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Exhibit 2.04
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
JCS ACQUISITION CORP.
(a New York corporation),
JACOM COMPUTER SERVICES, INC.
and
▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated as of February 14, 1998
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TABLE OF CONTENTS
PAGE
1. THE MERGER.............................................................................................. 2
1.1 Delivery and Filing of Certificate of Merger................................................... 2
1.2 Merger Effective Date.......................................................................... 2
1.3 Certificate of Incorporation, Bylaws, Board of Directors and Officers ..........................2
2. MERGER CONSIDERATION.................................................................................... 3
2.1 Conversion of Capital Stock; Merger Consideration.............................................. 3
2.2 Exchange Procedures............................................................................ 3
2.3 No Fractional Shares........................................................................... 4
2.4 Allocation of Merger Consideration..............................................................4
2.5 Earn-Out Consideration..........................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDER'S REPRESENTATIVE................................................... 5
3.1 Computation.................................................................................... 5
3.2 Disputes....................................................................................... 6
3.3 Stockholder's Representative................................................................... 7
4. INDEMNITY ESCROW........................................................................................ 7
4.1 Creation of Escrow............................................................................. 7
4.2 Duration and Terms............................................................................. 8
4.3 Voting and Investment.......................................................................... 8
5. CLOSING; MERGER EFFECTIVE DATE.......................................................................... 8
5.1 Closing........................................................................................ 8
5.2 Closing Date; Location......................................................................... 8
5.3 Effectiveness of Merger........................................................................ 9
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER........................................................... 9
6.1 Corporate Existence............................................................................ 9
6.2 Corporate Power; Authorization; Enforceable Obligations........................................ 9
6.3 Authority; Ownership........................................................................... 9
6.4 Validity of Contemplated Transactions.......................................................... 9
6.5 Capital Stock of the Company.................................................................. 10
6.6 Transactions in Capital Stock..................................................................10
6.7 No Bonus Shares................................................................................10
6.8 Subsidiaries...................................................................................10
6.9 Predecessor Status; etc........................................................................11
6.10 Spin-offs by Company...........................................................................11
6.11 No Third Party Options.........................................................................11
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6.12 Financial Statements...........................................................................11
6.13 Liabilities and Obligations....................................................................11
6.14 Accounts and Notes Receivable..................................................................12
6.15 Permits........................................................................................13
6.16 Real and Personal Property.....................................................................13
6.17 Contracts and Commitments......................................................................13
6.18 Government Contracts...........................................................................15
6.19 Real Property..................................................................................15
6.20 Insurance......................................................................................15
6.21 Employees......................................................................................16
6.22 Employee Benefit Plans and Arrangements........................................................16
6.23 Compliance with Law; Authorizations............................................................20
6.24 Transactions With Affiliates...................................................................20
6.25 Litigation.....................................................................................20
6.26 Restrictions...................................................................................21
6.27 Taxes..........................................................................................21
6.28 Intellectual Property Matters..................................................................22
6.29 Completeness; No Violations....................................................................23
6.30 Existing Condition.............................................................................23
6.31 Deposit Accounts; Powers of Attorney...........................................................25
6.32 Books of Account...............................................................................25
6.33 Environmental Matters..........................................................................26
6.34 No Illegal Payments............................................................................27
6.35 Leases.........................................................................................27
6.36 Lease Funding..................................................................................30
6.37 Disclosure.....................................................................................30
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO.................................................................31
7.1 Corporate Existence............................................................................31
7.2 UniCapital Stock...............................................................................31
7.3 Corporate Power and Authorization..............................................................31
7.4 No Conflicts...................................................................................31
7.5 Capitalization of UniCapital...................................................................32
7.6 Compliance With Law; Authorizations............................................................32
7.7 Transactions With Affiliates...................................................................32
7.8 Litigation.....................................................................................32
7.9 Registration Rights............................................................................33
7.9 Miscellaneous..................................................................................33
8. COVENANTS OF STOCKHOLDER AND COMPANY....................................................................33
8.1 Business in the Ordinary Course................................................................34
8.2 Existing Condition.............................................................................34
8.3 Maintenance of Properties and Assets...........................................................34
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8.4 Employees and Business Relations...............................................................34
8.5 Maintenance of Insurance.......................................................................34
8.6 Compliance with Laws, etc......................................................................34
8.7 Conduct of Business............................................................................34
8.8 Access.........................................................................................34
8.9 Press Releases and Other Communications........................................................35
8.10 Exclusivity....................................................................................35
8.11 Third Party Approvals .........................................................................36
8.12 Notice to Bargaining Agents ...................................................................36
8.13 Notification of Certain Matters................................................................36
8.14 Amendment of Schedules ........................................................................37
8.15 HSR Filing.....................................................................................37
8.16 Delivery of Information........................................................................37
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDER .....................................................38
9.1 Representations and Warranties; Performance of Obligations ................................... 38
9.2 Employment and Consulting Agreements ......................................................... 38
9.3 Opinion of Counsel ........................................................................... 38
9.4 Registration Statement ....................................................................... 38
9.5 HSR Act........................................................................................39
10. CONDITIONS PRECEDENT TO OBLIGATIONS
OF UNICAPITAL AND NEWCO ................................................................................39
10.1 Representations and Warranties; Performance of Obligations.....................................39
10.2 No Litigation .................................................................................39
10.3 Examination of Financial Statements ...........................................................39
10.4 No Material Adverse Change.....................................................................40
10.5 Regulatory Review .............................................................................40
10.6 Stockholder's Release .........................................................................40
10.7 Employment and Consulting Agreements ..........................................................40
10.8 Opinion of Counsel ............................................................................40
10.9 Consents and Approvals ........................................................................41
10.10 Good Standing Certificates ....................................................................41
10.11 Registration Statement ........................................................................41
10.12 Repayment of Indebtedness; Pre-Closing Distributions ..........................................41
10.13 Net Income.....................................................................................41
10.14 HSR Act........................................................................................41
11. COVENANTS OF UniCapital ................................................................................42
11.1 Leases ........................................................................................42
11.2 UniCapital Stock Options ......................................................................42
11.3 Information Filing.............................................................................42
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11.4 HSR Filing.....................................................................................42
11.5 Employee Benefit Plan of UniCapital............................................................42
11.6 Release From Guarantees; Indebtedness..........................................................42
11.7 Dividend Financing.............................................................................43
12. INDEMNIFICATION; SURVIVAL ..............................................................................43
12.1 General Indemnification by Stockholder ........................................................43
12.2 Specific Indemnification by Stockholder .......................................................44
12.3 Indemnification by UniCapital and Newco .......................................................44
12.4 Third Party Claims ............................................................................44
12.5 Limitations on Indemnification.................................................................46
12.6 Survival of Representations and Warranties ....................................................47
13. TERMINATION OF AGREEMENT ...............................................................................47
13.1 Termination by UniCapital .....................................................................47
13.2 Termination by the Stockholder ................................................................48
13.3 Automatic Termination .........................................................................48
13.4 Liquidated Damages ............................................................................48
14. NONCOMPETITION AND NONSOLICITATION......................................................................49
14.1 Noncompetition ................................................................................49
14.2 Damages .......................................................................................49
14.3 Reasonable Restraint ..........................................................................50
14.4 Severability; Reformation .....................................................................50
14.5 Independent Covenant...........................................................................50
14.6 Materiality ...................................................................................50
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION ..............................................................50
15.1 Stockholder....................................................................................50
15.2 UniCapital ....................................................................................51
15.3 Damages .......................................................................................51
16. LOCK-UP AGREEMENTS .....................................................................................51
16.1 Agreement .....................................................................................51
16.2 Intended Third Party Beneficiaries ............................................................52
17. FEDERAL SECURITIES ACT AND CONTRACTUAL
RESTRICTIONS ON UNICAPITAL STOCK........................................................................52
17.1 Investment Intent .............................................................................52
17.2 Compliance with Law ...........................................................................53
17.3 Economic Risk; Sophistication .................................................................53
17.4 Information Supplied ..........................................................................53
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18. SECURITIES LEGENDS .....................................................................................54
19. GENERAL ................................................................................................54
19.1 Cooperation ...................................................................................54
19.2 Successors and Assigns ........................................................................54
19.3 Entire Agreement...............................................................................55
19.4 Counterparts ..................................................................................55
19.5 Brokers and Agents ............................................................................55
19.6 Expenses ......................................................................................55
19.7 Notices .......................................................................................55
19.8 Governing Law .................................................................................57
19.9 Exercise of Rights and Remedies ...............................................................57
19.10 Time ..........................................................................................57
19.11 Reformation and Severability ..................................................................57
19.12 Remedies Cumulative............................................................................57
19.13 Captions ......................................................................................57
20. DEFINITIONS.............................................................................................57
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AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF CONTRIBUTION (the
"Agreement") is made as of the 14th day of February, 1998 between UNICAPITAL
CORPORATION, a Delaware corporation ("UniCapital"); JCS ACQUISITION CORP., a New
York corporation ("Newco"); Jacom Computer Services, Inc., which is to be
acquired pursuant to this Agreement (the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇▇
(the"Stockholder"), who is the only stockholder of the Company. Certain
capitalized terms used herein are defined in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement;
WHEREAS, Newco was duly incorporated on January 29, 1998 under the laws
of the State of New York solely for the purpose of completing this transaction,
and is a wholly-owned subsidiary of UniCapital;
WHEREAS, the Company is a corporation organized and existing under the
laws of New York;
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of such corporation and
their respective stockholders that Newco merge with and into the Company
pursuant to this Agreement and the applicable provisions of the laws of the
State of New York (such transaction being herein called the "Merger" and the
Company, Newco and UniCapital being hereinafter collectively referred to as the
"Constituent Corporations");
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of a number of similar agreements between UniCapital
and certain other corporations and partnerships and the IPO and that such single
transaction (the "Unified Transaction") shall fall within the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
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1. THE MERGER
1.1 DELIVERY AND FILING OF CERTIFICATE OF MERGER. The Constituent
Corporations will cause a Certificate of Merger, in substantially the form of
Annex I attached hereto with such changes therein as may be required by
applicable state laws (the "Certificate of Merger"), to be executed and
delivered to the Secretary of State of the state of New York on or before the
Merger Effective Date.
1.2 MERGER EFFECTIVE DATE. The "Merger Effective Date" shall be the
date specified in Section 5.3. At the Merger Effective Date, the Certificate of
Merger shall be filed in accordance with Section 1.1 either for immediate
effectiveness or to become effective if filed with such Secretary of State prior
to such date. On the Merger Effective Date upon the effectiveness of the Merger,
Newco shall be merged with and into the Company, in accordance with the
Certificate of Merger, and the separate existence of Newco shall cease. The
Company, as the entity surviving the Merger, is hereinafter sometimes referred
to as the "Surviving Corporation." The Merger shall have the effects specified
in the laws of the State of New York.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Certificate of Incorporation of the Company, as
amended and restated in the Certificate of Merger, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law;
(b) the Bylaws of the Company shall be the Bylaws of the
Surviving Corporation and shall remain so until thereafter duly amended;
(c) the Surviving Corporation shall have a Board of Directors
consisting of one member, who shall be ▇▇▇▇▇▇ New commencing upon the
effectiveness of the Merger and who shall hold office subject to the laws of the
State of New York and the Certificate of Incorporation and Bylaws of the
Surviving Corporation; and
(d) the officers of the Company immediately prior to the
Merger Effective Date shall continue as the officers of the Surviving
Corporation in the same capacity or capacities, each of such officers to serve,
subject to the provisions of the Certificate of Incorporation and Bylaws of the
Surviving Corporation, until such officer's successor is elected and qualified;
provided, that the Chairman of the Board (if any), the Treasurer and the
Secretary of the Company shall not succeed to the corresponding offices of the
Surviving Corporation, but instead (i) the sole director of the Surviving
Corporation shall be the Chairman of the Board of the Surviving Corporation,
(ii) the Treasurer of Newco shall be the Treasurer of the Surviving Corporation
and (iii) the Secretary of Newco shall be the Secretary of the Surviving
Corporation.
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2. MERGER CONSIDERATION
2.1 CONVERSION OF CAPITAL STOCK; MERGER CONSIDERATION.
(a) Upon the effectiveness of the Merger, all of the shares of
capital stock of the Company issued and outstanding immediately prior to the
effectiveness of the Merger ("Company Stock") shall, by virtue of the Merger and
without any action on the part of the holder thereof but subject to the
effectiveness of the Merger, automatically be converted into the right to
receive, without interest,
(i) an aggregate of $128,001,000 in cash,
(ii) an aggregate of 3,368,368 shares of common
stock, par value $.001 per share, of UniCapital ("UniCapital Stock") (the
consideration referred to in clauses (i) and (ii), all of which is to be
distributed to the Stockholder on the Merger Effective Date in the percentages
set forth on Annex II, subject to Article 4 hereof, is referred to in this
Agreement as the "Effective Date Consideration"); provided, however, in the
event that the aggregate value (based on the IPO price of the UniCapital Stock)
of the 3,368,368 shares of UniCapital Stock is less than $50,525,520 then
UniCapital shall issue additional shares to the Stockholder so that the
aggregate value of the shares of UniCapital Stock equals $50,525,520 (with
appropriate adjustment to the cash and stock components of the Effective Date
Consideration so as to eliminate fractional shares) and
(iii) the Earn-Out Consideration as described in
Section 2.5, to be distributed to the Stockholder within five business days
after the date the portion of the Earn-Out Consideration with respect to a given
calendar year (if any) is finally determined pursuant to Section 2.5 in the
percentages set forth on Annex II.
(b) Upon the effectiveness of the Merger, each share of
capital stock of Newco issued and outstanding immediately prior to the
effectiveness of the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, automatically be converted into one
fully paid and non-assessable share of common stock of the Surviving
Corporation, all of which converted common stock shall constitute all of the
outstanding shares of capital stock of the Surviving Corporation immediately
after the effectiveness of the Merger.
(c) The Effective Date Consideration and the Earn-Out
Consideration are referred to together in this Agreement as the "Merger
Consideration."
2.2 EXCHANGE PROCEDURES. On the Merger Effective Date, upon surrender
to UniCapital of certificates representing all of the outstanding shares of
Company Stock ("Certificates"), the Stockholder shall, subject to Article 4, be
entitled to receive, in exchange therefor, (i) the Stockholder's cash portion of
the Effective Date Consideration by wire transfer, calculated in accordance with
Annex II, and (ii) a certificate representing that number of whole shares of
UniCapital Stock which such holder has the right to receive in respect of the
Certificates
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surrendered, calculated in accordance with Annex II, and each Certificate so
surrendered shall forthwith be canceled. On the Merger Effective Date or as
promptly thereafter as is practicable, and subject to and in accordance with the
provisions of Article 4, UniCapital shall cause to be distributed to the
Indemnity Escrow Agent (as defined in Article 4) a certificate or certificates
representing the Escrow Shares (as defined in Article 4), which shall be
registered in the name of the Indemnity Escrow Agent as nominee for the
Stockholder and shall be held in accordance with the provisions of Article 4 and
the Indemnity Escrow Agreement referred to therein.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and the
Stockholder shall instead receive in lieu of any such fractional share a cash
payment equal to such fraction multiplied by the IPO price.
2.4 ALLOCATION OF MERGER CONSIDERATION. The parties agree that they
will not take a position on any income tax return, before any governmental
agency charged with the collection of any income tax, or in any judicial
proceeding that is in any way inconsistent with the allocation (if any) of the
Merger Consideration to the Company made by UniCapital following the Closing.
2.5 EARN-OUT CONSIDERATION.
(a) If the earnings before taxes (the "EBT") of the Company
for the twelve months ending December 31, 1998 increased by amounts in respect
of those items set forth on Schedule 2.5 that affected net income during the
period from January 1, 1998 through the Closing Date and decreased by the sum of
(i) amount of UniCapital corporate overhead allocated to the Company for the
period from the Closing Date through December 31, 1998 and (ii) $1,000,000 (the
"Adjusted 1998 EBT"), exceeds the EBT of the Company for the twelve months
ending December 31, 1997, inclusive of the add-backs set forth on Schedule 2.5
("Adjusted 1997 EBT"), then the Stockholder shall be entitled to receive
one-half of the difference between the Adjusted 1998 EBT and the Adjusted 1997
EBT;
(b) If the EBT of the Company for the year ending December 31,
1999, decreased by the sum of (i) the amount of UniCapital corporate overhead
allocated to the Company and (ii) $1,000,000 ("Adjusted 1999 EBT" and together
with Adjusted 1997 EBT and Adjusted 1998 EBT, the "Company EBT") exceeds the
greater of Adjusted 1998 EBT and Adjusted 1997 EBT, then the Stockholder shall
be entitled to receive one-half of the difference between (i) the Adjusted 1999
EBT and (ii) the greater of the Adjusted 1998 EBT and the Adjusted 1997 EBT.
(c) The EBT of the Company for the years ending December 31,
1998 and December 31, 1999 shall be computed using generally accepted accounting
principles and practices as applied in the audited financial statements of the
Company included in the Registration Statement. The allocation of UniCapital
overhead shall be made on a pro rata basis applied consistently among UniCapital
subsidiaries. To the extent gain-on-sale treatment was accorded any Lease,
whether in the add-backs set forth on Schedule 2.5 or in any year, income from
the payment stream on such Lease shall not be included in the EBT of the Company
for any subsequent year.
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(d) The amounts (if any) that the Stockholder becomes entitled
to receive pursuant to Sections 2.5(a) and/or 2.5(b) are referred to herein as
the "Earn-Out Consideration." The Earn-Out Consideration shall be paid one-half
in cash and one-half in shares of UniCapital Stock, valued at the average of the
closing prices per share of UniCapital Stock for the [20] trading days preceding
December 31 of the year to which the portion of Earn-Out Consideration in
question applies.
(e) Company EBT shall be determined within forty-five days
following December 31 of such year.
(f) Any revenues and expenses associated with the acquisition
of any assets, business or entities by the Company which are consummated after
the Merger Effective Date shall be included in EBT for the applicable time
periods on the terms and conditions agreed to by the Company and UniCapital
prior to the consummation of any such acquisition.
(g) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholder disputes the determination of Company EBT, then the
Stockholder's Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20 business days after notification of the
determination of Company EBT for any year. If UniCapital and the Stockholder's
Representative cannot resolve any such dispute which would affect the Earn-Out
Consideration, then such dispute shall be resolved by an Independent Accounting
Firm (as defined in Section 3.2). The Independent Accounting Firm shall be
directed to consider only those agreements, contracts, commitments or other
documents (or summaries thereof) that were either (i) delivered or made
available to Price Waterhouse LLP in connection with the transactions
contemplated hereby, or (ii) reviewed by Price Waterhouse LLP during the course
of determining Company EBT. The determination of the Independent Accounting Firm
shall be made as promptly as practicable and shall be final and binding upon the
parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. The costs of the Independent Accounting Firm shall
be borne by the party (either UniCapital or the Stockholder) whose determination
of Company EBT was further from the determination of the Independent Accounting
Firm. Pending resolution of any such dispute by the Independent Accounting Firm,
only the amount of the Earn-Out Consideration as determined by Price Waterhouse
LLP shall be paid by UniCapital. Once Company EBT is finally determined, the
Earn-Out Consideration attendant thereto not previously paid, if any, shall be
paid in accordance with this Section 2.5; provided that in the event the
Stockholder's determination of EBT was closer to the determination of the
Independent Accounting Firm than UniCapital's determination of EBT, the
Stockholder shall receive such Earn-Out Consideration plus interest which shall
accrue at the rate of 10% per annum on any such Earn-Out Consideration that is
resolved in the Stockholder's favor from the date the Earn-Out Consideration was
first payable to the date on which the Earn-Out Consideration is received by the
Stockholder.
(h) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
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3. POST-CLOSING ADJUSTMENT; STOCKHOLDER'S REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP"), and
consistent with previous practice, a balance sheet of the Company (the "Closing
Date Balance Sheet") as of the end of business on the day prior to the Closing
Date (as defined in Section 5). If the aggregate stockholders' equity of the
Company as shown on the Closing Date Balance Sheet is less than the aggregate
stockholders' equity as shown on the balance sheet of the Company as at December
31, 1997 (not taking into account any dividends distributed pursuant to this
Agreement) as audited by Price Waterhouse LLP, then, subject to Section 3.2,
commencing 20 business days after delivery of the Closing Date Balance Sheet to
UniCapital, the aggregate Merger Consideration shall be adjusted downward
dollar-for-dollar by the amount of such deficiency (the "Net Worth Deficiency").
After the 20th business day after the delivery of the Closing Date Balance Sheet
to UniCapital (or if applicable, after the final determination of any Disputed
Amount in accordance with Section 3.2), UniCapital shall be entitled to recover
from the Escrow Property pursuant to Article 4 that portion of any Net Worth
Deficiency which does not exceed one-half of the initial balance of the Escrow
Property. For any amount by which any Net Worth Deficiency exceeds one-half of
the initial balance of the Escrow Property, such portion of the Net Worth
Deficiency shall be paid by the Stockholder not later than the 25th business day
after the delivery of the Closing Date Balance Sheet (or if applicable, not
later than the 5th business day after the final determination of any Disputed
Amount in accordance with Section 3.2). At its sole and exclusive option, and at
any time after such 25th business day (or if applicable, not later than the
fifth business day after the final determination of any Disputed Amount in
accordance with Section 3.2), UniCapital shall be entitled to recover from the
Escrow Property pursuant to Article 4 all or any portion of the amount of the
Net Worth Deficiency not paid by the Stockholder as required by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholder disputes any
item contained on the Closing Date Balance Sheet, then the Stockholder's
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 20 business days after the delivery of the Closing Date Balance Sheet to
the Stockholder. If UniCapital and the Stockholder's Representative cannot
resolve any such dispute relating to the Net Worth Deficiency, then such dispute
shall be resolved by an independent nationally recognized accounting firm which
is reasonably acceptable to UniCapital and the Stockholder's Representative (the
"Independent Accounting Firm"). The determination of the Independent Accounting
Firm shall be made as promptly as practical and shall be final and binding on
the parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. Any expenses relating to the engagement of the
Independent Accounting Firm shall be allocated between UniCapital and the
Stockholder so that the Stockholder's aggregate share of such costs shall bear
the same proportion to the total costs that the Disputed Amounts unsuccessfully
contested by the Stockholder's Representative (as finally determined by the
Independent Accounting Firm) bear to the total of the Disputed Amounts so
submitted to the Independent Accounting Firm. Pending resolution of any
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such dispute by the Independent Accounting Firm, no such Disputed Amount shall
be due to UniCapital. Once any such Disputed Amount is finally determined to be
due to UniCapital, UniCapital may proceed to recover such amount in the manner
set forth in Section 3.1.
3.3 STOCKHOLDER'S REPRESENTATIVE.
(a) The Stockholder, by signing this Agreement, designates
▇▇▇▇ ▇. ▇▇▇▇▇▇, (or, in the event that ▇▇▇▇ ▇. ▇▇▇▇▇▇ is unable or unwilling to
serve, or resigns, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III) to be such Stockholder's Representative
for purposes of this Agreement (the "Stockholder's Representative"). The
Stockholder shall be bound by any and all actions taken by the Stockholder's
Representative on his behalf.
(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholder's Representative.
All communications or writings to be sent to the Stockholder pursuant to this
Agreement may be addressed to the Stockholder's Representative and any
communication or writing so sent shall be deemed notice to the Stockholder
hereunder. The Stockholder hereby consents and agrees that the Stockholder's
Representative is authorized to accept deliveries, including any notice, on
behalf of the Stockholder pursuant hereto.
(c) The Stockholder's Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of the Stockholder, with full
power in his name and on his behalf to act according to the terms of this
Agreement in the absolute discretion of the Stockholder's Representative, and in
general to do all things and to perform all acts including, without limitation,
executing and delivering all agreements, certificates, receipts, instructions
and other instruments contemplated by or deemed advisable in connection with
Article 12 of this Agreement. This power of attorney and all authority hereby
conferred is granted subject to and coupled with the interest of the Stockholder
hereunder and in consideration of the mutual covenants and agreements made
herein, and shall be irrevocable and shall not be terminated by any act of the
Stockholder, by operation of law, whether by such Stockholder's death or any
other event.
(d) Notwithstanding the foregoing, the Stockholder's
Representative shall inform the Stockholder of all notices received, and of all
actions, decisions, notices and exercises of any rights, power or authority
proposed to be done, given or taken by such Stockholder's Representative, and
shall act as directed by the Stockholder.
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4. INDEMNITY ESCROW
4.1 CREATION OF ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholder pursuant to Sections 12.1 and
12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof, the
following shall be delivered to an indemnity escrow agent agreed to by the
parties (the "Indemnity Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to the Stockholder as part of the Effective Date
Consideration in accordance with Annex II, rounded up to the nearest whole share
(the "Escrow Shares"); and
(ii) ten percent (10%) of the cash portion of the
Effective Date Consideration payable to the Stockholder in accordance with Annex
II, rounded up to the nearest whole cent (the "Escrow Cash").
(b) The Escrow Shares and the Escrow Cash are referred to
together as the "Escrow Property." In addition, the Escrow Property shall
include all cash and non-cash dividends and other property at any time received
or otherwise distributed in respect of or in exchange for any or all of the
Escrow Property, all securities hereafter issued in substitution for any of the
foregoing, all certificates and instruments representing or evidencing such
securities, all cash and non-cash proceeds of all of the foregoing property
except as provided in Section 4.3, all rights, titles, interests, privileges and
preferences appertaining or incident to the foregoing property.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex III. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Merger
Effective Date; and (b) the resolution of any claim for indemnification or
payment that is pending on the first anniversary of the Merger Effective Date,
but only to the extent of the amount of such pending claim.
4.3 VOTING AND INVESTMENT. The Stockholder shall be entitled to
exercise all voting powers incident to the Escrow Shares held by the Indemnity
Escrow Agent as their nominee, but shall not be entitled to exercise any
investment or dispositive powers over such Escrow Shares. The Escrow Cash shall
be invested from time to time by the Indemnity Escrow Agent as provided in the
Indemnity Escrow Agreement.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
underwriting agreement relating to the offer and sale of shares of UniCapital
Stock in the IPO (the "Underwriting
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Agreement") shall have been executed, the parties shall take all actions
necessary to effect the Merger (other than the filing with the appropriate state
authorities of the Certificate of Merger, which shall be filed and become
effective on the Merger Effective Date) and to effect the conversion and
delivery of shares referred to in Article 2 hereof (hereinafter referred to as
the "Closing"); provided, that such actions shall not include the actual
completion of the Merger or the actual conversion and delivery of the shares
referred to in Article 2 hereof, which actions shall only be taken on the Merger
Effective Date as herein provided.
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
5.3 EFFECTIVENESS OF MERGER. Concurrently with the consummation of the
sale of the shares of UniCapital Stock pursuant to the Underwriting Agreement,
the Merger shall become effective and all transactions contemplated by this
Agreement, including the conversion and delivery of shares and the delivery by
wire transfer of an amount equal to the cash which the Stockholder shall be
entitled to receive pursuant to the Merger referred to in Article 2 hereof,
shall occur and be deemed to be completed. The date on which the Merger is
effected shall be referred to as the "Merger Effective Date."
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, the Stockholder represents and warrants to UniCapital and Newco,
as follows:
6.1 CORPORATE EXISTENCE. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York.
The Company is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the conduct of its business
requires it to be so qualified, all of which jurisdictions are listed on
Schedule 6.1.
6.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Company has the corporate power, authority and legal right to execute, deliver
and perform this Agreement. The execution, delivery and performance of this
Agreement by the Company have been duly authorized by the Board of Directors of
the Company and no further corporate action on the part of the Company or the
Stockholder is necessary to authorize this Agreement and the performance of the
transactions contemplated hereby. This Agreement has been, and the other
agreements, documents and instruments required to be delivered by the Company in
accordance with the provisions hereof (the "Company Documents") will be, duly
executed and delivered on behalf of the Company by duly authorized officers of
the Company, and this Agreement constitutes, and the Company Documents when
executed and delivered will constitute, the legal, valid and binding obligations
of the Company, enforceable against it in accordance with their respective
terms.
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6.3 AUTHORITY; OWNERSHIP. The Stockholder has the full legal right,
power and capacity or authority to enter into this Agreement. Upon the date of
this Agreement and immediately prior to the Closing Date, the Stockholder owns
and will own beneficially and of record all of the shares of capital stock of
the Company identified on Annex II as being owned by such Stockholder. The
conversion of Company Stock into UniCapital Stock and cash pursuant to the
provisions of this Agreement will transfer to UniCapital valid title in the
shares of Company Stock owned by the Stockholder, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Company and the Stockholder does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the Company
or the Stockholder is subject, (b) any judgment, order, writ, injunction, decree
or award of any Governmental Entity which is applicable to the Company or the
Stockholder, (c) the charter documents of the Company or any securities issued
by the Company, or (d) any mortgage, indenture, agreement, contract, commitment,
lease, plan, Authorization, or other instrument, document or understanding, oral
or written, to which the Company or the Stockholder is a party, by which the
Company or the Stockholder may have rights or by which any of the properties or
assets of the Company may be bound or affected, or give any party with rights
thereunder the right to terminate, modify, accelerate or otherwise change the
existing rights or obligations of the Company thereunder. Except for filing the
Certificate of Merger with the Secretary of State and filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 except as aforesaid, no
authorization, approval or consent of, and no registration or filing with, any
Governmental Entity is required in connection with the execution, delivery or
performance of this Agreement by the Company or the Stockholder.
6.5 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company consists solely of the shares shown on Schedule 6.5, of which only the
shares shown on such Schedule 6.5 to be issued and outstanding are issued and
outstanding. All of the issued and outstanding shares of the capital stock of
the Company are owned by the Stockholder as set forth on Annex II, and are free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. All of the issued and
outstanding shares of Company Stock to be outstanding on the Merger Effective
Date will have been duly authorized and validly issued, fully paid and
nonassessable, will be owned of record and beneficially by the Stockholder and
in the amounts set forth in Annex II, and will have been offered, issued, sold
and delivered by the Company in compliance with all applicable state and federal
laws concerning the offering, sale or issuance of securities. None of such
shares will have been, and none of the shares from which they will have derived
were, issued in violation of the preemptive rights of any past or present
stockholder, whether contractual or statutory.
6.6 TRANSACTIONS IN CAPITAL STOCK. The Company has not acquired any
treasury stock since December 31, 1995. No option, warrant, call, conversion
right or commitment of any kind exists which obligates the Company to issue any
of its authorized but unissued capital stock. The
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Company does not have any obligation (contingent or otherwise) to purchase,
redeem or otherwise acquire any of its equity securities or any interests
therein or to pay any dividend or make any distribution in respect thereof.
6.7 NO BONUS SHARES. None of the shares of capital stock of the Company
was, and none of the shares of Company Stock will be, issued pursuant to awards,
grants or bonuses, whether of stock or of options or other rights.
6.8 SUBSIDIARIES. Schedule 6.8 lists the name of each subsidiary of the
Company (a "Subsidiary"), if any. Except as set forth in Schedule 6.8, neither
the Company nor Subsidiary currently owns, of record or beneficially, or
controls, directly or indirectly, any capital stock, any securities convertible
into capital stock or any other equity interest in any corporation, association
or other business entity. Except as set forth on Schedule 6.8, neither the
Company nor any Subsidiary of the Company is, directly or indirectly, a
participant in any joint venture, partnership or other noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Company and each Subsidiary, if any, including the
names of all entities from whom the Company and each Subsidiary previously
acquired assets representing all or substantially all of the assets of that
entity. Except as set forth on Schedule 6.9, the Company has never been a
subsidiary or division of another corporation or been a part of an acquisition
which was later rescinded.
6.10 SPIN-OFFS BY COMPANY. Since December 31, 1995, there has not been
any sale or spin-off of significant assets of the Company or any Subsidiary
other than in the ordinary course of business.
6.11 NO THIRD-PARTY OPTIONS. There are no existing agreements, options,
commitments or rights with, of or to any person to acquire any properties,
assets or rights of the Company or any interest therein.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the balance sheet of the Company (the "Balance Sheet") at December 31, 1997
(the "Balance Sheet Date") and December 31, 1996, and the related statements of
income, cash flows and changes in stockholders' equity for the fiscal years then
ended, certified by BDO ▇▇▇▇▇▇▇, LLP, the Company's independent public
accountants, together with the report of such independent public accountants
thereon (the "Financial Statements");
All of the Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved. The Financial Statements,
including the related notes, fairly presents the financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise) of the Company
as of the date indicated and the statements of income, cash flows and changes in
stockholders' equity fairly present the results of operations, cash flows and
changes in
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stockholders' equity of the Company for the periods indicated in accordance with
GAAP consistently applied.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Except as reflected or reserved against in the balance
sheet as at the "Balance Sheet Date" included in the Financial Statements or in
the notes thereto, there are no liabilities against, relating to or affecting
the Company that would otherwise have been required to be reflected or reserved
against in the Financial Statements. Attached hereto as Schedule 6.13 is an
accurate list, as of a date not more than two days prior to the date of this
Agreement, of: (i) all liabilities of the Company which are reflected on the
unaudited balance sheet as of the Balance Sheet Date included in the Financial
Statements; (ii) all liabilities incurred thereafter other than in the ordinary
course of business; (iii) all material liabilities incurred after the Balance
Sheet thereafter in the ordinary course of business; and (iv) all liabilities
(A) incurred as of the Balance Sheet Date that are not reflected on the
unaudited balance sheet as of the Balance Sheet Date and (B) all liabilities
incurred thereafter that would not have been so reflected had such liabilities
been incurred as of the Balance Sheet Date. Each of the foregoing liabilities
that has not heretofore been paid or discharged is so noted on Schedule 6.13.
For purposes of this Agreement, "liabilities" means liabilities of any kind,
character or description, whether accrued, absolute, secured or unsecured,
contingent or otherwise.
(b) For each such liability for which the amount is not fixed
or is contested, Schedule 6.13 shall include a summary description of the
liability, together with copies of all relevant non-privileged documentation
relating thereto, detail of all amounts claimed and any other action or relief
sought, the names of the claimant and all other parties to the claim, suit or
proceeding, the name of each court or agency before which such claim, suit or
proceeding is pending, the date such claim, suit or proceeding was instituted,
and a best estimate of the maximum amount, if any, which is likely to become
payable with respect to each such liability. If no estimate is provided, the
best estimate shall for purposes of this Agreement be deemed to be zero. On the
Closing Date, the Company shall deliver, and shall cause its accountants,
outside counsel and other representatives or agents to deliver, copies of all
privileged documents related to liabilities as listed on Schedule 6.13.
(c) All of the liabilities reflected on the unaudited balance
sheet included in the Financial Statements arose only out of or were incurred
only in connection with the conduct of the business of the Company. Except as
set forth on Schedule 6.13 and except for liabilities not required to be set
forth thereon pursuant to Section 6.13(a), the Company has no liabilities or
obligations with respect to its business, whether direct or indirect, matured or
unmatured, absolute contingent or otherwise, and there is no condition,
situation or set of circumstances which would reasonably be expected to result
in any such liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Company
(including, without limitation, receivables from and
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advances to employees and Stockholder) other than those arising out of Leases
(collectively, the "Accounts Receivable"). Schedule 6.14 includes an aging of
all Accounts Receivable showing amounts due in 30-day aging categories. On the
Closing Date, the Stockholder will deliver to UniCapital a complete and accurate
list, as of a date not more than two days prior to the Closing Date, of the
Accounts Receivable. All Accounts Receivable represent valid obligations arising
from bona fide business transactions in the ordinary course of business
consistent with past practice. The Accounts Receivable are, and as of the
Closing Date and the Merger Effective Date will be, collectible net of any
respective reserves shown on the Company's books and records (which reserves are
adequate and calculated consistent with past practice). Subject in the case of
Accounts Receivable reflected on the Company's balance sheet to such reserves
reflected on such balance sheet, each of the Accounts Receivable will be
collected in full within ninety (90) days after the day on which it first became
due and payable. There is no contest, claim, counterclaim, defense or right of
set-off, other than rebates and returns in the ordinary course of business,
under any contract with any obligor of any Account Receivable relating to the
amount or validity of such Account Receivable. The allowance for collection
losses on the Balance Sheet has been determined in accordance with GAAP
consistent with past practice.
6.15 PERMITS. Each material Permit, together with the name of the
Governmental Entity issuing such Permit is set forth on Schedule 6.15. Such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such transactions, the
Surviving Corporation will have all of the Company's right, title and interest
in the Permits.
6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Balance
Sheet Date, of all the real and personal property (which in the case of personal
property had an original cost in excess of $25,000) owned or where the Company
is a lessee or a sublessee, including true and correct copies of leases for
equipment and properties on which are situated buildings, warehouses and other
structures used in the operation of the business of the Company and including an
indication as to which assets were formerly owned by any Stockholder or
affiliate (which term, as used herein, shall have the meaning ascribed thereto
in Rule 144(a)(1) promulgated under the Securities Act of 1933, as amended (the
"Securities Act")) of the Company. Except as set forth on Schedule 6.16, all of
the Company's buildings, leasehold improvements, structures, facilities,
equipment and other material items of tangible property and assets owned or
leased by the Company are in good operating condition and repair, subject to
normal wear and maintenance, are usable in the regular and ordinary course of
business and conform to all applicable laws, ordinances, codes, rules and
regulations, and Authorizations relating to their construction, use and
operation. All leases set forth on Schedule 6.16 have been duly authorized,
executed and delivered and constitute the legal, valid and binding obligations
of the Company and, to the knowledge of the Stockholder, no other party to any
such lease is in default thereunder and such leases constitute the legal, valid
and binding obligations of such other parties. All fixed assets used by the
Company in the operation of its business are either owned by the Company or
leased under an agreement set forth on Schedule 6.16. The Company and the
Stockholder have heretofore delivered to UniCapital copies of all title reports
and title insurance
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policies received or held by the Company. The Company and the Stockholder have
indicated on Schedule 6.16 a summary description of all plans or projects
involving the opening of new operations, expansion of any existing operations or
the acquisition of any real property or existing business to which management of
the Company has devoted any significant effort or expenditure in the two-year
period prior to the date of this Agreement which, if pursued by the Company
would require additional expenditures of significant efforts or capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company other than Leases (the "Contracts"), to
which the Company is a party or is bound, or by which any of their respective
assets are bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$35,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $35,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing minimum requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof or exceeding $35,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement
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or arrangement for a line of credit or guarantee, pledge or undertaking of the
indebtedness of any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$35,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any successor thereto, or
to the knowledge of the Company and the Stockholder, any employee of the Company
or any successor thereto, from engaging or competing in any manner or in any
business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or other
know-how of or used by the Company;
(n) agreement, contract, commitment, arrangement or
understanding to which the Company, on the one hand, and any affiliate, officer,
director or stockholder of the Company, on the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
Each of the Contracts listed on Schedule 6.17, or not required to be listed
therein because of the amount thereof, is valid and enforceable in accordance
with its terms; the Company is, and to the knowledge of the Company and the
Stockholder, all other parties thereto are, in compliance with the provisions
thereof. The Company is not, and to the knowledge of the Company and the
Stockholder, no other party thereto is, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein; and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. None of
the rights of the Company under any Contract will be impaired by the
consummation of the transactions contemplated hereby, and all such rights will
be enforceable by the applicable Surviving Corporation after the Merger
Effective Date without the consent or agreement of any other party. The Company
has delivered accurate and complete copies of each Contract to UniCapital. No
Contract obligates any party to obtain any consent in connection with the
transactions contemplated hereby.
6.18 GOVERNMENT CONTRACTS. The Company is not now or never has been a
party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
6.19 REAL PROPERTY. The Company does not own any real property.
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6.20 INSURANCE. The assets, properties and operations of the Company
are insured under various policies of general liability and other forms of
insurance, all of which are described in Schedule 6.20, which discloses for each
policy the risks insured against, coverage limits, deductible amounts, all
outstanding claims thereunder, and whether the terms of such policy provide for
retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which, in relation to the business and assets of the
Company, are consistent with the normal or customary industry practice and all
premiums due to date have been paid in full. The Company has not been refused
any insurance, nor has the Company's coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past five years. Schedule 6.20 also contains a true and
complete description of all outstanding bonds and other surety arrangements
issued or entered into in connection with the business, assets and liabilities
of the Company.
6.21 EMPLOYEES. Schedule 6.21 contains the following with respect to
the Company:
(a) a list of all employees of the Company (including name,
title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of the Company and the Stockholder, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the Company and the
Stockholder, threatened before the National Labor Relations Board or similar
body in any foreign country; (iv) there is no employment handbook, personnel
policy manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Company are not covered by any collective
bargaining agreement; (vi) the Company has provided or will timely provide prior
to Closing all notices required by law to be given prior to Closing to all
local, state, federal or national labor, wage-payment, equal employment
opportunity, unemployment insurance and related agencies; (vii) the Company has
paid or properly accrued in the ordinary course of business all wages and
compensation due to employees, including all vacations or vacation pay, holidays
or holiday pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in force or the impact on employees on
plant closing or sales of businesses. All employees of the Company are legally
able to work in the United States.
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6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Company. "Benefit Plan" means each
"employee pension benefit plan" (as defined in Section 3(2) of ERISA,
hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other plan or
arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Company or its affiliates or any other
person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (each, together with
the Company, a "Commonly Controlled Entity") for the benefit of any present or
former officer, employee or director. The Company have no intent or commitment
to create any additional Benefit Plan or amend any Benefit Plan so as to
increase benefits thereunder. The Company have not created any Benefit Plan or
declared or paid any bonus compensation in contemplation of the transactions
contemplated by this Agreement. A current, accurate and complete copy of each
Benefit Plan has been made available to UniCapital. Except as disclosed on
Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Company and the Stockholder, no
condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company, nor any
Commonly Controlled Entity, nor any trustee or agent has been or is presently
engaged in any prohibited transactions as defined by Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not applicable which could
subject the Company to the tax or penalty imposed by Section 4975 of the Code or
Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Company and the Stockholder, no condition exists which could
subject the Company to a penalty under Section 4071 of ERISA;
(e) neither the Company nor any Commonly Controlled Entity is
or has ever been party to any "multi-employer plan," as that term is defined in
Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a
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true and correct copy of the most recent determination letter issued by the
Internal Revenue Service for each Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Company and the Stockholder, threatened
against any Benefit Plan, the Company, any Commonly Controlled Entity or any
trustee or agent of any Benefit Plan; and
(h) with respect to each Benefit Plan to which the Company or
any Commonly Controlled Entity is a party which constitutes a group health plan
subject to Section 4980B of the Code, each such Benefit Plan substantially
complies, and in each case has substantially complied, with all applicable
requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except for
premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty Corporation
nor the Company nor any Commonly Controlled Entity has instituted proceedings to
terminate any Pension Plan and the Pension Benefit Guaranty Corporation has not
informed the Company of its intent to institute proceedings to terminate any
Pension Plan;
(iii) full payment has been made of all amounts which
the Company or any Commonly Controlled Entity was required to have paid as a
contribution to the Pension Plans as of the last day of the most recent fiscal
year of each of the Pension Plans ended prior to the date of this Agreement, and
none of the Pension Plans has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such Pension
Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Company and the
Stockholder, the actuarial assumptions utilized, where appropriate, in
connection with determining the funding of each Pension Plan which is a defined
benefit pension plan (as set forth in the actuarial report for such Pension
Plan) are reasonable. Copies of the most recent actuarial reports have been
furnished to UniCapital. Based on such actuarial assumptions, as of the Balance
Sheet Date, the fair market value of the assets or properties held under each
such Pension Plan exceeds the actuarially determined present value of all
accrued benefits of such Pension Plan (whether or not vested) determined on an
ongoing Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and the Company has not received
any claim or notice that any such Benefit Plan is not in compliance
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with, all applicable laws and orders and prohibited transaction exemptions,
including without limitation, to the extent applicable, the requirements of
ERISA;
(vi) Neither the Company nor any Commonly Controlled
Entity is in default in performing any of its contractual obligations under any
of the Benefit Plans or any related trust agreement or insurance contract;
(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in the Benefit Plans and their beneficiaries in accordance with the
terms of the Benefit Plans;
(viii) each Benefit Plan may be amended or modified
by the Company or Commonly Controlled Entity at any time without liability
except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions contemplated
by this Agreement will not (in and of itself): (A) entitle any employee of the
Company to severance pay, unemployment compensation or any other payment; (B)
accelerate the time of payment or vesting, or increase the amount of
compensation due to any such employee; (C) result in any liability under Title
IV of ERISA; (D) result in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code for which an exemption is not available; or
(E) result (either alone or in conjunction with any other event) in the payment
or series of payments by the Company or any of its affiliates to any person of
an "excess parachute payment@ within the meaning of Section 280G of the Code;
(xi) with respect to each Benefit Plan that is funded
wholly or partially through an insurance policy, all premiums required to have
been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Merger Effective Date
will have been paid on or before the Merger Effective Date and, as of the Merger
Effective Date, there will be no liability of the Company or any Commonly
Controlled Entity under any insurance policy or ancillary agreement with respect
to such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring prior to the Merger Effective Date;
(xii) (A) each Benefit Plan that constitutes a
Welfare Plan, and for which contributions are claimed by the Company or any
Commonly Controlled Entity as deductions under any provision of the Code, is in
material compliance with all applicable requirements pertaining to such
deduction;
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(B) with respect to any welfare benefit fund
(within the meaning of Section 419 of the Code) related to a welfare benefit
plan, there is no disqualified benefit (within the meaning of Section 4976(b) of
the Code) that would result in the imposition of a tax under Section 4976(a) of
the Code; and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so exempt and no event or condition exists which
would adversely affect any such determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Merger Effective Date have been
made or will be made prior to the Merger Effective Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company has complied with
each, and is not in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign, to
which the Company's business, operations, assets or properties is subject. The
Company owns, holds, possesses or lawfully uses in the operation of its business
all franchises, licenses, permits, easements, rights, applications, filings,
registrations and other authorizations ("Authorizations") which are in any
manner necessary for it to conduct its business as now or previously conducted
or for the ownership and use of the assets owned or used by it in the conduct of
its business, free and clear of all liens, charges, restrictions and
encumbrances and in compliance with all Regulations. All such Authorizations are
listed and described in Schedule 6.23. The Company is not in default, nor has
the Company received any notice of any claim of default, with respect to any
such Authorization. All such Authorizations are renewable by their terms or in
the ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No Stockholder and no director, officer,
employee or former employee of the Company or any affiliates of the Company, or
any other person, firm or corporation, owns or has any proprietary, financial or
other interest (direct or indirect) in any Authorization which the Company owns,
possesses or uses in the operation of the business of the Company as now or
previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
6.24, no Stockholder and no director, officer or employee of the Company, or any
member of his or her immediate family or any other of its, his or her
affiliates, owns or has a 5% or more ownership interest in any corporation or
other entity that is or was during the last three years a party to, or in any
property which is or was during the last three years the subject of, any
contract, agreement or understanding, business arrangement or relationship with
the Company.
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6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Stockholder, threatened against the Company or
which relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Stockholder, threatened
against the Company or which relates to the Company.
(c) Neither the Company nor the Stockholder knows of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) Except as set forth on Schedule 6.25, the Company is not a
party to or subject to the provisions of any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority.
6.26 RESTRICTIONS. The Company is not a party to any indenture,
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially adversely affects or materially restricts or,
so far as the Company or any of the Stockholder can now reasonably foresee, may
in the future materially adversely affect or materially restrict, the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company after consummation of the transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company (the
"Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) ((singly, a "Tax," and collectively, the "Taxes")
have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such Tax Returns are required to be filed, and all such
Tax Returns properly reflect the liabilities of the Company for Taxes for the
periods, property or events covered thereby. All Taxes, including without
limitation those which are called for by the Tax Returns, required to be paid,
withheld or accrued by the Company and any deficiency assessments, penalties and
interest have been timely paid, withheld or accrued except for any local
personal property taxes (i) not in excess $1,000 in the aggregate for any
jurisdiction or (ii) not in excess of $7,500 for all such jurisdictions in the
aggregate, which are the obligations of third parties pursuant to an agreement
with the Company. The accruals for Taxes contained in the Balance Sheet are
adequate to cover the Tax liabilities of the Company as of that
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date and include adequate provision for all deferred Taxes, and nothing has
occurred subsequent to that date to make any of such accruals inadequate. The
Company's Tax basis in its assets for purposes of determining its future
amortization, depreciation and other federal income tax deductions is accurately
reflected on the Company's Tax books and records. The Company is not or has
never at any time been a party to a Tax sharing, Tax indemnity or Tax allocation
agreement, and the Company has not assumed any Tax liability of any other person
or entity under contract. The Company has not received any notice of assessment
or proposed assessment in connection with any Tax Returns and there are not
pending tax examinations of or tax claims asserted against the Company or any of
its assets or properties. The Company has not extended, or waived the
application of, any statute of limitations of any jurisdiction regarding the
assessment or collection of any Taxes. There are now (and as of immediately
following the Closing there will be) no Liens (other than any Lien for current
Taxes not yet due and payable) on any of the assets or properties of the Company
relating to or attributable to Taxes. To the knowledge of the Company and the
Stockholder, there is no basis for the assertion of any claim relating to or
attributable to Taxes which, if adversely determined, would result in any Lien
on the assets of the Company or otherwise have an adverse effect on the Company
or its business, operations, assets, properties, prospects or condition
(financial or otherwise). Neither the Company nor the Stockholder have any
knowledge of any basis for any additional assessment of any Taxes. All Tax
payments related to employees, including income tax withholding, FICA, FUTA,
unemployment and worker's compensation, required to be made by the Company have
been fully and properly paid, withheld, accrued or recorded. There are no
contracts, agreements, plans or arrangements, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Company that, individually or collectively, could give rise to any payment (or
portion thereof) that would not be deductible pursuant to Sections 280G, 404 or
162 of the Code. Two correct and complete copies of (a) all Tax examinations,
(b) all extensions of statutory limitations and (c) all federal, state and local
income tax returns and franchise tax returns of the Company for the last five
fiscal years, or such shorter period of time as any of them shall have existed,
have heretofore been delivered by the Company and the Stockholder to UniCapital.
The Company made an election to be taxed under the provisions of Subchapter S of
the Code and has at no time in the past five years been taxed under the
provisions of Subchapter C of the Code. The Company has a taxable year ended
December 31 and the Company has not made an election to retain a fiscal year
other than December 31 under Section 444 of the Code. The Company does not have
any net recognized built-in gain within the meaning of Section 1374 of the Code.
The Company currently utilizes the accrual method of accounting for income tax
purposes and has not changed its method of accounting for income tax purposes in
the past five years.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) The Company has never utilized or does not currently
utilize any patent, trademark, trade name, service ▇▇▇▇, copyright, software,
trade secret or know-how material to the business of such Company except for
those listed on Schedule 6.28 (the "Intellectual Property"), all of which are
owned by the Company free and clear of any liens, claims, charges or
encumbrances, or are licensed by the Company or are in the public domain. The
Intellectual Property constitutes
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all such assets, properties and rights which are used or held for use in, or are
necessary for, the conduct of the business of the Company.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Company.
(c) The Company does not infringe upon or unlawfully or
wrongfully use any patent, trademark, trade name, service ▇▇▇▇, copyright or
trade secret owned or claimed by another. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the Company and the
Stockholder, threatened relating to any, patent, trademark, trade name, service
▇▇▇▇, copyright or trade secret formerly or currently used by the Company. None
of the Intellectual Property is subject to any outstanding order, decree or
judgment. The Company has never agreed to indemnify any person or entity for or
against any infringement of or by the Intellectual Property.
(d) No present or former employee of the Company and no other
person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any patent, trademark, trade name,
service ▇▇▇▇ or copyright, or in any application therefor, or in any trade
secret, which the Company owns, possesses or uses in its operations as now or
heretofore conducted. Schedule 6.28(d) lists all confidentiality or
non-disclosure agreements currently in force and effect to which the Company or
any of its employees is a party.
(e) Schedule 6.28(e) sets forth a complete and accurate list
of all items of Intellectual Property duly registered in, filed in or issued by
the United States Copyright Office or the United States Patent and Trademark
Office, any offices in the various states of the United States and any offices
in other jurisdictions.
(f) All rights of the Company in the Intellectual Property
shall vest in the applicable Surviving Corporation pursuant to the transactions
contemplated hereby without any consent or other approval.
(g) All Intellectual Property in the form of computer software
that is utilized by the Company in the operations of its business is capable of
processing date data between and within the twentieth and twenty-first centuries
or can be rendered capable of processing such data within six (6) months by the
expenditure of more than $40,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of the
Company, and the copies of all material leases, instruments, agreements,
licenses, permits, certificates or other documents which are included on
Schedules attached hereto or which have been delivered or which have been made
available to UniCapital in connection with the transactions contemplated hereby,
are complete and correct; neither the Company nor, to the knowledge of the
Stockholder, any other party to any of the foregoing is in material default
thereunder; and, except as set forth in the schedules and documents
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attached to this Agreement, the rights and benefits of the Company thereunder
will not be materially and adversely affected by the transactions contemplated
hereby, and the execution of this Agreement and the performance of the
obligations hereunder will not result in a material violation or breach or
constitute a material default under any of the terms or provisions thereof.
Except as set forth on Schedule 6.29, none of such leases, instruments,
agreements, contracts, licenses, permits, certificates or other documents
requires notice to, or the consent or approval of, any governmental agency or
other third party to any of the transactions contemplated hereby to remain in
full force and effect. The consummation of the transactions contemplated hereby
will not give rise to any right of termination, cancellation or acceleration or
result in the loss of any right or benefit thereunder.
6.30 EXISTING CONDITION. Since the Balance Sheet Date, except as set
forth on Schedule 6.30, the Company has not:
(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of the Company or any interest therein;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except in the ordinary course of business
consistent with past practice;
(d) made or suffered any material amendment or termination of
any material agreement, contract, commitment, lease or plan to which it is a
party or by which it is bound, or canceled, materially modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, whether or not in the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed
to make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its shares of capital stock or other ownership interests, other
than a dividend consistent with past practice of up to $32.3 million (pursuant
as well to Section 11.7), which shall have been declared and paid prior to the
Closing;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than
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$35,000, or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise),
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except (i)
in the ordinary course of business consistent with past practice, (ii) such as
may be involved in ordinary repair, maintenance or replacement of its assets;
and (iii) for the implementation of a new computerized accounting system which
shall not exceed $100,000 in total cost.
(j) increased the salaries or other compensation of, or made
any advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its employees or made any increase in, or any addition to, other
benefits to which any of its employees may be entitled, except in the ordinary
course of business consistent with past practice and not to exceed 5% for any
individual unless otherwise agreed by UniCapital; ▇▇▇▇ ▇▇▇▇▇▇'▇ compensation (i)
for the year ended December 31, 1997 did not exceed $8.5 million and (ii) for
the period from January 1, 1998 through the Closing Date will not exceed an
amount which is equal to the a pro rata portion of $5.12 million on an annual
basis;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles;
(l) entered into any transaction other than in the ordinary
course of business consistent with past practice;
(m) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(n) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as Schedule
6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company has accounts or safe deposit boxes;
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(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company and a
description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions and the
assets and liabilities of the Company. The Company has never engaged in any
transaction, maintained any bank account or used any of the funds of the Company
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company has secured, and is in
compliance with, all Environmental Permits, with respect to any premises on
which its business is operated, all of which Environmental Permits shall vest in
the applicable Surviving Corporation upon consummation of the transactions
contemplated hereby. The Company is in compliance with all Environmental Laws.
(b) Neither the Company nor the Stockholder has received any
communication from any Governmental Entity that alleges that the Company is not
in compliance with any Environmental Laws or Environmental Permits.
(c) The Company has not entered into or agreed to any court
decree or order, and the Company is not subject to any judgment, decree or
order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Company and the Stockholder,
threatened to or against any assets or properties of the Company pursuant to any
Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company other than common household and office products in de minimis
quantities.
(f) The Company has not received a CERCLA 104(e) information
request or been named a potentially responsible party for any National
Priorities List site under CERCLA or any site under analogous state law or
received an analogous notice or request from any non-U.S.
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Governmental Entity, which notice, request or any inquiry or litigation has not
been fully and finally resolved without possibility of reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
and any former aboveground or underground tanks on any property owned, operated
or leased by the Company have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by the Company and there are no such articles, containers or
equipment containing PCBs, and there is no asbestos containing material in a
condition or location currently constituting a violation of any Environmental
Law at, on, under or within any property owned, operated or leased by the
Company.
(i) The Company and the Stockholder have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in their possession that have been prepared by
or on behalf of the Company during the past five years.
6.34 NO ILLEGAL PAYMENTS. Neither the Company nor, to the knowledge of
the Company and the Stockholder, any affiliate, officer, agent or employee
thereof, directly or indirectly, has, during the past five years, on behalf of
or with respect to the Company or any affiliate thereof, (a) made any unlawful
domestic or foreign political contributions, (b) made any payment or provided
services which were not legal to make or provide or which the Company or any
affiliate thereof or any such officer, agent or employee should have known were
not legal for the payee or the recipient of such services to receive, (c)
received any payment or any services which were not legal for the payer or the
provider of such services to make or provide, (d) made any payment to any person
or entity, or agent or employee thereof, in connection with any Lease (as
hereinafter defined) to induce such person or entity to enter into a Lease
transaction, (e) had any transactions or payments related to the Company which
are not recorded in their accounting books and records or (f) had any off-book
bank or cash accounts or "slush funds" related to the Company.
6.35 LEASES. Schedule 6.35 hereto sets forth the Company's
leases/financing arrangements as of the Balance Sheet Date (which, together with
all other lease/financing arrangements entered into by the Company between such
date and the Closing Date, are referred to herein as the "Leases"). The term
"Lease Documents" means the lease arrangements and financing contracts
evidencing the leases/financing arrangements described in Schedule 6.35,
together with all related documents and agreements including, without
limitations, master lease agreements, schedules or other addenda to such Leases,
certificates of delivery and acceptance, UCC financing statements, remarketing
agreements, residual guaranty agreements, insurance policies, guaranty
agreements and other credit supports. The term "Equipment" means all equipment,
inventory and other property described as being leased or financed pursuant to a
Lease, or in which the Company is granted a security interest pursuant to a
Lease. The term "Obligor" means any lessee party or other party obligated to pay
or
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perform any obligations under or in respect of a Lease or the Equipment covered
by a Lease (excluding the lessor party thereunder, but otherwise including,
without limitation, any guarantor of a Lease or any vendor, manufacturer or
similar party under a remarketing agreement, residual guaranty or similar
agreement). The term "Scheduled Payments" means the monthly or periodic rental
payments or installments of principal and interest under the terms of the Leases
except as set forth in Schedule 6.35.
(a) There is no restriction or limitation in any of the Lease
Documents or otherwise, restricting the Company from executing this Agreement,
terminating the Lease Documents, or entering into the transactions contemplated
by this Agreement, other than consents which have been, or prior to the Closing
will have been, obtained.
(b) The Company owns or validly leases the Equipment covered
by each Lease or has a vested and perfected first priority security interest in
the Equipment. Except as set forth on Schedule 6.35(b), all Equipment is located
in the United States.
(c) Except as set forth on Schedule 6.35(c), with respect to
each Lease, only one chattel paper original of such Lease exists and is held by
the Company.
(d) Each Lease is in full force and effect in accordance with
its terms, and there has been no occurrence which would or might permit any
Obligor to terminate such Lease or suspend or reduce any payments or obligations
due or to become due in respect of such Lease or the related Lease Documents by
reason of default by the lessor party under such Lease. To the knowledge of the
Stockholder, none of the Obligors in respect of a Lease or the related Lease
Documents is the subject of a bankruptcy, insolvency or similar proceeding.
(e) Except for the delinquency in the payment of any Scheduled
Payment that is not more than 60 days past due, there does not exist any default
in the payment of any Scheduled Payments due under any Lease or the related
Lease Documents, and there does not exist any other default, breach, violation
or event permitting acceleration, termination or repossession under any Lease or
the related Lease Documents or any event which, to the knowledge of the Company
and the Stockholder, with notice and the expiration of any applicable grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration, termination or repossession under such Lease or the
related Lease Documents.
(f) The Company has not acted in a manner which (nor has the
Company failed to act where such failure to act) would alter or reduce any of
the Company's rights or benefits under any manufacturer's or vendors' warranties
or guarantees with respect to any Equipment.
(g) The Company has complied with all requirements of any
federal, state or local law, including without limitation, usury laws,
applicable to each Lease.
(h) Each Lease has the following characteristics:
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(i) except as set forth on Schedule 6.35(h), such
Lease was originated in the United States and the Scheduled Payments thereunder
are payable in U.S. dollars by Obligors domiciled in the United States;
(ii) the lessee party under such Lease has
unconditionally accepted the Equipment covered by such Lease ;
(iii) except as set forth on Schedule 6.35(h), at
least one Scheduled Payment has been made by the Obligor under each such Lease;
and
(iv) no Obligor in respect of such Lease is an
affiliate of the Company.
(i) Each Lease and the related Lease Documents are valid,
binding, legally enforceable and non-cancelable obligations of the Company, and
to the knowledge of the Stockholder, the other parties thereto, enforceable in
accordance with their respective terms, except (i) as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization, arrangement and
other similar laws relating to or affecting the rights of creditors, and (ii) as
the same may be subject to the effect of general principles of equity. Each
Lease is a business obligation of the lessee thereunder and is not a "consumer
transaction" under any applicable federal or state regulation.
(j) To the knowledge of the Stockholder, no Lease or related
Lease Document is the subject of a fraudulent scheme by any Obligor or any
supplier of Equipment.
(k) Each item of Equipment is subject to a Lease.
(l) Each Lease is a fixed rate lease contract.
(m) No Lease or related Lease Document is subject to any
legally enforceable right of rescission, set-off, counterclaim, abatement or
defense, including without limitation any defense of usury, nor will the
operation of any of the terms of any Lease or any related Lease Document or the
exercise of any right or remedy thereunder render such Lease or any related
Lease Document or the obligations thereunder unenforceable, or subject the same
to any right of rescission, set-off, counterclaim, abatement or defense. No
Obligor has asserted any legally enforceable right of rescission, set-off,
counterclaim, abatement or defense to its obligations under a Lease or any
related Lease Document.
(n) As to the Leases and the related Lease Documents, (i) none
has been amended or modified (a) to extend the maturity date for a period of
longer than one year, or (b) to alter the amount or time of payment of any
amount due thereunder, unless as to (a) and (b) such extension or alteration is
reasonably expected to result in a net economic benefit to the Company; (ii) no
indulgences or waivers have been granted in respect of the obligations of any
Obligor under any
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Lease; and (iii) neither the Company nor its Subsidiaries have advanced any
monies on behalf of any Obligor.
(o) Each Lease requires the Obligor thereunder at its own cost
and expense to maintain the Equipment leased thereunder in good repair,
condition and working order, and each Obligor under a Lease is currently in
compliance with such requirement.
(p) Each Lease requires the Obligor thereunder (i) to pay all
fees, taxes (except income taxes), and other charges or liabilities arising with
respect to the Equipment leased thereunder or the use thereof, (ii) to keep the
Equipment free and clear of any and all liens, security interests and other
encumbrances, other than security interests of the Company, (iii) to hold
harmless the lessor thereunder and its successors and assigns against the
imposition of any fees, charges, liabilities and encumbrances, (iv) to bear all
risk of loss associated with the Equipment covered by or securing the
obligations under such Lease during the term of such Lease and (v) to maintain
at the cost of the Obligor public liability and casualty insurance in respect of
such Equipment covered by such Lease.
(q) Each Lease prohibits without the lessor's prior written
consent any relocation of the Equipment covered by such Lease and requires the
Obligor to execute such agreements and documents as may reasonably be requested
by the lessor in connection with any such relocation.
(r) Each Lease involves either the lease of tangible personal
property owned by the Company or the loan of money secured by a security
interest in tangible personal property owned by the Obligor thereunder.
(s) The Company has not received any notice challenging its
ownership or the priority of its security interest in the Equipment covered by
each Lease, and there are no proceedings pending before any court or
governmental entity or, to the knowledge of the Company and the Stockholder,
threatened by any Obligor or other party, (i) asserting the invalidity of any
Lease or the related Lease Documents, (ii) seeking to prevent payment or
performance by any Obligor of any Lease or any of the terms of the related Lease
Documents, or (iii) seeking any determination or ruling that might adversely
affect the validity or enforceability of any Lease or any of the terms or
provisions of the related Lease Documents.
(t) As to each Lease, there are no agreements or
understandings between the Company and the Obligors in respect of such Lease or
otherwise binding on the Company other than as expressly set forth in the Lease
and the related Lease Documents.
6.36 LEASE FUNDING. The Company is in compliance with all of the
material terms and covenants of, and is not in default or breach under, each
agreement, contract, understanding or arrangement with any funding source for
the Leases.
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6.37 DISCLOSURE. The Company has delivered, or in the case of Leases
and Lease Documents made available to UniCapital true and complete copies of
each agreement, contract, commitment or other document (or, in the case of any
such document not in the possession or reasonably available to the Company or
Stockholder, accurate and complete summaries thereof) that is referred to in the
schedules to this Agreement or that has been requested by UniCapital or its
representatives. Without limiting any exclusion, exception or other limitation
contained in any of the representations and warranties made herein, this
Agreement and the schedules hereto and all other documents and information
prepared or certified by the Stockholder to the Company and provided to
UniCapital and its representatives pursuant hereto do not and will not include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements herein and therein not misleading. If any
Stockholder becomes aware of any fact or circumstance that would change a
representation or warranty of any Stockholder in this Agreement or any
representation made on behalf of the Company, then the Stockholder shall
immediately give notice of such fact or circumstance to UniCapital. However,
such notification shall not relieve the Company or any of the Stockholder of
their respective obligations under this Agreement, and at the sole option of
UniCapital, the truth and accuracy of any and all warranties and representations
of the Stockholder, at the date of this Agreement and at the Closing, shall be a
precondition to the consummation of this transaction.
7. REPRESENTATIONS OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and
warrant to the Stockholder as follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. Immediately prior to the effectiveness
of the Merger, each of UniCapital and Newco is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
conduct of its business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Stockholder on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale will be legally equivalent in all respects to the majority of UniCapital
Stock issued and outstanding as of the date hereof. The UniCapital Stock to be
issued upon the conversion of Company Stock pursuant to the terms of this
Agreement will be free and clear of all liens, encumbrances and claims of every
kind, other than restrictions upon transfer contained herein and other than any
liens, encumbrances or claims arising other than by the actions of UniCapital or
Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution,
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delivery and performance of this Agreement by UniCapital and Newco and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with the provisions hereof (the "UniCapital
Documents") have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by UniCapital and Newco and
constitutes, and the UniCapital Documents when executed and delivered will
constitute, the legal, valid and binding obligations of UniCapital and Newco
enforceable against UniCapital and Newco in accordance with their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of any
other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or Newco is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity which is applicable
to UniCapital or Newco, (c) the charter documents of UniCapital or Newco, or (d)
any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which UniCapital or Newco is a party, by which UniCapital or Newco may have
rights or by which any of the properties or assets of UniCapital or Newco may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of UniCapital or Newco thereunder. Except for filing the Certificate
of Merger and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 and approval or consent of, and no registration or filing with, any
Governmental Entity is required in connection with the execution, delivery or
performance of this Agreement by UniCapital or Newco.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing of the IPO by the offering price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and Newco
has complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of the Company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital of Newco any of their affiliates, or
any other person, firm or corporation,
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owns or has any proprietary, financial or other interest (direct or indirect) in
any Authorization which UniCapital or Newco owns, possesses or uses in the
operation of the business of UniCapital and Newco as now or previously
conducted.
7.7 TRANSACTIONS WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or Newco, or any member of his or her immediate family or any other
of its, his or her affiliates, owns or has a 5% or more ownership interest in
any corporation or other entity that is or was during the last three years a
party to, or in any property which is or was during the last three years the
subject of, any contract, agreement or understanding, business arrangement or
relationship with UniCapital or Newco.
7.8 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of UniCapital and Newco, threatened against UniCapital or Newco which
relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 7.8, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of UniCapital or Newco, threatened against
UniCapital or Newco or which relates to UniCapital or Newco.
(c) Neither UniCapital nor Newco knows of any reasonably
likely basis for any litigation, arbitration, investigation or proceeding
referred to in Sections 7.8(a) or (b).
(d) Neither UniCapital nor Newco is a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority."
7.9 REGISTRATION RIGHTS. As of the date hereof and as of the Merger
Effective Date, no officer, director or shareholder of UniCapital will have been
granted any registration rights with respect to the registration of any shares
of capital stock of UniCapital.
7.10 MISCELLANEOUS. Prior to the consummation of the Merger, UniCapital
and Newco have no material properties or assets and are not party to any
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.10
hereto.
8. COVENANTS OF STOCKHOLDER AND COMPANY
The following covenants shall apply during the period from and after the date
hereof through the Closing Date.
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8.1 BUSINESS IN THE ORDINARY COURSE. Except as otherwise contemplated
by this Agreement, the Company shall, and the Stockholder shall cause the
Company to, conduct its business solely in the ordinary course and consistent
with past practice.
8.2 EXISTING CONDITION. The Company shall not, and the Stockholder
shall not suffer the Company to, cause or permit to occur any of the events or
occurrences described in Section 6.30 hereof.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. Except as otherwise
contemplated in Section 8.15, the Company shall, and the Stockholder shall cause
the Company to use its reasonable commercial efforts to, maintain and service
its properties and assets in order to preserve their value and usefulness in the
conduct of its business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Stockholder shall cause the Company to, use its reasonable commercial efforts to
keep available the services of its current employees and agents and to maintain
its relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Stockholder shall cause the Company
to notify UniCapital of any material changes in the terms of the insurance
policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Company shall, and the Stockholder
shall cause the Company to, comply with all laws, ordinances, rules, regulations
and orders applicable to the Company or its business, operations, properties or
assets, noncompliance with which might materially affect the Company.
8.7 CONDUCT OF BUSINESS. The Company shall, and the Stockholder shall
cause the Company to, use its reasonable commercial efforts to conduct its
business in such a manner that on the Closing Date and on the Merger Effective
Date the representations and warranties of the Stockholder contained in this
Agreement shall be true as though such representations and warranties were made
on and as of each such date (except to the extent such representations or
warranties expressly speak as of a specific date), and the Company shall, and
the Stockholder shall cause the Company to, use its reasonable commercial
efforts to cause all of the conditions to the obligations of UniCapital and the
Stockholder under this Agreement to be satisfied on or prior to the Closing
Date. The Company shall, and the Stockholder shall cause the Company to,
maintain credit underwriting standards consistent with past practice.
Furthermore, the Company shall, and the Stockholder shall cause the Company to,
maintain a residual value accounting methodology consistent with past practice.
8.8 ACCESS. Upon prior reasonable notice, the Company shall, and the
Stockholder shall cause the Company to, give to UniCapital's officers,
employees, counsel, accountants and other representatives free and full access
to and the right to inspect, during normal business hours, all of
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the premises, properties, assets, records, contracts and other documents
relating to the Company and shall permit them to consult with the officers,
employees, accountants, counsel and agents of the Company for the purpose of
making such investigation of the Company as UniCapital shall reasonably request,
provided that such investigation shall not unreasonably interfere with the
Company's business operations, and provided further that UniCapital shall not
contact or consult with any non-officer employees of the Company without the
Company's prior consent, which shall not be unreasonably withheld. Furthermore,
the Company shall, and the Stockholder shall cause the Company to, furnish to
UniCapital all such documents and copies of documents and records and
information with respect to the affairs of the Company and copies of any working
papers relating thereto as UniCapital shall from time to time reasonably
request. No information or knowledge obtained in any investigation pursuant to
this Section 8.8 or otherwise shall affect or be deemed to modify any
representation or warranty contained in this Agreement or the conditions to the
obligations of the parties to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Company nor
the Stockholder shall give notice to third parties or otherwise make any press
release or other public statement concerning this Agreement or the transactions
contemplated hereby. Neither the Company nor the Stockholder shall grant any
interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Company, the business (current and proposed) of UniCapital, the
Registration Statement (as defined below), the IPO or any other matter connected
with any of the foregoing without the express prior written approval of
UniCapital, and all inquiries and questions with respect to any of the foregoing
shall be coordinated through ▇▇▇▇▇▇ New, Chief Executive Officer of UniCapital.
The Company and the Stockholder shall coordinate all communications with the
employees and agents of the Company through UniCapital prior to making any such
communication. Notwithstanding the above, (i) the Stockholder may communicate,
whether oral or in writing, with any lenders, lessors, customers, suppliers or
any other parties from whom any consents, approvals or waivers are necessary or
advisable, or to whom notice is necessary or advisable, as well as with any
professional advisors with respect to the transactions contemplated by this
Agreement and related matters, (ii) this Section 8.9 shall not be interpreted to
prevent the Company or the Stockholder from disclosing information as compelled
by a court order, provided however, that prior to disclosing any information
concerning this Agreement or the transaction contemplated hereby in response to
any such court order, the Company or Stockholder, as applicable, shall provide
UniCapital with prompt notice of the court order so that UniCapital may take
whatever action it deems appropriate to prohibit such disclosure.
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, none of the Company, the Stockholder nor any
of their affiliates shall, and each of them shall cause its respective
employees, agents and representatives (including, without limitation, any
investment banking, legal or accounting firm retained by it or them and any
individual member or employee of the foregoing) (each, an "Agent") not to, (a)
initiate, solicit or seek, directly or indirectly, any inquiries or the making
or implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders or any of them) with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution or
similar transaction
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involving, or any purchase of all or any portion of the assets or any equity
securities of, the Company (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal"), or (b) engage in any negotiations
concerning, or provide any confidential information or data to, or have any
substantive discussions with, any person relating to an Acquisition Proposal,
(c) otherwise cooperate in any effort or attempt to make, implement or accept an
Acquisition Proposal, or (d) enter into or consummate any agreement or
understanding with any person or entity relating to an Acquisition Proposal,
except for the Merger contemplated hereby. If Company or Stockholder, or any of
their respective Agents, have provided any person or entity (other than
UniCapital) with any confidential information or data relating to an Acquisition
Proposal, then they shall request the immediate return thereof. The Company and
the Stockholder shall notify UniCapital immediately if any inquiries, proposals
or offers related to an Acquisition Proposal are received by, any confidential
information or data is requested from, or any negotiations or discussions
related to an Acquisition Proposal are sought to be initiated or continued with,
it or any individual or entity referred to in the first sentence of this Section
8.10. The covenant contained in this Section 8.10 shall not survive any
termination of this Agreement pursuant to Sections 13.1, 13.2 or 13.3.
8.11 THIRD PARTY APPROVALS. Prior to the Closing Date, the Company
shall satisfy any requirement for notice and approval of the transactions
contemplated by this Agreement under applicable agreements with third parties,
and shall provide UniCapital with satisfactory evidence of such third party
approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Company shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement, and shall provide UniCapital with proof that any required notice has
been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Company and the
Stockholder shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to any Stockholder or Company the occurrence
or non-occurrence of which would be likely to cause any representation or
warranty contained in Article 6 to be untrue or inaccurate in any material
respect at or prior to the Closing Date or the Merger Effective Date and (ii)
any material failure of any Stockholder or Company to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such person
hereunder.
(b) UniCapital shall give prompt notice to the Stockholder of
(i) the occurrence or non-occurrence of any event known to UniCapital or Newco
the occurrence of non-occurrence of which would be likely to cause any
representation or warranty contained in Article 7 to be untrue or inaccurate in
any material respect at or prior to the Closing Date or the Merger Effective
Date and (ii) any material failure of UniCapital or Newco to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
(c) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which
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modification may only be made pursuant to Section 8.14, (ii) modify the
conditions set forth in Sections 9 and 10 or (iii) limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Merger
Effective Date to supplement or amend promptly the schedules hereto with respect
to any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described in
the schedules, provided, that no amendment or supplement to a schedule that
constitutes or reflects a material adverse change in the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the
Company (a "Material Adverse Amendment"), may by made unless UniCapital consents
to such Material Adverse Amendment; provided, further, however, that if the
amendment or supplement relates to changes in facts or circumstances occurring
subsequent to the date of this Agreement and such amendment or supplement
constitutes or reflects a Material Adverse Amendment, then such amendment or
supplement shall be accepted by UniCapital subject to the provisions of Section
12.2 and 12.5 hereof. No amendment of or supplement to a Schedule shall be made
later than 48 hours prior to the anticipated effectiveness of the Registration
Statement defined in Section 9.4. Only (i) the schedules attached to this
Agreement at the time of its execution and (ii) amended schedules as accepted
under the standards and provisions of the Section 8.14, shall be deemed to be a
part of this Agreement in accordance with Section 19.3 hereof.
8.15 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, the Company shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide
UniCapital with all information reasonably requested and required by it to
satisfy any filing requirements it may have under such act.
8.16 DELIVERY OF INFORMATION. The Company shall, and the Stockholder
shall cause the Company to, deliver to UniCapital on or prior to February 6,
1998 (i) the Company's audited Financial Statements for the year ended December
31, 1997, (ii) projections for the full years 1998 and 1999 acceptable to
UniCapital and its auditors, Price Waterhouse LLP, in their sole discretion,
(iii) all documents requested by UniCapital, its counsel, accountants, advisors
and/or investment bankers on or prior to such date and (iv) all responses to
inquires and supporting documentation with respect to any of the foregoing or
the due diligence investigation being conducted by UniCapital, its counsel,
accountants, advisors and/or investment bankers.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE
STOCKHOLDER
The obligations of the Company and the Stockholder hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as of the Closing Date and as of the Merger Effective Date as
though such representations and warranties had been made as of such times; all
of the terms, covenants and conditions of this Agreement to be complied with and
performed by UniCapital and Newco on or before the Closing Date shall have been
duly complied with and performed; and a certificate to the foregoing effect
dated the Merger Effective Date and signed by a duly authorized agent, the
President or any Vice President of UniCapital shall have been delivered to the
Stockholder.
9.2 EMPLOYMENT AND CONSULTING AGREEMENTS. The Surviving Corporation
shall have executed and delivered an Employment Agreement and Consulting
Agreement, in the forms of Annex IV and Annex V attached hereto, to the
respective persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Stockholder shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein; and
(c) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation or
Bylaws of UniCapital or Newco;
(d) the shares of UniCapital Stock to be received by the
Stockholder on the Merger Effective Date shall be duly authorized, validly
issued, fully paid and nonassessable.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration Statement
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shall have been declared effective by the SEC not later than June 30, 1998,
UniCapital and the underwriters named therein shall have executed the
Underwriting Agreement and the underwriters named therein shall have agreed to
acquire, subject to the conditions set forth in the Underwriting Agreement, the
shares of UniCapital Stock covered by the Registration Statement. There shall
have been no stop-order issued (that remains in effect) by the SEC with respect
to the Registration Statement.
9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholder shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholder contained in this Agreement shall be true on
and as of the Closing Date and as of the Merger Effective Date with the same
effect as though such representations and warranties had been made on and as of
such dates, except for matters expressly disclosed in the certificate or a
Schedule thereto (which shall not serve to modify any representation or warranty
made herein or in any other document or otherwise in information supplied by the
Company or any Stockholder); and each and all of the agreements of the
Stockholder and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited balance sheet
of the Company as of the end of the most recently completed calendar month, and
the unaudited statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for the periods then ended, which statements shall
have disclosed no material adverse change in the financial condition of the
Company or the results of its respective operations from the financial
statements originally furnished by the Company as set forth in Schedule 6.12.
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10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company shall have occurred, and neither the Company shall
have suffered any material loss or damage to any of its properties or assets,
whether or not covered by insurance, since the Balance Sheet Date, which change,
loss or damage materially affects or impairs the ability of the Company or any
Subsidiary to conduct its business as now conducted or as proposed to be
conducted; and UniCapital shall have received on the Closing Date a certificate
signed by the Stockholder and dated the Merger Effective Date to such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company including, but not limited to, environmental and land
use practices, import and export laws, compliance with contracts and federal,
state and local laws and regulations governing the operations of the Company,
which review reflects compliance with all applicable laws governing the Company,
disclosing no material actual or probable violations, compliance problems,
required capital expenditures or other substantive environmental, real estate
and land use related concerns and which review is otherwise satisfactory in all
respects to UniCapital, in its sole discretion.
10.6 STOCKHOLDER'S RELEASE. At the Closing Date, the Stockholder shall
have delivered to UniCapital an instrument in the form of Annex VI dated the
Merger Effective Date releasing the Company from any and all claims of
Stockholder against the Company, except claims for benefits accrued by the
Stockholder pursuant to any Benefit Plan.
10.7 EMPLOYMENT AND CONSULTING AGREEMENTS. Each of the persons listed
on Schedule 9.2 shall have executed and delivered an Employment Agreement and
Consulting Agreement in the form of Annex IV and Annex V, as appropriate,
attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
a counsel to the Stockholder agreed to by the parties, dated the Merger
Effective Date, in form and substance satisfactory to UniCapital, to the effect
that, with respect to the Company is effective under all applicable state laws,
UniCapital, to the effect that the Merger of Newco with and into the Company
(including, without limitation, the Company);
(a) the Company has been duly organized and is validly
existing and in good standing under the laws of the state of New York;
(b) to the knowledge of such counsel, the Company is duly
authorized, qualified and licensed under all applicable laws, regulations,
ordinances or orders of public authorities to carry on its business in the
places and in the manner now conducted, except to the extent that the failure to
be in good standing would not have a material adverse effect on the Company;
(c) the authorized and outstanding capital stock of the
Company is as represented by the Stockholder in this Agreement and each share of
such stock has been duly and validly
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authorized and issued, is fully paid and nonassessable and was not issued in
violation of the preemptive rights of any stockholder;
(d) to the knowledge of such counsel, the Company does not
have any outstanding options, warrants, calls, conversion rights or other
commitments of any kind to issue or sell any of its capital stock;
(e) this Agreement has been duly authorized, executed and
delivered by the Company and the Stockholder and constitutes a valid and binding
agreement of the Company and the Stockholder enforceable in accordance with its
terms, except as such enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement and other similar laws relating to or
affecting the rights of creditors and except (i) as the same may be subject to
the effect of general principles of equity and (ii) that no opinion need be
expressed as to the enforceability of indemnification provisions included
herein;
(f) upon consummation of the Merger contemplated by this
Agreement, UniCapital will receive good title to the Company Stock, free and
clear of all liens, security interests, pledges, charges, voting trusts,
equities, restrictions, encumbrances and claims of every kind;
(g) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.23, the Company is not in violation of or default under any
law or regulation, or under any order of any court, commission, board, bureau,
agency or instrumentality wherever located and there are no claims, actions,
suits or proceedings pending, or threatened against or affecting the Company, at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
wherever located;
(h) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.17, the Company is not in default under any of its material
contracts or agreements or has received notice of such default;
(i) no notice to, consent, authorization, approval or order of
any court or governmental agency or body or of any other third party is required
in connection with the execution, delivery or consummation of this Agreement by
the Stockholder or for the transfer to UniCapital of the Company Stock; and
(j) the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or constitute a
default under any of the terms or provisions of the Company's charter documents
or the bylaws or any Contract or Lease listed on Schedules 6.17 and 6.35.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
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10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. Stockholder shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of incorporation and, unless waived by UniCapital, in each state
in which the Company is authorized to do business, showing that the Company is
in good standing and authorized to do business and that all state franchise
and/or income tax returns and taxes for the Company for all periods prior to the
dates of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the SEC with respect to the Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS; PRE-CLOSING DISTRIBUTIONS. Prior to
the Closing Date, the Stockholder shall have repaid to the Company in full all
amounts owing by the Stockholder to such entities and (ii) completed all
transactions contemplated by Section 8.16.
10.13 NET INCOME. The Company shall have aggregate after tax net income
for the twelve months ended December 31, 1997 as is included in UniCapital's
unaudited pro forma combined (prior to the pro forma and offering adjustments)
income statement for the twelve months ended December 31, 1997 included in the
Registration Statement.
10.14 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 shall have expired or been terminated.
11. COVENANTS OF UNICAPITAL
11.1 LEASES. At the Merger Effective Date, the Surviving Corporation
shall enter into lease arrangements with each of the persons or entities listed
in Schedule 11.1 with respect to the corresponding properties or assets listed
on Schedule 11.1.
11.2 UNICAPITAL STOCK OPTIONS. Effective upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall cause options to purchase that number of shares of
UniCapital Stock having a fair market value on the effective date of the
Registration Statement, based upon the IPO price per share set forth in the
Underwriting Agreement, equal to 6.25% of the Effective Date Consideration
(valuing the UniCapital Stock to be issued as part of the Effective Date
Consideration at the IPO price per share for the purposes of this Section 11.2)
to be granted to those non-Stockholder key employees,
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consultants and other third parties providing actual services of value to the
Company, which are important to the business of the Surviving Corporation
(provided such individuals meet the eligibility requirements under UniCapital's
stock option plan) after the Closing as are designated by the principal
executive officer of the Surviving Corporation who is entering into an
Employment Agreement pursuant to Section 9.2 hereof (or such other officer
designated by the Surviving Corporation and acceptable to UniCapital). Not later
than seven days prior to the effective date of the Registration Statement, the
officer designating the recipients of such options shall provide to UniCapital a
written list of the names of those designated recipients who will receive
options exercisable at the IPO price and the relative percentages of the 6.25%
option pool provided under this Section 11.2 to be awarded to each recipient, as
well as the percentage of options, if any, to be reserved for future issuance.
Any options reserved for future issuance shall be granted at an exercise price
equal to the fair market value of UniCapital Stock as of the date of grant. All
options shall be granted in accordance with UniCapital's policies, and
authorized and issued under the terms of UniCapital's principal stock option
plan for the benefit of employees of UniCapital and its subsidiaries.
11.3 INFORMATION FILING. To the extent the Unified Transaction is a
transaction that falls within Section 351 of the Code, UniCapital shall file all
information required to be filed by it pursuant to Treasury Regulation Section
1.351-3(b).
11.4 HSR FILING. To the extent the Merger is a transaction subject to
the filing requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, UniCapital shall use its reasonable best efforts to (a) file all
information required to be filed by it pursuant to such act and (b) provide the
Company with all information reasonably requested and required by it to satisfy
any filing requirements it may have under such act.
11.5 EMPLOYEE BENEFIT PLANS OF UNICAPITAL. During the two year period
after the Merger Effective Date and upon the termination of any of the Company's
major health insurance plans, retirement savings plans and/or disability plans
(each a "Terminated Plan"), UniCapital shall use its best efforts to promptly
make available a replacement for such terminated plan with a reasonably
comparable plan offering substantially similar benefits on substantially similar
terms to all current employees of the surviving corporation who were employees
of the Company at the time of the Merger.
11.6 RELEASE FROM GUARANTEES; INDEBTEDNESS. Not later than 120 days
following the Merger Effective Date, UniCapital shall cause the Stockholder to
be released from any and all personal guarantees of the indebtedness of the
Company at the Closing Date set forth on Schedule 11.6; provided, that, in the
event that the beneficiary of any such guarantee is unwilling to permit the
substitution of UniCapital's guarantee for the Stockholder's guarantee or the
assumption by UniCapital of the indebtedness, or in the event that the lender
with respect to the indebtedness to which such guarantee relates accelerates
such indebtedness whether or not prior to such 120 day period because of the
consummation of the transactions contemplated hereby, UniCapital shall repay up
to that amount of recourse indebtedness set forth on Schedule 11.6. The failure
of the Company
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to obtain the consent of its lenders to the change of control of the Company or
the substitution of a UniCapital guaranty or the assumption by UniCapital of the
indebtedness set forth on Schedule 11.6 shall not be deemed a breach hereunder.
11.7 DIVIDEND FINANCING. If the dividend set forth in Section 6.30 has
not been paid prior to the Closing Date, UniCapital shall provide, immediately
prior to the Closing, the financing arrangements necessary for the Company to
pay such dividends.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDER. Subject to the limitations
contained in Section 12.5 hereof, the Stockholder covenants and agrees that the
Stockholder will indemnify, defend, protect and hold harmless UniCapital, Newco
and the Surviving Corporation and their respective officers, stockholders,
directors, divisions, subdivisions, affiliates, subsidiaries, parents, agents,
employees, successors and assigns at all times from and after the date of this
Agreement until the Expiration Date (as defined in Section 12.6) from and
against all claims, damages, losses, liabilities, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) (collectively, "Losses") incurred by UniCapital, Newco or the
Surviving Corporation as a result of or arising from (a) any breach of the
representations and warranties made by the Stockholder set forth herein or on
the schedules or certificates delivered in connection herewith, (b) any
nonfulfillment of any covenant or agreement on the part of the Stockholder or
the Company under this Agreement, (c) the business, operations or assets of the
Company prior to the Merger Effective Date or the actions or omissions of the
Company's directors, officers, employees or agents prior to the Merger Effective
Date, other than Losses arising from matters expressly disclosed in the
Financial Statements, this Agreement or the Schedules to this Agreement, or (d)
any liability under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or other federal or state law or regulation, at
common law or otherwise, arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact relating to the Company or the
Stockholder contained in any preliminary prospectus, the Registration Statement
or any prospectus forming a part thereof, or any amendment thereof or supplement
thereto (including any additional registration statement filed pursuant to Rule
462(b) under the Securities Act), which statement was provided or was based upon
information or documents provided to UniCapital or its counsel by the Company or
the Stockholder, or (ii) any omission or alleged omission to state therein a
material fact relating to the Company or the Stockholder required to be stated
therein or necessary to make the statements therein not misleading, which
information was not provided to UniCapital or its counsel by the Company or the
Stockholder; provided, however, that such indemnity shall not inure to the
benefit of UniCapital, or any other indemnified person Newco or the Surviving
Corporation to the extent that such untrue statement (or alleged untrue
statement) was made in, or such omission (or alleged omission) occurred in, any
preliminary prospectus and the Stockholder provided, in writing, corrected
information to UniCapital for inclusion in the final prospectus, and such
information was not so included.
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12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDER. Subject to the
limitations contained in Section 12.5 hereof, notwithstanding any disclosure
made in this Agreement or in the Schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, the Stockholder
covenants and agrees that the Stockholder will indemnify, defend, protect and
hold harmless UniCapital, Newco and the Surviving Corporation and their
respective officers, stockholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement, from and against all Losses
incurred by UniCapital, Newco or the Surviving Corporation as a result of or
incident to: (a) the existence of liabilities of the Company in excess of the
liabilities set forth on Schedule 6.13, to the extent of such excess; (b) the
failure of the Company or the Stockholder to file all required Form 5500's prior
to the Merger Effective Date; (c) the litigation matters listed on Schedule
6.20; (d) any Material Adverse Amendments pursuant to Section 8.14(b) hereof;
(e) the matters listed on Schedules 6.35 (b), 6.35 (c) and 6.35 (h); and (f)
those Scheduled Payments delinquent for 90 days or longer as of the Closing Date
net of applicable reserves reflected on the balance sheet of the Company
immediately prior to the preparation of the Closing Date Balance Sheet.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, covenant and agree that they will indemnify, defend, protect and hold
harmless the Stockholder at all times from and after the date of this Agreement
from and against all Losses incurred by the Stockholder as a result of or
arising from (a) any breach of the representations and warranties made by
UniCapital and Newco set forth herein or on the schedules or certificates
attached hereto, (b) any nonfulfillment of any covenant or agreement on the part
of UniCapital under this Agreement, or (c) any liability under the Securities
Act, the Exchange Act or other federal or state law or regulation, at common law
or otherwise, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact relating to UniCapital (including all of the
companies, other than the Company, acquired by UniCapital as part of the Unified
Transaction, but only to the extent that UniCapital is actually indemnified by
such other companies for such liability) contained in any preliminary
prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto (including any registration
statement filed pursuant to Rule 462(b) under the Securities Act), or arising
out of or based upon any omission or alleged omission to state therein a
material fact relating to UniCapital (including all of the companies, other than
the Company, acquired by UniCapital as part of the Unified Transaction but only
to the extent that UniCapital is actually indemnified by such other companies
for such liability), required to be stated therein or necessary to make the
statements therein not misleading, which liability is not the subject of
indemnification of UniCapital, Newco and the Surviving Corporation pursuant to
Section 12.1(c) above.
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12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent the Indemnifying Party has actually paid
any amount to the Indemnified Party in respect of any Loss in connection with
such Third Party Claim, the Indemnifying Party shall have a right of subrogation
with respect to such Third Party Claim to the extent of such payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party and provided further that
selection for these purposes of Company's choice for counsel, absent any actual
or reasonably likely conflict of interest with respect to parties or defenses,
shall not be objected to by UniCapital), any Third Party Claim as the
Indemnifying Party pursues the same in good faith and diligently and so long as
the Third Party Claim does not relate to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital, Newco or
the Surviving Corporation. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnified Party's possession or
control. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense (unless there is a conflict of interest that prevents counsel for
the Indemnifying Party from representing the Indemnified Party, in which case
the Indemnifying Party will reimburse the Indemnified Party for the expenses of
its counsel). After the Indemnifying Party has notified the Indemnified Party of
its intention to undertake to defend or settle any such asserted liability, and
for so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except to the extent such participation is requested
by the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional legal expenses
and out-of-pocket expenses, and except
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in the case of a Third Party Claim relating to an actual or potential Loss to
which Section 12.4(e) applies in which the Indemnified Party is UniCapital,
Newco or the Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, Newco or the
Surviving Corporation as the Indemnified Party (notice of which opinion shall be
given in writing to the Indemnifying Party), any Third Party Claim seeks
material prospective relief which could have a material adverse effect on any
such Indemnified Party or any subsidiary, then such Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such
Third Party Claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense (including, but not limited to, fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation and all counseling or engineering fees and expenses
related thereto) shall be included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified Party elects to exercise
such right, then the Indemnifying Party shall have the right to participate in,
but not control, the defense of such Third Party Claim at the sole cost and
expense of the Indemnifying Party.
12.5 LIMITATIONS ON INDEMNIFICATION.
(a) To the extent of any amount that UniCapital actually receives as a
result of a Net Worth Deficiency that is directly attributable to an
Indemnifiable Decrease, UniCapital shall not be entitled to any indemnity under
Article 12. An "Indemnifiable Decrease" shall be equal to the amount of any Net
Worth Deficiency that consists of a liability for which UniCapital would
otherwise be entitled to indemnity under Article 12 but that has been (a)
accrued or (b) actually paid (so long as it was not previously accrued on or
before December 31, 1997) during the Interim Net Worth Period. The "Interim Net
Worth Period" shall mean the period beginning on January 1, 1998 and ending on
the Closing Date. No amounts under (a) or (b) that have not been reflected on
the Company's (or its Subsidiaries') financial statements under generally
accepted accounting principles applied consistently with previous practice shall
be deemed to be an Indemnifiable Decrease.
(b) No Indemnified Party shall assert any claim (other than a Third
Party Claim) for indemnification hereunder until such time as the aggregate of
all claims which such Indemnified Party may have against an Indemnifying Party
plus any Indemnifiable Decrease shall exceed
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$1,920,000 (the "Basket Limitation") at which time an Indemnified Party shall be
entitled to seek indemnification for all claims not previously asserted pursuant
to this Article 12, but only to the extent that such claims, in the aggregate,
exceed the Basket Limitation. For purposes of the preceding sentence,
UniCapital, Newco and the Surviving Corporation shall be considered to be a
single Indemnifying and Indemnified Party and Stockholder shall be considered to
be a single Indemnifying and Indemnified Party. Notwithstanding the foregoing,
on each date on which any Earn-Out Consideration is paid, the Basket Limitation
shall be increased by that amount (the "Basket Adjustment") equal to 1% of any
such Earn-Out Consideration, without prejudice to UniCapital's receipt of or
right to receive indemnification for claims exceeding the amount of the Basket
Limitation in effect at the time such claims were brought. If the Basket
Limitation is adjusted pursuant to the preceding sentence after such time as any
Indemnified Party, pursuant to this Article 12, has collected an amount in
excess (such excess amount is referred to as the "Excess Indemnity") of the
Basket Limitation (prior to giving effect to the applicable Basket Adjustment),
then such Indemnified Party, within 10 business days after the final
determination of such Earn-Out Consideration, shall pay to the Indemnifying
Party an amount equal to the lesser of applicable Basket Adjustment or the
Excess Indemnity. In addition, notwithstanding any provision of this Agreement
to the contrary, for the purposes of preventing a double recovery the
Stockholder shall not be obligated to indemnify UniCapital or any other
indemnified party pursuant to Section 12.1 or 12.2 with respect to any
particular act, omission, condition or event if and to the extent that the loss
resulting or arising from such act, omission, condition or event has, directly
or indirectly, been taken into account in the computation of any Net Worth
Deficiency provided for in Section 3.1. Notwithstanding any other term of this
Agreement, in no event shall any Stockholder be liable under this Article 12 for
an amount which exceeds the aggregate value (determined at the Merger Effective
Date) of the Merger Consideration received by the Stockholder under this
Agreement. Notwithstanding anything to the contrary contained in this Agreement,
the limitations upon indemnification contained in this Section 12.5 shall not
apply to Losses arising out of (i) any breach of the representations and
warranties of the Stockholder contained in Sections 6.3, 6.5, 6.14, 6.27 and
6.33 hereof, (ii) litigation net of applicable reserves reflected on balance
sheet of the Company at the Balance Sheet Date and (iii) a Material Adverse
Amendment pursuant to Section 8.14(b) hereof.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
survive for a period of one year from the Merger Effective Date (which date is
hereinafter called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended prior to the Merger Effective Date, which shall be deemed
to be the Expiration Date for purposes of this clause (a) and claims arising
from a breach of the representations and warranties contained in such Section
6.27;
(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely within the
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twenty-first century shall have been processed and UniCapital's consolidated
financial statements for the fiscal year in which the last such transaction to
be processed occurred have been audited, which shall be deemed to be the
Expiration Date for purposes of this clause (b) and claims arising from a breach
of the representations and warranties contained in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Merger Effective
Date, which shall be deemed the Expiration Date for purposes of this clause (c)
and claims arising from a breach of the representations and warranties contained
in such Section 6.33;
(d) solely for purposes of Section 12.1(d) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for purposes of this clause (d) and claims arising under such
laws;
(e) the representations and warranties of the Stockholder
contained in Section 6.5 hereof shall survive the Merger Effective Date without
time limitation; and
(f) any representations and warranties which serve as a basis
of the indemnity obligations of the Stockholder under Section 12.2 shall survive
the Merger Effective Date without time limitation.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Stockholder in the observance or due
and timely performance of any of the covenants, agreements or conditions
contained herein, and the curing of such default shall not have been made on or
before the Closing Date and shall not reasonably be expected to occur; (b) if
UniCapital in its sole judgment determines that any condition exists which has
made or could reasonably be expected to make any of the representations or
warranties contained in Article 6 hereof untrue in any material respect or (c)
if UniCapital in its sole judgment determines that information disclosed on the
Schedules to the Agreement delivered pursuant to Section 8.14 has or could
reasonably be expected to have a material adverse effect on the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company.
13.2 TERMINATION BY THE STOCKHOLDER. Prior to the initial filing of the
Registration Statement with the SEC, the Stockholder may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (a) in accordance with Section 17.4(b) or (b) if a material default
shall be made by UniCapital in the observance or due and timely performance of
any of the covenants, agreements or conditions contained herein, and the curing
of such default shall not have been made on or before such initial filing. From
and after the initial filing of the
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Registration Statement with the SEC, the Stockholder shall have no right to
terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, between the Closing Date and the Merger Effective
Date, the Underwriting Agreement is terminated pursuant to the terms thereof;
(c) if the Merger Effective Date has not occurred within 10
business days after the Closing Date; or
(d) (d) upon the date that the number of shares of UniCapital
Stock to be issued (other than as Earn-Out Consideration) to the persons who
will transfer property to UniCapital in the Unified Transaction can be
determined as a fixed number of shares, unless those same persons shall own
immediately after the Unified Transaction eighty percent (80%) or more of the
UniCapital Stock that will be issued and outstanding immediately after the
Unified Transaction.
13.4 LIQUIDATED DAMAGES. If the Merger fails to occur because of the
default of the Company or the Stockholder, then, in addition to the other
remedies available to UniCapital at law for fraud, in equity or pursuant to this
Agreement, the Stockholder shall pay to UniCapital the sum of $500,000 as
liquidated damages. It is hereby agreed that UniCapital's damages in the event
of a termination or default by Company hereunder are uncertain and impossible to
ascertain and that the foregoing constitutes a reasonable liquidation of such
damages and is intended not as penalty but as liquidated damages.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of the Company
and their respective businesses, the Stockholder covenants that, for the period
ending two years after the Closing Date, such Stockholder will not, directly or
indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be connected as a
partner, principal, agent, representative, consultant or otherwise with, or use
or permit such Stockholder's name to be used in connection with, any business or
enterprise which is engaged directly or indirectly in competition anywhere in
the United States with the business conducted by UniCapital, the Surviving
Corporation or any of its or their respective subsidiaries or affiliates or with
any business engaged in originating, servicing or securitizing leases or other
specialty financing products or services (the "Restricted Business"). The
Stockholder recognizes that the Restricted Business is expected to be conducted
throughout the United States and that more narrow
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geographical limitations of any nature on this non-competition covenant (and the
non-solicitation covenant set forth in subsection (b)) are therefore not
appropriate. The foregoing restriction shall not be construed to prohibit the
ownership by a Stockholder as a passive investment of not more than five percent
of any class of securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities registered pursuant to Section
12 of the Exchange Act or with respect to those activities identified on
Schedule 14.1 hereto.
(b) The Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers who were actually solicited by the Company prior to the Effective Time
of the Restricted Business, or (ii) solicit the employment of any person who is
employed by UniCapital, the Surviving Corporation or any of its or their
respective subsidiaries or affiliates in the Restricted Business during such
period.
(c) The Stockholder recognizes and acknowledges that by reason
of such Stockholder's relationship to the Company, the Stockholder has had
access to confidential information relating to the Restricted Business. The
Stockholder acknowledges that such confidential information is a valuable and
unique asset and covenants that such Stockholder will not disclose any such
confidential information after the Closing Date to any person for any reason
whatsoever.
14.2 DAMAGES. The Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholder agrees that,
in the event of a breach by him of any of the foregoing covenants, such
covenants may be enforced by UniCapital or the Surviving Corporation by, without
limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholder
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Company), and
that any violation will result in irreparable injury to UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
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14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of the Stockholder
against the Company, the Surviving Corporation or UniCapital, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement of such covenants. The parties specifically agree that the period of
two years stated above shall be computed by excluding from such computation any
time during which the Stockholder is in violation of any provision of this
Article 14 and any time during which there is pending in any court of competent
jurisdiction any action (including any appeal from any judgment) brought by any
person, whether or not a party to this Agreement, in which action UniCapital or
the Surviving Corporation seek to enforce the agreements and covenants of the
Stockholder or in which any person contests the validity of such agreements and
covenants or their enforceability or seeks to avoid their performance or
enforcement.
14.6 MATERIALITY. The Stockholder hereby acknowledges and agrees that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital and Newco of the business of the Company.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDER. The Stockholder recognizes and acknowledges that he
has in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company and the Company's businesses. The Stockholder
agrees that they he will not disclose any confidential information to any
person, firm, corporation, association or other entity for any purpose or reason
whatsoever, except to authorized representatives of UniCapital or as may be
required by law or order of a court of competent jurisdiction, unless the
Stockholder can show that such information has become known to the public
generally through no fault of the Stockholder. Prior to disclosing any
confidential information required by law or order of a court of competent
jurisdiction, the Stockholder shall provide UniCapital with prompt notice of the
disclosure requirement so that UniCapital may take whatever action it deems
appropriate to prohibit such disclosure. In the event of a breach or threatened
breach by the Stockholder of the provisions of this Section 15.1, UniCapital and
the Surviving Corporation shall be entitled to an injunction restraining
Stockholder from disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting UniCapital and the Surviving
Corporation from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to
certain confidential information solely of the Company in connection with its
respective business ("Company Information") and (ii) certain confidential
information concerning the Stockholder and certain business and activities of
the Stockholder that are not a part of the transactions contemplated by this
Agreement ("Stockholder
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Information"). Prior to the Closing Date with respect to Company Information and
at any time with respect to Stockholder Information, UniCapital shall not
disclose any such confidential information to any person, firm, corporation,
association, or other entity for any purpose or reason whatsoever without prior
written consent of the Stockholder, except as may be required by law or order of
a court of competent jurisdiction, unless UniCapital can show that such
information has become known to the public generally through no fault of the
UniCapital. Prior to disclosing any confidential information required by law or
order of a court of competent jurisdiction, UniCapital shall provide Stockholder
with prompt notice of the disclosure requirement so that Stockholder may take
whatever action it deems appropriate to prohibit such disclosure. In the event
of a breach or threatened breach by UniCapital of the provisions of this Section
15.2, the Stockholder shall be entitled to an injunction restraining UniCapital
from disclosing, in whole or in part, such confidential information. Nothing
contained herein shall be construed as prohibiting the Stockholder from pursuing
any other available remedy for such breach or threatened breach, including the
recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholder agree
that, in the event of a breach by any of them of the foregoing covenant, the
covenant may be enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, the Stockholder hereby agrees
that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on
behalf of such underwriters, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the final
prospectus contained in the Registration Statement relating to the IPO (the
"Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of UniCapital Stock or such other securities, in cash or
otherwise. In addition, the Stockholder agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the underwriters that
may participate in the IPO, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of UniCapital Stock or any security convertible into or exercisable
or exchangeable for Common Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. The Stockholder agrees that
the foregoing shall be binding upon his transferees, successors, assigns, heirs,
and personal representatives and
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shall benefit and be enforceable by the underwriters in the IPO. The Stockholder
acknowledges and agrees that such underwriters and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated are intended third party beneficiaries of the provisions of this
Article 16, and that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of such
underwriters shall be entitled to enforce the covenants contained in this
Article 16. In furtherance of the foregoing, UniCapital and its transfer agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Article 16. The
Stockholder also acknowledges and agrees that none of the companies to be
acquired as part of the Unified Transaction shall have any rights as intended
third-party beneficiaries under this Agreement.
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
17.1 INVESTMENT INTENT. The Stockholder acknowledges and agrees that
the shares of UniCapital Stock to be delivered to the Stockholder pursuant to
this Agreement have not been and will not be registered under the Securities Act
and therefore may not be resold without compliance with the Securities Act. The
Stockholder represents and warrants that the shares of UniCapital Stock to be
acquired by the Stockholder pursuant to this Agreement are being acquired solely
for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholder covenants, warrants and
represents that none of the shares of UniCapital Stock issued to the Stockholder
will be offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the Securities Act and the rules and regulations of the SEC thereunder, and
except after full compliance with any applicable state securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholder represents and
warrants that he is able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholder further represents and warrants
that he (a) fully understands the nature, scope and duration of the limitations
on transfer contained in this Agreement and (b) have such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the proposed investment and therefore have the capacity
to protect their own interests in connection with the acquisition of the
UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Stockholder represents and warrants that he has had an
adequate opportunity to ask questions and receive answers from the officers of
UniCapital concerning UniCapital, its business, operations, plans and strategy,
and the background and experience of its officers (other than the Chief
Operating Officer of UniCapital, which office had not been filled as of the date
of this Agreement) and directors. The Stockholder represents and warrants that
he has
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asked any and all questions that they he may have in the nature described in the
preceding sentence and that all such questions have been answered to their
satisfaction.
(b) The Stockholder represents and warrants that the
Stockholder has received the draft Registration Statement, including the draft
preliminary prospectus that forms a part thereof, delivered to the Stockholder
on or about February 14, 1998 that describes, among other things, UniCapital,
the Merger, the other acquisitions proposed to be undertaken by UniCapital
simultaneously with the Merger and the target companies of such other
acquisitions. The Stockholder represents and warrants that the Stockholder has
reviewed such draft Registration Statement and draft preliminary prospectus and
has had adequate opportunity to ask questions of and receive answers to the
Stockholder's satisfaction from the officers of UniCapital concerning the
matters described therein.
18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Stockholder hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Stockholder and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholder will cooperate and use their reasonable commercial efforts to have
the officers, directors and employees of Company prior to the Closing Date
cooperate
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with UniCapital on and after the Closing Date in furnishing information,
evidence, testimony and other assistance in connection with any actions,
proceedings, arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date.
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the Company,
the successors of UniCapital, and the heirs and legal representatives of the
Stockholder.
19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholder,
the Company, UniCapital and Newco and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agree ment,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Stockholder (subject to the limitations set
forth below), the Company, UniCapital and Newco acting through their respective
officers, duly authorized by their respective Boards of Directors; provided
further, that the Stockholder shall have no power or authority to modify or
amend this Agreement in any respect from and after the initial filing of the
Registration Statement with the SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Except for any fees paid by the Stockholder
related to the Merger as set forth on Schedule 19.5, each party represents and
warrants that it employed no broker or agent in connection with the transactions
contemplated hereby, and each of UniCapital and Newco, on the one hand, and the
Stockholder, on the other hand, agrees to indemnify the other against all loss,
liability, cost damages or expense arising out of or related to claims for fees
or commissions of brokers employed or alleged to have been employed by such
indemnifying party. Prior to the Closing Date, the Stockholder hereby agrees
that such Stockholder shall cause the Company to terminate all of the Company's
obligations, responsibilities and payments due under the agreement listed on
Schedule 19.5.
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and Newco and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments thereto. Whether or not the transactions herein
contemplated shall be consummated, the Stockholder will pay the fees, expenses
and disbursements of the Stockholder and the Company and their respective
agents, representatives, accountants and counsel incurred in connection with the
subject matter of this Agreement and any amendments hereto and all other costs
and expenses incurred in the performance of this Agreement
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by the Stockholder and the Company and in compliance with all conditions to be
performed by the Stockholder and the Company under this Agreement.
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
One Oxford Centre, Thirty-Second Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Stockholder, addressed to them in care
of the Stockholder's Representative at:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or
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communication shall be effective (i) if delivered by hand or by nationally
recognized courier service, when delivered at the address specified in this
Section 19.7 (or in accordance with the latest unrevoked written direction from
such party) and (ii) if given by telefax, when such telefax is transmitted to
the telefax number specified in this Section 19.7 (or in accordance with the
latest unrevoked written direction from such party), and the appropriate
confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
19.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof. Section, subsection, Schedule and
exhibit references are to this Agreement unless otherwise specified. Unless the
context of this Agreement clearly requires otherwise, (a) references to the
plural include the singular, the singular the plural, and the part the whole,
(b) "or" has the inclusive meaning frequently identified with the phrase
"and/or" and (c) "including" has the inclusive meaning
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frequently identified with the phrase "but not limited to."Each accounting term
used herein that is not specifically defined herein shall have the meaning given
to it under GAAP.
20. DEFINITIONS
20.1 "Accounts Receivable" is defined in Section 6.14.
20.2 "Acquisition Proposal" is defined in Section 8.10.
20.3 "Adjusted 1997 EBT" is defined in Section 2.5(a).
20.4 "Adjusted 1998 EBT" is defined in Section 25(a).
20.5 "Adjusted 1999 EBT" is defined in Section 25.(a).
20.6 "Agent" is defined in Section 8.10.
20.7 "Agreement" is defined in the preamble to this Agreement.
20.8 "Authorizations" are defined in Section 6.23.
20.9 "Balance Sheet Date" is defined in Section 6.12.
20.10 "Basket Limitation" is defined in Section 12.5(b).
20.11 "Benefit Plan" is defined in Section 6.22.
20.12 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
20.13 "Certificate of Merger" is defined in Section 1.1.
20.14 "Certificates" are defined in Section 2.2.
20.15 "Closing" is defined in Section 5.1(b).
20.16 "Closing Date" is defined in Section 5.2.
20.17 "Closing Date Balance Sheet" are defined in Section 3.1.
20.18 "Code" is defined in the recitals to this Agreement.
20.19 "Commonly Controlled Entity" is defined in Section 6.22.
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20.20 "Company" is defined in the preamble to this Agreement.
20.21 "Company Documents" are defined in Section 6.2.
20.22 "Company EBT" is defined in Section 2.5(b).
20.23 "Company Stock" is defined in Section 2.1(a).
20.24 "Constituent Corporations" are defined in the recitals to this
Agreement.
20.25 "Contracts" are defined in Section 6.17.
20.26 "Disputed Amounts" are defined in Section 3.2.
20.27 "EBT" is defined in Section 2.5(a).
20.28 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
20.29 "Effective Date Consideration" is defined in Section 2.1(a).
20.30 "Environmental Laws" mean any and all applicable treaties, laws,
regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
20.31 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
Newco, the Surviving Corporation, any Governmental Entity or any other person or
entity on the basis of any violation of any Environmental Laws or pursuant to
any requirement imposed under any Environmental Laws (including any sampling,
testing, investigation, removal, treatment or remediation undertaken by
UniCapital, Newco or the Surviving Corporation so as to avoid any claim or
violation or to comply with any requirement and all counseling or engineering
fees and expenses related thereto), and arising from pre-Closing operations,
events, circumstances or conditions at, on, under or emanating from, or as a
result of any
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pre-Closing off-site disposal of Hazardous Substances from, any property
currently or formerly owned, operated or leased by the Company.
20.32 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the applicable Company.
20.33 "Equipment" is defined in Section 6.35.
20.34 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.35 "Escrow Cash" is defined in Section 4.1(a).
20.36 "Escrow Property" is defined in Section 4.1(b).
20.37 "Escrow Shares" are defined in Section 4.1(a).
20.38 "Exchange Act" is defined in Section 12.1.
20.39 "Expiration Date" is defined in Section 12.6.
20.40 "Financial Statements" are defined in Section 6.12.
20.41 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.42 "GAAP" is defined in Section 3.1.
20.43 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
20.44 "Hazardous Substances" mean all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials or
chemicals regulated pursuant to any Environmental Law, including materials
listed in 49 C.F.R. ss.172.101 and materials defined as hazardous pursuant to
Section 101(4) of CERCLA.
20.45 "Indemnifiable Decrease" is defined in Section 12.5(a).
20.46 "Indemnified Party" is defined in Section 12.4(a).
20.47 "Indemnifying Party" is defined in Section 12.4(a).
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20.48 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.49 "Independent Accounting Firm" is defined in Section 3.2.
20.50 "Intellectual Property" is defined in Section 6.28(a).
20.51 "Interim Net Worth Period" is defined in Section 12.5(a).
20.53 "IPO" is defined in the recitals to this Agreement.
20.54 "IPO Price" means the per share price that the Company Stock is
sold to the Underwriters in the IPO prior to the deduction of any discounts or
expenses.
20.55 "Lease Documents" are defined in Section 6.35.
20.56 "Leases" are defined in Section 6.35.
20.57 "Liabilities" are defined in Section 6.13(a).
20.58 "Losses" are defined in Section 12.1.
20.59 "Material Adverse Amendment" is defined in Section 8.14.
20.60 "Merger" is defined in the recitals to this Agreement.
20.61 "Merger Consideration" is defined in Section 2.1(c).
20.62 "Merger Effective Date" is defined in Section 5.3.
20.63 "Net Worth Deficiency" is defined in Section 3.1.
20.64 "Newco" is defined in the preamble to this Agreement.
20.65 "Obligor" is defined in Section 6.35.
20.66 "Ordinary Course" or "ordinary course of business" means the
conduct of the business of as conducted by the Company prior to the date of this
Agreement consistent in nature and, where relevant, amount with past practices.
20.67 "PCBs" are defined in Section 6.33(h).
20.68 "Pension Plan" is defined in Section 6.22.
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20.69 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by any
Company, or held by any Stockholder that relate to the operations of any
Company.
20.70 "Prospectus" is defined in Section 16.1.
20.71 "Registration Statement" is defined in Section 9.4.
20.72 "Regulations" are defined in Section 6.23.
20.73 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
20.74 "Restricted Business" is defined in Section 14.1(a).
20.75 "Scheduled Payments" are defined in Section 6.35.
20.76 "SEC" is defined in Section 9.4.
20.77 "Securities Act" is defined in Section 6.16.
20.78 "Stockholder" is defined in the preamble to this Agreement.
20.79 "Stockholder's Representative" is defined in Section 3.3.
20.80 "Subsidiary" is defined in Section 6.8.
20.81 "Surviving Corporation" is defined in Section 1.2.
20.82 "Tax Returns" are defined in Section 6.27.
20.83 "Taxes" are defined in Section 6.27.
20.84 "Third Party Claim" is defined in Section 12.4(a).
20.85 "Unaudited Financial Statements" are defined in Section 6.12(b).
20.86 "Underwriting Agreement" is defined in Section 5.1(a).
20.87 "UniCapital" is defined in the preamble to this Agreement.
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20.88 "UniCapital Documents" are defined in Section 7.3
20.89 "UniCapital Stock" is defined in Section 2.1(a).
20.90 "Welfare Plan" is defined in Section 6.22.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ NEW
---------------------------------
▇▇▇▇▇▇ New
Chairman and Chief Executive Officer
JCS ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ NEW
---------------------------------
▇▇▇▇▇▇ New, President
JACOM COMPUTER SERVICES, INC.
By: /s/ ▇▇▇▇ ▇.▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
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ANNEXES
ANNEX I [Form of Certificate of Merger]
ANNEX II [Calculation and Composition of Consideration]
ANNEX III [Form of Indemnity Escrow Agreement]
ANNEX IV [Form of Employment Agreement]
ANNEX V [Form of Consulting Agreement]
ANNEX VI [Form of Stockholder Release]
SCHEDULES
SCHEDULE 2.5 [Add-Backs]
SCHEDULE 6.1 [Jurisdictions in which Company and Subsidiaries Are Qualified
to do Business]
SCHEDULE 6.5 [Issued and Outstanding Stock of the Company and Subsidiaries]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Companies]
SCHEDULE 6.11 [Third Party Options]
SCHEDULE 6.12 [Company Financial Statements]
SCHEDULE 6.13 [Liabilities and Obligations]
SCHEDULE 6.14 [Accounts and Notes Receivable Aging]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts and Commitments]
SCHEDULE 6.20 [Insurance]
SCHEDULE 6.21 [Employee Information]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.27 [Taxes]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(d) [Confidentiality and Non-Disclosure Agreements]
SCHEDULE 6.28(e) [Registered Intellectual Property]
SCHEDULE 6.29 [Notice and Consents]
SCHEDULE 6.30 [Absence of Changes]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 6.35 [Leases]
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SCHEDULE 7.8 [UniCapital and Newco Litigation]
SCHEDULE 7.10 [UniCapital and Newco Agreements]
SCHEDULE 9.2 [Employment Agreements]
SCHEDULE 11.1 [Lease Arrangements with Certain Persons]
SCHEDULE 11.6 [Personal Guarantees of the Indebtedness of the Company]
SCHEDULE 14.1 [Non-Competition]
SCHEDULE 19.5 [Brokers and Agents]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.04 to the Commission supplementally upon request
therefor.