1
Exhibit 2.09
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION,
(a Delaware corporation),
NSJ ACQUISITION CORP.
(a Delaware corporation),
and
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
The 1998 ▇▇▇▇▇ Family Trust and The 1998 ▇▇▇▇▇▇▇▇ Family Trust.
Dated as of February 14, 1998.
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Table Of Contents
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Page
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1. THE MERGER...............................................................................................2
1.1 DELIVERY AND FILING OF CERTIFICATE OF MERGER....................................................2
1.2 MERGER EFFECTIVE DATE...........................................................................2
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION...........................................................................2
2. MERGER CONSIDERATION.....................................................................................3
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION...............................................3
2.2 EXCHANGE PROCEDURES.............................................................................3
2.3 NO FRACTIONAL SHARES............................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
7
3.1 COMPUTATION.....................................................................................7
3.2 DISPUTES........................................................................................8
3.3 STOCKHOLDERS' REPRESENTATIVE....................................................................8
4. INDEMNITY ESCROW.........................................................................................9
4.1 CREATION OF ESCROW..............................................................................9
4.2 DURATION AND TERMS.............................................................................10
4.3 VOTING AND INVESTMENT..........................................................................10
5. CLOSING; MERGER EFFECTIVE DATE..........................................................................10
5.1 CLOSING........................................................................................10
5.2 CLOSING DATE; LOCATION.........................................................................10
5.3 EFFECTIVENESS OF MERGER........................................................................10
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS..........................................................11
6.1 CORPORATE EXISTENCE............................................................................11
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS........................................11
6.3 AUTHORITY; VALIDITY OF CONTEMPLATED TRANSACTIONS...............................................11
6.4 CAPITAL STOCK AND OWNERSHIP AS OF THE DATE OF THIS AGREEMENT...................................12
6.5 CAPITAL STOCK AND OWNERSHIP AS OF THE EFFECTIVE TIME...........................................12
6.6 TRANSACTIONS IN CAPITAL STOCK..................................................................12
6.7 NO BONUS SHARES................................................................................13
6.8 SUBSIDIARIES...................................................................................13
6.9 PREDECESSOR STATUS; ETC........................................................................13
6.10 SPIN-OFFS BY COMPANIES.........................................................................13
6.11 NO THIRD PARTY OPTIONS.........................................................................13
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6.12 FINANCIAL STATEMENTS...........................................................................13
6.13 LIABILITIES AND OBLIGATIONS....................................................................14
6.14 ACCOUNTS AND NOTES RECEIVABLE..................................................................15
6.15 PERMITS........................................................................................15
6.16 REAL AND PERSONAL PROPERTY.....................................................................15
6.17 CONTRACTS AND COMMITMENTS......................................................................16
6.18 GOVERNMENT CONTRACTS...........................................................................18
6.19 REAL PROPERTY..................................................................................18
6.20 INSURANCE......................................................................................18
6.21 EMPLOYEES......................................................................................18
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS........................................................19
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS............................................................23
6.24 TRANSACTIONS WITH AFFILIATES...................................................................23
6.25 LITIGATION.....................................................................................23
6.26 RESTRICTIONS...................................................................................24
6.27 TAXES..........................................................................................24
6.28 INTELLECTUAL PROPERTY MATTERS..................................................................25
6.29 COMPLETENESS...................................................................................26
6.30 EXISTING CONDITION.............................................................................27
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY...........................................................28
6.32 BOOKS OF ACCOUNT...............................................................................29
6.33 ENVIRONMENTAL MATTERS..........................................................................29
6.34 NO ILLEGAL PAYMENTS............................................................................30
6.35 LEASES.........................................................................................30
6.36 LEASE FUNDING..................................................................................33
6.37 DISCLOSURE.....................................................................................33
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO.................................................................34
7.1 CORPORATE EXISTENCE............................................................................34
7.2 UNICAPITAL STOCK...............................................................................34
7.3 CORPORATE POWER AND AUTHORIZATION..............................................................34
7.4 NO CONFLICTS...................................................................................35
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS............................................................35
7.7 TRANSACTIONS WITH AFFILIATES...................................................................35
7.8 LITIGATION.....................................................................................36
7.9 REGISTRATION RIGHTS............................................................................36
7.10 MISCELLANEOUS..................................................................................36
8. COVENANTS OF STOCKHOLDERS...............................................................................36
8.1 BUSINESS IN THE ORDINARY COURSE................................................................36
8.2 EXISTING CONDITION.............................................................................36
8.3 MAINTENANCE OF PROPERTIES AND ASSETS...........................................................37
8.4 EMPLOYEES AND BUSINESS RELATIONS...............................................................37
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8.5 MAINTENANCE OF INSURANCE.......................................................................37
8.6 COMPLIANCE WITH LAWS, ETC......................................................................37
8.7 CONDUCT OF BUSINESS............................................................................37
8.8 ACCESS.........................................................................................37
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS........................................................38
8.10 EXCLUSIVITY....................................................................................38
8.11 SUPPLIER.......................................................................................39
8.12 NOTICE TO BARGAINING AGENTS....................................................................39
8.13 NOTIFICATION OF CERTAIN MATTERS................................................................39
8.14 AMENDMENT OF SCHEDULES.........................................................................40
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS.....................................................40
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.....................................40
9.2 EMPLOYMENT AGREEMENTS..........................................................................41
9.3 OPINION OF COUNSEL.............................................................................41
9.4 REGISTRATION STATEMENT.........................................................................41
9.5 HSR ACT........................................................................................41
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF
UNICAPITAL AND NEWCO....................................................................................41
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.....................................42
10.2 NO LITIGATION..................................................................................42
10.3 EXAMINATION OF FINANCIAL STATEMENTS............................................................42
10.4 NO MATERIAL ADVERSE CHANGE.....................................................................42
10.5 REGULATORY REVIEW..............................................................................42
10.6 STOCKHOLDERS' RELEASE..........................................................................43
10.7 EMPLOYMENT AGREEMENTS..........................................................................43
10.8 OPINION OF COUNSEL.............................................................................43
10.9 CONSENTS AND APPROVALS.........................................................................44
10.10 GOOD STANDING CERTIFICATES.....................................................................44
10.11 REGISTRATION STATEMENT.........................................................................44
10.12 REPAYMENT OF INDEBTEDNESS......................................................................45
10.13 HSR ACT........................................................................................45
11. COVENANTS OF UNICAPITAL.................................................................................45
11.1 UNICAPITAL STOCK OPTIONS.......................................................................45
11.2 INFORMATION FILING.............................................................................45
11.3 HSR FILING.....................................................................................45
11.4 RELEASE FROM GUARANTEES; INDEBTEDNESS..........................................................45
12. INDEMNIFICATION; SURVIVAL...............................................................................46
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS........................................................46
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS.......................................................47
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12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO........................................................47
12.4 THIRD PARTY CLAIMS.............................................................................48
12.5 LIMITATIONS ON INDEMNIFICATION.................................................................49
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.....................................................50
13. TERMINATION OF AGREEMENT................................................................................51
13.1 TERMINATION BY UNICAPITAL......................................................................51
13.2 TERMINATION BY THE STOCKHOLDERS................................................................51
13.3 AUTOMATIC TERMINATION..........................................................................51
13.4 LIQUIDATED DAMAGES.............................................................................52
14. NONCOMPETITION AND NONSOLICITATION......................................................................52
14.1 NONCOMPETITION.................................................................................52
14.2 DAMAGES........................................................................................53
14.3 REASONABLE RESTRAINT...........................................................................53
14.4 SEVERABILITY; REFORMATION......................................................................53
14.5 INDEPENDENT COVENANT...........................................................................53
14.6 MATERIALITY....................................................................................53
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION...............................................................53
15.1 STOCKHOLDERS...................................................................................53
15.2 UNICAPITAL.....................................................................................54
15.3 DAMAGES........................................................................................54
16. LOCK-UP AGREEMENTS......................................................................................54
16.1 AGREEMENT......................................................................................54
16.2 INTENDED THIRD PARTY BENEFICIARIES.............................................................55
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK........................................................................................55
17.1 INVESTMENT INTENT..............................................................................55
17.2 COMPLIANCE WITH LAW............................................................................55
17.3 ECONOMIC RISK; SOPHISTICATION..................................................................56
17.4 INFORMATION SUPPLIED...........................................................................56
18. SECURITIES LEGENDS......................................................................................56
19. STOCKHOLDER REPAYMENT OBLIGATION
19.1 ...............................................................................................57
19.2 DISPUTES.......................................................................................57
20. GENERAL.................................................................................................58
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20.1 COOPERATION....................................................................................58
20.2 SUCCESSORS AND ASSIGNS.........................................................................58
20.3 ENTIRE AGREEMENT...............................................................................58
20.4 COUNTERPARTS...................................................................................58
20.5 BROKERS AND AGENTS.............................................................................58
20.6 EXPENSES.......................................................................................59
20.7 NOTICES........................................................................................59
20.8 GOVERNING LAW..................................................................................60
20.9 EXERCISE OF RIGHTS AND REMEDIES; FURTHER ASSURANCES............................................60
20.10 TIME...........................................................................................61
20.11 REFORMATION AND SEVERABILITY...................................................................61
20.12 REMEDIES CUMULATIVE............................................................................61
20.13 CAPTIONS, INTERPRETATION.......................................................................61
21. DEFINITIONS.............................................................................................61
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF
CONTRIBUTION (this "Agreement") is made as of the 14th day of February, 1998
among UNICAPITAL CORPORATION, a Delaware corporation ("UniCapital"); NSJ
ACQUISITION CORP., a Delaware corporation ("Newco"); and W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, The 1998 ▇▇▇▇▇▇▇▇ Family Trust (the
"▇▇▇▇▇▇▇▇ Trust"), and The 1998 ▇▇▇▇▇ Family Trust (the "▇▇▇▇▇ Trust"). Messrs.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ are sometimes collectively referred to herein as
the "Individual Stockholders," the ▇▇▇▇▇▇▇▇ Trust and the ▇▇▇▇▇ Trust are
sometimes collectively referred herein to as the "Trust Stockholders" and the
Individual Stockholders and the Trust Stockholders are sometimes collectively
referred to herein as the "Stockholders." Certain other capitalized terms used
herein are defined in Article 21 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations;
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the U.S. Securities and Exchange
Commission within 90 days of the execution and delivery of this Agreement;
WHEREAS, the Stockholders own 1,000 shares of common stock, no par
value, of The NSJ Group, Inc., a Delaware corporation (the "Company"),
constituting all issued and outstanding shares of capital stock of the Company;
WHEREAS, Newco was incorporated on January 26, 1998 under the laws of
the State of Delaware solely for the purpose of completing this transaction, and
is a wholly-owned subsidiary of UniCapital;
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of each such
corporations and their respective stockholders that the Company merge with and
into Newco pursuant to this Agreement and the applicable provisions of the laws
of the State of Delaware; and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of a number of similar agreements between UniCapital
and certain other corporations and partnerships and the IPO and that such single
transaction (the "Unified Transaction") shall fall within the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code").
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY AND FILING OF CERTIFICATE OF MERGER. Newco and the Company
(sometimes collectively referred to herein as the "Constituent Corporations")
shall cause a Certificate of Merger, in substantially the form of Annex I
attached hereto, with such changes therein as may be required by Delaware law
(the "Certificate of Merger"), to be executed and delivered to the Secretary of
State of the State of Delaware on or before the "Merger Effective Date" (as
specified in Section 5.3).
1.2 MERGER EFFECTIVE DATE. At the Merger Effective Date, the
Certificate of Merger shall either be filed for immediate effectiveness with the
Secretary of State of the State of Delaware or become effective if filed with
such Secretary of State prior to such date. On the Merger Effective Date upon
the effectiveness of the merger of Newco and the Company (the "Merger"), the
Company shall be merged with and into Newco, in accordance with the Certificate
of Merger, and the separate existence of Newco shall cease. The Company, as the
entity surviving the Merger, is hereinafter sometimes referred to as the
"Surviving Corporation." The Merger shall have the effects specified in the laws
of the State of Delaware.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Certificate of Incorporation of the Company, as
amended and restated as set forth in the Certificate of Merger, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law;
(b) the Bylaws of Newco, as amended and restated in
substantially the form attached as Annex II hereto, shall become the Bylaws of
the Surviving Corporation and shall remain so until thereafter duly amended, and
the bylaws of each NSJ Company shall be amended and restated in substantially
the form attached as Annex II hereto, subject to any exceptions imposed by the
laws of the respective states of incorporation of the NSJ Companies;
(c) in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation, the Surviving Corporation and each NSJ
Company shall have a Board of Directors consisting of one member, who shall be
▇▇▇▇▇▇ New commencing upon the effectiveness of the Merger and who shall hold
office subject to the laws of the State of Delaware and the Certificate of
Incorporation and Bylaws of the Surviving Corporation; and
(d) the officers of the Company immediately prior to the
Merger Effective Date shall continue as the officers of the Surviving
Corporation in the same capacity or
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capacities, each of such officers to serve, subject to the provisions of the
Certificate of Incorporation and Bylaws of the Surviving Corporation, until his
successor is elected and qualified; provided, that the Chairman of the Board (if
any), the Treasurer and the Secretary of the Company and each NSJ Company shall
not succeed to the corresponding offices of the Surviving Corporation and each
NSJ Company, but instead (i) the sole director of the Surviving Corporation and
each NSJ Company shall be the Chairman of the Board of the Surviving Corporation
and each NSJ Company, (ii) the Treasurer of Newco shall remain the Treasurer of
the Surviving Corporation and each NSJ Company and (iii) the Secretary of Newco
shall remain the Secretary of the Surviving Corporation and each NSJ Company.
2. MERGER CONSIDERATION
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION.
(a) Upon the effectiveness of the Merger, all of the shares of
capital stock of the Company which are issued and outstanding immediately prior
to the effectiveness of the Merger ("Company Stock") shall, by virtue of the
Merger and without any action on the part of the holder thereof but subject to
the effectiveness of the Merger, automatically be converted into the right to
receive in the aggregate, without interest,
(i) $16,016,410 in cash,
(ii) 561,979 shares of the common stock, par value
$.001 per share, of UniCapital ("UniCapital Stock") (the consideration referred
to in clauses (i) and (ii) of this Section 2.1(a), is referred to in this
Agreement as the "Effective Date Consideration"); provided, however, in the
event that the aggregate value (based on the IPO Price) of the 561,979 shares of
UniCapital Stock is less than $10,677,607, then the Company shall issue
additional shares to the Stockholders so that the aggregate value of the shares
of the UniCapital Stock included in the Effective Date Consideration equals
$10,677,607, with appropriate adjustment to the cash and stock components of the
Effective Date Consideration so as to eliminate fractional shares (the shares of
UniCapital Stock which is to be distributed to the Stockholders on the Merger
Effective Date, subject to Article 4 hereof, are referred to in this Agreement
as the "Merger Consideration Shares"), and
(iii) any Earn-Out Consideration as described in
Section 2.5 to be distributed to the Stockholders within five business days
after each date of determination of a portion of the Earn-Out Consideration with
respect to a given calendar year (if any), all as finally determined in
accordance with Section 2.5, in the percentages set forth on Annex III.
(b) The Effective Date Consideration and the Earn-Out
Consideration are sometimes collectively referred to in this Agreement as the
"Merger Consideration."
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2.2 EXCHANGE PROCEDURES. On the Merger Effective Date, upon surrender
to UniCapital of certificates representing all of the issued and outstanding
shares of Company Stock (the "Certificates"), the Stockholders shall, subject to
Article 4 and in such proportion as is set forth on Annex III, be entitled to
receive, in exchange therefor, $14,414,769, which shall be paid via wire
transfers or the delivery of certified bank checks pursuant to the instructions
received by UniCapital from such Stockholders), and certificates representing
90%of that number of whole Merger Consideration Shares in respect of the
Certificates surrendered and each Certificate so surrendered shall forthwith be
canceled. On the Merger Effective Date, and subject to and in accordance with
the provisions of Article 4, UniCapital shall cause to be distributed to the
Indemnity Escrow Agent (as defined in Article 4(a) (a) a certificate or
certificates representing the Escrow Shares (as defined in Article 4), which
shall be registered in the name of the Indemnity Escrow Agent as nominee for the
Stockholders and shall be held in accordance with the provisions of Article 4
and the Indemnity Escrow Agreement referred to therein and (b) cash representing
the Escrow Cash (as defined in Article 4).
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and the
Stockholders shall instead each receive in lieu of any such fractional share a
cash payment equal to such fraction multiplied by the IPO Price.
2.4 ALLOCATION OF MERGER CONSIDERATION. The parties hereto shall not
take a position on any income tax return, before any governmental agency charged
with the collection of any income tax, or in any judicial proceeding that is in
any way inconsistent with the allocation (if any) of the Merger Consideration
among the Company and the NSJ Companies as set forth on Annex III, as such Annex
shall be amended by mutual agreement among the parties hereto prior to the
Closing Date.
2.5 EARN-OUT CONSIDERATION.
(a) If the earnings before taxes (the "EBT") of the
"Big-Ticket Leasing Division" (defined below) for the twelve months ending
December 31, 1998 equals or exceeds $18,981,700, the Stockholders collectively
shall be entitled to receive an aggregate amount equal to $4,446,192.
(b) If the EBT of the Big-Ticket Leasing Division for the year
ending December 31, 1999, plus the amount by which the EBT of the Big-Ticket
Leasing Division for the twelve months ending December 31, 1998 exceeded
$26,669,288 (such sum is referred to as the "Adjusted 1999 EBT"), equals or
exceeds $18,981,700, then the Stockholders collectively shall be entitled to
receive an aggregate amount equal to $4,446,192.
(c) If the EBT of the Big-Ticket Leasing Division for the year
ending December 31, 2000, plus the amount by which the EBT of the Big-Ticket
Leasing Division for the twelve months ending December 31, 1999 exceeded
$26,669,288 (such sum is referred to as the
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"Adjusted 2000 EBT"), equals or exceeds $18,981,700, then the Stockholders
collectively shall be entitled to receive an aggregate amount equal to
$4,446,192, provided, however, that in lieu of the foregoing, if the amount paid
to the Stockholders pursuant to Sections 2.5(a) and (b) was less than $8,892,384
and the aggregate EBT of the Big-Ticket Leasing Division for the thirty-six
months ending December 31, 2000 equals or exceeds $56,945,100, then the
Stockholders collectively shall instead be entitled to receive an aggregate
amount equal to the difference between $13,338,576 and the aggregate amounts
paid to the Stockholders pursuant to Sections 2.5(a) and (b). Notwithstanding
anything to the contrary set forth herein, the maximum aggregate amount which
the Stockholders collectively shall be entitled to receive pursuant to Sections
2.5 (a), (b) and (c) shall be limited to $13,338,576.
(d) The amounts (if any) that the Stockholders become entitled
to receive pursuant to Sections 2.5(a) , (b) and (c) are referred to herein as
the "Earn-Out Consideration." The Earn-Out Consideration shall be paid 60% in
cash and 40% in fully paid and non-assessable shares of UniCapital Stock, valued
at the average of the closing prices per share of UniCapital Stock for the 20
trading days preceding December 31 of the year to which the portion of Earn- Out
Consideration in questions applies. The allocation of any Earn-Out Consideration
among the Shareholders shall be in such proportion as set forth on Annex III.
(e) Subject to Section 2.5(g), the EBT of the Big-Ticket
Leasing Division for each of the years ending December 31, 1998, 1999 and 2000
shall be computed within 45 days following December 31 of the applicable year
and by Price Waterhouse LLP in accordance with GAAP applied on a basis
consistent in all material respects with the Audited Financial Statements.
(f) For purposes hereof, the "Big Ticket Leasing Division"
means (i) after the Closing Date, the operating subsidiaries and other business
units of UniCapital that conduct businesses conducted by the Company and the NSJ
Companies and the CLA Companies prior to the Closing Date and (ii) for the
period beginning on January 1, 1998 through the Closing Date, the Company, the
NSJ Companies and the CLA Companies.
(g) Except as set forth in Schedule 2.5(g), the EBT of the
Big-Ticket Leasing Division shall be calculated in accordance with GAAP,
consistently applied as it relates to each of the Company, each NSJ Company and
each CLA Company.
(h) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholders dispute the determination of EBT, then the
Stockholders' Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20 business days after notification of the
determination of EBT for any year. If UniCapital and the Stockholders'
Representative cannot resolve any such dispute which would affect the Earn-Out
Consideration, then such dispute shall be resolved by an Independent Accounting
Firm (as defined in Section 3.2). The determination of the Independent
Accounting Firm shall be made as promptly as practicable and shall be final and
binding upon the parties, absent manifest error
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which error may only be corrected by such Independent Accounting Firm. The costs
of the Independent Accounting Firm shall be borne by the party (either
UniCapital or the Stockholders as a group) whose determination of EBT was
further from the determination of the Independent Accounting Firm. Once EBT is
finally determined, the Earn-Out Consideration attendant thereto shall be paid
in accordance with this Section 2.5; provided that in the event the
Stockholders' determination of EBT was closer to the determination of the
Independent Accounting Firm than UniCapital's determination of EBT, the
Stockholders shall receive such Earn-Out Consideration plus interest which shall
accrue at the rate of 10% per annum on any such Earn-Out Consideration that is
resolved in the Stockholders favor from the date the Earn-Out Consideration was
first payable and to the date on which the Earn-Out Consideration is received by
the Stockholders. Pending resolution of any such dispute by the Independent
Accounting Firm, only the amount of the Earn-Out Consideration as determined by
Price Waterhouse LLP shall be paid by UniCapital. Once EBT is finally
determined, the Earn-Out Consideration attendant thereto not previously paid, if
any, shall be paid in accordance with this Section 2.5.
(i) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
(j) In the event that the employment of any Individual
Stockholder under his respective Employment Agreement is terminated by the
employer thereunder without "cause"(as defined in his Employment Agreement) at
any time on or prior to December 31, 2000, UniCapital shall pay such terminated
Stockholder (and with respect to W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇ Trust, and
with respect to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the ▇▇▇▇▇ Trust), such amounts set forth on
Annex III hereto), less any amount theretofore paid or to become payable to any
such Stockholder (and with respect to W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇ Trust,
and with respect to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the ▇▇▇▇▇ Trust) pursuant to Sections
2.5(a), (b) and (c), whereupon all further obligations of UniCapital to such
terminated Stockholder (and with respect to W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇
Trust, and with respect to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the ▇▇▇▇▇ Trust) under this Section
2.5 shall cease.
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP") in a manner
consistent in all material respects with the preparation of the combined audited
balance sheets of the NSJ Companies at December 31, 1997 that was certified by
Price Waterhouse LLP, a balance sheet of the Company (the "Closing Date Balance
Sheet") as of the end of business on the day prior to the Closing Date (as
defined in Section 5). If the combined stockholders' equity of the Company and
the NSJ Companies as shown on the Closing Date Balance Sheet is less than the
combined stockholders equity at October 31, 1997 (to be determined in accordance
with GAAP in a manner consistent in all material respects with the preparation
of the combined audited balance sheets of the NSJ Companies at December 31, 1997
that was certified by Price Waterhouse LLP), plus any income
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earned by the Company and the NSJ Companies during the period (the "1998
Period") beginning on January 1, 1998 and ending on the day prior to the Merger
Effective Date, minus any cash distributions to the Stockholders made for the
purposes of enabling the Stockholders to satisfy their respective income tax
liabilities on any income of the Company or any NSJ Company earned during the
1998 Period, then, subject to Section 3.2, commencing 20 business days after
delivery of the Closing Date Balance Sheets to UniCapital, the aggregate Merger
Consideration shall be adjusted downward, dollar-for-dollar in the amount of any
such deficiency (the "Net Worth Deficiency"). After the 20th business day after
the delivery of the Closing Date Balance Sheets to UniCapital (or if applicable,
after the final determination of any Disputed Amount in accordance with Section
3.2), UniCapital shall be entitled to recover from the Indemnity Escrow pursuant
to Article 4 that portion of any Net Worth Deficiency which does not exceed
one-half of the initial balance of the Indemnity Escrow. For any amount by which
any Net Worth Deficiency exceeds one-half of the initial balance of the
Indemnity Escrow, such portion of the Net Worth Deficiency shall be paid by the
Stockholders not later than the 25th business day after the delivery of the
Closing Date Balance Sheet (or if applicable, not later than the 5th business
day after the final determination of any Disputed Amount in accordance with
Section 3.2). At its sole and exclusive option, and at any time after such 25th
business day (or if applicable, not later than the 5th business day after the
final determination of any Disputed Amount in accordance with Section 3.2),
UniCapital shall be entitled to recover from the Indemnity Escrow pursuant to
Article 4 all or any portion of the amount of the Net Worth Deficiency not paid
by the Stockholders as required by this Article 3. Notwithstanding any provision
of this Agreement to the contrary, it is understood that the Company or any of
the NSJ Companies may make distributions of cash or promissory notes to the
Stockholders or otherwise in respect of the capital stock of the Company or such
NSJ Companies at any time prior to the close of business on the day prior to the
Closing Date, provided that the foregoing shall not be deemed to modify or
constitute a waiver of UniCapital's rights under this Section 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholders dispute any
item contained on the Closing Date Balance Sheets, then the Stockholders'
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 20 business days after the delivery of the Closing Date Balance Sheets.
If UniCapital and the Stockholders' Representative cannot resolve any such
dispute which would eliminate or otherwise mutually resolve the calculation of
the Net Worth Deficiency, then such dispute shall be resolved by an independent
nationally recognized accounting firm which is reasonably acceptable to
UniCapital and the Stockholders' Representative (the "Independent Accounting
Firm"). The determination of the Independent Accounting Firm shall be made as
promptly as practical and shall be final and binding on the parties, absent
manifest error which error may only be corrected by such Independent Accounting
Firm. Any expenses relating to the engagement of the Independent Accounting Firm
shall be allocated between UniCapital and the Stockholders so that the
Stockholders' aggregate share of such costs shall bear the same proportion to
the total costs that the Disputed Amounts unsuccessfully contested by the
Stockholders' Representative (as finally determined by the Independent
Accounting Firm) bear to the total of the Disputed
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Amounts so submitted to the Independent Accounting Firm. Pending resolution of
any such dispute by the Independent Accounting Firm, no such Disputed Amount
shall be due to or by UniCapital. Once any such Disputed Amount is finally
determined to be due to or by UniCapital, UniCapital may proceed to recover such
amount in the manner set forth in Section 3.1.
3.3 STOCKHOLDERS' REPRESENTATIVE. (a) Each Stockholder, by signing this
Agreement, designates ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, in the event that he is unable or
unwilling to serve or resigns, W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) to be such Stockholders'
representative for purposes of this Agreement (the "Stockholders'
Representative"). The Stockholders shall be bound by any and all actions taken
by the Stockholders' Representative on their behalf.
(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholders' Representative.
All communications or writings to be sent to Stockholders pursuant to this
Agreement may be addressed to the Stockholders' Representative and any
communication or writing so sent shall be deemed notice to all of the
Stockholders hereunder. The Stockholders hereby consent and agree that the
Stockholders' Representative is authorized to accept deliveries, including any
notice, on behalf of the Stockholders pursuant hereto.
(c) The Stockholders' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Stockholder, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Stockholders'
Representative, and in general to do all things and to perform all acts
including, executing and delivering all agreements, certificates, receipts,
instructions and other instruments contemplated by or deemed advisable in
connection with Article 12 of this Agreement. This power of attorney and all
authority hereby conferred is granted subject to and coupled with the interest
of such Stockholder and the other Stockholders hereunder and in consideration of
the mutual covenants and agreements made herein, and shall be irrevocable and
shall not be terminated by any act of any Stockholder, by operation of law,
whether by such Stockholder's death or any other event.
(d) Notwithstanding the foregoing, the Stockholder
Representative shall inform the other Stockholder of all notices received, and
of all actions, decisions, notices and exercises of any rights, power or
authority proposed to be done, given or taken by such Stockholder Representative
4. INDEMNITY ESCROW
4.1 CREATION OF ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholders pursuant to Sections 12.1
and 12.2 hereof and for
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the payment of amounts due pursuant to Article 3 hereof, the following shall be
delivered to American Stock Transfer as indemnity escrow agent (the "Indemnity
Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to each Stockholder as part of the Effective Date
Consideration in accordance with Annex III, rounded up to the nearest whole
share (the "Escrow Shares"); and
(ii) ten percent (10%) of the cash portion of the
Effective Date Consideration payable to each Stockholder in accordance with
Annex III, rounded up to the nearest whole cent (the "Escrow Cash").
(b) The Escrow Shares and the Escrow Cash are referred to
together as the "Escrow Property." In addition, the Escrow Property shall
include all interest, cash and non-cash dividends and other property at any time
received or otherwise distributed on, in respect of or in exchange for any or
all of the Escrow Property, all securities hereafter issued in substitution for
any of the foregoing, all certificates and instruments representing or
evidencing such securities, all cash and non-cash proceeds of all of the
foregoing property and all rights, titles, interests, privileges and preferences
appertaining or incident to the foregoing property, except as provided in
Section 4.3.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex IV. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Merger
Effective Date; and (b) the resolution of any claim for indemnification or
payment that is pending on the first anniversary of the Merger Effective Date,
but only to the extent of the amount of such pending claim.
4.3 VOTING AND INVESTMENT. The Stockholders shall be entitled to
exercise all voting powers incident to the Escrow Shares held by the Indemnity
Escrow Agent as their nominee, but shall not be entitled to exercise any
investment or dispositive powers over such Escrow Shares. The Escrow Cash shall
be invested from time to time by the Indemnity Escrow Agent as provided in the
Indemnity Escrow Agreement.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
Underwriting Agreement shall have been executed, the parties shall take all
actions necessary to effect the Merger (other than the filing with the
appropriate state authorities of the Certificate of Merger, which shall be filed
and become effective on the Merger Effective Date) and to effect the conversion
and delivery of shares and cash referred to in Article 2 hereof (hereinafter
referred to as the "Closing"); provided, that such actions shall not include the
actual completion of the
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Merger or the actual conversion and delivery of the shares referred to in
Article 2 hereof, which actions shall only be taken on the Merger Effective Date
as herein provided.
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
5.3 EFFECTIVENESS OF MERGER. Concurrently with the consummation of the
sale of the shares of UniCapital Stock pursuant to the Underwriting Agreement,
the Merger shall become effective and all transactions contemplated by this
Agreement, including the conversion and delivery of shares and by the delivery
by checks or via wire transfers of an aggregate amount equal to the cash which
the Stockholders shall be entitled to receive pursuant to the Merger referred to
in Article 2 hereof, shall occur and be deemed to be completed. The date on
which the Merger is effected shall be referred to as the "Merger Effective Date"
and the time on which the Merger is effected shall be referred to as the
"Effective Time"
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
As of the date hereof and as of the Merger Effective Date, each
Individual Stockholder jointly and severally represents and warrants to
UniCapital as follows:
6.1 CORPORATE EXISTENCE. The Company and each NSJ Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. The Company and each NSJ Company is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction where the conduct of its business requires it to be so
qualified, all of which jurisdictions are listed on Schedule 6.1.
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
agreements, documents and instruments required to be delivered by the Company or
any NSJ Company in accordance with the provisions hereof (collectively, the
"Company Documents") will be duly executed and delivered on behalf of the
Company and such NSJ Company, as applicable, in each case by duly authorized
officers of such corporation. The Company Documents, when executed and delivered
by the Company and the NSJ Companies, will constitute, the legal, valid and
binding obligations of the Company and such NSJ Company, as applicable,
enforceable against it in accordance with their respective terms.
6.3 AUTHORITY; VALIDITY OF CONTEMPLATED TRANSACTIONS. Each Stockholder
has the full legal right, capacity and authority to enter into this Agreement.
Except as set forth in Schedule 6.3, the execution, delivery and performance of
this Agreement by each Stockholder does not and will not violate, conflict with
or result in the breach of any term, condition or provision of, or require the
consent of any other person under (a) any existing law, ordinance, or
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governmental rule or regulation to which the Company, any NSJ Company or any
Stockholder is subject, (b) any judgment, order, writ, injunction, decree or
award of any Governmental Entity which is applicable to the Company, any NSJ
Company or any Stockholder, (c) the charter documents of the Company or any NSJ
Company or any securities issued by the Company or any NSJ Company, or (d) any
mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which the Company, any NSJ Company or any Stockholder is a party, by which
the Company, any NSJ Company or any Stockholder may have rights or by which any
of the properties or assets of the Company or any NSJ Company may be bound or
affected, or give any party with rights thereunder the right to terminate,
modify, accelerate or otherwise change the existing rights or obligations of the
Company or any NSJ Company thereunder. Except for the filing of the Certificate
of Merger with the Secretary of the State of Delaware, filings under the
▇▇▇▇-▇▇▇▇▇- ▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), and as
aforesaid, no authorization, approval or consent of, and no registration or
filing with, any Governmental Entity is required in connection with the
execution, delivery or performance of this Agreement by any Stockholder.
6.4 CAPITAL STOCK AND OWNERSHIP AS OF THE DATE OF THIS AGREEMENT. As of
the date of this Agreement (i) the Stockholders own beneficially and of record
all of the outstanding capital stock of the Company and (ii) the Stockholders
each own beneficially and of record that portion of the outstanding capital
stock of each NSJ Company as is identified as so owned on Exhibit A, in each
case, free and clear of all liens, security interests, pledges, charges, voting
trusts, equities, restrictions, encumbrances and claims of every kind except as
otherwise set forth on Schedule 6.4. As of the date of this Agreement, the
record ownership of the capital stock of each NSJ Company is as set forth on
Exhibit A. All of the issued and outstanding capital stock of the Company and
each NSJ Company as of the date of this Agreement has been duly authorized and
validly issued, fully paid and nonassessable and have been offered, issued, sold
and delivered by the Company or the applicable NSJ Company in compliance with
all applicable state and federal laws concerning the offering, sale or issuance
of securities. None of such shares have been issued in violation of the
preemptive rights of any past or present stockholder, whether contractual or
statutory.
6.5 CAPITAL STOCK AND OWNERSHIP AS OF THE EFFECTIVE TIME. The
authorized capital stock of the Company and each NSJ Company immediately prior
to the Effective Time shall consist solely of the shares shown on Schedule 6.5.
Immediately prior to the Effective Time, the Stockholders shall own beneficially
and of record all of the issued and outstanding shares of capital stock of the
Company, in each case, free and clear of all liens, security interests, pledges,
charges, voting trusts, equities, restrictions, encumbrances and claims of every
kind. Immediately prior to the Effective Time, the Company shall own
beneficially and of record all of the issued and outstanding capital stock of
each NSJ Company, in each case, free and clear of all liens, security interests,
pledges, charges, voting trusts, equities, restrictions, encumbrances and claims
of every kind, except as set forth in Schedule 6.5. All of the issued and
outstanding shares of the Company and each NSJ Company to be outstanding
immediately prior to the Effective Time will have been duly authorized and
validly issued, fully paid and nonassessable
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and will have been offered, issued, sold and delivered by the Company and each
NSJ Company in compliance with all applicable state and federal laws concerning
the offering, sale or issuance of securities. As of the Effective Time, none of
such shares will have been, and none of the shares of the Company or any of the
NSJ Companies shall have been, issued in violation of the preemptive rights of
any past or present stockholder, whether contractual or statutory. As of the
Effective Time, UniCapital shall have acquired valid title to all of the issued
and outstanding capital stock of the Company, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.6 TRANSACTIONS IN CAPITAL STOCK. Except as set forth on Schedule 6.6,
neither the Company nor any NSJ Company has acquired any treasury stock since
December 31, 1995. Except as set forth on Schedule 6.6, as of the date of this
Agreement there is no, and immediately prior to the Effective Time there shall
be no, existing option, warrant, call, conversion right or commitment of any
kind which obligates the Company or any NSJ Company to issue any of its
authorized but unissued capital stock. Except as set forth on Schedule 6.6,
neither the Company nor any NSJ Company has any obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof.
6.7 NO BONUS SHARES. As of the date of this Agreement, none of the
shares of capital stock of the Company or any NSJ Company were, and immediately
prior to the Effective Time, none of the shares of capital stock of the Company
stock will be, issued pursuant to any awards, grants or bonuses, whether of
stock or of options or other rights.
6.8 SUBSIDIARIES. As of the date hereof, no NSJ Company has any
subsidiaries, and except for the NSJ Companies, the Company has no subsidiaries.
Except as set forth in Schedule 6.8, neither the Company nor any NSJ Company
owns, of record or beneficially, or controls, directly or indirectly, any
capital stock, any securities convertible into capital stock or any other equity
interest in any corporation, association or other business entity. Except as set
forth on Schedule 6.8, neither the Company nor any NSJ Company is, directly or
indirectly, a participant in any joint venture, partnership or other
noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all of the names of all
entities from whom the Company or any NSJ Company previously acquired assets
representing all or substantially all of the assets of such entity. Except as
set forth on Schedule 6.9, neither the Company nor any NSJ Company has ever been
a subsidiary of another corporation or been a part of an acquisition which was
later rescinded.
6.10 SPIN-OFFS BY COMPANIES. Except as set forth on Schedule 6.10,
since December 31, 1995 through the date of this Agreement, neither the Company
nor any NSJ Company has effected a sale or distribution of all or substantially
all of its assets.
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6.11 NO THIRD PARTY OPTIONS. Except as set forth in Schedule 6.11,
there are no existing agreements, options, commitments or rights with, of or to
any person to acquire any material assets or rights of the Company or any NSJ
Company or any interest therein.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the audited combined balance sheet of the NSJ Companies at December 31, 1997
and related combined statements of income, cash flows and stockholders' equity
for the fiscal year then ended, certified by Price Waterhouse LLP, together with
the reports of such independent public accountants thereon (collectively the
"Audited Financial Statements").
The Audited Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved. The balance sheet included
in the Audited Financial Statements, including the related notes, fairly
presents in all material respects the combined financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise) of the NSJ
Companies as of the date indicated and the statements of income, cash flows and
changes in stockholders' equity included in the Audited Financial Statements
fairly present in all material respects the combined results of operations, cash
flows and changes in stockholders' equity of the Company and the NSJ Companies
for the period indicated, in each case in accordance with GAAP consistently
applied.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Except as reflected or reserved against in the balance
sheet (the "Audited Balance Sheet Date") as at December 31, 1997 included in the
Audited Financial Statements or in the notes to the Audited Financial
Statements, there are no liabilities against, relating to or affecting any NSJ
Company as of such date that would otherwise have been required to be reflected
or reserved against on such Audited Financial Statements. As promptly as is
practicable after the date of this Agreement, the Company and the Stockholders
shall cause Price Waterhouse LLP to prepare and deliver to the Company and the
Stockholders, who shall in turn deliver to UniCapital, a schedule detailing each
and every liability reflected on the balance sheet included in the Audited
Financial Statements, which schedule shall be true, correct and complete in all
material respects. Attached hereto as Schedule 6.13(a) is an accurate list, as
of a date not more than two days prior to the date of this Agreement and as
amended as of a date not more than two days prior to the Closing Date, of all
liabilities incurred by the Company or any NSJ Company after the Audited Balance
Sheet Date (i) not in the ordinary course of business and (ii) in the ordinary
course of business that exceeds $10,000. Each of the foregoing liabilities that
has not heretofore been paid or discharged is so noted on Schedule 6.13(a). For
purposes of this Agreement, "liabilities" means liabilities of any kind,
character or description, whether accrued, absolute, secured or unsecured,
contingent or otherwise. For purposes of determining whether any contingent or
other liability exceeds $10,000 for the purposes of being included on Schedule
6.13(a) as required by this Section 6.13, such amount shall be determined on a
basis that assumes the ultimate assessment against the Company or the applicable
NSJ Company of the full amount of such contingent or other liability.
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(b) For each such liability for which, to the knowledge of the
Individual Stockholders, the amount is contested, Schedule 6.13(b) includes a
summary description of the liability, together with copies of all relevant
documentation relating thereto, detail of all amounts claimed and any other
action or relief sought, the names of the claimant and all other parties to the
claim, suit or proceeding, the name of each court or agency before which such
claim, suit or proceeding is pending, the date such claim, suit or proceeding
was instituted, and a best estimate of the maximum amount, if any, which is
likely to become payable with respect to each such liability. If no estimate is
provided, the best estimate shall for purposes of this Agreement be deemed to be
zero.
(c) As of the date of this Agreement and as of a date not more
than two days prior to the Closing Date, except as set forth on Schedules 6.13
(a) or (b) and except for liabilities not required to be set forth thereon
pursuant to Section 6.13(a) or liabilities reflected on the Audited Financial
Statements, the Company and the NSJ Companies have no material liabilities or
obligations, whether direct or indirect, matured or unmatured, absolute
contingent or otherwise, and there is no condition, situation or set of
circumstances which are reasonably be expected to result in any such material
liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Company and
each NSJ Company with an amount due that exceeds $1,000, (including receivables
from and advances to any employees or any Stockholder (including the spouses of
either Individual Stockholder)) excluding those arising out of Leases
(collectively, the "Accounts Receivable"). Schedule 6.14 includes an aging of
all Accounts Receivable showing amounts due in 30-day aging categories. On the
Closing Date, the Stockholders will deliver to UniCapital a complete and
accurate list, as of a date not more than two days prior to the Closing Date, of
the Accounts Receivable. Except as set forth on Schedule 6.14 (as such Schedule
shall be updated and delivered with the aging of Accounts Receivable not more
than two days prior to the Closing Date), all Accounts Receivable represent
valid obligations arising from bona fide business transactions in the ordinary
course of business. The Accounts Receivable are, and as of the Merger Effective
Date will be, collectible or actually collected, in each case net of any
respective reserves shown on the Company's or any NSJ Company's books and
records as of their respective dates (which reserves are adequate and calculated
in accordance with GAAP, consistent with past practice). Subject in the case of
Accounts Receivable reflected on the combined balance sheet of the Company and
the NSJ Companies to such reserves reflected on such balance sheet and except as
set forth in Schedule 6.14, each of the Accounts Receivable included in Schedule
6.14 as of the date this Agreement will be collected in full within ninety (90)
days after the day on which it first became due and payable. Except as set forth
on Schedule 6.14, there is no contest, claim, counterclaim, defense or right of
set-off, other than rebates and returns in the ordinary course of business,
under any contract with any obligor of any Account Receivable relating to the
amount or validity of such Account Receivable. The allowance for collection
losses on the balance sheet included in the
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Audited Financial Statement has been determined in accordance with GAAP,
consistent with past practice.
6.15 PERMITS. Each material Permit held by the Company and any NSJ
Company, together with the name of the Governmental Entity issuing such Permit,
is set forth on Schedule 6.15. Except as set forth on Schedule 6.15, such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such transactions, the
Surviving Corporation will have all of the Company's right, title and interest
in its Permits.
6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Audited
Balance Sheet Date, of all the real and personal property excluding aircrafts or
aircraft parts (which in the case of personal property had an original cost in
excess of $25,000) owned or where the Company or any NSJ Company is a lessee,
including true and correct copies of leases for equipment and properties on
which are situated buildings, warehouses and other structures used in the
operation of the busi ness of the Company or any NSJ Company and including an
indication as to which assets were formerly owned by any Stockholder or
affiliate (which term, as used herein, shall have the meaning ascribed thereto
in Rule 144(a)(1) promulgated under the Securities Act of 1933, as amended (the
"Securities Act")) of the Company or any NSJ Company. Except as set forth on
Schedule 6.16, all of the Company's and each NSJ Company's leasehold
improvements, facilities, equipment and other material items of tangible
property and assets are in good operating condition and repair, subject to
normal wear and maintenance, are usable in the regular and ordinary course of
business and conform to all applicable laws, ordinances, codes, rules and
regulations, and Authorizations relating to their construction, use and
operation. All leases set forth on Schedule 6.16 have been duly authorized,
executed and delivered and constitute the legal, valid and binding obligations
of the Company and each NSJ Company, as applicable, and, to the knowledge of any
Individual Stockholder, no other party to any such lease is in default
thereunder and such leases constitute the legal, valid and binding obligations
of such other parties. All fixed assets used by the Company or any NSJ Company
in the operation of its business are either owned by the Company or such NSJ
Company or leased under an agreement set forth on Schedule 6.16. The Company,
the NSJ Companies or the Stockholders have heretofore delivered to UniCapital
copies of any title reports and title insurance policies received or held by the
Company or any NSJ Company. The Company and the Stockholders have indicated on
Schedule 6.16 a summary description of all plans or projects involving the
opening of new operations, expansion of any existing operations or the
acquisition of any real property or existing business to which management of the
Company or any NSJ Company has devoted any significant effort or expenditure in
the two-year period prior to the date of this Agreement which have not been
terminated or abandoned and which, if pursued by the Company or such NSJ
Company, would require additional expenditures of significant efforts or capital
other than with respect to the acquisition of aircraft or aircraft parts.
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6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company or any NSJ Company other than Leases (the
"Contracts"), to which the Company or any NSJ Company is a party or is bound, or
by which any of their respective assets are bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$25,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $25,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing minimum requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof and exceeding $25,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding exceeding $10,000
in value;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity with
respect to, or to assume, any tax or environmental liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness for money borrowed of
any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
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(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$25,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any NSJ Company or any
successor thereto, or to the knowledge of any Individual Stockholder, any
employee of the Company or any NSJ Company or any successor thereto, from
engaging or competing in any manner or in any business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or other
know-how of or used by, and material to, the Company or any NSJ Company;
(n) agreement, contract, commitment, arrangement or
understanding to which the Company or any NSJ Company, on the one hand, and any
affiliate, officer, director or stockholder of the Company or any NSJ Company,
on the other hand, are parties.
Each of the Contracts listed on Schedule 6.17, except as set forth on Schedule
6.17, is valid and enforceable in accordance with its terms; the Company and
each applicable NSJ Company is, and to the knowledge of any Individual
Stockholder, all other parties thereto are, in compliance with the provisions
thereof. Except as set forth on Schedule 6.17, neither the Company nor any NSJ
Company is, and to the knowledge of any Individual Stockholder, no other party
thereto is, in default in the performance, observance or fulfillment of any
material obligation, covenant or condition contained therein; and no event has
occurred which with or without the giving of notice or lapse of time, or both,
would constitute a default thereunder. Except as set forth on Schedule 6.17,
none of the rights of the Company or any NSJ Company under any Contract will be
impaired by the consummation of the transactions contemplated hereby, and all
such rights will be enforceable by the applicable Surviving Corporation after
the Merger Effective Date without the consent or agreement of any other party.
The Company, the NSJ Companies or the Stockholders have delivered accurate and
complete copies or provided direct access to each Contract to UniCapital.
6.18 GOVERNMENT CONTRACTS. Except as set forth on Schedule 6.18,
neither the Company nor any NSJ Company is now or has ever been a party to any
contract with any Governmental Entity subject to price redetermination or
renegotiation.
6.19 REAL PROPERTY. Neither the Company nor any of the NSJ Companies
own any real property.
6.20 INSURANCE. The assets, properties and operations of the Company
and each NSJ Company are insured under various policies of general liability and
other forms of insurance as listed on Schedule 6.20, all of which are described
in the insurance policies attached to the Disclosure Schedules, which discloses
for each policy the risks insured against, coverage limits,
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deductible amounts, all outstanding claims thereunder, and whether the terms of
such policy provide for retrospective premium adjustments. All such policies are
in full force and effect in accordance with their terms, no notice of
cancellation has been received, and there is no existing default or event which,
with the giving of notice or lapse of time or both, would constitute a default
thereunder. Such policies are in amounts which, in relation to the business and
assets of the Company and the NSJ Companies, are consistent with the normal or
customary industry practice and all premiums due to date have been paid in full.
Neither the Company nor any NSJ Company has been refused any insurance, nor has
the Company's nor any NSJ Company's coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past five years. Schedule 6.20 also contains a true and
complete description of all outstanding bonds and other surety arrangements
issued or entered into in connection with the business, assets and liabilities
of the Company and the NSJ Companies.
6.21 EMPLOYEES. Schedule 6.21 contains the following with respect to
the Company and each NSJ Company:
(a) a list of all employees of the Company and each NSJ
Company (including organization, name, title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of any Individual Stockholder, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of any Individual
Stockholder, threatened before the National Labor Relations Board or similar
body in any foreign country; (iv) there is no employment handbook, personnel
policy manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Company and the NSJ Companies are not
covered by any collective bargaining agreement; (vi) the Company and each NSJ
Company has provided or will timely provide prior to Closing all notices
required by law to be given prior to Closing to all local, state, federal or
national labor, wage-payment, equal employment opportunity, unemployment
insurance and related agencies; (vii) the Company and each NSJ Company has paid
or properly accrued in the ordinary course of business all wages and
compensation due to employees, including all vacations or vacation pay, holidays
or holiday pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in
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force or the impact on employees on plant closing or sales of businesses. All
employees of the Company and each NSJ Company are legally able to work in the
United States.
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Company or any NSJ Company. "Benefit
Plan" means each "employee pension benefit plan" (as defined in Section 3(3) of
ERISA, hereinafter a "Pension Plan"), "employee welfare benefit plan" (as
defined in Section 3(2) of ERISA, hereinafter a "Welfare Plan") and each other
plan or arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Company or any NSJ Company or their
respective affiliates or any other person or entity that, together with the
Company and the NSJ Companies, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Code (each, together with the Company and the NSJ
Companies, a "Commonly Controlled Entity") for the benefit of any present or
former officer, employee or director. Neither the Company nor any NSJ Company
has any to intent or commitment to create any additional Benefit Plan or amend
any Benefit Plan so as to increase benefits thereunder. Neither the Company nor
any NSJ Company has created any Benefit Plan or declared or paid any bonus
compensation in contemplation of the transactions contemplated by this
Agreement. A current, accurate and complete copy of each Benefit Plan has been
made available to UniCapital. Except as disclosed on Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of any Individual Stockholder, no
condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company or any NSJ
Company, nor any Commonly Controlled Entity, nor any trustee or agent has been
or is presently engaged in any prohibited transactions as defined by Section 406
of ERISA or Section 4975 of the Code for which an exemption is not applicable
which could subject the Company or any NSJ Company to the tax or penalty imposed
by Section 4975 of the Code or Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of any Individual Stockholder, no condition exists which could subject
the Company or any NSJ Company to a penalty under Section 4071 of ERISA;
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(e) neither the Company, any NSJ Company nor any Commonly
Controlled Entity is or has ever been party to any "multi-employer plan," as
that term is defined in Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of any Individual Stockholder, threatened against
any Benefit Plan, the Company, any NSJ Company, any Commonly Controlled Entity
or any trustee or agent of any Benefit Plan; and
(h) with respect to each Benefit Plan to which the Company,
any NSJ Company or any Commonly Controlled Entity is a party which constitutes a
group health plan subject to Section 4980B of the Code, each such Benefit Plan
substantially complies, and in each case has substantially complied, with all
applicable requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except for
premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty
Corporation, the Company, any NSJ Company nor any Commonly Controlled Entity has
instituted proceedings to terminate any Pension Plan and the Pension Benefit
Guaranty Corporation has not informed the Company or any NSJ Company of its
intent to institute proceedings to terminate any Pension Plan;
(iii) full payment has been made of all amounts which
the Company, any NSJ Company or any Commonly Controlled Entity was required to
have paid as a contribution to the Pension Plans as of the last day of the most
recent fiscal year of each of the Pension Plans ended prior to the date of this
Agreement, and none of the Pension Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
such Pension Plan ended prior to the date of this Agreement;
(iv) to the knowledge of any Individual Stockholder,
the actuarial assumptions utilized, where appropriate, in connection with
determining the funding of each Pension Plan which is a defined benefit pension
plan (as set forth in the actuarial report for such Pension Plan) are
reasonable. Copies of the most recent actuarial reports have been furnished to
UniCapital. Based on such actuarial assumptions, as of the Interim Balance Sheet
Date, the fair market value of the assets or properties held under each such
Pension Plan exceeds the
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actuarially determined present value of all accrued benefits of such Pension
Plan (whether or not vested) determined on an ongoing Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and neither the Company nor any
NSJ Company has received any claim or notice that any such Benefit Plan is not
in compliance with, all applicable laws and orders and prohibited transaction
exemptions, including to the extent applicable, the requirements of ERISA;
(vi) neither the Company, any NSJ Company nor any
Commonly Controlled Entity is in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust agreement or
insurance contract;
(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in Benefit Plan and their beneficiaries in accordance with the
terms of Benefit Plan;
(viii) each Benefit Plan may be amended or modified
by the Company, each NSJ Company or Commonly Controlled Entity, as applicable,
at any time without liability except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions contemplated
by this Agreement will not (in and of itself): (A) entitle any employee of the
Company or any NSJ Company to severance pay, unemployment compensation or any
other payment; (B) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee; (C) result in any liability
under Title IV of ERISA; (D) result in any prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code for which an exemption is not
available; or (E) result (either alone or in conjunction with any other event)
in the payment or series of payments by the Company, any NSJ Company or any of
their respective affiliates to any person of an "excess parachute payment@
within the meaning of Section 280G of the Code;
(xi) with respect to each Benefit Plan that is funded
wholly or partially through an insurance policy, all premiums required to have
been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Merger Effective Date
will have been paid on or before the Merger Effective Date and, as of the Merger
Effective Date, there will be no liability of the Company, any NSJ Company or
any Commonly Controlled Entity under any insurance policy or ancillary agreement
with respect to such insurance policy in the nature of a retroactive rate
adjustment, loss sharing arrangement or
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other actual or contingent liability arising wholly or partially out of events
occurring prior to the Merger Effective Date;
(xii) (A) each Benefit Plan that constitutes a
"welfare benefit plan," within the meaning of Section 3(1) of ERISA, and for
which contributions are claimed by the Company, any NSJ Company or any Commonly
Controlled Entity as deductions under any provision of the Code, is in material
compliance with all applicable requirements pertaining to such deduction;
(B) with respect to any welfare benefit fund
(within the meaning of Section 419 of the Code) related to a welfare benefit
plan, there is no disqualified benefit (within the meaning of Section 4976(b) of
the Code) that would result in the imposition of a tax under Section 4976(a) of
the Code; and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so exempt and no event or condition exists which
would adversely affect any such determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Merger Effective Date have been
made or will be made prior to the Merger Effective Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company and each NSJ
Company has complied with each, and is not in violation in any material respect
of any, law, ordinance, or governmental or regulatory rule or regulation,
whether federal, state, local or foreign ("Regulations"), to which such
Company's business, operations, assets or properties is subject, except for
immaterial failures to comply of which none of the Individual Stockholders has
no knowledge. The Company and each NSJ Company owns, holds, possesses or
lawfully uses in the operation of its business all franchises, licenses,
permits, easements, rights, applications, filings, registrations and other
authorizations ("Authorizations") which are in any manner necessary for it to
conduct its business as now or previously conducted or for the ownership and use
of the assets owned or used by such Company in the conduct of the business of
such Company, free and clear of all liens, charges, restrictions and
encumbrances and in compliance with all Regulations. All such Authorizations are
listed and described in Schedule 6.23. Neither the Company nor any NSJ Company
in default, except for immaterail defaults of which none of the Individual
Stockholders has any knowledge, nor has the Company or any NSJ Company received
any notice of any claim of such a default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
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None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No Stockholder and no director, officer,
employee or former employee of the Company or any NSJ Company or any affiliates
of the Company or any NSJ Company, or any other person, firm or corporation,
owns or has any proprietary, financial or other interest (direct or indirect) in
any Authorization which the Company or any NSJ Company owns, possesses or uses
in the operation of the business the Company or any NSJ Company as now or
previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
6.24, no Stockholder and no director, officer or employee of the Company or any
NSJ Company, or any member of his or her immediate family or any other of its,
his or her affiliates, owns or has a 5% or more ownership interest in any
corporation or other entity (other than another NSJ Company) that is or was
during the last three years a party to, or in any property which is or was
during the last three years the subject of, any contract, agreement or
understanding, business arrangement or relationship with the Company or any NSJ
Company.
6.25 LITIGATION. (a) Except as set forth on Schedule 6.25, no
litigation, including any arbitration, investigation or other proceeding of or
before any court, arbitrator or governmental or regulatory official, body or
authority is pending or, to the knowledge of any Individual Stockholder,
threatened against the Company or any NSJ Company or which relates to the
transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of any Individual Stockholder, threatened against
the Company or any NSJ Company or which relates to such Company.
(c) No Individual Stockholder knows of any reasonably likely
basis for any litigation, arbitration, investigation or proceeding referred to
in Sections 6.25(a) or (b).
(d) Except as set forth on Schedule 6.25, neither the Company
nor any NSJ Company is a party to or subject to the provisions of any judgment,
order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority.
6.26 RESTRICTIONS. Except as set forth on Schedule 6.26, neither the
Company nor any NSJ Company is a party to any indenture, agreement, contract,
commitment, lease, plan, license, permit, authorization or other instrument,
document or understanding, oral or written, or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or award
which materially adversely affects or materially restricts or, so far as any of
the Individual Stockholders can now reasonably foresee, may in the future
materially adversely affect or materially restrict, the consolidated business,
operations, assets, properties, prospects or
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condition (financial or otherwise) of the Company after consummation of the
transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company or any
NSJ Company (the "Tax Returns") with respect to any federal, state, local or
foreign taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions (including all income tax, unemployment
compensation, social security, payroll, sales and use, excise, privilege,
property, ad valorem, franchise, license, school and any other tax or similar
governmental charge or imposition under laws of the United States or any state
or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (the "Taxes") have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all such Tax Returns properly reflect the
liabilities of the Companies for Taxes for the periods, property or events
covered thereby. All Taxes, including those which are called for by the Tax
Returns, required to be paid, withheld or accrued by the Company and the NSJ
Companies and any deficiency assessments, penalties and interest have been
timely paid, withheld or accrued. The accruals for Taxes contained in the
Audited Balance Sheet are adequate to cover the Tax liabilities of the Company
and the NSJ Companies as of that date and include adequate provision for all
deferred Taxes, and nothing has occurred subsequent to that date to make any of
such accruals inadequate. The Company's and each NSJ Company's tax basis in its
assets for purposes of determining its future amortization, depreciation and
other federal income tax deductions is accurately reflected on such Company's
Tax books and records. Except as set forth on Schedules 6.17 or 6.35, neither
the Company nor any NSJ Company is or has at any time ever been a party to a Tax
sharing, Tax indemnity or Tax allocation agreement, and no such Company has
assumed any Tax liability of any other person or entity under contract. Neither
the Company nor any NSJ Company has received any notice of assessment or
proposed assessment in connection with any Tax Returns and there are not pending
tax examinations of or tax claims asserted against the Company or any NSJ
Company or any of its assets or properties. Neither the Company nor any NSJ
Company has extended, or waived the application of, any statute of limitations
of any jurisdiction regarding the assessment or collection of any Taxes. There
are now (and as of immediately following the Closing there will be) no Liens
(other than any Lien for current Taxes not yet due and payable) on any of the
assets or properties of the Company or any NSJ Company relating to or
attributable to Taxes. To the knowledge of any Individual Stockholder, there is
no basis for the assertion of any claim relating to or attributable to Taxes
which, if adversely determined, would result in any Lien on the assets of the
Company or any NSJ Company or otherwise have an adverse effect on the Company or
any NSJ Company or its business, operations, assets, properties, prospects or
condition (financial or otherwise). No Stockholder has any knowledge of any
basis for any additional assessment of any Taxes. All Tax payments related to
employees, including income tax withholding, FICA, FUTA, unemployment and
worker's compensation, required to be made by the Company and the NSJ Companies
have been fully and properly paid, withheld, accrued or recorded. There are no
contracts, agreements, plans or arrangements, including the provisions of this
Agreement, covering any employee or former employee of the Company or any NSJ
Company that,
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individually or collectively, could give rise to any payment (or portion
thereof) that would not be deductible pursuant to Sections 280G, 404 or 162 of
the Code. Two correct and complete copies of (a) all Tax examinations, (b) all
extensions of statutory limitations and (c) all federal, state and local income
tax returns and franchise tax returns of the Company and each NSJ Company
(including, if filed separately, any of their respective Subsidiaries) for the
last five fiscal years, or such shorter period of time as any of them shall have
existed, have heretofore been delivered by the Company and the Stockholders to
UniCapital. The Company and each NSJ Company made an election to be taxed under
the provisions of Subchapter S of the Code within 75 days of its original
organization and has at no time been taxed under the provisions of Subchapter C
of the Code. Each of the Company and each NSJ Company has a taxable year ended
December 31 and no such Company has made an election to retain a fiscal year
other than December 31 under Section 444 of the Code. Neither the Company nor
any NSJ Company has any net recognized built-in gain within the meaning of
Section 1374 of the Code. Each of the Company and each NSJ Company currently
utilizes the accrual method of accounting for income tax purposes and has not
changed its method of accounting for income tax purposes in the past five years.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) Neither the Company nor any NSJ Company has utilized or
currently utilizes any patent, trademark, trade name, service ▇▇▇▇, copyright,
software, trade secret or know-how material to the business of such entity,
except for those listed on Schedule 6.28 (the "Intellectual Property"), all of
which are owned by such entity free and clear of any liens, claims, charges or
encumbrances. The Intellectual Property constitutes all such assets, properties
and rights which are used or held for use in, or are necessary for, the conduct
of the business of the Company and the NSJ Companies.
(b) Except as set forth in Schedule 6.28, there are no
royalty, commission or similar arrangements, and no licenses, sublicenses or
agreements, pertaining to any of the Intellectual Property.
(c) Except as set forth in Schedule 6.28, neither the Company
nor any NSJ Company infringes upon or unlawfully or wrongfully uses any patent,
trademark, trade name, service ▇▇▇▇, copyright or trade secret owned or claimed
by another. No action, suit, proceeding or investigation has been instituted or
threatened relating to any, patent, trademark, trade name, service ▇▇▇▇,
copyright or trade secret formerly or currently used by the Company or any NSJ
Company. Except as set forth in Schedule 6.28, none of the Intellectual Property
is subject to any outstanding order, decree or judgment. Neither the Company nor
any NSJ Company has agreed to indemnify any person or entity for or against any
infringement of or by the Intellectual Property.
(d) Except as set forth in Schedule 6.28, no present or former
employee of the Company or any NSJ Company and no other person or entity owns or
has any proprietary, financial or other interest, direct or indirect, in whole
or in part, in any of the Intellectual
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Property. Schedule 6.28(d) lists all confidentiality or non-disclosure
agreements currently in force and effect in connection with the Intellectual
Property to which the Company and each NSJ Company or any of its employees is a
party.
(e) Schedule 6.28(e) sets forth a complete and accurate list
of all items of Intellectual Property duly registered in, filed in or issued by
the United States Copyright Office or the United States Patent and Trademark
Office, any offices in the various states of the United States and any offices
in other jurisdictions.
(f) Except as set forth in Schedule 6.28, all Intellectual
Property in the form of computer software that is utilized by the Company or any
NSJ Company in the operations of its business is capable of processing date data
between and within the twentieth and twenty-first centuries.
(g) All Intellectual Property in the form of computer software
that is utilized by the Company or any NSJ Company in the operations of its
business is capable of processing date data between and within the twentieth and
twenty-first centuries, or can be rendered capable of processing such data
within 30 days by the expenditure of no more than $10,000 in the aggregate.
6.29 COMPLETENESS. The certified copies of the Certificate of
Incorporation and Bylaws, both as amended to date, of the Company and each NSJ
Company, and the copies of all material leases, instruments, agreements,
licenses, permits, certificates or other documents which are included on
schedules attached hereto or which have been delivered or have been made
available to UniCapital to the extent required by the terms of this Agreement,
are complete and correct; neither the Company nor any NSJ Company nor, to the
knowledge of any Individual Stockholder, any other party to any of the foregoing
is in material default thereunder; and, except as set forth in the schedules and
documents attached to this Agreement, the rights and benefits of each of the
Company and each NSJ Company) thereunder will not be materially and adversely
affected by the transactions contemplated hereby, and the execution of this
Agreement and the performance of the obligations hereunder will not result in a
material violation or breach or constitute a material default under any of the
terms or provisions thereof. Except as set forth on Schedule 6.29, none of such
leases, instruments, agreements, contracts, licenses, permits, certificates or
other documents requires notice to, or the consent or approval of, any
governmental agency or other third party to any of the transactions contemplated
hereby to remain in full force and effect. The consummation of the transactions
contemplated hereby will not give rise to any right of termination, cancellation
or acceleration or result in the loss of any right or benefit thereunder.
6.30 EXISTING CONDITION. Except as set forth in Schedule 6.30, between
the Audited Balance Sheet Date and the date of this Agreement, neither the
Company nor any NSJ Company has:
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(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of the Company or any NSJ Company or
any interest therein;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance other than in the ordinary course of business consistent with past
practice.
(d) except in the ordinary course of business consistent with
past practice, made or suffered any material amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, materially modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, where such amendments, terminations, cancellations, modifications and
waivers in the aggregate do not or could not reasonably be expected to have a
material adverse effect on the business, operations, assets, properties,
prospects or condition (financial or otherwise) of the Company or the NSJ
Company, taken as a whole;
(e) except in the ordinary course of business consistent with
past practice during the period beginning on January 1, 1998 and ending on the
day prior to the Closing Date and for any dividends in such amounts necessary to
pay taxes on account of any income of the Company or any NSJ Company, declared,
set aside or paid any dividend or made or agreed to make any other distribution
or payment in respect of its capital shares or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or acquire any of its shares of capital
stock or other ownership interests;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
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(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise),
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company and the NSJ Companies;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except in
the ordinary course of business consistent with past practice or such as may be
involved in ordinary repair, maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or made
any advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its non- Stockholder employees or made any increase in, or any
addition to, other benefits to which any of its non-Stockholder employees may be
entitled;
(k) materially changed any of the accounting principles
followed by it or the methods of applying such principles;
(l) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(m) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as
Schedule 6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company or any NSJ Company has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
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(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company or any NSJ
Company and a description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
and each NSJ Company accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of such Company. Neither the Company
nor any NSJ Company has engaged in any transaction, maintained any bank account
or used any material funds of entity except for transactions, bank accounts and
funds which have been and are reflected in the normally maintained books and
records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company and each NSJ Company has
secured, and is in compliance with, all Environmental Permits, with respect to
any premises on which its business is operated, all of which Environmental
Permits shall vest in the applicable Surviving Corporation upon consummation of
the transactions contemplated hereby. The Company and each NSJ Company is in
compliance with all Environmental Laws.
(b) Neither the Company, any NSJ Company nor Stockholder has
received any communication from any Governmental Entity that alleges that any
Company is not in compliance with any Environmental Laws or Environmental
Permits.
(c) Neither the Company nor any NSJ Company has entered into
or agreed to any court decree or order, and no such entity is subject to any
judgment, decree or order, relating to compliance with any Environmental Law or
to investigation or cleanup of a Hazardous Substance under any Environmental
Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of any Individual Stockholder,
threatened to or against any assets or properties of the Company or any NSJ
Company pursuant to any Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company or any NSJ Company.
(f) Neither the Company nor any NSJ Company has received a
CERCLA 104(e) information request or has been named a potentially responsible
party for any National Priorities List site under CERCLA or any site under
analogous state law or received an analogous notice or request from any non-U.S.
Governmental Entity, which notice, request or any resulting inquiry or
litigation has not been fully and finally resolved without possibility of
reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
or any NSJ Company and any former aboveground or underground tanks on any
property owned, operated or leased by the
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Company or any NSJ Company have been removed in accordance with all
Environmental Laws and no residual contamination, if any, remains at such sites
in excess of applicable standards.
(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by the Company or any NSJ Company and there are no such
articles, containers or equipment containing PCBs, and there is no asbestos
containing material in a condition or location currently constituting a
violation of any Environmental Law at, on, under or within any property owned,
operated or leased by the Company or any NSJ Company.
(i) The Company, the NSJ Companies and the Stockholders have
collectively provided to UniCapital true and complete copies of, or access to,
all written environmental assessment materials and reports in their possession
that have been prepared by or on behalf of the Company or the NSJ Companies
during the past five years.
6.34 NO ILLEGAL PAYMENTS. Neither the Company nor any NSJ Company and,
to the knowledge of any Individual Stockholder, no affiliate, officer, agent or
employee thereof, directly or indirectly, has, during the past five years, on
behalf of or with respect to any Company or any affiliate thereof, (a) made any
unlawful domestic or foreign political contributions, (b) made any payment or
provided any services which were not legal to make or provide or which the
Company or any NSJ Company or any affiliate thereof or any such officer, agent
or employee should have known were not legal for the payee or the recipient of
such services to receive, (c) received any payment or any services which were
not legal for the payer or the provider of such services to make or provide, (d)
made any payment to any person or entity, or agent or employee thereof, in
connection with any Lease (as hereinafter defined) to induce such person or
entity to enter into a Lease transaction, (e) had any material transactions or
material payments related to the Companies which are not recorded in their
accounting books and records or (f) had any off- book bank or cash accounts or
"slush funds" related to the Company or any NSJ Company.
6.35 LEASES. Schedule 6.35 hereto sets forth the Company's and each NSJ
Company's lease/financing arrangements as of the Audited Balance Sheet Date
(which, together with all other lease/financing arrangements entered into by the
Company or any NSJ Company between such date and the Closing Date, are referred
to herein as the "Leases"). The term "Lease Documents" means the lease
arrangements and financing contracts evidencing the Leases described on Schedule
6.35, together with all related documents and agreements including master lease
agreements, schedules or other addenda to such Leases, certificates of delivery
and acceptance, UCC financing statements, remarketing agreements, residual
guaranty agreements, insurance policies, guaranty agreements and other credit
supports. The term "Equipment" means all equipment, inventory and other property
described as being leased pursuant to a Lease, or in which the Company or any
NSJ Company is granted a security interest pursuant to a Lease. The term
"Obligor" means any lessee party or other party obligated to pay or perform any
obligations under or in respect of a Lease or the Equipment covered by a Lease
(excluding the lessor party thereunder, but otherwise including any guarantor of
a Lease or any vendor, manufacturer or
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similar party under a remarketing agreement, residual guaranty or similar
agreement). The term "Scheduled Payments" means the monthly or periodic rental
payments or installments of principal and interest under the terms of the
Leases. Except as set forth in Schedule 6.35:
(a) There is no restriction or limitation in any of the Lease
Documents or otherwise, restricting the Company or any NSJ Company from
executing this Agreement or entering into the transactions contemplated by this
Agreement, other than consents which have been, or prior to the Closing will
have been, obtained.
(b) The Company or applicable NSJ Company owns or validly
leases the Equipment covered by each Lease.
(c) Each Lease is in full force and effect in accordance with
its terms, and, to the knowledge of any Individual Stockholder, there has been
no occurrence which would or might permit any Obligor to terminate such Lease or
suspend or reduce any payments or obligations due or to become due in respect of
such Lease or the related Lease Documents by reason of default by the lessor
party under such Lease. To the knowledge of any Individual Stockholder, none of
the Obligors in respect of a Lease or the related Lease Documents is the subject
of a bankruptcy, insolvency or similar proceeding.
(d) Except for the delinquency in the payment of any Scheduled
Payment that is not more than 90 days past due, there does not exist any default
in the payment of any Scheduled Payments due under any Lease or the related
Lease Documents, and there does not exist any other default, breach, violation
or event permitting acceleration, termination or repossession under any Lease or
the related Lease Documents or any event which, to the knowledge of any
Stockholder, with notice and the expiration of any applicable grace or cure
period, would constitute such a default, breach, violation or event permitting
acceleration, termination or repossession under such Lease or the related Lease
Documents.
(e) Neither the Company nor any NSJ Company has acted in a
manner which (nor has the Company nor any NSJ Company failed to act where such
failure to act) would alter or reduce any of such entity's rights or benefits
under any manufacturer's or vendors' warranties or guarantees with respect to
any Equipment.
(f) The Company and each NSJ Company has complied with all
requirements of any federal, state or local law, including usury laws,
applicable to each Lease.
(g) Except as set forth in Schedule 6.35, each Lease has the
following characteristics:
(i) such Lease was originated in the United States
and the Scheduled Payments thereunder are payable in U.S. dollars by Obligors
domiciled in the United States;
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(ii) the lessee party under such Lease has
unconditionally accepted the Equipment covered by such Lease ;
(iii) at least one Scheduled Payment has been made by
the Obligor under each such Lease; and
(iv) no Obligor in respect of such Lease is an
affiliate of the Company or any NSJ Company.
(h) Each Lease and the related Lease Documents are valid,
binding, legally enforceable and non-cancelable obligations of the applicable
Company, and to the knowledge of any Individual Stockholder, the other parties
thereto, enforceable in accordance with their respective terms. Each Lease is a
business obligation of the lessee thereunder and is not a "consumer transaction"
under any applicable federal or state regulation.
(i) To the knowledge of any Individual Stockholder, no Lease
or related Lease Document is the subject of a fraudulent scheme by any Obligor
or any supplier of Equipment.
(j) Each item of Equipment is subject to a Lease.
(k) Each Lease is a fixed rate lease contract.
(l) No Lease or related Lease Document is subject to any right
of rescission, set-off, counterclaim, abatement or defense, including any
defense of usury, nor will the operation of any of the terms of any Lease or any
related Lease Document or the exercise of any right or remedy thereunder render
such Lease or any related Lease Document or the obligations thereunder
unenforceable, or subject the same to any right of rescission, set-off,
counterclaim, abatement or defense. No Obligor has asserted any right of
rescission, set-off, counterclaim, abatement or defense to its obligations under
a Lease or any related Lease Document.
(m) As to the Leases and the related Lease Documents, (i) none
has been amended or modified (a) to extend the maturity date for a period of
more than one year, or (b) to alter the amount or time of payment of any amount
due thereunder; unless as to (a) and (b) such extension or alteration is
reasonably expected to result in a net economic benefit to the Company and the
NSJ Companies, (ii) no indulgences or waivers have been granted in respect of
the obligations of any Obligor under any Lease, and (iv) neither the Company nor
any NSJ Company has advanced any monies on behalf of any Obligor.
(n) Each Lease requires the Obligor thereunder at its own cost
and expense to maintain the Equipment leased thereunder in good repair,
condition and working order, and to the knowledge of any Individual Stockholder,
each Obligor under a Lease is currently in compliance with such requirement.
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(o) Each Lease requires the Obligor thereunder (i) to pay all
fees, taxes (except income taxes), and other charges or liabilities arising with
respect to the Equipment leased thereunder or the use thereof, (ii) to keep the
Equipment free and clear of any and all liens, security interests and other
encumbrances, other than security interests of the applicable Company, (iii) to
hold harmless the lessor thereunder and its successors and assigns against the
imposition of any fees, charges, liabilities and encumbrances, (iv) to bear all
risk of loss associated with the Equipment covered by or securing the
obligations under such Lease during the term of such Lease and (v) to maintain
at the cost of the Obligor public liability and casualty insurance in respect of
such Equipment covered by such Lease.
(p) Except as set forth on Schedule 6.35, each Lease involves
either the lease of tangible personal property owned, either beneficially or
legally, or leased by the Company or the applicable NSJ Company or the loan of
money secured by a security interest in tangible personal property owned by the
Obligor thereunder.
(q) Neither the Company nor any NSJ Company has received any
notice challenging its ownership or the priority of its security interest in the
Equipment covered by each Lease, and there are no proceedings pending before any
court or governmental entity or, to the knowledge of the Stockholders,
threatened by any Obligor or other party, (i) asserting the invalidity of any
Lease or the related Lease Documents, (ii) seeking to prevent payment or
performance by any Obligor of any Lease or any of the terms of the related Lease
Documents, or (iii) seeking any determination or ruling that might adversely
affect the validity or enforceability of any Lease or any of the terms or
provisions of the related Lease Documents.
(r) As to each Lease, there are no material agreements or
understandings between the Company or any NSJ Company and the Obligors in
respect of such Lease or otherwise binding on the Company or any NSJ Company
other than as expressly set forth in the Lease and the related Lease Documents.
6.36 LEASE FUNDING. Except as set forth on Schedule 6.36, the Company
and each NSJ Company is in compliance with all of the material terms and
covenants of, and is not in material default or breach under, each agreement,
contract, understanding or arrangement with any funding source for the Leases.
6.37 DISCLOSURE. The Company and the NSJ Companies have delivered, or
in the case of the Leases, Lease Documents and loan documents made available to,
UniCapital true and complete copies of each agreement, contract, commitment or
other document (or, in the case of any such document not in the possession of
reasonably available to the Company or a NSJ Company or a Stockholder, accurate
and complete summaries thereof) that is referred to in the schedules to this
Agreement or that has been requested by UniCapital or its representatives.
Without limiting any exclusion, exception or other limitation contained in any
of the representations and warranties made herein, this Agreement and the
schedules hereto do not and will not include any untrue statement of a material
fact or omit to state a material fact necessary
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to make the statements herein and therein not misleading. If any Individual
Stockholder become aware of any fact or circumstance that would materially
change a representation or warranty of the Stockholders in this Agreement or any
representation made on behalf of the Company or any NSJ Company, then such
Stockholder shall as promptly as practical give notice of such fact or
circumstance to UniCapital. However, such notification shall not relieve the
Company or any NSJ Company or any of the Stockholders of their respective
obligations under this Agreement, and at the sole option of UniCapital, the
truth and accuracy of any and all warranties and representations of the
Stockholders, at the date of this Agreement and at the Closing, shall be a
precondition to the consummation of this transaction.
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and
warrant as follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Immediately prior to the
Effective Time, each of UniCapital and Newco will be duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction
where the conduct of its business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Stockholders on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale, will be legally equivalent in all respects to the majority of UniCapital
Stock issued and outstanding as of the date hereof. The UniCapital Stock to be
issued upon the conversion of Company Stock pursuant to the terms of this
Agreement will be free and clear of all liens, encumbrances and claims of every
kind, other than restrictions upon transfer contained herein and other than any
liens, encumbrances or claims arising other than by the actions of UniCapital or
Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with the provisions hereof (the "UniCapital
Documents") have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by UniCapital and Newco and
constitutes, and the UniCapital Documents when executed and delivered will
constitute, the legal, valid and binding obligations of UniCapital and Newco
enforceable against UniCapital and Newco in accordance with its terms.
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7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of any
other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or Newco is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity which is applicable
to UniCapital or Newco, (c) the charter documents of UniCapital or Newco, or (d)
any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which UniCapital or Newco is a party, by which UniCapital or Newco may have
rights or by which any of the properties or assets of UniCapital or Newco may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of UniCapital or Newco thereunder. Except for filing the Articles of
Merger, filings under the HSR Act and except as aforesaid, no authorization,
approval or consent of, and no registration or filing, provided that with
respect to such Act the representation set forth in this sentence shall be
limited to those facts of which UniCapital or Newco has knowledge) with, any
Governmental Entity is required in connection with the execution, delivery or
performance of this Agreement by UniCapital or Newco.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing by the IPO Price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and Newco
has complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of such company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital of Newco any of their affiliates, or
any other person, firm or corporation, owns or has any proprietary, financial or
other interest (direct or indirect) in any Authorization which UniCapital or
Newco owns, possesses or uses in the operation of the business of UniCapital and
Newco as now or previously conducted.
7.7 TRANSACTIONS WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or Newco, or any member of
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his or her immediate family or any other of its, his or her affiliates, owns or
has a 5% or more ownership interest in any corporation or other entity that is
or was during the last three years a party to, or in any property which is or
was during the last three years the subject of, any contract, agreement or
understanding, business arrangement or relationship with UniCapital or Newco.
7.8 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of UniCapital and Newco, threatened against UniCapital or Newco which
relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 7.8, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of UniCapital or Newco, threatened against
UniCapital or Newco or which relates to UniCapital or Newco.
(c) Neither UniCapital nor Newco is a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority."
7.9 REGISTRATION RIGHTS As of the date hereof and as of the Merger
Effective Date, no officer, director or shareholder of UniCapital will have been
granted any registration rights with respect to the registration of any shares
of capital stock of UniCapital.
7.10 MISCELLANEOUS. Prior to the consummation of the Merger, UniCapital
and Newco will have no material properties or assets and are not party to any
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.10
hereto.
8. COVENANTS OF STOCKHOLDERS
The following covenants shall apply during the period from and after
the date hereof through the Closing Date.
8.1 BUSINESS IN THE ORDINARY COURSE. Except as otherwise expressly
contemplated by this Agreement, the Stockholders shall cause the Company and
each NSJ Company to conduct its respective business solely in the ordinary
course and consistent with past practice.
8.2 EXISTING CONDITION. To the extent within the reasonable control of
the Stockholders, no Stockholder shall suffer the Company or any NSJ Company to
cause or permit to occur any of the events or occurrences described in Section
6.30 hereof. Notwithstanding
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anything in this Agreement to the contrary, at any time or from time to time
between the date hereof and the Closing Date, the Company and the NSJ Companies
shall be able to make distributions to the Stockholders either in the form of
cash or promissory notes for the purpose of enabling the Stockholders to satisfy
their respective tax liabilities for the 1997 and the 1998 Period.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. Except as otherwise expressly
contemplated by this Agreement, the Stockholders shall cause the Company and
each NSJ Company to use its reasonable commercial efforts to, maintain and
service its properties and assets in order to preserve their value and
usefulness in the conduct of their respective businesses.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Stockholders shall cause the
Company and each NSJ Company to use its reasonable commercial efforts to keep
available the services of its current employees and agents and to maintain its
relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Stockholders shall cause the Company
and each NSJ Company to notify UniCapital of any material changes in the terms
of the insurance policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Stockholders shall cause the Company
and each NSJ Company to comply with all laws, ordinances, rules, regulations and
orders applicable to the Company and each NSJ Company or its business,
operations, properties or assets, except where the noncompliance with which
could not reasonable be expected to materially adversely affect the Company or
such NSJ Company.
8.7 CONDUCT OF BUSINESS. The Stockholders shall cause the Company and
each NSJ Company to use its reasonable commercial efforts to conduct its
business in such a manner that on the Closing Date and on the Merger Effective
Date the representations and warranties of the Stockholders contained in this
Agreement shall be true, as though such representations and warranties were made
on and as of each such date (except to the extent such representations or
warranties expressly speak as of a specific date), and the Stockholders shall
cause the Company and each NSJ Company to use its reasonable commercial efforts
to cause all of the conditions to the obligations of UniCapital and the
Stockholders under this Agreement to be satisfied on or prior to the Closing
Date. The Stockholders shall cause the Company and each NSJ Company to, maintain
credit underwriting standards consistent with past practices.
8.8 ACCESS. Upon prior reasonable notice, the Stockholders shall cause
the Company and each NSJ Company to give to UniCapital's officers, employees,
counsel, accountants and other representatives free and full access to and the
right to inspect, during normal business hours, all of the premises, properties,
assets, records, contracts and other documents relating to the Company and the
NSJ Companies and shall permit them to consult with the officers,
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employees, accountants, counsel and agents of the Company and the NSJ Companies
for the purpose of making such investigation of such entities as UniCapital
shall reasonably request; provided that such investigation shall not
unreasonably interfere with such entities business operations, and provided,
further, that UniCapital shall not contact or consult with any non-officer
employees of the Company without the Company's prior consent, which consent
shall not be unreasonably withheld. Furthermore, the Stockholders shall cause
the Company and each NSJ Company to furnish to UniCapital all such documents and
copies of documents and records and information with respect to the affairs of
such entity and copies of any working papers relating thereto as UniCapital
shall from time to time reasonably request. No information or knowledge obtained
in any investigation pursuant to this Section 8.8 or otherwise shall affect or
be deemed to modify any representation or warranty contained in this Agreement
or the conditions to the obligations of the parties to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. The Stockholders shall
cause the Company and each NSJ Company to refrain from giving notice to third
parties or otherwise make any press release or other public statement concerning
this Agreement or the transactions contemplated hereby. No Stockholder shall,
and the Stockholders shall cause the Company and each NSJ Company not to, grant
any interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Company or the NSJ Companies, the business (current and
proposed) of UniCapital, the Registration Statement (as defined below), the IPO
or any other matter connected with any of the foregoing without the express
prior written approval of UniCapital, and all inquiries and questions with
respect to any of the foregoing shall be coordinated through ▇▇▇▇▇▇ New, Chief
Executive Officer of UniCapital. Each Stockholder shall, and shall cause the
Company and the NSJ Companies to, coordinate all communications with the
employees and agents of the Company or any NSJ Company concerning this Agreement
or the transactions contemplated hereby through UniCapital prior to making any
such communication. Notwithstanding the above, the Stockholders may communicate,
whether oral or in writing, with any lenders, lessors, customers, suppliers or
any other parties from whom any consents, approvals or waivers are necessary or
advisable, or to whom notice is necessary or advisable, as well as with any
professional advisors with respect to the transactions contemplated by this
Agreement and related matters. Notwithstanding the foregoing, this Section 8.9
shall not be interpreted to prevent the Company, any NSJ Company or any
Stockholder from disclosing information as compelled by a court order, provided,
however, that prior to disclosing any information concerning this Agreement or
the transaction contemplated hereby in response to any such court order, the
Stockholders shall, or shall cause the Company or the applicable NSJ Company to,
provide UniCapital with prompt notice of the court order so that UniCapital may
take whatever action it deems appropriate to prohibit such disclosure.
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, no Stockholder and none of their affiliates
shall, and each of them shall cause the Company and each NSJ Company and their
respective employees, agents and representatives (including any investment
banking, legal or accounting firm retained by it or
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them and any individual member or employee of the foregoing) (each, an "Agent")
not to, (a) initiate, solicit or seek, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including any proposal or
offer to the Stockholders or any of them) with respect to a merger, acquisition,
consolidation, recapitalization, liquidation, dissolution or similar transaction
involving, or any purchase of all or any portion of the assets or any equity
securities of, the Company or any NSJ Company other than any such transaction
effected or to be effected in the ordinary course of business (any such proposal
or offer being hereinafter referred to as an "Acquisition Proposal"), or (b)
engage in any negotiations concerning, or provide any confidential information
or data to, or have any substantive discussions with, any person relating to an
Acquisition Proposal, (c) otherwise cooperate in any effort or attempt to make,
implement or accept an Acquisition Proposal, or (d) enter into or consummate any
agreement or understanding with any person or entity relating to an Acquisition
Proposal, and the Merger contemplated hereby. If the Company, any NSJ Company or
any Stockholder, or any of their respective Agents, have provided any person or
entity (other than UniCapital) with any confidential information or data
relating to an Acquisition Proposal, then the Stockholders shall request the
immediate return thereof. The Stockholders shall notify UniCapital immediately
if any inquiries, proposals or offers related to an Acquisition Proposal are
received by, any confidential information or data is requested from, or any
negotiations or discussions related to an Acquisition Proposal are sought to be
initiated or continued with, it or any individual or entity referred to in the
first sentence of this Section 8.10. The covenant contained in this Section 8.10
shall not survive any termination of this Agreement pursuant to Sections 13.1,
13.2 or 13.3.
8.11 SUPPLIER APPROVAL. Prior to the Closing Date, the Stockholders
will cause the Company and each NSJ Company to satisfy any requirement for
notice and approval of the transactions contemplated by this Agreement under
applicable supplier agreements, and shall provide UniCapital with satisfactory
evidence of such approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Stockholders will cause the Company and each NSJ Company to satisfy any
requirement for notice of the transactions contemplated by this Agreement under
any applicable collective bargaining agreement, and shall provide UniCapital
with proof that any required notice has been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Stockholders shall give
prompt notice to UniCapital of (i) the occurrence or non-occurrence of any event
known to any Individual Stockholder the occurrence or non-occurrence of which
would be likely to cause any representation or warranty contained in Article 6
to be untrue or inaccurate in any material respect at or prior to the Closing
Date and (ii) any material failure of any Stockholder to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by such
person hereunder.
(b) UniCapital shall give prompt notice to each Stockholder of
(i) the occurrence or non-occurrence of any event known to UniCapital the
occurrence of non-
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occurrence of which would be likely to cause any representation or warranty
contained in Article 7 to be untrue or inaccurate in any material respect at or
prior to the Closing Date and (ii) any material failure of UniCapital to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder.
(c) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 8.14, (ii) modify the conditions set forth in Sections 9 and 10 or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party shall have, with respect to the
representations and warranties of such party contained in this Agreement, an
obligation until the Merger Effective Date to supplement or amend the schedules
hereto within two days of each filing with the SEC of an amendment to the
Registration Statement with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the schedules, provided that no
amendment or supplement to a Schedule that constitutes or reflects a material
adverse change in the business, operations, assets, properties, prospects or
condition (financial or otherwise) of the Company or the NSJ Companies, taken as
a whole (a "Material Adverse Amendment"), may be made unless UniCapital consents
to such amendment or supplement; and provided further, however, that UniCapital
may not withhold consent to such Material Adverse Amendment if the same relates
to (i) changes in facts or circumstances occurring subsequent to the date
hereof, or (ii) facts and circumstances existing as of the date hereof that were
not disclosed by the Stockholders because they did not have knowledge of them
(but, with respect to facts and circumstances described in (ii) only to the
extent that the omission thereof from Schedules attached hereto as of the date
hereof was not the result of a lack of good faith diligence on the part of the
Stockholders). Notwithstanding the foregoing, (i) if any such amendment or
supplement relates to changes in facts or circumstances occurring subsequent to
the date of this Agreement and such amendment or supplement constitutes or
reflects a Material Adverse Amendment, then such amendment or supplement shall
be accepted by UniCapital subject to the provisions of Section 12.2 hereof and
(ii) no amendment of or supplement to a schedule shall be made later than 48
hours prior to the anticipated effectiveness of the Registration Statement
defined in Section 9.4. Only (i) the schedules attached to this Agreement at the
time of its execution and (ii) amended schedules as accepted under the standards
and provisions of this Section 8.14, shall be deemed to be part of this
Agreement in accordance with Section 19.3 hereof. UniCapital shall provide the
Individual Stockholders with no less than five days notice of the filing of any
amendment of the Registration Statement for the purposes of the first sentence
of this Section 8.14, and in the absence of the provision of such notice,
UniCapital will be deemed to have waived the requirement of the Individual
Stockholders to have updated the Schedules to this Agreement with respect to
that specific filing with the SEC.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS
The obligations of the Stockholders hereunder are subject to the
satisfaction on or prior to the Closing Date (or such earlier date specified
below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as of the Closing Date and (except to the extent
representations and warranties expressly speak as of an earlier date) as of the
Merger Effective Date as though such representations and warranties had been
made as of such times; all of the terms, covenants and conditions of this
Agreement to be complied with and performed by UniCapital and Newco on or before
the Closing Date shall have been duly complied with and performed; and a
certificate to the foregoing effect dated the Merger Effective Date and signed
by a duly authorized agent, the President or any Vice President of UniCapital
shall have been delivered to the Stockholders.
9.2 EMPLOYMENT AGREEMENTS. The Surviving Corporation shall have
executed and delivered Employment Agreements, in the form of Annex V attached
hereto, to each of the persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Stockholders shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein;
(c) the shares of UniCapital Stock to be received by the
Stockholders on the Merger Effective Date shall be duly authorized, fully paid
and nonassessable; and
(d) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation or
Bylaws of UniCapital or Newco.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration
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Statement shall have been declared effective by the SEC not later than June 30,
1998, UniCapital and the underwriters named therein shall have executed the
Underwriting Agreement and the underwriters named therein shall have agreed to
acquire, subject to the conditions set forth in the Underwriting Agreement, the
shares of UniCapital Stock covered by the Registration Statement. There shall
have been no stop-order issued (that remains in effect) by the Securities and
Exchange Commission with respect to the Registration Statement.
9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the HSR Act shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND
NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholders shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholders contained in this Agreement shall be true on
and as of the Closing Date and (except to the extent the representations and
warranties expressly speak as of an earlier date) as of the Merger Effective
Date with the same effect as though such representations and warranties had been
made on and as of such dates, except for matters expressly disclosed pursuant to
Section 8.14; and each and all of the agreements of the Stockholders, the
Company or any NSJ Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited combined
balance sheets of the Company and the NSJ Companies as of the end of the most
recently completed calendar month, and the unaudited combined statements of
income, cash flows and stockholders' equity of the Company and the NSJ Companies
for the periods then ended, which statements shall have disclosed no material
adverse change in the financial condition of the Company and the NSJ Companies
taken as a whole or the results of their combined operations from the financial
statements originally furnished as set forth in Schedule 6.12.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company and
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the NSJ Companies, taken as a whole, shall have occurred, and neither the
Company nor any NSJ Company shall have suffered any material loss or damage to
any of its properties or assets, whether or not covered by insurance, since the
Audited Balance Sheet Date, which change, loss or damage materially affects or
impairs the ability of such entity to conduct its business as now conducted or
as proposed to be conducted; and UniCapital shall have received on the Closing
Date a certificate signed by the Stockholders and dated the Merger Effective
Date to such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company and each NSJ Company including environmental and land
use practices, import and export laws, compliance with contracts and federal,
state and local laws and regulations governing the respective operations of the
Company and the NSJ Companies, which review reflects compliance with all
applicable laws governing the Company and each NSJ Company, disclosing no
material actual or probable violations, compliance problems, required capital
expenditures or other substantive environmental, real estate and land use
related concerns and which review is otherwise satisfactory in all respects to
UniCapital, in its sole discretion.
10.6 STOCKHOLDERS' RELEASE. Except as set forth on Schedule 10.6, at
the Closing Date, the Stockholders shall have delivered to UniCapital an
instrument dated the Merger Effective Date releasing the Company and each NSJ
Company from any and all claims of the Stockholders against the Company and each
NSJ Company.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex V
attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
Feltman, Karesh, Major & ▇▇▇▇▇▇▇ L.L.P., counsel to the Stockholders, dated the
Merger Effective Date, in form and substance satisfactory to UniCapital, to the
effect that the Merger is effective under all applicable state laws and that,
with respect to the Company and the NSJ Companies (including the Resulting
Company):
(a) the Company and each NSJ Company has been duly
incorporated and is validly existing and in good standing under the laws of the
state of its incorporation;
(b) to the knowledge of such counsel, the Company and each NSJ
Company is duly authorized, qualified and licensed under all applicable laws,
regulations, ordinances or orders of public authorities to carry on its business
in the places and in the manner now conducted;
(c) the authorized and outstanding capital stock of the
Company and each NSJ Company is as represented by the Stockholders in this
Agreement and each share of such stock has been duly and validly authorized and
issued, is fully paid and nonassessable and was not
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issued in violation of any statutory, or such counsel's knowledge, contractual,
preemptive rights of any stockholder;
(d) to the knowledge of such counsel, neither the Company or
any NSJ Company has any outstanding options, warrants, calls, conversion rights
or other commitments of any kind to issue or sell any of its capital stock;
(e) this Agreement has been duly executed and delivered by
each Stockholder and constitutes a valid and binding agreement of such
Stockholder, enforceable in accordance with its terms, except as such
enforceability may be subject to bankruptcy, moratorium, insolvency and other
similar laws relating to or affecting the rights of creditors and except (i) as
the same may be subject to the effect of general principles of equity and (ii)
that no opinion need be expressed as to the enforceability of indemnification
provisions included herein;
(f) each other document or agreement contemplated by this
Agreement to be executed by the Company or any NSJ Company has been duly
authorized, executed and delivered by each such entity and constitutes a valid
and binding agreement of such entity, enforceable in accordance with its terms,
except as such enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement and other similar laws relating to or
affecting the rights of creditors and except as the same may be subject to the
effect of general principles of equity;
(g) upon consummation of the Merger contemplated by this
Agreement, UniCapital will receive valid title to the Company Stock, free and
clear of all "adverse claims" (as defined in the Uniform Commercial Code
applicable in the state of New York) known to such counsel;
(h) no notice to, consent, authorization, approval or order of
any court or governmental agency or body is required in connection with the
execution, delivery or consummation of this Agreement by any Stockholders or for
the transfer to UniCapital of the Company Stock; and
(i) the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or constitute a
default under any of the terms or provisions of the Company's or any NSJ
Company's charter documents or the bylaws or any Contract or Lease listed on
Schedule 6.17 and 6.35.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
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10.10 GOOD STANDING CERTIFICATES. Stockholders shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's and each NSJ Company's state of incorporation and, unless waived by
UniCapital, in each state in which the Company or any NSJ Company is authorized
to do business, showing that each such entity is in good standing and authorized
to do business and that all state franchise and/or income tax returns and taxes
for such entity for all periods prior to the dates of such certificates have
been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the Securities and Exchange Commission with respect to the
Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS. Prior to the Closing Date, the
Stockholders shall have repaid to the Company and each NSJ Company in full all
amounts owing by the Stockholders to any such entity.
10.13 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the HSR Act shall have expired or been terminated.
11. COVENANTS OF UNICAPITAL
11.1 UNICAPITAL STOCK OPTIONS. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall make available options to purchase that number of
shares of UniCapital Stock having a fair market value on the effective date of
the Registration Statement, based upon the IPO price per share set forth in the
Underwriting Agreement, equal to 6.25% of the Effective Date Consideration
(valuing the UniCapital Stock to be issued as part of the Effective Date
Consideration at the IPO price per share for the purposes of this Section 11.1)
to be granted to those non-Stockholder key employees of the Surviving
Corporation after the Closing as are designated by the principal executive
officer of the Surviving Corporation who is entering into an Employment
Agreement pursuant to Section 9.2 hereof (or such other officer designated by
the Surviving Corporation and acceptable to UniCapital). Not later than seven
days prior to the effective date of the Registration Statement, the officer
designating the recipients of such options shall provide to UniCapital a written
list of the names of those designated recipients who will receive options
exercisable at the IPO price and the relative percentages of the 6.25% option
pool provided under this Section 11.1 to be awarded to each recipient, as well
as the percentage of options, if any, to be reserved for future issuance. Any
options reserved for future issuance shall be granted at an exercise price equal
to the fair market value of UniCapital Stock as of the date of grant. All
options shall be granted in accordance with UniCapital's policies, and
authorized and issued under the terms of UniCapital's principal stock option
plan for the benefit of employees of UniCapital and its subsidiaries.
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11.2 INFORMATION FILING. To the extent the Unified Transaction is a
transaction that falls within Section 351 of the Code, UniCapital shall file all
information required to be filed by it pursuant to Treasury Regulation Section
1.351-3(b).
11.3 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the HSR Act, UniCapital shall use its reasonable best
efforts to (a) file all information required to be filed by it pursuant to such
act and (b) provide the Stockholders with all information reasonably requested
and required by it to satisfy any filing requirements it may have under such
Act.
11.4 RELEASE FROM GUARANTEES; INDEBTEDNESS.. Not later than 120 days
following the Merger Effective Date, UniCapital shall cause the Stockholders to
be released from any and all personal guarantees of the indebtedness of the
Company at the Closing Date set forth on Schedule 11.4; provided, that, in the
event that the beneficiary of any such guarantee is unwilling to permit the
substitution of UniCapital's guarantee for the Stockholder's guarantee or the
assumption by UniCapital of the indebtedness, or in the event that the lender
with respect to the indebtedness to which such guarantee relates accelerates
such indebtedness whether or not prior to such 120 day period because of the
consummation of the transactions contemplated hereby, UniCapital shall repay up
to that amount of recourse indebtedness set forth on Schedule 11.4. The failure
of the Company to obtain the consent of its lenders to the change of control of
the Company or the NSJ Companies or the substitution of a UniCapital guaranty or
the assumption by UniCapital of the indebtedness set forth on Schedule 11.4
shall not be deemed a breach hereunder.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS. After the Effective Time,
subject to the limitations contained in Section 12.5 hereof, each Stockholder
shall indemnify, defend, protect and hold harmless UniCapital and its officers,
stockholders, directors, divisions, subdivisions, affiliates, subsidiaries,
parents, agents, employees, successors and assigns at all times from and after
the date of this Agreement until the Expiration Date (as defined in Section
12.6) from and against all claims, damages, losses, liabilities, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses (including
reasonable attorneys' fees and expenses of investigation) (collectively,
"Losses") incurred by UniCapital as a result of or arising from (a) any breach
of the representations and warranties made by the Individual Stockholders set
forth herein or on the schedules or certificates delivered in connection
herewith, (b) any nonfulfillment of any covenant or agreement on the part of any
Stockholder under this Agreement, or (c) any liability under the Securities Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or other
federal or state law or regulation, at common law or otherwise, arising out of
or based upon (i) any untrue statement or alleged untrue statement of a material
fact relating to the Company, any NSJ Company or any Stockholder contained under
the "Identified Disclosure" (as defined below) or (ii) any omission or alleged
omission to state in the
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Identified Disclosure of a material fact relating to the Company, any NSJ
Company or any Stockholder required to be stated therein or necessary to make
the statements therein not misleading, which information was provided to
UniCapital or its counsel by the Company, any NSJ Company or any Stockholder;
provided, however, that such indemnity shall not inure to the benefit of
UniCapital or any other indemnified person, Newco or the Surviving Corporation
to the extent that such untrue statement (or alleged untrue statement) was made
in, or such omission (or alleged omission) occurred in, any preliminary
prospectus and the Company, any NSJ Company or the Stockholders provided, in
writing, corrected information to UniCapital for inclusion in the final
prospectus, and such information was not so included. For purposes hereof, the
term "Identified Disclosure" means (i) the disclosure contained under the
captions "PROSPECTUS SUMMARY--The Founding Companies--The NSJ Group,
Inc.("NSJ")," MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL CONDITION AND
OPERATION RESULTS--The Founding Companies--The NSJ Group, Inc." and BUSINESS--
The Founding Companies--The NSJ Group, Inc." or (ii) under any other caption
identified in writing by UniCapital to the Stockholders as being included in the
Identified Captions in any preliminary prospectus or the final prospectus
forming a part the Registration Statement, or any amendment thereof or
supplement thereto (including any additional registration statement filed
pursuant to Rule 462(b) under the Securities Act), which disclosure was provided
or was based upon information or documents provided to UniCapital or its counsel
by the Company, any NSJ Company or any Stockholder.
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, notwithstanding any disclosure
made in this Agreement or in the schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, each Stockholder,
jointly and severally, shall indemnify, defend, protect and hold harmless
UniCapital and its respective officers, stockholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, employees, successors
and assigns at all times from and after the date of this Agreement, from and
against all Losses as a result of or incident to: (a) the existence of
liabilities of the Company or any NSJ Company (i) that are required to be set
forth on Schedules 6.13(a) or (b) that have not been so set forth or (ii) the
ultimate assessment of any liability in excess of any amount set forth on
Schedule 6.13(b), to the extent of such excess; (b) the failure of the Company,
any NSJ Company or any Stockholder to file all required Form 5500's prior to the
Merger Effective Date; and (c) any Material Adverse Amendments.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, shall indemnify, defend, protect and hold harmless the Stockholders
at all times from and after the date of this Agreement from and against all
Losses incurred by the Stockholders as a result of or arising from (a) any
breach of the representations and warranties made by UniCapital and Newco set
forth herein or on the schedules or certificates attached hereto, (b) any
nonfulfillment of any covenant or agreement on the part of UniCapital under this
Agreement, or (c) any liability under the Securities Act, the Exchange Act or
other federal or state law or regulation, at common law or otherwise, arising
out of or based upon any untrue statement or alleged untrue statement of a
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material fact relating to UniCapital (including all of the companies (other than
the Company or any NSJ Company) acquired by UniCapital as part of the Unified
Transaction, but with respect to such untrue statement or alleged untrue
statements made by any such other company, only to the extent that UniCapital is
actually indemnified by such other company) contained in any preliminary
prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto (including any registration
statement filed pursuant to Rule 462(b) under the Securities Act), or arising
out of or based upon any omission or alleged omission to state therein a
material fact relating to UniCapital (including all of the companies (other than
the Company or any NSJ Company) acquired by UniCapital as part of the Unified
Transaction, but with respect to such omission or alleged omission of any such
other company, only to the extent that UniCapital is actually indemnified by
such other company) required to be stated therein or necessary to make the
statements therein not misleading, which liability is not the subject of
indemnification of UniCapital pursuant to Section 12.1(c) above, or any personal
liability imposed on or asserted against any Stockholder (exclusively in their
capacity as a former stockholder of the Company or any NSJ Company) as a result
of any act or omission that occurs after the Effective Time by UniCapital or any
of its officers, directors, affiliates, subsidiaries, agents or employees.
12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent the Indemnifying Party has actually paid
any amount to the Indemnified Party in respect of any Loss in connection with
such Third Party Claim, the Indemnifying Party shall have a right of subrogation
with respect to such Third Party Claim to the extent of such payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party), any Third Party Claim as
the Indemnifying Party pursues the same in good faith and diligently and so long
as the Third Party Claim does not relate to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital, Newco or
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the Surviving Corporation. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnified Party's possession or
control. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense (unless there is a conflict of interest that prevents counsel for
the Indemnifying Party from representing the Indemnified Party, in which case
the Indemnifying Party will reimburse the Indemnified Party for the expenses of
its counsel). After the Indemnifying Party has notified the Indemnified Party of
its intention to undertake to defend or settle any such asserted liability, and
for so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except to the extent such participation is requested
by the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional legal expenses
and out-of-pocket expenses, and except in the case of a Third Party Claim
relating to an actual or potential Loss to which Section 12.4(e) applies in
which the Indemnified Party is UniCapital, Newco or the Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, as the Indemnified
Party (notice of which opinion shall be given in writing to the Indemnifying
Party), any Third Party Claim seeks material prospective relief which could have
a material adverse effect on any such Indemnified Party or any subsidiary, then
such Indemnified Party shall have the right to control or assume (as the case
may be) the defense of any such Third Party Claim and the amount of any judgment
or settlement and the reasonable costs and expenses of defense (including fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital and
all counseling or engineering fees and expenses related thereto) shall be
included as part of the indemnification obligations of the Indemnifying Party
hereunder. If the Indemnified Party elects to exercise such right, then the
Indemnifying Party shall have the right to participate in, but not control, the
defense of such Third Party Claim at the sole cost and expense of the
Indemnifying Party.
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12.5 LIMITATIONS ON INDEMNIFICATION. No Indemnified Party shall assert
any claim (other than a Third Party Claim) for indemnification hereunder until
such time as the aggregate of all claims which such Indemnified Party may have
against an Indemnifying Party shall exceed $270,000 (the "Basket Amount"), at
which time an Indemnified Party shall be entitled to seek indemnification
pursuant to this Article 12, but only to the extent that such claims, in the
aggregate, exceed the Basket Amount. For purposes of this Section 12.5, the
Stockholders shall be considered to be a single Indemnifying and Indemnified
Party and UniCapital and Newco shall be considered to be a single Indemnifying
and Indemnified Party. Notwithstanding any other term of this Agreement, in no
event shall any Stockholder be liable under this Article 12 for an amount which
exceeds the aggregate value (determined at the Merger Effective Date) of the
Merger Consideration received by such Stockholder under this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the
limitations upon indemnification contained in this Section 12.5 shall not apply
to Losses arising out of (i) any breach of the representations and warranties of
the Individual Stockholders contained in Sections 6.4, 6.5, 6.14, 6.25, 6.27 and
6.33 hereof or (ii) any breach by UniCapital of any of its covenants under this
Agreement. Notwithstanding the foregoing, the Basket Amount shall automatically
increase by an amount (such amount is referred to as the "Basket Adjustment")
equal to one percent of any Earn-Out Consideration that is finally determined to
be due to the Stockholders pursuant to Section 2.5 hereof. If the Basket Amount
is adjusted pursuant to the preceding sentence after such time as any
Indemnified Party, pursuant to this Article 12, has collected an amount in
excess (such excess amount is referred to as the "Excess Indemnity") of the
Basket Amount (prior to giving effect to the applicable Basket Adjustment), then
such Indemnified Party, within 10 business days after the final determination of
such Earn-Out Consideration, shall pay to the Indemnifying Party an amount equal
to the lesser of applicable Basket Adjustment or the Excess Indemnity. In
addition, notwithstanding any provision of this Agreement to the contrary, for
the purposes of preventing a double recovery the Stockholders shall not be
obligated to indemnify UniCapital or any other indemnified party pursuant to
Section 12.1 or 12.2 with respect to any particular act, omission, condition or
event if and to the extent that the loss resulting or arising from such act,
omission, condition or event has, directly or indirectly, been taken into
account in the computation of any Net Worth Deficiency provided for in Section
3.1.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warran ties made by the parties in this Agreement, or in any certificate or
other instrument delivered pursuant to this Agreement, shall survive for a
period of one year from the Merger Effective Date (which date is hereinafter
called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended prior to the Merger Effective Date, which shall be deemed
to be the Expiration Date for purposes of this clause (a) and claims arising
from a breach of the representations and warranties contained in such Section
6.27;
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(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely within the twenty-first century shall have been
processed and UniCapital's consolidated financial statements for the fiscal year
in which the last such transaction to be processed occurred have been audited,
which shall be deemed to be the Expiration Date for purposes of this clause (b)
and claims arising from a breach of the representations and warranties contained
in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Merger Effective
Date, which shall be deemed the Expiration Date for purposes of this clause (c)
and claims arising from a breach of the representations and warranties contained
in such Section 6.33;
(d) solely for purposes of Section 12.1(c) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for purposes of this clause (d) and claims arising under such
laws;
(e) the representations and warranties of the Stockholders
contained in Sections 6.4 and 6.5 hereof shall survive the Merger Effective Date
without time limitation; and
(f) any representations and warranties which serve as a basis
of the indemnity obligations of the Stockholders under Section 12.2 shall
survive the Merger Effective Date without time limitation; provided, however,
that the representations and warranties contained in Section 6.35(d) regarding
delinquent accounts identified on Schedule 6.35(d) shall survive until the final
resolution of such delinquent accounts.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement if
a material default shall be made by the Stockholders in the observance or due
and timely performance of any of the covenants, agreements or conditions
contained herein, and the curing of such default shall not have been
substantially made on or before the Closing Date and shall not reasonably be
expected to occur, (b) if UniCapital in its sole judgment determines that any
condition exists which has made or could reasonably be expected to make any of
the representations or warranties contained in Article 6 hereof untrue in any
material respect or (c) if UniCapital in its sole judgment determines that
information disclosed on the schedules to the Agreement delivered pursuant to
Section 8.14 has or could reasonably be expected to have a material adverse
effect on the
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business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company or any material NSJ Company.
13.2 TERMINATION BY THE STOCKHOLDERS. Prior to the initial filing of
the Registration Statement with the SEC, the Stockholders may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (a) in accordance with Sections 17.4(a) or (b) if a material default
shall be made by UniCapital in the observance or due and timely performance of
any of the material covenants, agreements or conditions contained herein, and
the curing of such default shall not have been substantially made on or before
such initial filing. From and after the initial filing of the Registration
Statement with the SEC, the Stockholders shall have no right to terminate this
Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, after its execution and delivery by the parties
thereto and prior to the Effective Time, the Underwriting Agreement is
terminated pursuant to the terms thereof;
(c) if the Effective Time has not occurred within 10 business
days after the Closing Date; or
(d) upon the date that the number of shares of UniCapital
Stock (other than shares included in any Earn-Out Consideration) to be issued to
the persons who will transfer property to UniCapital in the Unified Transaction
can be determined as a fixed number of shares, unless those same persons shall
own immediately after the Unified Transaction 80% or more of the UniCapital
Stock that will be issued and outstanding immediately after the Unified
Transaction.
13.4 LIQUIDATED DAMAGES. If the Merger fails to occur because of the
default of any Stockholder, then, in addition to the other remedies available to
UniCapital at law for fraud, in equity or pursuant to this Agreement, the
Individual Stockholders shall pay to UniCapital an aggregate amount of $500,000
as liquidated damages. It is hereby agreed that UniCapital's damages in the
event of a termination or default by any Stockholder hereunder are uncertain and
impossible to ascertain and that the foregoing constitutes a reasonable
liquidation of such damages and is intended not as penalty but as liquidated
damages.
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14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of UniCapital,
the Company and the NSJ Companies and their respective businesses, each
Stockholder covenants that, for the period ending two years after the Closing
Date, such Stockholder will not, directly or indirectly, own, manage, operate,
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as a partner, principal, agent,
representative, consultant or otherwise with, or use or permit such
Stockholder's name to be used in connection with, any business or enterprise
which is engaged directly or indirectly in competition anywhere in the United
States with the business conducted by UniCapital, the Surviving Corporation or
any of its or their respective subsidiaries or affiliates (the "Restricted
Business"). Each Stockholder recognizes that the Restricted Business is expected
to be conducted throughout the United States and that more narrow geographical
limitations of any nature on this non-competition covenant (and the
non-solicitation covenant set forth in subsection (b)) are therefore not
appropriate. The foregoing restrictions shall not be construed to prohibit the
ownership by a Stockholder as a passive investment (i) of not more than five
percent of any class of securities of any corporation which is engaged in any of
the foregoing businesses having a class of securities registered pursuant to
Section 12 of the Exchange Act, (ii) with respect to those activities identified
on Schedule 14.1 hereto, or (iii) in any business or enterprise that is not so
directly or indirectly in competition with the Restricted Business as it exists
on the date of this Agreement.
(b) Each Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers who were actually solicited by the Company or any NSJ Company prior to
the Effective Time of the Restricted Business, or (ii) solicit the employment of
any person who is employed by UniCapital, the Surviving Corporation or any of
its or their respective subsidiaries or affiliates in the Restricted Business
during such period.
(c) Each Stockholder recognizes and acknowledges that by
reason of such Stockholder's relationship to the Company and the NSJ Companies,
such Stockholder has had access to confidential information relating to the
Restricted Business. Each Stockholder acknowledges that such confidential
information is a valuable and unique asset and covenants that such Stockholder
will not disclose any such confidential information after the Closing Date to
any person for any reason whatsoever.
14.2 DAMAGES. Each Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholders agree that,
in the event of a breach by a Stockholder of the foregoing covenants, such
covenants may be
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enforced by UniCapital or the Surviving Corporation by, without limitation,
injunctions and restraining orders against such Stockholder.
14.3 REASONABLE RESTRAINT. The Parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholders
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Company and
the NSJ Companies), and that any violation will result in irreparable injury to
UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Stockholder
against the Company, any NSJ Company or UniCapital, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement of
such covenants. The parties specifically agree that the period of two years
stated above shall be computed by excluding from such computation any time
during which any Stockholder is in violation of any provision of this Article
14.
14.6 MATERIALITY. The Stockholders hereby acknowledge and agree that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital of the Company and the NSJ Companies.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
have in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company and the NSJ Companies, such as
lists of customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of such corporations and their respective
businesses. Neither the Company nor any Stockholder shall disclose, and they
shall cause each NSJ Company from disclosing, any confidential information to
any person, firm, corporation, association or other entity for any purpose or
reason whatsoever, except to authorized representatives of UniCapital, unless
the Stockholders can show that such information has become known to the public
generally through no fault of the Stockholders. In the event of a breach or
threatened breach by the Stockholders of the provisions
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of this Section 15.1, UniCapital and the Surviving Corporation shall be entitled
to an injunction restraining Stockholders from disclosing, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
UniCapital and the Surviving Corporation from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to (i)
certain confidential information solely of the Company and the NSJ Companies in
connection with their respective businesses ("Company Information") and (ii)
certain confidential information concerning the Stockholders and certain
business and activities of the Stockholders that are not a part of the
transactions contemplated by this Agreement ("Stockholder Information"). Prior
to the Closing Date with respect to Company Information and at any time with
respect to Stockholder Information, UniCapital shall not disclose any such
confidential information to any person, firm, corporation, association, or other
entity for any purpose or reason whatsoever without prior written consent of the
Stockholders. In the event of a breach or threatened breach by UniCapital of the
provisions of this Section 15.2, the Stockholders shall be entitled to an
injunction restraining UniCapital from disclosing, in whole or in part, such
confidential information. Nothing contained herein shall be construed as
prohibiting the Stockholders from pursuing any other available remedy for such
breach or threatened breach, including the recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholders
agree that, in the event of a breach by any of them of the foregoing covenant,
the covenant may be enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Stockholder hereby
agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated on behalf of such underwriters, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the final prospectus contained in the Registration Statement relating to the IPO
(the "Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above
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is to be settled by delivery of UniCapital Stock or such other securities, in
cash or otherwise. In addition, each Stockholder agrees that, without the prior
written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the
underwriters that may participate in the IPO, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of UniCapital Stock or any security convertible into
or exercisable or exchangeable for Common Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. Each Stockholder agrees that
the foregoing shall be binding upon their transferees, successors, assigns,
heirs, and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Stockholder acknowledges and agrees that such
underwriters and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated are intended third party
beneficiaries of the provisions of this Article 16, and that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Article 16. The Stockholders also acknowledge and agree that neither the
Company nor any NSJ Company shall have any rights as intended third-party
beneficiaries under this Agreement.
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
17.1 INVESTMENT INTENT. The Stockholders acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Stockholders represent and warrant that the shares of UniCapital Stock to be
acquired by the Stockholders pursuant to this Agreement are being acquired
solely for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholders covenant, warrant and
represent that none of the shares of UniCapital Stock issued to such
Stockholders will be offered, sold, assigned, pledged, hypothecated, transferred
or otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC
thereunder, and except after full compliance with any applicable state
securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholders further represent and warrant
that they (a) fully understand the nature, scope and duration of the
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limitations on transfer contained in this Agreement and (b) have such knowledge
and experience in financial and business matters that they are capable of
evaluating the merits and risks of the proposed investment and therefore have
the capacity to protect their own interests in connection with the acquisition
of the UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Stockholders represent and warrant that, as of the
date of this Agreement, they have had an adequate opportunity to ask questions
and receive answers from the officers of UniCapital concerning UniCapital, its
business, operations, plans and strategy, and the background and experience of
its officers (other than the Chief Operating Officer of UniCapital, which office
had not been filled as of the date of this Agreement) and directors. The
Stockholders represent and warrant that they have asked any and all questions
that they may have in the nature described in the preceding sentence and that
all such questions have been answered to their satisfaction.
(b) Each Stockholder represents and warrants that he has
received the draft Registration Statement, including the draft preliminary
prospectus that forms a part thereof, delivered to him on or about February 14,
1998 that describes, among other things, UniCapital, the Merger, the other
acquisitions proposed to be undertaken by UniCapital simultaneously with the
Merger and the target companies of such other acquisitions. Each Stockholder
represents and warrants that he has reviewed such draft Registration Statement
and draft preliminary prospectus and has had adequate opportunity to ask
questions of and receive answers to his satisfaction from the officers of
UniCapital concerning the matters described therein.
18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Stockholders hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY
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TO THE CORPORATION) OF COUNSEL SATISFACTORY TO THE
CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. STOCKHOLDER REPAYMENT OBLIGATION
19.1 If (a) the revenue recorded by the B & A Leasing Corporation from
the lease of the Boeing 737-301 to Southwest Airlines or U.S. Airways (or
another third-party lessor reasonably acceptable to UniCapital) for the year
ending December 31, 1998 is less than $1,710,000 (such shortfall is referred to
as the "Revenue Deficiency") or (b) the consolidated net income of the Company
and the NSJ Companies for the year ending December 31, 1998 is less than
$4,800,000 (such shortfall is referred to as the "Income Shortfall"), then the
Stockholders shall pay to UniCapital an amount (the "NSJ Deficiency") equal to
the lesser of (x) the Income Shortfall or the (y) the Revenue Deficiency. As
soon as practicable, but in any event by March 31, 1997, UniCapital shall engage
Price Waterhouse LLP to prepare, in accordance with GAAP in a manner consistent
in all material respects with the Closing Date Balance Sheet, a statement of the
revenues of B & A Leasing Corporation and net income of the Company and the NSJ
Companies (the "NSJ Statement"). After the 20th business day after the delivery
of the NSJ Statement to UniCapital (or if applicable, after the final
determination of any Disputed NSJ Amount), the Stockholders shall pay
UniCapital, by wire transfer, an amount equal to the NSJ Deficiency. At sole and
exclusive option, and at any time after such 25th business day, UniCapital shall
be entitled to recover from the Indemnity Escrow pursuant to Article 4 all or
any portion of the amount of the NSJ Deficiency not paid by the Stockholders as
required by this Article 19.
19.2 DISPUTES. Notwithstanding anything in this Article 19 to the
contrary, if there is any NSJ Deficiency and the Stockholders dispute any item
contained on the NSJ Statement, the effect of which would be to reduce the
amount of the NSJ Deficiency by an aggregate amount in excess of $10,000, then
the Stockholders' Representative shall notify UniCapital in writing of each
disputed item (collectively, the "NSJ Disputed Amounts") and specify the amount
thereof in dispute within 20 business days after the delivery of the NSJ
Statement. If UniCapital and the Stockholders' Representative cannot resolve any
such dispute which would eliminate or otherwise mutually resolve the calculation
of the NSJ Deficiency, then such dispute shall be resolved by an independent
nationally recognized accounting firm which is reasonably acceptable to
UniCapital and the Stockholders' Representative (the "Independent Accounting
Firm"). The determination of the Independent Accounting Firm shall be made as
promptly as practical and shall be final and binding on the parties, absent
manifest error which error may only be corrected by such Independent Accounting
Firm. Any expenses relating to the engagement of the Independent Accounting Firm
shall be allocated between UniCapital and the Stockholders so that the
Stockholders' aggregate share of such costs shall bear the same proportion to
the total
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costs that the NSJ Disputed Amounts unsuccessfully contested by the
Stockholders' Representative (as finally determined by the Independent
Accounting Firm) bear to the total of the NSJ Disputed Amounts so submitted to
the Independent Accounting Firm. Pending resolution of any such dispute by the
Independent Accounting Firm, no such NSJ Disputed Amount shall be due to or by
UniCapital. Once any such NSJ Disputed Amount is finally determined to be due to
or by UniCapital, UniCapital may proceed to recover such amount in the manner
set forth in Section 19.1
20. GENERAL
20.1 COOPERATION. The Stockholders and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholders will cooperate and use their reasonable commercial efforts to have
the officers, directors and employees of Company prior to the Closing Date
cooperate with UniCapital on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings, arrangements or disputes of any nature with respect to
matters pertaining to all periods prior to the Closing Date.
20.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the Resulting
Company, the successors of UniCapital, and the heirs and legal representatives
of the Stockholders.
20.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Company, UniCapital and Newco and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Stockholders (subject to the limitations
set forth below), and the Company, UniCapital and Newco acting through their
respective officers, duly authorized by their respective Boards of Directors.
20.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
20.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and Newco, on the one hand, and the Stockholders,
on the other hand, agrees to indemnify the other against all loss, liability,
cost damages or expense arising out of or related to claims for fees
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or commissions of brokers employed or alleged to have been employed by such
indemnifying party.
20.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and Newco and their respective agents, representatives,
accountants (including all fees, disbursements and expenses of Price Waterhouse
LLP) and counsel incurred in connection with the subject matter of this
Agreement and any amendments thereto. Whether or not the transactions herein
contemplated shall be consummated, the Stockholders will pay the fees, expenses
and disbursements of the Stockholders, the Company and the NSJ Companies and
their respective agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments hereto
and all other costs and expenses incurred in the performance of this Agreement
by the Stockholders and the Company and in compliance with all conditions to be
performed by the Stockholders and the Company under this Agreement.
20.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
One Oxford Centre, Thirty-Second Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Stockholders, addressed to them in care
of the Stockholders' Representative at:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The NSJ Group, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Feltman, Karesh, Major & ▇▇▇▇▇▇▇
Carnegie Hall Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax is transmitted to the telefax number specified in this Section 19.7
(or in accordance with the latest unrevoked written direction from such party),
and the appropriate confirmation is received.
20.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
20.9 EXERCISE OF RIGHTS AND REMEDIES; FURTHER ASSURANCES. Except as
otherwise provided herein, no delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any
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waiver of any single breach or default be deemed a waiver of any other breach or
default occurring before or after that waiver.
After the Closing, each party will afford the other party, its counsel
and accountants, during normal business, hours, reasonable access to the books,
records and other data relating to the Company and the NSJ Companies in its
possession with respect to periods prior to the Merger Effective Date and the
right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting party in connection (i) the preparation
of tax returns, (ii) the determination or enforcement of rights under this
Agreement, (iii) compliance with any governmental or regulatory authority or
(iv) in connection with any actual or threatened action or proceeding.
20.10 TIME. At all times after the execution of the Underwriting
Agreement, time shall be of the essence with respect to all matters under this
Agreement.
20.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
20.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
20.13 CAPTIONS, INTERPRETATION.. The headings of this Agreement are
inserted for convenience only and shall not constitute a part of this Agreement
or be used to construe or interpret any provision hereof. Section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified. Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, and the
part the whole, (b) "or" has the inclusive meaning frequently identified with
the phrase "and/or" and (c) "including" has the inclusive meaning frequently
identified with the phrase "but not limited to."Each accounting term used herein
that is not specifically defined herein shall have the meaning given to it under
GAAP.
21. DEFINITIONS
21.1 "1998 Period" is defined in Section 3.1.
21.2 "Accounts Receivable" is defined in Section 6.14.
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21.3 "Acquisition Proposal" is defined in Section 8.10.
21.4 "Adjusted EBT" is defined in Section 2.5(a).
21.5 "Agent" is defined in Section 8.10.
21.6 "Agreement" is defined in the preamble to this Agreement.
21.7 "Audited Balance Sheet Date" is defined in Section 6.13(a).
21.8 "Audited Financial Statements" are defined in Section 6.13(a).
21.9 "Authorizations" are defined in Section 6.23.
21.10 "Benefit Plan" is defined in Section 6.22.
21.11 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
21.12 "CLA Companies" means CLA Holdings, Inc. and the "CLA Companies,"
as defined in the Agreement and Plan of Contribution dated as of the date of
this Agreement by and among UniCapital; CLA Acquisition Corp., a Florida
corporation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, The 1998 Cauff Family Trust, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
The 1998 ▇▇▇▇▇▇▇ Family Trust.
21.13 "Certificates" are defined in Section 2.2.
21.14 "Certificate of Merger" is defined in Section 1.1.
21.15 "Closing" is defined in Section 5.1(b).
21.16 "Closing Date" is defined in Section 5.2.
21.17 "Closing Date Balance Sheets" are defined in Section 3.1.
21.18 "Code" is defined in the recitals to this Agreement.
21.19 "Commonly Controlled Entity" is defined in Section 6.22.
21.20 "Company" is defined in the preamble to this Agreement.
21.21 "Company Documents" are defined in Section 6.2.
21.22 "Company Stock" is defined in Section 2.1(a).
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21.23 "Constituent Corporations" are defined in Section 1.1.
21.24 "Contracts" are defined in Section 6.17.
21.25 "Disputed Amounts" are defined in Section 3.2.
21.26 "EBT" is defined in Section 2.5(a).
21.27 "Earn-Out Consideration" is defined in Section 2.5(c).
21.28 "Earn-Out Escrow Cash" is defined in Section 4.1(b).
21.29 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
21.30 "Effective Date Consideration" is defined in Section 2.1(a).
21.31 "Effective Time" is defined in Section 5.3.
21.32 "Environmental Laws" mean any and all applicable treaties, laws,
regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
21.33 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
Newco, the Surviving Corporation, any Governmental Entity or any other person or
entity on the basis of any violation of any Environmental Laws or pursuant to
any requirement imposed under any Environmental Laws (including any sampling,
testing, investigation, removal, treatment or remediation undertaken by
UniCapital, Newco or the Surviving Corporation so as to avoid any claim or
violation or to comply with any requirement and all counseling or engineering
fees and expenses related thereto), and arising from pre-Closing operations,
events, circumstances or conditions at, on, under or emanating from, or as a
result of any pre-Closing off-site disposal of Hazardous
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Substances from, any property currently or formerly owned, operated or leased by
the Companies.
21.34 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the applicable Company.
21.35 "Equipment" is defined in Section 6.35.
21.36 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
21.37 "Escrow Cash" is defined in Section 4.1(a).
21.38 "Escrow Property" is defined in Section 4.1(b).
21.39 "Escrow Shares" are defined in Section 4.1(a).
21.40 "Exchange Act" is defined in Section 12.1.
21.41 "Expiration Date" is defined in Section 12.6.
21.42 "Financial Statements" are defined in Section 6.12(b).
21.43 "Foreign Plans" are defined in Section 6.22(i)(xiii).
21.44 "▇▇▇▇▇ Trust" is defined in the preamble to this Agreement.
21.45 "GAAP" is defined in Section 3.1.
21.46 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
21.47 "HSR Act" is defined in Section 6.3.
21.48 "Indemnified Party" is defined in Section 12.4(a).
21.49 "Indemnifying Party" is defined in Section 12.4(a).
21.50 "Indemnity Escrow Agent" is defined in Section 4.1(a).
21.51 "Independent Accounting Firm" is defined in Section 3.2.
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21.52 "Individual Stockholders" are defined in the preamble to this
Agreement.
21.53 "Intellectual Property" is defined in Section 6.28(a).
21.54 "Interim Balance Sheet Date" is defined in Section 6.12(b).
21.55 "IPO" is defined in the recitals to this Agreement.
21.56 "IPO Price" means the per share price that the Company Stock is
sold to the Underwriters in the IPO prior to the deduction of any discounts or
expenses.
21.57 "Lease Documents" are defined in Section 6.35.
21.58 "Leases" are defined in Section 6.35.
21.59 "Liabilities" are defined in Section 6.13(a).
21.60 "Losses" are defined in Section 12.1.
21.61 "Material Adverse Amendment" is defined in Section 8.14.
21.62 "Merger Consideration" is defined in Section 2.1(b).
21.63 "Merger Effective Date" is defined in Section 5.3.
21.64 "Merger Consideration Shares" are defined in Section 2.1(a).
21.65 "Merger Effective Date" is defined in Section 5.3.
21.66 "Merger" is defined in the recitals to this Agreement.
21.67 "NSJ Companies" is defined in Exhibit A hereto.
21.68 "Net Worth Deficiency" is defined in Section 3.1.
21.69 "Newco" is defined in the preamble to this Agreement.
21.70 "Obligor" is defined in Section 6.35.
21.71 "Ordinary course" or "ordinary course of business" means the
leasing, acquisition, sale and/or trading of commercial jet aircraft and
aircraft parts, providing financial structures and similar products or services
relating to the aircraft and/or aviation industry, and providing consulting
and/or advisory services with respect to any of the foregoing.
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21.72 "PCBs" are defined in Section 6.33(h).
21.73 "Pension Plan" is defined in Section 6.22.
21.74 "Prospectus" is defined in Section 16.1.
21.75 "Registration Statement" is defined in Section 9.4.
21.76 "Regulations" are defined in Section 6.23.
21.77 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
21.78 "Restricted Business" is defined in Section 14.1(a).
21.79 "Scheduled Payments" are defined in Section 6.35.
21.80 "SEC" is defined in Section 9.4.
21.81 "Securities Act" is defined in Section 6.16.
21.82 "Stockholders" are defined in the preamble to this Agreement.
21.83 "Stockholders' Representative" is defined in Section 3.3.
21.84 "Subsidiary" is defined in Section 6.1.
21.85 "Surviving Corporation" is defined in Section 1.2.
21.86 "Tax Returns" are defined in Section 6.27.
21.87 "Taxes" are defined in Section 6.27.
21.88 "Third Party Claim" is defined in Section 12.4(a).
21.89 "▇▇▇▇▇▇▇▇ Trust" is defined in the preamble to this Agreement.
21.90 "Unaudited Financial Statements" are defined in Section 6.12(b).
21.91 "Underwriting Agreement" is defined in Section 5.1(a).
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21.92 "UniCapital" is defined in the preamble to this Agreement.
21.93 "UniCapital Documents" are defined in Section 7.3.
21.94 "UniCapital Stock" is defined in Section 2.1(a).
21.95 "Unified Transaction" is defined in the recitals to this
Agreement.
21.96 "Welfare Plan" is defined in Section 6.22.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ New
--------------
Name: ▇▇▇▇▇▇ New
Title: Chairman and Chief Executive Officer
NSJ ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ New
--------------
Name: ▇▇▇▇▇▇ New
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
/s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
-------------------------------
The 1998 ▇▇▇▇▇▇▇▇ Family Trust
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
/s/ ▇▇▇ ▇▇▇▇▇, Trustee
----------------------
The 1998 ▇▇▇▇▇ Family Trust
By: ▇▇▇ ▇▇▇▇▇, Trustee
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EXHIBITS
EXHIBIT A [Ownership of the Company and the NSJ Companies]
ANNEXES
ANNEX I [Form of Certificate of Merger]
ANNEX II [Form of Bylaws]
ANNEX III [Allocation of Merger Consideration and Earn-Out
Consideration]
ANNEX IV [Allocation of Purchase Price]
ANNEX V [Form of Indemnity Escrow Agreement]
ANNEX VI [Form of Employment Agreement]
SCHEDULES
SCHEDULE 2.5 [Add-Backs]
SCHEDULE 6.1 [Jurisdictions in which Company and Subsidiaries
Are Qualified to do Business]
SCHEDULE 6.3 [Authority]
SCHEDULE 6.4 [Stockholders of Company]
SCHEDULE 6.5 [Issued and Outstanding Stock of the Company and
Subsidiaries]
SCHEDULE 6.6 [Transactions in Capital Stock]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Companies]
SCHEDULE 6.10 [Spin-offs by Company]
SCHEDULE 6.11 [Third Party Options]
SCHEDULE 6.12 [Company Financial Statements]
SCHEDULE 6.13(a) [Liabilities and Obligations]
SCHEDULE 6.13(b) [Contested Liabilities]
SCHEDULE 6.14 [Accounts and Notes Receivable Aging]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts and Commitments]
SCHEDULE 6.18 [Government Contracts]
SCHEDULE 6.20 [Insurance Policies and Surety Arrangements]
SCHEDULE 6.21 [Employee Information]
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SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.26 [Restrictions]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(d) [Confidentiality and Non-Disclosure Agreements]
SCHEDULE 6.29 [Notice and Consents]
SCHEDULE 6.30 [Absence of Changes]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 6.35 [Leases]
SCHEDULE 6.36 [Lease Funding]
SCHEDULE 7.8 [UniCapital and Newco Litigation]
SCHEDULE 7.10 [UniCapital and Newco Agreements]
SCHEDULE 9.2 [Employment Agreements]
SCHEDULE 10.6 [Stockholders Claims]
SCHEDULE 11.4 [Personal Guarantees of the Indebtedness of the
Company]
SCHEDULE 14.1 [Non-Competition]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.09 to the Commission supplementally upon request
therefor.
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