresentation......................................... 32
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ARTICLE VII
CERTAIN COVENANTS AND OTHER TERMS................................... 32
7.1 Conduct of Business by the Company Pending the Acquisition... 32
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7.2 No-Shop...................................................... 35
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7.3 Schedules.................................................... 36
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7.4 Company Stockholders Meeting................................. 37
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7.5 Conversion................................................... 37
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ARTICLE VIII
ADDITIONAL AGREEMENTS............................................... 37
8.1 Access to Information........................................ 37
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8.2 Registration Statements...................................... 38
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8.3 Expenses and Fees............................................ 39
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8.4 Agreement to Cooperate....................................... 39
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8.5 Public Statements............................................ 39
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8.6 Registration Rights.......................................... 40
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8.7 CenterPoint Covenants........................................ 42
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8.8 Release of Guarantees........................................ 42
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8.9 Lock-Up Agreement............................................ 42
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8.10 Preparation and Filing of Tax Returns........................ 43
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8.11 Maintenance of Insurance..................................... 43
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8.12 Administration............................................... 43
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ARTICLE IX
INDEMNIFICATION..................................................... 43
9.1 Indemnification by the Partners.............................. 43
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9.2 Indemnification by CenterPoint............................... 45
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9.3 Indemnification Procedure for Third Party Claims............. 46
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9.4 Direct Claims................................................ 48
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9.5 Failure to Give Timely Notice................................ 48
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9.6 Reduction of Loss............................................ 48
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9.7 Limitation on Indemnities.................................... 49
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9.7.1 Threshold for the Partners............................ 49
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9.7.2 Threshold for CenterPoint............................. 49
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9.7.3 Limitations on Claims Against the Partners............ 49
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(iii)
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9.7.4 Limitation on Claims Against CenterPoint......................... 50
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9.8 Survival of Representations, Warranties and Covenants of
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the Partners, Seller and the Company; Time Limits on Obligations....... 50
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9.9 Survival of Representations, Warranties and Covenants of
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CenterPoint; Time Limits on Indemnification Obligations................. 50
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9.10 Defense of Claims; Control of Proceedings............................... 50
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9.11 Fraud; Exclusive Remedy................................................. 51
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9.12 Manner of Satisfying Indemnification Obligations........................ 51
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9.13 Partners' Representative................................................ 51
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ARTICLE X
CLOSING CONDITIONS............................................................. 51
10.1 Conditions to Each Party's Obligation to Effect the Acquisition......... 51
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10.2 Conditions to Obligation of the Partners, Seller and the Company
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to Effect the Acquisition............................................... 52
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10.3 Conditions to Obligation of CenterPoint to Effect the Acquisition....... 54
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ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER.............................................. 56
11.1 Termination............................................................. 56
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11.2 Effect of Termination................................................... 57
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11.3 Amendment............................................................... 57
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11.4 Waiver.................................................................. 58
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ARTICLE XII
TRANSFER RESTRICTIONS.......................................................... 58
12.1 Transfer Restrictions................................................... 58
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12.2 Release of Restrictions................................................. 58
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12.3 Legend.................................................................. 59
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ARTICLE XIII
NONCOMPETITION................................................................. 59
13.1 Prohibited Activities................................................... 59
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13.2 Damages................................................................. 60
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13.3 Reasonable Restraint.................................................... 61
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13.4 Severability; Reformation............................................... 61
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13.5 Independent Covenant.................................................... 61
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(iv)
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13.6 Materiality................................................... 61
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ARTICLE XIV
[RESERVED].......................................................... 62
ARTICLE XV
GENERAL PROVISIONS.................................................. 62
15.1 Brokers....................................................... 62
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15.2 Notices....................................................... 62
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15.3 Interpretation................................................ 63
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15.4 Certain Definitions........................................... 63
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15.5 Entire Agreement; Assignment.................................. 64
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15.6 Applicable Law................................................ 64
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15.7 Counterparts.................................................. 64
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15.8 Parties in Interest........................................... 64
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(v)
LIST OF SCHEDULES
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Schedule 2.1 Consideration
Schedule 2.5 Net Working Capital Adjustment Items
Schedule 4.2 Company Subsidiaries
Schedule 4.3.2 Required Consents
Schedule 4.4 Capitalization
Schedule 4.7 Liabilities
Schedule 4.9 Certain Changes and Events
Schedule 4.10 Litigation
Schedule 4.11 Noncompliance with Applicable Laws
Schedule 4.12 Licenses and Permits
Schedule 4.13 Material Contracts
Schedule 4.14.1-1 Real Property
Schedule 4.14.1-2(a) Exceptions Regarding Owned Property
Schedule 4.14.1-2(b) Exceptions Regarding Leased Property
Schedule 4.14.2 Tangible Personal Property; Liens
Schedule 4.15 Intellectual Property
Schedule 4.16.1-1 Taxes
Schedule 4.16.1-2 Tax Audits
Schedule 4.17.1 Employee Plans
Schedule 4.17.2 Unwritten Employee Plans
(vi)
Schedule 4.17.4 Multiple Employer Plans
Schedule 4.18 Labor Matters
Schedule 4.19 Environmental Matters
Schedule 4.20 Insurance
Schedule 4.21 Affiliate Transactions
Schedule 4.22 Business Relationships
Schedule 4.23 Compensation
Schedule 4.24 Bank Accounts
Schedule 6.2 CenterPoint's Capitalization
Schedule 6.5 Liabilities
Schedule 7.1.4(i) Terminated Agreements
Schedule 7.1.4(i)-D Agreements Not To Be Terminated
Schedule 7.1.4(ii) Excluded Assets
Schedule 8.8 Partners' Guarantees
Schedule 15.1 Brokers
Schedule 15.2.3 Partners and Their Counsel
(vii)
LIST OF EXHIBITS
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Exhibit A Partners of Seller
Exhibit 10.2(c) Form of Opinion of CenterPoint's Counsel
Exhibit 10.2(d) Form of Incentive Compensation Agreement
Exhibit 10.2(f) Form of Stockholders Agreement
Exhibit 10.3(c) Form of Opinion of Counsel to Seller, the Company and
Partners
Exhibit 10.3(d)(A) Form of Separate Practice Agreement
Exhibit 10.3(d)(B) Form of Services Agreement
Exhibit 10.3(j) Form of Partners' General Release and Covenant Not to
▇▇▇
CenterPoint agrees to furnish supplementally to the Securities Exchange
Commission, upon request, a copy of any omitted exhibit or schedule to this
Agreement.
(viii)
DEFINED TERMS
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Acquisition................................................... Introduction
Acquisition Transaction....................................... Section 13.1
Actions....................................................... Section 4.10.1
Affiliate..................................................... Section 15.4
Affiliate Transactions........................................ Section 4.21
Agreement..................................................... Introduction
AR............................................................ Section 2.5
Arbitrator.................................................... Section 2.2.5
Attest Entity................................................. Section 7.1.2
Attestation Practice.......................................... Introduction
Basic Purchase Consideration.................................. Section 2.1.1
BBM........................................................... Section 7.1.4
BBM Agreement................................................. Section 7.1.4
Business...................................................... Introduction
Cash Consideration............................................ Section 2.1.1
CenterPoint................................................... Introduction
CenterPoint Accountants....................................... Section 2.2.2
CenterPoint Common Stock...................................... Section 2.1.1
CenterPoint Indemnified Party(ies)............................ Section 9.1
CenterPoint Material Adverse Effect........................... Section 6.4.3
CenterPoint Representatives................................... Section 8.1.1
CenterPoint Required Statutory Approvals...................... Section 6.4.3
Closing....................................................... Article III
(ix)
Closing Balance Sheet......................................... Section 2.2.2
Closing Date.................................................. Article III
Code.......................................................... Introduction
Company....................................................... Introduction
Company Material Adverse Effect............................... Section 4.3.3
Company Representatives....................................... Section 8.1.1
Company Stock................................................. Section 2.1.1
Company Subsidiary(ies)....................................... Section 4.2
Consummation Date............................................. Article III
Contracts..................................................... Section 4.13
Conversion.................................................... Introduction
Copyrights.................................................... Section 4.15
Defense Notice................................................ Section 9.3.1
DGCL.......................................................... Section 1.1
Direct Claim.................................................. Section 9.4
Disputed Item................................................. Section 2.2.5
Dissenting Shares............................................. Section 2.1.3
Effective Time................................................ Section 1.1
Employee Plan................................................. Section 4.17.5(a)
Environmental and Safety Requirements......................... Section 4.19
ERISA......................................................... Section 4.17.5(b)
Excluded Assets............................................... Section 7.1.4
Excluded Liabilities.......................................... Section 7.1.4
Final Adjustment.............................................. Section 2.2.4
(x)
Financial Statements.......................................... Section 4.6
First Person.................................................. Section 4.17.5(c)
Form S-1...................................................... Section 4.3.3
Form S-4...................................................... Section 4.3.3
Founding Companies............................................ Introduction
GAAP.......................................................... Section 4.6
GBCLM......................................................... Section 1.1
general increase.............................................. Section 4.23
Governmental Authority........................................ Section 4.3.2
Hazardous Materials........................................... Section 4.19
herein........................................................ Section 15.3
hereof........................................................ Section 15.3
hereunder..................................................... Section 15.3
HSR Act....................................................... Section 4.3.3
Incentive Compensation Agreement.............................. Section 10.2(d)
Indemnified Party............................................. Section 9.3.1
Indemnifying Party............................................ Section 9.3.1
Intellectual Property......................................... Section 4.15
Intellectual Property Licenses................................ Section 4.15
Interim Adjustment............................................ Section 2.2.3
IPO........................................................... Introduction
Knowledge..................................................... Section 15.4
Latest Balance Sheet.......................................... Section 4.6
Laws.......................................................... Section 4.11
(xi)
Leased Property............................................... Section 4.14.1
Licenses...................................................... Section 4.12
Lien(s)....................................................... Section 4.3.2
Liquidated Damages Amount..................................... Section 7.3
Losses........................................................ Section 9.1
Market Price.................................................. Section 9.12
Marks......................................................... Section 4.15
Material Contracts............................................ Section 4.13
Merger........................................................ Introduction
Merger Documents.............................................. Section 1.1
Mergersub..................................................... Introduction
Mergersub Stock............................................... Section 6.2.1
Net Working Capital........................................... Section 2.5
1933 Act...................................................... Section 4.3.3
1934 Act...................................................... Section 9.1(c)
Organizational Documents...................................... Section 4.1
Other Agreements.............................................. Introduction
Other Acquisitions............................................ Introduction
Other Founding Companies...................................... Section 9.1
Owned Property................................................ Section 4.14.1
Partner(s).................................................... Introduction
Partner Indemnified Party..................................... Section 9.2
Partner Representative........................................ Section 9.13
Patents....................................................... Section 4.15
(xii)
Person........................................................ Section 15.4
Plan Affiliate................................................ Section 4.17.5(c)
Real Property................................................. Section 4.14.1
Registration Statements....................................... Section 4.3.3
Resolution Period............................................. Section 2.2.5
Restricted Shares............................................. Section 12.1
Returns....................................................... Section 4.16.1
Schedules..................................................... Section 7.3
SEC........................................................... Section 4.3.3
Securities Act................................................ Section 4.3.3
Seller........................................................ Introduction
Special Bonus................................................. Section 2.5(b)
Stock Consideration........................................... Section 2.1.1
Stockholders Agreement........................................ Section 10.2(f)
Surviving Corporation......................................... Section 1.2
Target........................................................ Section 2.5
Tax Accrual................................................... Section 2.5
Taxes......................................................... Section 4.16.2
Territory..................................................... Section 13.1(a)
Third Party Claim............................................. Section 9.3.1
Trade Secrets................................................. Section 4.15
Underwriters.................................................. Section 8.1.1
Voting Agreement.............................................. Introduction
(xiii)
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "AGREEMENT") is made as of March 31, 1999, by
and among CenterPoint Advisors, Inc., a Delaware corporation ("CENTERPOINT"),
Grace Capital, LLP, a Missouri limited liability partnership (the "SELLER"),
Grace Mergersub, Inc. a Delaware corporation and wholly owned subsidiary of
CenterPoint ("MERGERSUB"), Grace & Company, P.C., a Missouri professional
corporation (the "COMPANY"), and the partners of Seller identified on Exhibit A
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to this Agreement (each a "PARTNER" and, collectively, the "PARTNERS").
WITNESSETH:
WHEREAS, Seller is the sole owner and holder of record of all of the
outstanding shares of capital stock of the Company;
WHEREAS, the Company engages directly, and indirectly through the Company
Subsidiaries, in the business of providing accounting, tax and other related
services (such business provided by the Company is referred to as the
"BUSINESS");
WHEREAS, prior to, and in anticipation of, completion of the transactions
contemplated hereby (a) the Company will cease to provide services related to
the practice of accounting that, pursuant to applicable laws and regulations,
may only be conducted by certified public accountants (the "ATTESTATION
PRACTICE") and (b) the Partners will cause the conversion of the Company from a
professional corporation to a business corporation by (x) amending the Company's
Organizational Documents (as defined in Section 4.1) such that it converts to a
business corporation, (y) or adopting a plan of liquidation and reincorporating
as a business corporation, or (z) merging with a foreign professional
corporation, with the surviving professional corporation amending its
Organizational Documents such that it converts to a business corporation, as
applicable (the actions described in the foregoing (a) and (b), collectively,
the "CONVERSION");
WHEREAS, the Boards of Directors of the Company, CenterPoint and Mergersub
deem it advisable and in the best interests of their respective shareholders to
approve and consummate the business combination transaction provided for herein
in which Mergersub would merge with the Company, with the Company being the
surviving corporation in the merger (the "ACQUISITION" or "MERGER");
WHEREAS, certain Partners have entered into a Voting Agreement dated the
date hereof (the "VOTING AGREEMENT") pursuant to which among other things such
Partners have agreed to vote the shares of capital stock of the Company that
such Partners own or control, directly or indirectly, to approve the Merger and
the transactions contemplated by this Agreement.
WHEREAS, CenterPoint is entering into other agreements (the "OTHER
AGREEMENTS") substantially similar to this Agreement with each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇▇▇▇ ▇. Driver Company, Inc., ▇▇▇▇ Frankfort ▇▇▇▇▇ & ▇▇▇▇,
P.C., The ▇▇▇▇▇▇▇ Company, Inc., ▇▇▇▇▇▇▇ Administrators, LLC, Verasource Excess
Risk Ltd., Berry, Dunn, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chartered, ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ PC,
Self Funded Benefits, Inc. d/b/a Insurance Design Administrators, Simione,
Scillia, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC, ▇▇▇▇▇▇▇ Rudzewicz & Co., P.C., and ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Van Trigt (which companies together with the Company are collectively
referred to herein as the "FOUNDING COMPANIES"), which agreements provide for
the merger of a wholly owned subsidiary of CenterPoint with each such Founding
Company (the "OTHER ACQUISITIONS") simultaneously with the Acquisition;
CenterPoint has provided a side letter to each holder of equity interests of the
Company to such effect;
WHEREAS, simultaneously with the consummation of the Acquisition,
CenterPoint will close an initial public offering (the "IPO") of CenterPoint
Common Stock (as defined in Section 2.1; and
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WHEREAS, the parties intend the acquisition of CenterPoint Common Stock
pursuant to the terms hereof to be tax-free under the provisions of Section 351
of the Internal Revenue Code of 1986, as amended (the "CODE").
NOW, THEREFORE, for and in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 Merger. Upon the terms and subject to the conditions set forth in
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this Agreement and in reliance upon the representations and warranties set forth
herein, Mergersub shall be merged with and into the Company, the result of which
will cause the separate corporate existence of Mergersub to cease and the
Company to continue under the laws of the State of Missouri. As promptly as
possible on the Closing Date, the parties shall cause the Merger to be completed
by filing articles of merger and a certificate of merger, as applicable (the
"MERGER DOCUMENTS"), with the Secretary of State of the State of Missouri, as
provided in the General and Business Corporation Law of Missouri, as amended
(the "GBCLM"), and with the Secretary of State of the State of Delaware, as
provided in the General Corporation Law of the State of Delaware (the "DGCL").
The Merger shall become effective (the "EFFECTIVE TIME") upon the filing of the
Merger Documents with the Secretary of State of the State of Missouri and the
Secretary of State of the State of Delaware or at such later time,
contemporaneously with the
2
closing of the IPO, as agreed by CenterPoint and the Company and specified in
the Merger Documents.
1.2 Effects of the Merger. At the Effective Time (i) the separate
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existence of Mergersub shall cease and Mergersub shall be merged with and into
the Company, with the Company being the surviving corporation in the Merger (the
Company is sometimes referred to herein as the "SURVIVING CORPORATION"), (ii)
the Articles of Incorporation and By-laws of the Surviving Corporation shall be
amended in form and substance acceptable to CenterPoint and as specified in the
Merger Documents, (iii) the Merger shall have all the effects provided by
applicable law, and (iv) the Company shall be a wholly-owned subsidiary of
CenterPoint.
1.3 Directors and Officers of the Surviving Corporation. From and after
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the Effective Time, the directors and officers of Mergersub shall be the
directors and officers of the Surviving Corporation until their successors are
duly elected and qualified.
ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT
2.1 Merger Consideration.
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2.1.1 Basic Purchase Consideration. At the Closing, by virtue of the
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Merger and without any action on the part of the holder thereof, the
outstanding shares of capital stock, consisting of 15,000 shares of common
stock of the Company, no par value per share (the "COMPANY STOCK"), shall
be converted into the right to receive: (a) that number of shares of
CenterPoint common stock, par value $.01 per share (the "CENTERPOINT
COMMON STOCK") determined in accordance with the formula in Schedule 2.1
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(the "STOCK CONSIDERATION") and (b) the amount of cash in Schedule 2.1 (the
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"CASH CONSIDERATION"). The sum of the Cash Consideration and the Stock
Consideration is herein referred to as "BASIC PURCHASE CONSIDERATION."
2.1.2 Treasury Stock. Each share of capital stock of the Company held
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in treasury of the Company shall be canceled and retired and no payment
shall be made in respect thereof.
2.1.3 Dissenters. Each outstanding share of capital stock of the
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Company the holder of which has perfected his right to dissent under
applicable law and has not effectively withdrawn or lost such right as of
the Effective Time (the "DISSENTING SHARES") shall not be converted into
the right to receive Basic Purchase Consideration, and the holder thereof
shall be entitled only to such rights as are granted by applicable law. The
Company shall give CenterPoint prompt notice upon receipt by the Company of
any such written demands for payment of fair value of shares of capital
stock of the Company and
3
any other instruments provided pursuant to applicable law. Any payments
made in respect of Dissenting Shares shall be made by the Surviving
Corporation.
2.1.4 Conversion of Mergersub Stock. At the Effective Time, each
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share of Mergersub Stock issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and become one validly
issued, fully paid and non-assessable share of the Surviving Corporation.
Such newly issued shares shall thereafter constitute all of the issued and
outstanding capital stock of the Surviving Corporation.
2.1.5 Exchange of Certificates. At the Closing, Seller shall deliver
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to CenterPoint the original Company Stock certificates, duly endorsed in
blank by the Seller or accompanied by blank stock powers, in exchange for
the allocated share of (a) CenterPoint Common Stock certificates
representing the Stock Consideration and (b) payment of the Cash
Consideration by certified check, cashier's check or wire transfer of
immediately available funds to a bank account or bank accounts in the
amounts and manner specified by Seller in a writing delivered to
CenterPoint at least three (3) business days prior to the Closing Date. The
shares represented by the Company Stock certificates so delivered to
CenterPoint shall be canceled. Until surrendered as contemplated by this
Section 2.1.5, each certificate representing shares of Company Stock
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represents only the right to receive Basic Purchase Consideration, as
adjusted in accordance with this Article II.
2.2 Post-Closing Adjustments to Basic Purchase Consideration.
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2.2.1 Adjustments for Net Working Capital Shortfall/Excess. The Basic
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Purchase Consideration shall be (a) reduced dollar-for-dollar to the extent
Net Working Capital on the Closing Date is less than the Target or (b)
increased dollar-for-dollar to the extent Net Working Capital on the
Closing Date is greater than the Target.
2.2.2 Preliminary Balance Sheet and Adjustment. At or about the
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Closing, the Company will prepare, and the firm PricewaterhouseCoopers LLP
(the "CENTERPOINT ACCOUNTANTS") will review, a balance sheet of the
Company, as of the Closing Date, in accordance with GAAP and consistent
with the accounting policies and practices used in connection with the
preparation of the Financial Statements (the "CLOSING BALANCE SHEET") along
with a preliminary calculation of any excess or shortfall of Net Working
Capital as compared to the Target.
2.2.3 Interim Adjustment. As soon as practicable, the Company will
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prepare and deliver to CenterPoint a revised calculation of Net Working
Capital reflecting all collections of AR up to the date 90 days from the
Closing Date. Within 10 days of receipt of such calculation, CenterPoint
will deliver to the Partner Representative a written report indicating the
amount and nature of any adjustment to the Basic Purchase Consideration
determined in accordance with Section 2.2.1 (the "INTERIM ADJUSTMENT").
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2.2.4 Final Adjustment. As soon as practicable, the Company will
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prepare and deliver to CenterPoint a final calculation of Net Working
Capital revised to reflect all collections of AR up to the date 180 days
from the Closing Date. CenterPoint will review such calculation and any
records, work papers and other documents related thereto. Within 10 days of
receipt of such calculation, CenterPoint will deliver to the Partner
Representative a written report indicating the amount and nature of any
adjustment to the Basic Purchase Consideration determined in accordance
with Section 2.2.1 (the "FINAL ADJUSTMENT").
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2.2.5 Disputes. The parties hereto shall not object to the Interim
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Adjustment which shall be binding on the parties hereto, and shall withhold
all objections until delivery of the Final Adjustment report. If the
Partner Representative does not object (or otherwise respond) in writing to
the Final Adjustment report within 30 days after its delivery, the Final
Adjustment shall automatically become final, binding and conclusive on all
parties hereto. Any objection to the Final Adjustment report shall be in
writing and shall specify the item or items in dispute (each a "DISPUTED
ITEM").
If the Partner Representative and CenterPoint are unable to resolve
any Disputed Item within 30 days after notice from the Partner
Representative that a dispute exists (the "RESOLUTION PERIOD"), then a
representative from the office of a nationally recognized accounting firm
(the "ARBITRATOR") selected jointly by CenterPoint and the Partner
Representative will arbitrate the dispute. The Partner Representative and
CenterPoint shall, within 20 days after expiration of the Resolution
Period, present their respective positions with respect to any Disputed
Item to the Arbitrator together with such materials as the Arbitrator deems
appropriate. To the extent any Disputed Item is similar to a disputed item
under the Other Agreements, the Arbitrator shall arbitrate the Disputed
Item based on the submitted materials and without regard to the disputed
item under the Other Agreements. The Arbitrator shall, after the submission
of the materials, submit a written decision on each Disputed Item to the
Partner Representative and CenterPoint and such determination shall be
final and binding on the parties hereto. The arbitration shall be conducted
in Chicago, Illinois. The parties hereto agree that the cost of the
Arbitrator shall be borne by the non-prevailing party or as determined by
the Arbitrator.
2.2.6 Payment of Adjustments. In the event Net Working Capital is
----------------------
less than the Target, Seller and the Partners shall pay the amount of the
shortfall to CenterPoint. In the event Net Working Capital is greater than
the Target, CenterPoint shall pay the amount of the excess to Seller. Any
payment required to be made pursuant to this paragraph shall be made,
within ten days of delivery of the report indicating any adjustment, by
wire transfer of immediately available funds to an account designated in
writing by the party that is to receive payment of such adjustment. In
respect of the Final Adjustment, the party making a payment required by
such adjustment shall make such payment within ten days after the
5
Final Adjustment becomes final and shall receive credit for or return of
any amount previously paid in connection with the Interim Adjustment.
2.3 Post-Closing Management of AR. Following the Closing, the billing,
-----------------------------
servicing, administering and collection of the AR shall be conducted by the
Company. The Company shall take all such actions as may be necessary or
advisable to collect the AR in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Company's credit and collection policy in effect at Closing. The Company may
modify, adjust or write-off AR from time to time in accordance with the
Company's credit and collection policy in effect at Closing. Unless otherwise
required by contract or law, payments by an obligor in respect of services
rendered or expenses advanced by the Company shall be applied as follows: in the
event any such payment specifically references the invoice being paid or clearly
relates to an outstanding invoice, the payment will be applied to the
corresponding invoice; and, in any other case, the payment will be applied to
satisfy AR relating to such obligor in the order that such AR arose. Any
adjustment, modification or write-off affecting AR and fees and expenses
receivable and unbilled fees and expenses of the Company incurred after Closing
with respect to the same client engagement shall be allocated ratably to the
pre-Closing and post-Closing periods.
2.4 Assignment of Uncollected AR. If any AR remain uncollected by the
----------------------------
Company as of 180 days after the Closing Date, the Company will assign the
uncollected AR to Seller. Notwithstanding the foregoing, the Company will retain
the sole right to service, administer and collect the uncollected AR in
accordance with Section 2.3.
-----------
2.5 Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following meanings:
(a) "AR" means any fees and expenses receivable and unbilled fees and
expenses of the Company on the Closing Date.
(b) "NET WORKING CAPITAL" means an amount determined as of the
Closing Date, whenever calculated, equal to difference between: (i) the sum
of any AR, prepaid expenses and other current assets less (ii) the sum of
----
accounts payable, accrued current liabilities, the items listed on Schedule
--------
2.5, the Tax Accrual, the Special Bonus (as defined in Section 7.1.4(iii))
---
and the employer-paid FICA payable in connection with deferred compensation
and the Special Bonus.
(c) [RESERVED]
(d) "TARGET" means an amount equal to 1% of the Company's net
revenues for the four quarter period ending on the last day of the calendar
quarter prior to Closing.
(e) "TAX ACCRUAL" means an amount equal to the product of (i) Net
Working Capital (calculated before deduction of the Tax Accrual) less an
amount equal to any tax
6
deductions realized by CenterPoint as a result of any payments pursuant to
the Special Bonus Plan times (ii) the sum of 34% plus the effective state
tax rate on the Company (net of any federal tax benefit). A negative Tax
Accrual shall be treated as a current asset for purposes of Section
-------
2.5(b)(i).
---------
ARTICLE III
THE CLOSING AND CONSUMMATION DATE
The consummation of the Acquisition and the other transactions contemplated
by this Agreement (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, Chicago, Illinois, contemporaneously with the closing of the
IPO, or at such other time and date as the parties hereto may mutually agree
(the "CLOSING DATE").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY
Seller and the Company hereby jointly and severally represent and warrant
to CenterPoint, as of the date hereof and, subject to Section 7.3, as of the
-----------
date on which CenterPoint and the lead Underwriter (as defined in Section 8.1.1)
-------------
execute and deliver the Underwriting Agreement related to the IPO and as of the
Closing Date, as follows:
4.1 Organization and Qualification. The Company is a professional
------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Missouri, and, following the Conversion, the Company will be a
business corporation duly organized, validly existing and in good standing under
the laws of the State of Missouri. Seller is a limited liability partnership
duly organized, validly existing and in good standing under the laws of
Missouri. Each Company Subsidiary (as defined in Section 4.2) is duly
-----------
organized, validly existing and in good standing under the laws of the state of
its organization set forth on Schedule 4.2. Each of Seller, the Company and the
------------
Company Subsidiaries has the requisite power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted, and is qualified to do business and is in good standing in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary. The
Company has not qualified to do business in the states listed on Schedule 4.2.
------------
True, accurate and complete copies of Seller's, the Company's and each Company
Subsidiary's Organizational Documents, in each case as in effect on the date
hereof, have heretofore been delivered to CenterPoint. "ORGANIZATIONAL
DOCUMENTS" means (a) the articles or certificate of incorporation and the bylaws
of a corporation (professional or otherwise), (b) the partnership agreement and
any statement of partnership of a general partnership, (c) the limited
partnership agreement and the certificate of limited partnership of any limited
partnership, (d) the operating or limited liability company agreement and
certificate of formation of any limited liability company, (e) any charter or
similar document adopted and filed in connection with the
7
creation, formation, organization or governance (as applicable) of any Person
and (f) any amendment to any of the foregoing.
4.2 Company Subsidiaries. Schedule 4.2 sets forth the name (including any
--------------------
assumed names), jurisdiction of organization and ownership of the issued and
outstanding equity interests of each Person in which the Company owns, directly
or indirectly, securities or other interests having the power to elect a
majority of such Person's board of directors or similar governing body, or
otherwise having the power to direct the business and policies of such Person
(each a "COMPANY SUBSIDIARY" and collectively, the "COMPANY SUBSIDIARIES").
Except as set forth on Schedule 4.2, the Company does not, directly or
indirectly, own, of record or beneficially, or control any capital stock,
securities convertible into capital stock or any other equity interest in any
Person.
4.3 Authority; Non-Contravention; Approvals.
---------------------------------------
4.3.1 Each of Seller and the Company has full right, power and
authority to enter into this Agreement and, subject to the approval of the
Merger and the transactions contemplated hereby by the Company's
stockholders, to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by Seller and the
Company have been duly authorized by all necessary partnership and
corporate action on the part of Seller and the Company, subject to the
approval of the Merger and the transactions contemplated hereby by the
Company's stockholders. This Agreement has been duly executed and delivered
by Seller and the Company, and, assuming the due authorization, execution
and delivery hereof by CenterPoint, constitutes a valid and legally binding
agreement of Seller and the Company, enforceable against Seller and the
Company in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles.
4.3.2 The execution and delivery of this Agreement by each of Seller
and the Company does not violate, conflict with or result in a breach of
any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under, or result in the creation of
any claim, lien, privilege, mortgage, charge, hypothecation, assessment,
security interest, pledge or other encumbrance, conditional sales contract,
equity charge, restriction, or adverse claim of interest of any kind or
nature whatsoever (each a "LIEN" and collectively, the "LIENS"), upon any
of the properties or assets of the Company or any Company Subsidiary under,
any of the terms, conditions or provisions of (i) the Organizational
Documents of Seller, the Company or any Company Subsidiary, (ii) following
completion of the Conversion, any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or license of
any court or federal, state,
8
provincial, local or foreign government, or any subdivision, agency or
authority of any thereof ("GOVERNMENTAL AUTHORITY") applicable to Seller,
the Company, any Company Subsidiary, or the Business, properties or assets
of Seller, the Company or any Company Subsidiary, except for those items
discussed in (ii) above relating to regulating, licensing or permitting the
practice of public accountancy, or (iii) any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind to which any
of Seller, the Company or any Company Subsidiary is a party or by which any
of Seller, the Company, any Company Subsidiary or any of the properties or
assets of Seller, the Company or any Company Subsidiary may be bound or
affected. The consummation by Seller and the Company of the transactions
contemplated hereby will not result in a violation, conflict, breach, right
of termination, creation or acceleration of Liens under the terms,
conditions or provisions of the items described in clauses (i) through
(iii) of the immediately preceding sentence, subject in the case of the
terms, conditions or provisions of the items described in clause (iii)
above, to obtaining (prior to the Closing Date) such consents required from
third parties set forth on Schedule 4.3.2 and except for those items
--------------
described in (ii) and (iii) above relating to regulating, licensing or
permitting the practice of public accountancy and any filing which may be
required under the HSR Act.
4.3.3 Except for (i) the filing in connection with the IPO of a
registration statement on Form S-1 (the "FORM S-1") and the filing of a
registration statement on Form S-4 (the "FORM S-4") (Form S-1 and Form S-4
are collectively the "REGISTRATION STATEMENTS") with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as
amended (the "SECURITIES ACT"or the "1933 ACT"), the declaration of the
effectiveness thereof by the SEC and filings, if required, with various
state securities or "blue sky" authorities, (ii) any filing which may be
required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act of 1976, as
amended (the "HSR ACT"), and (iii) any filing which may be required by any
Governmental Authority or self-regulatory organization regulating,
licensing or permitting the practice of public accountancy, no declaration,
filing or registration with, or notice to, or authorization, consent or
approval of, any Governmental Authority is necessary for the execution and
delivery of this Agreement by Seller or the Company or the consummation by
Seller or the Company of the transactions contemplated hereby, other than
such declarations, filings, registrations, notices, authorizations,
consents or approvals which, if not made or obtained, as the case may be,
would not, individually or in the aggregate, have a "COMPANY MATERIAL
ADVERSE EFFECT," which, for purposes of this Agreement means a material
adverse effect on the operations, assets, condition (financial or other),
operating results, employee or client relations, or prospects of the
Company or any Company Subsidiary.
9
4.4 Capitalization.
--------------
4.4.1 The authorized capital stock of the Company consists of 30,000
shares of Company Stock, of which 15,000 shares are issued and outstanding.
The Company has 1,500 shares in its treasury. The authorized capital stock
of each of the Company Subsidiaries, if any, and the number of such shares
issued and outstanding is completely and accurately set forth in Schedule
--------
4.4. All of such issued and outstanding shares are validly issued and are
---
fully paid, nonassessable and free of preemptive rights. Seller owns
beneficially and of record all of the issued and outstanding shares of the
Company Stock, which shares constitute all of the outstanding shares of
capital stock of the Company. The Company owns all shares of the Company's
Subsidiaries as indicated on Schedule 4.4, in each case free and clear of
------------
all Liens, and the Company has good and marketable title to such shares of
the Company Subsidiaries. All of such issued and outstanding shares are
validly issued and are fully paid, nonassessable and free of preemptive
rights.
4.4.2 Except as set forth on Schedule 4.4, there are no outstanding
------------
subscriptions, options, calls, contracts, commitments, undertakings,
restrictions, arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security, instrument or other
agreement to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of the capital stock of the Company or any Company
Subsidiary or obligating the Company or any Company Subsidiary to grant,
extend or enter into any such agreement or commitment or obligating Seller
or the Company or any Company Subsidiary to convey or transfer any Company
Stock or Company Subsidiary stock, as the case may be. As of the Closing
Date, there will be no voting trusts, proxies or other agreements or
understandings to which the Company or any Company Subsidiary is a party or
is bound with respect to the voting of any shares of capital stock or other
equity interests of the Company or any Company Subsidiary.
4.5 Year 2000. To the Knowledge of Seller or the Company, all of the
---------
computer software, computer firmware, computer hardware (whether general or
special purpose), and other similar or related items of automated, computerized,
and/or software system(s) that are used or relied on by the Company or any
Company Subsidiary in the conduct of the Business will not malfunction, will not
cease to function, will not generate incorrect data, and will not produce
incorrect results when processing, providing, and/or receiving (i) date-related
data into and between the twentieth (20/th/) and twenty-first (21/st/) centuries
and (ii) date-related data in connection with any valid date in the twentieth
(20/th/) and twenty-first (21/st/) centuries, except for any malfunctions or
generations of incorrect data or results that would not individually or in the
aggregate have a 1 Company Material Adverse Effect. Nothing in this Section 4.5
is intended or shall be construed as a representation or warranty with respect
to embedded systems.
4.6 Financial Statements. Seller and the Company have previously furnished
--------------------
to CenterPoint copies of the audited consolidated balance sheet of the Company
as of December 31, 1998 (the "LATEST BALANCE SHEET"), and the related audited
consolidated statement of income,
10
stockholders' equity and cash flow for the one (1) year period ended December
31, 1998, including all notes thereto, (collectively, the "FINANCIAL
STATEMENTS"). Each of the Financial Statements is accurate and complete in all
material respects, is consistent with the books and records of the Company and
the Company Subsidiaries (which, in turn, are accurate and complete in all
material respects), and fairly presents in all material respects the financial
condition, assets and liabilities of the Company and the Company Subsidiaries as
of its date and the results of operations and cash flows for the periods related
thereto, in each case in accordance with generally accepted accounting
principles, applied on a consistent basis ("GAAP").
4.7 Absence of Undisclosed Liabilities. Except as disclosed in Schedule
---------------------------------- --------
4.7, neither the Company nor any Company Subsidiary had, as of the date of the
---
Latest Balance Sheet, nor has it incurred since that date, any liabilities or
obligations of any nature (whether known or unknown, absolute, contingent,
accrued, direct, indirect, perfected, inchoate, unliquidated or otherwise),
except (i) to the extent clearly and accurately reflected or accrued or fully
reserved against in the Financial Statements or (ii) liabilities and obligations
which have arisen after the date of the Latest Balance Sheet in the ordinary
course of business and consistent with past custom and practices (none of which
is a liability resulting from a breach of contract, breach of warranty, tort,
infringement claim, legal violation or lawsuit).
4.8 Unbilled Fees and Expenses. At the Closing all unbilled fees and
--------------------------
expenses at net realizable value reflected in the records of the Company and the
Company Subsidiaries arose in the ordinary course of business and will be
billable in the ordinary course of business using normal billing practices and
adjustments employed as of the date of this Agreement by the Company and each
Company Subsidiary. Upon such billing any such amounts will be collectible in
the ordinary course of business using normal collection practices and policies
employed by the Company and each Company Subsidiary (net of any allowance for
doubtful accounts determined in accordance with the Company's and the Company
Subsidiaries' past practice and custom).
4.9 Absence of Certain Changes or Events. Except as set forth on Schedule
------------------------------------ --------
4.9, since the date of the Latest Balance Sheet, each of the Company and the
---
Company Subsidiaries has conducted its business only in the ordinary course
consistent with past custom and practices. Except as set forth on Schedule 4.9,
------------
since the date of the Latest Balance Sheet, there has not been any:
(a) material adverse change in the operations, condition (financial or
otherwise), operating results, assets, liabilities, employee or client
relations or prospects of the Company or any Company Subsidiary;
(b) damage, destruction or loss of any property owned by the Company
or any Company Subsidiary, or used in the operation of the Business,
whether or not covered by insurance, having a replacement cost or fair
market value in excess of five percent (5%) of the amount of net property,
plant and equipment shown on the Latest Balance Sheet, in the aggregate;
11
(c) voluntary or involuntary sale, transfer, surrender, cancellation,
abandonment, waiver, release or other disposition of any kind by the
Company or any Company Subsidiary of any right, power, claim or debt,
except the collection of accounts and billing of work-in-process, each in
the ordinary course of business consistent with past custom and practices;
(d) strike, picketing, boycott, work stoppage, union organizational
activity, allegation, charge or complaint of employment discrimination or
other labor dispute or similar occurrence that is reasonably expected to
adversely affect the Company, a Company Subsidiary or the Business;
(e) loan or advance by the Company or any Company Subsidiary to any
Person, other than as a result of services performed for, or expenses
properly and reasonably advanced for the benefit of, customers in the
ordinary course of business consistent with past custom and practices;
(f) notice (formal or otherwise) of any liability, potential liability
or claimed liability relating to environmental matters;
(g) declaration, setting aside, or payment of any dividend or other
distribution in respect of the Company's capital stock or other equity
interests or any direct or indirect redemption, purchase, or other
acquisition of the Company's or any Company Subsidiary's capital stock or
other equity interests, or the payment of principal or interest on any
note, bond, debt instrument or debt to any Affiliate (as defined in Section
-------
15.4) of the Company or any Company Subsidiary, except bonuses and
----
distributions to employees and stockholders of the Company disclosed to
CenterPoint in writing that are consistent with the Company's past custom
and practices or as otherwise contemplated by this Agreement;
(h) incurrence by the Company or any Company Subsidiary of debts,
liabilities or obligations except current liabilities incurred in
connection with or for services rendered or goods supplied in the ordinary
course of business consistent with past custom and practices, liabilities
on account of taxes and governmental charges (but not penalties, interest
or fines in respect thereof), and obligations or liabilities incurred by
virtue of the execution of this Agreement;
(i) issuance by the Company or any Company Subsidiary of any notes,
bonds, or other debt securities or any equity securities or securities
convertible into or exchangeable for any equity securities;
(j) entry by the Company or any Company Subsidiary into, or amendment
or termination of, any material commitment, contract, agreement, or
transaction, other than in the ordinary course of business and other than
expiration of contracts in accordance with their terms;
12
(k) loss or threatened loss of, or any material reduction or
threatened material reduction in revenues from, any client of the Company
or any Company Subsidiary that accounted for revenues during the last
twelve months in excess of one percent (1%) of the consolidated net
revenues of the Company and the Company Subsidiaries, or change in the
relationship of the Company or any Company Subsidiary with any client or
Governmental Authority that is reasonably expected to adversely affect the
Company, any Company Subsidiary or the Business;
(l) change in accounting principles, methods or practices (including,
without limitation, any change in depreciation or amortization policies or
rates) utilized by the Company or any Company Subsidiary;
(m) discharge or satisfaction by the Company or any Company Subsidiary
of any material liability or encumbrance or payment by the Company or any
Company Subsidiary of any material obligation or liability, other than
current liabilities paid in the ordinary course of its business consistent
with past custom and practices;
(n) sale, lease or other disposition by the Company or any Company
Subsidiary of any tangible assets (having an aggregate replacement cost or
fair market value in excess of five percent (5%) of the amount of net
property, plant and equipment shown on the Latest Balance Sheet) other than
in the ordinary course of business, or the sale, assignment or transfer by
the Company or any Company Subsidiary of any trademarks, service marks,
trade names, corporate names, copyright registrations, trade secrets or
other intangible assets, or disclosure of any proprietary confidential
information of the Company or any Company Subsidiary to any Person other
than an employee, agent, attorney, accountant or other representative of
the Company that has agreed to maintain the confidentiality of any such
proprietary confidential information;
(o) capital expenditures or commitments therefor by the Company or any
Company Subsidiary in excess of $50,000 individually or $100,000 in the
aggregate;
(p) mortgage, pledge or other encumbrance of any asset of the Company
or any Company Subsidiary or creation of any easements, Liens or other
interests against or on any of the Real Property (as defined in Section
-------
4.14.1);
------
(q) adoption, amendment or termination of any Employee Plan (as
defined in Section 4.17.5(a)) or increase in the benefits provided under
-----------------
any Employee Plan, or promise or commitment to undertake any of the
foregoing in the future; or
(r) an occurrence or event not included in clauses (a) through (q)
that has resulted or, based on information of which Seller or the Company
has Knowledge, is reasonably expected to result in a Company Material
Adverse Effect.
13
4.10 Litigation. Except as set forth on Schedule 4.10 (which shall
---------- -------------
disclose the parties to, nature of and relief sought for each matter to be
disclosed on Schedule 4.10):
--------------
4.10.1 There is no suit, action, proceeding, investigation, claim or
order pending or, to the Knowledge of Seller or the Company, threatened
against the Company or any Company Subsidiary, or with respect to the
Merger, or with respect to any Employee Plan, or any fiduciary of any such
plan (or pending or, to the Knowledge of Seller or the Company, threatened
against any of the officers, directors, members, stockholders, partners or
employees of the Company or any Company Subsidiary with respect to its
business or proposed business activities), or to which the Company or any
Company Subsidiary is otherwise a party, or that is reasonably expected to
have a Company Material Adverse Effect, before any court, or before any
Governmental Authority (each an "ACTION" and collectively, the "ACTIONS");
nor, to the Knowledge of Seller or the Company, is there any basis for any
such Action.
4.10.2 Neither the Company nor any Company Subsidiary is subject to
any unsatisfied or continuing judgment, order or decree of any court or
Governmental Authority. Neither the Company nor any Company Subsidiary, to
the Knowledge of Seller or the Company, is otherwise exposed, from a legal
standpoint, to any liability or disadvantage that is reasonably expected to
result in a Company Material Adverse Effect, and neither the Company nor
any Company Subsidiary is a party to any legal action to recover monies due
it or for damages sustained by it, other than collection of past due
charges for services rendered or expenses incurred by the Company.
4.10.3 Schedule 4.10 lists the insurer for each Action covered by
-------------
insurance or designates such Action, or a portion of such Action, as
uninsured and lists the individual and aggregate policy limits for the
insurance covering each insured Action and the applicable policy
deductibles for each insured Action.
4.10.4 Schedule 4.10 sets forth all material closed litigation
-------------
matters to which the Company or any Company Subsidiary was a party during
the five (5) year period preceding the Closing Date, the date such
litigation was commenced and concluded, and the nature of the resolution
thereof (including amounts paid in settlement or judgment).
4.11 Compliance with Applicable Laws. Except as set forth on Schedules
------------------------------- ---------
4.11 and 4.19, each of the Company and the Company Subsidiaries has complied in
---- ----
all material respects with all laws, rules, regulations, writs, injunctions,
decrees, and orders (collectively, the "LAWS") applicable to it or to the
operation of the Business, and neither Seller, the Company nor any Company
Subsidiary has received any notice of any alleged claim or threatened claim,
violation of or liability or potential responsibility under any such Law which
has not heretofore been cured and for which there is no remaining liability and,
to the Knowledge of Seller or the Company, no event has occurred or
circumstances exist that (with or without notice or lapse of time) is reasonably
expected to constitute or result in a violation by the Company or any Company
14
Subsidiary of any Law that gives rise to any liability on the part of the
Company or any Company Subsidiary under any Law.
4.12 Licenses. Schedule 4.12 lists all Licenses used by the Company and
-------- -------------
the Company Subsidiaries that are material to the conduct of the Business.
"LICENSES" means all notifications, licenses, permits, franchises, certificates,
approvals, exemptions, classifications, registrations and other similar
documents and authorizations, and applications therefor held by the Company or
any Company Subsidiary and issued by, or submitted by the Company or any Company
Subsidiary to, any Governmental Authority or other Person, other than those
relating to the practice of public accountancy. Section B of Schedule 4.12 lists
all licenses, certificates, approvals, registrations and other similar documents
and authorizations, and applications therefor relating to the practice of public
accountancy (the "ACCOUNTING LICENSES") held by the Company or a Company
Subsidiary and issued by, or submitted by the Company or any Company Subsidiary
to, any Governmental Authority or other Person. All such Licenses and Accounting
Licenses are valid, binding and in full force and effect. Except as described on
Schedule 4.12, the execution, delivery and performance of this Agreement and the
-------------
consummation of the transactions contemplated hereby will not adversely affect
any such Licenses. To the Knowledge of Seller or the Company, the Company and
the Company Subsidiaries have taken all necessary action to maintain such
Licenses. No loss or expiration of any such License is pending or, to Seller's
or the Company's Knowledge, threatened or reasonably foreseeable.
4.13 Material Contracts. Except as listed or described on Schedule 4.13
------------------ -------------
(such contracts, or those which should have been listed on Schedule 4.13, are
-------------
herein referred to as the "MATERIAL CONTRACTS"), as of or on the date hereof,
neither the Company nor any Company Subsidiary is a party to or bound by, any
written or oral leases, agreements or other contracts or legally binding
contractual rights or contractual obligations or contractual commitments (each a
"CONTRACT" and collectively, the "CONTRACTS") relating to or in any way
affecting the operation or ownership of the Business that are of a type
described below and no such agreements are currently in negotiation or proposed:
(a) any consulting agreement pursuant to which the Company or a
Company Subsidiary is to receive consulting services (other than consulting
agreements that may be terminated by the Company or a Company Subsidiary on
not more than 30 days notice without penalty), employment agreement,
change-in-control agreement, or collective bargaining arrangement with any
labor union;
(b) any Contract for capital expenditures or the acquisition or
construction of fixed assets in excess of $50,000;
(c) any Contract for the purchase, maintenance or acquisition, or the
sale or furnishing, of materials, supplies, merchandise, machinery,
equipment, parts or other property or services (except if such Contract is
made in the ordinary course of business and requires aggregate future
payments of less than $25,000);
15
(d) any Contract, other than trade payables in the ordinary course of
business, relating to the borrowing of money, or the guaranty of another
Person's borrowing of money, including, without limitation, any notes,
mortgages, indentures and other obligations, guarantees of performance,
agreements and instruments for or relating to any lending or borrowing,
including assumed indebtedness;
(e) any Contract granting any Person a Lien on all or any part of the
assets of the Company or any Company Subsidiary;
(f) any Contract for the cleanup, abatement or other actions in
connection with Hazardous Materials (as defined in Section 4.19), the
------------
remediation of any existing environmental liabilities or relating to the
performance of any environmental audit or study;
(g) any Contract granting to any Person an option or a first refusal,
first-offer or similar preferential right to purchase or acquire any
material assets of the Company or any Company Subsidiary;
(h) any Contract with any agent, distributor or representative which
is not terminable by the Company or a Company Subsidiary upon ninety (90)
calendar days or less notice without penalty;
(i) any Contract under which the Company or any Company Subsidiary is
(A) a lessee or sublessee of any machinery, equipment, vehicle or other
tangible personal property, or (B) a lessor of any tangible personal
property owned by the Company or any Company Subsidiary, in either case
having an original purchase price or requiring aggregate lease payments in
excess of $50,000;
(j) any Contract under which the Company or any Company Subsidiary has
granted or received a license or sublicense or under which it is obligated
to pay or has the right to receive a royalty, license fee or similar
payment, in either case which provides for payments over the life of such
Contract in excess of $25,000;
(k) any Contract concerning an Affiliate Transaction (as defined in
Section 4.21);
------------
(l) any Contract providing for the indemnification or holding harmless
of any officer, director, employee or other Person;
(m) any Contract (A) for purchase or sale by the Company or any
Company Subsidiary of any real property on which the Company or any Company
Subsidiary conducts any aspect of the Business, (B) granting any options to
lease or purchase all or any portion of the Real Property, or (C) providing
for labor, services or materials to the
16
Real Property (including, without limitation, brokerage or management
services) involving aggregate future payments of more than $25,000;
(n) any Contract limiting, restricting or prohibiting the Company or
any Company Subsidiary from conducting business anywhere in the United
States or elsewhere in the world;
(o) any joint venture or partnership Contract;
(p) any lease, sublease or associated agreements relating to the
Leased Property (as defined in Section 4.14.1);
--------------
(q) any Contract requiring prior notice, consent or other approval
upon a change of control in the equity ownership of the Company or any
Company Subsidiary, which, if amended, modified or terminated as a result
of, relating to or in connection with a failure to provide prior notice, or
gain such consent or approval, would result in a Company Material Adverse
Effect; or
(r) any other Contract, whether or not made in the ordinary course of
business, which involves future payments by the Company or any Company
Subsidiary in excess of $25,000.
Seller and the Company have provided CenterPoint with a true and complete
copy of each written Material Contract and a true and complete summary of each
oral Material Contract, in each case including all amendments or other
modifications thereto. Except as set forth on Schedule 4.13, each Material
-------------
Contract is a valid and binding obligation of, and enforceable in accordance
with its terms against, the Company or a Company Subsidiary, as applicable, and,
to the Knowledge of Seller or the Company, the other parties thereto, and is in
full force and effect, subject only to bankruptcy, reorganization, receivership
and other laws affecting creditors' rights generally and equitable principles.
Except as set forth on Schedule 4.13, the Company or one of the Company
-------------
Subsidiaries, as applicable, has performed in all material respects all
obligations required to be performed by it as of the date hereof and will have
performed in all material respects all obligations required to be performed by
it as of the Closing Date under each Material Contract and neither the Company
or Company Subsidiary, as applicable, nor, to the Knowledge of Seller or the
Company, any other party to any Material Contract is in breach or default
thereunder, and, to the Knowledge of Seller or the Company, there exists no
condition which would, with or without the lapse of time or the giving of
notice, or both, constitute a breach or default thereunder. Neither Seller nor
the Company has been notified that any party to any Material Contract intends to
cancel, terminate, not renew, or exercise an option under any Material Contract,
whether in connection with the transactions contemplated hereby or otherwise.
17
4.14 Properties.
----------
4.14.1 Schedule 4.14.1-1 is a correct and complete list, and a brief
-----------------
description of, all real estate in which the Company or any of the Company
Subsidiaries has an ownership interest (the "OWNED PROPERTY") and all real
property leased by the Company (the "LEASED PROPERTY"). Except as lessee of
Leased Property, neither the Company nor any Company Subsidiary is a lessee
under or otherwise a party to any lease, sublease, license, concession or
other agreement, whether written or oral, pursuant to which another Person
has granted to the Company or any Company Subsidiary the right to use or
occupy all or any portion of any real property.
The Company or one or more of the Company Subsidiaries has good and
marketable fee simple title to the Owned Property and, assuming good title
in the landlord, a valid leasehold interest in the Leased Property (the
Owned Property and the Leased Property being sometimes referred to herein
as "REAL PROPERTY"), in each case free and clear of all Liens, assessments
or restrictions (including, without limitation, inchoate liens arising out
of the provision of labor, services or materials to any such real estate)
other than (a) mortgages shown on the Financial Statements as securing
specified liabilities or obligations, with respect to which no default (or
event that, with notice or lapse of time or both, would constitute a
default) exists, (b) Liens for current taxes not yet due, (c) (i) minor
imperfections of title, including utility and access easements depicted on
subdivision plats for platted lots that do not impair the intended use of
the property, if any, none of which materially impairs the current
operations of the Company, any Company Subsidiary or the Business, and (ii)
zoning laws and other land use restrictions or restrictive covenants that
do not materially impair the present use of the property subject thereto,
and (d) Liens, assessments, and restrictions pursuant to and by virtue of
the terms of the lease of the Leased Property. The Real Property
constitutes all real properties reflected on the Financial Statements or
used or occupied by the Company or any Company Subsidiary in connection
with the Business or otherwise.
With respect to the Owned Property, except as reflected on Schedule
--------
4.14.1-2(a):
-----------
(a) the Company or one of the Company Subsidiaries is in exclusive
possession thereof and no easements, licenses or rights are necessary to
conduct the Business thereon in addition to those which exist as of the
date hereof;
(b) no portion thereof is subject to any pending condemnation
proceeding or proceeding by any public or quasi-public authority materially
adverse to the Owned Property and, to the Knowledge of Seller or the
Company, there is no threatened condemnation or proceeding with respect
thereto;
18
(c) there is no violation of any covenant, condition, restriction,
easement or agreement of any Governmental Authority that affects the Owned
Property or the ownership, operation, use or occupancy thereof;
(d) no portion of any parcel of the Owned Property is subject to any
roll-back tax, dual or exempt valuation tax, and no portion of any Owned
Property is omitted from the appropriate tax rolls; and
(e) all assessments and taxes currently due and payable on such Owned
Property have been paid.
With respect to the Leased Property, except as reflected on Schedule
--------
4.14.1-2(b):
-----------
(i) the Company and/or one of the Company Subsidiaries is in
exclusive, peaceful and undisturbed possession thereof and, to the
Knowledge of Seller or the Company, no easements, licenses or rights are
necessary to conduct the Business thereon in addition to those which exist
as of the date hereof; and
(ii) to the Knowledge of Seller or the Company, no portion
thereof is subject to any pending condemnation proceeding or proceeding by
any public or quasi-public authority materially adverse to the Leased
Property and there is no threatened condemnation or proceeding with respect
thereto.
4.14.2 The Latest Balance Sheet and/or Schedule 4.14.2 reflect all
---------------
material tangible personal property owned by the Company or any Company
Subsidiary, except as sold or otherwise disposed of or acquired in the
ordinary course of business. Except as set forth on Schedule 4.14.2, the
---------------
Company or one of the Company Subsidiaries has good and marketable title
to, or a valid leasehold interest in, or valid license of, such personal
property (including, without limitation, machinery, equipment and
computers), in each case free and clear of any Liens (other than Liens
that are part of such leasehold or license), and each such asset is in
working order and has been maintained in a commercially reasonable manner
and does not contain, to the Knowledge of Seller or the Company, any
material defect. Except as set forth in Schedule 4.14.2, no personal
---------------
property (including, without limitation, software and databases maintained
on off-premises computers) used by the Company or any Company Subsidiary in
connection with the Business is held under any lease, security agreement,
conditional sales contract or other title retention or security arrangement
or is located other than on the Real Property.
4.15 Intellectual Property. The (i) patents, patent applications,
---------------------
inventions and discoveries that may be patentable (collectively, the "PATENTS"),
(ii) registered and unregistered trademarks, trade names, company names, assumed
business names and service marks (collectively, the "MARKS"), (iii) copyrights
(the "COPYRIGHTS"), and (iv) know how, trade secrets, confidential information,
client lists, software, technical information, data, process technology,
19
plans and drawings (collectively, the "TRADE SECRETS") owned, used or licensed
by the Company or any Company Subsidiary (collectively, the "INTELLECTUAL
PROPERTY") are all those necessary to enable the Company and the Company
Subsidiaries to conduct and to continue to conduct the Business substantially as
it is currently conducted. Schedule 4.15 contains a complete and accurate list
-------------
of all material Patents, Marks and Copyrights and a brief description of all
material Trade Secrets owned, used by or directly licensed to the Company or any
Company Subsidiary, and a list of all material license agreements and
arrangements with respect to any of the Intellectual Property to which the
Company or any Company Subsidiary is a party, whether as licensee, licensor or
otherwise (collectively, the "INTELLECTUAL PROPERTY LICENSES"). Except as set
forth on Schedule 4.15, (i) all of the Intellectual Property is owned or, to the
-------------
Knowledge of Seller or the Company, used under a valid Intellectual Property
License, by the Company or one of the Company Subsidiaries, and is free and
clear of all Liens and other adverse claims; (ii) none of Seller, the Company
nor any Company Subsidiary has received any written notice that it is or has
infringed on, misappropriated or otherwise conflicted with, or otherwise has
Knowledge that it is infringing on, misappropriating, or otherwise conflicting
with the intellectual property rights of any third parties; (iii) there is no
claim pending or, to the Knowledge of Seller or the Company, threatened against
the Company or any Company Subsidiary with respect to the alleged infringement
or misappropriation by the Company or Company Subsidiary, or a conflict with,
any intellectual property rights of others; (iv) the operation of any aspect of
the Business in the manner in which it has heretofore been operated or is
presently operated does not give rise to any such infringement or
misappropriation; and (v) there is no infringement or misappropriation of the
Intellectual Property by a third party or claim, pending or, to the Knowledge of
Seller or the Company, threatened, against any third party with respect to the
alleged infringement or misappropriation of the Intellectual Property.
4.16 Taxes.
-----
4.16.1 Except as set forth on Schedule 4.16.1-1, each of the Company
-----------------
and the Company Subsidiaries has timely and accurately prepared and filed
or been included in or will timely and accurately prepare and file or be
included in all federal, state, local and foreign returns, declarations and
reports, information returns and statements (collectively, the "RETURNS")
for Taxes (as defined in Section 4.16.2) required to be filed by or with
--------------
respect to the Company or the Company Subsidiaries before the Closing Date,
and has paid or caused to be paid, or has made adequate provision or set up
an adequate accrual or reserve for the payment of, all Taxes required to be
paid in respect of the periods for which Returns are due on or prior to the
Closing Date, and will establish an adequate accrual or reserve for the
payment of all Taxes payable in respect of the period, including portions
thereof, subsequent to the last of said periods required to be so accrued
or reserved, in each case in accordance with GAAP up to and including the
Closing Date. All such Returns are or will be true and correct in all
material respects. Seller and the Company have delivered to CenterPoint
true and complete copies of all Returns referred to in the first sentence
of this Section 4.16.1 (including any amendments thereof) for the five (5)
--------------
most recent taxable years. Neither the Company nor any Company Subsidiary
is
20
delinquent in the payment of any Tax, and no material deficiencies for any
Tax, assessment or governmental charge have been threatened, claimed,
proposed or assessed. No waiver or extension of time to assess any Taxes
has been given or requested. No written claim, or any other claim, by any
taxing authority in any jurisdiction where the Company or any Company
Subsidiary does not file Tax returns is pending pursuant to which the
Company or Company Subsidiary, as applicable, is or may be subject to
taxation by that jurisdiction. The Company's and the Company Subsidiaries'
Returns were last audited by the Internal Revenue Service or comparable
state, local or foreign agencies on the dates set forth on Schedule 4.16.1-
----------------
2.
-
4.16.2 For purposes of this Agreement, the term "TAXES" shall mean
all taxes, charges, withholdings, fees, levies, penalties, additions,
interest or other assessments, including, without limitation, income, gross
receipts, excise, property, sales, employment, withholding, social
security, occupation, use, service, service use, license, payroll,
franchise, transfer and recording taxes, fees and charges, windfall
profits, severance, customs, import, export, employment or similar taxes,
charges, fees, levies or other assessments, imposed by the United States,
or any state, local, foreign or provincial government or subdivision or any
agency thereof, whether computed on a separate, consolidated, unitary,
combined or any other basis.
4.17 Employee Benefit Plans; ERISA.
-----------------------------
4.17.1 Except as described in Schedule 4.17.1, neither the Company
---------------
nor any Company Subsidiary has or is reasonably expected to have any
liability (including contingent liability) whether direct or indirect (and
regardless of whether it would be derived from a current or former Plan
Affiliate, as defined in Section 4.17.5(c)) with respect to any of the
-----------------
following (whether written, unwritten or terminated): (i) any employee
welfare benefit plan, as defined in Section 3(1) of "ERISA," including,
but not limited to, any medical plan, life insurance plan, short-term or
long-term disability plan or dental plan; (ii) any "employee pension
benefit plan," as defined in Section 3(2) of ERISA (as defined in Section
-------
4.17.5(b)), including, but not limited to, any excess benefit plan, top hat
----------
plan or deferred compensation plan or arrangement, nonqualified retirement
plan or arrangement, qualified defined contribution or defined benefit
arrangement; or (iii) any other benefit plan, policy, program, arrangement
or agreement, including, but not limited to, any material fringe benefit
plan or program, personnel policy, bonus or incentive plan, stock option,
restricted stock, stock bonus, holiday pay, vacation pay, sick pay, bonus
program, service award, moving expense, reimbursement program, tool
allowance, safety equipment allowance, deferred bonus plan, salary
reduction agreement, change-of-control agreement, employment agreement or
consulting agreement.
4.17.2 A complete copy of each written Employee Plan (as defined in
Section 4.17.5(a)) as amended to the Closing, together with audited
-----------------
financial statements, if any, for the three (3) most recent plan years; a
copy of each trust agreement or other funding
21
vehicle with respect to each such plan; a copy of any and all determination
letters, rulings or notices issued by a Governmental Authority with respect
to such plan; a copy of the Form 5500 Annual Report for the three (3) most
recent plan years; and a copy of each and any general explanation or
communication which was required to be distributed or otherwise provided to
participants in such plan and which describes all or any relevant aspect of
each plan, including summary plan descriptions and/or summary of material
modifications, have been delivered to CenterPoint. A description of each
unwritten Employee Plan, including a description of eligibility,
participation, benefits, funding arrangements and assets or other relevant
aspects of the obligation, is set forth in Schedule 4.17.2.
---------------
4.17.3 Except as is not reasonably expected to give rise to any
liability (including contingent liability), whether direct or indirect, to
the Company or any Company Subsidiary, each Employee Plan (i) has been and
is operated and administered in compliance with its terms; (ii) has been
and is operated, administered, maintained and funded in compliance with the
applicable requirements of the Code in such a manner as to qualify, where
appropriate and intended, for both Federal and state purposes, for income
tax exclusions, tax-exempt status, and the allowance of deductions and
credits with respect to contributions thereto; (iii) where appropriate, has
received a favorable determination letter from the Internal Revenue Service
upon which the sponsor of the plan may currently rely; (iv) has been and
currently complies in form and in operation in all respects with all
applicable requirements of ERISA and the Code and any applicable reporting
and disclosure requirements of Federal and state laws, including but not
limited to the requirement of Part 6 of subtitle B of Title I of ERISA and
Section 4980B of the Code. With respect to each Employee Plan, no Person
has: (i) entered into any nonexempt "prohibited transaction," as such
terms are defined in ERISA or the Code; (ii) breached a fiduciary
obligation or (iii) any liability for any failure to act or comply in
connection with the administration or investment of the assets of such
plan; and no Employee Plan has any liability and there is no liability in
connection with any Employee Plan, other than a liability (i) which is
expressly and adequately reflected in the Latest Balance Sheets, (ii) which
is discretionary or terminable at will by the Company or one of the Company
Subsidiaries without incurring any such liability, or (iii) which is
adequately funded under a funding arrangement separate from the assets of
the Company, any Company Subsidiary or a Plan Affiliate (and only to the
extent of such funding). Any contribution made or accrued with respect to
any Employee Plan is fully deductible by the Company, a Company Subsidiary
or a Plan Affiliate.
4.17.4 Except as set forth on Schedule 4.17.4, neither the Company
---------------
nor any Company Subsidiary or Plan Affiliate has ever sponsored,
maintained, contributed to or been required to contribute to, or has any
liability, whether direct or indirect, with respect to any Employee Plan
which is or has ever been (i) a "multiemployer plan" as defined in Section
4001 of ERISA, (ii) a "multiemployer plan" within the meaning of Section
3(37) of ERISA, (iii) a "multiple employer plan" within the meaning of Code
Section 413(c), (iv)
22
a "multiple employer welfare arrangement" within the meaning of Section
3(40) of ERISA, (v) subject to the funding requirements of Section 412 of
the Code or to Title IV of ERISA, or (vi) provides for post-retirement
medical, life insurance or other welfare-type benefits.
4.17.5 As used in this Agreement, the following terms shall have the
following respective meanings:
(a) the term "EMPLOYEE PLAN" shall mean any plan, policy,
program, arrangement or agreement described in Section 4.17.1, whether
--------------
or not scheduled;
(b) the term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended; and
(c) with respect to any Person ("FIRST PERSON"), the term
"PLAN AFFILIATE" shall mean any other Person with whom the First
Person constitutes or has constituted all or part of a controlled
group, or which would be treated or have been treated with the First
Person as under common control or whose employees would be or have
been treated as employed by the First Person, under Section 414 of the
Code or Section 4001(b) of ERISA and any regulations, administrative
rulings and case law interpreting the foregoing.
4.18 Labor Matters. Except as set forth in Schedule 4.18, there is no, and
------------- -------------
within the last three (3) years neither the Company nor any Company Subsidiary
has experienced any, strike, picketing, boycott, work stoppage or slowdown or
other similar labor dispute, union organizational activity, allegation, charge
or complaint of unfair labor practice, employment discrimination or other
matters relating to the employment of labor pending or, to the Knowledge of
Seller or the Company, threatened against the Company or any Company Subsidiary,
or that is reasonably expected to affect the Company or any Company Subsidiary;
nor, to the Knowledge of Seller or the Company, is there any basis for any such
allegation, charge, or complaint. There is no request for representation pending
and, to the Knowledge of Seller or the Company, no question concerning
representation has been raised. There is no grievance pending that is reasonably
expected to result in a Company Material Adverse Effect nor any arbitration
proceeding arising out of a union agreement. To the Knowledge of Seller or the
Company, no employee who is key to the Business and no group of employees has
announced or otherwise indicated any plans to terminate employment with the
Company or any Company Subsidiary. Each of the Company and any Company
Subsidiary has complied with all applicable laws relating to the employment of
labor, including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining and the payment of social security and other taxes.
Neither the Company nor any Company Subsidiary is liable for any arrears of
wages or any taxes or penalties for failure to comply with any such laws,
ordinances or regulations.
23
4.19 Environmental Matters. Other than as disclosed on Schedule 4.19, (i)
--------------------- -------------
each of the Company and the Company Subsidiaries is operating and has operated
its business in compliance with all applicable Environmental and Safety
Requirements (as defined later in this Section); (ii) to the actual knowledge of
the Operating Committee of Seller and the Board of Directors of the Company,
without any duty to inquire (notwithstanding the definition of "Knowledge" in
Section 15.4), there are no Hazardous Materials (as defined later in this
Section) present at, on or under any real property currently or formerly owned,
leased or used by the Company or Company Subsidiary (other than those present in
office supplies and cleaning/maintenance materials) for which the Company or a
Company Subsidiary or is or is reasonably expected to be responsible, or
otherwise have any liability, for response costs under any Environmental and
Safety Requirements; (iii) each of the Company and the Company Subsidiaries has
disposed of all waste materials generated by the Company or such Company
Subsidiary at any real property currently or formerly owned, leased or used by
the Company or Company Subsidiary in compliance with applicable Environmental
and Safety Requirements; and (iv) there are and have been no facts, events,
occurrences or conditions at or related to any real property currently or
formerly owned, leased or used by the Company or Company Subsidiary that is
reasonably expected to cause or give rise to liabilities or response obligations
of the Company or any Company Subsidiary under any Environmental and Safety
Requirements. The term "ENVIRONMENTAL AND SAFETY REQUIREMENTS" means any
federal, state and local laws, statutes, regulations or other requirements
relating to the protection, preservation or conservation of the environment or
worker health and safety, all as amended or reauthorized. The term "HAZARDOUS
MATERIALS" means "hazardous substances," as defined by the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. (S) 9601 et
seq., "hazardous wastes," as defined by the Resource Conservation Recovery Act,
42 U.S.C. (S) 6901 et seq., asbestos in any form or condition, polychlorinated
biphenyls and any other material, substance or waste to which liability or
standards of conduct may be imposed under any Environmental and Safety
Requirement.
4.20 Insurance. Each of the Company and the Company Subsidiaries has in
---------
full force and effect commercially reasonable amounts of insurance to protect
the Company's and Company Subsidiaries' ownership or interest in, and operation
of, its assets against the types of liabilities, including professional
malpractice, customarily insured against in connection with operations similar
to the Business, and all premiums due on such policies have been paid. To
Seller's or the Company's Knowledge, each of the Company and the Company
Subsidiaries has complied with the provisions of all such policies and is not in
default under any of such policies. Schedule 4.20 contains a complete and
-------------
correct list of all such insurance policies. None of Seller, the Company nor any
Company Subsidiary has received any notice of cancellation or intent to cancel
or increase premiums with respect to such insurance policies. Schedule 4.20 also
-------------
contains a list of all claims or asserted claims reported to insurers under such
policies relating to the ownership or interest in the Company's and the Company
Subsidiaries' assets, or operation of the Business, including all professional
malpractice claims and similar types of claims, actions or proceedings asserted
against the Company or any Company Subsidiary arising out of the Business at any
time within the past three (3) years.
24
4.21 Interest in Customers and Suppliers; Affiliate Transactions. Except
-----------------------------------------------------------
as described on Schedule 4.21 and except for ownership as an investment of not
-------------
more than one percent (1%) of any class of capital stock of any publicly-traded
company, none of Seller, the Company, any Partner, any Affiliate of a Partner
nor any Affiliate of Seller, the Company or any Company Subsidiary (i)
possesses, directly or indirectly, any financial interest in, or is a director,
officer, employee or affiliate of, any Person that is a client, supplier,
customer, lessor, lessee or competitor of the Company or any Company Subsidiary,
(ii) owns, directly or indirectly, in whole or in part, or has any interest in
any tangible or intangible property used in the conduct of the Business, or
(iii) is a party to an agreement or relationship, that involves the receipt by
such Person of compensation or property from the Company or any Company
Subsidiary other than through a customary employment relationship or through
distributions made with respect to the Company Stock or equity interests in any
Company Subsidiary (provided such distributions have been made consistent with
the Company's or any Company Subsidiary's, as the case may be, past custom and
practices). Schedule 4.21 sets forth the parties to and the date, nature and
-------------
amount of each transaction during the last five years involving the transfer of
any cash, property or rights to or from the Company or any Company Subsidiary
from, to or for the benefit of any Affiliates (other than customary employment
relationships or distributions made with respect to the Company Stock)
("AFFILIATE TRANSACTIONS"), and any existing commitments of the Company or any
Company Subsidiary to engage in the future in any Affiliate Transactions. Except
as disclosed, each Affiliate Transaction and each transaction with former
Affiliates of the Company or any Company Subsidiary was effected on terms
equivalent to those that would have been established in an arm's-length
transaction.
4.22 Business Relationships. Schedule 4.22 lists all clients of the Company
---------------------- -------------
and each Company Subsidiary representing one percent (1%) or more of the
Company's consolidated net revenue for the twelve (12) months ended December 31,
1998. Except as set forth on Schedule 4.22, since December 31, 1998, none of
-------------
such clients has canceled or substantially reduced its business with the Company
or Company Subsidiary, as applicable, nor are any of such clients threatening to
do so. To the Knowledge of Seller or the Company, except as set forth on
Schedule 4.22 no client that accounts for one percent (1%) or more of the
-------------
Company's consolidated net revenue, or supplier of the Company or any Company
Subsidiary, will cease to do business with, or substantially reduce its business
with, the Company or any Company Subsidiary, as applicable, after the
consummation of the transactions contemplated hereby.
4.23 Compensation. Schedule 4.23 is a complete list setting forth the names
------------ -------------
and current total compensation, including, without limitation, salary and
bonuses paid to employees and draws or other distributions paid to partners,
members or owners of each Person who earned from the Company or a Company
Subsidiary in 1998 total compensation in excess of $100,000. Except as set forth
in Schedule 4.23, no Person listed thereon has received any bonus or increase in
-------------
compensation and there has been no "general increase" in the compensation or
rate of compensation payable to any employees, partners, members or owners of
the Company or any Company Subsidiary since the date of the Latest Balance
Sheet, other than in the Company's and Company Subsidiaries' ordinary course of
business, consistent with past custom and practices, nor
25
since that date has there been any oral or written promise to employees,
partners, members or owners of any bonus or increase in compensation, other than
in the Company's and Company Subsidiaries' ordinary course of business,
consistent with past custom and practices. The term "GENERAL INCREASE" as used
herein means any increase generally applicable to a class or group, but does not
include increases granted to individuals for merit, length of service or change
in position or responsibility made on the basis of the custom and past practices
of the Company or any Company Subsidiary. Schedule 4.23 includes the date and
-------------
amount of the last bonus or similar distribution or increase in compensation for
each listed individual.
4.24 Bank Accounts. Schedule 4.24 is a true and complete list of each bank
------------- -------------
in which the Company or any Company Subsidiary has an account or safe deposit
box, the number of each such account or box, and the names of all Persons
authorized to draw thereon or to have access thereto.
4.25 Professional Credentials. Each Partner is a Certified Public
------------------------
Accountant in good standing in one of the States of the United States or the
District of Columbia, and entitled to practice in one of the jurisdictions in
which the Company or any Company Subsidiary maintains an office, and there are
no disciplinary proceedings pending or threatened against the Company, any
Company Subsidiary or any of the Partners by any Governmental Authority or self-
regulatory organization regulating, licensing or permitting the practice of
public accountancy.
4.26 Disclosure; No Misrepresentation. No representation or warranty of
--------------------------------
Seller or the Company contained in this Agreement or in any of the
certification, schedules, lists, documents, exhibits, or other instruments
delivered or to be delivered to CenterPoint as contemplated by any provision
hereof contains any untrue statement regarding a material fact or omits to state
a material fact necessary in order to make the statements made herein or therein
not misleading. To the Knowledge of Seller or the Company, there is no fact or
circumstance that has not been disclosed to CenterPoint herein that has or is
reasonably expected to have a Company Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PARTNERS
5.1 Several Representations and Warranties. Each Partner, severally and
--------------------------------------
not jointly, hereby represents and warrants to CenterPoint as of the date hereof
and, subject to Section 7.3, as of the date on which CenterPoint and the lead
-----------
Underwriter execute and deliver the Underwriting Agreement related to the IPO
and as of the Closing Date as follows:
5.1.1 Capitalization. Except as set forth on Schedule 4.4,
-------------- ------------
immediately prior to the contribution thereof by such Partner to the
capital of Seller, such Partner owned beneficially and of record, and had
good and marketable title to, all of the issued and
26
outstanding shares of the Company Stock as set forth opposite the name of
such Partner in Schedule 4.4, free and clear of all Liens. Upon
------------
contribution of such Company Stock to the capital of Seller, Seller
acquired, and at the Closing as provided in this Agreement, CenterPoint
will acquire, good and valid title to such Company Stock, free and clear of
any Lien other than any Lien created by CenterPoint.
5.1.2 Authority. Such Partner has full right, capacity, power and
---------
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
such Partner, and, assuming the due authorization, execution and delivery
hereof by CenterPoint, constitutes a valid and legally binding agreement of
such Partner, enforceable against such Partner in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
5.1.3 Non-Contravention. The execution and delivery of this Agreement
-----------------
by such Partner does not violate, conflict with or result in a breach of
any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under, or result in the creation of
any Lien upon any of the properties or assets of Seller, the Company or any
Company Subsidiary under, any of the terms, conditions or provisions of (i)
any statute, law, ordinance, rule, regulation, judgment, decree, order,
injunction, writ, permit or license of any Governmental Authority
applicable to such Partner, except for those items relating to regulating,
licensing or permitting the practice of public accountancy or (ii) other
than those licenses, franchises, permits, concessions or instruments of any
Governmental Authority, any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which such Partner is a
party or by which such Partner may be bound or affected. The consummation
by such Partner of the transactions contemplated hereby will not result in
a violation, conflict, breach, right of termination, creation or
acceleration of Liens under the of the terms, conditions or provisions of
the items described in clauses (i) and (ii) of the immediately preceding
sentence, subject to obtaining (prior to the Closing Date) the consents set
forth on Schedule 4.3.2 and except for those items described above relating
--------------
to regulating, licensing or permitting the practice of public accountancy
and any filing which may be required under the HSR Act.
5.1.4 Approvals. To the Knowledge of such Partner, and except with
---------
respect to (i) the filing of the Registration Statements with the SEC
pursuant to the 1933 Act, the declaration of the effectiveness of the
Registration Statements by the SEC and filings, if required, with various
state securities or "blue sky" authorities, (ii) any filing which may be
required under the HSR Act, (iii) any filing which may be required by any
Governmental Authority or self-regulatory organization regulating,
licensing or permitting
27
the practice of public accountancy, no declaration, filing, or registration
with, or notice to, or authorization, consent or approval of, any
Governmental Authority is necessary for the execution and delivery of this
Agreement by such Partner or the consummation by such Partner of the
transactions contemplated hereby.
5.1.5 Litigation. There is no action, claim, suit, proceeding
----------
(disciplinary or otherwise), arbitration or investigation pending, or to
the Knowledge of such Partner, threatened against such Partner relating to
(i) the transactions contemplated by this Agreement, (ii) any action taken
by such Partner or contemplated by such Partner in connection with the
consummation by such Partner of the transactions contemplated hereby or
(iii) the practice of public accountancy by such Partner.
5.1.6 No Transfer. There are no outstanding subscriptions, options,
-----------
calls, contracts, commitments, undertakings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement to deliver or sell, or
cause to be delivered or sold, shares of Company Stock previously owned by
such Partner or obligating such Partner to grant, extend or enter into any
such agreement or commitment or obligating such Partner to convey or
transfer any Company Stock. As of the Closing Date, there will be no voting
trusts, proxies or other agreements or understandings to which such Partner
is a party or is bound with respect to the voting of any shares of capital
stock or other equity interests of the Company other than the Voting
Agreement.
5.1.7 Disclosure. No representation or warranty by or on behalf of
----------
such Partner contained in this Agreement or any of the written statements
or certificates furnished at or prior to the Closing by or on behalf of
such Partner to CenterPoint or its representatives in connection herewith
or pursuant hereto, contains any untrue statement of a material fact, or
omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading.
5.1.8 Representations and Warranties of Seller and the Company. To
--------------------------------------------------------
such Partner's actual knowledge, the representations and warranties of
Seller and the Company set forth in Article IV of this Agreement are true
----------
and correct.
5.2 Joint and Several Representations and Warranties. The Partners jointly
------------------------------------------------
and severally represent and warrant to CenterPoint that the authorized capital
stock of the Company consists of 30,000 shares of Company Stock, of which 15,000
shares are issued and outstanding and 1,500 shares are held in the Company's
treasury, all of which are validly issued and are fully paid, nonassessable and
free of preemptive rights.
28
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CENTERPOINT
CenterPoint represents and warrants to Seller, the Company and the Partners
as of the date hereof and, subject to Section 7.3, as of the date on which
-----------
CenterPoint and the lead Underwriter execute and deliver the Underwriting
Agreement related to the IPO and as of the Closing Date as follows:
6.1 Organization And Qualification. Each of CenterPoint and Mergersub is
------------------------------
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being conducted. True, accurate and complete copies of each of
CenterPoint's and Mergersub's Certificate of Incorporation and By-laws, as in
effect on the date hereof, including all amendments thereto, have heretofore
been delivered to Seller and the Company.
6.2 Capitalization.
--------------
6.2.1 The authorized capital stock of CenterPoint consists of 20,000
shares of CenterPoint Common Stock, of which 17,500 shares are outstanding
as of the date hereof. All of the issued and outstanding shares of
CenterPoint Common Stock are validly issued and are fully paid,
nonassessable and free of preemptive rights. Immediately prior to the
Closing Date, the authorized capital stock of CenterPoint will consist of
50,000,000 shares of CenterPoint Common Stock, of which the number of
shares set forth in the Form S-1 will be issued and outstanding, and
10,000,000 shares of Preferred Stock, par value $0.01 per share, none of
which will be issued and outstanding. Other than (i) shares of CenterPoint
Common Stock issued pursuant to a split of the shares outstanding as of the
date of this Agreement, (ii) shares of CenterPoint Common Stock issued in
accordance with the Acquisition and the Other Acquisitions, and (iii)
shares of CenterPoint Common Stock that may be issued to new members of
management in lieu of shares previously issued to current members of
management, but which will not increase the number of shares of outstanding
CenterPoint Common Stock, no shares of CenterPoint Common Stock will be
issued prior to the consummation of the IPO. Mergersub's authorized capital
stock consists solely of 1000 shares of common stock, par value $.01 per
share (the "MERGERSUB STOCK"), all of which are issued and outstanding, are
owned free and clear of any Liens by CenterPoint, and are fully paid,
nonassessable and free of preemptive rights.
6.2.2 Except as set forth on Schedule 6.2, as of the date hereof,
------------
there are no outstanding subscriptions, options, calls, contracts,
commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or
29
exchange under any outstanding security, instrument or other agreement
obligating CenterPoint to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of CenterPoint or
obligating CenterPoint to grant, extend or enter into any such agreement or
commitment. There are no voting trusts, proxies or other agreements or
understandings to which CenterPoint is a party or is bound with respect to
the voting of any shares of capital stock of CenterPoint. The shares of
CenterPoint Common Stock issued to Seller in the Acquisition will at the
Closing Date be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights and issued pursuant to a
registration statement as required by the 1933 Act or an exemption
therefrom.
6.3 No Subsidiaries. Except for CenterPoint's ownership of 100% of the
---------------
capital stock of Professional Service Group, Inc., a Delaware corporation, and
Mergersub (and similar entities created for similar purposes with respect to the
Other Agreements) CenterPoint has no subsidiaries and it does not own any
capital stock of any corporation or any equity or other interest of any nature
whatsoever in any Person.
6.4 Authority; Non-Contravention; Approvals.
---------------------------------------
6.4.1 Each of CenterPoint and Mergersub has all requisite right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been approved by the
Boards of Directors of CenterPoint and Mergersub, and no other corporate
proceedings on the part of CenterPoint or Mergersub are necessary to
authorize the execution and delivery of this Agreement or the consummation
by CenterPoint and Mergersub of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by CenterPoint and Mergersub
and, assuming the due authorization, execution and delivery hereof by
Seller, the Company and the Partners, constitutes a valid and legally
binding agreement of CenterPoint and Mergersub, enforceable against each of
them in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles.
6.4.2 The execution and delivery of this Agreement by CenterPoint and
Mergersub does not violate, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of
any Lien upon any of the properties or assets of CenterPoint or Mergersub
under any of the terms, conditions or provisions of (i) the Certificate of
Incorporation or By-laws of CenterPoint or Mergersub, (ii) any statute,
law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or license of any court or Governmental Authority applicable
to CenterPoint or Mergersub or any of their respective properties or
30
assets, or (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which CenterPoint or
Mergersub is now a party or by which CenterPoint, Mergersub or any of their
respective properties or assets, may be bound or affected, except those
items described in clause (ii) relating to regulating, licensing or
permitting the practice of public accountancy. The consummation by
CenterPoint and Mergersub of the transactions contemplated hereby will not
result in any violation, conflict, breach, right of termination or
acceleration or creation of Liens under any of the terms, conditions or
provisions of the items described in clauses (i) through (iii) of the
immediately preceding sentence, subject, in the case of the terms,
conditions or provisions of the items described in clause (ii) above, to
obtaining (prior to the Closing Date) CenterPoint Required Statutory
Approvals and except for those items described in (ii) above relating to
regulating, licensing or permitting the practice of public accountancy.
6.4.3 Except with respect to (i) the filing of the Registration
Statements with the SEC pursuant to the 1933 Act, the declaration of the
effectiveness of the Registration Statements by the SEC and filings, if
required, with various state securities or "blue sky" authorities, (ii)
any filing which may be required under the HSR Act, (iii) any filing which
may be required by any Governmental Authority or self-regulatory
organization regulating, licensing or permitting the practice of public
accountancy (the filings and approvals referred to in clauses (i) through
(iii) are collectively referred to as the "CENTERPOINT REQUIRED STATUTORY
APPROVALS") no declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body
or authority is necessary for the execution and delivery of this Agreement
by CenterPoint or Mergersub or the consummation by CenterPoint or Mergersub
of the transactions contemplated hereby, other than such declarations,
filings, registrations, notices, authorizations, consents or approvals
which, if not made or obtained, as the case may be, are not reasonably
expected to, in the aggregate, have a material adverse effect on the
business operations, properties, assets, condition (financial or other),
results of operations or prospects of CenterPoint and its subsidiaries,
taken as a whole (a "CENTERPOINT MATERIAL ADVERSE EFFECT").
6.5 Absence of Undisclosed Liabilities. Except as set forth on Schedule
---------------------------------- --------
6.5, neither CenterPoint nor Mergersub has incurred any liabilities or
---
obligations (whether known or unknown, absolute, contingent, direct, indirect,
perfected, inchoate, unliquidated or otherwise) of any nature. Except as set
forth on Schedule 6.5, neither CenterPoint nor Mergersub has engaged in any
------------
business activities of any type or kind whatsoever, nor entered into any
agreements nor is either bound by any obligation or undertaking.
6.6 Litigation. There are no claims, suits, actions or proceedings pending
----------
or, to the Knowledge of CenterPoint, threatened against, relating to or
affecting CenterPoint or Mergersub, before any court, Governmental Authority or
any arbitrator that seek to restrain or enjoin the consummation of the
Acquisition or the IPO or which could reasonably be expected, either alone
31
or in the aggregate with all such claims, actions or proceedings, to have a
CenterPoint Material Adverse Effect. CenterPoint is not subject to any
unsatisfied or continuing judgment, order or decree of any court or Governmental
Authority. CenterPoint is not a party to any legal action to recover monies due
it or for damages sustained by it.
6.7 Compliance with Applicable Laws. Each of CenterPoint and Mergersub
-------------------------------
has complied in all material respects with all Laws applicable to it, and has
not received any notice of any alleged claim or threatened claim, violation of
or liability or potential responsibility under any such Law which has not
heretofore been cured and for which there is no remaining liability and, to the
Knowledge of CenterPoint, no event has occurred or circumstances exist that
(with or without notice or lapse of time) may constitute or result in a
violation by CenterPoint or Mergersub of any Law or may give rise to any
liability on the part of the CenterPoint or Mergersub under any Law.
6.8 No Misrepresentation. None of the representations and warranties of
--------------------
CenterPoint or Mergersub set forth in this Agreement or in any of the
certificates, schedules, lists, documents, exhibits, or other instruments
delivered or to be delivered to Seller, the Company or the Partners as
contemplated by any provision hereof contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading. To the Knowledge of CenterPoint,
there is no fact or circumstance that has not been disclosed to the Company
herein that has or is reasonably expected to have a Company Material Adverse
Effect.
ARTICLE VII
CERTAIN COVENANTS AND OTHER TERMS
7.1 Conduct of Business by the Company Pending the Acquisition.
----------------------------------------------------------
7.1.1 Except as otherwise contemplated by this Agreement, after the
date hereof and prior to the Closing Date or earlier termination of this
Agreement, unless CenterPoint shall otherwise agree in writing, the Company
shall, and shall cause each Company Subsidiary to:
(a) in all material respects conduct the Business in the
ordinary and usual course and consistent with past customs and
practices;
(b) not (i) amend its Organizational Documents except as
necessary to complete the Conversion, (ii) split, combine or
reclassify its outstanding capital stock or (iii) declare, set aside
or pay any dividend or distribution payable in cash, stock, property
or otherwise except dividends or distributions which (A) are
32
consistent with past customs and practices and (B) do not result in a
Company Material Adverse Effect;
(c) not issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of (i) any additional shares of, or any
options, warrants or rights of any kind to acquire any shares of, its
capital stock or equity interests of any class, (ii) any debt with
voting rights or (iii) any debt or equity securities convertible into
or exchangeable for, or any rights, warrants, calls, subscriptions, or
options to acquire, any such capital stock, debt with voting rights or
convertible securities;
(d) not (i) incur or become contingently liable with respect to
any indebtedness for borrowed money other than (A) borrowings in the
ordinary course of business in a manner consistent with past customs
and practices or (B) borrowings to refinance existing indebtedness on
commercially reasonable terms, (ii) redeem, purchase, acquire or offer
to purchase or acquire any shares of its capital stock or equity
interests or any options, warrants or rights to acquire any of its
capital stock or equity interests or any security convertible into or
exchangeable for its capital stock or equity interests, (iii) sell,
pledge, dispose of or encumber any assets or businesses other than
dispositions in the ordinary course of business in a manner consistent
with past customs and practices (iv) enter into any contract,
agreement, commitment or arrangement with respect to any of the
foregoing;
(e) use commercially reasonable efforts to (i) preserve intact
its business organizations and goodwill, (ii) keep available the
services of its present officers and key employees, and (iii) preserve
the goodwill and business relationships with clients and others having
business relationships with it and not engage in any action, directly
or indirectly, with the intent to adversely impact the transactions
contemplated by this Agreement;
(f) confer on a regular and frequent basis with one or more
representatives of CenterPoint to report operational matters of
materiality and the general status of ongoing operations;
(g) except as contemplated on Schedule 4.9, not (i) increase in
------------
any manner the base compensation of, or enter into any new bonus or
incentive agreement or arrangement with, any of its employees,
partners, members or owners, except in the ordinary course of business
in a manner consistent with past customs and practices of the Company
or any Company Subsidiary, as applicable, (ii) pay or agree to pay any
additional pension, retirement allowance or other employee benefit
under any Employee Plan to any such Person, whether past or present,
(iii) enter into any new employment, severance, consulting, or other
compensation agreement with any of its existing employees, partners,
members or
33
owners, (iv) amend or enter into a new Employee Plan (except as
required by Law) or amend or enter into a new collective bargaining
agreement, or (v) engage in any new Affiliate Transaction;
(h) comply in all material respects with all applicable Laws;
(i) not make any material investment in, directly or
indirectly, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or substantial
portion of the assets of, or by any other manner, any businesses or
any Person or division thereof or otherwise acquire or agree to
acquire any assets in each case which are material to it other than in
the ordinary course of business in a manner consistent with past
customs and practices;
(j) not sell, lease, license, encumber or otherwise dispose of,
or agree to sell, lease, license, encumber or otherwise dispose of,
any of its assets other than in the ordinary course of business,
consistent with past customs and practices;
(k) maintain with financially responsible insurance companies
insurance on its tangible assets and its businesses in such amounts
and against such risks and losses in a manner consistent with past
customs and practices in all material respects; and
(l) collect and ▇▇▇▇ receivables in the ordinary and usual
course and consistent with past custom and practices.
7.1.2 Prior to the Closing, the Partners shall have (a) formed a
separate Person ("ATTEST ENTITY") pursuant to Organizational Documents
reasonably acceptable in form and substance to CenterPoint and (b) used
their diligent efforts to have secured, or have caused the Attest Entity to
have secured, all licenses, permits, approvals and authorizations necessary
to conduct the Attestation Practice in accordance with applicable laws and
regulations.
7.1.3 Notwithstanding the fact that such action might otherwise be
permitted pursuant to this Article, none of the Partners, Seller or the
Company shall take, or permit any Company Subsidiary to take, any action
that would or is reasonably likely to result in any of the representations
or warranties of the Partners, Seller and the Company set forth in this
Agreement being untrue or in any of the conditions to the consummation of
the transactions contemplated hereunder set forth in Article X (other than
---------
Section 10.1(i)) not being satisfied.
---------------
7.1.4 Prior to the Closing, (i) the Company and/or the Partners, as
applicable, shall terminate, without any liability to the Company or the
Company Subsidiaries, all agreements relating to the voting of the
Company's capital stock, and all agreements and
34
obligations of the Company and the Company Subsidiaries relating to
borrowed money and/or involving payments to or for the benefit of a Partner
or former stockholder of the Company, or an Affiliate or family member of a
Partner or former stockholder of the Company, including without limitation
those set forth on Schedule 7.1.4(i), but excluding (A) debt reflected on
-----------------
Schedule 2.1 as Debt Assumed By CenterPoint, (B) items reflected on
------------
Schedule 2.5, (C) to the extent such agreements and obligations result in
------------
Indirect Costs under the Incentive Compensation Agreement, (D) the
agreements set forth on Schedule 7.1.4(i)-D and (E) items approved by
-------------------
CenterPoint in writing, (ii) the Company shall transfer or distribute to
the Persons set forth on Schedule 7.1.4(ii), and such Persons shall assume,
------------------
(A) all assets identified on Schedule 7.1.4(ii) (collectively, the
------------------
"Excluded Assets") and (B) any and all liabilities and obligations of any
nature (whether known or unknown, accrued, absolute, contingent, direct,
indirect, perfected, inchoate, unliquidated or otherwise) relating to the
Excluded Assets and the Company's interest in Better Business Methods,
L.L.C., a Missouri limited liability company ("BBM"), which was transferred
by the Company to Seller effective as of January 1, 1999 (collectively, the
"EXCLUDED LIABILITIES"), and (iii) the Company may declare a special bonus
(the "Special Bonus") in an amount (after adding all Taxes payable by the
Company with respect thereto) not in excess of that portion of the AR that
is not necessary to meet the Target or otherwise satisfy the obligations of
the Company or the Partners hereunder. Prior to the Closing, the Company
and the Partners shall obtain novations or other releases or agreements
discharging the Company from all Excluded Liabilities (so that the
respective Excluded Liabilities will become direct liabilities and
obligations of the assignee), including without limitation the obligation
to make loans to BBM, contained in Section 2.d.i. of that certain Operating
Agreement dated August 3, 1998, by and among the Company, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "BBM AGREEMENT"), and the restriction on
competition, contained in Section 6.g. of the BBM Agreement and provide
copies thereof to CenterPoint.
7.2 No-Shop.
-------
(a) After the date hereof and prior to the Closing Date or earlier
termination of this Agreement, Seller, the Company and the Partners shall
(i) not, and each of Seller and the Company shall use its diligent efforts
to cause the Company Subsidiaries and any officer, director or employee of,
or any attorney, accountant, investment banker, financial advisor or other
agent retained by Seller, the Company or any Company Subsidiary not to,
initiate, solicit, negotiate, encourage, or provide non-public or
confidential information to facilitate, any proposal or offer to acquire
all or any substantial part of the business and properties of the Company
or any Company Subsidiary, or any capital stock or other equity interest of
Seller, the Company or any Company Subsidiary, whether by merger, purchase
of assets or otherwise, whether for cash, securities or any other
consideration or combination thereof, or enter into any joint venture or
partnership or similar arrangement, and (ii) promptly advise CenterPoint of
the terms of any communications Seller, the
35
Company or the Partners may receive or become aware of relating to any bid
for part or all of Seller, the Company or any Company Subsidiary.
(b) Seller, the Company and the Partners (i) acknowledge that a breach
of any of their covenants contained in this Section 7.2 will result in
-----------
irreparable harm to CenterPoint which will not be compensable in money
damages; and (ii) agree that such covenant shall be specifically
enforceable and that specific performance and injunctive relief shall be a
remedy properly available to the other party for a breach of such covenant.
7.3 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 Closing promptly to
supplement or amend and deliver to the other parties all the schedules to this
Agreement (the "SCHEDULES") to correct any matter which would constitute a
breach of any such party's representations and warranties herein; provided,
--------
however, that no amendment or supplement to a Schedule that constitutes or
-------
reflects a Company Material Adverse Effect or affects Schedule 4.2, Schedule 4.4
------------ ------------
or Schedule 8.8 may be made unless CenterPoint and a majority of the Founding
------------
Companies consent to such amendment or supplement. No amendment of or
supplement to a Schedule shall be made later than three (3) business days prior
to the anticipated effectiveness of the Form S-1. For all purposes of this
Agreement, including, without limitation, for purposes of determining whether
the conditions set forth in Sections 10.2 and 10.3 have been fulfilled, the
------------- ----
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this Section 7.3. In the event that (i) one of the other Founding
-----------
Companies seeks to amend or supplement a Schedule pursuant to Section 7.3 of one
-----------
of the Other Agreements, (ii) such amendment or supplement constitutes or
reflects a Company Material Adverse Effect (as defined in such Other Agreement)
or affects Schedule 4.2, Schedule 4.4 or Schedule 8.8 of such Other Agreement,
------------ ------------ ------------
and (iii) CenterPoint and a majority of the Founding Companies consent to such
amendment or supplement, but Seller, the Company and a majority of the Partners
do not, Seller, the Company and a majority of the Partners may terminate this
Agreement at any time prior to the Closing Date. In the event that (i) Seller,
the Company or the Partners seek to amend or supplement a Schedule pursuant to
this Section 7.3, (ii) such amendment or supplement constitutes or reflects a
-----------
Company Material Adverse Effect or affects Schedule 4.2, Schedule 4.4 or
------------ ------------
Schedule 8.8, and (iii) CenterPoint and a majority of the Founding Companies do
------------
not consent to such amendment or supplement, this Agreement shall be deemed
terminated.
No party to this Agreement shall be liable to any other party if this
Agreement shall be terminated pursuant to the provisions of this Section 7.3,
-----------
unless this Agreement is so terminated in connection with an amendment of or
supplement to a Schedule relating to Seller's, the Company's or any Partner's
breach of a representation or warranty as of the date of this Agreement in which
case the Company shall pay to CenterPoint, as CenterPoint's exclusive remedy
(notwithstanding anything to the contrary) and as liquidated damages, and not as
a penalty, an amount equal to $2,000,000 (the "LIQUIDATED DAMAGES AMOUNT"). The
Company agrees that in the case of such termination CenterPoint and the Founding
Companies (excluding the Company) will sustain immediate and irreparable
economic harm and loss of goodwill and that actual losses
36
suffered by such parties will be difficult, if not impossible, to ascertain, but
the Liquidated Damages Amount set forth herein is reasonable and has been
arrived at after a good faith effort to estimate such losses. Payment of the
Liquidated Damages Amount shall be made in cash to CenterPoint within thirty
(30) days of a termination pursuant to this Section 7.3 in connection with an
-----------
amendment of or supplement to a Schedule relating to a breach of a
representation or warranty as of the date of this Agreement.
7.4 Company Stockholders Meeting. The Company shall take all action in
----------------------------
accordance with applicable Laws and its Organizational Documents necessary to
duly call, give notice of, convene and hold a meeting of the Company's
stockholders to be held on the earliest practicable date determined in
consultation with CenterPoint to consider and vote upon approval of the Merger,
this Agreement and the transactions contemplated hereby. The Company shall
solicit the approval of the Merger, this Agreement and the transactions
contemplated hereby by the Company's stockholders and the Company's Board of
Directors shall recommend approval of the Merger, this Agreement and the
transactions contemplated hereby by the Company's stockholders.
7.5 Conversion. Prior to the Closing but effective only if, as and when
----------
the Closing occurs, Seller and the Partners shall cause the Company to complete,
and the Company shall complete, the Conversion, pursuant to applicable law and
present such evidence of the Conversion at the Closing, as CenterPoint or its
counsel may require.
ARTICLE VII
ADDITIONAL AGREEMENTS
8.1 Access to Information.
---------------------
8.1.1 The Company shall and shall cause the Company Subsidiaries to
afford to CenterPoint and its accountants, counsel, financial advisors and
other representatives, including without limitation the underwriters
engaged in connection with the IPO (each an "UNDERWRITER" and
collectively, the "UNDERWRITERS") and their counsel (collectively, the
"CENTERPOINT REPRESENTATIVES"), and to the other Founding Companies and
their accountants, counsel, financial advisors and other representatives,
and CenterPoint shall afford to the Partners, Seller and the Company and
their accountants, counsel, financial advisors and other representatives
(the "COMPANY REPRESENTATIVES"), upon reasonable notice, full access during
normal business hours throughout the period prior to the Closing Date to
all of its respective properties, books, contracts, commitments and records
(including, but not limited to, financial statements and Tax Returns) and,
during such period, shall furnish promptly to one another all due diligence
information requested by the other party. CenterPoint shall hold and shall
use its best efforts to cause the CenterPoint Representatives to hold, and
the Partners, Seller and the Company shall hold and shall use their best
efforts to cause the Company Representatives to hold, in strict
37
confidence all non-public information furnished to it in connection with
the transactions contemplated by this Agreement, except that each of
CenterPoint, the Partners and the Company may disclose any information that
it is required by law or judicial or administrative order to disclose. In
addition, CenterPoint will cause each of the other Founding Companies and
their members and stockholders to enter into a provision similar to this
Section 8.1 requiring each such Founding Company to keep confidential any
-----------
information obtained by such Founding Company in connection with the
transactions contemplated by this Agreement.
8.1.2 In the event that this Agreement is terminated in accordance
with its terms, each party shall promptly return to the disclosing party
all non-public written material provided pursuant to this Section 8.1 or
-----------
pursuant to the Other Agreements and shall not retain any copies, extracts
or other reproductions of such written material. In the event of such
termination, all documents, memoranda, notes and other writings prepared by
CenterPoint or the Company based on the information in such material shall
be destroyed (and CenterPoint and the Company shall use their respective
reasonable best efforts to cause their advisors and representatives to
similarly destroy such documents, memoranda and notes), and such
destruction (and reasonable best efforts) shall be certified in writing by
an authorized officer supervising such destruction.
8.2 Registration Statements.
-----------------------
8.2.1 Subject to the reasonable discretion of CenterPoint as advised
by the lead Underwriter, CenterPoint shall file with the SEC as soon as is
reasonably practicable after the date hereof the Registration Statements
and shall use all reasonable efforts to have the Registration Statements
declared effective by the SEC as promptly as practicable. CenterPoint shall
also take any action required to be taken under applicable state "blue sky"
or securities laws in connection with the issuance of CenterPoint Common
Stock. CenterPoint, Seller, the Company and the Partners shall promptly
furnish to each other all information, and take such other actions, as may
reasonably be requested in connection with making such filings. All
information provided and to be provided by CenterPoint Seller, the Partners
and the Company, respectively, for use in the Registration Statements shall
be true and correct in all material respects without omission of any
material fact which is required to make such information not false or
misleading as of the date thereof and in light of the circumstances under
which given or made. Seller, the Company and the Partners agree promptly to
advise CenterPoint if at any time during the period in which a prospectus
relating to the offering or the Merger is required to be delivered under
the Securities Act, any information contained in the prospectus concerning
the Company, the Company Subsidiaries, Seller or the Partners becomes
incorrect or incomplete in any material respect, and to provide the
information needed to correct such inaccuracy or remedy such incompletion.
38
8.2.2 CenterPoint agrees that it will provide to Seller and its counsel
copies of drafts of the Registration Statements (and any amendments thereto)
containing material changes to the information therein as they are prepared and
will not (i) file with the SEC, (ii) request the acceleration of the
effectiveness of or (iii) circulate any prospectus forming a part of, the
Registration Statements (or any amendment thereto) unless Seller and its counsel
(x) have had at least two days to review the revised information contained
therein (which changes shall be highlighted by computer generated marks
indicating the additions and deletions made from the prior draft reviewed by
Seller's counsel) and (y) have not objected to the substance of the information
contained therein. Any objections posed by Seller or its counsel shall be in
writing and state with specificity the material in question, the reason for the
objection, and Seller's proposed alternative. If the objection is founded upon a
rule promulgated under the Securities Act, the objection shall cite the rule.
Notwithstanding the foregoing, during the five (5) business days immediately
preceding the date scheduled for the filing of the Registration Statements and
any amendment thereto, Seller, and its counsel shall be obligated to respond to
proposed changes electronically transmitted to them within two (2) hours from
the time the proposed changes (in the case of the initial filing of the
Registration Statements, from the last circulated draft of the Registration
Statements; and, in the case of any subsequent filing of the Registration
Statements or any amendment thereof, from the most recently filed Registration
Statements or amendment thereof) are transmitted to Seller's counsel; provided,
--------
that, CenterPoint has provided to Seller or its counsel reasonable advance
----
notice of such proposed changes; provided, further, that such changes are
-------- -------
highlighted by computer generated marks indicating the additions and deletions
made from the prior draft reviewed by Seller's counsel.
8.2.3 CenterPoint will advise the Partner Representative of the
effectiveness of the Registration Statements, advise the Partner Representative
of the entry of any stop order suspending the effectiveness of the Registration
Statements or the initiation of any proceeding for that purpose, and, if such
stop order shall be entered, use its best efforts promptly to obtain the lifting
or removal thereof. Upon the written request of Seller, CenterPoint will furnish
to Seller a reasonable number of copies of the final prospectus associated with
the IPO.
8.3 Expenses and Fees. CenterPoint shall pay the fees and expenses of the
-----------------
independent public accountants and legal counsel to CenterPoint and all filing,
printing and other reasonable, documented fees and expenses associated with the
IPO and Form S-4. Neither Seller, the Company nor the Partners will be liable
for any portion of the above expenses in the event the IPO is not completed.
CenterPoint shall also pay the underwriting discounts and commissions payable in
connection with the sale of CenterPoint Common Stock in the IPO. All other costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
8.4 Agreement to Cooperate. Subject to the terms and conditions herein
----------------------
provided, each of the parties hereto shall use all reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
39
8.5 Public Statements. Except as may be required by law, no party hereto
-----------------
nor any Affiliate of any party hereto shall issue any press release or any
written public statement with respect to this Agreement or the transactions
contemplated by this Agreement or the Other Agreements without the prior written
consent of CenterPoint, Seller and the Company.
8.6 Registration Rights.
-------------------
8.6.1 At any time after the second anniversary but prior to the
fourth anniversary of the Closing Date, whenever CenterPoint proposes to
register any CenterPoint Common Stock for its own account or the account of
others under the Securities Act for a public offering for cash other than a
registration relating to employee benefit plans or acquisitions,
CenterPoint will give Seller and the Partner Representative prompt written
notice of its intent to do so. Promptly after receipt of such notice,
Seller and the Partner Representative shall provide written notice to
CenterPoint of all Partners (and their respective current mailing address)
that beneficially own shares of CenterPoint Common Stock. Thereafter, upon
the written request of Seller or any of the Partners given within thirty
(30) days after receipt of such notice, CenterPoint will use its best
efforts to cause to be included in such registration all of the CenterPoint
Common Stock which Seller or any such Partner requests, provided that
CenterPoint shall have the right to reduce the number of shares included in
such registration, if CenterPoint is advised in writing in good faith by
any managing underwriter of the securities being offered pursuant to any
registration statement under this Section 8.6 that the number of shares to
-----------
be sold by Persons other than CenterPoint is greater than the number of
such shares which can be offered without adversely affecting the offering;
in such case, CenterPoint may reduce the number of shares offered for the
accounts of such Persons to a number deemed satisfactory by such managing
underwriter. Any such reduction shall occur first by eliminating from such
registration any shares held by Persons other than Persons holding
CenterPoint Common Stock directly or indirectly immediately following the
Closing and then reducing pro rata (based upon the number of shares
requested to be registered) the number of shares offered for the account of
such Person. CenterPoint shall not be obligated to register any shares of
CenterPoint Common Stock held by Seller or any Partner at any time when
such shares are not then transferable in accordance with Section 12.2
------------
hereof. Registration rights under this Section 8.6 may be transferred in
-----------
whole or in part in connection with the transfer of any shares of
CenterPoint Common Stock received pursuant to this Agreement other than the
transferee of the kind described in clause (x) of Section 12.2 hereof.
------------
8.6.2 Except for underwriting commissions and discounts, all expenses
incurred in connection with the registrations under this Section 8.6
-----------
(including all registration, filing, qualification, legal, printer and
accounting fees) shall be paid by CenterPoint. In connection with
registrations under this Section 8.6, CenterPoint shall
-----------
(a) use its best efforts to prepare and file with the SEC as
soon as reasonably practicable, a registration statement with respect
to the CenterPoint
40
Common Stock (and such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
required by applicable law) and use its best efforts to cause such
registration to promptly become and remain effective for a period of at
least one hundred twenty (120) days (or such shorter period during which
holders shall have sold all CenterPoint Common Stock which they requested
to be registered);
(b) upon the written request of a Partner whose CenterPoint
Common Stock is to be covered by any such registrations, furnish to such
Partner a reasonable number of copies of the prospectus covering the
offering and sale by the Partner of the shares to be covered thereby;
(c) use its best efforts to register and qualify the CenterPoint
Common Stock covered by such registration statement under applicable state
securities laws as the holders shall reasonably request for the
distribution for the CenterPoint Common Stock;
(d) take such other actions as are reasonable and necessary to
comply with the requirements of the 1933 Act and the regulations
thereunder;
(e) advise Seller and each Partner whose CenterPoint Common Stock
is to be covered by such registration of the effectiveness of such
registration statement, advise Seller and each such Partner of the entry of
any stop order suspending the effectiveness of such registration statement
or of the initiation of any proceeding for that purpose, and, if such stop
order shall be entered, use its best efforts promptly to obtain the lifting
or removal thereof; and
(f) at any time when a prospectus relating to any CenterPoint
Common Stock is required to be delivered under the 1933 Act, notify Seller
and each Partner whose CenterPoint Common Stock is to be covered by such
registration, of the happening of any event as a result of which the
registration statement, the prospectus or any document incorporated therein
by reference includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements made therein not misleading and, at the request of Seller or
such Partner, prepare and furnish to Seller or such Partner a post-
effective amendment or supplement to the registration statement or the
related prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein not
misleading.
41
8.6.3 In connection with each registration pursuant to this Section
-------
8.6 covering an underwritten registration public offering, CenterPoint and
---
each participating holder agree to enter into a written agreement with the
managing underwriters in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
managing underwriters and companies of CenterPoint's size and investment
stature, including indemnification.
8.6.4 In consideration of the granting to Seller and the Partners of
the registration rights under this Section 8.6, Seller and the Partners
-----------
agree, and agree to enter into an agreement with the underwriters in
connection with an underwritten registration to the effect, that it/they
will not sell, transfer or otherwise dispose of, including, without
limitation, through put or short sale arrangements, shares of CenterPoint
Common Stock in the ten (10) days prior to the effectiveness of any
registration of CenterPoint Common Stock for sale to the public and for up
to ninety (90) days following the effectiveness of such registration,
provided that all directors, executive officers and holders of more than
five percent (5%) of the outstanding CenterPoint Common Stock agree to the
same restrictions; and further provided that, with respect to the first
public offering of shares of the CenterPoint Common Stock within three (3)
years following the IPO, Seller and the Partners shall have been afforded a
meaningful opportunity to include shares in such registration after any
reduction by reason of underwriters' written advice.
8.7 CenterPoint Covenants. After the date hereof and prior to the Closing
---------------------
Date or earlier termination of this Agreement in accordance with its terms,
CenterPoint shall comply in all material respects with all applicable Laws.
CenterPoint shall not take any action that would or is reasonably likely to
result in any of the representations or warranties of CenterPoint set forth in
this Agreement being untrue or in any of the conditions to the consummation of
the transactions contemplated hereunder set forth in Article X not being
---------
satisfied.
8.8 Release of Guarantees. CenterPoint shall use all commercially
---------------------
reasonable efforts and good faith to have the Partners released from any and all
guarantees on any indebtedness and leases that they personally guaranteed for
the benefit of the Company as set forth on Schedule 8.8, with all such
------------
guarantees on indebtedness and leases being assumed by CenterPoint, if necessary
to achieve such releases. If any guaranteed indebtedness is repaid in full with
proceeds from the IPO and the Partners' guarantees thereafter shall have no
further force or effect, then CenterPoint shall not be obligated to use any
efforts to obtain a release of such guarantee. In the event that CenterPoint
cannot obtain such releases from the lenders of any such guaranteed indebtedness
or lessors of any guaranteed leases, CenterPoint agrees to indemnify, defend and
hold harmless the Partners against any and all claims made by lenders or
landlords under such guarantees.
8.9 Lock-Up Agreement. Seller and each Partner agree, and agree to enter
-----------------
into an agreement with the Underwriter on or prior to the date on which
preliminary Prospectuses are delivered to the effect that, Seller and the
Partners will not offer, sell, contract to sell or otherwise dispose of any
shares of CenterPoint Common Stock, or any securities convertible into or
42
exercisable or exchangeable for CenterPoint Common Stock, for a period of 180
days after the date of the final Prospectus of the IPO without the prior written
consent of the Underwriter except for shares of CenterPoint Common Stock
disposed of as bona fide gifts, subject to any remaining portion of the 180-day
period applying to any shares so disposed of.
8.10 Preparation and Filing of Tax Returns.
-------------------------------------
8.10.1 The Company shall be responsible for causing the timely filing
of the final pre-Closing Returns for the Company and the Company
Subsidiaries; provided, however, that CenterPoint and its advisors shall
have the right to review and approve such returns prior to filing, which
approval shall not be unreasonably withheld. CenterPoint shall, and shall
cause its Affiliates to, provide to the Company such cooperation and
information reasonably requested in filing any return, amended return or
claim for refund, determining a liability for Taxes or a right to refund of
Taxes or in conducting any audit or other proceeding in respect of Taxes.
The Company shall bear all costs of filing such returns.
8.10.2 Each of Seller, the Company, CenterPoint and the Partners
shall comply with the tax reporting requirements of Section 1.351-3 of the
Treasury Regulations promulgated under the Code, and shall treat the
transaction as subject to the provisions of Section 351 of the Code.
8.11 Maintenance of Insurance. The Company covenants and agrees that all
------------------------
insurance policies listed, or required to be listed, on Schedule 4.20 will be
-------------
maintained in full force and effect through the Closing Date.
8.12 Administration. After the Closing, at the request of Seller,
--------------
CenterPoint shall, directly or through one or more of its subsidiaries,
administer and manage the collection of amounts referred to on Schedule
--------
7.1.4(ii) using reasonable care and in accordance with the Company's policies in
---------
effect at Closing.
8.13 Payment of Special Bonus. After the Closing, CenterPoint shall cause
------------------------
the Company to make payments of the Special Bonus to the Persons and in the
amounts set forth on a schedule to be provided by the Partner Representative to
CenterPoint as soon as practicable after the Closing (which schedule shall be
substantially similar to the bonus projection schedule previously provided by
the Company to CenterPoint); provided, however, that (i) the Company shall make
such payments on a monthly basis (the first payment to be made one month after
the Closing Date), (ii) the aggregate payments to be made by the Company at the
end of each month shall be limited to the AR collected by the Company during
such month, (iii) one hundred eighty days after the Closing Date the Company
shall (A) make payments of AR collected through such date and not yet paid out
in accordance with this Section 8.13, and (B) distribute any then remaining AR
------------
as final payment of the Special Bonus, and (iv) in no event shall the liability
of CenterPoint and the Company under this Section 8.13 plus for all Taxes
------------
payable by the Company on account of the Special Bonus exceed the amount of the
AR.
43
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by the Partners. Subject to Sections 9.7 and 9.8, the
-------------------------------
Partners jointly and severally agree to indemnify, defend and save the
CenterPoint Indemnified Parties (hereinafter defined), forever harmless from and
against, and to promptly pay to a CenterPoint Indemnified Party or reimburse a
CenterPoint Indemnified Party for, any and all Losses (hereinafter defined)
sustained or incurred by any CenterPoint Indemnified Party resulting from,
arising out of, in connection with or otherwise by virtue of:
(a) any misrepresentation or breach of a representation or warranty
made in Article V herein or in any certificate, schedule, document, exhibit
---------
or other instrument delivered hereunder by any Partner or any action,
demand or claim by any third party against or affecting any CenterPoint
Indemnified Party which, if successful, would give rise to a breach of any
such representation or warranty, except that the obligation of the Partners
to indemnify, defend and save harmless for any misrepresentation or breach
of representation or warranty made in Section 5.1 hereof or in any
-----------
certificate, schedule, document, exhibit or other instrument delivered in
respect thereof shall not be joint and several, but such obligation shall
be several only and limited to the several Partner(s) making such
misrepresentation or breach;
(b) any failure by Seller, the Company or any Partner to observe or
perform any of their covenants and agreements set forth herein related to
the period prior to the Closing, except that the obligation of the Partners
to indemnify, defend and save harmless for any breach of a covenant or
agreement by a Partner shall not be joint and several, but such obligation
shall be several only and limited to the several Partner(s) committing such
breach;
(c) any liability under the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 ACT"), or other federal or state law or
regulation, at common law or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to
the Company contained in any preliminary prospectus relating to the IPO,
the Registration Statements or any proxy statement or prospectus forming a
part thereof, or any amendment thereof or supplement thereto, or arising
out of or based upon any omission to state therein a material fact relating
to the Company required to be stated therein or necessary to make the
statements therein not misleading, and not provided to CenterPoint or its
counsel by the Company; provided, however, that such indemnity shall not
-------- -------
inure to the benefit of any CenterPoint Indemnified Party to the extent
that such untrue statement (or alleged untrue statement) was made in, or
omission (or alleged omission) occurred in, any preliminary prospectus and
(i) the Company provided, in writing, corrected information to CenterPoint
or its counsel for inclusion in the final prospectus prior to distributing
such prospectus, and such information was not so included,
44
or (ii) CenterPoint did not provide the Company and its counsel with the
information required to be provided pursuant to Section 8.2.2, and such
-------------
information is the basis for the untrue statement or omission (or alleged
untrue statement or omission) giving rise to the liability under this
Section 9.1(c); or
--------------
(d) notwithstanding anything contained in this Agreement to the
contrary, (i) any arrangements made by or on behalf of the Partners, Seller
or the Company in connection with the Acquisition or the transactions
contemplated by this Agreement with respect to brokerage, finders and other
fees or commissions, (ii) disallowance of any tax deduction to CenterPoint
or the Company with respect to any item listed on Schedule 2.5 and
------------
considered in determining Net Working Capital and of the Special Bonus,
(iii) any matter which is or should be listed on Schedule 4.10 or which is
-------------
listed on Schedule 7.1.4 hereto, (iv) the Excluded Assets, the Excluded
--------------
Liabilities, the transactions contemplated or referred to in Section 7.1.4,
-------------
and the transaction identified as item 1 on Schedule 4.9, and (v) any
------------
payment with respect to the Dissenting Shares.
As used herein, the "CENTERPOINT INDEMNIFIED PARTIES" shall mean
CenterPoint, its Subsidiaries and Affiliates, the Founding Companies other than
the Company (the "OTHER FOUNDING COMPANIES"), and their respective officers,
directors, employees, agents, employee plans and plan fiduciaries, plan
administrators or other Person dealing with any such plans; provided, however,
-------- -------
that the Other Founding Companies, and each of their respective officers,
directors, employees, agents, employee plans and plan fiduciaries, plan
administrators or other Persons dealing with any such plans, shall cease to be a
"CENTERPOINT INDEMNIFIED PARTY" for all purposes hereunder as of the Closing,
and thereafter such Persons shall have no further rights and remedies under this
Article IX (except to the extent a Person is an officer, director, employee or
----------
agent of CenterPoint as a result of the consummation of the transactions
contemplated under the Other Agreements); provided, further that the
-------- --------
Subsidiaries of CenterPoint shall include the Company, the Company Subsidiaries
and the other Founding Companies from and after the Closing. Accordingly, for
purposes of this Article IX and subject to the limitations set forth in this
----------
Article IX, the Other Founding Companies, and each of their respective officers,
----------
directors, employees, agents, employee plans and plan fiduciaries, plan
administrators or other Persons dealing with any such plans, shall be deemed to
be third party beneficiaries of this Agreement.
As used in this Agreement, "LOSSES" shall mean the following: (i) in the
event the Agreement is terminated pursuant to Section 11.1 and the Closing does
------------
not occur, any and all out-of-pocket costs and expenses (including reasonable
fees and expenses of the attorneys, accountants and other experts), or (ii)
subsequent to the Closing, any and all liabilities (whether contingent, fixed or
unfixed, liquidated or unliquidated, or otherwise), obligations, deficiencies,
demands, claims, suits, actions, or causes of action, assessments, losses,
costs, expenses, interests, fines, penalties, actual or punitive damages or
costs or expenses of any and all investigations, proceedings, judgments, orders,
environmental analyses, remediations, settlements and compromises (including
reasonable fees and expenses of the attorneys, accountants and other experts).
45
9.2 Indemnification by CenterPoint. CenterPoint agrees to indemnify,
------------------------------
defend and save each of the Partners and their respective Affiliates, and their
Affiliates' respective officers, directors, employees and agents (each, a
"PARTNER INDEMNIFIED PARTY") forever harmless from and against, and to promptly
pay to a Partner Indemnified Party or reimburse a Partner Indemnified Party for,
any and all Losses sustained or incurred by any Partner Indemnified Party
relating to, resulting from, arising out of or otherwise by virtue of any of the
following:
(a) any misrepresentation or breach of a representation or warranty
made herein or in any document or other instrument delivered hereunder by
CenterPoint or any action, demand or claim by any third party against or
affecting any Partner Indemnified Party which, if successful, would give
rise to a breach of any such representation or warranty;
(b) any failure by CenterPoint to observe or perform any of its
covenants and agreements set forth herein or in any document or other
instrument delivered hereunder; or
(c) any liability under the 1933 Act, the 1934 Act or other Federal or
state law or regulation, at common law or otherwise, arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact relating to CenterPoint or any of the Other Founding Companies
contained in any preliminary prospectus relating to the IPO, the
Registration Statements or any proxy statement or prospectus forming a part
thereof, or any amendment thereof or supplement thereto, or arising out of
or based upon any omission or alleged omission to state therein a material
fact relating to CenterPoint or any of the Other Founding Companies
required to be stated therein or necessary to make the statements therein
not misleading; and
(d) any liability under the 1933 Act, the 1934 Act, or other federal
or state law or regulation, at common law or otherwise, arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact relating to Seller, the Company or the Partners, contained in any
preliminary prospectus relating to the IPO, the Registration Statements or
any proxy statement or prospectus forming a part thereof, or any amendment
thereof or supplement thereto, or arising out of or based upon any omission
to state therein a material fact relating to Seller, the Company or the
Partners required to be stated therein or necessary to make the statements
therein not misleading, to the extent such untrue statement (or alleged
untrue statement) was made in, or omission (or alleged omission) occurred
in, any preliminary prospectus and (i) Seller, the Company or Partners
provided, in writing, corrected information to CenterPoint or its counsel
for inclusion in the final prospectus prior to distributing such
prospectus, and such information was not so included, or (ii) CenterPoint
did not provide Seller, the Partner Representative and their counsel with
the information required to be provided pursuant to Section 8.2.2, and such
-------------
information is the basis for the untrue statement or omission (or alleged
untrue statement or omission) giving rise to the liability under this
Section 9.2(d).
-------------
46
9.3 Indemnification Procedure for Third Party Claims.
------------------------------------------------
9.3.1 In the event that subsequent to the Closing any Person entitled
to indemnification under this Agreement (an "INDEMNIFIED PARTY") receives
notice of the assertion of any claim, issuance of any order or the
commencement of any action or proceeding by any Person who is not a party
to this Agreement or an Affiliate of a party, including, without
limitation, any domestic or foreign court or Governmental Authority (a
"THIRD PARTY CLAIM"), against such Indemnified Party, against which a party
to this Agreement is required to provide indemnification under this
Agreement (an "INDEMNIFYING PARTY"), the Indemnified Party shall give
written notice thereof together with a statement of any available
information regarding such claim to the Indemnifying Party within thirty
(30) days after learning of such claim (or within such shorter time as may
be necessary, in the Indemnified Party's reasonable judgment, to give the
Indemnifying Party a reasonable opportunity to respond to and defend such
claim). The Indemnifying Party shall have the right, upon written notice to
the Indemnified Party (the "DEFENSE NOTICE") within ten days (10) after
receipt from the Indemnified Party of notice of such claim, to conduct at
its expense the defense against such claim in its own name, or if necessary
in the name of the Indemnified Party; provided, however, that the
-------- -------
Indemnified Party shall have the right to approve the defense counsel
selected by the Indemnifying Party, which approval shall not be
unreasonably withheld, and in the event the Indemnifying Party and the
Indemnified Party cannot agree upon such counsel within ten (10) days after
the Defense Notice is provided, then the Indemnifying Party shall propose
an alternate defense counsel, who shall be subject again to the Indemnified
Party's approval.
9.3.2 In the event that the Indemnifying Party shall fail to timely
give the Defense Notice, it shall be deemed to have elected not to conduct
the defense of the subject claim, and in such event the Indemnified Party
shall have the right to conduct such defense in good faith at the cost and
expense of the Indemnifying Party and the Indemnifying Party shall
reimburse the Indemnified Party for all costs, expenses and settlement
amounts actually paid in connection therewith; provided, however, that
-------- -------
under no circumstances shall the Indemnified Party compromise or settle any
Third Party Claim without the prior written consent of the Indemnifying
Party (which, in the case of the Partners, may be granted by the Partner
Representative (as defined in Section 9.13)), which consent shall not be
------------
unreasonably withheld or delayed.
9.3.3 In the event that the Indemnifying Party does elect to conduct
the defense of the subject claim, the Indemnified Party will cooperate with
and make available to the Indemnifying Party such assistance and materials
as may be reasonably requested by it, all at the expense of the
Indemnifying Party, and the Indemnified Party shall have the right at its
expense to participate in the defense assisted by counsel of its own
choosing, provided that the Indemnified Party shall have the right to
compromise and settle the claim only with the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. Without the prior written consent of the Indemnified
47
Party, the Indemnifying Party will not enter into any settlement of any
Third Party Claim or cease to defend against such claim, if pursuant to or
as a result of such settlement or cessation, (i) injunctive or other
equitable relief would be imposed against the Indemnified Party, or (ii)
such settlement or cessation would lead to liability or create any
financial or other obligation on the part of the Indemnified Party for
which the Indemnified Party is not entitled to indemnification hereunder,
or (iii) such settlement includes a written admission of guilt. The
Indemnifying Party shall not be entitled to control, and the Indemnified
Party shall be entitled to have sole control over, the defense or
settlement of any claim (A) to the extent that claim seeks an order,
injunction or other equitable relief against the Indemnified Party which,
if successful, could materially interfere with the business, operations,
assets, condition (financial or otherwise) or prospects of the Indemnified
Party or (B) in a proceeding to which the Indemnifying Party is also a
party and the Indemnified Party determines in good faith that joint
representation would be inappropriate (and in each case the cost of such
defense shall constitute an amount for which the Indemnified Party is
entitled to indemnification hereunder). If an offer is made to settle a
Third Party Claim which all parties to such Third Party Claim (including
the Indemnifying Party) are prepared to settle and which offer the
Indemnifying Party is permitted to settle under this Section 9.3.3 only
-------------
upon the prior written consent of the Indemnified Party, the Indemnifying
Party will give prompt written notice to the Indemnified Party to that
effect. If the Indemnified Party fails to consent to such firm offer within
(30) calendar days after its receipt of such notice, the Indemnified Party
may continue to contest or defend such Third Party Claim and, in such
event, the maximum liability of the Indemnifying Party as to such Third
Party Claim will not exceed the amount of such settlement offer, plus costs
and expenses paid or incurred by the Indemnified Party through the end of
such (30) day period.
9.3.4 Any judgment entered, order issued or settlement agreed upon in
the manner provided herein shall be binding upon the Indemnifying Party,
and shall conclusively be deemed to be an obligation with respect to which
the Indemnified Party is entitled to prompt indemnification hereunder.
9.4 Direct Claims. It is the intent of the parties hereto that all direct
-------------
claims by an Indemnified Party against a party hereto not arising out of Third
Party Claims shall be subject to and benefit from the terms of this Article IX.
----------
Any claim under this Article IX by an Indemnified Party for indemnification
----------
other than indemnification against a Third Party Claim, (a "DIRECT CLAIM") will
be asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, together with a statement of any available information regarding such
claim, and the Indemnifying Party will have a period of thirty (30) calendar
days within which to satisfy such Direct Claim. If the Indemnifying Party does
not so respond within such thirty (30) calendar day period, the Indemnifying
Party will be deemed to have rejected such claim, in which event the Indemnified
Party will be free to pursue such remedies as may be available to the
Indemnified Party under this Article IX.
----------
48
9.5 Failure to Give Timely Notice. A failure by an Indemnified Party to
-----------------------------
give timely, complete or accurate notice as provided in Section 9.3 or 9.4 will
----------- ---
not affect the rights or obligations of any party hereunder except and only to
the extent that, as a result of such failure, any party entitled to receive such
notice was deprived of its right to recover any payment under any applicable
insurance coverage, or deprived of its right to assert any claim because of
expiration of the applicable statute of limitations, or was otherwise directly
and materially damaged as a result of such failure to give timely notice.
9.6 Reduction of Loss. To the extent any Loss of an Indemnified Party is
-----------------
reduced by receipt of payment (i) under insurance policies (net of any
retroactive adjustment or other reimbursement to the insurer in respect of such
payment), (ii) from third parties not affiliated with the Indemnified Party, or
(iii) the amount of any tax benefit to the CenterPoint Indemnified Parties, such
payments and/or tax benefits (net of the expenses of the recovery thereof) shall
be credited against such Loss. The pendency of such payments shall not delay or
reduce the obligation of the Indemnifying Party to make payment to the
Indemnified Party in respect of such Loss, and the Indemnified Party shall not
have any obligation, hereunder or otherwise, to pursue payment under or from any
insurer or third party in respect of such Loss. The Indemnified Party shall
cooperate, at no expense to the Indemnified Party, in any reasonable efforts of
the Indemnifying Party in pursuing such payments, including expressly
acknowledging the Indemnifying Party's right and standing to pursue such
payments, and the Indemnified Party will use its customary efforts short of
litigating with an insurer or third party to collect amounts due from such
insurer or third party. If any insurance or third party reimbursement is
obtained subsequent to payment by an Indemnifying Party in respect of a Loss,
such reimbursement (to the extent of amounts theretofore paid by the
Indemnifying Party on account of such Loss) shall be promptly paid over to the
Indemnifying Party.
9.7 Limitation on Indemnities.
-------------------------
9.7.1 Threshold for the Partners. With respect to representations and
--------------------------
warranties, the Partners shall not have any liability pursuant to Section
-------
9.1(a) hereof unless and until and only to the extent that the aggregate
------
amount of Losses accrued pursuant to Section 9.1(a) exceeds 1% of aggregate
-------------
Basic Purchase Consideration; provided, however, that this threshold shall
-------- -------
not apply to Losses arising out of breaches of representations or
warranties contained in Sections 5.1.1, 5.1.2, 5.2 and 5.1.8 as it relates
-------------- ----- --- -----
to the representation and warranty of Seller and the Company set forth in
Section 4.16, and the Partners shall indemnify the CenterPoint Indemnified
------------
Parties for any Losses accruing thereunder in accordance with this Article
-------
IX without regard to such threshold.
--
9.7.2 Threshold for CenterPoint. With respect to representations and
-------------------------
warranties, CenterPoint shall not have any liability pursuant to Section
-------
9.2(a) hereof unless and until and only to the extent that the aggregate
------
amount of the Losses accrued pursuant to Section 9.2(a) exceeds 1% of
-------------
aggregate Basic Purchase Consideration; provided, however, that this
-------- -------
threshold shall not apply to Losses arising out of the breach of
representations or
49
warranties contained in Section 6.2 and CenterPoint shall indemnify the
-----------
Partner Indemnified Parties from any Losses occurring thereunder in
accordance with this Article IX without regard to such threshold.
----------
9.7.3 Limitations on Claims Against the Partners. The liability of
------------------------------------------
all Partners for misrepresentations and breaches of representations and
warranties under Section 9.1(a) shall be limited to 100% of aggregate Basic
-------------
Purchase Consideration in the aggregate; provided, however, that such
-------- -------
liability for a Partner shall be limited to three times the aggregate Basic
Purchase Consideration received, directly or indirectly, by such Partner or
by Seller on behalf of such Partner; provided further, however, that such
---------------- -------
limitations shall not apply to Losses arising out of breaches of
representations or warranties contained in Sections 5.1.1, 5.1.2, 5.2, and
-------------- ----- ---
5.1.8 as it relates to the representation and warranty of Seller and the
-----
Company set forth in Section 4.16, and any Losses accruing thereunder shall
------------
not count towards such limitations.
9.7.4 Limitation on Claims Against CenterPoint. The liability of
----------------------------------------
CenterPoint under Section 9.2(a) shall be limited to 100% of aggregate
--------------
Basic Purchase Consideration in the aggregate; provided, however, that this
-------- -------
limitation shall not apply to Losses arising out of breaches of
representations or warranties in Section 6.2 and any Losses accruing
-----------
thereunder shall not count towards such limitation.
9.8 Survival of Representations, Warranties and Covenants of the Partners,
----------------------------------------------------------------------
Seller and the Company; Time Limits on Indemnification Obligations.
------------------------------------------------------------------
Notwithstanding any right of CenterPoint to fully investigate the affairs of
Seller, the Company, the Company Subsidiaries and the Business, and
notwithstanding any Knowledge of facts determined or determinable by CenterPoint
pursuant to such investigation or right of investigation, CenterPoint has the
right to rely fully upon the representations, warranties, covenants and
agreements of the Partners, Seller and the Company contained in this Agreement
or in any certificate delivered pursuant to any of the foregoing. All such
representations, warranties, covenants and agreements of the Partners, Seller
and the Company shall survive the execution and delivery of this Agreement and
the Closing hereunder; provided, however, (i) that the Partners' obligations
-------- -------
pursuant to Section 9.1, other than those relating to covenants and agreements
-----------
to be performed by the Partners after the Closing, shall expire one (1) year
after the Closing, except with respect to obligations arising under or relating
to Section 4.16 hereof as it relates to federal, state, local and foreign income
------------
taxation, which shall survive until the earlier of (A) the expiration of the
applicable periods (including any extensions) of the respective statutes of
limitation applicable to the payment of the Taxes or (B) the completion of the
final audit and determinations by the applicable taxing authority and final
disposition of any deficiency resulting therefrom; and (ii) solely to the extent
that CenterPoint actually incurs liability under the 1933 Act or the 1934 Act,
the obligations under Sections 9.1(c) or (d) above shall survive until the
--------------- ---
expiration of any applicable statute of limitations with respect to such claims.
9.9 Survival of Representations, Warranties and Covenants of CenterPoint;
---------------------------------------------------------------------
Time Limits on Indemnification Obligations. All representations, warranties,
------------------------------------------
covenants and agreements of
50
CenterPoint shall survive the execution and delivery of this Agreement and the
Closing hereunder; provided, however, that CenterPoint's obligations under
-------- -------
Section 9.2, other than those relating to covenants and agreements to be
-----------
performed by CenterPoint after the Closing, shall expire one year after Closing,
except that, solely to the extent that the Partners actually incur liability
under the 1933 Act or the 1934 Act, the obligations under Section 9.2(c) or (d)
-------------- ---
above shall survive until the expiration of any applicable statute of
limitations with respect to such claims.
9.10 Defense of Claims; Control of Proceedings. Notwithstanding anything
-----------------------------------------
in this Agreement to the contrary, to the extent any Loss subject to
indemnification hereunder would exceed the Indemnifying Party's indemnity
obligations under this Agreement, the Indemnified Party shall be entitled to
control the defense of such claim or management of such proceeding with respect
to such excess Loss.
9.11 Fraud; Exclusive Remedy. The limitations set forth in this Article IX
----------------------- ----------
shall not apply to fraud by any party. In the absence of fraud and
notwithstanding any Law to the contrary and any rights that would otherwise be
available thereunder, the indemnification provisions of this Article IX set
----------
forth the sole and exclusive remedy of the CenterPoint Indemnified Parties
following the Closing against the Partners and of the Partner Indemnified
Parties following the Closing against CenterPoint and its affiliates with
respect to any claim for relief resulting from, arising out of or otherwise by
virtue of this Agreement and the transactions contemplated hereby.
9.12 Manner of Satisfying Indemnification Obligations. Subsequent to the
------------------------------------------------
Closing, the Partners may satisfy their respective obligations, if any, under
this Article IX by tendering to the CenterPoint Indemnified Parties cash or
----------
shares of CenterPoint Common Stock that are then transferable in accordance with
Section 12.2, such shares to be valued at the Market Price. "MARKET PRICE" shall
------------
mean the average closing (last) price for a share of CenterPoint Common Stock
(as reported on the exchange or market on which such shares are then listed or
traded) for the most recent twenty (20) days that such shares have traded ending
on the date two (2) days prior to the date tendered pursuant to clause (i) of
the preceding sentence, or, if such shares are not then listed or traded on an
exchange or other market, the fair market value of such shares as determined by
an appraiser reasonably agreed to by the parties.
9.13 Partner Representative. Each of the Partners and Seller appoints
----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "PARTNER REPRESENTATIVE") as its agent and
representative with full power and authority to agree, contest or settle any
claim or dispute affecting any Partner made under Articles II or IX and to
otherwise act on behalf of the Partners in accordance with the terms of this
Agreement, including, without limitation, to direct the amount and manner of the
payment of the aggregate Basic Purchase Consideration; provided, that the
-------- ----
Partner Representative may be removed and a successor to the Person originally
serving as the Partner Representative may be designated in a writing signed by a
majority-in-interest of the Partners and delivered to CenterPoint in accordance
with Section 15.2.
------------
51
ARTICLE X
CLOSING CONDITIONS
10.1 Conditions to Each Party's Obligation to Effect the Acquisition. The
---------------------------------------------------------------
respective obligations of each party to effect the Acquisition shall be subject
to the fulfillment at or prior to the Closing of the following conditions:
(a) the Underwriting Agreement related to the IPO shall have been
executed and the closing of the sale of CenterPoint Common Stock to the
Underwriters pursuant thereto shall have occurred simultaneously with the
Closing hereunder;
(b) the closings of the transactions contemplated under each of the
Other Agreements shall have occurred simultaneously with the Closing
hereunder, unless terminated in accordance with Section 7.3 of the
-----------
applicable Other Agreement;
(c) the Registration Statements shall have become effective in
accordance with the provisions of the Securities Act, and no stop order
suspending such effectiveness shall have been issued and remain in effect
and no proceeding for that purpose shall have been instituted by the SEC or
any state regulatory authorities;
(d) no preliminary or permanent injunction or other order or decree
shall be pending before or issued by any federal or state court which seeks
to prevent or prevents the consummation of the IPO, the Acquisition or any
of the Other Acquisitions shall have been issued and remain in effect;
(e) the minimum price condition set forth on Schedule 2.1 shall have
------------
been satisfied;
(f) no action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any state or federal government or
governmental agency in the United States which would prevent the
consummation of the Acquisition or any of the Other Acquisitions or make
the consummation of the Acquisition or any of the Other Acquisitions
illegal;
(g) all material governmental and third party waivers, consents and
approvals required for the consummation of the Acquisition or any of the
Other Acquisitions and the transactions contemplated hereby and by the
Other Agreements (including, without limitation, any consents listed on
Schedules 4.3.2 or 4.12) shall have been obtained and be in effect;
--------------- ----
52
(h) No action, suit or proceeding with respect to the Acquisition
has been filed or threatened by a third party and remains threatened or
remains pending before any court, Governmental Authority or regulatory
Person;
(i) This Agreement, the Merger and the transactions contemplated
hereby shall have been approved and adopted by the Company's stockholders
in the manner required by any applicable Law and the Company's
Organizational Documents; and
(j) CenterPoint shall have entered into one or more credit
facilities providing for aggregate commitments of not less than $75
million.
10.2 Conditions to Obligation of the Partners, Seller and the Company to
-------------------------------------------------------------------
Effect the Acquisition. Unless waived by Seller, the obligation of the Partners,
----------------------
Seller and the Company to effect the Acquisition shall be subject to the
fulfillment at or prior to the Closing of the following additional conditions:
(a) CenterPoint, Mergersub and each of the Other Founding Companies
shall have performed in all material respects their agreements contained in
this Agreement and each Other Agreement required to be performed on or
prior to the Closing Date and the representations and warranties of
CenterPoint contained in this Agreement and each Other Agreement shall be
true and correct in all material respects on and as of the date made and on
and as of the Closing Date as if made at and as of such date, and Seller
and the Company shall have received a certificate of the Chief Executive
Officer or President of CenterPoint to that effect;
(b) no Governmental Authority or self-regulatory organization
regulating, licensing or permitting the practice of public accountancy
shall have promulgated or formally proposed any statute, rule or regulation
which, when taken together with all such promulgations, would materially
impair the value to Seller of the Acquisition;
(c) the Company shall have received an opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Zavis, dated as of the Closing Date, containing the substantive opinions
set forth in Exhibit 10.2(c), the final form of such opinion to be in form
---------------
and substance reasonably acceptable to Seller, the Company and the
Partners;
(d) each of the Partners shall have been afforded the opportunity to
enter into an incentive compensation agreement (the "INCENTIVE COMPENSATION
AGREEMENT") with CenterPoint substantially in the form attached hereto as
Exhibit 10.2(d);
---------------
(e) CenterPoint shall have delivered to Seller, the Company and the
Partners a certificate, dated as of a date no later than ten days prior to
the Closing Date, duly issued by the Delaware Secretary of State, showing
that CenterPoint is in good standing;
53
(f) each of the Partners, the partners, members and stockholders of
the other Founding Companies who are to receive shares of CenterPoint
Common Stock pursuant to the Other Agreements, and the other stockholders
of CenterPoint other than those acquiring stock in the IPO shall have
entered into an agreement (the "STOCKHOLDERS AGREEMENT") substantially in
the form attached hereto as Exhibit 10.2(f);
---------------
(g) all conditions to the Acquisitions of the other Founding
Companies, on substantially the same terms as provided herein, shall have
been satisfied or waived by the applicable party and the Company;
(h) each of Seller and the Partners shall have been afforded the
opportunity to
review the executed employment agreement by and between CenterPoint and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; and
(i) the Company shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Zavis, dated as of the Closing Date and based upon certain factual
representations and assumptions, that for federal income tax purposes there
will be no gain or loss recognized with respect to the CenterPoint Common
Stock received in exchange for Company Stock in the Merger pursuant to
Section 351 of the Code, the final form of such opinion to be in form and
substance reasonably acceptable to the Company and the Partners.
10.3 Conditions to Obligation of CenterPoint to Effect the Acquisition.
-----------------------------------------------------------------
Unless waived by CenterPoint, the obligation of CenterPoint and Mergersub to
effect the Acquisition shall be subject to the fulfillment at or prior to the
Closing of the additional following conditions:
(a) Seller and the Company shall have performed in all material
respects their respective agreements contained in this Agreement required
to be performed on or prior to the Closing Date and the representations and
warranties of Seller and the Company contained in this Agreement shall be
true and correct in all material respects on and as of the date made and on
and as of the Closing Date as if made at and as of such date, and
CenterPoint and the Underwriters shall have received a Certificate of the
Chief Executive Officer or President of each of Seller and the Company to
that effect;
(b) the Partners shall have performed in all material respects
their agreements contained in this Agreement required to be performed on or
prior to the Closing Date and the representations and warranties of the
Partners contained in this Agreement shall be true and correct in all
material respects on and as of the date made and on and as of the Closing
Date as if made at and as of such date, and CenterPoint and the
Underwriters shall have received a Certificate of each Partner to that
effect;
(c) CenterPoint and the Underwriters shall have received an
opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq. counsel to Seller, the Company, and
the Partners, dated the
54
Closing Date, in the form attached hereto as Exhibit 10.3(c), the final
---------------
form of such opinion to be in form and substance reasonably acceptable to
the Underwriters and CenterPoint;
(d) Seller and the Partners shall have caused the Attest Entity
and the Company, as applicable, to have executed and delivered a Separate
Practice Agreement substantially in the form attached hereto as Exhibit
-------
10.3(d)(A) and a Services Agreement substantially in the form attached
----------
hereto as Exhibit 10.3(d)(B);
------------------
(e) each Partner shall have executed and delivered the Incentive
Compensation Agreement substantially in the form attached hereto as Exhibit
-------
10.2(d);
------
(f) CenterPoint and the Underwriters shall have received
"Comfort" letters in customary form from the Company's independent public
accountants, dated the effective date of the Form S-1 and the Closing Date
(or such other date reasonably acceptable to CenterPoint), with respect to
certain financial statements and other financial information included in
the Form S-1 and any subsequent changes in specified balance sheet and
income statement items, including total assets, working capital, total
stockholders' equity, total revenues and the total and per share amounts of
net income;
(g) Seller and the Company shall have delivered to CenterPoint
and the Underwriters a certificate, dated as of a date no later than ten
days prior to the Closing Date, duly issued by the appropriate Governmental
Authority in the state of organization of Seller, the Company and each
Company Subsidiary and, unless waived by CenterPoint, in each state in
which the Company or any Company Subsidiary is authorized to do business,
showing Seller, the Company or Company Subsidiary (as applicable) is in
good standing;
(h) no Governmental Authority or self-regulatory organization
regulating, licensing or permitting the practice of public accountancy
shall have promulgated or formally proposed any statute, rule or regulation
which, when taken together with all such promulgations, would materially
impair the value to CenterPoint of the Acquisition;
(i) the Partners shall have executed the Stockholders Agreement;
(j) Seller and the Partners shall have delivered to CenterPoint
an instrument in the form attached hereto as Exhibit 10.3(j), dated the
---------------
Closing Date, releasing the Company and the Company Subsidiaries from any
and all claims of Seller and the Partners against the Company and the
Company Subsidiaries and obligations of the Company and the Company
Subsidiaries to Seller and the Partner;
(k) the Company's interest in BBM and all Excluded Liabilities
related thereto, including without limitation under the BBM Agreement,
shall have been distributed,
55
transferred, assigned and novated, as applicable, in form and substance on
terms and conditions acceptable to CenterPoint;
(l) the Company shall have presented evidence in form and substance on
terms and conditions satisfactory to CenterPoint of its compliance with the
provisions of Section 7.1.4 hereof, including, without limitation that as
-------------
of the Closing the amount of debt of the Company and the Company
Subsidiaries shall not exceed the amount reflected on Schedule 2.1 as Debt
------------
Assumed By CenterPoint;
(m) Seller, the Company and the Partners, as applicable, shall have
terminated or have caused the termination of any voting trusts, proxies or
other agreements or understandings to which Seller, the Company or any
Partner is a party or is bound with respect to any shares of capital stock
or other equity interests of the Company and the Company Subsidiaries and
shall have provided CenterPoint evidence of such termination that is
acceptable to CenterPoint's counsel;
(n) Seller, the Company and the Partners shall have completed the
Conversion of the Company and have presented evidence of such conversion in
accordance with Section 7.5;
(o) Seller, the Company and the Partners shall have delivered payoff
letters including a statement of per diem interest amounts and other
applicable release documents from all institutional lenders and creditors
of the Company and the Company Subsidiaries regarding the payment in full
of indebtedness at Closing, in each case in form and substance satisfactory
to CenterPoint (including, without limitation, applicable UCC-3 termination
statements); and
(p) the secretary of the Company shall have delivered certified copies
of the resolutions of the board of directors and shareholders of the
Company and the Partner Representative shall have delivered certified
copies of resolutions of the Partners, approving execution and delivery of
this Agreement, the Conversion, the Merger and the other actions,
agreements and documents, necessary or desirable to complete the
transactions contemplated herein.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing Date:
(a) pursuant to Section 7.3;
-----------
56
(b) by Seller,
(i) if the Acquisition is not completed by August 31, 1999
other than on account of delay or default on the part of Seller, the
Company or any Partner or any of their affiliates or associates;
(ii) if the Acquisition is enjoined by a final, unappealable
court order not entered at the request or with the support of Seller,
the Company or any of the Partner or any of their affiliates or
associates;
(iii) if CenterPoint (A) fails to perform in any material
respect any of its material covenants in this Agreement and (B) does
not cure such default in all material respects within thirty (30) days
after written notice of such default is given to CenterPoint; or
(c) by CenterPoint,
(i) if the Acquisition is not completed by August 31, 1999
other than on account of delay or default on the part of CenterPoint
or any of its stockholders or any of their affiliates or associates;
(ii) if the Acquisition is enjoined by a final, unappealable
court order not entered at the request or with the support of
CenterPoint or any of its stockholders or any of their affiliates or
associates;
(iii) if Seller or the Company (A) fails to perform in any
material respect any of its material covenants in this Agreement and
(B) does not cure such default in all material respects within thirty
(30) days after written notice of such default is given to Seller or
the Company by CenterPoint;
(iv) if a Partner (A) fails to perform in any material respect
any of such Partner's material covenants in this Agreement and (B)
does not cure such default in all material respects within thirty (30)
days after written notice of such default is given to the Partner
Representative by CenterPoint; or
(d) by mutual consent of the Operating Committee of Seller and the
Board of Directors of CenterPoint.
11.2 Effect of Termination. In the event of termination of this Agreement
---------------------
by either CenterPoint or Seller, as provided in Section 11.1, this Agreement
------------
shall forthwith become void and there shall be no further obligation on the part
of Seller, the Company, the Partners, CenterPoint or Mergersub or their
respective officers or directors (except the obligations set forth in this
Section 11.2 and in Sections 8.1, 8.3, 8.5 and Article IX, all of which shall
------------ ------------ --- --- ----------
survive the
57
termination). Nothing in this Section 11.2 shall relieve any party from
------------
liability for any breach of this Agreement.
11.3 Amendment. This Agreement may not be amended except by action taken
---------
by the Boards of Directors of CenterPoint and the Company or duly authorized
committees thereof and then only by an instrument in writing signed on behalf of
each of the parties hereto and in compliance with applicable law. CenterPoint
covenants and agrees that it shall not amend, modify or supplement the material
terms of any Other Agreement following the Closing without the prior written
consent of at least two thirds (2/3rds) of the members of CenterPoint's Board of
Directors; provided that no waiver of any restriction set forth in Article XII
-----------
shall be of any effect unless consented to by a majority of the members of
CenterPoint's Board of Directors who do not at the time of such proposed waiver
hold Restricted Shares within the meaning of this Agreement, any Other Agreement
or the Stockholders Agreement.
11.4 Waiver. At any time prior to the Closing Date, the parties hereto may
------
(a) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant thereto
and (c) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE XII
TRANSFER RESTRICTIONS
12.1 Transfer Restrictions. Except for distributions by Seller to the
---------------------
Partners and except as provided in Section 12.2, for a period of forty-two (42)
------------
months from the Closing, none of Seller nor any of the Partners shall (a) sell,
assign, exchange, transfer, distribute or otherwise dispose of, in whole or in
part, (i) any shares of CenterPoint Common Stock received by Seller in the
Acquisition and/or subsequently distributed by Seller to the Partners (the
"RESTRICTED SHARES"), or (ii) any interest (including, without limitation, an
option to buy or sell) in any Restricted Shares; or (b) engage in any
transaction, whether or not with respect to any Restricted Shares or any
interest therein, the intent or effect of which is to reduce the risk of owning
the Restricted Shares (including, without limitation, engaging in put, call,
short-sale, derivative, straddle or similar market transactions); provided,
however, for a period of one (1) year from the Closing, Seller shall not
distribute any Restricted Shares to any Partner.
12.2 Release of Restrictions. Effective eighteen (18) months following the
-----------------------
Closing, and every six (6) months thereafter, until all Restricted Shares shall
have been released from such restrictions, twenty percent (20%) of the original
number of Restricted Shares of Seller and/or each Partner shall no longer be
subject to the restrictions set forth in Section 12.1 and shall no
------------
58
longer be deemed Restricted Shares for any purposes of this Agreement; provided,
--------
that if a Partner's employment with CenterPoint or its subsidiary is terminated
----
within 30 months of the Closing other than through death, disability, retirement
or circumstances approved by the Company's management and reasonably approved by
CenterPoint's chief executive officer, the Restricted Shares then held by such
Partner (or held by Seller for such Partner) shall remain subject to the
restrictions set forth in Section 12.1 until the fifth anniversary of the
------------
Closing Date. Notwithstanding the foregoing and Section 12.1, Seller or a
------------
Partner may (x) at any time pledge or encumber all or part of Seller's or such
Partner's Restricted Shares, as applicable, provided that the pledgee or secured
party agrees in writing to be bound by the provisions contained in Article XII,
-----------
(y) at any time after the first anniversary of the Closing transfer all or part
of such Partner's Restricted Shares to another Partner or to an immediate family
member (or trust or other estate planning Person), provided, that any such
-------- ----
Partner, family member or other Person agrees in writing to be bound by the
provisions contained in Article XII, and (z) transfer or cause to be transferred
-----------
such Partner's Restricted Shares upon such Partner's disability or death. As
used in this Section 12.2, the terms "disability" and "retirement" shall have
------------
the meaning ascribed to them in CenterPoint's Employee Incentive Compensation
Plan. No attempted transfer of any nature whatsoever that is in violation of
this Section shall be treated as effective for any purpose.
12.3 Legend. The certificates evidencing the CenterPoint Common Stock
------
delivered to Seller pursuant to this Agreement and/or subsequently distributed
by Seller to the Partners shall bear a legend substantially in the form set
forth below and containing such other information as CenterPoint may deem
necessary or appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE
DISPOSITION THEREOF ARE SUBJECT TO THE TERMS OF A MERGER
AGREEMENT DATED MARCH __, 1999. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND MAY
BE INSPECTED BY THE REGISTERED OWNER OF THIS CERTIFICATE OR
A DULY AUTHORIZED REPRESENTATIVE OF SUCH OWNER UPON REQUEST
DURING NORMAL BUSINESS HOURS.
Upon request from Seller or any Partner (or a permitted transferee)
following the expiration of either all or a part of the restrictions on the
transfer of CenterPoint Common Stock set forth in this Article XII, CenterPoint
-----------
shall immediately notify its transfer agent that the applicable shares of
CenterPoint Common Stock are no longer restricted shares and shall direct the
transfer agent to reissue certificates of CenterPoint Common Stock which do not
contain a restrictive legend in place of the applicable restricted shares. In
the event Seller's or a Partner's request to remove the restrictive legend
coincides with Seller's or such Partner's request to sell the CenterPoint Common
Stock, CenterPoint shall take such actions as are required by its transfer agent
to allow the transfer agent to transfer the unrestricted CenterPoint Common
Stock free of any restrictive legend.
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ARTICLE XII
NONCOMPETITION
13.1 Prohibited Activities. Each Partner agrees severally, and not
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jointly, that such Partner will not, for a period of three (3) years following
the Closing Date, for any reason whatsoever, directly or indirectly, for
themselves or on behalf of or in conjunction with any other Person:
(a) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales
representative, in any business selling or providing accounting, tax,
consulting or other related services of a type or nature similar to those
sold or provided by the Company at or within one year prior to the date
that such Seller or Partner commences competition within a fifty (50) mile
radius of any office location of the Company or any Company Subsidiary (the
"TERRITORY");
(b) sell or provide any accounting, tax, consulting or other related
services of a type or nature similar to those sold or provided by the
Company to, or solicit for the purpose of selling or providing any such
services to, any Person that was a customer of the Company or any Company
Subsidiary at any time during the preceding one-year period or that was
known by the Partner to have been actively being solicited by the Company
or any Company Subsidiary to become a customer at any time during such
period;
(c) call upon any Person who is, at that time, within the Territory,
an employee of CenterPoint (including the subsidiaries and affiliates
thereof) for the purpose or with the intent of enticing such employee away
from or out of the employ of CenterPoint (including the subsidiaries and
affiliates thereof), or hire such Person; or
(d) enter into, or call upon or request non-public information for
the purpose of entering into, an Acquisition Transaction (as hereinafter
defined) with any Person with respect to which CenterPoint or any
subsidiary or affiliate thereof has made an offer or proposal for, or
entered into discussions or negotiations for, or evaluated with the intent
of making a proposal for, an Acquisition Transaction, within the preceding
one-year period.
Notwithstanding the foregoing, a Partner may be employed by a customer of
the Company or any other Person for the purpose of providing accounting, tax,
consulting or other related services of a type of nature similar to those sold
or provided by the Company to such customer or other Person, so as long in
connection therewith the Partner does not, directly or indirectly, provide such
services to another third party for hire.
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For purposes of this Agreement, an "ACQUISITION TRANSACTION" means a
merger, consolidation, purchase of material assets, purchase of a material
equity interest, tender offer, recapitalization, accumulation of shares, proxy
solicitation or other business combination. Notwithstanding the above, the
foregoing covenant shall not be deemed to prohibit any Partner from (a)
acquiring as an investment not more than one percent (1%) of the capital stock
of a competing business whose stock is traded on a national securities exchange
or over-the-counter so long as the Partner does not consult with or is not
employed by such competitor and (b) owning equity interests in Seller or Attest
Entity.
13.2 Damages. Because of the difficulty of measuring economic losses to
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CenterPoint as a result of a breach of the foregoing covenant, and because of
the immediate and irreparable damage that could be caused to CenterPoint for
which it would have no other adequate remedy, each Partner agrees that the
foregoing covenant may be enforced by CenterPoint in the event of breach by such
Partner, by injunctions and restraining orders.
13.3 Reasonable Restraint. It is agreed by the parties hereto that the
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foregoing covenants in this Article XIII impose a reasonable restraint on the
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Partners in light of the activities and business of CenterPoint (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of CenterPoint; but it is also the intent of CenterPoint and the
Partners that such covenants be construed and enforced in accordance with the
changing activities and business of CenterPoint (including the subsidiaries
thereof) throughout the term of this covenant.
It is further agreed by the parties hereto that, in the event that any
Partner who has entered into an employment agreement, incentive compensation
agreement or other similar agreement with CenterPoint and/or any subsidiary
thereof as set forth herein shall thereafter cease to be employed thereunder,
and such Partner shall enter into a business or pursue other activities not in
competition with CenterPoint and/or any subsidiary thereof, or similar
activities or business in locations the operations of which, under such
circumstances, does not violate this Article XIII and in any event such new
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business, activities or location are not in violation of this Article XIII or of
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such Partner's obligations under this Article XIII, such Partner shall not be
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chargeable with a violation of this Article XIII if CenterPoint and/or any
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subsidiary thereof shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.
13.4 Severability; Reformation. The covenants in this Article XIII are
------------------------- ------------
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event 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.
13.5 Independent Covenant. All of the covenants in this Article XIII shall
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be construed as an agreement independent of any other provision in this
Agreement, and the existence of any
61
claim or cause of action of any Partner against CenterPoint (including the
subsidiaries thereof), whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by CenterPoint of such covenants. It
is specifically agreed that the period of three (3) years stated at the
beginning of this Article XIII, during which the agreements and covenants of
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each Partner made in this Article XIII shall be effective, shall be computed by
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excluding from such computation any time during which such Partner is in
violation of any provision of this Article XIII; provided, however, in all
------------ -------- -------
events CenterPoint shall initiate proceedings to enforce this Article XIII
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within four (4) years of the Closing Date. The covenants contained in this
Article XIII shall not be affected by any breach of any other provision hereof
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by any party hereto and shall have no effect if the transactions contemplated by
this Agreement are not consummated.
13.6 Materiality. The Company and each of the Partners hereby agree that
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this covenant is a material and substantial part of this transaction.
ARTICLE XIV
[RESERVED]
ARTICLE XV
GENERAL PROVISIONS
15.1 Brokers. Each of Seller, the Company and the Partners represents and
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warrants that no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee (except for any fee described in Schedule 15.1)
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or commission in connection with the Acquisition or the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. CenterPoint represents and warrants that no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Acquisition or the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of CenterPoint or
its stockholders (other than underwriting discounts and commission to be paid in
connection with the IPO).
15.2 Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed given if delivered personally, sent by nationally
recognized overnight delivery service, mailed by registered or certified mail
(return receipt requested) or sent via facsimile to the parties at the following
addresses (or at such other address for a party as shall be specified by notice
given in accordance with this Section):
15.2.1 If to CenterPoint or Mergersub, to:
CenterPoint Advisors, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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15.2.2 If to the Company, to:
c/o Grace & Company P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
15.2.3 If to the Partner Representative or the Partners, as
applicable, addressed to the addresses set forth on Schedule 15.2.3, with copies
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to such counsel as set forth with respect to each Partner on such Schedule
--------
15.2.3, as applicable.
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15.3 Interpretation. The table of contents and headings contained in this
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Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. In this Agreement, unless a
contrary intention appears, (i) the words "HEREIN," "HEREOF" and "HEREUNDER" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision and (ii) reference to any
Article or Section means such Article or Section hereof. No provision of this
Agreement shall be interpreted or construed against any party hereto solely
because such party or its legal representative drafted such provision.
15.4 Certain Definitions. As used in this Agreement, (i) the term "PERSON"
-------------------
shall mean any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated association, corporation, entity, firm, association,
organization or other business in any form whatsoever or government (whether
Federal, state, county, city or otherwise, including, without limitation, any
instrumentality, division, agency or department thereof), (ii) the term
"AFFILIATE" shall have the meaning given for that term in Rule 405 under the
Securities Act, and shall include each past and present Affiliate of a Person
and the members of such Affiliate's immediate family or their spouses or
children and any trust the beneficiaries of which are such individuals or
relatives, and (iii) an individual will be deemed to have "KNOWLEDGE" of a
particular fact or other matter if: (a) such individual is actually aware of
such fact or matter, or (b) a prudent individual could be expected to discover
or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or other matter and a prudent individual would conduct such
investigation; a Person, other than an individual, will be deemed to have
"KNOWLEDGE" of a particular fact or other matter if any individual who is a
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partner, member or shareholder of such Person or who is otherwise serving, or
who has served, as a director, officer, or trustee (or any capacity) of such
Person has, or at any time had, Knowledge of such fact or o ther matter.
15.5 Entire Agreement; Assignment. This Agreement (including the documents
----------------------------
and instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof and
(b) shall not be assigned by operation of law or otherwise, except that
CenterPoint may assign this Agreement to any wholly-owned subsidiary of
CenterPoint.
15.6 Applicable Law. This Agreement shall be governed in all respects,
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including validity, interpretation and effect, by the laws of the State of
Illinois applicable to contracts executed and to be performed wholly within such
state, without giving effect to its choice of law rules.
15.7 Counterparts. This Agreement may be executed via facsimile or
------------
otherwise in two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.
15.8 Parties in Interest. This Agreement shall be binding upon and inure
-------------------
solely to the benefit of each party hereto, and their respective successors,
permitted assigns, heirs, legal representatives and executors and except as
expressly set forth in herein, nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
* * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the date first written above.
CENTERPOINT ADVISORS, INC.
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:▇▇▇▇▇▇ ▇▇▇▇▇▇
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Its:President and Chief Executive Officer
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GRACE MERGERSUB, INC.
By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: President
GRACE CAPITAL, LLP
By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Partner
GRACE & COMPANY, P.C.
By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
PARTNERS
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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