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EXHIBIT NO. 10.10
ASSET PURCHASE AGREEMENT
by and among
SC/NE, LLC
as "Buyer,"
NEXTERA ENTERPRISES, L.L.C.
as "Nextera,"
SIBSON & COMPANY, L.P.
as "Seller,"
SIBSON & COMPANY, INC.
as "General Partner,"
SC2, INC.
as "Limited Partner"
and
THE SHAREHOLDERS OF THE GENERAL
PARTNER AND THE LIMITED PARTNER
as the "Shareholders"
Dated as of August 31, 1998
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS .......................................................... 2
1.1. Defined Terms ....................................................... 2
1.2. Other Defined Terms ................................................. 8
ARTICLE II. PURCHASE AND SALE OF ASSETS ......................................... 9
2.1. Sale of Assets ...................................................... 9
2.2. Assumption of Liabilities ........................................... 9
2.3. Excluded Liabilities ................................................ 10
2.4. Purchase Price ...................................................... 10
2.5. Working Capital ..................................................... 11
2.6. Closing Costs; Transfer Taxes and Fees .............................. 11
ARTICLE III. CLOSING ............................................................ 12
3.1. Closing ............................................................. 12
3.2. Conveyances at Closing .............................................. 12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER ........................ 13
4.1. Organization and Qualification ...................................... 14
4.2. Capitalization; Beneficial Ownership ................................ 14
4.3. Subsidiaries ........................................................ 15
4.4. Authority ........................................................... 15
4.5. Assets .............................................................. 16
4.6. Real Property ....................................................... 17
4.7. Financial Statements ................................................ 18
4.8. Absence of Certain Changes or Events ................................ 19
4.9. Contracts and Commitments ........................................... 21
4.10. Permits ............................................................ 23
4.11. Litigation ......................................................... 23
4.12. Compliance with Law ................................................ 24
4.13. Ordinary Course .................................................... 24
4.14. Officers and Compensation .......................................... 24
4.15. Employees; Labor Matters ........................................... 24
4.16. Banking Relations .................................................. 25
4.17. No Brokers ......................................................... 25
4.18. No Other Agreements to Sell the Assets ............................. 25
4.19. Clients ............................................................ 26
4.20. Backlog ............................................................ 26
4.21. Proprietary Rights ................................................. 26
4.22. Taxes .............................................................. 26
4.23. Employee Benefit Programs .......................................... 28
4.24. Insurance .......................................................... 31
4.25. Accounts Receivable ................................................ 32
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4.26. Payments ........................................................... 32
4.27. Environmental Matters .............................................. 32
4.28. Warranty or Other Claims ........................................... 34
4.29. Records; Copies of Documents ....................................... 34
4.30. Powers of Attorney ................................................. 34
4.31. Business of General Partner and Limited Partner .................... 34
4.32. Accredited Investor ................................................ 34
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF GENERAL PARTNER, LIMITED PARTNER
AND THE SHAREHOLDERS ................................................. 34
5.1. Authority ........................................................... 35
5.2. No Brokers .......................................................... 35
5.3. Agreements .......................................................... 35
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER AND NEXTERA ................. 36
6.1. Organization ........................................................ 36
6.2. Subsidiaries ........................................................ 36
6.3. Authority ........................................................... 37
6.4. Litigation .......................................................... 38
6.5. No Brokers .......................................................... 38
6.6. Membership Interests of Nextera ..................................... 38
6.7. Operating Agreements ................................................ 38
6.8. Financial Statements ................................................ 38
6.9. Taxes ............................................................... 39
6.10. Absence of Certain Changes or Events ............................... 41
6.11. Insurance .......................................................... 42
6.12. Compliance with Laws ............................................... 43
6.13. Proprietary Rights ................................................. 43
6.14. Indebtedness ....................................................... 44
ARTICLE VII. COVENANTS .......................................................... 44
7.1. Further Assurances .................................................. 44
7.2. Conduct of Business ................................................. 44
7.3. No Solicitation of Other Offers ..................................... 46
7.4. Notification of Certain Matters ..................................... 47
7.5. Employee Matters .................................................... 47
7.6. Option Pool ......................................................... 49
7.7. Additional Units .................................................... 50
7.8. Conduct of the Business Following the Closing ....................... 50
7.9. Permitted Distribution .............................................. 50
7.10. Preservation of Confidentiality .................................... 50
7.11. No Distribution of Nextera Class A Units ........................... 51
7.12. Buyer Efforts on Financing and Qualifications ...................... 51
7.13. Annual Incentive Plan .............................................. 51
7.14. Senior Leadership Team of Nextera .................................. 51
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ARTICLE VIII. CONDITIONS TO SELLER'S OBLIGATIONS ................................ 51
8.1. Representations, Warranties and Covenants ........................... 52
8.2. No Actions or Court Orders .......................................... 52
8.3. Consents ............................................................ 52
8.4. Material Changes .................................................... 52
8.5. Approval of Seller's Counsel ........................................ 52
8.6. Opinions of Counsel ................................................. 52
8.7. Assumption Document ................................................. 53
8.8. Escrow Agreement .................................................... 53
8.9. Employment Agreements ............................................... 53
8.10. Corporate Documents ................................................ 53
8.11. Operating Agreement of Nextera ..................................... 53
8.12. Operating Agreement of Buyer ....................................... 53
8.13. Deliveries ......................................................... 53
8.14. Exchange Agreement ................................................. 53
8.15. Annual Incentive Plan .............................................. 53
8.16. Sibson Canada ...................................................... 53
8.17. PNC Bank ........................................................... 54
ARTICLE IX. CONDITIONS TO BUYER'S AND NEXTERA'S OBLIGATIONS ..................... 54
9.1. Representations, Warranties and Covenants ........................... 54
9.2. Consents; Regulatory Compliance and Approval ........................ 54
9.3. No Actions or Court Orders .......................................... 54
9.4. Approval of Nextera's Counsel ....................................... 55
9.5. Opinions of Counsel ................................................. 55
9.6. Material Changes .................................................... 55
9.7. Partnership Documents ............................................... 55
9.8. Corporate Documents ................................................. 55
9.9. Conveyancing Documents; Release of Encumbrances ..................... 55
9.10. Name Change ........................................................ 55
9.11. Permits ............................................................ 55
9.12. Escrow Agreement ................................................... 56
9.13. Employment Agreements .............................................. 56
9.14. Third-Party Financing .............................................. 56
9.15. Payment of Employee Promissory Notes ............................... 56
9.16. Deliveries ......................................................... 56
9.17. Exchange Agreement ................................................. 56
9.18. Sibson Canada ...................................................... 56
9.19. PNC Bank ........................................................... 56
ARTICLE X. CONSENTS TO ASSIGNMENT ............................................... 56
10.1. Consents to Assignment ............................................. 56
ARTICLE XI. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING ........................ 57
11.1. Collection of Accounts Receivable and Letters of Credit ............ 57
11.2. Books and Records; Tax Matters ..................................... 57
11.3. Survival of Representations, Etc ................................... 58
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ARTICLE XII. INDEMNIFICATION .................................................... 58
12.1. Indemnification by the Selling Parties ............................. 58
12.2. Limitations on Indemnification by the Selling Parties .............. 59
12.3. Indemnification by Buyer and Nextera ............................... 60
12.4. Limitation on Indemnification by Buyer and Nextera ................. 60
12.5. Notice; Defense of Claims .......................................... 61
12.6. Satisfaction of Selling Party Indemnification Obligations .......... 61
12.7. Use of Nextera Class A Units ....................................... 62
12.8. Bulk Sales ......................................................... 62
12.9. Exclusive Remedy ................................................... 62
ARTICLE XIII. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED ....................... 62
13.1. Termination ........................................................ 62
13.2. Effect of Termination .............................................. 63
ARTICLE XIV. MISCELLANEOUS ...................................................... 63
14.1. Fees and Expenses .................................................. 63
14.2. Governing Law ...................................................... 63
14.3. Notices ............................................................ 63
14.4. Entire Agreement ................................................... 67
14.5. Assignability; Binding Effect ...................................... 68
14.6. Captions and Gender ................................................ 68
14.7. Execution in Counterparts .......................................... 68
14.8. Amendments ......................................................... 68
14.9. Publicity and Disclosures .......................................... 68
14.10. Specific Performance .............................................. 68
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated as of August 31, 1998, is
by and among SC/NE, LLC, a newly formed Delaware limited liability company and a
wholly owned subsidiary of Nextera ("Buyer"), Nextera Enterprises, L.L.C., a
Delaware limited liability company and the sole member of Buyer ("Nextera"),
Sibson & Company, L.P., a Delaware limited partnership (the "Seller"), Sibson &
Company, Inc., a Delaware corporation and the sole general partner of Seller
(the "General Partner"), SC2, Inc., a Delaware corporation and the sole limited
partner of Seller (the "Limited Partner"), the holders of the capital stock of
General Partner identified on Exhibit A as such (the "GP Shareholders"), the
holders of the capital stock of Limited Partner identified on Exhibit A as such
(the "LP Shareholders") (the GP Shareholders and LP Shareholders are
collectively referred to herein as the "Shareholders").
W I T N E S S E T H
WHEREAS, Seller owns certain assets which it uses in the conduct
of the Business (as defined below);
WHEREAS, Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, the Assets (as defined below), upon the terms and
subject to the conditions of this Agreement;
WHEREAS, General Partner and Limited Partner own of record and
beneficially all of the issued and outstanding general and limited partnership
interests of Seller, respectively, and desire to have Seller sell the Assets to
Buyer, upon the terms and subject to the conditions of this Agreement;
WHEREAS, the GP Shareholders own of record and beneficially all
of the issued and outstanding capital stock of General Partner and desire to
have General Partner direct Seller to sell the Assets to Buyer upon the terms
and subject to the conditions of this Agreement;
WHEREAS, the LP Shareholders own of record and beneficially all
of the issued and outstanding capital stock of Limited Partner and desire to
have the Limited Partner consent to the sale of the Assets by Seller to Buyer
upon the terms and subject to the conditions of this Agreement;
WHEREAS, Nextera as the sole member of Buyer, desires to issue
membership interests consisting of Nextera Units (as defined below) pursuant to,
and subject to the terms and conditions of, this Agreement; and
NOW THEREFORE, in consideration of the respective covenants and
promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
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ARTICLE I.
DEFINITIONS
1.1. Defined Terms. As used herein, the terms below shall have
the following meanings. Any of such terms, unless the context otherwise
requires, may be used in the singular or plural, depending upon the reference.
"Action" shall mean any action, claim, suit, litigation,
proceeding, arbitral action, governmental audit, criminal prosecution,
governmental investigation or unfair labor practice charge or complaint.
"affiliate" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
"Assets" shall mean all of Seller's right, title and interest in
and to the business, properties, assets and rights of any kind, whether tangible
or intangible, real or personal and constituting, or used or useful in
connection with, or related to, the Business owned by Seller or in which Seller
has any interest, including without limitation all of Seller's right, title and
interest in the following:
(a) all accounts and notes receivable (whether current or
noncurrent), refunds, deposits, prepayments or prepaid expenses (including
without limitation any prepaid insurance premiums) of Seller;
(b) all cash and cash equivalents held by Seller;
(c) all equity interests in other entities held by Seller
(including, without limitation, Seller's interest in Sibson Europe (as
hereinafter defined), Sibson UK (as hereinafter defined) and Sibson & Company
(Pty.) Ltd., a Republic of South Africa corporation);
(d) all Contract Rights (including, without limitation, rights
with respect to (i) the split-dollar life insurance policies described on
Schedule 4.23, (ii) the Sibson & Company, L.P. Profit Sharing Plan and the trust
maintained in connection therewith and (iii) license agreements between Seller
and Sibson Canada Inc., Sibson UK, ▇▇▇▇▇▇ & Banks Reward Consulting (PTY), and
Sibson & Company Limited), to the extent transferable;
(e) all Leases;
(f) all Owned Real Property;
(g) all Leasehold Estates;
(h) all Leasehold Improvements;
(i) all Fixtures and Equipment;
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(j) all Books and Records;
(k) all Proprietary Rights relating to the Business;
(l) all Permits, to the extent transferable;
(m) all Insurance Policies, to the extent assignable;
(n) all available supplies, sales literature, promotional
literature, customer, supplier and distributor lists, art work, display units,
telephone and fax numbers and purchasing records related to the Business;
(o) all rights under or pursuant to all warranties,
representations and guarantees made by suppliers in connection with the Assets
or services furnished to Seller pertaining to the Business or affecting the
Assets, to the extent such warranties, representations and guarantees are
assignable;
(p) all deposits and prepaid expenses of Seller;
(q) all claims, causes of action, causes in action, rights of
recovery and rights of set-off of any kind, against any person or entity,
including without limitation any liens, security interests, pledges or other
rights to payment or to enforce payment in connection with service performed or
products delivered by Seller on or prior to the Closing Date; and
(r) all of the goodwill of Seller;
but excluding therefrom the Excluded Assets.
"Books and Records" shall mean, to the extent in Seller's
possession, (a) all records and lists of Seller pertaining to the Assets, (b)
all records and lists pertaining to the Business, customers, suppliers or
personnel of Seller, (c) all product, business and marketing plans of Seller and
(d) all books, ledgers, files, reports, plans, drawings and operating records of
every kind maintained by Seller, but excluding the originals of Seller's minute
books, stock or partnership interest books and tax returns.
"Business" shall mean all of Seller's and its Subsidiaries'
current operations including its business of management and human resources
consulting.
"Buyer Operating Agreement" shall mean the Limited Liability
Company Agreement of SC/NE, LLC of even date herewith, a true and correct copy
of which is attached as Exhibit L hereto.
"Closing Date" shall mean August __, 1998, or such other date as
Buyer and Seller shall mutually agree upon.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder.
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"Contract" shall mean any agreement, contract, note, loan,
evidence of indebtedness, purchase order, letter of credit, indenture, security
or pledge agreement, franchise agreement, undertaking, covenant not to compete,
employment agreement, license agreement, instrument, obligation or commitment to
which Seller is a party or is bound and which relates to the Business or the
Assets, whether oral or written, but excluding all Leases.
"Contract Rights" shall mean all of Seller's rights and
obligations under the Contracts including, without limitation, those Contracts
listed on Schedule 4.9.
"Copyrights" shall mean registered copyrights, copyright
applications and unregistered copyrights.
"Court Order" shall mean any judgment, decision, consent decree,
injunction, ruling or order of any federal, state or local court or governmental
agency, department or authority that is binding on any person or its property
under applicable law.
"Damages" shall mean damages, Liabilities, losses, Taxes, fines,
penalties, costs, and expenses (including, without limitation, reasonable fees
of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts paid in investigation, defense or
settlement of the foregoing) but excluding consequential or special damages.
"Default" shall mean (1) a breach of or default under any
Contract or Lease, (2) the occurrence of an event that with the passage of time
or the giving of notice or both would constitute a breach of or default under
any Contract or Lease, or (3) the occurrence of an event that with or without
the passage of time or the giving of notice or both would give rise to a right
of termination, renegotiation or acceleration under any Contract or Lease.
"Disclosure Schedule" shall mean a schedule and letters executed
and delivered by the Seller to Buyer as of the date hereof which sets forth the
exceptions to the representations and warranties contained in Article IV hereof
and certain other information called for by this Agreement. Unless otherwise
specified or the context otherwise requires, each reference in this Agreement to
any numbered schedule is a reference to that numbered schedule which is included
in the Disclosure Schedule.
"Encumbrance" shall mean any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, conditional sales
agreement, or other similar right of third parties, whether voluntarily incurred
or arising by operation of law, and includes, without limitation, any agreement
to give any of the foregoing in the future, and any contingent sale or other
title retention agreement or lease in the nature thereof.
"Escrow Agent" shall have the meaning assigned to such term in
the Escrow Agreement attached hereto as Exhibit B.
"Excluded Assets," notwithstanding any other provision of this
Agreement, shall mean the following assets of Seller which are not to be
acquired by Buyer hereunder:
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(a) all Permits, to the extent not transferable;
(b) all claims, causes of action, chooses in action, rights of
recovery and rights of set-off of any kind against any person or entity arising
out of or relating to the Excluded Liabilities;
(c) all rights under this Agreement and the Escrow Agreement and
other agreements related to this Agreement; and
(d) minute books and other partnership records.
"Facility Leases" shall mean all of the leases described on
Schedule 4.6.
"Fixtures and Equipment" shall mean all of the furniture,
fixtures, furnishings, machinery, spare parts, supplies, equipment and other
tangible personal property owned by Seller and used in connection with the
Business, wherever located and including any such Fixtures and Equipment in the
possession of any of Seller's suppliers, including all warranty rights with
respect thereto.
"Former Facility" shall mean each plant, office, manufacturing
facility, store, warehouse, improvement, administrative building and all real
property and related facilities that was owned, leased or operated by Seller at
any time prior to the date hereof.
"GP Shareholders" shall mean those individuals identified as such
on Exhibit A hereto.
"Insurance Policies" shall mean the insurance policies related to
the Assets listed on Schedule 4.24.
"IRS" shall mean the Internal Revenue Service.
"knowledge of Nextera" shall mean the actual knowledge of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or that which could be learned by any such
individual upon reasonable investigation.
"knowledge of Seller" shall mean the actual knowledge of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or that which could be learned by any such individual
upon reasonable investigation.
"Leased Real Property" shall mean all leased plants, offices,
manufacturing facilities, stores, warehouses, improvements, administration
buildings, and all real property and related facilities which are identified or
listed on Schedule 4.6 attached hereto.
"Leasehold Estates" shall mean all of Seller's rights and
obligations as lessee under the Leases.
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"Leasehold Improvements" shall mean all leasehold improvements
situated in or on the Leased Real Property and owned by Seller.
"Leases" shall mean all of the existing leases with respect to
the personal or real property of Seller including, without limitation, those
Leases listed on Schedule 4.6 and/or Schedule 4.9.
"Liabilities" shall mean any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, guaranty or endorsement of
or by any person of any type, whether accrued, absolute, contingent, matured,
unmatured or other.
"LP Shareholders" shall mean those individuals identified as such
on Exhibit A hereto.
"material adverse effect" or "material adverse change" shall mean
with respect to Seller, the Business or the Assets any material adverse effect
or change in the condition (financial or other), business, results of
operations, prospects, assets, Liabilities or operations of the Seller, the
Business and/or the Assets taken as a whole or on the ability of Seller to
consummate the transactions contemplated hereby, or any event or condition which
would, with the passage of time, constitute a "material adverse effect" or
"material adverse change." "Material adverse effect" or "material adverse
change" shall mean with respect to Nextera any material adverse effect or change
in the condition (financial or other), business, results of operations,
prospects, assets, liabilities or operations of Nextera and its Subsidiaries
taken as a whole or on the ability of Nextera or Buyer to consummate the
transactions contemplated hereby, or any event or condition which would, with
the passage of time, constitute a "material adverse effect" or "material adverse
change."
"Nextera Class A Units" shall mean the Class A Common Units of
Nextera, representing membership interests in Nextera.
"Nextera Disclosure Schedule" shall mean a schedule and letters
executed and delivered by Nextera and Buyer to the Selling Parties as of the
date hereof which sets forth the exceptions to the representations and
warranties contained in Article VI hereof and certain other information called
for by this Agreement. Unless otherwise specified or the context otherwise
requires, each reference in this Agreement to any numbered schedule is a
reference to that numbered schedule which is included in the Nextera Disclosure
Schedule.
"Nextera Operating Agreement" shall mean the Second Amended and
Restated Limited Liability Company Agreement of Nextera Enterprises, L.L.C.
dated as of May 1, 1998, as amended, a true and correct copy of which is
attached as Exhibit M hereto.
"ordinary course of business" or "ordinary course" or any similar
phrase shall mean the ordinary course of the Business and consistent with
Seller's past practice.
"Permits" shall mean all licenses, permits, franchises,
approvals, authorizations, consents or orders of, or filings with, any
governmental authority, whether foreign, federal, state or local, necessary for
the past or present conduct of, or relating to the operation of the Business.
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"Permitted Lien" shall mean: (i) materialmen's, mechanics',
carriers', workmen's, repairmen's or other like liens arising in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings, (ii) liens for current taxes not yet due or
any taxes being contested in good faith by appropriate proceedings, (iii) liens
to secure performance of statutory obligations, (iv) any lien securing any
purchase money indebtedness incurred in the ordinary course of business and
reflected in Seller's financial statements, (v) liens of lessors under Leases,
(vi) pledges or deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation; (vii) pledges or deposits securing bids, tenders, contracts (other
than contracts for the payment of money) or leases to which Seller or any of its
Subsidiaries is a party as lessee made in the ordinary course of business;
(viii) deposits securing public or statutory obligations of Seller or any of its
Subsidiaries; (ix) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which Seller or any of its Subsidiaries is a party; (x)
zoning restrictions on the use of real property or other minor irregularities in
title (including leasehold title) thereto, so long as the same do not materially
impair the use of leases or leasehold estates; (xi) any requirement that consent
be obtained or notice be given in connection with the assignment of contracts to
Buyer hereunder and the consummation of the other transactions contemplated
hereby; and (xii) liens under Seller's revolving credit facility.
"Proprietary Rights" shall mean all Copyrights, Trademarks,
patents, technology rights and licenses, computer software (including without
limitation any source or object codes therefor or documentation relating
thereto), trade secrets, franchises, know-how, inventions, designs,
specifications, plans, drawings and intellectual property rights.
"Regulations" shall mean any laws, statutes, ordinances,
regulations, rules, court decisions, agency guidelines, principles of law and
orders of any foreign, federal, state or local government and any other
governmental department or agency, including without limitation Environmental
Laws, energy, motor vehicle safety, public utility, zoning, building and health
codes, and occupational safety and health and laws respecting employment
practices, employee documentation, terms and conditions of employment and wages
and hours.
"Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
"Selling Party" shall mean any of Seller, General Partner,
Limited Partner and the Shareholders (collectively, Seller, General Partner,
Limited Partner and the Shareholders are referred to herein as the "Selling
Parties")
"Shareholders" shall mean the GP Shareholders and the LP
Shareholders.
"Subsidiary" shall mean (a) any corporation in an unbroken chain
of corporations beginning with Seller or Nextera, as applicable, if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain, (b) any partnership in
which Seller or Nextera, as applicable, is a general partner, (c) any limited
liability company in which Seller or Nextera, as applicable, is a managing
member, or (d) any partnership
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or limited liability company in which Seller or Nextera, as applicable,
possesses a 50% or greater interest in the total capital or total income of such
partnership.
"Tax" shall mean all governmental taxes, charges, fees, levies or
other assessments, including, without limitation, all net income, gross income,
gross receipts, sales, use, VAT, service, service use, ad valorem, transfer,
franchise, profits, license, lease, withholding, social security, payroll,
employment, excise, estimated, severance, stamp, recording, occupation, real and
personal property, gift, windfall profits or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary, combined or other basis, together with any interest,
fines, penalties, additions to tax or other additional amounts imposed thereon
or with respect thereto imposed by any taxing authority (domestic or foreign).
"Trademarks" shall mean registered trademarks, registered service
marks, trademark and service ▇▇▇▇ applications and unregistered trademarks and
service marks.
1.2. Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
Term Section
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Arbitrator 2.5(b)
Assumed Liabilities 2.2
Assumption Document 3.2(c)
Audited Financial Statements 6.8(a)
Base Balance Sheet 4.7(a)
Base Balance Sheet Date 4.7(a)
Clients 4.19
Closing 3.1
Closing Working Capital 2.5(a)
Customers 4.19
Employee Program 4.23(l)
Employment Agreement 9.13
Environmental Law 4.27(e)
Equity Participation Plan 7.6
ERISA 4.23(c)
ERISA Affiliate 4.23(l)
Escrow Amount 2.4(b)
Escrow Agreement 2.4(b)
Estimated Working Capital 2.5(a)
Exchange Agreement 4.18
Excluded Liabilities 2.3
Excluded Liability Claims 12.1
Facility Lease 4.6(a)
Financial Statements 4.7(a)
Fraud Claims 12.1(a)
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Term Section
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GAAP 2.5
General Claims 12.1(e)
GP Shareholders' Agreement 5.4
Hazardous Material 4.27(e)
Hazardous Waste 4.27(e)
Individual Fraud Claims 12.1
Individual General Claims 12.1
IRS 4.23(b)
LP Shareholders' Agreement 5.4
Minimum Working Capital 2.5(a)
Nextera Balance Sheet 6.8
Nextera Financial Statements 6.8(c)
Ownership Claims 12.1(b)
Partnership Agreement 4.1(a)
Permitted Distribution 7.9
Pro Forma Financial Statements 6.8(a)
Purchase Price 2.4(a)
Principals 8.9
Rehired Employee 7.5(a)
Shareholder Representative 14.8
Sibson Canada 8.16
Sibson Europe 2.4(c)
Sibson UK 4.3
Tax Claims 12.1(c)
Tax Return 4.22(a)
Working Capital Retention 2.5(a)
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1. Sale of Assets. Upon the terms and subject to the conditions
contained herein, at the Closing, Seller will sell, convey, transfer, assign and
deliver to Buyer, and Buyer will purchase and acquire from Seller, the Assets,
free and clear of all Encumbrances other than the Permitted Liens.
2.2. Assumption of Liabilities. Upon the terms and subject to the
conditions contained herein, at the Closing, Buyer shall assume and agree to pay
when due, perform and discharge in accordance with the terms thereof (a) all
Liabilities of Seller arising out of occurrences or circumstances prior to the
Closing, other than the Excluded Liabilities, (b) any Liabilities arising after
the Closing related to the Business, the Assets, the Contracts and/or the
Leases, other than the Excluded Liabilities and (c) Liabilities arising from the
failure to obtain necessary waivers, consents or approvals with respect to the
Contracts and Leases, including without limitation, consents with respect to the
items described on Schedule 7.1 (collectively, the "Assumed Liabilities").
15
2.3. Excluded Liabilities. Notwithstanding any other provision of
this Agreement, Buyer shall not assume, or otherwise be responsible for, (a) any
Liabilities of any Selling Party under this Agreement, the Exchange Agreement,
the Escrow Agreement and the other agreements and transactions contemplated
hereby and (b) any Liabilities of Seller or any Subsidiary of Seller in respect
of any Tax, whether liquidated or unliquidated, or known or unknown, whether
arising out of occurrences, in the case of Seller, prior to, at or after the
date hereof and, in the case of any Subsidiary, prior to, at or after the date
hereof until the Closing Date (the "Excluded Liabilities").
2.4. Purchase Price.
(a) Purchase Price of Assets. In consideration of the sale,
transfer, assignment, conveyance and delivery of an undivided eighty-five
percent (85%) interest in the Assets by Seller to Buyer and in reliance upon the
representations and warranties of Seller herein contained and made at the
Closing and upon the terms and subject to the satisfaction or waiver by the
party entitled thereto of all of the conditions set forth herein, Buyer agrees
that at the Closing, it will pay to Seller the aggregate amount of Thirty Four
Million Seven Hundred Sixty Three Thousand Nine Hundred Dollars ($34,763,900)
(the "Purchase Price") (to be paid by wire transfer of immediately available
funds) and shall assume the Assumed Liabilities pursuant to this Agreement.
The Purchase Price shall be allocated among the Assets in the
manner required by Section 1060 of the Code and regulations thereunder. Exhibit
C attached hereto sets forth the amount and form of the Purchase Price allocable
to the various Assets. Buyer and Seller (or General Partner and Limited Partner
on behalf of Seller) agree to each prepare and file on a timely basis with the
Internal Revenue Service substantially identical initial and supplemental
Internal Revenue Service Forms 8594 "Asset Acquisition Statements Under Section
1060" consistent with Exhibit C and which gives effect to any working capital
adjustment determined in accordance with Section 2.5 hereof and to file all
relevant Tax Returns in a manner consistent therewith.
(b) Contribution of Assets. In consideration of the contribution
of an undivided fifteen percent (15%) interest in the Assets by Seller to Buyer
and in reliance upon the representations and warranties of Seller herein
contained and made at the Closing and upon the terms and subject to the
satisfaction or waiver of all of the conditions set forth herein, Buyer agrees
that at the Closing, it will (i) deliver to Seller the aggregate amount of
1,828,539 Nextera Class A Units issued by Nextera in Seller's name pursuant to
the Nextera Operating Agreement and (ii) deliver to the Escrow Agent 784,548
Nextera Class A Units (the "Escrow Amount") issued by Nextera in Seller's name
pursuant to and in accordance with the terms of the Nextera Operating Agreement
and to be held in the manner described in the Escrow Agreement to be executed in
substantially the form attached hereto as Exhibit B. The parties acknowledge
that the value of the Nextera Class A Units is $2.50 per unit.
(c) Purchase Price of Sibson Europe. In consideration of the
sale, transfer, assignment, conveyance and delivery of the one percent (1%)
membership interest in Sibson Europe LLC, a Delaware limited liability company
("Sibson Europe") by General Partner to Buyer and in reliance on the
representations and warranties of General Partner herein contained and made at
the Closing and upon the terms and subject to the satisfaction of all of the
conditions
16
set forth herein, Buyer agrees that at the Closing, it will pay to General
Partner the aggregate amount of One Hundred Dollars ($100).
2.5. Working Capital.
(a) Working Capital Adjustment. The amount of the cash payment to
be made by Buyer for the Assets at the Closing is premised upon Seller
delivering to Buyer at least Three Million One Hundred Thousand Dollars
($3,100,000) of working capital determined in accordance with generally accepted
accounting principles ("GAAP") consistently applied (except as separately agreed
in writing by the parties), at the Closing (such amount being the "Minimum
Working Capital"). No later than two (2) business days prior to the Closing
Date, Seller shall advise Buyer and Nextera of its estimate of working capital
to be delivered at the Closing (the "Estimated Working Capital"). Without
limiting other rights that Buyer and Nextera may have under this Agreement, if
the Estimated Working Capital is less than the Minimum Working Capital, the cash
payment to Seller for the Assets at the Closing shall be reduced by the amount
of such shortfall. Seller shall retain from the Purchase Price, and not
distribute to its General Partner or Limited Partner, the sum of Three Hundred
Thousand Dollars ($300,000) (the "Working Capital Retention") until such time as
the Closing Working Capital (as defined below) has been determined and
reconciled pursuant to this Section 2.5. Within thirty (30) days following the
Closing, Seller shall determine the actual working capital as of the Closing
Date (the "Closing Working Capital") and promptly notify Buyer of such amount.
If the Closing Working Capital is less than the Estimated Working Capital, and
would have resulted in a reduced or further reduced cash payment, as applicable,
to Seller for the Assets at the Closing, Seller shall promptly pay to Buyer the
difference (the "Working Capital Adjustment").
(b) Disputed Closing Working Capital. If Buyer shall disagree
with the amount determined to be the Closing Working Capital, it shall notify
Seller in writing of such disagreement within fifteen (15) business days of its
receipt of the determination of Closing Working Capital. Buyer and Seller shall
use their commercially reasonable efforts for a period of thirty (30) days
following the notice of disagreement to resolve any disagreement. If at the end
of such period, Buyer and Seller are unable to resolve the disagreement, a
mutually agreed upon independent public accounting firm (the "Arbitrator") shall
be retained to make a final and binding determination of the actual Closing
Working Capital, at which ▇▇▇▇ ▇▇▇▇▇▇ shall promptly pay to Buyer the Working
Capital Adjustment, if any. The determination of the Arbitrator shall be final,
binding and conclusive on the parties. The fees and expenses of the Arbitrator
shall be borne equally by Buyer and Seller.
2.6. Closing Costs; Transfer Taxes and Fees. Seller and Nextera
shall each be responsible for one-half of any documentary and transfer taxes and
any sales, use or other taxes imposed by reason of the transfers of the Assets
provided hereunder and any deficiency, interest or penalty asserted with respect
thereto. Seller and Nextera shall each pay one-half of the fees and costs of
recording or filing all applicable conveyancing instruments described in Section
3.2(a). Nextera shall pay all costs of applying for new Permits and obtaining
the transfer of existing Permits which may be lawfully transferred.
17
ARTICLE III.
CLOSING
3.1. Closing. The Closing of the transactions contemplated herein
(the "Closing") shall be held at a mutually agreeable location in New York, New
York on August __, 1998 or at such other date and location as may be mutually
agreed upon by the parties.
3.2. Conveyances at Closing.
(a) Instruments and Possession. Subject to the terms and
conditions contained herein, to effect the sale and transfer referred to in
Section 2.1 hereof, Seller will, at the Closing, execute and deliver or cause to
be executed and delivered to Buyer:
(i) one or more bills of sale, in the form attached hereto
as Exhibit D, conveying in the aggregate all of Seller's owned personal property
included in the Assets;
(ii) subject to Section 10.1, Assignments and Assumptions
of Facility Leases in the form attached hereto as Exhibit E with respect to the
Facility Leases or in such other form as may be required by the lessor or
sublessor thereunder and which is reasonably acceptable to Nextera;
(iii) subject to Section 10.1, Assignments and Assumptions
of Contracts and Leases (other than Facility Leases), each in the form of
Exhibit F attached hereto, with respect to the Contracts and Leases (other than
any Facility Lease);
(iv) letters from each of Seller and General Partner to
the Delaware Secretary of State giving permission to use the names "Sibson" and
"Sibson & Company" to SC/NE, LLC in the forms attached hereto as Exhibit K;
(v) assignment to, and assumption by, Buyer with respect
to the one percent (1%) membership interest in Sibson Europe owned by General
Partner; and all other required documents or actions to have Buyer admitted as
the sole member of Sibson Europe;
(vi) such other instruments as shall be reasonably
requested by Buyer to vest in Buyer title in and to the Assets in accordance
with the provisions hereof.
(b) Transfer of Cash and Cash Equivalents. Subject to the terms
and conditions contained herein, Seller will, as the Closing, transfer and
deliver to Buyer all cash and cash equivalents of the Business.
(c) Assumption Documents. Upon the terms and subject to the
conditions contained herein, Buyer will, at the Closing, execute and deliver or
cause to be delivered to Seller;
(i) an instrument of assumption substantially in the form
attached hereto as Exhibit G, evidencing Buyer's assumption, pursuant to Section
2.2, of the Assumed Liabilities (the "Assumption Document");
18
(ii) subject to Section 10.1, Assignments and Assumptions
of Lease in the form attached hereto as Exhibit E with respect to each Facility
Lease, or such other form as may be required by the lessor or sublessor
thereunder and which is reasonably acceptable to Nextera;
(iii) subject to Section 10.1, Assignments and Assumptions
of Contracts and Leases (other than Facility Leases), each in the form of
Exhibit F attached hereto, with respect to such Contracts and Leases;
(iv) assignment to, and assumption by, Buyer with respect
to the one percent (1%) membership interest in Sibson Europe owned by General
Partner and such other required documents or actions to have Buyer admitted as
the sole member of Sibson Europe;
(v) an assignment to, and assumption by, Buyer of Seller's
Revolving Credit Facility with PNC Bank, National Association, and all
indebtedness thereunder (which shall include a release of Seller and its
Subsidiaries from all obligations thereunder), in the form of Exhibit S attached
hereto; and
(vi) such other instruments as shall be reasonably
requested by Seller to effectuate the assumption of Assumed Liabilities by Buyer
in accordance with the provisions hereof.
(d) Form of Instruments. To the extent that a form of any
document to be delivered hereunder is not attached as an Exhibit hereto, such
documents shall be in form and substance, and shall be executed and delivered in
a manner, reasonably satisfactory to Buyer and Seller.
(e) Purchase Price and Escrow Amount. Subject to the terms of
this Agreement, Buyer shall deliver (i) the Purchase Price and Nextera Class A
Units described in Section 2.4 less the Escrow Amount to the Seller and (ii) the
Escrow Amount to the Escrow Agent.
(f) Certificates; Opinions. Seller and Buyer shall deliver or
cause to be delivered the certificates, opinions of counsel and other matters
described in Articles VIII and IX.
(g) Consents. Subject to Section 10.1, Seller shall deliver all
third party consents described on Schedule 7.1 hereto.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As a material inducement to Buyer and Nextera to enter into this
Agreement and consummate the transactions contemplated hereby, Seller hereby
represents and warrants to Buyer and Nextera as follows:
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4.1. Organization and Qualification.
(a) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware with
partnership power and authority to own or lease its properties and to conduct
its business in the manner and in the places where such properties are owned or
leased or such business is currently conducted or proposed to be conducted.
Copies of the Certificate of Limited Partnership and Agreement of Limited
Partnership of Seller, and all amendments thereto, heretofore delivered to
Nextera are accurate and complete as of the date hereof. Seller is not in
violation of any term of the Certificate of Limited Partnership and Agreement of
Limited Partnership of Seller (the "Partnership Agreement"). Except as set forth
on Schedule 4.1. Seller is duly qualified or authorized to do business as a
foreign limited partnership and is in good standing under the laws of each
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified or authorized would not have a material adverse
effect.
(b) General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is currently conducted or proposed to be conducted.
Copies of the Certificate of Incorporation and Bylaws of General Partner, and
all amendments thereto, heretofore delivered to Nextera are accurate and
complete as of the date hereof. General Partner is not in violation of any term
of its Certificate of Incorporation or Bylaws. Except as set forth on Schedule
4.1, General Partner is duly qualified or authorized to do business as a foreign
corporation under the laws of each jurisdiction in which the conduct of its
business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified or authorized would
not have a material adverse effect.
(c) Limited Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is currently conducted or proposed to be conducted.
Copies of the Certificate of Incorporation and Bylaws of Limited Partner, and
all amendments thereto, heretofore delivered to Nextera are accurate and
complete as of the date hereof. Limited Partner is not in violation of any term
of its Certificate of Incorporation or Bylaws. Limited Partner is duly qualified
or authorized to do business as a foreign corporation under the laws of each
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified or authorized would not have a material adverse
effect.
4.2. Capitalization; Beneficial Ownership.
(a) The authorized equity of Seller consists solely of
partnership interests issued to General Partner and Limited Partner and, other
than as set forth on Schedule 4.2, there are no outstanding options, warrants,
rights, commitments, preemptive rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into, any additional
20
equity of any class of Seller. Except as set forth on Schedule 4.2, there are no
voting trusts, voting agreements, proxies or other agreements, instruments or
undertakings with respect to the voting of the equity interests of Seller.
(b) The authorized capital stock of General Partner consists of
30,000 shares of common stock of which 13,788 shares are duly and validly
issued, and outstanding, and are fully paid and non-assessable. Each GP
Shareholder is the record owner of the amount of shares of common stock of
General Partner set forth opposite such GP Shareholder's name on Schedule 4.2
hereto. Other than as set forth on Schedule 4.2, there are no outstanding
options, warrants, rights, commitments, preemptive rights or agreements of any
kind for the issuance or sale of, or outstanding securities convertible into,
any additional equity of any class of General Partner. Except as set forth on
Schedule 4.2, there are no voting trusts, voting agreements, proxies or other
agreements, instruments or undertakings with respect to the voting of the
capital stock of General Partner.
(c) The authorized capital stock of Limited Partner consists of
30,000 shares of common stock of which 3,167 shares are duly and validly issued,
and outstanding, and are fully paid and non-assessable. Each LP Shareholder is
the record owner of the amount of shares of common stock of Limited Partner set
forth opposite such GP Shareholder's name on Schedule 4.2 hereto. Other than as
set forth on Schedule 4.2, there are no outstanding options, warrants, rights,
commitments, preemptive rights or agreements of any kind for the issuance or
sale of, or outstanding securities convertible into, any additional equity of
any class of Limited Partner. Except as set forth on Schedule 4.2, there are no
voting trusts, voting agreements, proxies or other agreements, instruments or
undertakings with respect to the voting of the capital stock of Limited Partner.
4.3. Subsidiaries. Except as set forth on Schedule 4.3, other
than Sibson Europe and Sibson UK Limited, a private limited company organized
and existing under the laws of England and Wales ("Sibson UK"), Seller has no
Subsidiaries and does not own an equity interest in any other corporation or
business organization. Together, Seller and General Partner own 100% of the
membership interests of Sibson Europe, with Seller owning 99% and General
Partner owning 1% of the membership interests of Sibson Europe, respectively.
Sibson Europe owns 100% of the outstanding capital stock of Sibson UK. Other
than as set forth on Schedule 4.3, there are no outstanding options, warrants,
rights, commitments, preemptive rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into, any additional
equity of any class of Sibson Europe or Sibson UK.
4.4. Authority. Each of Seller, General Partner and Limited
Partner has full partnership or corporate, as the case may be, right, authority
and power to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by Seller, General Partner and/or
Limited Partner, respectively, pursuant to this Agreement and to carry out the
transactions contemplated hereby or thereby. The execution, delivery and
performance by each of Seller, General Partner and Limited Partner of this
Agreement and each such other agreement, document and instrument have been duly
authorized by all necessary partnership or corporate, as the case may be, action
of each of Seller, General Partner and Limited Partner.
21
This Agreement and each agreement, document and instrument
executed and delivered by any of Seller, General Partner and/or Limited Partner
pursuant to this Agreement constitutes, or when executed and delivered will
constitute, valid and binding obligations of each of them that is a party
thereto enforceable in accordance with their terms (assuming the due
authorization, execution and delivery by the other parties thereto), subject to
the effect of any applicable bankruptcy, reorganization, insolvency, moratorium
or similar laws affecting creditors' rights generally and subject to the effect
of general principles of equity, including, without limitation, the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law.
The execution, delivery and performance by Seller, General
Partner and Limited Partner of this Agreement and each such other agreement,
document and instrument:
(i) with respect to Seller, does not and will not violate
any provision of the Certificate of Limited Partnership or Agreement of Limited
Partnership of Seller;
(ii) with respect to General Partner, does not and will
not violate any provision of the Certificate of Incorporation or Bylaws of
General Partner;
(iii) with respect to Limited Partner, does not and will
not violate any provision of the Certificate of Incorporation or Bylaws of
Limited Partner;
(iv) except as set forth in Schedule 4.4, and except for
non-compliance with any bulk sales law of any jurisdiction, does not and will
not violate any laws of the United States, or any state or other jurisdiction
applicable to any of Seller, General Partner and/or Limited Partner, or, except
as set forth on Schedule 4.4, require Seller, General Partner and/or Limited
Partner to obtain any approval, consent or waiver of, or make any filing with,
any person or entity (governmental or otherwise) that will not be obtained or
made on or prior to the Closing other than any such approval, consent or waiver
of or filing with respect to which the failure to so obtain will not have a
material adverse effect; and
(v) except as set forth in Schedule 4.4, does not and will
not result in (i) a breach of, constitute a default under, accelerate any
obligation under, or give rise to a right of termination of any indenture or
loan or credit agreement or any other agreement, contract, instrument, mortgage,
lien, lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which any of Seller, General Partner,
Limited Partner or any Subsidiary of Seller is a party or by which the property
of any of Seller, General Partner, Limited Partner or any Subsidiary of Seller
is bound or affected, or (ii) result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or similar encumbrance
on any equity interest in Seller, General Partner, Limited Partner or any
Subsidiary of Seller except, in the case of clause (i), for such breaches,
defaults, accelerations or terminations as would not, individually or in the
aggregate, have a material adverse effect.
4.5. Assets. Seller has and will transfer title to the Assets and
upon the consummation of the transactions contemplated hereby, Buyer will
acquire title to all of the Assets, free and clear of any Encumbrances other
than the Permitted Liens. The Assets include all
22
assets necessary for the conduct of the Business as currently conducted (except
for Contracts and Leases subject to Section 10.1). Schedule 4.5 contains an
accurate list by general category of all tangible Assets where the value of an
individual item exceeds $25,000 or where an aggregate of similar items exceeds
$50,000 except for tangible Assets that have been fully depreciated for tax
purposes. All tangible assets and properties which are part of the Assets and
are material to the operation of the Business are in good operating condition
and repair (normal wear and tear excepted) and are usable in the ordinary course
of business.
4.6. Real Property.
(a) Owned Real Property. Neither Seller nor any Subsidiary of
Seller owns any real property.
(b) Leases. All of the real property leased by Seller or any
Subsidiary of Seller is identified on Schedule 4.6 (herein referred to as the
"Leased Real Property" and each such lease is herein referred to as a "Facility
Lease"). True and complete copies of each Facility Lease have been delivered to
Nextera. Except as set forth on Schedule 4.6, each Facility Lease has been duly
authorized and executed by Seller or a Subsidiary of Seller, as applicable, and,
to the knowledge of Seller, the other parties thereto and is in full force and
effect and binding and enforceable against the parties thereto (assuming due
authorization, execution and delivery by the other parties thereto), subject to
the effect of any applicable bankruptcy, reorganization, insolvency, moratorium
or similar laws affecting creditors' rights generally and subject to the effect
of general principles of equity, including, without limitation, the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law. Except as set forth on
Schedule 4.6, neither Seller nor any Subsidiary of Seller is in default under
any Facility Lease, nor to the knowledge of Seller, has any event occurred
which, with notice or the passage of time, or both, would give rise to such a
default. Except as set forth on Schedule 4.6, to the knowledge of Seller, none
of the other parties to each Facility Lease is in default under such Facility
Lease and there is no event which, with notice or the passage of time, or both,
would give rise to such a default.
(c) Leases or Other Agreements. Except for Facility Leases listed
on Schedule 4.6, neither Seller nor any of its Subsidiaries holds, or is
obligated under or a party to, any leases, subleases, licenses, occupancy
agreements, options, rights, concessions or other agreements or arrangements,
written or oral, granting to any person the right to purchase, use or occupy any
real property in connection with the Business or any portion thereof or interest
in any such real property.
(d) Facility Leases and Leased Real Property. Except as set forth
on Schedule 4.6, with respect to each Facility Lease to which Seller is a party,
as lessee or sublessee, Seller has and will transfer, subject to the obtaining
on or prior to the Closing of any required consent of the lessor or sublessor,
as applicable listed on Schedule 7.1 to Buyer at the Closing an unencumbered
leasehold interest as lessee or lessor, as applicable, in the Leasehold Estate
subject to the Permitted Liens and the terms and conditions of each such
Facility Lease. With respect to any Facility Lease to which any Subsidiary of
Seller is a party, as lessee or sublessee, the actions contemplated by this
Agreement do not violate the terms or result in the termination of, or create
23
a right to terminate, such Facility Lease. To the knowledge of Seller, Seller
and each Subsidiary of Seller enjoys peaceful and undisturbed possession of all
the Leased Real Property, as applicable.
(e) Condition of Leased Real Property. To the knowledge of Seller
there are no material defects in the physical condition of any portion of the
Leased Real Property and all such Leased Real Property is in good operating
condition and repair (reasonable wear and tear excepted).
(f) Compliance with the Law. Neither Seller nor any Subsidiary of
Seller has received any written notice from any governmental authority of any
violation of any law, ordinance, regulation, license, permit or authorization
issued with respect to the Leased Real Property that has not been heretofore
corrected. Neither Seller nor any Subsidiary of Seller has received any notice
of any real estate tax deficiency or assessment nor is aware of any proposed
deficiency, claim or assessment with respect to any of the Leased Real Property,
or any pending or threatened condemnation thereof.
4.7. Financial Statements.
(a) Seller has delivered to Nextera the following financial
statements, copies of which are attached hereto as Schedule 4.7: consolidated
balance sheets of Seller as of December 31, 1996 and December 31, 1997,
consolidated statements of operations and partners' capital for its fiscal years
ended December 31, 1996 and December 31, 1997, and consolidated statements of
cash flows for its fiscal years ended December 31, 1996 and December 31, 1997,
as audited by ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, unaudited consolidated balance sheets of
Seller as of June 30, 1998 and unaudited consolidated statement of operations
and partners' capital for the interim period ended June 30, 1998 and unaudited
consolidated statement of cash flows for the interim period ended June 30, 1998
(collectively, the "Financial Statements"). The December 31, 1997 consolidated
balance sheet is hereinafter referred to as the "Base Balance Sheet" and
December 31, 1997 is hereafter referred to as the "Base Balance Sheet Date." The
Financial Statements, have been prepared in accordance with GAAP (subject to
normal year-end adjustments in the case of the unaudited Financial Statements)
applied consistently during the periods covered thereby, and said Financial
Statements in the case of the audited statements, present fairly in all material
respects the consolidated financial condition of Seller at the dates of said
statements and the consolidated results of its operations for the periods
covered thereby, and the unaudited balance sheet and statements of income,
retained earnings and cash flows for the interim period ended June 30, 1998
provided by Seller to Nextera present fairly and completely in all material
respects the information purported to be shown thereon.
(b) Seller's fiscal year 1998 operating budget dated June 4, 1998
attached hereto as Schedule 4.7 which has previously been supplied by Seller to
Nextera has been prepared in good faith on the basis of assumptions by Seller
which Seller believed were reasonable at the time of the preparation of such
budget.
(c) Except as set forth on Schedule 4.7 and for the Excluded
Liabilities, as of the date hereof, Seller and its Subsidiaries do not have any
Liabilities of any nature, whether
24
accrued, absolute or contingent (including without limitation Liabilities as
guarantor or otherwise with respect to obligations of others, or Liabilities for
any Tax due or then accrued or to become due or contingent or potential
Liabilities relating to activities of Seller or any Subsidiary of Seller or the
conduct of the Business prior to the date hereof or the Closing, as the case may
be, regardless of whether claims in respect thereof had been asserted as of such
date), except Liabilities (i) stated or adequately reserved against on the Base
Balance Sheet or the notes thereto, (ii) incurred or arising in the ordinary
course of business under Contracts, Leases, Permits and other business
arrangements described in the Disclosure Schedule (and under those Contracts,
Leases and Permits which are not required to be disclosed on the Disclosure
Schedule) none of which relates to any Default under any Contract or Lease,
breach of warranty, tort infringement or violation of any Regulation or Court
Order or arose out of any Action and none of which, individually or in the
aggregate, has or would have a material adverse effect, (iii) incurred or
arising in the ordinary course of the Business subsequent to the Base Balance
Sheet Date consistent with the terms of this Agreement (none of which relates to
any Default under any Contract or Lease, breach of warranty, tort infringement
or violation of any Regulation or Court Order or arose out of any Action) and
none of which, individually or in the aggregate, has or would have a material
adverse effect, (iv) disclosed in this Article IV or on the Disclosure Schedule
or (v) future performance obligations under Contracts and Leases, none of which
relates to any default, breach of warranty, tort infringement, or violation of
any Regulation or Court Order or arose out of any action and none of which,
individually or in the aggregate, has or would have a material adverse effect.
4.8. Absence of Certain Changes or Events. Except as provided in
this Agreement or as disclosed in Schedule 4.8, since the Base Balance Sheet
Date, there has not been any:
(a) actual or, to the knowledge of Seller, threatened material
adverse change;
(b) change in accounting methods, principles or practices of
Seller affecting the Assets, its Liabilities or the Business;
(c) revaluation by Seller or any Subsidiary of Seller of any of
the Assets, including without limitation writing down the value of inventory or
writing off of notes or accounts receivable;
(d) damage, destruction or loss (whether or not covered by
insurance) which has had or will have a material adverse effect;
(e) cancellation of any indebtedness or waiver or release of any
right or claim of Seller or any Subsidiary of Seller relating to its activities
or properties which had or will have a material adverse effect;
(f) declaration, setting aside, or payment of dividends or
distributions by Seller or any Subsidiary of Seller in respect of the
partnership interests of Seller or any redemption, purchase or other acquisition
of any of the securities of Seller or any Subsidiary of Seller;
25
(g) increase in the rate of compensation payable or to become
payable to any director, officer or other employee of Seller or any Subsidiary
of Seller or any consultant earning in excess of $100,000 per year,
Representative or agent of Seller or any Subsidiary of Seller, including without
limitation the making of any loan to, or the payment, grant or accrual of any
bonus, incentive compensation, service award or other similar benefit to, any
such person, or the addition to, modification of, or contribution to any
Employee Program, arrangement, or practice described in the Disclosure Schedule
(except for normal increases, payments, grants and accruals in the ordinary
course of business consistent with past practices and that in the aggregate have
not resulted in material increase in benefits or compensation expense of the
Seller and its Subsidiaries, taken as a whole);
(h) adverse change in employee relations which has or is
reasonably likely to have a material adverse effect on the productivity, the
financial condition, results of operations or Business of Seller or any
Subsidiary of Seller or the relationships between the employees of Seller or any
Subsidiary of Seller and the management of Seller or any Subsidiary of Seller;
(i) (x) amendment, cancellation or termination of any Contract,
commitment, agreement, Lease, transaction or Permit relating to the Assets or
the Business or (y), except for this Agreement and the other agreements entered
into in connection herewith, entry into any Contract, Lease, transaction or
Permit which is not in the ordinary course of business, including without
limitation any employment or consulting agreements, except in the cases of the
forgoing clauses (x) and (y), the amendment, cancellation or termination or the
entering into, of Contracts or commitments for the provision of consulting
services in the ordinary course of business consistent with past practices;
(j) mortgage, pledge or other encumbrance of any Assets, except
purchase money mortgages arising in the ordinary course of business and
Permitted Liens;
(k) sale, assignment or transfer of any of the Assets, except to
the extent Assets are sold or disposed of in the ordinary course of business;
(l) incurrence of indebtedness by Seller or any Subsidiary of
Seller for borrowed money or commitment to borrow money entered into by Seller
or any Subsidiary of Seller, or loans made or agreed to be made by Seller or any
Subsidiary of Seller, or indebtedness guaranteed by Seller or any Subsidiary of
Seller, except for employee advances in the ordinary course of business,
endorsements for collection or deposit in the ordinary course of business and
borrowings under Seller's existing credit facilities in the ordinary course of
business;
(m) except as provided in this Agreement or the other agreements
contemplated hereby or as described in the Disclosure Schedules, incurrence by
Seller or any of its Subsidiaries of Liabilities, except Liabilities incurred in
the ordinary course of business, or increase or change in any assumptions
underlying or methods of calculating, any doubtful account contingency or other
reserves of Seller or any of its Subsidiaries;
(n) payment, discharge or satisfaction of any Liabilities of
Seller or any Subsidiary of Seller other than the payment, discharge or
satisfaction in the ordinary course of
26
business of Liabilities set forth or reserved for on the Base Balance Sheet or
incurred in the ordinary course of business;
(o) capital expenditure by Seller or any Subsidiary of Seller in
excess of $25,000 individually or $50,000 in the aggregate, the execution of any
Lease by Seller or any Subsidiary of Seller or the incurring of any obligation
by Seller or any Subsidiary of Seller to make any capital expenditures or
execute any Lease;
(p) failure to pay or satisfy when due any Liability of Seller or
any Subsidiary of Seller, except where the failure would not have a material
adverse effect;
(q) failure of Seller or any Subsidiary of Seller to use
commercially reasonable efforts to carry on diligently the Business in the
ordinary course;
(r) disposition or lapsing of any Proprietary Rights or any
disposition or disclosure to any person of any Proprietary Rights of Seller or
any Subsidiary of Seller not theretofore a matter of public knowledge, other
than as would not have a material adverse effect; or
(s) agreement by Seller, any Subsidiary of Seller, General
Partner, Limited Partner, or, to the knowledge of Seller, any Shareholder to do
any of the things described in the preceding clauses (a) through (r) other than
as expressly provided for herein.
4.9. Contracts and Commitments.
(a) Contracts. Schedule 4.9 sets forth the following Contracts
(or descriptions thereof, in the case of oral Contracts) to which Seller, any of
its Subsidiaries, General Partner or Limited Partner is a party or by which any
of them is bound (collectively, the "Material Contracts"):
(i) Contracts not made in the ordinary course of business;
(ii) (A) Employment contracts and severance agreements to
employ or terminate present executive officers or other personnel and other
contracts with present officers, directors or shareholders of Seller or (B)
employment contracts and severance agreements that will result in the payment
by, or the creation of any Liability to pay on behalf of Buyer, Seller or any
Subsidiary of Seller any severance, termination, "golden parachute," or other
similar payments to any present or former personnel following termination of
employment or otherwise as a result of the consummation of the transactions
contemplated by this Agreement. It being understood that no such contract or
agreement needs to be listed with respect to clause (B) if no payment is to be
made or Liability exists thereunder following the Closing;
(iii) Labor or union contracts;
(iv) Distribution, franchise, license, technical
assistance, sales, commission, agency or advertising contracts in respect of the
Assets or the Business, or consultant contracts (where a third party is
providing services to Seller or any of its Subsidiaries),
27
excluding (A) software licenses that are not material to the Business and (B)
such consultant contracts involving aggregate fees of less than $25,000 per
annum and that are terminable by Seller on no more than three months notice;
(v) Contracts or agreements with a client or customer of
Seller providing for an aggregate payment by such client or customer in excess
of $75,000 which, to the knowledge of Seller, obligate Seller or one of its
Subsidiaries to indemnify such client or customer or which are in the possession
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(vi) Options with respect to any property, real or
personal, where Seller is the grantor thereunder;
(vii) Contracts (excluding real property leases) involving
actual future expenditures in excess of $150,000 in the aggregate (excluding
Liabilities for indirect expenditures such as salaries and overhead expenses and
any contingent or potential Liability) related to the Business or the Assets;
(viii) Contracts or commitments relating to commission
arrangements with others;
(ix) Promissory notes, loans, agreements, indentures,
evidences of indebtedness, letters of credit, guarantees, or other instruments
relating to an obligation to in respect of borrowed money, individually in
excess of or in the aggregate in excess of $75,000, whether Seller shall be the
borrower, lender or guarantor thereunder or whereby any Assets are pledged
(excluding credit provided by Seller or any Subsidiary of Seller in the ordinary
course of business to purchasers of its services);
(x) Contracts containing covenants limiting the freedom of
Seller or any Subsidiary of Seller or any of their respective officers,
directors, shareholders or other affiliates, to engage in any line of business
or compete with any person;
(xi) Other than Contracts with colleges, universities and
other institutions of higher learning, any Contract to supply services to the
United States federal, state or local government or any agency or department
thereof;
(xii) Leases of real property;
(xiii) Leases of personal property not cancelable (without
Liability) within 30 calendar days, excluding leases of personal property
involving the expenditure of less than $25,000 in the aggregate annually.
Seller has delivered to Buyer true, correct and complete
copies (or descriptions thereof with respect to oral Material Contracts) of all
of the Material Contracts, including all amendments and supplements thereto.
Other than the Material Contracts, Seller and its Subsidiaries have no other
Contracts of the type described in clauses (i) through (xiii) above.
28
(b) Absence of Defaults. Seller and each of its Subsidiaries have
fulfilled, or taken all action necessary to enable it to fulfill when due, all
of their respective material obligations under each such Material Contract. To
the knowledge of Seller, all other parties to such Material Contract are
currently in compliance in all material respects with the provisions thereof, no
party is in Default in any material respect thereunder and no notice of any such
claim of Default relating thereto has been given to Seller, General Partner or
Limited Partner other than as disclosed on Schedule 4.6 and Schedule 4.11 and
non-compliance and Defaults relating to the failure to obtain consents or give
notices with respect to the transfer of any Material Contract as a result of the
transactions contemplated hereby. To the knowledge of Seller, there is no reason
to believe that the services called for by any Material Contract between Seller
and a client of Seller cannot be supplied substantially in accordance with the
terms of such Material Contract, including time specifications, and Seller has
no reason to believe that any such Material Contract will upon performance by
Seller or any Subsidiary of Seller result in a net loss to Seller or such
Subsidiary of Seller.
4.10. Permits.
(a) Except as set forth on Schedule 4.10, each of Seller, its
Subsidiaries, General Partner, and Limited Partner has, and at all times has
had, all Permits required under any Regulation (including Environmental Laws) in
the operation of its Business or in the ownership of the Assets except for those
Permits the absence of which would not individually or in the aggregate have a
material adverse effect. A complete list of such Permits is set forth in
Schedule 4.10. Except for the audit of certain tax returns disclosed on Schedule
4.22, none of Seller, its Subsidiaries, General Partner or Limited Partner is in
Default, nor has it received any notice of any claim of Default, with respect to
any such Permit. To the knowledge of Seller, no present or former shareholder,
director, officer or employee of Seller, any Subsidiary of Seller, or any
affiliate thereof, or any other person, firm, corporation or other entity, owns
or has any proprietary, financial or other interest (direct or indirect) in any
such Permit.
(b) Except as disclosed on Schedule 4.10 hereto, no notice to,
declaration, filing or registration with, or Permit from, any domestic or
foreign governmental or regulatory body or authority is required to be made or
obtained by Seller or any Subsidiary of Seller in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.11. Litigation. Except as set forth on Schedule 4.11, there are
no Actions pending or, to the knowledge of Seller, threatened (a) against (i)
Seller, any Subsidiary of Seller, General Partner, Limited Partner, the Business
or the Assets (including with respect to Environmental Laws), (ii) to the
knowledge of Seller, any officers or directors of Seller or any Subsidiary of
Seller as such, or (iii) to the knowledge of Seller, any Shareholder in such
Shareholder's capacity as a shareholder of General Partner or Limited Partner or
as an employee of Seller, (b) against Seller seeking to delay, limit or enjoin
the transactions contemplated by this Agreement, (c) against Seller, any
Subsidiary of Seller, General Partner, Limited Partner or any of their officers
or directors in their capacity as such that involves the risk of criminal
liability to any such entity or person, or (d) in which any of Seller, any
Subsidiary of Seller, General Partner or Limited Partner is a plaintiff,
including any derivative suits brought by
29
or on behalf of Seller, any Subsidiary of Seller, General Partner or Limited
Partner nor, to the knowledge of Seller, is there any reasonable basis for any
such Action. None of Seller, its Subsidiaries, General Partner and Limited
Partner is in Default with respect to or subject to any Court Order, and there
are no unsatisfied judgments against Seller, any Subsidiary of Seller, General
Partner, Limited Partner, the Business or the Assets. Except as set forth on
Schedule 4.11, there is not a reasonable likelihood of an adverse determination
of any pending Actions that could have a material adverse effect. There are no
Court Orders or agreements with, or liens by, any governmental authority or
quasi-governmental entity relating to any Environmental Law which regulate,
obligate, bind or in any way affect Seller, the Assets or the Business, other
than the Permitted Liens.
4.12. Compliance with Law. Except as set forth on Schedule 4.12,
Seller, each Subsidiary of Seller, General Partner and Limited Partner and the
conduct of the Business have been and are in substantial compliance with all
Regulations and Court Orders relating to the Assets or the Business or
operations of Seller, each of its Subsidiaries, General Partner or Limited
Partner except in each case for such non-compliance as would not, individually
or in the aggregate, have a material adverse effect. Within the last five years,
none of Seller, its Subsidiaries, General Partner or Limited Partner has
received any written notice to the effect that, it is not in compliance with any
such Regulations or Court Orders.
4.13. Ordinary Course. Except for the transactions contemplated
by this Agreement and as set forth on Schedule 4.13, since December 31, 1997,
Seller has conducted its business only in the ordinary course and consistently
with its prior practices.
4.14. Officers and Compensation. Schedule 4.14 hereto contains a
true and complete list of all current officers and directors of Seller, General
Partner, Limited Partner and each Subsidiary of Seller. In addition, Schedule
4.14 hereto contains a list of all managers, employees and consultants of Seller
and any Subsidiary of Seller who, individually, have received or are scheduled
to receive compensation from Seller for the fiscal year ended December 31, 1997,
in excess of $100,000. Seller has heretofore provided Nextera with a true and
complete list setting forth the current job title and aggregate annual
compensation of each such individual.
4.15. Employees; Labor Matters.
(a) As of the date of this Agreement, Seller employs a total of
approximately one hundred seventy one (171) full-time employees and eight (8)
part-time employees, Sibson Europe employs one (1) full-time employee and Sibson
UK Limited employs approximately three (3) full-time employees and three (3)
part-time employees. Except as set forth in Schedule 4.15, Seller has not
received any written notice that any employee does not intend to accept
employment with Buyer following the Closing. Neither Seller nor any Subsidiary
of Seller is delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees. Upon termination of the employment of any of the employees of Seller
(assuming acceptance of Buyer's offer of substantially comparable employment to
all of said employees), Buyer and Nextera will not by reason of such termination
or anything done prior to the Closing be liable to any of said employees for
so-called "severance
30
pay" or any other similar payments. Neither Seller nor any Subsidiary of Seller
has a policy, practice, plan or program of paying severance pay or any form of
severance compensation in connection with the termination of employment, except
as set forth in Schedule 4.15. Each of Seller and its Subsidiaries is in
compliance in all material respects with all applicable laws and regulations
respecting labor, employment, fair employment practices, work place safety and
health, terms and conditions of employment, and wages and hours. There are no
charges of employment discrimination or unfair labor practices pending or, to
the knowledge of Seller, threatened and there exists no basis for any such
claim, nor are there any strikes, slowdowns, stoppages of work, or any other
concerted interference with normal operations which are existing, pending or to
the knowledge of Seller threatened against or involving Seller or any Subsidiary
of Seller. No question concerning union representation exists respecting any
employees of Seller or any Subsidiary of Seller. There are no pending
grievances, complaints or charges that have been filed against Seller or any
Subsidiary of Seller under any dispute resolution procedure (including, but not
limited to, any arbitration or similar proceedings of which Seller has received
written notice. No collective bargaining agreement is in effect or is currently
being or is about to be negotiated by Seller or any Subsidiary of Seller.
Neither Seller nor any Subsidiary of Seller has received any written notice
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. Each
of Seller and its Subsidiaries doing business in the United States is, and at
all times has been, in compliance in all material respects with the requirements
of the Immigration Reform Control Act of 1986.
(b) Neither General Partner nor Limited Partner employ any
individual other than their respective officers and directors. Neither General
Partner nor Limited Partner have paid or currently pay compensation to any
individual.
4.16. Banking Relations. Schedule 4.16 contains a complete and
correct list of the names and locations of all banks in which Seller or any of
its Subsidiaries has accounts or safe deposit boxes and the names of all persons
authorized to draw thereon or to have access thereto.
4.17. No Brokers. Neither Seller, its Subsidiaries, General
Partner, Limited Partner, or, to the knowledge of Seller, the Shareholders nor,
to the knowledge of Seller any of their respective officers, directors,
employees, or affiliates has employed or made any agreement with any broker,
finder or similar agent or any person or firm which will result in the
obligation of Buyer, Nextera or any of their affiliates to pay any finder's fee,
brokerage fees or commission or similar payment in connection with the
transactions contemplated hereby.
4.18. No Other Agreements to Sell the Assets. Other than as
described on Schedule 4.18 or as contemplated by the Exchange Agreement attached
hereto as Exhibit N, neither Seller, its Subsidiaries, General Partner, Limited
Partner, or, to the knowledge of Seller, the Shareholders nor, to the knowledge
of Seller any of their respective officers, directors, employees or affiliates
have any commitment or legal obligation, absolute or contingent, to any other
person or firm other than Buyer and Nextera to sell, assign, transfer or effect
a sale of any of the Assets (other than inventory or services in the ordinary
course of business), to sell or effect a sale of the equity of Seller, any
31
Subsidiary of Seller, General Partner or Limited Partner, to effect any merger,
consolidation, liquidation, dissolution or other reorganization of Seller, any
Subsidiary of Seller, General Partner or Limited Partner, or to enter into any
agreement or cause the entering into of an agreement with respect to any of the
foregoing.
4.19. Clients. Schedule 4.19 sets forth any client, which (i)
accounted for more than $75,000 in revenue for Seller for the six months ended
June 30, 1998 and or (ii) accounted for more than $150,000 in revenue for Seller
in the twelve months ended December 31, 1997 (collectively, the "Clients"). To
the knowledge of Seller, the relationships of Seller and its Subsidiaries with
their respective Clients are good commercial working relationships.
4.20. Backlog. As of July 31, 1998, Seller and its Subsidiaries
have a backlog of firm orders for the sale or lease of services, for which
revenues have not been recognized by Seller or its Subsidiaries, as set forth in
Schedule 4.20.
4.21. Proprietary Rights.
(a) Proprietary Rights. Schedule 4.21 lists: (i) for each
registered Trademark of Seller or any Subsidiary of Seller, the application
serial number or registration number and the class of goods covered and (ii) for
each registered Copyright of Seller or any Subsidiary of Seller, the number and
date of filing for each country in which a Copyright has been filed. Other than
the items set forth on Schedule 4.21 and other than the unregistered
service/trade name "Sibson" and variations thereof, there are no Proprietary
Rights used by Seller that are material to the conduct of the Business. Seller
has no patents or registered designs and has not filed any patent applications
or registered design applications.
(b) Royalties and Licenses. Except as set forth on Schedule 4.21
neither Seller nor any Subsidiary of Seller, has any obligation to compensate
any person for the use of any such Proprietary Rights nor has Seller or any
Subsidiary of Seller granted to any person any license, option or other rights
to use in any manner any of such Proprietary Rights, whether requiring the
payment of royalties or not.
(c) Ownership and Protection of Proprietary Rights. Except as set
forth on Schedule 4.21, Seller and/or its Subsidiaries own or have a valid right
to use each of such Proprietary Rights. No other person (i) has notified Seller
or any Subsidiary of Seller that it is claiming any ownership of or right to use
any such Proprietary Rights, or (ii) to the knowledge of Seller, is infringing
upon any such Proprietary Right in any way. To the knowledge of Seller, except
as set forth on Schedule 4.21, use of such Proprietary Rights by Seller or any
Subsidiary of Seller does not and will not conflict with, infringe upon or
otherwise violate the valid rights of any third party in or to such Proprietary
Rights, and no Action has been instituted against or notices received by Seller
that are presently outstanding alleging that use of the Proprietary Rights by
Seller or any Subsidiary of Seller infringes upon or otherwise violates any
rights of a third party in or to such Proprietary Rights.
4.22. Taxes. Except as otherwise set forth on Schedule 4.22:
(a) All returns, declarations, reports, estimates, statements,
schedules or other information or documents with respect to Taxes (collectively,
"Tax Returns") required to be filed
32
by or with respect to Seller and each Subsidiary of Seller have been timely
filed (giving effect to extensions granted with respect thereto) with the
appropriate taxing authorities, and all such Tax Returns are true, correct, and
complete in all material respects.
(b) Seller and each Subsidiary of Seller have timely paid all
Taxes due from it or claimed to be due from it by any federal, state, local,
foreign or other taxing authority.
(c) There are no liens for Taxes upon any of the assets of, or
interests in Seller, General Partner, Limited Partner or any Subsidiary of
Seller, except liens for Taxes not yet due and payable.
(d) No Tax Returns of Seller or any Subsidiary of Seller have
been audited by the relevant taxing authority. No deficiency for any Taxes has
been proposed, asserted or assessed against Seller or any Subsidiary of Seller
that has not been paid in full. There are no outstanding waivers, extensions, or
comparable consents regarding the application of the statute of limitations with
respect to any Taxes or Tax Returns of Seller or any Subsidiary of Seller
(including the time for filing of Tax Returns or paying Taxes) and neither
Seller nor any Subsidiary of Seller has pending requests for any such waivers,
extensions, or comparable consents.
(e) No audit or other proceeding by any federal, state, local or
foreign court, governmental, regulatory, administrative or similar authority is
presently pending with respect to any Taxes or Tax Return of Seller or any
Subsidiary of Seller, and neither Seller nor any Subsidiary of Seller has
received written notice of any pending audits or proceedings.
(f) Neither Seller nor any Subsidiary of Seller has received a
ruling from any taxing authority or signed an agreement with any taxing
authority that could reasonably be expected to have a material adverse effect on
Seller, General Partner, Limited Partner, any Subsidiary of Seller or the assets
of Seller or any Subsidiary of Seller.
(g) Seller and each Subsidiary of Seller have complied in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including, without limitation, withholding
of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar
provisions under any applicable state and foreign laws) and has, within the time
and the manner prescribed by law, paid over to the proper governmental
authorities all amounts so withheld.
(h) Neither Seller nor any Subsidiary of Seller is a party to or
bound by or has any obligation under any Tax sharing allocation or indemnity
agreement or similar contract or arrangement (whether or not written).
(i) No power of attorney granted by Seller or any Subsidiary of
Seller with respect to any Taxes is currently in force.
(j) There is no expectation that any taxing authority may claim
or assess any material amount of Taxes payable by Seller or any Subsidiary of
Seller for any period ending on or prior to the Closing Date and there are no
facts of which Seller is aware which would constitute
33
grounds for the assessment of any material amount of Taxes payable by Seller or
any Subsidiary of Seller for any period ending on or prior to the Closing Date.
(k) No issue has been raised by a federal, state, local or
foreign taxing authority in any examination relating to Seller or any Subsidiary
of Seller which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period.
(l) Neither Seller nor any Subsidiary of Seller is subject to
liability as a transferee pursuant to Code Section 6901 et seq. or otherwise.
(m) Schedule 4.22 sets forth each state, local and foreign
jurisdiction in which Seller, General Partner, Limited Partner and each
Subsidiary of Seller has filed a Tax Return during the last five years. No
written claim has ever been received by Seller, General Partner, Limited Partner
or any Subsidiary of Seller from a taxing authority in a jurisdiction where
Seller or such Subsidiary of Seller does not pay Taxes or file Tax Returns that
Seller or such Subsidiary of Seller is or may be subject to Taxes assessed by
such jurisdiction, and, to the knowledge of Seller, no such claim has been
threatened by a taxing authority.
(n) Seller is a United States person within the meaning of the
Code.
4.23. Employee Benefit Programs
(a) Schedule 4.23 lists every Employee Program (as defined below)
that has been maintained (as defined below) by Seller or any Subsidiary of
Seller at any time during the past three-years (collectively, "Seller Employee
Programs"). General Partner and Limited Partner have not maintained any Employee
Program during the three-year period ending on the date of the Closing.
(b) Except as set forth on Schedule 4.23, each Employee Program
which has ever been maintained by Seller or any Subsidiary of Seller and which
has at any time been intended to qualify under Section 401(a) of the Code, and
each associated trust which at any time has been intended to be exempt from
taxation pursuant to Section 501(a) of the Code is the subject of a favorable
determination, opinion or approval letter from the Internal Revenue Service
("IRS") regarding its qualification or exemption from taxation, as applicable,
under such section and has, in fact, been qualified or tax exempt, as
applicable, under the applicable section of the Code for all periods for which
the applicable statute of limitations has not expired through and including the
Closing (or, if earlier, the date that all of such Employee Program's assets
were distributed). No event or omission has occurred which would cause any such
Employee Program to lose its qualification under the applicable Code section.
(c) Except as set forth on Schedule 4.23, Seller does not know
and has no reason to know, of any failure of any party to comply in any material
respect with any laws applicable to the Employee Programs that have been
maintained by Seller or any Subsidiary of Seller. With respect to any Employee
Program ever maintained by Seller or any Subsidiary of Seller for all periods
for which the applicable statute of limitations has not expired, there has
34
occurred no "prohibited transaction," as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Code, or any material violation of, or material breach of any duty under,
ERISA or other applicable law (including, without limitation, any health care
continuation requirements (under part 6 of subtitle B of Title I or ERISA, or
otherwise) or any other tax law requirements, or conditions to favorable tax
treatment, applicable to such plan), which could result, directly or indirectly,
in any taxes, penalties or other liability to Seller, or any Subsidiary of
Seller, Buyer or Nextera. No litigation, arbitration, or governmental
administrative proceeding (or investigation) or other proceeding (other than
those relating to routine claims for benefits) is pending or, to the knowledge
of Seller, threatened with respect to any Employee Program.
(d) Except as disclosed on Schedule 4.23, neither Seller nor any
ERISA Affiliate (as defined below) has ever (i) maintained any Employee Program
which has been subject to Title IV of ERISA; (ii) maintained any Multiemployer
Plan (as defined below); or (iii) provided health care or any other non-pension
benefits to any employees after their employment is terminated (other than as
required by part 6 of subtitle B of title I of ERISA or benefits that continue
for a brief period of time after termination of employment, for example for the
balance of the month in which an employee terminates, or has ever promised to
provide such post-termination benefits).
(e) Except as set forth on Schedule 4.23, with respect to each
Seller Employee Program maintained by Seller or any Subsidiary of Seller within
the three years preceding the Closing, complete and correct copies of the
following documents (if applicable to such Seller Employee Program) have
previously been delivered to Nextera: (i) all documents embodying or governing
such Seller Employee Program, and any funding medium for the Seller Employee
Program (including, without limitation, trust agreements) as they may have been
amended; (ii) the most recent IRS determination, opinion or approval letter with
respect to such Seller Employee Program under Code Sections 401 and 501(a), and
any applications for determination or approval subsequently filed with the IRS;
(iii) the three most recently filed IRS Forms 5500, with all applicable
schedules and accountants' opinions attached thereto; (iv) the summary plan
description for such Seller Employee Program (or other descriptions of such
Seller Employee Program provided to employees) and all modifications thereto;
(v) any insurance policy (including any fiduciary liability insurance policy)
related to such Seller Employee Program; (vi) any documents evidencing any loan
to a Seller Employee Program that is a leveraged employee stock ownership plan;
and (vii) all other materials reasonably necessary for Buyer to perform any of
its responsibilities with respect to any Seller Employee Program subsequent to
the Closing (including, without limitation, health care continuation
requirements).
(f) Neither Seller nor any ERISA Affiliate has any announced plan
or legally binding commitment to create any additional Employee Program which is
intended to cover employees or former employees of Seller or any ERISA Affiliate
(with respect to their relationship with such entities) or to amend or modify
any existing Employee Program which covers or has covered employees or former
employees of Seller or any ERISA Affiliate (with respect to their relationship
with such entities).
35
(g) Schedule 4.23(g) sets forth (i) all plans, policies,
contracts, agreements or similar arrangements that impose any obligation on
Seller (including any Liability assumed from a predecessor of Seller) or any
ERISA Affiliate to provide any retiree medical benefits or any other "welfare
plan" (as defined in Section 3(1) of ERISA) benefits for retirees (collectively,
"Retiree Welfare Benefit Plans"). Except as set forth on Schedule 4.23(g) no
representative of Seller (or any representative of any predecessor of Seller to
the extent enforceable against Seller) or any ERISA Affiliate, or, to the
knowledge of Seller, any Retiree Welfare Benefit Plan, has made any commitment
(whether written or oral) to any employee or former employee of Seller or any
ERISA Affiliate to maintain any such Retiree Welfare Benefit Plan or any
benefits thereunder.
(h) No event has occurred in connection with which Seller, any
ERISA Affiliate or any Employee Program, directly or indirectly, could be
subject to any material liability (A) under any statute, regulation or
governmental order relating to any Employee Programs or (B) pursuant to any
obligation of Seller or any ERISA Affiliate to indemnify any person against
liability incurred under any such statute, regulation or order as they relate to
the Employee Programs.
(i) Except as described on Schedule 4.23, neither the execution
and delivery of this Agreement by Seller or any Subsidiary of Seller nor the
consummation of the transactions contemplated hereby will result in the
acceleration or creation of any rights of any person to benefits under any
Employee Program (including, without limitation, the acceleration of the vesting
or exercisability of any stock options, the acceleration of the vesting of any
restricted stock, or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(j) There is no contract, agreement, plan or arrangement covering
any employee or former employee of Seller or any ERISA Affiliate (with respect
to its relationship with such entities) that, individually or collectively,
provides for the payment by Seller or any ERISA Affiliate of any amount (i) that
is not deductible under Section 162(a)(1) or 404 of the Code or (ii) that is an
"excess parachute payment" pursuant to Section 280G of the Code.
(k) All contributions required to be made by Seller or any ERISA
Affiliate with respect to any Employee Program due as of any date through and
including the Closing Date have been made when due.
36
(l) For purposes of this section:
(i) "Employee Program" means (A) any employee benefit plan
within the meaning of ERISA Section 3(3), including, but not limited to, any
multiple employer welfare arrangement (within the meaning of ERISA Section 3(4))
and any plan to which more than one unaffiliated employer contributes and any
employee benefit plan (such as a foreign or excess benefit plan) which is not
subject to ERISA; and (B) any employment, consulting, severance or other similar
contract, arrangement or policy, any stock option plan, bonus or incentive award
plan, deferred compensation agreement, supplemental income arrangement, vacation
plan, any employee benefit arrangement described in Code Section 501(c)(9), and
any other employee benefit plan, agreement, and arrangement not described in (A)
above. In the case of an Employee Program funded through a trust described in
Code Section 501(a), each reference to such Employee Program shall include a
reference to such trust.
(ii) An entity "maintains" an Employee Program if such
entity sponsors, contributes to, or provides (or has promised to provide)
benefits under such Employee Program, or has any obligation (by agreement or
under applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise covers
employees of such entity, or their spouses, dependents, or beneficiaries.
(iii) An entity is an "ERISA Affiliate" of Seller if it
would have ever been considered a single employer with Seller under ERISA
Section 4001(b) or part of the same "controlled group" as Seller or any of its
Subsidiaries for purposes of ERISA Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and which is
maintained pursuant to one or more collective bargaining agreements as defined
in Section 3(37) of ERISA.
4.24. Insurance. Schedule 4.24 contains a complete and accurate
list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance maintained by
Seller or any Subsidiary of Seller on the Business, the Assets or its employees.
All such insurance coverage applicable to Seller or any Subsidiary of Seller,
the Business and the Assets is in full force and effect and provides coverage as
may be required by applicable Regulation and to the knowledge of Seller by any
and all Contracts to which Seller or any Subsidiary of Seller is a party. To the
knowledge of Seller, there is no Default under any such coverage nor is there
presently any failure to give notice or present any claim under any such
coverage in a due and timely fashion, except for such Defaults and any such
failure to give notice or present any claim as would not, individually or in the
aggregate, have a material adverse effect. There are no outstanding unpaid
premiums except in the ordinary course of business and no notice of cancellation
or nonrenewal of any such coverage has been received. There are no provisions in
such insurance policies for retroactive or retrospective premium adjustments.
All products liability, general liability and workers' compensation insurance
policies maintained by Seller or any Subsidiary of Seller are presently
occurrence policies and not claims made policies, except for Seller's
professional liability (error and omissions), fiduciary liability and employment
practices policies. There are no outstanding performance bonds covering or
issued for the benefit
37
of Seller or any Subsidiary of Seller. To the knowledge of Seller, no insurer
has advised Seller or any Subsidiary of Seller that it intends to reduce
coverage, materially increase premiums or fail to renew existing policy or
binder.
4.25. Accounts Receivable. To the knowledge of Seller, the
accounts receivable set forth on the Base Balance Sheet, and all accounts
receivable arising since the Base Balance Sheet Date, arose from bona fide
transactions, and all the goods delivered and services performed which gave rise
to said accounts were delivered or performed in all material respects in
accordance with past practice. To the knowledge of Seller, said accounts
receivable are subject to no defenses, counterclaims or rights of setoff and are
fully collectible in the ordinary course of business without cost in collection
efforts therefor, except to the extent of the appropriate reserves for bad debts
on accounts receivable as set forth on the Base Balance Sheet and, in the case
of accounts receivable arising since the Base Balance Sheet Date, to the extent
of a reasonable reserve rate for bad debts on accounts receivable which is not
greater than the rate reflected by the reserve for bad debts on the Base Balance
Sheet.
4.26. Payments. Neither Seller, General Partner, Limited Partner,
nor any Subsidiary of Seller has violated the U.S. Foreign Corrupt Practices Act
or, to the knowledge of Seller, has directly or indirectly, paid or delivered
any fee, commission or other sum of money or item or property, however
characterized, to any finder, agent, client, customer, supplier, government
official or other party, in the United States or any other country, which is in
any manner related to the Business, Assets or operations of Seller, General
Partner, Limited Partner, or any Subsidiary of Seller, which is, or may be with
the passage of time or discovery, illegal under any other federal, state or
local laws of the United States or any other country having jurisdiction; and to
the knowledge of Seller neither Seller, General Partner, Limited Partner, or any
Subsidiary of Seller has participated, directly or indirectly, in any boycotts
or other similar practices affecting any of its actual or potential customers.
4.27. Environmental Matters.
(a) Except for Hazardous Material contained in cleaning and other
office products used in the ordinary course of Seller's business, (i) neither
Seller, General Partner, Limited Partner nor any Subsidiary of Seller has ever
generated, transported, used, stored, treated, disposed of, or managed any
Hazardous Waste (as defined below); (ii) to the knowledge of Seller, no
Hazardous Material (as defined below) has ever been or is threatened to be
spilled, released, or disposed of at any site presently or formerly owned,
operated, leased, or used by Seller, General Partner, Limited Partner, or any
Subsidiary of Seller, or has ever been located in the soil or groundwater at any
such site; (iii) to the knowledge of Seller, no Hazardous Material has ever been
transported from any site presently or formerly owned, operated, leased, or used
by Seller, General Partner, Limited Partner or any Subsidiary of Seller for
treatment, storage, or disposal at any other place; (iv) to the knowledge of
Seller, neither Seller, General Partner, Limited Partner, nor any Subsidiary of
Seller presently owns, operates, leases, or uses, nor has any of them previously
owned, operated, leased, or used any site on which underground storage tanks are
or were located; and (v) no lien has ever been imposed by any governmental
agency on any property, facility, machinery, or equipment owned, operated,
leased, or used by Seller,
38
General Partner, Limited Partner or any Subsidiary of Seller in connection with
the presence of any Hazardous Material.
(b) (i) To the knowledge of Seller, neither Seller, General
Partner, Limited Partner nor any Subsidiary of Seller has liability under, or
has ever violated in any material respect, any Environmental Law (as defined
below); (ii) to the knowledge of Seller, Seller, General Partner, Limited
Partner, each Subsidiary of Seller, any property owned, operated, leased, or
used by any of them, and any facilities and operations of Seller, General
Partner, Limited Partner or any Subsidiary of Seller thereon, are presently in
compliance in all material respects with all applicable Environmental Laws;
(iii) neither Seller, General Partner, Limited Partner nor any Subsidiary of
Seller has ever entered into or been subject to any judgment, consent decree,
compliance order, or administrative order with respect to any environmental or
health and safety matter or received any request for information, notice, demand
letter, administrative inquiry, or formal or informal complaint or claim with
respect to any environmental or health and safety matter or the enforcement of
any Environmental Law; and (iv) neither Seller, General Partner, or Limited
Partner nor any Subsidiary of Seller has reason to believe that any of the items
enumerated in clause (iii) of this subsection will be forthcoming.
(c) To the knowledge of Seller without investigation, no site
operated, leased, or used by Seller (or any other entity for whose conduct
Seller is or may be held responsible under any Environmental Law), General
Partner, Limited Partner or any Subsidiary of Seller contains any asbestos or
asbestos-containing material, any polychlorinated biphenyls ("PCBs") or
equipment containing PCBs; or any urea formaldehyde foam insulation.
(d) Seller has made available to Nextera copies of all documents
and records, and information in Seller's possession concerning any environmental
or health and safety matter relevant to Seller, General Partner, Limited Partner
or any Subsidiary of Seller, whether generated by Seller or others, including
without limitation, environmental audits, environmental risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control plans, and reports, correspondence, permits, licenses, approvals,
consents, and other authorizations related to environmental or health and safety
matters issued by any governmental agency.
(e) For purposes of this Section 4.27, (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, contaminant, or
other substance which may pose a threat to the environment or to human health or
safety, as defined or regulated under any Environmental Law except for any such
Hazardous Material contained in cleaning and other office products used in the
ordinary course of Seller's business; (ii) "Hazardous Waste" shall mean and
include any hazardous waste as defined or regulated under any Environmental Law;
(iii) "Environmental Law" shall mean any environmental or health and
safety-related law, regulation, rule, ordinance, or by-law at the foreign,
federal, state, or local level, whether existing as of the date hereof,
previously enforced, or subsequently enacted; (iv) "General Partner" shall mean
and include General Partner and all other entities for whose conduct General
Partner is or may be held responsible under any Environmental Law; (v) "Limited
Partner" shall mean and include Limited Partner and all other entities for whose
conduct Limited Partner is or may be held responsible under any Environmental
39
Law; and (vi) "Subsidiary" shall mean and include such Subsidiary and all other
entities for whose conduct such Subsidiary is or may be held responsible under
any Environmental Law.
4.28. Warranty or Other Claims. To the knowledge of Seller, there
are no existing or, to the knowledge of Seller, threatened service liability,
warranty or other similar claims, or any reasonable basis upon which a material
claim of such nature could be based, against Seller for services which are
defective or fail to meet any service warranties. Since the Balance Sheet Date,
no claim has been asserted against Seller for renegotiation or price
redetermination of any business transaction, and, to the knowledge of Seller,
there are no facts known to Seller upon which any such claim could be based.
4.29. Records; Copies of Documents. The actions recorded in the
record books of Seller and each Subsidiary of Seller accurately reflect all
action taken by their partners, committees and, in the case of Seller, the
Senior Managing Principal as the case may be. The record books of General
Partner and Limited Partner accurately reflect all action taken by their
shareholders and Boards of Directors and committees. The copies of the records
of Seller, General Partner, Limited Partner, and each Subsidiary of Seller as
made available to Nextera for review, are true and complete copies of the
originals or conformed copies of originals of such documents. Seller has made
available for inspection and copying by Nextera and its counsel true and correct
copies of all documents referred to in this Section or in the Schedules
delivered to Nextera pursuant to this Agreement.
4.30. Powers of Attorney. Neither Seller, the Subsidiaries of
Seller, General Partner, Limited Partner nor, to the knowledge of Seller, any of
the Shareholders has any outstanding power of attorney with respect to or
affecting any transaction contemplated by this Agreement.
4.31. Business of General Partner and Limited Partner. General
Partner was formed for the sole purpose of serving as the general partner of
Seller and a member of Sibson Europe and has conducted no other business since
its formation. Limited Partner was formed for the sole purpose of serving as the
limited partner of Seller and has conducted no other business since its
formation.
4.32. Accredited Investor. Seller is an "accredited investor" as
defined in Rule 501 under the Securities Act.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF GENERAL PARTNER,
LIMITED PARTNER AND THE SHAREHOLDERS
As a material inducement to Buyer and Nextera to enter into this
Agreement and consummate the transactions contemplated hereby, each of General
Partner and Limited Partner and each of the Shareholders hereby severally, but
not jointly, makes to Buyer and Nextera each of the representations and
warranties set forth in this Article V with respect to itself or himself only as
applicable.
40
5.1. Authority. Such Shareholder has full right, authority, power
and capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by such Shareholder pursuant to this
Agreement and to carry out the transactions contemplated hereby and thereby.
This Agreement and each agreement, document and instrument executed and
delivered by such Shareholder pursuant to this Agreement constitutes a valid and
binding obligation of such Shareholder, enforceable in accordance with their
respective terms (assuming the due authorization, execution and delivery by the
other parties thereto), subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity,
including, without limitation, the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law. The execution, delivery and performance of this
Agreement by such Shareholder and each such agreement, document and instrument:
(i) does not and will not violate any provision of any laws of
the United States or any state or other jurisdiction applicable to such
Shareholder, or require such Shareholder to obtain any approval, consent
or waiver from, or make any filing with, any person or entity
(governmental or otherwise) that will not have been obtained or made on
or prior to the Closing; and
(ii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right
of termination of, any indenture or loan or credit agreement or any
other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which such Shareholder is a party or by which
the property of such Shareholder is bound or affected, or result in the
creation or imposition of any mortgage, pledge, lien, security interest
or other charge or similar encumbrance on the capital stock of General
Partner and/or Limited Partner owned by such Shareholder.
5.2. No Brokers. Such Shareholder has not employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in the obligation of Buyer, Nextera or any of Seller's their
affiliates to pay any finder's fee, brokerage fees or commission or similar
payment in connection with the transactions contemplated hereby
5.3. Agreements. Except for this Agreement and agreements
contemplated hereby and that certain Agreement of Limited Partnership of Seller
dated November 5, 1993, as amended, that certain Shareholders' Agreement of
General Partner dated October 31, 1993, as amended, and that certain
Shareholders' Agreement of Limited Partner dated January 1, 1998, as amended,
there are no agreements or arrangements not contained herein or disclosed in a
Schedule hereto, to which General Partner, Limited Partner or such Shareholder
is a party relating to the business of Seller or to the rights and obligations
of General Partner, Limited Partner or such Shareholder as a partner or officer
of Seller. Except as set forth on Schedule 5.3, General Partner, Limited Partner
or such Shareholder does not own, directly or indirectly, on an individual or
joint basis, any material interest in, or serve as an officer or director of,
any customer,
41
competitor or supplier of Seller, or any organization which has a contract or
arrangement with Seller.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF BUYER AND NEXTERA
As a material inducement to the Selling Parties to enter into
this Agreement and consummate the transactions contemplated hereby, Buyer and
Nextera, jointly and severally hereby make the representations and warranties to
the Selling Parties as follows, which representations and warranties are, as of
the date hereof, and will be, as of the Closing Date, true and correct:
6.1. Organization. Each of Buyer and Nextera is a limited
liability company organized, validly existing and in good standing under the
laws of the State of Delaware with full limited liability company power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is conducted by it. Copies of the Certificate of Formation of each of
Buyer and Nextera, and all amendments thereto, heretofore delivered to Seller
and the Buyer Operating Agreement attached hereto as Exhibit L and the Nextera
Operating Agreement attached hereto as Exhibit M are accurate and complete as of
the date hereof. Neither Buyer nor Nextera is in violation of any term of its
respective Certificate of Formation or the Buyer Operating Agreement or Nextera
Operating Agreement, as applicable. Each of Nextera's Subsidiaries is duly
organized or incorporated (as applicable) and in good standing under the laws of
the state of its organization or incorporation (as applicable) with full limited
liability company power and authority or corporate power and authority (as
applicable) to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is conducted by it. Each of Nextera and its Subsidiaries is duly
qualified or authorized to do business as a foreign limited liability company or
corporation, as applicable, and is in good standing under the laws of each
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so licensed or so qualified or authorized would not have a
material adverse effect.
6.2. Subsidiaries. Other than Symmetrix, Inc., SGM Consulting,
L.L.C. (d/b/a "Sigma Consulting"), The Planning Technologies Group, L.L.C.,
Pyramid Imaging, Inc., Symmetrix European Holdings, Inc., Symmetrix Europe,
S.A., Cranberry Hill Capital, LLC, Scanada, Inc., Sibson Acquisition Co. and
Buyer, Nextera has no Subsidiaries and does not own an equity interest in any
other corporation or business organization. Buyer was founded solely for the
purpose of consummating the transactions contemplated by this Agreement and
prior to the Closing will not have transacted any business or have any
Liabilities except as provided hereunder or under that certain Subsidiary
Guaranty dated as of the date hereof and that certain Security and Pledge
Agreement dated as of the date hereof to be entered into by Buyer in connection
with that certain Securities Purchase Agreement dated as of the date hereof
between Nextera and Nextera Funding, Inc. Buyer has no Subsidiaries and does not
own an equity interest in any other corporation or business organization except
that, at the Closing Date, Buyer will own Sibson Europe and Sibson UK Limited.
42
6.3. Authority. Each of Buyer and Nextera has full right,
authority and power to enter into this Agreement and each agreement, document
and instrument to be executed and delivered by Buyer and/or Nextera,
respectively, pursuant to this Agreement and to carry out the transactions
contemplated hereby. The execution, delivery and performance by Buyer and
Nextera of this Agreement and each such other agreement, document and instrument
have been duly authorized by all necessary organizational action of Buyer and
Nextera.
This Agreement and each other agreement, document and instrument
executed and delivered by Buyer and/or Nextera pursuant to this Agreement
constitutes, or when executed and delivered will constitute, valid and binding
obligations of Buyer and/or Nextera, as applicable, enforceable in accordance
with their terms (assuming due authorization, execution and delivery by the
other parties thereto), subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity,
including, without limitation, the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law.
The execution, delivery and performance by Buyer and Nextera of
this Agreement and each such agreement, document and instrument:
(i) does not and will not violate any provision of the
certificate of formation of Buyer, the Buyer Operating Agreement, the
certificate of formation of Nextera or the Nextera Operating Agreement;
(ii) except for noncompliance with any bulk sales law of any
jurisdiction, does not and will not violate any laws of the United
States or of any state or any other jurisdiction applicable to Buyer or
Nextera or require Buyer or Nextera to obtain any approval, consent or
waiver of, or make any filing with, any person or entity (governmental
or otherwise) that will not be obtained or made on or prior to the
Closing other than (x) any such approval, consent or waiver of or filing
with respect to which the failure to so obtain will not have a material
adverse effect and (y) any approvals, consents, waivers or filings in
connection with Contracts and Leases as a result of the transactions
contemplated hereby; and
(iii) does not and will not result in (i) a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture, loan or credit
agreement, or other agreement, mortgage, lease, permit, order, judgment
or decree to which Buyer or Nextera or any of their Subsidiaries is
bound or affected, or (ii) result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or similar
encumbrance on any of the assets or capital stock of Buyer or Nextera
and which is material to the business and financial condition of Nextera
or its Subsidiaries on a consolidated basis except, in the case of
clause (i), for such breaches, defaults, accelerations or terminations
as would not, individually or in the aggregate, have a material adverse
effect..
43
6.4. Litigation. Except as set forth on Schedule 6.4, there are
no Actions pending or, to the knowledge, of Nextera threatened (a) against (i)
Nextera or its Subsidiaries (including with respect to Environmental Laws) or
(ii) to the knowledge of Nextera, any officers, directors or managers of Nextera
or its Subsidiaries as such, (b) against Nextera or Buyer seeking to delay,
limit or enjoin the transactions contemplated by this Agreement, (c) against
Nextera, any Subsidiary of Nextera or any of its officers, directors or managers
in their capacity as such that involves the risk of criminal liability to any
such entity or person, or (d) in which Nextera or any Subsidiary of Nextera is a
plaintiff, including any derivative suits brought by or on behalf of any of
Nextera or its Subsidiaries. Neither Nextera nor any Subsidiary of Nextera is in
default with respect to or subject to any Court Order, and there are no
unsatisfied judgments against Nextera or any Subsidiary of Nextera. There is not
a reasonable likelihood of an adverse determination of any pending Actions that
could have a material adverse effect. There are no Court Orders or agreements
with, or liens by, any governmental authority or quasi-governmental entity
relating to any Environmental Law which regulate, obligate, bind or in any way
affect Nextera or its Subsidiaries.
6.5. No Brokers. Neither Buyer, Nextera nor, to the knowledge of
Nextera, any of their officers, directors, managers, employees, shareholders,
members or affiliates has employed or made any agreement with any broker, finder
or similar agent or any person or firm which will result in the obligation of
Buyer, Seller or any of Seller's affiliates to pay any finder's fee, brokerage
fees or commission or similar payment in connection with the transactions
contemplated hereby.
6.6. Membership Interests of Nextera.
Schedule 6.6 sets forth all of the issued and outstanding
membership interests of Nextera and Buyer on the date hereof and on the Closing
Date (assuming consummation of the transactions contemplated hereby, including,
in the case of Nextera, the issuance of Nextera Class A Units under the
Employment Agreements). Except as set forth on Schedule 6.6, there are no
outstanding options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance and sale of, or outstanding securities
convertible into, any additional membership interests of any class of Nextera or
Buyer. Schedule 6.6 sets forth a list of all agreements, instruments and
undertakings, if any, relating to the voting, transfer, registration, repurchase
or any similar right with respect to the issued and outstanding equity interests
of Nextera or Buyer. None of the equity interests of Nextera were issued in
violation of any federal or state law. All of the Nextera Class A Units to be
issued as consideration for the sale of the Assets will be duly issued under the
Nextera Operating Agreement free and clear of all liens or other encumbrances.
6.7. Operating Agreements. The Nextera Operating Agreement
attached as Exhibit M is in full force and effect, as amended through the
Closing Date. The Buyer Operating Agreement attached as Exhibit L is in full
force and effect, as amended through the Closing Date.
6.8. Financial Statements.
(a) Nextera has delivered to the Seller the following financial
statements, copies of which are attached hereto as Schedule 6.8: a consolidated
balance sheet of Nextera and its Subsidiaries and a consolidated statement of
profit and loss of Nextera as of December 31,
44
1997 as audited by Ernst & Young LLP (the "Audited Financial Statements"), an
unaudited balance sheet of Nextera and its Subsidiaries as of June 30, 1998 and
an unaudited statement of profit and loss of Nextera for the six months ended
June 30, 1998 (the "Interim Financial Statements") and together with the Audited
Financial Statements, the "Nextera Financial Statements"). The December 31, 1997
balance sheet is hereinafter referred to as the "Nextera Balance Sheet" and
December 31, 1997 is hereinafter referred to as the "Nextera Balance Sheet
Date." The Nextera Financial Statements have been prepared in accordance with
GAAP (subject to normal year-end adjustments in the case of the Interim
Financial Statements) applied consistently during the period covered thereby,
and said Audited Financial Statements present fairly in all material respects
the consolidated financial condition of Nextera at the date of said statements
and the consolidated results of its operations for the period covered thereby
and the Interim Financial Statements present fairly and completely in all
material respects the information purported to be shown thereon.
(b) Except as set forth on Schedule 6.8, as of the date hereof,
Nextera and its Subsidiaries do not have any Liabilities of any nature, whether
accrued, absolute or contingent (including without limitation, Liabilities as
guarantor or otherwise with respect to obligations of others, or Liabilities for
any Tax due or then accrued or to become due or contingent or potential
Liabilities relating to activities of Nextera or any Subsidiary of Nextera or
the conduct of their respective business prior to the date hereof or the
Closing, as the case may be, regardless of whether claims in respect thereof had
been asserted as of such date), except Liabilities (i) stated or adequately
reserved against on the Nextera Balance Sheet or the notes thereto, (ii)
incurred or arising in the ordinary course of business of Nextera or any
Subsidiary of Nextera after the Nextera Balance Sheet Date, (iii) disclosed in
this Article VI or on the Nextera Disclosure Schedule or (iv) future performance
obligations under contracts and leases, none of which relates to any default,
breach of warranty, tort infringement, or violation of any Regulation or Court
Order or arose out of any action.
(c) Nextera has delivered to Seller the following unaudited pro
forma financial statements, copies of which are attached hereto as Schedule 6.8:
a consolidated balance sheet of Nextera and its Subsidiaries as of June 30, 1998
and a consolidated statement of profit and loss of Nextera for the six months
ended June 30, 1998 (the "Pro Forma Statements"). The Pro Forma Statements have
been prepared giving effect to the consummation of each acquisition made by
Nextera subsequent to January 1, 1998 (including pursuant to this Agreement and
the acquisition of Sibson Canada). The Pro Forma Statements have been prepared
based on information Nextera believes to be reasonable as of the date of
delivery thereof, and present fairly in all material respects on a pro forma
basis the estimated financial position of Nextera as of June 30, 1998 and
results of operations for the six months then ended, assuming that the events
specified in the preceding sentence had actually occurred; provided, however,
that Nextera makes no representation with respect to the financial statements of
Seller or Sibson Canada reflected therein. The Pro Forma Statements are not
necessarily indicative of the financial position or results of operations that
would have been obtained had the pro forma events actually occurred and should
be read in conjunction with the Nextera Financial Statements provided to Seller.
6.9. Taxes. Except as otherwise set forth on Schedule 6.9:
45
(a) Each of Nextera and its Subsidiaries that are limited
liability companies is, and has been at all times since its formation, properly
characterized as a partnership for federal income Tax purposes and those
jurisdictions where Nextera and its Subsidiaries that are limited liability
companies file income Tax Returns which recognize such status.
(b) All Tax Returns required to be filed by Nextera, each
Subsidiary that is a limited liability company and, to the knowledge of Nextera,
each corporate Subsidiary that is a corporation have been timely filed (giving
effect to extensions granted with respect thereto) with the appropriate taxing
authorities, and all such Tax Returns are true, correct, and complete in all
material respects.
(c) Nextera, each Subsidiary that is a limited liability company
and, to the knowledge of Nextera, each Subsidiary that is a corporation has
timely paid all Taxes due from them or claimed to be due from them by any
federal, state, local, foreign or other taxing authority.
(d) There are no liens for Taxes upon any of the assets of
Nextera, any Subsidiary that is a limited liability company or, to the knowledge
of Nextera, any Subsidiary that is a corporation, except liens for Taxes not yet
due and payable.
(e) No Tax Returns of Nextera, any Subsidiary that is a limited
liability company or, to the knowledge of Nextera, any Subsidiary that is a
corporation have been audited by the relevant taxing authority. No deficiency
for any Taxes has been proposed, asserted or assessed against Nextera, any
Subsidiary that is a limited liability company or, to the knowledge of Nextera,
any Subsidiary that is a corporation that has not been paid in full. There are
no outstanding waivers, extensions, or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns that have been given by Nextera, any Subsidiary that is a limited
liability company or, to the knowledge of Nextera, any Subsidiary that is a
corporation (including the time for filing of Tax Returns or paying Taxes) and
neither, Nextera, any Subsidiary that is a limited liability company nor, to the
knowledge of Nextera, any Subsidiary that is a corporation has any pending
requests for any such waivers, extensions, or comparable consents.
(f) No audit or other proceeding by any federal, state, local or
foreign court, governmental, regulatory, administrative or similar authority is
presently pending with respect to any Taxes or Tax Return of Nextera, any
Subsidiary that is a limited liability company or, to the knowledge of Nextera,
any Subsidiary that is a corporation, and neither, Nextera, any Subsidiary that
is a limited liability company nor, to the knowledge of Nextera, any Subsidiary
that is a corporation has received written notice of any pending audits or
proceedings.
(g) Nextera, each Subsidiary that is a limited liability company
and, to the knowledge of Nextera, each Subsidiary that is a corporation have
complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes (including, without
limitation, withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446
of the Code or similar provisions under any applicable state and foreign laws)
and have, within the time and the manner prescribed by law, paid over to the
proper governmental authorities all amounts so withheld.
46
(h) Neither Nextera, any Subsidiary that is a limited liability
company nor, to the knowledge of Nextera, any Subsidiary that is a corporation
is a party to, is not bound by and does not have any obligation under any Tax
sharing allocation or indemnity agreement or similar contract or arrangement.
(i) No power of attorney granted by Nextera, any Subsidiary that
is a limited liability company or, to the knowledge of Nextera, any Subsidiary
that is a corporation with respect to any Taxes is currently in force.
(j) There is no expectation that any taxing authority may claim
or assess any material amount of Taxes payable by Nextera, any Subsidiary that
is a limited liability company or, to the knowledge of Nextera, any Subsidiary
that is a corporation for any period ending on or prior to the Closing Date and
there are no facts of which Nextera is aware which would constitute grounds for
the assessment of any material amount of Taxes payable by Nextera, any
Subsidiary that is a limited liability company or, to the knowledge of Nextera,
any Subsidiary that is a corporation for any period ending on or prior to the
Closing Date.
(k) No claim has been made by a taxing authority in a
jurisdiction where Nextera or any of its Subsidiaries does not file Tax Returns
such that it is or may be subject to taxation by that jurisdiction.
(l) No issue has been raised by a federal, state, local or
foreign taxing authority in any examination relating to Nextera or any of its
Subsidiaries which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period. Neither Nextera nor any of its Subsidiaries is subject to any
private letter ruling of the IRS or comparable rulings of other taxing
authorities.
(m) Neither Nextera nor any of its Subsidiaries or any Person on
behalf of Nextera or any of its Subsidiaries has (i) agreed to or is required to
make any adjustments pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method (except for conversions from cash basis accounting to accrual basis
accounting) initiated by Nextera or any of its Subsidiaries or has any knowledge
that the IRS has proposed any such adjustment or change in accounting method, or
has any application pending with any taxing authority requesting permission for
any changes in accounting methods that relate to the business or operations of
Nextera and or any of its Subsidiaries, (ii) executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law with respect to
Nextera or any of it Subsidiaries, or (iii) extended the time within which to
file any Tax Return, which Tax Return has since not been filed or the assessment
or collection of Taxes, which Taxes have not since been paid.
6.10. Absence of Certain Changes or Events. Except as disclosed
in Schedule 6.10, since the Base Balance Sheet Date, there has not been any:
(a) actual or threatened material adverse change;
47
(b) change in accounting methods, principles or practices by
Nextera or any Subsidiary of Nextera affecting Nextera's assets, Liabilities or
business;
(c) revaluation by Nextera or any Subsidiary of Nextera of any of
their assets, including without limitation writing down the value of inventory
or writing off notes or accounts receivable;
(d) damage, destruction or loss (whether or not covered by
insurance) which has had or will have a material adverse affect;
(e) cancellation of any indebtedness or waiver or release of any
right or claim of Nextera or any Subsidiary of Nextera relating to its
activities or properties which had or will have a material adverse effect;
(f) declaration, setting aside, or payment of dividends or
distributions by Nextera or any Subsidiary of Nextera in respect of its equity
securities or any redemption, purchase or other acquisition of any of the
securities of Nextera or any Subsidiary of Nextera;
(g) adverse change in employee relations which has or is
reasonably likely to have a material adverse effect on the productivity, the
financial condition, results of operations of Nextera and its Subsidiaries on a
consolidated basis or the relationships between the employees of Nextera and its
Subsidiaries and the management of Nextera and its Subsidiaries;
(h) payment, discharge or satisfaction of any Liabilities of
Nextera or any Subsidiary of Nextera other than the payment, discharge or
satisfaction in the ordinary course of business of Liabilities set forth or
reserved for on the Nextera Balance Sheet or incurred in the ordinary course of
business;
(i) failure to pay or satisfy when due any Liability of Nextera
or any Subsidiary of Nextera, except where the failure would not have a material
adverse effect on Nextera and its Subsidiaries on a consolidated basis;
(j) disposition or lapsing of any Proprietary Rights, or any
disposition or disclosure to any person of any of Proprietary Rights of Nextera
or any Subsidiary of Nextera not therefore a matter of public knowledge other
than as would not have a material adverse effect; or
(k) agreement by Nextera to do any of the things described in the
preceding clauses (a) through (j) other than as expressly provided for herein.
6.11. Insurance. Schedule 6.11 contains a complete and accurate
list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance maintained by
Nextera or any Subsidiary of Nextera on its business, assets or employees. All
such insurance coverage applicable to Nextera or any Subsidiary of Nextera is in
full force and effect and provides coverage as may be required by applicable
Regulation and to the knowledge of Nextera by any and all contracts to which
Nextera or any Subsidiary of Nextera is a party. To the knowledge of Nextera,
there is no Default under any such coverage nor is there presently any failure
to give notice or present any claim under any such coverage in a due and
48
timely fashion, except for such Defaults and any such failure to give notice or
present any claim as would not, individually or in the aggregate, have a
material adverse effect. There are no outstanding unpaid premiums except in the
ordinary course of business and no notice of cancellation or nonrenewal of any
such coverage has been received. There are no provisions in such insurance
policies for retroactive or retrospective premium adjustments. All products
liability, general liability and workers' compensation insurance policies
maintained by Nextera or any Subsidiary of Nextera are presently occurrence
policies and not claims made policies. There are no outstanding performance
bonds covering or issued for the benefit of Nextera or any Subsidiary of
Nextera. To the knowledge of Nextera, no insurer has advised Nextera or any
Subsidiary of Nextera that it intends to reduce coverage, materially increase
premiums or fail to renew existing policy or binder. As of the Closing Date,
Buyer shall have insurance in place that is substantially similar to the type
and level of insurance maintained by Seller immediately prior to the Closing.
6.12. Compliance with Laws. Nextera and each of its Subsidiaries
has been and are in substantial compliance with all Regulations and Court Orders
relating to the operations of Nextera and each of its Subsidiaries except in
each case for such non-compliance as would not, individually or in the
aggregate, have a material adverse effect. Within the last five years, none of
Nextera or its Subsidiaries has received any written notice to the effect that,
it is not in compliance with any such Regulations or Court Orders.
6.13. Proprietary Rights.
(a) Proprietary Rights. Schedule 6.13 lists: (i) for each
registered Trademark of Nextera or any Subsidiary of Nextera, the application
serial number or registration number, the class of goods covered and the
expiration date for each country in which a Trademark has been registered and
(ii) for each registered Copyright of Nextera or any Subsidiary of Nextera, the
number and date of filing for each country in which a Copyright has been filed.
Other than the items set forth on Schedule 6.13 and other than the unregistered
service/trade name "Nextera Enterprises" and variations thereof, there are no
Proprietary Rights used by Nextera or any Subsidiary of Nextera that are
material to the conduct of its business. Neither Nextera nor any Subsidiary of
Nextera has any patents or registered designs nor has it filed any patent
applications or registered design applications.
(b) Royalties and Licenses. Except as set forth on Schedule 6.13
neither Nextera nor any Subsidiary of Nextera has any obligation to compensate
any person for the use of any such Proprietary Rights nor has Nextera or any
Subsidiary of Nextera granted to any person any license, option or other rights
to use in any manner any of such Proprietary Rights, whether requiring the
payment of royalties or not.
(c) Ownership and Protection of Proprietary Rights. Except as set
forth on Schedule 6.13, Nextera and/or its Subsidiaries own or have a valid
right to use each of such Proprietary Rights. Except as set forth on Schedule
6.13, no other person (i) has notified Nextera or any Subsidiary of Nextera that
it is claiming any ownership of or right to use any such Proprietary Rights, or
(ii) to the knowledge of Seller, is infringing upon any such Proprietary Right
in any way. To the knowledge of Seller, except as set forth on Schedule 6.13,
use of such
49
Proprietary Rights by Nextera or any Subsidiary of Nextera does not and will not
conflict with, infringe upon or otherwise violate the valid rights of any third
party in or to such Proprietary Rights, and no Action has been instituted
against or notices received by Nextera or any Subsidiary of Nextera that are
presently outstanding alleging that use of the Proprietary Rights by Nextera or
any Subsidiary of Nextera infringes upon or otherwise violates any rights of a
third party in or to such Proprietary Rights.
6.14. Indebtedness. Other than as set forth on Schedule 6.14,
neither Nextera nor its Subsidiaries has any indebtedness for borrowed money or
has guaranteed the obligations of any Person with respect to indebtedness for
borrowed money.
ARTICLE VII.
COVENANTS
7.1. Further Assurances. Upon the terms and subject to the
conditions contained herein, Seller, General Partner and Limited Partner on the
one hand, and Buyer and Nextera on the other hand, agree, both before and after
the Closing, (a) to use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (b) to execute any documents, instruments or conveyances of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (c) to cooperate with each other in
connection with the foregoing. Without limiting the foregoing, Seller, General
Partner and Limited Partner on the one hand, and Buyer and Nextera on the other
hand, agree to use their respective commercially reasonable efforts (i) to
obtain all necessary waivers, consents and approvals from other parties to the
Contracts and Leases to be assumed by Buyer as listed on Schedule 7.1; provided,
however, that to the extent Buyer fails to cooperate (i) by providing on a
timely basis any financial or similar information reasonably requested by the
party whose consent is sought, including, without limitation, any pro forma
financial statements with respect to Buyer reflecting the consummation of the
transactions contemplated hereby, or (ii) executing and delivering any
assumption agreement or similar instrument requested by any lessor or sublessor
and which is reasonably acceptable to Buyer in connection with the obtaining of
any consent with respect to a Contract or Facility Lease listed on Schedule 7.1,
Seller shall not be required to obtain said consent hereunder and the obtaining
of said consent shall no longer be deemed a condition to Closing under Article
IX hereof; provided, further that no party shall be required to make any
payments, commence litigation or agree to modifications of the terms thereof in
order (i) to obtain any such waivers, consents or approvals, (ii) to obtain all
necessary Permits as are required to be obtained under any Regulations, (iii) to
give all notices to, and make all registrations and filings with third parties,
including without limitation submissions of information requested by
governmental authorities, and (iv) to fulfill all conditions to this Agreement.
7.2. Conduct of Business. Except as contemplated hereby and as
set forth on Schedule 7.2, between the date of this Agreement and the date of
the Closing, Seller will:
50
(a) Use reasonable efforts to conduct its business only in the
ordinary course consistent with past operations and refrain from changing or
introducing any method of management or operations except in the ordinary course
of business;
(b) Not enter into, extend, materially modify, terminate or renew
any Contract or Lease, except in the ordinary course of business;
(c) Not sell, assign, transfer, convey, lease, mortgage, pledge
or otherwise dispose of or encumber any of the Assets, or any interests therein,
except in the ordinary course of business and for the Permitted Liens;
(d) Not incur any Liability for long-term interest bearing
indebtedness, guarantee the obligations of others, indemnify others or, except
in the ordinary course of business (including borrowings in the ordinary course
of business under Seller's revolving credit facility) and endorsements for
collection of deposits in the ordinary course of business, incur any other
Liability;
(e) Refrain from making any change or incurring any obligation to
make a change in the Certificate of Limited Partnership and Agreement of Limited
Partnership of Seller;
(f) Refrain from declaring, setting aside or paying any dividend,
making any other distribution in respect of its capital stock or making any
direct or indirect redemption, purchase or other acquisition of its capital
stock;
(g) Refrain from making any material change in the method of
determining compensation (whether salary or bonus) payable or to become payable
to any of its employees and use all reasonable efforts in the ordinary course of
business to maintain Seller's workforce at its current level and make no
material adjustment in wages or hours of work, nor enter into any employment
agreement, or adopt any new Employee Programs or other benefit or severance plan
or amend or otherwise modify in any material respect any existing employment
agreement, Employee Programs or other benefit or severance plan;
(h) Refrain from entering into any arrangement or amending any
existing arrangement between Seller and any officer, director, partner or
Shareholder (or any entity affiliated with such persons), except for
arrangements contemplated by this Agreement or the Disclosure Schedule;
(i) Refrain from prepaying any loans (if any) from its partners,
officers or directors, borrowing any funds (other than borrowings in the
ordinary course of business under Seller's revolving credit facility) or making
any other change in its borrowing arrangements;
(j) Use its commercially reasonable efforts to prevent any change
with respect to its management and supervisory personnel and banking
arrangements;
(k) Use its commercially reasonable efforts to keep intact its
business organization, to keep available its present officers and employees and
to preserve the goodwill of all suppliers, customers, independent contractors
and others having business relations with it;
51
(l) Have in effect and maintain at all times all insurance of the
kind, in the amount and with the insurers set forth in the Schedule 4.24 hereto
or equivalent insurance with any substitute insurers approved in writing by
Nextera;
(m) Maintain the working capital of Seller in the ordinary course
of business at levels consistent with past operations;
(n) Furnish Nextera with unaudited monthly balance sheets and
statements of income and retained earnings and cash flows of Seller within
fifteen (15) days after each month end for each month ending more than fifteen
(15) days before the Closing;
(o) Permit Nextera and its authorized representatives during
normal business hours to have full access to all its properties, assets,
records, tax returns, contracts and documents and furnish to Nextera or its
authorized representatives such financial and other information with respect to
its business or properties as Nextera may from time to time reasonably request.
Between the date of this Agreement and the Closing, Nextera shall
provide Seller with prior written notice of (a) any material actions,
transactions or developments outside the ordinary course of Nextera's and its
Subsidiaries' respective businesses, (b) failure of Nextera or any of its
Subsidiaries to use all reasonable efforts to conduct their respective business
only in the ordinary course consistent with past operations; (c) failure of
Nextera or any of its Subsidiaries to use all reasonable efforts in the ordinary
course of business to maintain their respective workforces at current levels and
not make any material adjustment in wages or hours of work, nor enter into any
amendments to any material employment agreement, or adopt any new pension,
benefit or severance plan; (d) other than the issuance of equity interests upon
the exercise of options as set forth on Schedule 6.6, any issuance or sale of
any additional equity interests by any of Nextera or its Subsidiaries or any
securities convertible into such equity interests; (e) any amendment by Nextera
or any of its Subsidiaries of its respective operating agreement in the case of
a limited liability company or constituent documents in the case of a
corporation so as to effect the value of such person or the ability of such
person to consummate the transactions contemplated hereby; and (f) any material
capital expenditures by Nextera or any of its Subsidiaries.
Between the date of this Agreement and the date of the Closing,
Nextera shall permit Seller and its authorized representatives during normal
business hours to have full access to all its properties, assets, records, tax
returns, contracts and documents and furnish to Seller or its authorized
representatives such financial and other information with respect to its
business or properties as Seller may from time to time reasonably request.
7.3. No Solicitation of Other Offers. Neither Seller, General
Partner, Limited Partner, nor any of their officers, directors, agents, or
employees or Representatives will, directly or indirectly, solicit, encourage,
assist, initiate discussions or engage in negotiations with, provide any
information concerning the operations, properties or assets of Seller, or
entertain or enter into any agreement or transaction with, any person, other
than Nextera, relating to the possible acquisition of the equity of Seller or
any of its assets, except for the sale of assets in the ordinary course of
business of Seller consistent with the terms of this Agreement. If such a
proposal is
52
received, Seller will promptly notify Nextera of the terms of such proposal and
the identity of the party making the proposal.
7.4. Notification of Certain Matters.
(a) From the date hereof through the Closing, Seller, General
Partner, Limited Partner and the Shareholders on the one hand, and Buyer and
Nextera on the other hand, shall give prompt notice to the other of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty made by such person and
contained in this Agreement or in any exhibit or schedule hereto to be untrue or
inaccurate in any respect and (ii) any failure of such party, or any of its
respective affiliates or Representatives, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement or any exhibit or schedule hereto; provided, however, that such
disclosure shall not be deemed to cure any breach of a representation, warranty,
covenant or agreement or to satisfy any condition except as otherwise provided
in Section 7.4(b) hereof. The Seller shall promptly notify Nextera of any
Default, the threat or commencement of any Action, or any development that
occurs before the Closing that could in any way materially affect Seller, the
Assets or the Business. The Buyer and Nextera shall promptly notify the Selling
Parties of any default, the threat or commencement of any action, or any
development that occurs before the Closing that could in any way materially
affect the Buyer or Nextera, individually, or their respective businesses and
operations.
(b) Anything in Section 7.4(a) to the contrary notwithstanding,
if any event not expressly contemplated by this Agreement occurs at any time
between the date hereof and the Closing Date that would result in any
representation or warranty made by the Selling Parties, on the one hand, and
Buyer and Nextera, on the other hand, not being true in any material respect on
the Closing Date, such parties shall promptly give written notice of such event
to such other parties. Following receipt of such notice, the parties receiving
notice shall have no obligation to consummate the transactions contemplated
hereby and the Selling Parties, on the one hand, or Buyer and Nextera, on the
other hand, may terminate this Agreement pursuant to Article XIII hereof;
provided, however, that if such parties consummate the transactions contemplated
hereby, such parties shall not have any indemnification rights hereunder
relating to or arising out of, the subject matter of the event described in any
written notice validly given pursuant to this Section 7.4(b) and; provided,
further, that the giving of any notice by a party pursuant to this Section
7.4(b) shall not relieve such party of any liability for breach of any covenant
hereunder or the failure of any representation or warranty of such party
hereunder to be true and correct as of the date hereof.
7.5. Employee Matters.
(a) In addition to the Employment Agreements described in Section
9.13, Buyer shall extend offers of employment to all of the employees of Seller
and its Subsidiaries (such employees are hereinafter referred to as the "Rehired
Employees") effective as of the Closing, which offers shall be on terms and
conditions substantially similar to the current terms and conditions of
employment by Seller and its Subsidiaries. Seller shall cooperate with and use
53
its commercially reasonable efforts to assist Buyer in its efforts to secure
satisfactory employment arrangements with the employees of Seller.
(b) Effective as of the Closing Date, Buyer shall adopt, assume
sponsorship of and substitute itself as employer under each of the Seller
Employee Programs listed on Schedule 4.23. Seller shall take all actions within
its authority to enable and use its best efforts to assist Buyer in adopting and
assuming such programs, including obtaining resignations effective as of the
Closing Date of any and all fiduciaries (including trustees, committee members
and plan administrators) with respect to such programs whose resignation is
requested by Buyer. In connection with the assumption of the Seller Employee
Programs, Buyer shall assume all liabilities and obligations relating thereto,
including those incurred prior to, on or after the Closing Date with respect to
all participants thereunder.
(c) Buyer agrees that, with respect to all of its employee
benefit programs and arrangements covering or otherwise benefiting any of the
Rehired Employees on or after the Closing Date, service with Seller and its
affiliates shall be counted for purposes of determining any period of
eligibility to participate or to vest in benefits to the same extent such
service was counted under the Seller Employee Programs.
(d) Subject to Section 10.1, Seller shall use its best efforts to
cause to be transferred to the Buyer all life and other insurance policies used
in connection with the Seller Employee Programs.
(e) Except to the extent required by law, Seller shall not pay
Rehired Employees their accrued and unused vacation, and Buyer shall provide,
without duplication of benefits, all Rehired Employees with vacation time rather
than cash in lieu of vacation time for all vacation earned and unpaid through
the Closing Date.
(f) Buyer shall provide a medical plan as of the Closing Date so
as to ensure uninterrupted coverage of all Rehired Employees. Such medical plan
shall grant credit for amounts paid by employees during the applicable plan year
beginning prior to the Closing Date, shall not exclude pre-existing conditions
and shall provide for medical benefits substantially consistent with the
Seller's (and its Subsidiaries') medical plan in effect prior to the Closing
Date.
(g) From and after the Closing Date until December 31, 1999,
Buyer shall, and shall cause its Subsidiaries, to provide employee benefits and
compensation to the Rehired Employees which are substantially similar to those
provided by Seller and its Subsidiaries immediately prior to the Closing Date,
provided, however, that at any time (i) Nextera may in its sole discretion cause
Buyer or Buyer's Subsidiaries (A) to modify or terminate any employee benefits
provided to such Rehired Employees as Nextera deems necessary to provide that
any employee benefit plan and related trust intended to be qualified and exempt
under Code Sections 401(a) and 501(a), respectively, shall be so qualified and
exempt, or (B) to otherwise comply with the applicable requirements of ERISA (or
other applicable law) and (ii) the Leadership Council (as defined in the Buyer
Operating Agreement) may terminate such employee benefits in its discretion. In
the event that any employee benefits are terminated or materially reduced
pursuant to subsection (g)(i), Buyer (or a Subsidiary thereof) shall provide
each applicable Rehired
54
Employee with other benefits or one or more cash payments which in the aggregate
on an after-tax basis are equal to the value of such terminated or
materially-reduced benefits through the earlier of December 31, 1999 or the date
of the Rehired Employee's termination of employment.
(h) Except as provided in the Employment Agreements described in
Section 9.13, nothing contained in this Agreement shall confer upon any Rehired
Employee any right with respect to continuance of employment by Buyer, nor shall
anything herein interfere with the right of Buyer to terminate the employment of
any of the Rehired Employees at any time, with or without cause, or restrict
Buyer in the exercise of its independent business judgment in modifying any of
the terms and conditions of the employment of the Rehired Employees.
(i) Except as provided in the Employment Agreements described in
Section 9.13, no provision of this Agreement shall create any third party
beneficiary rights in any Rehired Employee, any beneficiary or dependents
thereof, or any collective bargaining representative thereof, with respect to
the compensation, terms and conditions of employment and benefits that may be
provided to any Rehired Employee by Buyer or under any benefit plan which Buyer
may maintain.
(j) Seller shall not, directly or indirectly, hire or offer
employment to or seek to hire or offer employment to any employee of Seller
whose employment is continued by Buyer after the Closing Date or any employee of
Buyer or any successor or affiliate of Buyer which is engaged in the Business,
unless Buyer first terminates the employment of such employee or gives its
written consent to such employment or offer of employment.
7.6. Option Pool. At the Closing, Nextera agrees to grant to the
Rehired Employees and the new hires of Buyer who are involved in the Business
options under the Amended and Restated Equity Participation Plan effective as of
July 28, 1998 (the "Equity Participation Plan"), a true and correct copy of
which is attached hereto as Exhibit P and in the forms of related agreements
attached hereto as Exhibit Q-1 for those Rehired Employees who are also
Principals and Exhibit Q-2 for the those Rehired Employees or new hires who are
not also Principals, which grants shall consist of an aggregate pool of options
to purchase 815,000 Nextera Class A Units to be distributed and allocated as set
forth in a letter of even date herewith from Seller to Buyer and Nextera which
letter makes specific reference to this Section 7.6. Such options shall have an
exercise price of $7.50 per share and shall vest at the rate of twenty-five
percent (25%) per year over four (4) years. Buyer and Nextera also agree to make
available an additional pool of options to purchase 100,000 Nextera Class A
Units for hiring purposes and performance recognition in calendar year 1998
subject to Nextera's review and approval and with such terms and conditions as
may be determined by Nextera, of which options to purchase 30,000 Nextera Class
A Units have been allocated as set forth on in the letter referred to in the
preceding sentence.
Nextera has duly adopted the Equity Participation Plan in the
form attached as Exhibit P and form of related agreement in the forms attached
as Exhibit Q-1 and Exhibit Q-2 hereto. The Shareholders acknowledge that (a) the
terms of the options are governed by such Equity Participation Plan attached as
Exhibit P and related agreements in the forms attached as Exhibit Q-1 and
Exhibit Q-2, and (b) the tax consequences of the options are materially
different
55
in a limited liability company as compared to a corporate structure, and the
Shareholders have had the opportunity to consult their own tax advisors of such
tax consequences.
7.7. Additional Units. The Employment Agreements referred to in
Section 9.13 (other than those in the form of Exhibit J-5) shall provide for the
sale by Nextera of Nextera Class A Units to the individuals whose names are set
forth in a letter of even date herewith from Seller to Buyer and Nextera which
letter makes specific reference to this Section 7.7.
7.8. Conduct of the Business Following the Closing.
(a) Buyer and Nextera agree to maintain the consulting service
offerings of Seller in substantially the same form as such service offerings
existed immediately prior to the Closing; provided, however, that Buyer and
Nextera (or the entity controlled by Nextera which provides such service
offerings) (i) may make available additional service offerings and (ii) may
eliminate existing service offerings if the gross revenues and/or net profits
derived from such offerings are determined by Nextera to be inadequate to
maintain such service offerings.
(b) Buyer and Nextera hereby confirm that as of the date hereof
they intend (i) to use the "Sibson & Company, L.L.C., a Nextera Company" name in
its worldwide operations, (ii) to cause Buyer (or some other entity controlled
by Nextera) to conduct the Business for the foreseeable future and (iii) to
cause Buyer or such other entity that conducts the Business to lead human
capital consulting for Nextera and its Subsidiaries. The parties acknowledge
that the intention of Buyer and Nextera with respect to this Section 7.8(b) is
not a binding commitment on the part of Buyer or Nextera.
7.9. Permitted Distribution. Prior to the Closing, Seller shall
be permitted to accrue and declare a distribution (the "Permitted Distribution")
to General Partner and Limited Partner provided that at the Closing, taking into
account the Permitted Distribution, Seller shall have an amount of working
capital greater than or equal to the Minimum Working Capital. Effective as of
the Closing, Buyer hereby agrees to assume the liability to pay the Permitted
Distribution and shall pay the Permitted Distribution within 15 days after
resolution of the Working Capital Adjustment under Section 2.5 provided that at
such time Buyer has sufficient cash or availability under its revolving credit
facility to make the Permitted Distribution; provided further, however, that in
no event shall Buyer pay the Permitted Distribution later than December 31,
1998. In the event that the Permitted Distribution is to be paid after the
Incorporation Transaction (as defined in the Exchange Agreement), Buyer shall
make such payment to the Shareholder Representative for distribution to the
Shareholders.
7.10. Preservation of Confidentiality. In connection with the
negotiation of this Agreement and the preparation for the consummation of the
transactions contemplated hereby, the parties acknowledge that each has had
access to confidential information relating to each other, including technical
or marketing information, ideas, methods, developments, inventions,
improvements, business plans, trade secrets, scientific or statistical data,
diagrams, drawings, specifications or other proprietary information relating
thereto, together with all analyses, compilations, studies or other documents,
records or data prepared by Seller, General Partner, Limited Partner, the
Shareholders, Buyer, Nextera or their respective Representatives which
56
contain or otherwise reflect or are generated from such information
("Confidential Information"). Prior to the date of the Closing, each of the
parties shall treat all Confidential Information as confidential, preserve the
confidentiality thereof and not disclose any Confidential Information, except to
their Representatives and affiliates who need to know such Confidential
Information in connection with the transactions contemplated hereby. The parties
shall use all reasonable efforts to cause their Representatives to treat all
Confidential Information as confidential, preserve the confidentiality thereof
and not disclose any Confidential Information. Each party shall be responsible
for any breach of this Agreement by any of its Representatives.
7.11. No Distribution of Nextera Class A Units. Except following
a breach by Nextera of its obligation to effect the Incorporation Transaction
(as defined in the Exchange Agreement), Seller, General Partner and Limited
Partner agree to retain the Nextera Class A Units and to not distribute such
units to the Shareholders, provided that Seller may distribute the Nextera Class
A Units it receives pursuant to this Agreement to General Partner and Limited
Partner. It being understood that the capital stock of General Partner and
Limited Partner will be exchanged pursuant to the Exchange Agreement.
7.12. Buyer Efforts on Financing and Qualifications. Buyer agrees
to use commercially reasonable efforts to (i) consummate the third party
financing to fund the Purchase Price pursuant to the commitment letter attached
hereto Exhibit O, (ii) qualify itself to do business in each jurisdiction in
which Seller does business within thirty days following the Closing Date, and
(iii) obtain insurance substantially similar to the insurance maintained by the
Seller immediately prior to the Closing Date.
7.13. Annual Incentive Plan. On or prior to the Closing, Buyer
shall adopt the Annual Incentive Plan attached hereto as Exhibit R.
7.14. Senior Leadership Team of Nextera. Following the Closing,
the Leadership Council of Buyer shall designate two individuals who shall serve
from time to time as members of the Senior Leadership Team of Nextera and/or
Newco (as defined in the Exchange Agreement) or other similar team comprised of
representatives of Nextera's Subsidiaries or the Subsidiaries of Newco, subject
to the approval of such designees by Nextera (which approval shall not be
unreasonably withheld). The Leadership Council of Buyer shall have the right to
remove and designate replacements for such designees to the Senior Leadership
Team of Nextera and/or Newco or such other similar teams subject to Nextera's
approval (which approval shall not be unreasonably withheld).
ARTICLE VIII.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions provided
for hereby are subject, in the discretion of Seller, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by Seller:
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8.1. Representations, Warranties and Covenants. All
representations and warranties of Buyer and Nextera contained in this Agreement
shall be true and correct at and as of the date of this Agreement and at and as
of the Closing Date, except as and to the extent that the facts and conditions
upon which such representations and warranties are based are expressly required
or permitted to be changed by the terms hereof, and Buyer and Nextera shall have
performed and satisfied all agreements and covenants required hereby to be
performed by them prior to or on the Closing Date.
8.2. No Actions or Court Orders. No Action by any governmental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected to (a) materially affect the right or ability
of Buyer to own operate possess or transfer the Assets after the Closing, (b)
materially damage the Selling Parties if the transactions contemplated hereunder
are consummated or (c) materially damage the business or financial condition of
Buyer and/or Nextera on a consolidated basis if the transactions contemplated
hereunder are consummated. There shall have been no determination by the Selling
Parties, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state or other
governmental authority of litigation. There shall not be any Regulation or Court
Order that makes the purchase and sale of the Business or the Assets
contemplated hereby illegal or otherwise prohibited.
8.3. Consents. All Permits, consents, approvals and waivers from
governmental authorities and other parties necessary to the consummation of the
transactions contemplated hereby and for the operation of the Business by Buyer
(including, without limitation, the termination of the applicable waiting period
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act) shall have been
obtained.
8.4. Material Changes. Since December 31, 1997, there shall not
have been any material adverse change with respect to the financial or business
condition of Nextera and its Subsidiaries except as disclosed on the schedules
hereto provided by Nextera to Seller.
8.5. Approval of Seller's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this agreement shall have been approved by Weil, Gotshal & ▇▇▇▇▇▇ LLP, special
counsel to Seller and such counsel shall have received on behalf of Seller such
other certificates, opinions and documents in form satisfactory to such counsel
as Seller may reasonably require from Buyer and Nextera to evidence compliance
with the terms and conditions hereof as of the Closing and the correctness as of
the Closing of the representations and warranties of Buyer and Nextera and the
fulfillment of its covenants.
8.6. Opinions of Counsel. Buyer shall have delivered to Seller
opinions of Maron & Sandler, counsel to Buyer and Nextera, and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel to Buyer and Nextera, each dated as of the Closing Date, in the
forms attached hereto as Exhibit H-1 and Exhibit H-2;
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8.7. Assumption Document. Buyer shall have executed the
Assumption Document in substantially the form attached hereto as Exhibit G and
the other assumption documents identified in Section 3.2(c).
8.8. Escrow Agreement. Buyer, Nextera and the Escrow Agent shall
have executed and delivered the Escrow Agreement in substantially the form
attached hereto as Exhibit B.
8.9. Employment Agreements. Buyer shall have executed and
delivered to each of the individuals (the "Principals") listed in a letter of
even date herewith from Seller to Buyer and Nextera which letter makes specific
reference to this Section 8.9 the Employment Agreements in substantially the
forms attached hereto as Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇ and J-5, as applicable,
with the salaries, non-solicitation and severance periods as set forth on such
letter. Buyer shall have offered employment to all of the employees of Seller as
provided hereunder.
8.10. Corporate Documents. Seller shall have received from Buyer
and Nextera resolutions adopted by the board of directors of Nextera and the
member of Buyer, approving this Agreement and the agreements and the
transactions contemplated hereby and thereby, certified by an officer of Nextera
and the manager of Buyer, respectively.
8.11. Operating Agreement of Nextera. A majority of the
membership interests of Nextera shall have adopted that certain First Amendment
to the Nextera Operating Agreement which, among other things, admits Seller and
certain Shareholders as members of Nextera. Seller shall have received from
Nextera (a) a copy of the Nextera Operating Agreement including the First
Amendment thereto attached hereto as Exhibit M and (b) resolutions adopted by
the Board of Directors of Nextera, approving this Agreement and the agreements
and the transactions contemplated hereby and thereby, certified by an officer of
Nextera.
8.12. Operating Agreement of Buyer. Nextera, as the single member
of Buyer, shall have adopted the form of Limited Liability Company Agreement
attached hereto as Exhibit L. Seller shall have received from Buyer (a) a copy
of the Buyer Operating Agreement and (b) resolutions adopted by the member of
Buyer, approving this Agreement and the agreements and the transactions
contemplated hereby and thereby, certified by the manager of Buyer.
8.13. Deliveries. Buyer shall have made all deliveries to Seller
required by Section 3.2.
8.14. Exchange Agreement. Buyer and the other parties thereto
shall have executed the Exchange Agreement in substantially the form attached
hereto as Exhibit N.
8.15. Annual Incentive Plan. Buyer shall have adopted the Annual
Incentive Plan attached hereto as Exhibit R.
8.16. Sibson Canada. Nextera and the shareholders of Sibson
Canada, Inc. ("Sibson Canada") shall have entered into a definitive agreement
regarding the purchase of Sibson Canada, or its successor, by Nextera or a
Subsidiary of Nextera.
59
8.17. PNC Bank. PNC Bank, National Association, shall have
consented to the assignment to and assumption by Buyer of Seller's Revolving
Credit Facility with PNC Bank, National Association, and the existing
indebtedness thereunder and any and all related loan documents and Buyer shall
have assumed all of Seller's and its subsidiaries' obligations with respect to
such Revolving Credit Facility and any and all related loan documents and Seller
and its Subsidiaries shall have been released from all obligations thereunder.
ARTICLE IX.
CONDITIONS TO BUYER'S AND NEXTERA'S OBLIGATIONS
The obligations of Buyer and Nextera to consummate the
transactions provided for hereby are subject, in the discretion of Buyer and
Nextera, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by Buyer and Nextera:
9.1. Representations, Warranties and Covenants. All
representations and warranties of the Selling Parties contained in this
Agreement shall be true and correct in all material respects at and as of the
date of this Agreement and at and as of the Closing Date, except as and to the
extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms hereof, and each Selling Party shall have performed and satisfied in all
material respects all agreements and covenants required hereby to be performed
by it prior to or on the Closing Date.
9.2. Consents; Regulatory Compliance and Approval. All Permits,
consents, approvals and waivers from governmental authorities and other parties
listed on Schedule 7.1 shall have been obtained. Buyer shall be satisfied that
all approvals required under any Regulations to carry out the transactions
contemplated by this Agreement shall have been obtained and that the parties
shall have complied with all Regulations applicable to this Agreement and the
transactions contemplated hereby.
9.3. No Actions or Court Orders. No Action by any governmental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected (a) to materially damage Buyer or Nextera,
(b) to materially damage the Assets or the Business if the transactions
contemplated hereunder are consummated, including without limitation any
material adverse effect on the right or ability of Buyer or Nextera to own,
operate, possess or transfer the Assets after the Closing or (c) to materially
damage the business or financial condition of Buyer and Nextera on a
consolidated basis if the transactions contemplated hereunder are consummated.
There shall have been no determination by Buyer or Nextera, acting in good
faith, that the consummation of the transactions contemplated by this Agreement
has become inadvisable or impracticable by reason of the institution or threat
by any person or any federal, state or other governmental authority of
litigation. There shall not be any Regulation or Court Order that makes the
purchase and sale of the Business or the Assets contemplated hereby illegal or
otherwise prohibited.
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9.4. Approval of Nextera's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this Agreement shall have been approved by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, as counsel for
Nextera, and such counsel shall have received on behalf of Nextera such other
certificates, opinions, and documents in form satisfactory to such counsel as
Nextera may reasonably require from Seller or the Shareholders to evidence
compliance with the terms and conditions hereof as of the Closing and the
correctness as of the Closing of the representations and warranties of the
Selling Parties and the fulfillment of their respective covenants.
9.5. Opinions of Counsel. Seller shall have delivered to Buyer
opinions of Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel to Seller, and ▇▇▇▇▇▇▇
▇▇▇▇▇▇, counsel to Seller, each dated as of the Closing Date, in the forms
attached hereto as Exhibit I-1 and Exhibit I-2.
9.6. Material Changes. Since the Base Balance Sheet Date, there
shall not have been any material adverse change with respect to the Business or
the Assets except as disclosed on the Disclosure Schedule.
9.7. Partnership Documents. Buyer and Nextera shall have received
from Seller resolutions adopted by its General Partner, approving this Agreement
and the agreements and transactions contemplated hereby and thereby, certified
by Seller's Senior Managing Principal.
9.8. Corporate Documents. Buyer and Nextera shall have received
from Seller resolutions adopted by the boards of directors of General Partner
and Limited Partner, approving this Agreement and the agreements and the
transactions contemplated hereby and thereby, certified by an officer of General
Partner and Limited Partner, respectively.
9.9. Conveyancing Documents; Release of Encumbrances. Seller
shall have executed and delivered the documents described in Section 3.2 hereof
so as to effect the transfer and assignment to Buyer of all right, title and
interest in and to the Assets and Seller shall have filed (where necessary) and
delivered to Buyer all documents necessary to release the Assets from all
Encumbrances other than the Permitted Liens, which documents shall be in a form
reasonably satisfactory to Buyer's counsel.
9.10. Name Change. Each of Seller and General Partner shall have
filed amendments to its Certificate of Limited Partnership or Articles of
Incorporation or similar documents, as appropriate, to change its organization
name so as not to include the words "Sibson & Company" or any other name or ▇▇▇▇
that has such a near resemblance thereto as may be likely to cause confusion or
mistake to the public, or to otherwise deceive the public. Such amendment shall
be in a form acceptable for filing with the Secretary of State of the State of
Delaware, if applicable.
9.11. Permits. Buyer shall have obtained or been granted the
right to use all Permits necessary to its operation of the Business except for
qualifications to do business to be obtained within thirty (30) days after the
Closing.
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9.12. Escrow Agreement. The Selling Parties and the Escrow Agent
shall have executed and delivered the Escrow Agreement in substantially the form
attached hereto as Exhibit B.
9.13. Employment Agreements. Each of the individuals listed on
Schedule 8.9 shall have executed and delivered to Buyer an employment agreement
in substantially the form indicated opposite such individual's names on Schedule
8.9 and in the forms attached hereto as Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, or J-5 as
applicable (individually, an "Employment Agreement" and collectively, the
"Employment Agreements").
9.14. Third-Party Financing. Nextera and Buyer shall have
received third party financing in an amount sufficient to fund the Purchase
Price under the commitment letter attached hereto as Exhibit N.
9.15. Payment of Employee Promissory Notes. The borrowers under
the promissory notes listed on Schedule 4.9 shall have repaid the principal
balance and any accrued interest on such promissory notes.
9.16. Deliveries. Seller shall have made all deliveries to Buyer
required by Section 3.2.
9.17. Exchange Agreement. The Shareholders shall have executed
the Exchange Agreement in substantially the form attached hereto as Exhibit O.
9.18. Sibson Canada. Nextera and the shareholders of Sibson
Canada, Inc. ("Sibson Canada") shall have entered into a definitive agreement
regarding the purchase of Sibson Canada, or its successor, by Nextera or a
Subsidiary of Nextera.
9.19. PNC Bank. PNC Bank, National Association, shall have
consented to the assignment to and assumption by Buyer of Seller's Revolving
Credit Facility with PNC Bank, National Association, and the existing
indebtedness thereunder.
ARTICLE X.
CONSENTS TO ASSIGNMENT
10.1. Consents to Assignment. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Contract, Lease, Permit or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a Default thereof or in
any way adversely affect the rights of Buyer thereunder. If such consent is not
obtained, or if an attempted assignment thereof would be ineffective or would
affect the rights thereunder so that Buyer would not receive all such rights,
Seller will cooperate with Buyer, in all reasonable respects, to provide to
Buyer at the Buyer's sole cost and expense the benefits under any such Contract,
Lease, Permit or any claim or right, including without limitation enforcement
for the benefit of Buyer of any and all rights of Seller against a third party
thereto arising out of the Default or cancellation by such third party or
otherwise. In addition, Seller agrees to cancel
62
any life or other insurance policy used in connection with Seller Employee
Programs as directed by Nextera at or after the Closing. Nothing in this Section
10.1 shall affect Buyer's right to terminate this Agreement under Sections 9.2
and 13.1 in the event that any consent or approval set forth on Schedule 7.1 is
not obtained. Anything in this Agreement to the contrary notwithstanding Seller
shall have no liability whatsoever for failure to assign any such Contract or
Lease or obtain consent to transfer same.
ARTICLE XI.
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
11.1. Collection of Accounts Receivable and Letters of Credit. At
the Closing, Buyer will acquire hereunder, and thereafter Buyer or its designee
shall have the right and authority to collect for Buyer's or its designee's
account, all receivables, letters of credit and other items which constitute a
part of the Assets, and Seller shall promptly after receipt of any payment in
respect of any of the foregoing, properly endorse and deliver to Buyer any
letters of credit, documents, cash or checks received on account of or otherwise
relating to any such receivables, letters of credit or other items. Seller shall
promptly transfer or deliver to Buyer or its designee any cash or other property
that the Seller may receive in respect of any deposit, prepaid expense, claim,
contract, license, lease, commitment, sales order, purchase order, letter of
credit or receivable of any character, or any other item, constituting a part of
the Assets.
11.2. Books and Records; Tax Matters.
(a) Books and Records. Each of Seller and General Partner, on the
one hand, and Buyer and Nextera, on the other hand, agrees that it will
cooperate with and make available to the other party, during normal business
hours, all Books and Records, information and employees (without substantial
disruption of employment) retained and remaining in existence after the Closing
which are necessary or useful in connection with any tax inquiry, audit,
investigation or dispute, any litigation or investigation or any other matter
requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and Records,
information or employees shall bear all of the out-of-pocket costs and expenses
(including without limitation attorneys' fees, but excluding reimbursement for
salaries and employee benefits) reasonably incurred in connection with providing
such Books and Records, information or employees.
(b) Cooperation and Records Retention. Seller, General Partner,
Limited Partner, Buyer and Nextera shall (i) each provide the others with such
assistance as may reasonably be requested by any of them in connection with the
preparation of any Tax Return, audit, or other examination by any taxing
authority or judicial or administrative proceedings relating to Liability for
Taxes, (ii) each provide the others with any records or other information that
may be relevant to such Tax Return, audit or examination, proceeding or
determination subject to the last sentence of this subsection (b), and (iii)
each provide the others with any final determination of any such audit or
examination, proceeding, or determination that affects any amount required to be
shown on any Tax Return of the other for any period. Without limiting the
generality of the foregoing, Seller, General Partner, Limited Partner, Buyer and
Nextera shall
63
each retain, until the applicable statutes of limitations (including any
extensions) have expired, copies of all Tax Returns, supporting work schedules,
and other records or information that may be relevant to such Tax Returns for
all tax periods or portions thereof ending on or before the Closing Date and
shall not destroy or otherwise dispose of any such records without first
providing the other party with a reasonable opportunity to review and copy the
same.
(c) Preparation of Form W-2's. Pursuant to Revenue Procedure
84-77 (1984-2 C.B. 753), provided that Seller provides Buyer with all necessary
payroll records for the calendar year which includes the Closing Date, Buyer
shall furnish a Form W-2 to each employee employed by Buyer who had been
employed by Seller disclosing all wages and other compensation paid for such
calendar year, and taxes withheld therefrom, and Seller shall be relieved of the
responsibility to do so.
(d) Payment of Liabilities. Following the Closing Date, Seller
shall pay promptly when due all of the debts and Liabilities of Seller for
Taxes; provided, however, this covenant shall not apply to that portion (or all)
of any Tax that Seller is contesting in good faith. Following the Closing Date,
Buyer shall pay promptly when due all of the Assumed Liabilities; provided,
however, this covenant shall not apply to that portion (or all) of any Liability
that Buyer is contesting in good faith.
11.3. Survival of Representations, Etc. Each of the
representations, warranties, agreements, covenants and obligations herein are
material, shall be deemed to have been relied upon by the other party and shall
survive the Closing regardless of any investigation and shall not merge in the
performance of any obligation by either party hereto; provided, however, that
such representations and warranties shall expire on the same dates as and to the
extent that the rights to indemnification with respect thereto under Article XII
shall expire.
ARTICLE XII.
INDEMNIFICATION
12.1. Indemnification by the Selling Parties. Each Selling Party
agrees subsequent to the Closing to indemnify and hold Buyer and Nextera and
their respective subsidiaries, affiliates, successors and assigns and persons
serving as officers, directors, partners, managers, shareholders, members,
employees and agents thereof (other than the Shareholders, except to the extent
of Liabilities incurred in their capacities as an officer, director or employee
of Buyer after the Closing) (individually a "Buyer Indemnified Party" and
collectively the "Buyer Indemnified Parties") harmless from and against any
Damages which may be sustained or suffered by any of them attributable to,
arising out of or based upon any of the following matters:
(a) the commission of common law fraud by any of the Seller,
General Partner or Limited Partner in connection with the transactions
contemplated by this Agreement (collectively, "Fraud Claims");
(b) any failure to convey title to the Assets free and clear of
any Encumbrances other than Permitted Liens (collectively, "Ownership Claims");
64
(c) except for the Assumed Liabilities, any liability of Seller,
General Partner, Limited Partner and each Subsidiary of Seller for Taxes arising
from their respective activities, assets and all events and transactions on or
prior to the Closing and any breach of the representations and warranties set
forth in Section 4.22 hereof and any covenant with respect to Taxes or tax
related matters set forth herein or in any related agreement (collectively, "Tax
Claims");
(d) any Excluded Liability (collectively, "Excluded Liability
Claims");
(e) other than Fraud Claims, Ownership Claims, Tax Claims or
Excluded Liability Claims, any other breach of any representation, warranty or
covenant of Seller under this Agreement or in any certificate or schedule
delivered pursuant hereto by Seller (collectively, "General Claims").
In addition, each Shareholder severally, but not jointly, agrees
subsequent to the Closing to indemnify and hold all Buyer Indemnified Parties
harmless from and against any Damages attributable to, arising out of or based
upon common law fraud by such Shareholder in connection with the transactions
completed by this Agreement (collectively, "Individual Fraud Claims") or any
breach (whether or not deliberate or willful) of any representation or warranty
of such Shareholder contained in Article V (collectively, "Individual General
Claims" and together with Individual Fraud Claims, "Individual Claims").
12.2. Limitations on Indemnification by the Selling Parties.
Anything contained in this Agreement to the contrary notwithstanding, the
liability of Seller, General Partner, Limited Partner and the Shareholders to
provide any indemnification to any Buyer Indemnified Party and right of Buyer
Indemnified Parties to indemnification under Section 12.1 (or otherwise) shall
be subject to the following provisions:
(a) No claims for indemnification shall be made under this
Agreement against the Seller, the General Partner, the Limited Partner or any
Shareholder, and no indemnification shall be payable to any Buyer Indemnified
Party, with respect to General Claims and Individual General Claims after the
date which is eighteen (18) months following the Closing.
(b) No claims for indemnification shall be made under this
Agreement against the Seller, the General Partner, the Limited Partner or any
Shareholder, and no indemnification shall be payable to any Buyer Indemnified
Party, with respect to any Tax Claim (including any Excluded Liability in
respect of any Tax) after expiration of all applicable statutes of limitation
with respect to the Tax that is the subject of the indemnification claim taking
into account any extensions thereof with respect to collection of the Tax.
(c) The aggregate amount to be payable by the Selling Parties to
all Buyer Indemnified Parties for claims for indemnification with respect to
General Claims and Individual General Claims (including any amounts subject to
the Escrow Agreement and any Nextera Class A Units delivered to Nextera in
satisfaction of an indemnification claim) shall in no event exceed $26,551,000.
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(d) With respect to General Claims, the amount payable by a
Shareholder to all Buyer Indemnified Parties for claims for indemnification
hereunder shall in no event exceed such Shareholder's pro rata share of the
total amount to be paid to all Buyer Indemnified Parties for claims for
indemnification hereunder. The pro rata shares of the Shareholders for purposes
of this paragraph shall be the same percentages as the Shareholders' respective
ownership interests listed on Schedule 4.2
(e) With respect to Individual Claims, the Shareholder who makes
the representation, warranty or covenant from which the claim arose shall be
severally liable for indemnification in respect of such a claim and the other
Selling Parties shall not be jointly liable therefor.
(f) Seller, General Partner, Limited Partner, and the
Shareholders shall have no obligation for indemnification with respect to
General Claims hereunder until aggregate claims for indemnification with respect
to General Claims hereunder exceed $200,000, in which case Seller, General
Partner, Limited Partner and the Shareholders shall be obligated for
indemnification of all General Claims including the initial $200,000 of such
claims.
(g) Claims for indemnification with respect to Fraud Claims,
Ownership Claims, Tax Claims (except with respect to subsection (b) above),
Excluded Liability Claims (except with respect to subsection (b) above),
Individual Fraud Claims made under this Agreement by any Buyer Indemnified Party
and breach by Seller, General Partner or Limited Partner of Section 7.11 shall
not be subject to any of the limitations set forth in this Section 12.2.
12.3. Indemnification by Buyer and Nextera. Buyer and Nextera
jointly and severally agree to indemnify and hold Seller, General Partner,
Limited Partner, the Shareholders and their affiliates and persons serving as
officers, directors, partners, managers, shareholders, members, employees and
agents thereof (individually a "Seller Indemnified Party" and collectively the
"Seller Indemnified Parties") harmless from and against any Damages which may be
sustained or suffered by any of them attributable to, arising out of or based
upon any of the following matters:
(a) common law fraud committed by Buyer or Nextera with respect
to this Agreement in connection with the transactions contemplated by this
Agreement;
(b) failure to pay, perform or discharge, as applicable, any of
the Assumed Liabilities; and
(c) any breach of any representation, warranty or covenant made
by Buyer and/or Nextera in this Agreement or in any certificate or schedule
delivered by Nextera and/or Buyer hereunder.
12.4. Limitation on Indemnification by Buyer and Nextera.
Notwithstanding the foregoing, (a) no indemnification shall be payable to the
Seller Indemnified Parties with respect to claims asserted pursuant to
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Section 12.3 above after the date which is eighteen (18) months after the
Closing, (b) the aggregate amount to be payable to all Seller Indemnified
Parties pursuant to Section 12.3 shall not exceed $26,551,000 and (c) Buyer and
Nextera shall have no obligation for indemnification hereunder until aggregate
claims for indemnification hereunder exceed $200,000, in which case Buyer and/or
Nextera shall be obligated for indemnification of all claims, including the
initial $200,000 of such claims. Claims for indemnification with respect to
Sections 12.3(a) and 12.3(b) and breach by Buyer and/or Nextera of Sections 7.5
through 7.9, Section 7.14 and Section 10.1 shall not be subject to any of the
limitations set forth in this Section 12.4.
12.5. Notice; Defense of Claims. An indemnified party shall make
claims for indemnification hereunder by giving written notice thereof to the
indemnifying party promptly on discovery and in any event within the period in
which indemnification claims can be made hereunder. If indemnification is sought
for a claim or liability asserted by a third party, the indemnified party shall
also give written notice thereof to the indemnifying party promptly after it
receives notice of the claim or liability being asserted, but the failure to do
so shall not relieve the indemnifying party from any liability except to the
extent that it is prejudiced by the failure or delay in giving such notice. Such
notice shall summarize the basis for the claim for indemnification and any claim
or liability being asserted by a third party. Within 20 days after receiving
such notice the indemnifying party shall give written notice to the indemnified
party stating whether it disputes the claim for indemnification and whether it
will defend against any third party claim or liability at its own cost and
expense. If the indemnifying party fails to give notice that it disputes an
indemnification claim within 20 days after receipt of notice thereof, it shall
be deemed to have accepted and agreed to the claim, which shall become
immediately due and payable. The indemnifying party shall be entitled to direct
the defense against a third party claim or liability with counsel selected by it
(subject to the consent of the indemnified party, which consent shall not be
unreasonably withheld) as long as the indemnifying party is conducting a good
faith and diligent defense and to compromise or settle it with consent of the
indemnified party, which consent shall not be unreasonably withheld. The
indemnified party shall at all times have the right to fully participate at its
own expense in the defense of a third party claim or liability, directly or
through counsel; provided, however, that if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and the
indemnified party is advised that representation of both parties by the same
counsel would be inappropriate under applicable standards of professional
conduct, the indemnified party may engage separate counsel at the expense of the
indemnifying party. If no such notice of intent to dispute and defend a third
party claim or liability is given by the indemnifying party, or if such good
faith and diligent defense is not being or ceases to be conducted by the
indemnifying party, the indemnified party shall have the right, at the expense
of the indemnifying party, to undertake the defense of such claim or liability
(with counsel selected by the indemnified party), and to compromise or settle
it, with consent of the indemnifying party, which consent shall not be
unreasonably withheld. If the third party claim or liability is one that by its
nature cannot be defended solely by the indemnifying party, then the indemnified
party shall make available such information and assistance as the indemnifying
party may reasonably request and shall cooperate with the indemnifying party in
such defense, at the expense of the indemnifying party.
12.6. Satisfaction of Selling Party Indemnification Obligations.
Nextera shall bring and control all indemnification claims hereunder and under
the Exchange Agreement on behalf of the Buyer Indemnified Parties, including
without limitation Buyer. In order to satisfy the indemnification obligations of
the Selling Parties hereunder and under the Exchange Agreement,
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Nextera shall proceed first directly against the Escrow Deposit as further set
forth and defined in the Escrow Agreement and then may proceed directly against
the Selling Parties subject to the limitations set forth herein. Nextera may
proceed against the Selling Party of its choosing and may proceed directly
against any Shareholder without proceeding against Seller, General Partner
and/or Limited Partner. Any Shareholder called upon to satisfy indemnification
obligations in connection with this Agreement may not seek any right of
contribution against (a) General Partner or Limited Partner following completion
of the Incorporation Transaction (as defined in the Exchange Agreement) or (b)
Seller following completion of the Incorporation Transaction unless Seller has
been converted to a limited liability company the membership interests of which
are not owned by General Partner or Limited Partner.
12.7. Use of Nextera Class A Units. To the extent indemnification
claims exceed the Escrow Deposit (as defined in the Escrow Agreement), the
parties may, at their option, elect to satisfy any indemnification claims under
this Agreement by delivering Nextera Class A Units issued pursuant to Section
2.4 or any securities into or for which they may be converted or exchanged. To
the extent that Nextera Class A Units (or such other securities) are used to
satisfy indemnification obligations under this Agreement, such units shall be
valued in accordance with the terms of the Escrow Agreement. No statement of
value in this Agreement shall affect such valuation under the Escrow Agreement.
12.8. Bulk Sales. Buyer hereby waives any requirements for
compliance with the procedures of the "Bulk Sales Act" or similar laws of any or
all of the states in which the Assets are situated or of any other state which
may be asserted to be applicable to the transactions contemplated hereby and
agrees that the Selling Parties shall have no indemnity obligations under
Article XII hereof arising solely out of or resulting solely from the failure of
Seller or Buyer to comply with any such laws.
12.9. Exclusive Remedy. Other than Fraud Claims and claims
pursuant to Section 12.3(a), the foregoing indemnification provisions in this
Article XII shall be the exclusive remedy for any breach of the representations
and warranties of the Selling Parties in Articles IV and V and of Buyer and
Nextera in Article VI above.
ARTICLE XIII.
TERMINATION OF AGREEMENT; RIGHTS TO PROCEED
13.1. Termination. At any time prior to the Closing, this
Agreement may be terminated as follows:
(i) by mutual written consent of Nextera and the
Shareholder Representative;
(ii) by Buyer or Nextera, pursuant to written notice to
Seller, if any of the conditions set forth in Article IX of this Agreement have
not been satisfied at or prior to the Closing, or if it has become reasonably
and objectively certain that any of such conditions, other than a condition
within the control of the Selling Parties, will not be satisfied at or prior to
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the Closing, such written notice to set forth such conditions which have not
been or will not be so satisfied;
(iii) by the Seller, pursuant to written notice to Buyer
and Nextera, if any of the conditions set forth in Article VIII of this
Agreement have not been satisfied at or prior to the Closing, or if it has
become reasonably and objectively certain that any of such conditions, other
than a condition within the control of Buyer and Nextera, will not be satisfied
at or prior to the Closing, such written notice to set forth such conditions
which have not been or will not be so satisfied;
(iv) by the Selling Parties, on the one hand, or by
Nextera and Buyer, on the other, pursuant to Section 7.4(b); and
(v) by Nextera or the Shareholder Representative if the
Closing shall not have occurred on or before September 30, 1998.
13.2. Effect of Termination. All obligations of the parties
hereunder shall cease upon any termination pursuant to Section 13.1, provided,
however, that the provisions of Section 7.10, Article XIII, Section 14.1 and
Section 14.9 hereof shall survive any termination of this Agreement. No
termination shall relieve any party of any liability for breach of this
Agreement prior to termination except as otherwise provided herein.
ARTICLE XIV.
MISCELLANEOUS
14.1. Fees and Expenses. Except as otherwise specified in this
Agreement and the Buyer Operating Agreement, each party hereto shall pay its own
legal, accounting, out-of-pocket and other expenses incident to this Agreement
and to any action taken by such party in preparation for carrying this Agreement
into effect. With respect to any payment by Seller for fees and expenses
incurred by the Selling Parties, such payment shall reduce the amount of Closing
Working Capital for purposes of Section 2.5 hereto. Notwithstanding the
foregoing, in the event the transaction does not close solely as a result of
Nextera's failure to obtain third party financing for the Purchase Price,
Nextera shall reimburse Seller for its actual out-of-pocket expenses incurred in
connection herewith, up to a maximum of $250,000, upon the submission of
reasonably detailed invoices for such expenses.
14.2. Governing Law. This Agreement shall be construed under and
governed by the internal laws of the State of New York without regard to its
conflict of laws provisions.
14.3. Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail, upon the sooner of the date on which
receipt is acknowledged or the expiration of three days after deposit in United
States post office facilities properly addressed with postage prepaid. All
notices to a party
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will be sent to the addresses set forth below or to such other address or person
as such party may designate by notice to each other party hereunder:
TO BUYER: SC/NE, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With an additional copy to: Maron & Sandler
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO NEXTERA: Nextera Enterprises, L.L.C.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With an additional copy to: Maron & Sandler
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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TO GENERAL PARTNER,
LIMITED PARTNER,
OR SELLER: Sibson & Company, L.P.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Weil, Gotshal & ▇▇▇▇▇▇ LLP
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE
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With a copy to: Weil, Gotshal & ▇▇▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
14.4. Entire Agreement. This Agreement, including the Escrow
Agreement, Employment Agreements, Exchange Agreement and schedules and exhibits
hereto and thereto, is the entire agreement of the parties with respect to its
subject matter, and supersedes all previous written or oral negotiations,
commitments and writings. No promises, representations, understandings,
warranties and agreements have been made by any of the parties hereto except as
referred to herein or in such schedules and exhibits; and all inducements to the
making of this Agreement relied upon by either party hereto have been expressed
herein or in such schedules or exhibits.
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14.5. Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer or Nextera to an entity controlling, controlled by or under
common control with Buyer or Nextera upon written notice to Seller; provided,
however, that Buyer and Nextera shall remain liable for all obligations
hereunder to the extent such obligations are not satisfied by the transferee.
This Agreement may not be assigned by Seller without the prior written consent
of Nextera. This Agreement shall be binding upon and enforceable by, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. Assignment of this Agreement by any party shall not relieve
such party from its obligations hereunder.
14.6. Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
14.7. Execution in Counterparts. For the convenience of the
parties and to facilitate execution, this Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.
14.8. Amendments. This Agreement may not be amended or modified,
nor may compliance with any condition or covenant set forth herein be waived,
except by a writing duly and validly executed by each party hereto, or in the
case of a waiver, the party waiving compliance; provided that the Shareholder
Representative (as defined below) may consent to any such amendment or
modification or waiver on behalf of the Shareholders; provided further that the
Shareholder Representative may not enter into any such amendment or modification
or waive any condition or covenant that materially and adversely affects any
Shareholder differently than all other Shareholders affected thereby without the
consent of such Shareholder. Each of the Shareholders hereby designate the
Seller and, upon conversion of Seller to a limited liability company as provided
in Section 4.4 of the Exchange Agreement, such limited liability company (in
each instance and in such capacity, the "Shareholder Representative") to act for
and represent them in those matters with respect to which this Agreement
specifies that the Shareholder Representative shall so act, including, without
limitation, entering into any amendment to this Agreement, and Seller, on behalf
of itself and its successors and assigns, hereby accepts such designation.
Anything herein to the contrary notwithstanding, any amendment, modification or
waiver to be given by the Shareholders may be given by the Shareholder
Representative.
14.9. Publicity and Disclosures. No press releases or public
disclosure (other than disclosure to Seller's clients regarding the closing of
this transaction as is reasonably deemed necessary by the parties to promote
Buyer's provision of service to such clients and in connection with the transfer
of Assets as contemplated hereunder), either written or oral, of the
transactions contemplated by this Agreement, shall be made by a party to this
Agreement without the prior knowledge and written consent of Nextera and Seller.
14.10. Specific Performance. The parties agree that it would be
difficult to measure damages which might result from a breach of this Agreement
by the Selling Parties and that money damages would be an inadequate remedy for
such a breach. Accordingly, if there is a breach or proposed breach of any
provision of this Agreement by any Selling Party, and Buyer or
74
Nextera do not elect to terminate under Article XIII, Buyer or Nextera shall be
entitled, in addition to any other remedies which it may have, to an injunction
or other appropriate equitable relief to restrain such breach without having to
show or prove actual damage to Buyer or Nextera.
The parties agree that it would be difficult to measure damages
which might result from a breach of this Agreement by the Buyer or Nextera and
that money damages would be an inadequate remedy for such a breach. Accordingly,
if there is a breach or proposed breach of any provision of this Agreement by
Buyer or Nextera, and Selling Parties do not elect to terminate under Article
XIII, Selling Parties shall be entitled, in addition to any other remedies which
they may have, to an injunction or other appropriate equitable relief to
restrain such breach without having to show or prove actual damage to Selling
Parties.
75
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives, as of the date first written above.
BUYER:
SC/NE, LLC, a Delaware limited liability company
By: NEXTERA ENTERPRISES, L.L.C.
Its: Sole Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Chief Financial Officer
------------------------------------
NEXTERA:
NEXTERA ENTERPRISES, L.L.C., a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Chief Financial Officer
------------------------------------
76
SELLER:
SIBSON & COMPANY, L.P., a Delaware limited
partnership
By: Sibson & Company, Inc., its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
GENERAL PARTNER:
SIBSON & COMPANY, INC. a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
LIMITED PARTNER:
SC2, Inc., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
77
SHAREHOLDERS:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
State of Residence: Illinois
-----------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: Illinois
-----------------------
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇▇▇▇
-------------------------------------
State of Residence: California
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
State of Residence: California
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: Pennsylvania
-----------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: Michigan
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
State of Residence: Missouri
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: New Jersey
-----------------------
78
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: New Jersey
-----------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: New Hampshire
-----------------------
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
State of Residence: Missouri
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: Illinois
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: North Carolina
-----------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: New York
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
State of Residence: North Carolina
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
-------------------------------------
State of Residence: New Jersey
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: New York
-----------------------
79
By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
-------------------------------------
State of Residence: New Jersey
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: California
-----------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
State of Residence: New York
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
State of Residence: California
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
State of Residence: Illinois
-----------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ (Chip) ▇▇▇▇▇▇
-------------------------------------
State of Residence: North Carolina
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
State of Residence: Connecticut
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
State of Residence: Illinois
-----------------------