1
Exhibit 2.08
--------------------------------------------------------------------------------
AMENDMENT AND RESTATED
AGREEMENT AND PLAN OF CONTRIBUTION
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
MCMG ACQUISITION CORP.
(a Delaware corporation),
MUNICIPAL CAPITAL MARKETS GROUP, INC.
(a Texas corporation),
and
THE STOCKHOLDERS NAMED THEREIN
Dated as of February 14, 1998
--------------------------------------------------------------------------------
2
Table of Contents
-----------------
Page
----
1. THE MERGER...............................................................................................2
1.1 Delivery and Filing of Articles of Merger.......................................................2
1.2 Merger Effective Date...........................................................................2
1.3 Certificate of Incorporation, Bylaws, Board of Directors and Officers
of the Surviving Corporation....................................................................2
2. MERGER CONSIDERATION.....................................................................................3
2.1 Conversion of Capital Stock; Merger Consideration...............................................3
2.2 Exchange Procedures.............................................................................3
2.3 No Fractional Shares............................................................................4
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE....................................................5
3.1 Computation.....................................................................................5
3.2 Disputes........................................................................................6
3.3 Stockholders' Representative....................................................................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 STOCKHOLDERS...........................................................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..........................................................10
6.5 Capital Stock of Each 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 Companies.........................................................................11
6.11 No Third-Party Options.........................................................................11
6.12 Financial Statements...........................................................................11
6.13 Liabilities and Obligations....................................................................11
6.14 Accounts and Notes Receivable..................................................................12
i
3
6.15 Permits........................................................................................12
6.16 Real and Personal Property.....................................................................13
6.17 Contracts and Commitments......................................................................13
6.18 Government Contracts...........................................................................15
6.19 Title to 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.....................................................................................21
6.26 Restrictions...................................................................................21
6.27 Taxes..........................................................................................21
6.28 Intellectual Property Matters..................................................................22
6.29 Completeness; No Violations....................................................................23
6.30 Existing Condition.............................................................................24
6.31 Deposit Accounts; Powers of Attorney...........................................................25
6.32 Books of Account...............................................................................26
6.33 Environmental Matters..........................................................................26
6.34 No Illegal Payments............................................................................27
6.35 Intentionally Omitted..........................................................................27
6.36 Intentionally Omitted..........................................................................27
6.37 Disclosure.....................................................................................27
7. REPRESENTATIONS AND WARRANTIES OF UNICAPITAL
AND NEWCO...............................................................................................28
7.1 Corporate Existence............................................................................28
7.2 UniCapital Stock...............................................................................28
7.3 Corporate Power and Authorization..............................................................28
7.4 No Conflicts...................................................................................28
7.5 Capitalization of UniCapital...................................................................29
7.6 Compliance with Law; Authorizations............................................................29
7.7 Transactions With Affiliates...................................................................29
7.8 Litigation.....................................................................................29
7.10 Miscellaneous..................................................................................30
8. COVENANTS OF STOCKHOLDERS AND THE COMPANY...............................................................30
8.1 Business in the Ordinary Course................................................................30
8.2 Existing Condition.............................................................................30
8.3 Maintenance of Properties and Assets...........................................................30
8.4 Employees and Business Relations...............................................................30
8.5 Maintenance of Insurance.......................................................................31
8.6 Compliance with Laws, etc......................................................................31
ii
4
8.7 Conduct of Business............................................................................31
8.8 Access.........................................................................................31
8.9 Press Releases and Other Communications........................................................31
8.10 Exclusivity....................................................................................32
8.11 Third-Party Supplier...........................................................................32
8.12 Notice to Bargaining Agents....................................................................32
8.13 Notification of Certain Matters................................................................33
8.14 Amendment of Schedules.........................................................................33
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
AND THE STOCKHOLDERS....................................................................................34
9.1 Representations and Warranties; Performance of Obligations.....................................34
9.2 Employment Agreements..........................................................................34
9.3 Opinion of Counsel.............................................................................34
9.4 Registration Statement.........................................................................35
9.5 HSR Act........................................................................................35
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL
AND NEWCO...............................................................................................35
10.1 Representations and Warranties; Performance of Obligations.....................................35
10.2 No Litigation..................................................................................35
10.3 Examination of Financial Statements............................................................36
10.4 No Material Adverse Change.....................................................................36
10.5 Regulatory Review..............................................................................36
10.6 Stockholders' Release..........................................................................36
10.7 Employment Agreements..........................................................................36
10.8 Opinion of Counsel.............................................................................36
10.9 Consents and Approvals.........................................................................38
10.10 Good Standing Certificates.....................................................................38
10.11 Registration Statement.........................................................................38
10.12 Repayment of Indebtedness......................................................................38
10.13 Net Income.....................................................................................38
10.14 HSR Act........................................................................................38
10.15 NASD Consent...................................................................................38
11.1 Leases.........................................................................................39
11.2 UniCapital Stock Options.......................................................................39
11.3 Information Filing.............................................................................39
11.5 Notification of Certain Matters................................................................39
11.6 Release From Guarantees; Indebtedness..........................................................40
12. INDEMNIFICATION; SURVIVAL...............................................................................40
12.1 General Indemnification by Stockholders........................................................40
12.2 Specific Indemnification by Stockholders.......................................................41
iii
5
12.3 Indemnification by UniCapital and Newco........................................................41
12.4 Third-Party Claims.............................................................................42
12.5 Limitations on Indemnification.................................................................43
12.6 Survival of Representations and Warranties.....................................................44
13. TERMINATION OF AGREEMENT................................................................................45
13.1 Termination by UniCapital......................................................................45
13.2 Termination by the Stockholders................................................................45
13.3 Automatic Termination..........................................................................46
13.4 Liquidated Damages.............................................................................46
14. NONCOMPETITION AND NONSOLICITATION......................................................................46
14.1 Noncompetition.................................................................................46
14.2 Damages........................................................................................47
14.3 Reasonable Restraint...........................................................................47
14.4 Severability; Reformation......................................................................47
14.5 Independent Covenant...........................................................................47
14.6 Materiality....................................................................................48
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION...............................................................48
15.1 Stockholders...................................................................................48
15.2 UniCapital.....................................................................................48
15.3 Damages........................................................................................49
16. LOCK-UP AGREEMENTS......................................................................................49
16.1 Agreement......................................................................................49
16.2 Intended Third-Party Beneficiaries.............................................................49
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK........................................................................................50
17.1 Investment Intent..............................................................................50
17.2 Compliance with Law............................................................................50
17.3 Economic Risk; Sophistication..................................................................50
17.4 Information Supplied...........................................................................50
18. SECURITIES LEGENDS......................................................................................51
19. GENERAL.................................................................................................51
19.1 Cooperation....................................................................................51
19.2 Successors and Assigns.........................................................................51
19.3 Entire Agreement...............................................................................52
19.4 Counterparts...................................................................................52
19.5 Brokers and Agents.............................................................................52
iv
6
19.6 Expenses.......................................................................................52
19.7 Notices........................................................................................52
19.8 Governing Law..................................................................................53
19.9 Exercise of Rights and Remedies................................................................54
19.10 Time...........................................................................................54
19.11 Reformation and Severability...................................................................54
19.12 Remedies Cumulative............................................................................54
19.13 Captions.......................................................................................54
20. DEFINITIONS.............................................................................................54
v
7
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF
REORGANIZATION (the "Agreement") is made as of the 14th day of February, 1998,
between UNICAPITAL CORPORATION, a Delaware corporation ("UniCapital"); MCMG
ACQUISITION CORP., a Delaware corporation ("Newco"); MUNICIPAL CAPITAL MARKETS
GROUP, INC., (the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and (collectively referred to as the "Stockholders"), who are all of the
stockholders of the Company. Certain capitalized terms used herein are defined
in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement;
WHEREAS, Newco was duly incorporated on January 27, 1998 under the laws
of the State of Delaware solely for the purpose of completing this transaction,
and is a wholly-owned subsidiary of UniCapital; and
WHEREAS, the Company is a corporation organized and existing under the
laws of the state of Texas; and
WHEREAS, the respective Boards of Directors of UniCapital, Newco and
the Company deem it advisable and in the best interests of such corporations and
their respective stockholders that Newco merge with and into the Company
pursuant to this Agreement and the applicable provisions of the laws of the
respective states of incorporation of the Company and Newco (such transaction
being herein called the "Merger" and the Company, Newco and UniCapital being
hereinafter collectively referred to as the "Constituent Corporations"); and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction involving the
simultaneous consummation of (i) a number of similar agreements between
UniCapital and certain other corporations and partnerships and (ii) 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:
1
8
1. THE MERGER
1.1 DELIVERY AND FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause a Articles of Merger, in substantially the form of Annex
I attached hereto with such changes therein as may be required by applicable
state laws (the "Articles of Merger"), to be executed and delivered to the
Secretary of State of the state of incorporation of Newco and the Company on or
before the Merger Effective Date.
1.2 MERGER EFFECTIVE DATE. The "Merger Effective Date" shall be the
date specified in Section 5.3. At the Merger Effective Date, the Articles of
Merger shall either be filed for immediate effectiveness with the Secretary of
State of the applicable state of incorporation of Newco and the Company or
become effective 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 Articles of Merger, and
the separate existence of the Newco shall cease. The Company, as the entity
surviving the Merger, is hereinafter sometimes referred to as the "Surviving
Corporation." The Merger shall have the effects specified in the laws of the
state of incorporation of the Surviving Corporation.
1.3 CERTIFICATE OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Upon the effectiveness of the Merger:
(a) the Articles of Incorporation of the Company, as amended
and restated in the Articles of Merger, shall be the Articles 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 Texas and the Articles 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.
2
9
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 $7,042,500 in cash,
(ii) an aggregate of 370,657 shares of common stock,
par value $.001 per share, of UniCapital ("UniCapital Stock") (the consideration
referred to in clauses (i) and (ii), all of which is to be distributed to the
Stockholders on the Merger Effective Date in the percentages set forth on Annex
II, subject to Article 4 hereof, is referred to in this Agreement as the
"Effective Date Consideration"); provided, however, in the event that the
aggregate value (based on the IPO Price of the UniCapital Stock) of the 370,657
shares of UniCapital Stock is less than $5,559,855, then UniCapital shall issue
additional shares to the Stockholders so that the aggregate value of the shares
of UniCapital Stock equals $5,559,855 (with appropriate adjustment to the cash
and stock components of the Effective Date Consideration so as to eliminate
fractional shares), and
(iii) the Earn-Out Consideration as described in
Section 2.5, to be distributed to the Stockholders within five business days
after 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"), each Stockholder shall, subject to Article 4, be
entitled to receive, in exchange therefor, such Stockholder's pro rata share of
the cash portion of the Effective Date
3
10
Consideration by wire transfer, calculated in accordance with Annex II, and a
certificate representing that number of whole shares of UniCapital Stock which
such holder has the right to receive in respect of the Certificates surrendered,
calculated in accordance with Annex II, and each Certificate so surrendered
shall forthwith be canceled. On the Merger Effective Date or as promptly
thereafter as is practicable, and subject to and in accordance with the
provisions of Article 4, UniCapital shall cause to be distributed to the
Indemnity Escrow Agent (as defined in Article 4) a certificate or certificates
representing the Escrow Shares (as defined in Article 4), which shall be
registered in the name of the Indemnity Escrow Agent as nominee for the
Stockholders and shall be held in accordance with the provisions of Article 4
and the Indemnity Escrow Agreement referred to therein.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and any
holder of Company Stock entitled hereunder to receive a fractional share of
UniCapital Stock but for this Section 2.3 will be entitled hereunder to receive
no such fractional share but a cash payment in lieu thereof in an amount equal
to such fraction multiplied by $19.00.
2.4 ALLOCATION OF MERGER CONSIDERATION. The parties agree that they
will not take a position on any income tax return, before any governmental
agency charged with the collection of any income tax, or in any judicial
proceeding that is in any way inconsistent with the allocation (if any) of the
Merger Consideration made by UniCapital following the Closing.
2.5 EARN-OUT CONSIDERATION.
(a) If the earnings before taxes (the "EBT") of the Company
for the twelve months ending December 31, 1998, increased by amounts in respect
of those items set forth on Schedule 2.5 that affected net income during the
period from January 1, 1998 through the Closing Date and decreased by the amount
of UniCapital corporate overhead allocated to the Company for the period from
the Closing Date through December 31, 1998 (the "Adjusted 1998 EBT"), exceeds
the EBT of the Company for the twelve months ending December 31, 1997, inclusive
of the add-backs set forth on Schedule 2.5 (the "Adjusted 1997 EBT"), then the
Stockholders shall be entitled to receive one-half of the difference between the
Adjusted 1998 EBT and the Adjusted 1997 EBT.
(b) If the EBT of the Company for the year ending December 31,
1999, decreased by the amount of UniCapital corporate overhead allocated to the
Company (the "Adjusted 1999 EBT," and together with the Adjusted 1997 EBT and
the Adjusted 1998 EBT, the "Company EBT"), exceeds the greater of Adjusted 1998
EBT or the Adjusted 1997 EBT, then the Stockholders shall be entitled to receive
one-half of the difference between (i) the Adjusted 1999 EBT and (ii) the
greater of the Adjusted 1998 EBT or 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
4
11
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.
(d) The amounts (if any) that the Stockholders become entitled
to receive pursuant to Sections 2.5(a) and/or 2.5(b) are referred to herein as
the "Earn-Out Consideration." The Earn-Out Consideration shall be paid one-half
in cash and one-half in shares of UniCapital Stock, valued at the average of the
closing prices per share of UniCapital Stock for the [20] trading days preceding
December 31 of the year to which the portion of Earn-Out Consideration in
question applies.
(e) Company EBT shall be determined within forty-five days
following December 31 of such year.
(f) Notwithstanding anything in this Section 2.5 to the
contrary, if the Stockholders dispute the determination of Company EBT, then the
Stockholders' Representative shall notify UniCapital in writing of such dispute
and specify the amount thereof within 20 business days after notification of the
determination of Company EBT. If UniCapital and the Stockholders' Representative
cannot resolve any such dispute which would affect the Earn-Out Consideration,
then such dispute shall be resolved by an Independent Accounting Firm (as
defined in Section 3.2). The Independent Accounting Firm shall be directed to
consider only those agreements, contracts, commitments or other documents (or
summaries thereof) of the Company 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 only by such
Independent Accounting Firm. The costs of the Independent Accounting Firm shall
be borne by the party (either UniCapital or the Stockholders as a group) whose
determination of Company EBT was further from the determination of the
Independent Accounting Firm. Pending resolution of any such dispute by the
Independent Accounting Firm, only the amount of the Earn-Out Consideration as
determined by Price Waterhouse LLP shall be paid by UniCapital. Once Company EBT
is finally determined, the Earn-Out Consideration attendant thereto not
previously paid, if any, shall be paid in accordance with this Section 2.5;
provided that in the event the Stockholders' determination of EBT was closer to
the determination of the Independent Accounting Firm than UniCapital's
determination of EBT, the Stockholders shall receive such Earn-Out Consideration
plus interest which shall accrue at the rate of 10% per annum on any such
Earn-Out Consideration that is resolved in the Stockholders' favor from the date
the Earn-Out Consideration was first payable to the date on which the Earn-Out
Consideration is received by the Stockholders.
(g) Any Earn-Out Consideration paid by UniCapital shall be
treated as additional consideration paid by UniCapital for the shares of Company
Stock.
5
12
3. POST-CLOSING ADJUSTMENT; STOCKHOLDERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP") and
consistent with previous practice, of the independent auditors of the Company in
the Financial Statements (as defined herein) (to the extent such practices are
in accordance with GAAP) 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 as certified by ▇▇▇▇▇ ▇▇▇▇▇▇▇ and reviewed by Price Waterhouse LLP,
then, subject to Section 3.2, commencing 10 business days after delivery of the
Closing Date Balance Sheet to UniCapital, the aggregate Merger Consideration
shall be adjusted downward dollar-for-dollar in the amount of any such
deficiency (the "Net Worth Deficiency"). Upon determination of the Net Worth
Deficiency, if any, UniCapital shall be entitled to recover from the Escrow
Property pursuant to Article 4 that portion of the Net Worth Deficiency which
does not exceed one-half of the 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
Stockholders not later than the 25th business day after the delivery of the
Closing Date Balance Sheet (or if applicable, not later than the 5th business
day after the final determination of any Disputed Amount in accordance with
Section 3.2). At its sole and exclusive option, and at any time after such 25th
business day (or if applicable, not later than the fifth business day after the
final determination of any Disputed Amount in accordance with Section 3.2),
UniCapital shall be entitled to recover from the Escrow Property pursuant to
Article 4 all or any portion of the amount of the Net Worth Deficiency not paid
by the Stockholders as required by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Stockholders dispute any
item contained on the Closing Date Balance Sheet, then the Stockholders'
Representative shall notify UniCapital in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within 10 business days after the delivery of the Closing Date Balance Sheet to
the Stockholders. If UniCapital and the Stockholders' Representative cannot
resolve any such dispute relating to the Net Worth Deficiency, then such dispute
shall be resolved by an independent nationally recognized accounting firm which
is reasonably acceptable to UniCapital and the Stockholders' Representative (the
"Independent Accounting Firm"). The determination of the Independent Accounting
Firm shall be made as promptly as practical and shall be final and binding on
the parties, absent manifest error which error may only be corrected by such
Independent Accounting Firm. Any expenses relating to the engagement of the
Independent Accounting Firm shall be allocated between UniCapital and the
Stockholders so that the Stockholders' aggregate share of such costs shall bear
the same proportion to the total costs that the Disputed Amounts unsuccessfully
contested by the Stockholders' Representative (as finally determined by the
6
13
Independent Accounting Firm) bear to the total of the Disputed Amounts so
submitted to the Independent Accounting Firm. Pending resolution of any such
dispute by the Independent Accounting Firm, no such Disputed Amount shall be due
to UniCapital. Once any such Disputed Amount is finally determined to be due to
UniCapital, UniCapital may proceed to recover such amount in the manner set
forth in Section 3.1.
3.3 STOCKHOLDERS' REPRESENTATIVE. (a) Each Stockholder, by signing this
Agreement, designates ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (or, in the event that ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
is unable or unwilling to serve, or resigns, ▇▇▇▇▇ ▇. ▇▇▇▇▇) to be such
Stockholders' representative for purposes of this Agreement (the "Stockholders'
Representative"). The Stockholders shall be bound by any and all actions taken
by the Stockholders' Representative on their behalf.
(b) UniCapital and Newco shall be entitled to rely upon any
communication or writing given or executed by the Stockholders' Representative.
All communications or writings to be sent to Stockholders pursuant to this
Agreement may be addressed to the Stockholders' Representative and any
communication or writing so sent shall be deemed notice to all of the
Stockholders hereunder. The Stockholders hereby consent and agree that the
Stockholders' Representative is authorized to accept deliveries, including any
notice, on behalf of the Stockholders pursuant hereto.
(c) The Stockholders' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Stockholder, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Stockholders'
Representative, and in general to do all things and to perform all acts
including, without limitation, executing and delivering all agreements,
certificates, receipts, instructions and other instruments contemplated by or
deemed advisable in connection with Article 12 of this Agreement. This power of
attorney and all authority hereby conferred is granted subject to and coupled
with the interest of such Stockholder and the other Stockholders hereunder and
in consideration of the mutual covenants and agreements made herein, and shall
be irrevocable and shall not be terminated by any act of any Stockholder, by
operation of law, whether by such Stockholder's death or any other event.
(d) Notwithstanding the foregoing, the Stockholders'
Representative shall inform each 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 Stockholders' Representative or
taken by such Stockholders' Representative, and shall act as directed by the
Stockholders.
4. INDEMNITY ESCROW
4.1 CREATION OF ESCROW.
7
14
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Stockholders pursuant to Sections 12.1
and 12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof,
the following shall be delivered to [UniCapital's Transfer Agent] as indemnity
escrow agent (the "Indemnity Escrow Agent"):
(i) ten percent (10%) of the number of shares of
UniCapital Stock issuable to each Stockholder as part of the Effective Date
Consideration in accordance with Annex II, rounded up to the nearest whole share
(the "Escrow Shares"); and
(ii) ten percent (10%) of the cash portion of the
Effective Date Consideration payable to each Stockholder in accordance with
Annex II, rounded up to the nearest whole cent (the "Escrow Cash").
(b) The Escrow Shares and the Escrow Cash are referred to
together as the "Escrow Property." In addition, the Escrow Property shall
include all cash and non-cash dividends and other property at any time received
or otherwise distributed in respect of or in exchange for any or all of the
Escrow Property, all securities hereafter issued in substitution for any of the
foregoing, all certificates and instruments representing or evidencing such
securities, all cash and non-cash proceeds of all of the foregoing property and,
except as provided in Section 4.3, all rights, titles, interests, privileges and
preferences appertaining or incident to the foregoing property.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex III. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Merger
Effective Date; and (b) the resolution of any claim for indemnification or
payment that is pending on the first anniversary of the Merger Effective Date,
but only to the extent of the amount of such pending claim.
4.3 VOTING AND INVESTMENT. The Stockholders shall be entitled to
exercise all voting powers incident to the Escrow Shares held by the Indemnity
Escrow Agent as their nominee, but shall not be entitled to exercise any
investment or dispositive powers over such Escrow Shares. The Escrow Cash shall
be invested from time to time by the Indemnity Escrow Agent as provided in the
Indemnity Escrow Agreement.
5. CLOSING; MERGER EFFECTIVE DATE
5.1 CLOSING. Within two business days following the date on which the
underwriting agreement relating to the offer and sale of shares of UniCapital
Stock in the IPO (the "Underwriting Agreement") shall have been executed, the
parties shall take all actions necessary to effect the Merger (other than the
filing with the appropriate state authorities of the Articles of Merger, which
shall be filed and become effective on the Merger Effective Date) and to effect
8
15
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
federal wire transfer of unencumbered and immediately available fundsin an
amount equal to the cash which the Stockholders shall be entitled to receive
pursuant to the Merger referred to in Article 2 hereof, shall occur and be
deemed to be completed. The date on which the Merger is effected shall be
referred to as the "Merger Effective Date."
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, each Stockholder, jointly and severally, 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 jurisdiction of its
incorporation. The Company has the requisite corporate power and authorize to
carry on its business as described in the business plan (the "Business Plan")
submitted to the National Association of Securities Dealers, Inc. ("NASD") in
connection with the Company's application for membership therein. 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 has been duly authorized by the Board of Directors and
Stockholders of the Company and no further corporate action on the part of the
Company or its stockholders is necessary to authorize this Agreement and the
performance of the transactions contemplated hereby. This Agreement has been,
and the other agreements, documents and instruments required to be delivered by
the Company in accordance with the provisions hereof (the "Company Documents")
will be, duly executed and delivered on behalf of the Company by duly authorized
officers, and this Agreement constitutes, and the Company Documents when
executed and delivered will constitute, the legal, valid and
9
16
binding obligations of the Company, enforceable against it in accordance with
their respective terms.
6.3 AUTHORITY; OWNERSHIP. Each Stockholder has the full legal right,
power and legal capacity to enter into this Agreement. Upon the date of this
Agreement and immediately prior to the Closing Date, each 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 such Stockholder, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Company and each Stockholder does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the Company
or any Stockholder is subject, (b) any judgment, order, writ, injunction, decree
or award of any Governmental Entity which is applicable to the Company or any
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 any Stockholder is a party, by which the
Company or any 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
Articles of Merger with the Secretary of State and filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, and except as aforesaid,
no authorization, approval or consent of, and no registration or filing with any
Governmental Entity is required in connection with the execution, delivery or
performance of this Agreement by the Company or any Stockholder.
6.5 CAPITAL STOCK OF EACH 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 Stockholders 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 Stockholders 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.
10
17
6.6 TRANSACTIONS IN CAPITAL STOCK. The Company has not acquired any
treasury stock since December 31, 1995. No option, warrant, call, conversion
right or commitment of any kind exists which obligates the Company to issue any
of its authorized but unissued capital stock. The Company has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof.
6.7 NO BONUS SHARES. None of the shares of capital stock of the Company
was 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 (the "Subsidiary"). Except as set forth in Schedule 6.8, the Company
does not currently own, of record or beneficially, or control, directly or
indirectly, any capital stock, any securities convertible into capital stock or
any other equity interest in any corporation, association or other business
entity. Except as set forth on Schedule 6.8, the Company is not, directly or
indirectly, a participant in any joint venture, partnership or other
noncorporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Company, including the names of all entities from
whom the Company previously acquired assets representing all or substantially
all of the assets of such entity. Except as set forth on Schedule 6.9, the
Company has 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 COMPANIES. Since December 31, 1995, there has not
been any sale or spin-off of significant assets of the 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 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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. All of the balance sheets
included in the Financial Statements, including the related notes, fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Company at the dates indicated and
such statements of income, cash flows and changes in stockholders' equity fairly
present the
11
18
results of operations, cash flows and changes in stockholders' equity of the
Company for the periods indicated.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 6.13 is an accurate list, as
of a date not more than two days prior to the date of this Agreement, of: (i)
all liabilities of the Company which are reflected on the 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 thereafter in the ordinary course of
business; and (iv) all liabilities as of the Balance Sheet Date or incurred
thereafter that are not reflected on such balance sheet. 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
consolidated 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 advances to employees and
Stockholders) other than those arising out of Leases (collectively, the
"Accounts Receivable"). Schedule 6.14 includes an aging of all Accounts
Receivable showing amounts due in 30-day aging categories. On the Closing Date,
the Stockholders will deliver to UniCapital a complete and accurate list, as of
a date not more than two days prior to the Closing Date, of the Accounts
Receivable. All Accounts Receivable
12
19
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, current and 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, each
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 leased by the
Company, where the Company is a lessee or 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 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 (or its
Company Subsidiaries) and, to the knowledge of the Stockholders, no other party
to any such lease is in default thereunder and such leases constitute the legal,
valid and binding obligations of such other parties. All fixed assets used by
the Company in the operation of its business are either owned by the Company or
leased under an agreement set forth on Schedule 6.16. The Company and the
Stockholders have heretofore delivered to UniCapital copies of all title reports
and title insurance policies received or held by the Company (including its
Company). The Company and the Stockholders have indicated on Schedule 6.16 a
summary description of all plans or projects
13
20
involving the opening of new operations, expansion of any existing operations or
the acquisition of any real property or existing business to which management of
the Company has devoted any significant effort or expenditure in the two-year
period prior to the date of this Agreement which, if pursued by the Company
would require additional expenditures of significant efforts or capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company other than Leases (the "Contracts"), to
which the Company is a party or is bound, or by which any of its respective
assets are bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$25,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $25,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing 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 $10,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any other person;
14
21
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$25,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any successor thereto, or
to the knowledge of the Company and each Stockholder, any employee of the
Company or any successor thereto, from engaging or competing in any manner or in
any business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or other
know-how of or used by the Company;
(n) agreement, contract, commitment, arrangement or
understanding to which the Company, on the one hand, and any affiliate, officer,
director or stockholder of the Company, on the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
Each of the Contracts listed on Schedule 6.17, or not required to be listed
thereon because of the amount thereof, is valid and enforceable in accordance
with its terms; the Company is, and to the knowledge of the Company and each
Stockholder, all other parties thereto are, in compliance with the provisions
thereof. The Company is not, and to the knowledge of the Company and each
Stockholder, no other party thereto is, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein; and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. None of
the rights of the Company under any Contract will be impaired by the
consummation of the transactions contemplated hereby, and all such rights will
be enforceable by the 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 written Contract and complete
and accurate summaries of all other Contracts 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 nor ever has been a
party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
6.19 TITLE TO REAL PROPERTY. The Company has good and insurable title
to all real property owned and used in its business, subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge, except for:
15
22
(a) liens, if any, reflected on Schedules 6.13 and 6.16 as
securing specified liabilities (with respect to which no material default
exists);
(b) liens for current taxes and assessments not yet due or in
default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions
to title shown of record in the offices of the county clerks in which the
properties, assets and leasehold estates are located which, in UniCapital's sole
judgment, do not adversely affect UniCapital's intended use of such properties.
6.20 INSURANCE. The assets, properties and operations of the Company is
insured under various policies of general liability and other forms of
insurance, all of which are described on 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 Stockholders, there are not
pending, any labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (ii) there are and have
been no unresolved violations of any Laws of any Governmental Entity respecting
the employment of any employees; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the Company and the
Stockholders,
16
23
threatened before the National Labor Relations Board or similar body in any
foreign country; (iv) there is no employment handbook, personnel policy manual,
or similar document that creates prospective employment rights or obligations;
(v) the employees of the Company are not covered by any collective bargaining
agreement; (vi) the Company has provided or will timely provide prior to Closing
all notices required by law to be given prior to Closing to all local, state,
federal or national labor, wage-payment, equal employment opportunity,
unemployment insurance and related agencies; (vii) the Company has paid or
properly accrued in the ordinary course of business all wages and compensation
due to employees, including all vacations or vacation pay, holidays or holiday
pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in force or the impact on employees on
plant closing or sales of businesses. All employees of the Company are legally
able to work in the United States.
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Companies. "Benefit Plan" means each
"employee pension benefit plan" (as defined in Section 3(3) of ERISA,
hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other plan or
arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Company or its respective affiliates or
any other person or entity that, together with the Company, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code (each,
together with the Company, a "Commonly Controlled Entity") for the benefit of
any present or former officer, employee or director. The Company has no intent
or commitment to create any additional Benefit Plan or amend any Benefit Plan so
as to increase benefits thereunder. The Company has not created any Benefit Plan
or declared or paid any bonus compensation in contemplation of the transactions
contemplated by this Agreement. A current, accurate and complete copy of each
Benefit Plan has been made available to UniCapital. Except as disclosed on
Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code, has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Companies and the Stockholders,
no condition exists that would adversely affect any such determination;
(c) neither any Benefit Plan, nor the Company, nor any
Commonly Controlled Entity, nor any trustee or agent has been or is presently
engaged in any prohibited transactions as defined by Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not
17
24
applicable which could subject the Company to the tax or penalty imposed by
Section 4975 of the Code or Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Company and the Stockholders, no condition exists which could
subject the Company to a penalty under Section 4071 of ERISA;
(e) neither the Company nor any Commonly Controlled Entity is
or has ever been party to any "multi-employer plan," as that term is defined in
Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Company and the Stockholders, threatened
against any Benefit Plan, the Company, any Commonly Controlled Entity or any
trustee or agent of any Benefit Plan; and
(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
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
18
25
or not waived, as of the last day of the most recent fiscal year of each such
Pension Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Company and the
Stockholders, the actuarial assumptions utilized, where appropriate, in
connection with determining the funding of each Pension Plan which is a defined
benefit pension plan (as set forth in the actuarial report for such Pension
Plan) are reasonable. Copies of the most recent actuarial reports have been
furnished to UniCapital. Based on such actuarial assumptions, as of the Balance
Sheet Date, the fair market value of the assets or properties held under each
such Pension Plan exceeds the actuarially determined present value of all
accrued benefits of such Pension Plan (whether or not vested) determined on an
ongoing Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and the Company has not received
any claim or notice that any such Benefit Plan is not in compliance with, all
applicable laws and orders and prohibited transaction exemptions, including
without limitation, to the extent applicable, the requirements of ERISA;
(vi) Neither the Company nor any Commonly Controlled
Entity is in default in performing any of its contractual obligations under any
of the Benefit Plans or any related trust agreement or insurance contract;
(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in Benefit Plan and their beneficiaries in accordance with the
terms of Benefit Plan;
(viii) each Benefit Plan may be amended or modified
by the applicable 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;
19
26
(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;
(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
("Regulations"), 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 the Company in the conduct of the business of the
Company, free and clear of all liens, charges, restrictions and encumbrances and
in compliance with all Regulations. All such Authorizations are listed and
described in Schedule 6.23. The Company is not in default, nor has the Company
received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary
20
27
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 (including, but not limited to, any Authorizations of the NASD
and the Municipal Securities Rulemaking Board) 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. The Company has timely
filed all registrations, reports, statements, notices and other filings required
to be filed with the Securities and Exchange Commission and the NASD by the
Company, and all amendments or supplements to any of the above (the "Filings").
Each of the Filings, as of their respective filing dates, complied in all
material respects, where applicable, with the Exchange Act (as defined in
Section 12.1) and the Securities Act. The Company holds all requisite
securities-related approvals, licenses and registrations in each jurisdiction in
which the Business Plan contemplates it will conduct business, except where the
failure to hold any such approvals, licenses and registrations would not
reasonably be expected to have an adverse effect. The Company has provided to
UniCapital true and correct copies of the Company's current Form BD which has
been completed in accordance with applicable law.
6.24 TRANSACTIONS WITH AFFILIATES. No Stockholder and no director,
officer or employee of the Company, or any member of his or her immediate family
or any other of its, his or her affiliates, owns or has a 5% or more ownership
interest in any corporation or other entity that is or was during the last three
years a party to, or in any property which is or was during the last three years
the subject of, any contract, agreement or understanding, business arrangement
or relationship with the Company.
6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Stockholders, threatened against the Company or
which relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Stockholders, threatened
against the Company or which relates to the Company
(c) Neither the Company nor any Stockholder knows of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) The Company is not a party to or subject to the provisions
of any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority.
21
28
6.26 RESTRICTIONS. The Company is not a party to any indenture,
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially adversely affects or materially restricts or,
so far as the Company or any of the Stockholders can now reasonably foresee, may
in the future materially adversely affect or materially restrict, the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Company after consummation of the transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Company (the
"Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (the "Taxes") have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all such Tax Returns properly reflect the
liabilities of the Company for Taxes for the periods, property or events covered
thereby. All Taxes, including without limitation those which are called for by
the Tax Returns, required to be paid, withheld or accrued by the Company and any
deficiency assessments, penalties and interest have been timely paid, withheld
or accrued. The accruals for Taxes contained in the Balance Sheet are adequate
to cover the Tax liabilities of the Company as of that date and include adequate
provision for all deferred Taxes, and nothing has occurred subsequent to that
date to make any of such accruals inadequate. The Company's Tax basis in its
assets for purposes of determining its future amortization, depreciation and
other federal income tax deductions is accurately reflected on the Company's Tax
books and records. The Company is not or has not at any time ever been a party
to a Tax sharing, Tax indemnity or Tax allocation agreement, and the Company has
not assumed any Tax liability of any other person or entity under contract. The
Company has not received any notice of assessment or proposed assessment in
connection with any Tax Returns and there are not pending tax examinations of or
tax claims asserted against the Company or any of its assets or properties. The
Company has not extended, or waived the application of, any statute of
limitations of any jurisdiction regarding the assessment or collection of any
Taxes. There are now (and as of immediately following the Closing there will be)
no Liens (other than any Lien for current Taxes not yet due and payable) on any
of the assets or properties of the Company relating to or attributable to Taxes.
To the knowledge of the Company and the Stockholders, there is no basis for the
assertion of any claim relating to or attributable to Taxes which, if adversely
determined, would result in any Lien on the assets of the Company or otherwise
have an adverse effect on the Company or its business, operations, assets,
properties, prospects or condition (financial or otherwise). Neither the Company
nor the Stockholders have any knowledge of any basis for any additional
assessment of any Taxes. All Tax payments related to employees, including income
tax withholding, FICA, FUTA, unemployment and worker's
22
29
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 (including, if filed separately, its
Subsidiaries) for the last five fiscal years, or such shorter period of time as
any of them shall have existed, have heretofore been delivered by the Company
and the Stockholders to UniCapital. The Company made an election to be taxed
under the provisions of Subchapter S of the Code within 75 days of its original
organization and has at no time been taxed under the provisions of Subchapter C
of the Code. The Company has a taxable year ended December 31 and no the Company
has 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. Each the Company currently
utilizes the accrual method of accounting for income tax purposes and has not
changed its method of accounting for income tax purposes in the past five years.
6.28 INTELLECTUAL PROPERTY MATTERS. (a) The Company has not utilized or
currently does not utilize any patent, trademark, trade name, service ▇▇▇▇,
copyright, software, trade secret or know-how except for those listed on
Schedule 6.28 (the "Intellectual Property"), all of which are owned by the
Company free and clear of any liens, claims, charges or encumbrances. The
Intellectual Property constitutes all such assets, properties and rights which
are used or held for use in, or are necessary for, the conduct of the business
of the Company.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Company.
(c) The Company does not infringe upon or unlawfully or
wrongfully use any patent, trademark, trade name, service ▇▇▇▇, copyright or
trade secret owned or claimed by another. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the Company and the
Stockholders, threatened relating to any, patent, trademark, trade name, service
▇▇▇▇, copyright or trade secret formerly or currently used by the Company. None
of the Intellectual Property is subject to any outstanding order, decree or
judgment. The Company has not agreed to indemnify any person or entity for or
against any infringement of or by the Intellectual Property.
(d) No present or former employee of the Company and no other
person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any patent, trademark, trade name,
service ▇▇▇▇ or copyright, or in any application therefor, or in any trade
secret, which the Company owns, possesses or uses in its operations as
23
30
now or heretofore conducted. Schedule 6.28 lists all confidentiality or
non-disclosure agreements to which the Company or any of its employees is a
party.
(e) Schedule 6.28(e) sets forth a complete and accurate list
of all items of Intellectual Property, including, without limitation,
unregistered and 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 and information related to such registration.
(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 operation 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 two (2)
months by the expenditure of no more than $10,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of the
Company, and the copies of all leases, instruments, agreements, licenses,
permits, certificates or other documents which are included on schedules
attached hereto or which have been delivered to UniCapital in connection with
the transactions contemplated hereby, are complete and correct; neither the
Company nor, to the knowledge of the Stockholders, any other party to any of the
foregoing is in material default thereunder; and, except as set forth in the
schedules and documents 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, 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
24
31
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 amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, except in the
ordinary course of business consistent with past practice;
(e) except as set forth on Schedule 6.30(e), declared, set
aside or paid any dividend or made or agreed to make any other distribution or
payment in respect of its capital shares or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or acquire any of its shares of capital
stock or other ownership interests;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise),
other than as directly caused by adverse economic conditions not specific to, or
having an extraordinary impact upon, the Company;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
25
32
(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;
(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 (including its Company Subsidiaries) has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Company and a
description of the terms of such power.
6.32 BOOKS OF ACCOUNT. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions and the
assets and liabilities of the Company. The Company has not engaged in any
transaction, maintained any bank account or used any of the funds of the Company
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the business.
6.33 ENVIRONMENTAL MATTERS. (a) The Company has secured, and is in
compliance with, all Environmental Permits, with respect to any premises on
which its business is operated, all of which Environmental Permits shall vest in
the applicable Surviving Corporation upon
26
33
consummation of the transactions contemplated hereby. The Company is in
compliance with all Environmental Laws.
(b) Neither the Company nor any Stockholder has received any
communication from any Governmental Entity that alleges that the Company is not
in compliance with any Environmental Laws or Environmental Permits.
(c) 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 Stockholders,
threatened to or against any assets or properties of the Company pursuant to any
Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Company.
(f) The Company has not received a CERCLA 104(e) information
request or has been named a potentially responsible party for any National
Priorities List site under CERCLA or any site under analogous state law or
received an analogous notice or request from any non-U.S. Governmental Entity,
which notice, request or any resulting inquiry or litigation has not been fully
and finally resolved without possibility of reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
and any former aboveground or underground tanks on any property owned, operated
or leased by the Company have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
(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 Stockholders have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in their possession that have been prepared by
or on behalf of the Company during the past five years.
27
34
6.34 NO ILLEGAL PAYMENTS. The Company and, to the knowledge of the
Company and the Stockholders, any affiliate, officer, agent or employee thereof,
directly or indirectly, has not, 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 INTENTIONALLY OMITTED.
6.36 INTENTIONALLY OMITTED.
6.37 DISCLOSURE. The Company has delivered to UniCapital true and
complete copies of each agreement, contract, commitment or other document (or,
in the case of any such document not in the possession of reasonably available
to a Company or a Stockholder, accurate and complete summaries thereof) that is
referred to in the schedules to this Agreement or that has been requested by
UniCapital or its representatives. Without limiting any exclusion, exception or
other limitation contained in any of the representations and warranties made
herein, this Agreement and the schedules hereto and all other documents and
information prepared or certified by the Stockholders to the Company 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
Stockholders become aware of any fact or circumstance that would change a
representation or warranty of any Stockholder in this Agreement or any
representation made on behalf of the Company, then the Stockholders shall
immediately give notice of such fact or circumstance to UniCapital. However,
such notification shall not relieve the Company or any of the Stockholders of
their respective obligations under this Agreement, and at the sole option of
UniCapital, the truth and accuracy of any and all warranties and representations
of the Stockholders, at the date of this Agreement and at the Closing, shall be
a precondition to the consummation of this transaction.
7. REPRESENTATIONS AND WARRANTIES OF UNICAPITAL AND NEWCO
As of the date hereof and as of each of the Closing Date and the Merger
Effective Date, UniCapital and Newco, jointly and severally, represent and
warrant as follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newco is a corporation
28
35
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Immediately prior to the effectiveness of the
Merger, each of UniCapital and Newco 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 Stockholders on the Merger Effective Date, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares, and except for restrictions upon
resale will be legally equivalent in all respects to the UniCapital Stock issued
and outstanding as of the date hereof. The UniCapital Stock to be issued upon
the conversion of Company Stock pursuant to the terms of this Agreement will be
free and clear of all liens, encumbrances and claims of every kind, other than
restrictions upon transfer contained herein and other than any liens,
encumbrances or claims arising other than by the actions of UniCapital or Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and Newco have the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and all
related documents and agreements required to be executed and delivered by
UniCapital and Newco in accordance with the provisions hereof (the "UniCapital
Documents") have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by UniCapital and Newco and
constitutes, and the UniCapital Documents when executed and delivered will
constitute, the legal, valid and binding obligations of UniCapital and Newco
enforceable against UniCapital and Newco in accordance with their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and Newco will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of any
other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or Newco is subject, (b) any judgment, order,
writ, injunction, decree or award of any Governmental Entity that is applicable
to UniCapital or Newco, (c) the charter documents of UniCapital or Newco, or (d)
any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorization, or other instrument, document or understanding, oral or written,
to which UniCapital or Newco is a party, by which UniCapital or Newco may have
rights or by which any of the properties or assets of UniCapital or Newco may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of UniCapital or Newco thereunder. Except for filing the Articles of
Merger and except as aforesaid, no authorization, approval or consent of, and no
registration or filing and filings under the ▇▇▇▇- ▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, with, any Governmental Entity is required in
connection with the execution, delivery or performance of this Agreement by
UniCapital or Newco.
29
36
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 Price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and Newco
have complied with each, and is not in violation of Regulations to which
UniCapital's and Newco's respective business, operations, assets or properties
is subject. Each of UniCapital and Newco owns, holds, possesses or lawfully uses
in the operation of its business all Authorizations which are in any manner
necessary for it to conduct its business as now or previously conducted or for
the ownership and use of the assets owned or used by UniCapital and Newco,
respectively, in the conduct of the business of the Company, free and clear of
all liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor Newco is in default, nor has UniCapital or
Newco received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital of Newco any of their affiliates, or
any other person, firm or corporation, owns or has any proprietary, financial or
other interest (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.
30
37
(c) Neither UniCapital nor Newco is not a party to or subject
to the provisions of any judgment, order, writ, injunction, decree or award of
any court, arbitrator or governmental or regulatory official, body or authority.
7.9. 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 STOCKHOLDERS AND THE COMPANY
The following covenants shall apply during the period from and after
the date hereof through the Closing Date.
8.1 BUSINESS IN THE ORDINARY COURSE. The Company shall, and the
Stockholders shall cause the Company to, conduct its business solely in the
ordinary course and consistent with past practice.
8.2 EXISTING CONDITION. The Company shall not, and no Stockholder shall
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. The Company shall, and the
Stockholders shall cause the Company to, maintain and service its properties and
assets in order to preserve their value and usefulness in the conduct of its
respective business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Stockholders shall cause the Company to, use commercially reasonable efforts to
keep available the services of its current employees and agents and to maintain
its relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Company shall, and the Stockholders
shall cause the Company to, notify UniCapital of any material changes in the
terms of the insurance policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Company shall, and the Stockholders
shall cause the Company to, comply with all laws, ordinances, rules, regulations
and orders applicable
31
38
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 Stockholders shall
cause the Company to, use its reasonable commercial efforts to conduct its
business in such a manner that on the Closing Date and on the Merger Effective
Date the representations and warranties of the Stockholders contained in this
Agreement shall be true, as though such representations and warranties were made
on and as of each such date (except to the extent such representations or
warranties expressly speak as of a specific date), and each company shall, and
the Stockholders shall cause the Company and each of its Subsidiaries to use
commercially reasonable efforts to cause all of the conditions to the
obligations of the Company and the Stockholders under this Agreement to be
satisfied on or prior to the Closing Date.
8.8 ACCESS. Upon prior reasonable notice, the Stockholders 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 the premises, properties, assets, records,
contracts and other documents relating to the Company and shall permit them to
consult with the officers, employees, accountants, counsel and agents of the
Company for the purpose of making such investigation of the Company as
UniCapital shall desire to make, provided that such investigation shall not
unreasonably interfere with 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 Stockholders
shall cause the Company to, furnish to UniCapital all such documents and copies
of documents and records and information with respect to the affairs of the
Company and copies of any working papers relating thereto as UniCapital shall
from time to time reasonably request. No information or knowledge obtained in
any investigation pursuant to this Section 8.8 or otherwise shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the parties to consummate the Merger.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Company nor
any Stockholder shall give notice to third parties or otherwise make any press
release or other public statement concerning this Agreement or the transactions
contemplated hereby. Neither the Company nor any Stockholder shall grant any
interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Company, the business (current and proposed) of UniCapital, the
Registration Statement (as defined below), the IPO or any other matter connected
with any of the foregoing without the express prior written approval of
UniCapital, and all inquiries and questions with respect to any of the foregoing
shall be coordinated through ▇▇▇▇▇▇ New, Chief Executive Officer of UniCapital.
The Company and each Stockholder shall coordinate all communications with the
employees and agents of the Company through UniCapital prior to making any such
communication. Notwithstanding the foregoing, this Section 8.9 shall not be
interpreted to prevent the Company or any Stockholder from disclosing
information as compelled by a court
32
39
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, neither the Company, nor any Stockholder and
nor any of their affiliates shall, and each of them shall not 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") to, (a)
initiate, solicit or seek, directly or indirectly, any inquiries or the making
or implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders or any of them) with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase of all or any portion of the
assets or any equity securities of, the Company (any such proposal or offer
being hereinafter referred to as an "Acquisition 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 of the Company with and into the Company and the Merger
contemplated hereby. If the Company or Stockholder, or any of their respective
Agents, have provided any person or entity (other than UniCapital) with any
confidential information or data relating to an Acquisition Proposal, then they
shall request the immediate return thereof. The Company and the Stockholders
shall notify UniCapital immediately if any inquiries, proposals or offers
related to an Acquisition Proposal are received by, any confidential information
or data is requested from, or any negotiations or discussions related to an
Acquisition Proposal are sought to be initiated or continued with, it or any
individual or entity referred to in the first sentence of this Section 8.10. The
covenant contained in this Section 8.10 shall not survive any termination of
this Agreement pursuant to Sections 13.1, 13.2 or 13.3.
8.11 THIRD-PARTY SUPPLIER APPROVALS. Prior to the Closing Date, the
Company shall satisfy any requirement for notice and approval of the
transactions contemplated by this Agreement under applicable agreements with
third parties, and shall provide UniCapital with satisfactory evidence of such
third-party approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Company shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement, and shall provide UniCapital with proof that any required notice has
been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Company and the
Stockholders shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to
33
40
any Stockholder or the Company the occurrence or non-occurrence of which would
be likely to cause any representation or warranty contained in Article 6 to be
untrue or inaccurate in any material respect at or prior to the Closing Date or
the Merger Effective Date and (ii) any material failure of any Stockholder or
the Company to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder.
(b) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 8.14, (ii) modify the conditions set forth in Sections 9 and 10 or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party 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 that constitutes or
reflects a material adverse change in the business, operations, assets,
properties, prospects or condition (financial or otherwise) of the Company (a
"Material Adverse Amendment") may be made unless UniCapital consents to such
Material Adverse Amendment; provided, further, however, that if the amendment 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 standard
and provisions of this Section 18.4, 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 COOPERATION WITH NASD APPROVAL PROCESS. From the date hereof to
the Closing Date, and thereafter to the extent necessary or appropriate, the
Stockholders and/or the Company, as required, shall, from time to time, execute
and deliver such additional instruments, documents, conveyances or assurances
and take such other actions as reasonably requested by UniCapital in order to
obtain the consent of any regulatory or self-regulatory bodies whose consent is
necessary or appropriate to complete the transactions contemplated hereby,
including
34
41
but not limited to participating in any pre-membership interview or similar
proceeding before the NASD to obtain its consent to the change of control of the
Company pursuant to Rule 1018(f)(2) of the NASD Conduct Rules.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND
THE STOCKHOLDERS
The obligations of the Company and the Stockholders hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and Newco contained in Article 7
shall be accurate as of the Closing Date and as of the Merger Effective Date as
though such representations and warranties had been made as of such times; all
of the terms, covenants and conditions of this Agreement to be complied with and
performed by UniCapital and Newco on or before the Closing Date shall have been
duly complied with and performed; and a certificate to the foregoing effect
dated the Merger Effective Date and signed by a duly authorized agent, the
President or any Vice President of UniCapital shall have been delivered to the
Stockholders.
9.2 EMPLOYMENT AGREEMENTS. The Surviving Corporation shall have
executed and delivered Employment Agreements, in the form of Annex IV attached
hereto, to each of the persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Stockholders shall have received an opinion
from counsel for UniCapital, dated the Merger Effective Date, to the effect
that:
(a) UniCapital and Newco have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and Newco and constitutes a valid and binding agreement
of UniCapital and Newco enforceable in accordance with its terms, except (i) as
such enforceability may be subject to bankruptcy, moratorium, insolvency,
reorganization, arrangement and other similar laws relating to or affecting the
rights of creditors, (ii) as the same may be subject to the effect of general
principles of equity and (iii) that no opinion need be expressed as to the
enforceability of indemnification provisions included herein; 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 of
Bylaws of UniCapital or Newco;
35
42
(d) the shares of UniCapital Stock to be received by the
Stockholders 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 shall have been declared
effective by the SEC not later than June 30, 1998, UniCapital and the
underwriters named therein shall have executed the Underwriting Agreement and
the underwriters named therein shall have agreed to acquire, subject to the
conditions set forth in the Underwriting Agreement, the shares of UniCapital
Stock covered by the Registration Statement. There shall have been no stop-order
issued (that remains in effect) by the Securities and Exchange Commission with
respect to the Registration Statement.
9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 shall have expired or been terminated.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND
NEWCO
The obligations of UniCapital and Newco hereunder are subject to the
satisfaction, on or prior to the Closing Date (or such earlier date specified
below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Stockholders shall have delivered to UniCapital a certificate dated the Merger
Effective Date and signed by them to the effect that all of the representations
and warranties of the Stockholders contained in this Agreement shall be true on
and as of the Closing Date and as of the Merger Effective Date with the same
effect as though such representations and warranties had been made on and as of
such dates, except for matters expressly disclosed in the certificate or a
schedule thereto (which shall not serve to modify any representation or warranty
made herein or in any other document or otherwise in information supplied by the
Company or any Stockholder); and each and all of the agreements of the
Stockholders and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the acquisition by UniCapital of the Company Stock and no
governmental agency or body shall have taken any other action or made any
request of UniCapital as a result of which the management of UniCapital deems it
inadvisable to proceed with the transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited balance sheets
of the Company as of the end of the most recently completed calendar month, and
the unaudited statements of income,
36
43
cash flows and stockholders' equity of the Company for the periods then ended,
which statements shall have disclosed no material adverse change in the
financial condition of the Company or the results of its respective operations
from the financial statements originally furnished by the Company as set forth
in Schedule 6.12.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Company shall have occurred, and the Company shall not 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 to conduct its
business as now conducted or as proposed to be conducted; and UniCapital shall
have received on the Closing Date a certificate signed by the Stockholders and
dated the Merger Effective Date to such effect.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Company including, but not limited to, environmental and land
use practices, import and export laws, compliance with contracts and federal,
state and local laws and regulations governing the respective operations of
Companies, which review reflects compliance with all applicable laws governing
the Company, disclosing no material actual or probable violations, compliance
problems, required capital expenditures or other substantive environmental, real
estate and land use related concerns and which review is otherwise satisfactory
in all respects to UniCapital, in its sole discretion.
10.6 STOCKHOLDERS' RELEASE. At the Closing Date, the Stockholders shall
have delivered to UniCapital an instrument dated the Merger Effective Date
releasing the Company from any and all claims of the Stockholders against the
Company, except for claims for benefits accrued by the Stockholders pursuant to
any Benefit Plan.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex
IV attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, a professional corporation, counsel to the Company and
the Stockholders, dated the Merger Effective Date, in form and substance
satisfactory to UniCapital, to the effect that, with respect to 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 its incorporation;
(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;
37
44
(c) the authorized and outstanding capital stock of the
Company is as represented by the Stockholders in this Agreement and each share
of such stock has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of the preemptive rights of any
stockholder;
(d) 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 Stockholders and constitutes a valid and
binding agreement of the Company and the Stockholders 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
(which has not been obtained) in connection with the execution, delivery or
consummation of this Agreement by the Company or any Stockholders 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.
38
45
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. Stockholders shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of incorporation and, unless waived by UniCapital, in each state
in which the Company is authorized to do business, showing that the Company is
in good standing and authorized to do business and that all state franchise
and/or income tax returns and taxes for the Company for all periods prior to the
dates of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the Securities and Exchange Commission with respect to the
Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS. Prior to the Closing Date, the
Stockholders shall have repaid to the Company in full all amounts owing by the
Stockholders to such entities.
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.
10.15 NASD CONSENT. The NASD shall have given its written consent to
the change of control of the Company pursuant to Rule 1018(f)(2) of the NASD
Conduct Rules.
39
46
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. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
Merger), UniCapital shall make available options to purchase that number of
shares of UniCapital Stock having a fair market value on the effective date of
the Registration Statement, based upon the IPO Price per share set forth in the
Underwriting Agreement, equal to 6.25% of the Effective Date Consideration
(valuing the UniCapital Stock to be issued as part of the Effective Date
Consideration at the IPO price per share for the purposes of this Section 11.2)
to be granted to those non-Stockholder key employees of the Surviving
Corporation after the Closing as are designated by the principal executive
officer of the Surviving Corporation who is entering into an Employment
Agreement pursuant to Section 9.2 hereof (or such other officer designated by
the Surviving Corporation and acceptable to UniCapital). Not later than seven
days prior to the effective date of the Registration Statement, the officer
designating the recipients of such options shall provide to UniCapital a written
list of the names of those designated recipients who will receive options
exercisable at the IPO price and the relative percentages of the 6.25% option
pool provided under this Section 11.2 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 NOTIFICATION OF CERTAIN MATTERS. (a) UniCapital shall give prompt
notice to each Stockholder of (i) the occurrence or non-occurrence of any event
known to UniCapital the occurrence or non-occurrence of which would be likely to
cause any representation or warranty contained in Article 7 to be untrue or
inaccurate in any material respect at or prior to the Closing Date or the Merger
Effective Date and (ii) any material failure of UniCapital to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
40
47
(b) The delivery of any notice pursuant to this Section 11.4
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, (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.
11.6 RELEASE FROM GUARANTEES; INDEBTEDNESS. Not later than 120 days
following the Merger Effective Date, UniCapital shall cause the Stockholders to
be released from any and all personal guarantees of the indebtedness of the
Company at the Closing Date set forth on Schedule 11.6; 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 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.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, each Stockholder, jointly and
severally, covenants and agrees that such Stockholder will indemnify, defend,
protect and hold harmless UniCapital, Newco and the Surviving Corporation and
their respective officers, stockholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement until the Expiration Date
(as defined in Section 12.6) from and against all claims, damages, losses,
liabilities, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively, "Losses") incurred
by UniCapital, Newco or the Surviving Corporation as a result of or arising from
(a) any breach of the representations and warranties made by the Stockholders
set forth herein or on the schedules or certificates delivered in connection
herewith, (b) any nonfulfillment of any covenant or agreement on the part of the
Stockholders or the Company under this Agreement, (c) the business, operations
or assets of the Company prior to the Merger Effective Date or the actions or
omissions of the Company's directors, officers, stockholders, employees or
agents prior to the Merger Effective Date, other than Losses arising from
matters expressly disclosed in the Financial Statements, this Agreement or the
Schedules to this Agreement, or (d) any liability under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or other
federal or state law or regulation, at common law or otherwise, arising out of
or based upon (i) any untrue statement or alleged untrue statement of a material
fact relating to the Company or the Stockholders contained in any preliminary
prospectus, the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement
41
48
thereto (including any additional registration statement filed pursuant to Rule
462(b) under the Securities Act), which statement was provided or was based upon
information or documents provided to UniCapital or its counsel by the Company or
the Stockholders, or (ii) any omission or alleged omission to state therein a
material fact relating to the Company or the Stockholders required to be stated
therein or necessary to make the statements therein not misleading, which
information was not provided to UniCapital or its counsel by the Company or the
Stockholders; provided, however, that such indemnity shall not inure to the
benefit of UniCapital, Newco or the Surviving Corporation to the extent that
such untrue statement (or alleged untrue statement) was made in, or such
omission (or alleged omission) occurred in, any preliminary prospectus and the
Stockholders provided, in writing, corrected information to UniCapital for
inclusion in the final prospectus, and such information was not so included.
12.2 SPECIFIC INDEMNIFICATION BY STOCKHOLDERS. Subject to the
limitations contained in Section 12.5 hereof, notwithstanding any disclosure
made in this Agreement or in the schedules or exhibits hereto, and
notwithstanding any investigation by UniCapital or Newco, each Stockholder,
jointly and severally, covenants and agrees that such Stockholder will
indemnify, defend, protect and hold harmless UniCapital, Newco and the Surviving
Corporation and their respective officers, stockholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, employees, successors
and assigns at all times from and after the date of this Agreement, from and
against all Losses incurred by UniCapital, Newco or the Surviving Corporation as
a result of or incident to: (a) the existence of liabilities of the Company in
excess of the liabilities set forth on Schedule 6.13, to the extent of such
excess; (b) the failure of the Company or the Stockholders to file all required
Form 5500's prior to the Merger Effective Date; (c) the litigation matters
listed on Schedule 6.25; and (d) any Material Adverse Amendments pursuant to
Section 8.14 hereof.
12.3 INDEMNIFICATION BY UNICAPITAL AND NEWCO. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and Newco, jointly and
severally, covenant and agree that they will indemnify, defend, protect and hold
harmless the Stockholders at all times from and after the date of this Agreement
from and against all Losses incurred by the Stockholders as a result of or
arising from (a) any breach of the representations and warranties made by
UniCapital and Newco set forth herein or on the schedules or certificates
attached hereto, (b) any nonfulfillment of any agreement on the part of
UniCapital under this Agreement, or (c) any liability under the Securities Act,
the Exchange Act or other federal or state law or regulation, at 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,
42
49
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.
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 Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, a professional
corporation, 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
43
50
for any additional legal expenses incurred by the Indemnified Party in
connection with any defense or settlement of such asserted liability, except to
the extent such participation is requested by the Indemnifying Party, in which
event the Indemnified Party shall be reimbursed by the Indemnifying Party for
reasonable additional legal expenses and out-of-pocket expenses, and except in
the case of a Third-Party Claim relating to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital, Newco or
the Surviving Corporation.
(c) No Indemnifying Party shall, in the defense of any
Third-Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third-Party Claim, then the Indemnified Party may defend against such
Third-Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital, Newco or the
Surviving Corporation as the Indemnified Party (notice of which opinion shall be
given in writing to the Indemnifying Party), any Third- Party Claim seeks
material prospective relief which could have a material adverse effect on any
such Indemnified Party or any subsidiary, then such Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such
Third-Party Claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense (including, but not limited to, fees
and disbursements of counsel and experts, as well as any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital, Newco
or the Surviving Corporation and all counseling or engineering fees and expenses
related thereto) shall be included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified Party elects to exercise
such right, then the Indemnifying Party shall have the right to participate in,
but not control, the defense of such Third-Party Claim at the sole cost and
expense of the Indemnifying Party.
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
44
51
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 $140,850 (the
"Basket Limitation") at which time an Indemnified Party shall be entitled to
seek indemnification for all claims pursuant to this Article 12, but only to the
extent such claims, in the aggregate, exceed $140,850. For purposes of the
preceding sentence, UniCapital, Newco and the Surviving Corporation shall be
considered to be a single Indemnifying and Indemnified Party and Stockholders
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 received indemnification for claims
exceeding the amount of the Basket Limitation in effect at the time of such
claims were brought. If the Basket Limitation is adjusted pursuant to the
preceding sentence after such time as any Indemnified Party, pursuant to this
Article 12, has collected an amount in excess (such excess amount is referred to
as the "Excess Indemnity") of the Basket Limitation (prior to giving effect to
the applicable Basket Adjustment), then such Indemnified Party, within 10
business days after the final determination of such Earn-Out Consideration,
shall pay to the Indemnifying Party an amount equal to the lesser of applicable
Basket Adjustment or the Excess Indemnity. In addition, notwithstanding any
provision of this Agreement to the contrary, for the purposes of preventing a
double recovery the Stockholders shall not be obligated to indemnify UniCapital
or any other indemnified party pursuant to Section 12.1 or 12.2 with respect to
any particular act, omission, condition or event if and to the extent that the
loss resulting or arising from such act, omission, condition or event has,
directly or indirectly, been taken into account in the computation of any Net
Worth Deficiency provided for in Section 3.1. Notwithstanding any other term of
this Agreement, in no event shall any Stockholder be liable under this Article
12 for an amount which exceeds the aggregate value (determined at the Merger
Effective Date) of the Merger Consideration received by such Stockholder under
this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, the limitations upon indemnification contained in this Section 12.5
shall not apply to Losses arising out of any of the following: (i) any breach of
the representations and warranties of the Stockholders contained in Sections
6.3, 6.5, 6.14, 6.27 and 6.33 hereof; (ii) litigation net of applicable reserves
reflected on balance sheets of the Company at the Balance Sheet Date; or (iii)
any Material Adverse Amendment pursuant to Section 8.14 hereof.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
survive for a period of one year from the Merger Effective Date (which date is
hereinafter called the "Expiration Date"), except that:
45
52
(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 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 Stockholders
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 Stockholders under Section 12.2 shall
survive the Merger Effective Date without time limitation.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Stockholders in the observance or due
and timely performance of any of the covenants, agreements or 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
46
53
Section 8.14 has or could reasonably be expected to have a material adverse
effect on the business, operations, assets, properties, prospects or condition
(financial or otherwise) of the Company.
13.2 TERMINATION BY THE STOCKHOLDERS. Prior to the initial filing of
the Registration Statement with the SEC, the Stockholders may, by notice in the
manner hereinafter provided on or before such initial filing, terminate this
Agreement (a) in accordance with Section 17.4(b) or (b) if a material default
shall be made by UniCapital 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 Registration Statement with the SEC, the
Stockholders shall have no right to terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998;
(b) if, between the Closing Date and the Merger Effective
Date, the Underwriting Agreement is terminated pursuant to the terms thereof; or
(c) if the Merger Effective Date has not occurred within 10
business days after the Closing Date.
(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 Stockholders, then, in addition to the other
remedies available to UniCapital at law for fraud, in equity or pursuant to this
Agreement, the Stockholders shall pay to UniCapital the sum of $500,000 as
liquidated damages. It is hereby agreed that UniCapital's damages in the event
of a termination or default by Company hereunder are uncertain and impossible to
ascertain and that the foregoing constitutes a reasonable liquidation of such
damages and is intended not as penalty but as liquidated damages.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION. (a) In order to protect the value and goodwill of
the Company and their respective businesses, each Stockholder covenants that,
for the period ending two years after the Closing Date, such Stockholder will
not, directly or indirectly, own, manage, operate,
47
54
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as a partner, principal, agent,
representative, consultant or otherwise with, or use or permit such
Stockholder's name to be used in connection with, any business or enterprise
which is engaged directly or indirectly in competition anywhere in the United
States with the business conducted by UniCapital, the Surviving Corporation or
any of its or their respective subsidiaries or affiliates or with any business
engaged in originating, servicing or securitizing leases or other specialty
financing products or services (the "Restricted Business"). Each Stockholder
recognizes that the Restricted Business is expected to be conducted throughout
the United States and that more narrow geographical limitations of any nature on
this non-competition covenant (and the non-solicitation covenant set forth in
subsection (b)) are therefore not appropriate. The foregoing restriction shall
not be construed to prohibit the ownership by a Stockholder as a passive
investment of not more than five percent of any class of securities of any
corporation which is engaged in any of the foregoing businesses having a class
of securities registered pursuant to Section 12 of the Exchange Act.
(b) Each Stockholder further covenants that for the period
ending two years after the Closing Date, such Stockholder will not, either
directly or indirectly, (i) call on or solicit any customers or prospective
customers of the Restricted Business, or (ii) solicit the employment of any
person who is employed by UniCapital, the Surviving Corporation or any of its or
their respective subsidiaries or affiliates in the Restricted Business during
such period.
(c) Each Stockholder recognizes and acknowledges that by
reason of such Stockholder's relationship to the Company, such Stockholder has
had access to confidential information relating to the Restricted Business. Each
Stockholder acknowledges that such confidential information is a valuable and
unique asset and covenants that such Stockholder will not disclose any such
confidential information after the Closing Date to any person for any reason
whatsoever.
14.2 DAMAGES. Each Stockholder acknowledges and agrees that measuring
economic losses to UniCapital and the Surviving Corporation as a result of the
breach of the foregoing covenants in this Article 14 would be impossible, and
that any breach of the foregoing covenants would result in immediate and
irreparable damage to UniCapital and the Surviving Corporation for which they
would have no other adequate remedy. Accordingly, the Stockholders agree that,
in the event of a breach by them of any of the foregoing covenants, such
covenants may be enforced by UniCapital or the Surviving Corporation by, without
limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The Parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Stockholders
in light of the activities and business of UniCapital on the date of the
execution of this Agreement and the current and future plans of UniCapital and
the Surviving Corporation (as successors to the businesses of the Company), and
that any violation will result in irreparable injury to UniCapital.
48
55
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Stockholder
against the Company, the Surviving Corporation or UniCapital, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement of such covenants. The parties specifically agree that the period of
two years stated above shall be computed by excluding from such computation any
time during which any Stockholder is in violation of any provision of this
Article 14 and any time during which there is pending in any court of competent
jurisdiction any action (including any appeal from any judgment) brought by any
person, whether or not a party to this Agreement, in which action UniCapital or
the Surviving Corporation seek to enforce the agreements and covenants of the
Stockholders or in which any person contests the validity of such agreements and
covenants or their enforceability or seeks to avoid their performance or
enforcement.
14.6 MATERIALITY. The Stockholders hereby acknowledge and agree that
the covenants contained in this Article 14 are a material and substantial part
of this transaction and are entered into in connection with and as an inducement
to the acquisition by UniCapital and Newco of the businesses of the Company.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
have in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company and the Company' respective businesses. The
Stockholders agree that they will not disclose any confidential information to
any person, firm, corporation, association or other entity for any purpose or
reason whatsoever, except to authorized representatives of UniCapital, or as may
be required by law or order of a court of competent jurisdiction unless the
Stockholders can show that such information has become known to the public
generally through no fault of the Stockholders. Prior to disclosing any
confidential information required by law or order of a court of competent
jurisdiction, the Stockholders shall 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 Stockholders of the provisions of this Section 15.1, UniCapital
and the Surviving Corporation shall be entitled to an injunction restraining
Stockholders from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting UniCapital and the
Surviving Corporation from
49
56
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 their
respective businesses. UniCapital agrees that, prior to the Closing Date, it
will not disclose any such confidential information to any person, firm,
corporation, association, or other entity for any purpose or reason whatsoever
without prior written consent of the Stockholders, except as may be required by
law or order of a court of competent jurisdiction, 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
Stockholders with prompt notice of the disclosure requirement so that
Stockholders 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 Stockholders shall be entitled to an
injunction restraining UniCapital from disclosing, in whole or in part, such
confidential information. Nothing contained herein shall be construed as
prohibiting the Stockholders from pursuing any other available remedy for such
breach or threatened breach, including the recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Surviving Corporation and the Stockholders
agree that, in the event of a breach by any of them of the foregoing covenant,
the covenant may be enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Stockholder hereby
agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated on behalf of such underwriters, it will not, during the period
commencing on the date of this Agreement and ending 180 days after the date of
the final prospectus contained in the Registration Statement relating to the IPO
(the "Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of UniCapital Stock or such other securities, in cash or
otherwise. In addition, each Stockholder agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
50
57
Co. Incorporated on behalf of the underwriters that may participate in the IPO,
it will not, during the period commencing on the date of this Agreement and
ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of UniCapital
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
16.2 INTENDED THIRD-PARTY BENEFICIARIES. Each Stockholder agrees that
the foregoing shall be binding upon their transferees, successors, assigns,
heirs, and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Stockholder acknowledges and agrees that such
underwriters and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated are intended third-party
beneficiaries of the provisions of this Article 16, and that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Article 16. The Stockholders acknowledge and agree 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 Stockholders acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Stockholders represent and warrant that the shares of UniCapital Stock to be
acquired by the Stockholders pursuant to this Agreement are being acquired
solely for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Stockholders covenant, warrant and
represent that none of the shares of UniCapital Stock issued to such
Stockholders will be offered, sold, assigned, pledged, hypothecated, transferred
or otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC
thereunder, and except after full compliance with any applicable state
securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in
UniCapital Stock acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment. The Stockholders further represent and warrant
that they (a) fully understand the nature, scope and duration of the limitations
on transfer contained in this Agreement and (b) have such knowledge and
experience in financial and business matters that they are capable of evaluating
the merits and risks of the
51
58
proposed investment and therefore have the capacity to protect their own
interests in connection with the acquisition of the UniCapital Stock.
17.4 INFORMATION SUPPLIED. (a) The Stockholders represent and warrant
that they have had an adequate opportunity to ask questions and receive answers
from the officers of UniCapital concerning UniCapital, its business, operations,
plans and strategy, and the background and experience of its officers and
directors. The Stockholders represent and warrant that they have asked any and
all questions that they may have in the nature described in the preceding
sentence and that all such questions have been answered to their satisfaction.
(b) Each Stockholder represents and warrants that such
Stockholder has received the draft Registration Statement (without exhibits),
including the draft preliminary prospectus that forms a part thereof, delivered
to such 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. Each Stockholder represents and warrants that such
Stockholder has reviewed such draft Registration Statement (without exhibits)
and draft preliminary prospectus and has had adequate opportunity to ask
questions of and receive answers to such 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
Stockholders hereunder will bear a legend substantially in the form set forth
below and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
52
59
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Stockholders and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Stockholders will cooperate and use their best efforts to have the officers,
directors and employees of Company prior to the Closing Date cooperate with
UniCapital on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to all
periods prior to the Closing Date.
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the Company,
the successors of UniCapital, and the heirs and legal representatives of the
Stockholders.
19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Company, UniCapital and Newco and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Stockholders (subject to the limitations
set forth below), the Company, UniCapital and Newco acting through their
respective officers, duly authorized by their respective Boards of Directors;
provided that no Stockholder shall have any power or authority to modify or
amend this Agreement in any respect from and after the initial filing of the
Registration Statement with the SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and Newco, on the one hand, and the Stockholders,
on the other hand, agrees to indemnify the other against all loss, liability,
cost damages or expense arising out of or related to claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
53
60
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consum mated, 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 Stockholders will pay the fees, expenses
and disbursements of the Stockholders and the Company and their respective
agents, representatives, accountants and counsel incurred in connection with the
subject matter of this Agreement and any amendments hereto and all other costs
and expenses incurred in the performance of this Agreement by the Stockholders
and the Company and in compliance with all conditions to be performed by the
Stockholders and the Company under this Agreement.
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to UniCapital or Newco, addressed to them at:
UniCapital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
One Oxford Centre, Thirty-Second Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Stockholders, addressed to them in care of
the Stockholders' Representative at:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Municipal Capital Market Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
54
61
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
2200 One Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax is transmitted to the telefax number specified in this Section 19.7
(or in accordance with the latest unrevoked written direction from such party),
and the appropriate confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
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.
55
62
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
20. DEFINITIONS
20.1 "Accounts Receivable" is defined in Section 6.14.
20.2 "Acquisition Proposal" is defined in Section 8.10.
20.3 "Adjusted EBT" is defined in Section 2.5(a).
20.4 "Agent" is defined in Section 8.10.
20.5 "Agreement" is defined in the preamble to this Agreement.
20.6 "Articles of Merger" is defined in Section 1.1.
20.7 "Authorizations" are defined in Section 6.23.
20.8 "Balance Sheet Date" is defined in Section 6.12(b).
20.9 "Basket Adjustment" is defined in Section 12.5(b).
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 "Certificates" are defined in Section 2.2.
20.14 "Closing" is defined in Section 5.1(b).
20.15 "Closing Date" is defined in Section 5.2.
20.16 "Closing Date Balance Sheets" are defined in Section 3.1.
56
63
20.17 "Code" is defined in the recitals to this Agreement.
20.18 "Commonly Controlled Entity" is defined in Section 6.22.
20.19 "Company" is defined in the preamble to this Agreement.
20.20 "Company Documents" are defined in Section 6.2.
20.21 "Company EBT" is defined in Section 2.5(b).
20.22 "Company Stock" is defined in Section 2.1(a).
20.23 "Constituent Corporations" are defined in the recitals to this
Agreement.
20.24 "Contracts" are defined in Section 6.17.
20.25 "Disputed Amounts" are defined in Section 3.2.
20.26 "Earn-Out Consideration" is defined in Section 2.5(c).
20.27 "Earn-Out Escrow Cash" is defined in Section 4.1(b).
20.28 "Earn-Out Escrow Shares" are defined in Section 4.1(b).
20.29 "EBT" is defined in Section 2.5(a).
20.30 "Effective Date Consideration" is defined in Section 2.1(a).
20.31 "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.
57
64
20.32 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
Newco, the Surviving Corporation, any Governmental Entity or any other person or
entity on the basis of any violation of any Environmental Laws or pursuant to
any requirement imposed under any Environmental Laws (including any sampling,
testing, investigation, removal, treatment or remediation undertaken by
UniCapital, Newco or the Surviving Corporation so as to avoid any claim or
violation or to comply with any requirement and all counseling or engineering
fees and expenses related thereto), and arising from pre-Closing operations,
events, circumstances or conditions at, on, under or emanating from, or as a
result of any pre-Closing off-site disposal of Hazardous Substances from, any
property currently or formerly owned, operated or leased by the Company.
20.33 "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 Company.
20.34 "Equipment" is defined in Section 6.35.
20.35 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.36 "Escrow Cash" is defined in Section 4.1(c).
20.37 "Escrow Property" is defined in Section 4.1(c).
20.38 "Escrow Shares" are defined in Section 4.1(c).
20.39 "Exchange Act" is defined in Section 12.1.
20.40 "Expiration Date" is defined in Section 12.6.
20.41 "Financial Statements" are defined in Section 6.12.
20.42 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.43 "GAAP" is defined in Section 3.1.
20.44 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational including, but not limited
to the National Association of Securities Dealers and the Municipal Securities
Rulemaking Board.
58
65
20.45 "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. Section 172.101 and materials defined as hazardous pursuant
to Section 101(14) of CERCLA.
20.46 "Indemnifiable Decrease" is defined in Section 12.5(a).
20.47 "Indemnified Party" is defined in Section 12.4(a).
20.48 "Indemnifying Party" is defined in Section 12.4(a).
20.49 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.50 "Independent Accounting Firm" is defined in Section 3.2.
20.51 "Intellectual Property" is defined in Section 6.28(a).
20.52 "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.
59
66
20.64 "Newco" is defined in the preamble to this Agreement.
20.65 "1999 EBT" is defined in Section 2.5(b).
20.66 "Obligor" is defined in Section 6.35.
20.67 "Ordinary course" or "ordinary course of business" means the
conduct of business as conducted by the Company prior to the date of this
Agreement consistent in nature and, where relevant, amount with past practices.
20.68 "PCBs" are defined in Section 6.33(h).
20.69 "Pension Plan" is defined in Section 6.22.
20.70 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by any
Company, or held by any Stockholder that relate to the operations of any
Company.
20.71 "Prospectus" is defined in Section 16.1.
20.72 "Registration Statement" is defined in Section 9.4.
20.73 "Regulations" are defined in Section 6.23.
20.74 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
20.75 "Restricted Business" is defined in Section 14.1(a).
20.76 "SEC" is defined in Section 9.4.
20.77 "Securities Act" is defined in Section 6.16.
20.78 "Stockholders" are defined in the preamble to this Agreement.
20.79 "Stockholders' 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.
60
67
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.
20.88 "UniCapital Documents" are defined in Section 7.3.
20.89 "UniCapital Stock" is defined in Section 2.1(a).
20.90 "Unified Transaction" is defined in the recitals to this
Agreement.
20.91 "Welfare Plan" is defined in Section 6.22.
61
68
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By:/s/ ▇▇▇▇▇▇ NEW
--------------
Name: ▇▇▇▇▇▇ New
Title: President
MCMG ACQUISITION CORP.
By:/s/ ▇▇▇▇▇▇ NEW
--------------
Name: ▇▇▇▇▇▇ New
Title: President
MUNICIPAL CAPITAL MARKETS GROUP, INC.
By:/s/ ▇▇▇▇ ▇.▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇ ▇.▇▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇.▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
62
69
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 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 6.12 [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 Policies and Surety Arrangements]
SCHEDULE 6.21 [Employee Information]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Authorizations]
SCHEDULE 6.24 [Transactions with Affiliates]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(d) [Confidentiality or 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 7.8 [UniCapital and Newco Litigation]
SCHEDULE 7.10 [UniCapital and Newco Agreements]
SCHEDULE 9.2 [Employment Agreements]
SCHEDULE 11.1 [Leases]
SCHEDULE 11.6 [Personal Guarantees of the Indebtedness of the
Company]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.08 to the Commission supplementally upon request
therefor.
