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EXHIBIT NO. 10.4
PURCHASE AGREEMENT
by and among
SGM CONSULTING, L.L.C.
(Buyer)
NEXTERA ENTERPRISES, L.L.C.
(Nextera)
NEXTERA ENTERPRISES HOLDINGS, L.L.C.
(Holdings)
SIGMA CONSULTING, LLC
(the Company)
and
The Members of the Company
January 5, 1998
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STOCK PURCHASE AGREEMENT
INDEX
Page
SECTION 1. SALE OF THE COMPANY'S ASSETS, TRANSFER OF THE MEMBERS' SHARES AND
PURCHASE PRICE.......................................................................1
1.1. SALE OF ASSETS..................................................................1
1.2. CONTRIBUTION OF COMPANY SHARES..................................................2
1.3. TIME AND PLACE OF CLOSING.......................................................3
1.4. FURTHER ASSURANCES..............................................................3
1.5. TRANSFER TAXES..................................................................3
1.6. EXCLUDED INTERESTS..............................................................3
1.7. HOLDBACK AMOUNT.................................................................3
1.8. WORKING CAPITAL.................................................................4
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBERS.............5
2.1. MAKING OF REPRESENTATIONS AND WARRANTIES........................................5
2.2. ORGANIZATION AND QUALIFICATIONS OF THE COMPANY..................................5
2.3. MEMBERSHIP INTERESTS OF THE COMPANY; BENEFICIAL OWNERSHIP.......................5
2.4. NO SUBSIDIARIES.................................................................6
2.5. AUTHORITY OF THE COMPANY........................................................6
2.6. REAL AND PERSONAL PROPERTY......................................................7
2.7. FINANCIAL STATEMENTS............................................................8
2.8. TAXES...........................................................................9
2.9. ACCOUNTS RECEIVABLE............................................................11
2.10. ABSENCE OF CERTAIN CHANGES....................................................12
2.11. ORDINARY COURSE...............................................................13
2.12. BANKING RELATIONS.............................................................13
2.13. INTELLECTUAL PROPERTY.........................................................14
2.14. CONTRACTS.....................................................................15
2.15. LITIGATION....................................................................16
2.16. COMPLIANCE WITH LAWS..........................................................17
2.17. INSURANCE.....................................................................17
2.18. WARRANTY OR OTHER CLAIMS......................................................17
2.19. POWERS OF ATTORNEY............................................................17
2.20. FINDER'S FEE..................................................................17
2.21. PERMITS: BURDENSOME AGREEMENTS...............................................17
2.22. COMPANY RECORDS; COPIES OF DOCUMENTS..........................................18
2.23. TRANSACTIONS WITH INTERESTED PERSONS..........................................18
2.24. EMPLOYEE BENEFIT PROGRAMS.....................................................18
2.25. ENVIRONMENTAL MATTERS.........................................................21
2.26. LIST OF MANAGEMENT COMMITTEE..................................................22
2.27. BACKLOG.......................................................................22
2.28. EMPLOYEES; LABOR MATTERS......................................................22
2.29. CUSTOMERS, DISTRIBUTORS AND SUPPLIERS.........................................23
2.30. EQUITY REPURCHASE.............................................................23
2.31. DISCLOSURE....................................................................24
2.32. ASSETS........................................................................24
2.33. NO ADDITIONAL REPRESENTATIONS AND WARRANTIES..................................24
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE MEMBERS............................24
3.1. OWNERSHIP OF SHARES............................................................24
3.2. AUTHORITY......................................................................24
3.3. FINDER'S FEE...................................................................25
3.4. AGREEMENTS.....................................................................25
3.5. EXPERIENCE; ACCREDITED INVESTOR................................................25
3.6. INVESTMENT.....................................................................26
3.7. NO PUBLIC MARKET...............................................................26
3.8. ACCESS TO DATA.................................................................26
3.9. RESIDENCE......................................................................26
SECTION 4. COVENANTS OF THE COMPANY AND THE MEMBERS.................................26
4.1. MAKING OF COVENANTS AND AGREEMENTS.............................................26
4.2. CONDUCT OF BUSINESS............................................................26
4.3. AUTHORIZATION FROM OTHERS......................................................28
4.4. NOTICE OF DEFAULT..............................................................28
4.5. CONSUMMATION OF AGREEMENT......................................................28
4.6. COOPERATION OF THE COMPANY AND MEMBERS.........................................28
4.7. NO SOLICITATION OF OTHER OFFERS................................................28
4.8. TAX RETURNS....................................................................29
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER, NEXTERA AND HOLDINGS............29
5.1. MAKING OF REPRESENTATIONS AND WARRANTIES.......................................29
5.2. ORGANIZATION...................................................................29
5.3. AUTHORITY......................................................................29
5.4. LITIGATION.....................................................................30
5.5. FINDER'S FEE...................................................................30
5.6. AVAILABLE FUNDS................................................................30
5.7. MEMBERSHIP INTERESTS OF NEXTERA AND HOLDINGS...................................30
5.8. FINANCIAL STATEMENTS...........................................................30
5.9. TAXES..........................................................................31
5.10. ABSENCE OF CERTAIN CHANGES....................................................33
5.11. COMPLIANCE WITH LAWS..........................................................34
5.12. OPERATING AGREEMENTS..........................................................35
SECTION 6. COVENANTS OF BUYER, NEXTERA AND HOLDINGS.................................35
6.1. CONSUMMATION OF AGREEMENT......................................................35
6.2. 1997 BONUS POOL................................................................35
6.3. OPTION POOL....................................................................35
6.4. HOLDINGS CLASS A UNITS.........................................................35
HOLDINGS AGREES THAT, IN CONNECTION WITH, AND PURSUANT TO THE TERMS AND CONDITIONS
OF, THE EMPLOYMENT AGREEMENTS TO BE ENTERED INTO BY EACH MEMBER AND BUYER AS CONTEMPLATED BY
SECTION 7.1(J), IT SHALL ISSUE CLASS A COMMON UNITS OF HOLDINGS ("HOLDINGS CLASS A UNITS")
PURSUANT TO THE LIMITED LIABILITY COMPANY AGREEMENT OF NEXTERA ENTERPRISES HOLDINGS, L.L.C.
DATED AS OF APRIL 9, 1997 (THE "HOLDINGS OPERATING AGREEMENT"), IN THE AMOUNTS SET FORTH
OPPOSITE THE NAMES OF THE MEMBERS ON EXHIBIT A-2. THE VALUE OF A HOLDINGS CLASS A UNIT AS
OF THE DATE HEREOF IS $0.10 PER UNIT........................................................36
6.5. BOOKS AND RECORDS; TAX MATTERS.................................................36
SECTION 7. CONDITIONS...............................................................36
7.1. CONDITIONS TO THE OBLIGATIONS OF BUYER, NEXTERA AND HOLDINGS...................36
7.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE MEMBERS.......................39
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SECTION 8. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED..............................40
8.1. TERMINATION....................................................................40
8.2. EFFECT OF TERMINATION..........................................................40
SECTION 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.............................40
9.1. SURVIVAL OF WARRANTIES.........................................................40
9.2. RELEASE........................................................................41
SECTION 10. INDEMNIFICATION.........................................................42
10.1. INDEMNIFICATION BY THE MEMBERS................................................42
10.2. LIMITATIONS ON INDEMNIFICATION BY THE MEMBERS.................................44
10.3. INDEMNIFICATION BY NEXTERA....................................................44
10.4. LIMITATION ON INDEMNIFICATION BY NEXTERA......................................45
10.5. NOTICE; DEFENSE OF CLAIMS.....................................................45
10.6. SATISFACTION OF MEMBER INDEMNIFICATION OBLIGATIONS............................46
SECTION 11. MISCELLANEOUS...........................................................46
11.1. FEES AND EXPENSES.............................................................46
11.2. GOVERNING LAW.................................................................46
11.3. NOTICES.......................................................................46
11.4. ENTIRE AGREEMENT..............................................................48
11.5. ASSIGNABILITY; BINDING EFFECT.................................................48
11.6. CAPTIONS AND GENDER...........................................................49
11.7. EXECUTION IN COUNTERPARTS.....................................................49
11.8. AMENDMENTS....................................................................49
11.9. PUBLICITY AND DISCLOSURES.....................................................49
11.10. SPECIFIC PERFORMANCE.........................................................49
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PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") is entered into as of January
5, 1998 by and among SGM Consulting, L.L.C., a Delaware limited liability
company ("Buyer"), Nextera Enterprises, L.L.C., a Delaware limited liability
company and the controlling member of Buyer ("Nextera"), Nextera Enterprises
Holdings, L.L.C., a Delaware limited liability company and the controlling
member of Nextera ("Holdings"), SiGMA Consulting, LLC, a New York limited
liability company (the "Company"), and the holders of the Company's membership
interests listed on Exhibit A-1 (herein collectively referred to as the
"Members" and individually as a "Member").
W I T N E S S E T H
WHEREAS, the Members own of record and beneficially all of the issued
and outstanding membership interests of the Company, consisting of 88,137
ownership units (said units referred to herein as the "Shares");
WHEREAS, the Company and the Members desire to sell to Buyer certain
assets of the Company as listed on Exhibit B hereto (the "Purchased Assets"),
and Buyer desires to acquire the Purchased Assets upon the terms and subject to
the conditions of this Agreement;
WHEREAS, immediately following the purchase and sale of the Purchased
Assets the Members desire to contribute all of the Shares to Buyer in return for
membership interests in Nextera;
WHEREAS, Nextera as the controlling member of Buyer, desires to issue
membership interests pursuant to, and subject to the terms and conditions of,
this Agreement; and
WHEREAS, Holdings, as the controlling member of Nextera, desires to
issue membership interests pursuant to, and subject to the terms and conditions
of, employment agreements to be entered into by the Members and Buyer, as
further specified herein.
NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
SECTION 1. SALE OF THE COMPANY'S ASSETS, TRANSFER OF THE MEMBERS' SHARES AND
PURCHASE PRICE.
1.1. Sale of Assets.
(a) Transfer of Assets. Upon the terms and subject to the
conditions contained herein, at the Closing (as hereinafter defined), the
Company shall sell, convey, transfer, assign and deliver to Buyer, and Buyer
will acquire from the Company, the Purchased Assets.
(b) Purchase Price of Assets and Payment Therefor. In
consideration of the sale, transfer, assignment, conveyance and delivery by the
Company to Buyer of the Purchased Assets and in reliance upon the
representations and warranties of the Company and the
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Members herein contained and made at the Closing and subject to the satisfaction
of all of the conditions contained herein, Buyer agrees that at the Closing, it
will (a) deliver to the Company the aggregate amount of $7,650,000 in cash,
subject to reduction as provided in Section 1.8 (together with the Holdback
Amount and the Escrowed Cash as defined below, "the Asset Purchase Price") (the
cash payment to be made by bank cashier's check in Boston Clearing House Funds
or by wire transfer of immediately available funds), (b) deposit into an
interest bearing account One Million Five Hundred Thousand Dollars ($1,500,000)
(such amount, the "Holdback Amount") to be held and distributed pursuant to
Section 1.7 hereof and (c) deliver to the Escrow Agent Eight Hundred Fifty
Thousand Dollars ($850,000) in cash (the "Escrowed Cash") to be held by the
Escrow Agent pursuant to and in accordance with the terms of the Escrow
Agreement to be executed substantially in the form attached hereto as Exhibit C.
The Asset Purchase Price shall be allocated among the Purchased Assets in the
manner required by Section 1060 of the Internal Revenue Code and regulations
thereunder. Exhibit B attached hereto sets forth the amount of the Asset
Purchase Price allocable to the various Purchased Assets. Buyer and the Company
each agree to prepare and file on a timely basis with the Internal Revenue
Service substantially identical initial and supplemental Internal Revenue
Service Forms 8594 "Asset Acquisitions Statements Under Section 1060" consistent
with Exhibit B.
(c) Distribution to Members. Immediately upon receipt of the
funds representing the Asset Purchase Price, the Company shall distribute such
funds not subject to the Holdback Amount or the Escrowed Cash to its Members in
accordance with the Operating Agreement of SiGMA Consulting, LLC dated January
31, 1997, as amended (the "Company Operating Agreement").
1.2. Contribution of Company Shares.
(a) Transfer of Shares. At the Closing, but subsequent to the
sale of the Purchased Assets as described in Section 1.1, each Member shall
deliver or cause to be delivered to Buyer all of the assignments duly executed
in blank (or the equivalent), to effect a valid transfer of Shares owned by such
Member, as set forth on Exhibit A-1, free and clear of any and all liens,
encumbrances, charges or claims. In addition, the Company and each Member shall
execute and deliver to Buyer a consent and waiver in the form attached hereto as
Exhibit D to the sale and transfer to Buyer of Shares owned by the other Members
pursuant to the Company Operating Agreement.
(b) Contribution of Shares and Exchange of Nextera Interest. In
return for the contribution from the Members to Buyer of the Shares and in
reliance upon the representations and warranties of the Company and the Members
herein contained and made at the Closing and subject to the satisfaction of all
of the conditions contained herein, Buyer agrees that at the Closing, it will
(a) deliver to the Members, 469,000 Class A Common Units of Nextera ("Nextera
Class A Units") issued pursuant to the Limited Liability Company Agreement of
Nextera Enterprises, L.L.C. dated as of April 9, 1997 (the "Nextera Operating
Agreement"), which shall be distributed in the amounts set forth opposite the
name of each Member on Exhibit A-1, and (b) deliver to the Escrow Agent 200,000
Nextera Class A Units (the "Escrowed Units," together with the Escrowed Cash,
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the "Escrow Deposit") to be held by the Escrow Agent pursuant to and in
accordance with the terms of the Escrow Agreement to be executed substantially
in the form attached hereto as Exhibit C. The Members acknowledge that the value
of the Nextera Class A Common Units is $2.50 per unit.
1.3. Time and Place of Closing.
The closing of the purchase and sale provided for in this Agreement
(herein called the "Closing") shall be held at a mutually agreeable location on
January 5, 1998 or at such other date as may be mutually agreed upon by the
parties.
1.4. Further Assurances.
The Members from time to time after the Closing at the request of
Buyer and without further consideration shall execute and deliver further
instruments of transfer and assignment and take such other action as Buyer may
reasonably require to more effectively transfer and assign to, and vest in,
Buyer the Shares and all rights thereto, and to fully implement the provisions
of this Agreement.
1.5. Transfer Taxes.
All transfer taxes, fees and duties under applicable law incurred in
connection with the sale and transfer of the Purchased Assets and/or Shares
under this Agreement, if any, will be borne and paid by the Company.
1.6. Excluded Interests.
It is the understanding of Buyer and Nextera that the Company prior to
the date hereof had held equity interests in New Med Corporation, Screening
Technologies, Inc. and ReCall Services, Inc. (such equity interests, together
with the contracts and agreements between the Company and such entities,
hereinafter referred to collectively as the "Excluded Interests"). Prior to the
Closing, all Excluded Interests and all related contracts and agreements will be
transferred by the Company to an entity to be formed by the Company (the
"Excluded Entity"). Notwithstanding the purchase by Buyer of the Purchased
Assets and the Shares, the Company and the Members acknowledge and agree that
Buyer and Nextera will not acquire any assets or assume any liabilities
(hereinafter referred to as the "Excluded Liabilities") of the Company or of the
Members associated with or related to the Excluded Interests, including, without
limitation, any liabilities or obligations relating to work performed or to be
performed by the Company. The Members further represent and warrant (i) that the
sole purpose of the Excluded Entity is and shall continue to be holding the
Excluded Interests and to complete existing obligations related to work
performed for the Excluded Interests, (ii) that the Members will not devote any
time to the Excluded Entity other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ who may serve in a
passive oversight role as a director of the Excluded Entity, and (iii) that the
Excluded Entity will not compete directly or indirectly with the business of
Buyer or Nextera.
1.7. Holdback Amount.
(a) Schedule of 1997 Revenue. As soon as practicable following
completion of the audit of the Company's financial statements for the fiscal
year ending December 31, 1997 ("Fiscal 1997"), the Company shall prepare, in
accordance with generally accepted accounting principles, consistent with those
used in the preparation of the Company's Financial Statements (as hereinafter
defined), a schedule of the Company's revenue for Fiscal 1997 (the "Revenue
Schedule") which shall include revenues generated
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from the Excluded Interests. The aggregate Company revenues shown on the Revenue
Schedule shall be the "1997 Revenue." The Revenue Schedule shall be itemized by
customer and otherwise be in reasonably sufficient detail to identify and
analyze the Company services provided to generate the revenues. The Company
shall deliver the Revenue Schedule to Buyer and the Members promptly following
its completion.
(b) Distribution of Holdback Amount. In the event that the 1997
Revenue exceeds Nine Million Two Hundred Fifty Thousand Dollars ($9,250,000)
(the "Base Amount"), Buyer shall pay to the Members from the Holdback Amount an
aggregate amount equal to (i) Two Dollars ($2.00), multiplied by (ii) the amount
by which 1997 Revenue exceeds the Base Amount, together with the interest earned
on such amount from the Closing. Any such amounts paid to the Members shall be
allocated among the Members in accordance with their respective interest in the
Holdback Amount as shown on Exhibit A-1 hereto. In no event shall any amounts
payable to the Members under this Section 1.7 exceed the Holdback Amount, plus
interest earned thereon. The amount of the Holdback Amount not so allocated to
the Members, together with interest earned thereon from the Closing, shall be
retained by Buyer. If the 1997 Revenue is less than or equal to the Base Amount,
the Company shall retain the entire Holdback Amount, together with interest
earned thereon.
(c) Disputes. If Nextera or the Members shall disagree with the
amount of 1997 Revenues shown on the Revenue Schedule, it shall notify the other
in writing of such disagreement within fifteen (15) business days of its receipt
of the Revenue Schedule. If no notice of disagreement is so provided, the
Holdback Amount shall be distributed in accordance with Section 1.7(b) above. If
a disagreement exists, Nextera and the Members shall use their best efforts for
a period of thirty days following the notice of disagreement to resolve any
disagreement. If at the end of such period, Nextera and the Members are unable
to resolve the disagreement, a mutually agreed upon independent public
accounting firm (the "Arbitrator") shall be retained to make a final and binding
determination of 1997 Revenue. The fees and expenses of the Arbitrator shall be
borne equally by Nextera and the Members.
1.8. Working Capital. The amount of the cash payments to be
made by Buyer to the Company for the Purchased Assets at the Closing is premised
upon the Company having at least One Million Two Hundred Thousand Dollars
($1,200,000) of working capital, determined in accordance with generally
accepted accounting principles, at the Closing, taking into account all fees and
expenses of the Company related to the transactions contemplated by this
Agreement, accruals for year-end bonuses to the Members and accruals related to
amounts to be paid pursuant to Section 6.2 hereof and without taking into
account items related to the Excluded Investments (such amount being the
"Closing Working Capital"). No later than two business days prior to the
Closing, the Company shall advise Buyer and Nextera of its estimate of Closing
Working Capital. Without limiting other rights that Buyer and Nextera may have
under this Agreement, if the amount so estimated is less than One Million Two
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Hundred Thousand ($1,200,000), the cash payment to the Company for the Purchased
Assets at Closing shall be reduced by the amount of such shortfall. If the
Closing Working Capital is One Million Two Hundred Thousand Dollars ($1,200,000)
or more, such excess shall become an account payable by the Buyer to the
Members, pro rata among the Members based on their respective ownership interest
in the Company as set forth in Exhibit A-1 (the "Working Capital Payable"). Such
account payable shall be made, without interest, at such time as payment can be
funded from the Company's operations without borrowing under the Company's line
of credit as determined in good faith by Nextera's Board of Directors and in no
event shall payment be made later than June 30, 1998. Within thirty (30) days
following the Closing, the Company shall determine the actual Closing Working
Capital and promptly notify Buyer, Nextera and the Members of such amount. If
such actual Closing Working Capital would have resulted in a different cash
payment to the Company for the Purchased Assets at the Closing or a different
account payable to the Members, Nextera and the Members shall reconcile the
payment discrepancy unless either Nextera or the Members disputes the
determination of actual Closing Working Capital. All such disputes shall be
governed by the same procedures as set forth in Section 1.7(c).
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBERS.
2.1. Making of Representations and Warranties. As a material
inducement to Buyer, Nextera and Holdings to enter into this Agreement and
consummate the transactions contemplated hereby, the Company and each of the
Members jointly and severally hereby make to Buyer, Nextera and Holdings the
representations and warranties contained in this Section 2; provided, however,
that no Member shall have any right of indemnity or contribution from the
Company with respect to any breach of representation or warranty hereunder.
2.2. Organization and Qualifications of the Company. The Company is a
limited liability company organized, validly existing and in good standing under
the laws of the State of New York with full limited liability company power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is currently conducted or proposed to be conducted. The copies of the
Company Operating Agreement, heretofore delivered to Buyer's counsel, are
complete and correct, and, except as set forth in Schedule 2.2, no amendments
thereto are pending. The Company is not in violation of any term of the Company
Operating Agreement. The Company is duly qualified to do business in New York
and, except as set forth in Schedule 2.2, it is not required to be licensed or
qualified to conduct its business or own its property in any other jurisdiction
in which failure to be so licensed or qualified would have a material adverse
effect on the Company.
2.3. Membership Interests of the Company; Beneficial Ownership. The
Shares (i) have been duly issued under the Company Operating Agreement, (ii)
represent all of the issued and outstanding membership interests in the Company,
and (iii) are owned of record by the Members as set forth on Exhibit A-1 hereto.
The Shares are not certificated securities. There are no outstanding options,
warrants, rights, commitments, preemptive rights or agreements of any kind for
the issuance or sale of, or outstanding securities convertible into, any
additional membership interests of any class of the Company. None of the
Company's membership interests have been issued in violation of any federal or
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state law. Other than as provided in the Company Operating Agreement, there are
no voting trusts, voting agreements, proxies or other agreements, instruments or
undertakings with respect to the voting of the Shares to which the Company or
any of the Members is a party.
2.4. No Subsidiaries. The Company has no subsidiaries or, other than
the Excluded Interests, investments in any other corporation or business
organization.
2.5. Authority of the Company. The Company has full right, authority
and power to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by the Company pursuant to this
Agreement and to carry out the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement and each such other
agreement, document and instrument have been duly authorized by all necessary
action of the Company and no other action on the part of the Company or the
Members is required in connection therewith.
This Agreement and each agreement, document and instrument executed
and delivered by the Company pursuant to this Agreement constitutes, or when
executed and delivered will constitute, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject to the effect of general
principles of equity, including, without limitation, the possible unavailability
of specific performance or injunctive relief, regardless of whether considered
in a proceeding in equity or at law. The execution, delivery and performance by
the Company of this Agreement and each such agreement, document and instrument:
(i) does not and will not violate any provision of the
Company Operating Agreement;
(ii) does not and will not violate any laws of the United
States, or any state or other jurisdiction applicable to the Company
or require the Company to obtain any approval, consent or waiver of,
or make any filing with, any person or entity (governmental or
otherwise) that has not been obtained or made; and
(iii) except as set forth in Schedule 2.5, does not and will
not result in a breach of, constitute a default under, accelerate any
obligation under, or give rise to a right of termination of any
indenture or loan or credit agreement or any other agreement,
contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or
arbitration award to which the Company is a party or by which the
property of the Company is bound or affected, or result in the
creation or imposition of any mortgage, pledge, lien, security
interest or other charge or encumbrance on any of the Company's assets
or the Shares.
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2.6. Real and Personal Property.
(a) Real Property. The Company does not own any real property.
All of the real property leased by the Company is identified on Schedule 2.6(a)
(herein referred to as the "Leased Real Property").
(i) Leases. All leases of Leased Real Property are
identified on Schedule 2.6(a), and true and complete copies thereof
have been delivered to Nextera. Each of said leases has been duly
authorized and executed by the parties and is in full force and effect
and binding and enforceable against the parties thereto. The Company
is not in default under any of said leases, nor to the knowledge of
the Company has any event occurred which, with notice or the passage
of time, or both, would give rise to such a default. To the Company's
knowledge, the other party to each of said leases is not in default
under any of said leases and there is no event which, with notice or
the passage of time, or both, would give rise to such a default.
(ii) Consents. Except as set forth in Schedule 2.6(a), no
consent or approval is required with respect to the transactions
contemplated by this Agreement from the other parties to any lease of
Leased Real Property or, to the Company's knowledge, from any
regulatory authority, no filing with any regulatory authority is
required in connection therewith, and to the extent that any such
consents, approvals or filings are required, the Company or the
Members will obtain or complete them before the Closing.
(iii) Condition of Leased Real Property. Except as set forth
in Schedule 2.6(a), to the knowledge of the Company and the Members
(1) there are no material defects in the physical condition of any
portion of the Leased Real Property and (2) all such Leased Real
Property is in good operating condition and repair, has been well
maintained.
(iv) Compliance with the Law. The Company has not received
any notice from any governmental authority of any violation of any
law, ordinance, regulation, license, permit or authorization issued
with respect to the Leased Real Property that has not been heretofore
corrected. The Company has not received any notice of any real estate
tax deficiency or assessment and is not aware of any proposed
deficiency, claim or assessment with respect to any of the Leased Real
Property, or any pending or threatened condemnation thereof.
(b) Personal Property. A list of the machinery and equipment of
the Company is contained in Schedule 2.6(b) hereto. Except as specifically
disclosed in said Schedule or in the Base Balance Sheet (as hereinafter
defined), the Company owns all of its personal property free of all liens and
claims. None of such personal property or assets is subject to any mortgage,
pledge, lien, conditional sale agreement, security title, encumbrance or other
charge except as specifically disclosed in said Schedule or in the
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Base Balance Sheet. The personal property listed in Schedule 2.6(b) reflects all
material personal property of the Company. Except as otherwise specified in
Schedule 2.6(b) hereto, all leasehold improvements, furnishings, machinery and
equipment of the Company presently necessary to the conduct of the business of
the Company as such business is currently being conducted are in good repair,
have been well maintained, and comply in all material respects with all
applicable laws, ordinances and regulations, and such machinery and equipment is
in good working order. Neither the Company nor any of the Members has received
notice of any such law, ordinance or regulation which could adversely affect the
Company or its business.
2.7. Financial Statements.
(a) The Company has delivered to Nextera the following financial
statements, copies of which are attached hereto as Schedule 2.7: balance sheets
of the Company for its fiscal years ended December 31, 1995 and 1996 and
statements of income, retained earnings and cash flows for the years then ended
(with the exception of a statement of cash flow for the year ended December 31,
1995), and a balance sheet of the Company for the interim period ended September
30, 1997 and a statement of income, retained earnings and cash flows for the
nine months then ended (the "Financial Statements"). The September 30, 1997
balance sheet is hereinafter referred to as the "Base Balance Sheet." The
Financial Statements, have been prepared in accordance with generally accepted
accounting principles applied consistently during the periods covered thereby,
and said Financial Statements, present fairly in all material respects the
financial condition of the Company at the dates of said statements and the
results of its operations for the periods covered thereby, and all other
unaudited financial information provided by the Company to Nextera since the
date of the Base Balance Sheet presents fairly and completely in all material
respects the information purported to be shown thereon.
(b) As of the date of the Base Balance Sheet, the Company did not
have any liabilities of any nature, whether accrued, absolute or contingent
(including without limitation, liabilities as guarantor or otherwise with
respect to obligations of others, liabilities for taxes due or then accrued or
to become due, or contingent or potential liabilities relating to activities of
the Company or the conduct of its business prior to the date of the Base Balance
Sheet), except liabilities stated or adequately reserved against on the Base
Balance Sheet.
(c) The projected operating results for fiscal year 1997 and the
Company's fiscal year 1998 operating budget which have previously been supplied
by the Company to Nextera have been prepared in good faith on the basis of
assumptions by the Company which the Company believed were reasonable at the
time of the preparation of such projections. It being recognized, however,
without affecting or limiting any other representation or warranty in this
Agreement, that such projections do not constitute any warranty as to the
Company's future performance and that some assumptions may not materialize and
unanticipated events and circumstances may occur subsequent to the date
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hereof and that therefore actual results may vary materially from projected
results and such variations may be adverse.
(d) Except as set forth on Schedule 2.7, as of the date hereof
and as of the Closing, the Company has not had and will not have any liabilities
of any nature, whether accrued, absolute or contingent (including without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, or liabilities for taxes due or then accrued or to become due or
contingent or potential liabilities relating to activities of the Company or the
conduct of its business prior to the date hereof or the Closing, as the case may
be, regardless of whether claims in respect thereof had been asserted as of such
date), except liabilities (i) stated or adequately reserved against on the Base
Balance Sheet or the notes thereto, or (ii) incurred in the ordinary course of
business of the Company consistent with the terms of this Agreement.
2.8. Taxes.
(a) As used in this Section 2.8, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, VAT,
service, service use, ad valorem, transfer, franchise, profits, license, lease,
withholding, social security, payroll, employment, excise, estimated, severance,
stamp, recording, occupation, real and personal property, gift, windfall profits
or other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, whether computed on a separate, consolidated, unitary, combined or
other basis, together with any interest, fines, penalties, additions to tax or
other additional amounts imposed thereon or with respect thereto imposed by any
taxing authority (domestic or foreign).
(b) Except as otherwise set forth on Schedule 2.8, all returns,
declarations, reports, estimates, statements, schedules or other information or
documents with respect to Taxes (collectively, "Tax Returns") required to be
filed by the Company have been timely filed (giving effect to extensions granted
with respect thereto), and all such Tax Returns are true, correct, and complete
in all material respects.
(c) Except as otherwise set forth on Schedule 2.8, the Company
and each of the Members has timely paid all Taxes due from it or claimed to be
due from it by any federal, state, local, foreign or other taxing authority.
(d) There are no liens for Taxes upon any of the assets of the
Company, except liens for taxes not yet due and payable.
(e) No Tax Returns of the Company have been examined by the
relevant taxing authority. No deficiency for any Taxes has been proposed,
asserted or assessed against the Company that has not been resolved and paid in
full. There are no outstanding waivers, extensions, or comparable consents
regarding the application of the statute of limitations with respect to any
Taxes or Tax Returns that have been given by the
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Company (including the time for filing of Tax Returns or paying Taxes) and the
Company has no pending requests for any such waivers, extensions, or comparable
consents.
(f) No audit or other proceeding by any federal, state, local or
foreign court, governmental, regulatory, administrative or similar authority is
presently pending with respect to any Taxes or Tax Return of the Company, and
the Company has not received written notice of any pending audits or
proceedings.
(g) The Company has established adequate reserves in accordance
with generally accepted accounting principles for all Taxes not yet due and
payable, which reserves are set forth in Schedule 2.8.
(h) The Company uses the cash method of accounting for income tax
purposes and has not made any change in accounting methods, received a ruling
from any taxing authority or signed an agreement with any taxing authority that
could reasonably be expected to have a material adverse effect on the Company.
(i) Except as otherwise set forth on Schedule 2.8, the Company
and each Member has complied in all respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes (including, without
limitation, withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446
of the Code or similar provisions under any applicable state and foreign laws)
and has, within the time and the manner prescribed by law, paid over to the
proper governmental authorities all amounts so withheld.
(j) The Company is not a party to and is not bound by or has any
obligation under any Tax sharing allocation or indemnity agreement or similar
contract or arrangement.
(k) The Company is, and has been at all times since its
formation, properly characterized as a partnership for federal and applicable
state and local income tax purposes.
(l) No power of attorney granted by the Company with respect to
any Taxes is currently in force.
(m) Other than its own operating agreement, the Company is not
subject to any joint venture, partnership or other arrangement or contract that
is treated as a partnership for U.S. federal income tax purposes.
(n) Except as otherwise set forth in Schedule 2.8, there is no
expectation that any taxing authority may claim or assess any additional Taxes
payable by the Company for any period ending on or prior to the Closing Date and
there are no facts of which the Company or the Members are aware which would
constitute grounds for the assessment of any Taxes payable by the Company for
any period ending on or prior to the Closing Date.
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(o) Schedule 2.8 sets forth each state, local and foreign
jurisdiction in which the Company is required, or has been at any time required,
to file or be included in a Tax Return. No written claim has ever been received
by the Company from a taxing authority in a jurisdiction where the Company does
not pay Taxes or file Tax Returns that the Company is or may be subject to Taxes
assessed by such jurisdiction, and, to the knowledge of the Company, no such
claim has been threatened by a taxing authority.
(p) The Company has disclosed on its federal income Tax Returns
all positions taken therein that could give rise to a substantial understatement
of federal income Taxes within the meaning of Section 6662 of the Code.
(q) The Company has not agreed, nor is it required, to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(r) No property of the Company is "tax exempt use property"
within the meaning of Section 168(h) of the Code.
(s) The Company has not entered into any installment sale
contract pursuant to Section 453 of the Code whereby the installments have not
been fully collected, nor has the Company entered into an interest rate swap,
currency swap, or similar transaction.
(t) The Company is not subject to liability as a transferee
pursuant to Code Section 6901 et seq or otherwise, nor will Buyer or Nextera be
subject to such liability as a direct or indirect result of Buyer's acquisition
of the Shares.
(u) Neither the Company nor any Member has received a notice of
tax lien with respect to a Member's share of the Company's assets or profits.
(v) The net benefits to the direct and indirect members of Buyer
(other than the Members) resulting from the tax basis of all assets acquired
pursuant to this Agreement will not be less than the benefits associated with
Buyer obtaining a cost basis for the Purchased Assets as set forth on Exhibit B
hereto and a carryover basis for other acquired assets, provided Buyer and its
said members shall not voluntarily adopt a reporting position inconsistent with
the foregoing.
2.9. Accounts Receivable. All of the accounts receivable of the
Company shown or reflected on the Base Balance Sheet or existing at the date
hereof (less the reserve for bad debts set forth on the Base Balance Sheet) are
or will be at the Closing valid and enforceable claims, fully collectible and
subject to no set off or counterclaim. All unbilled revenue recognized and not
yet billed to clients shown on the Base Balance Sheet or existing at the date
hereof has been recorded using the percentage of completion method and are or
will be valid and enforceable claims, fully collectible and subject to no set
off or counterclaim. Except as set forth on Schedule 2.9, the Company has no
accounts or loans receivable from any person, firm or corporation which
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is affiliated with the Company or from any Member, director, officer or employee
of the Company.
2.10. Absence of Certain Changes. Except as disclosed in Schedule 2.10
attached hereto, since September 30, 1997 there has not been:
(a) Any change in the business, properties, assets, results of
operations, financial condition, liabilities, or prospects of the Company, which
change by itself or in conjunction with all other such changes, whether or not
arising in the ordinary course of business, has been materially adverse with
respect to the Company;
(b) Any contingent liability incurred by the Company as guarantor
or otherwise with respect to the obligations of others or any cancellation of
any material debt or claim owing to, or waiver of any material right of, the
Company;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the date hereof or will
remain on the date of the Closing;
(d) Any obligation or liability of any nature, whether accrued,
absolute or contingent (including without limitation liabilities for Taxes due
or to become due or contingent or potential liabilities relating to products or
services provided by the Company or the conduct of the business of the Company
since the date of the Base Balance Sheet regardless of whether claims in respect
thereof have been asserted), incurred by the Company other than obligations and
liabilities incurred in the ordinary course of business consistent with the
terms of this Agreement (it being understood that product or service liability
claims shall not be deemed to be incurred in the ordinary course of business);
(e) Any purchase, sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company other than in the ordinary course of
business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(g) Except for the transfer of the Excluded Interests to the
Excluded Entity and the distribution of the equity interests in the Excluded
Entity to the Members, any declaration, setting aside or payment of any dividend
by the Company, or the making of any other distribution in respect of the
membership interests of the Company, or any direct or indirect redemption,
purchase or other acquisition by the Company of its membership interests;
(h) Any labor trouble or claim of unfair labor practices
involving the Company; any change in the compensation payable or to become
payable by the Company to any of its officers, employees, agents or independent
contractors other than normal
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merit increases in accordance with its usual practices; or any bonus payment or
arrangement made to or with any of such officers, employees, agents or
independent contractors;
(i) Any change with respect to the officers or management of the
Company;
(j) Any payment or discharge of a material lien or liability of
the Company which was not shown on the Base Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company to any of
its officers, directors, Members or employees, or any loans or advances made by
the Company to any of its officers, directors, Members or employees, except
normal compensation and expense allowances and advances payable to officers or
employees;
(l) Any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(m) Any other transaction entered into by the Company other than
transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above.
2.11. Ordinary Course. Since September 30, 1997, the Company has
conducted its business only in the ordinary course and consistently with its
prior practices.
2.12. Banking Relations. All of the arrangements which the Company has
with any banking institution are completely and accurately described in Schedule
2.12 attached hereto, indicating with respect to each of such arrangements the
type of arrangement maintained (such as checking account, borrowing
arrangements, safe deposit box, etc.) and the person or persons authorized in
respect thereof.
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2.13. Intellectual Property.
(a) Except as described in Schedule 2.13, the Company has
exclusive ownership of, or exclusive license to use, all patent, copyright,
trade secret, trademark, or other proprietary rights (collectively,
"Intellectual Property") used or to be used in the business of the Company as
presently conducted or contemplated and all of the rights of the Company in such
Intellectual Property are freely transferable. There are no claims or demands of
any other person pertaining to any of such Intellectual Property and no
proceedings have been instituted, or, to the knowledge of the Company or any of
the Members, are pending or threatened, which challenge the rights of the
Company in respect thereof. The Company has the right to use, free and clear of
claims or rights of other persons, all customer lists, designs, manufacturing or
other processes, computer software, systems, data compilations, research results
and other information required for or incident to its products or its business
as presently conducted or contemplated.
(b) All patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights which are owned by or
licensed to the Company or used or to be used by the Company in its business as
presently conducted or contemplated, and all other items of Intellectual
Property which are material to the business or operations of the Company, are
listed in Schedule 2.13. All of such patents, patent applications, trademark
registrations, trademark applications and registered copyrights have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Register of Copyrights, or the corresponding offices
of other jurisdictions as identified on said Schedule, and have been properly
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations of the United States and each such jurisdiction.
(c) All licenses or other agreements under which the Company is
granted rights in Intellectual Property are listed in Schedule 2.13. All said
licenses or other agreements are in full force and effect, there is no material
default by any party thereto, and, except as set forth on Schedule 2.13, all of
the rights of the Company thereunder are freely assignable. To the knowledge of
Company, the licensors under said licenses and other agreements have and had all
requisite power and authority to grant the rights purported to be conferred
thereby. True and complete copies of all such licenses or other agreements, and
any amendments thereto, have been provided to Nextera.
(d) All licenses or other agreements under which the Company has
granted rights to others in Intellectual Property owned or licensed by the
Company are listed in Schedule 2.13. All of said licenses or other agreements
are in full force and effect, there is no material default by any party thereto,
and, except as set forth on Schedule 2.13, all of the rights of Company
thereunder are freely assignable. True and complete copies of all such licenses
or other agreements, and any amendments thereto, have been provided to Nextera.
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(e) The Company has taken all steps required in accordance with
sound business practice to establish and preserve its ownership of all
Intellectual Property rights with respect to its products, services and
technology. The Company has required all professional and technical employees
and other employees having access to valuable non-public information of Company,
to execute agreements under which such employees are required to convey to the
Company ownership of all inventions and developments conceived or created by
them in the course of their employment and to maintain the confidentiality of
all such information of Company. The Company has not made any such information
available to any person other than employees of Company except pursuant to
written agreements requiring the recipients to maintain the confidentiality of
such information and appropriately restricting the use thereof. The Company has
no knowledge of any infringement by others of any Intellectual Property rights
of the Company.
(f) To the knowledge of the Company and each of the Members, the
present and contemplated business, activities and products of the Company do not
infringe any Intellectual Property of any other person. No proceeding charging
the Company with infringement of any adversely held Intellectual Property has
been filed or, to the knowledge of the Company or any of the Members, is
threatened to be filed. To the Company's knowledge, there exists no unexpired
patent or patent application which includes claims that would be infringed by or
otherwise adversely affect the products, activities or business of the Company.
The Company is not making unauthorized use of any confidential information or
trade secrets of any person, including without limitation, any former employer
of any past or present employee of Company. Except as set forth in Schedule
2.13, neither the Company nor, to the knowledge of the Company and the Members,
any of the Company's employees have any agreements or arrangements with any
persons other than the Company related to confidential information or trade
secrets of such persons or restricting any such employee's ability to engage in
business activities of any nature. The activities of the Company's employees on
behalf of the Company do not violate any such agreements or arrangements known
to the Company.
2.14. Contracts. Except for contracts, commitments, plans, agreements
and licenses described in Schedule 2.14 (true and complete copies of which have
been delivered to Nextera), the Company is not a party to or subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the payment of more than $25,000 annually or which is not terminable
within 30 days by the Company without liability for any penalty or severance
payment;
(c) any contract or agreement for the purchase of any commodity,
material or equipment except purchase orders in the ordinary course for less
than $25,000 each;
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(d) any contract or agreement with a client or customer of the
Company providing for an aggregate payment by such client or customer of more
than $25,000;
(e) any other contracts or agreements creating any obligations of
the Company of $25,000 or more with respect to any such contract or agreement
not specifically disclosed elsewhere under this Agreement;
(f) any contract or agreement providing for the purchase of all
or substantially all of its requirements of a particular product from a
supplier;
(g) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by the Company or its successors
within one year after the date hereof;
(h) any contract or agreement for the sale or lease of its
products not made in the ordinary course of business;
(i) any contract with any sales agent or distributor of products
of the Company;
(j) any contract containing covenants limiting the freedom of the
Company to compete in any line of business or with any person or entity;
(k) any contract or agreement for the purchase of any fixed asset
for a price in excess of $25,000 whether or not such purchase is in the ordinary
course of business;
(l) any license agreement (as licensor or licensee);
(m) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money; or
(n) any contract or agreement with any officer, employee,
director or Member of the Company or with any persons or organizations
controlled by or affiliated with any of them.
The Company is not in default under any such contracts, commitments,
plans, agreements or licenses described in said Schedule or has any knowledge of
conditions or facts which with notice or passage of time, or both, would
constitute a default.
2.15. Litigation. There is no litigation or governmental or
administrative proceeding or investigation pending or, to the knowledge of the
Company or any of the Members, threatened against the Company or its affiliates.
There have been no claims made or threatened by a client or customer of the
Company nor, to the knowledge of the Company or any of the Members, are there
any such claims that may be asserted.
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2.16. Compliance with Laws. The Company is in compliance with all
applicable statutes, ordinances, orders, judgments, decrees, rules and
regulations promulgated by any federal, state, municipal entity, agency, court
or other governmental authority which apply to the Company or to the conduct of
its business, except where noncompliance with such statute, ordinance, order,
judgment, decree, rule or regulation would not have a material adverse effect on
the Company, and the Company has not received notice of a violation or alleged
violation of any such statute, ordinance, order, rule or regulation.
2.17. Insurance. The physical properties, assets and business of the
Company are insured to the extent disclosed in Schedule 2.17 attached hereto and
all such insurance policies and arrangements are disclosed in said Schedule.
Said insurance policies and arrangements are in full force and effect, all
premiums with respect thereto are currently paid, and the Company is in
compliance in all material respects with the terms thereof. Said insurance is
adequate and customary for the business engaged in by the Company and is
sufficient for compliance by the Company with all requirements of law and all
agreements and leases to which the Company is a party.
2.18. Warranty or Other Claims. There are no existing or threatened
product or service liability, warranty or other similar claims, or any facts
upon which a material claim of such nature could be based, against the Company
for products or services which are defective or fail to meet any product or
service warranties. No claim has been asserted against the Company for
renegotiation or price redetermination of any business transaction, and to the
knowledge of the Company and each of the Members there are no facts upon which
any such claim could be based.
2.19. Powers of Attorney. Neither the Company or any of the Members
has any outstanding power of attorney with respect to or affecting any
transaction contemplated by this Agreement.
2.20. Finder's Fee. The Company has not incurred or become liable for
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement, other than fees to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ which shall be paid by the Members.
2.21. Permits: Burdensome Agreements. Schedule 2.21 lists all permits,
registrations, licenses, franchises, certifications and other approvals
(collectively, the "Approvals") required from federal, state or local
authorities in order for the Company to conduct its business. The Company has
obtained all such Approvals, which are valid and in full force and effect, and
is operating in compliance therewith. Such Approvals include, but are not
limited to, those required under federal, state or local statutes, ordinances,
orders, requirements, rules, regulations, or laws pertaining to environmental
protection, public health and safety, worker health and safety, buildings,
highways or zoning. Except as disclosed in Schedule 2.21 or in any other
Schedule hereto, the Company is not subject to or bound by any agreement,
judgment, decree or order which may materially and adversely affect its business
or prospects, its condition, financial or otherwise, or any of its assets or
properties.
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2.22. Company Records; Copies of Documents. The record books of the
Company accurately record all action taken by its Members and Management
Committee and committees. The copies of the records of the Company, as made
available to Nextera for review, are true and complete copies of the originals
of such documents. The Company has made available for inspection and copying by
Nextera and its counsel true and correct copies of all documents referred to in
this Section or in the Schedules delivered to Nextera pursuant to this
Agreement.
2.23. Transactions with Interested Persons. Neither the Company, any
of its Subsidiaries, any Member, officer, supervisory employee or director of
the Company or any of its Subsidiaries owns directly or indirectly on an
individual or joint basis any material interest in, or serves as an officer or
director or in another similar capacity of, any competitor or supplier of
Company or any of its Subsidiaries, or any organization which has a material
contract or arrangement with the Company or any of its Subsidiaries.
2.24. Employee Benefit Programs.
(a) Schedule 2.24 lists every Employee Program (as defined
below) that has been maintained (as defined below) by the Company at any time
during the three-year period ending on the date of the Closing.
(b) Each Employee Program which has ever been maintained by the
Company and which has at any time been intended to qualify under Section 401(a)
of the Code, and each associated trust which at any time has been intended to be
exempt from taxation pursuant to Section 501(a) of the Code is the subject of a
favorable determination, opinion or approval letter from the Internal Revenue
Service ("IRS") regarding its qualification or exemption from taxation, as
applicable, under such section and has, in fact, been qualified or tax exempt,
as applicable, under the applicable section of the Code for all periods for
which the applicable statute of limitations has not expired through and
including the Closing (or, if earlier, the date that all of such Employee
Program's assets were distributed). No event or omission has occurred which
would cause any such Employee Program to lose its qualification under the
applicable Code section.
(c) The Company does not know and has no reason to know, of any
failure of any party to comply in any material respect with any laws applicable
to the Employee Programs that have been maintained by the Company. With respect
to any Employee Program ever maintained by the Company for all periods for which
the applicable statute of limitations has not expired, there has occurred no
"prohibited transaction," as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Code,
or any material violation of, or material breach of any duty under, ERISA or
other applicable law (including, without limitation, any health care
continuation requirements (under part 6 of subtitle B of Title I or ERISA, or
otherwise) or any other tax law requirements, or conditions to favorable tax
treatment, applicable to such plan), which could result, directly or indirectly,
in any taxes,
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penalties or other liability to the Company, Buyer or Nextera. No litigation,
arbitration, or governmental administrative proceeding (or investigation) or
other proceeding (other than those relating to routine claims for benefits) is
pending or, to the knowledge of the Company, threatened with respect to any
Employee Program.
(d) Neither the Company nor any Affiliate (as defined below) has
ever (i) maintained any Employee Program which has been subject to Title IV of
ERISA; (ii) maintained any Multiemployer Plan (as defined below); or (iii)
provided health care or any other non-pension benefits to any employees after
their employment is terminated (other than as required by part 6 of subtitle B
of title I of ERISA or benefits that continue for a brief period of time after
termination of employment, for example for the balance of the month in which an
employee terminates, or has ever promised to provide such post-termination
benefits).
(e) With respect to each Employee Program maintained by the
Company within the three years preceding the Closing, complete and correct
copies of the following documents (if applicable to such Employee Program) have
previously been delivered to Nextera: (i) all documents embodying or governing
such Employee Program, and any funding medium for the Employee Program
(including, without limitation, trust agreements) as they may have been amended;
(ii) the most recent IRS determination, opinion or approval letter with respect
to such Employee Program under Code Sections 401 and 501(a), and any
applications for determination or approval subsequently filed with the IRS;
(iii) the three most recently filed IRS Forms 5500, with all applicable
schedules and accountants' opinions attached thereto; (iv) the summary plan
description for such Employee Program (or other descriptions of such Employee
Program provided to employees) and all modifications thereto; (v) any insurance
policy (including any fiduciary liability insurance policy) related to such
Employee Program; (vi) any documents evidencing any loan to an Employee Program
that is a leveraged employee stock ownership plan; and (vii) all other materials
reasonably necessary for Buyer to perform any of its responsibilities with
respect to any Employee Program subsequent to the Closing (including, without
limitation, health care continuation requirements).
(f) Neither the Company nor any Affiliate has any announced plan
or legally binding commitment to create any additional Employee Program which is
intended to cover employees or former employees of the Company or any Affiliate
(with respect to their relationship with such entities) or to amend or modify
any existing Employee Program which covers or has covered employees or former
employees of the Company or any Affiliate (with respect to their relationship
with such entities).]
(g) Each Employee Plan listed on Schedule 2.24 may be amended,
terminated, modified or otherwise revised prospectively by the Company including
the elimination of any and all future benefit accruals under any Employee Plan.
(h) No event has occurred in connection with which the Company,
any Affiliate or any Employee Program, directly or indirectly, could be subject
to any material
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liability (A) under any statute, regulation or governmental order relating to
any Employee Programs or (B) pursuant to any obligation of the Company or any
Affiliate to indemnify any person against liability incurred under any such
statute, regulation or order as they relate to the Employee Programs.
(i) Neither the execution and delivery of this Agreement by the
Company nor the consummation of the transactions contemplated hereby will result
in the acceleration or creation of any rights of any person to benefits under
any Employee Program (including, without limitation, the acceleration of the
vesting or exercisability of any stock options, the acceleration of the vesting
of any restricted stock, or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(j) Each Employee Program and related trust agreement or other
funding instrument, as applicable, which covers or has covered employees or
former employees of the Company or any Affiliate (with respect to their
relationship with such entities) is legally valid and binding and in full force
and effect.
(k) There is no contract, agreement, plan or arrangement
covering any employee or former employee of the Company or any Affiliate (with
respect to its relationship with such entities) that, individually or
collectively, provides for the payment by the Company or any Affiliate of any
amount (i) that is not deductible under Section 162(a)(1) or 404 of the Code or
(ii) that is an "excess parachute payment" pursuant to Section 280G of the Code.
(l) All contributions required to be made by the Company or any
Affiliate with respect to any Employee Program due as of any date through and
including the Closing Date have been made when due.
(m) For purposes of this section:
(i) "Employee Program" means (A) any employee benefit plan
within the meaning of ERISA Section 3(3), including, but not limited
to, any multiple employer welfare arrangement (within the meaning of
ERISA Section 3(4)), plan to which more than one unaffiliated employer
contributes and any employee benefit plan (such as a foreign or excess
benefit plan) which is not subject to ERISA; and (B) any employment,
consulting, severance or other similar contract, arrangement or
policy, any stock option plan, bonus or incentive award plan, deferred
compensation agreement, supplemental income arrangement, vacation
plan, any employee benefit arrangement described in Code Section
501(c)(9), and any other employee benefit plan, agreement, and
arrangement not described in (A) above. In the case of an Employee
Program funded through a trust described in Code Section 501(a), each
reference to such Employee Program shall include a reference to such
trust.
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(ii) An entity "maintains" an Employee Program if such
entity sponsors, contributes to, or provides (or has promised to
provide) benefits under such Employee Program, or has any obligation
(by agreement or under applicable law) to contribute to or provide
benefits under such Employee Program, or if such Employee Program
provides benefits to or otherwise covers employees of such entity, or
their spouses, dependents, or beneficiaries.
(iii) An entity is an "Affiliate" of the Company if it would
have ever been considered a single employer with the Company under
ERISA Section 4001(b) or part of the same "controlled group" as the
Company or any of its Subsidiaries for purposes of ERISA Section
302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and
which is maintained pursuant to one or more collective bargaining
agreements as defined in Section 3(37) of ERISA.
2.25. Environmental Matters.
(a) (i) The Company has never generated, transported, used,
stored, treated, disposed of, or managed any Hazardous Waste (as defined below);
(ii) to the knowledge of the Company and each of the Members, no Hazardous
Material (as defined below) has ever been or is threatened to be spilled,
released, or disposed of at any site presently or formerly owned, operated,
leased, or used by the Company, or has ever been located in the soil or
groundwater at any such site; (iii) to the knowledge of the Company and each of
the Members, no Hazardous Material has ever been transported from any site
presently or formerly owned, operated, leased, or used by the Company for
treatment, storage, or disposal at any other place; (iv) to the knowledge of the
Company and each of the Members, the Company does not presently own, operate,
lease, or use, nor has it previously owned, operated, leased, or used any site
on which underground storage tanks are or were located; and (v) no lien has ever
been imposed by any governmental agency on any property, facility, machinery, or
equipment owned, operated, leased, or used by the Company in connection with the
presence of any Hazardous Material.
(b) (i) To the knowledge of the Company and each of the Members,
the Company has no liability under, nor has it ever violated, any Environmental
Law (as defined below); (ii) to the knowledge of the Company and each of the
Members, the Company, any property owned, operated, leased, or used by any of
it, and any facilities and operations thereon, are presently in compliance with
all applicable Environmental Laws; (iii) the Company has never entered into or
been subject to any judgment, consent decree, compliance order, or
administrative order with respect to any environmental or health and safety
matter or received any request for information, notice, demand letter,
administrative inquiry, or formal or informal complaint or claim with respect to
any environmental or health and safety matter or the enforcement of any
Environmental Law;
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and (iv) the Company has no reason to believe that any of the items enumerated
in clause of this subsection will be forthcoming.
(c) To the knowledge of the Company and each of the Members, no
site owned, operated, leased, or used by the Company contains any asbestos or
asbestos-containing material, any polychlorinated biphenyls (PCBs) or equipment
containing PCBs; or any urea formaldehyde foam insulation.
(d) The Company has provided to Nextera copies of all documents,
records, and information available to the Company concerning any environmental
or health and safety matter relevant to the Company or any of its Subsidiaries,
whether generated by the Company or others, including without limitation,
environmental audits, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans, and reports, correspondence, permits, licenses, approvals, consents, and
other authorizations related to environmental or health and safety matters
issued by any governmental agency.
(e) For purposes of this Section 2.25, (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, contaminant, or
other substance which may pose a threat to the environment or to human health or
safety, as defined or regulated under any Environmental Law; (ii) "Hazardous
Waste" shall mean and include any hazardous waste as defined or regulated under
any Environmental Law; (iii) "Environmental Law" shall mean any environmental or
health and safety-related law, regulation, rule, ordinance, or by-law at the
foreign, federal, state, or local level, whether existing as of the date hereof,
previously enforced, or subsequently enacted; and (iv) "Company" shall mean and
include Company and all other entities for whose conduct the Company is or may
be held responsible under any Environmental Law.
2.26. List of Management Committee. Schedule 2.26 hereto contains a
true and complete list of all current members of the Management Committee of the
Company. In addition, Schedule 2.26 hereto contains a list of all managers,
employees and consultants of the Company who, individually, have received or are
scheduled to receive compensation from the Company for the fiscal year ending
December 31, 1997, in excess of $20,000. In each case such Schedule includes the
current job title and aggregate annual compensation of each such individual.
2.27. Backlog. As of the date hereof, the Company has a backlog of
firm orders for the sale or lease of products or services, for which revenues
have not been recognized by the Company, as set forth in Schedule 2.27.
2.28. Employees; Labor Matters. The Company employs a total of
approximately forty-two (42) full-time employees and one (1) part-time employee.
Except as set forth in Schedule 2.28(a), neither the Company nor any Member has
received any notice that any employee intends to terminate his or her employment
with the Company following the Closing. The Company is not delinquent in
payments to any of its employees for any wages, salaries,
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commissions, bonuses or other direct compensation for any services performed for
it to the date hereof or amounts required to be reimbursed to such employees.
Upon termination of the employment of any of said employees, none of the
Company, Buyer or Holdings will by reason of the transactions contemplated under
this Agreement or anything done prior to the Closing be liable to any of said
employees for so-called "severance pay" or any other payments. The Company has
no policy, practice, plan or program of paying severance pay or any form of
severance compensation in connection with the termination of employment, except
as set forth in Schedule 2.28(b). The Company is in compliance in all material
respects with all applicable laws and regulations respecting labor, employment,
fair employment practices, work place safety and health, terms and conditions of
employment, and wages and hours. There are no charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work, or any other concerted interference with normal operations
which are existing, pending or threatened against or involving the Company. No
question concerning union representation exists respecting any employees of the
Company. There are no grievances, complaints or charges that have been filed
against the Company under any dispute resolution procedure (including, but not
limited to, any proceedings under any dispute resolution procedure under any
collective bargaining agreement) that might have an adverse effect on the
Company or the conduct of its business, and there is no arbitration or similar
proceeding pending and no claim therefor has been asserted. No collective
bargaining agreement is in effect or is currently being or is about to be
negotiated by the Company. The Company has not received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. The
Company is, and at all times has been, in compliance in all material respects
with the requirements of the Immigration Reform Control Act of 1986.
2.29. Customers, Distributors and Suppliers. Schedule 2.29(a) sets
forth any customer, sales representative or distributor (whether pursuant to a
commission, royalty or other arrangement) which will account for more than
$50,000 in revenue for the Company for the twelve months ending December 31,
1997 (collectively, the "Customers and Distributors"). Schedule 2.29(b) lists
all of the suppliers of the Company to whom during the fiscal year ending
December 31, 1997 the Company will make payments aggregating $50,000 or more
showing, with respect to each, the name, address and dollar volume involved (the
"Suppliers"). The relationships of the Company with its Customers, Distributors
and Suppliers are good commercial working relationships. No Customer,
Distributor or Supplier has canceled, materially modified, or otherwise
terminated (other than in accordance with the terms of a valid contract) its
relationship with the Company, or has during the last twelve months decreased
materially its services, supplies or materials to the Company or its usage or
purchase of the services or products of the Company, nor to the knowledge of
Company, does any Customer, Distributor or Supplier have any plan or intention
to do any of the foregoing.
2.30. Equity Repurchase. Other than as set forth in Schedule 2.30, the
Company has not redeemed or repurchased any of its membership interests. The
Company has no remaining obligations or liabilities, whether absolute,
contingent or otherwise, related to or arising out of any such redemption or
repurchase of its membership interests.
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2.31. Disclosure. The representations, warranties and statements
contained in this Agreement and in the exhibits and schedules hereto do not
contain any untrue statement of a material fact, and, when taken together, to
the Company's knowledge do not omit to state a material fact required to be
stated therein or necessary in order to make such representations, warranties or
statements not misleading in light of the circumstances under which they were
made. To the Company's knowledge, there are no facts which presently or may in
the future have a material adverse affect on the business, properties,
prospects, operations or condition of the Company which have not been
specifically disclosed herein or in a Schedule furnished herewith, other than
general economic conditions affecting the industries in which the Company
operates.
2.32. Assets. Except as set forth on Schedule 2.32, the Company has
and will transfer good and marketable fee simple title to the Purchased Assets
and upon the consummation of the transactions contemplated hereby, Buyer will
acquire good title to all of the Purchased Assets free of any claim, lien,
pledge, option charge, security interest, deed of trust, mortgage, encumbrance
or other right of third parties, whether voluntarily incurred or arising by
operation of law.
2.33. No Additional Representations and Warranties. Except as set
forth in this Agreement, the Company and the Members make no other
representations and warranties.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE MEMBERS.
As a material inducement to Buyer, Nextera and Holdings to enter into
this Agreement and consummate the transactions contemplated hereby, each Member
hereby severally, but not jointly, makes to Buyer, Nextera and Holdings each of
the representations and warranties set forth in this Section 3 with respect to
such Member. No Member shall have any right of indemnity or contribution from
the Company with respect to the breach of any representation or warranty
hereunder.
3.1. Ownership of Shares. Such Member owns of record and beneficially
the number of the Shares set forth opposite such Member's name in Exhibit A-1.
Such Shares are, and when delivered by such Member to Buyer pursuant to this
Agreement will be, free and clear of any and all liens, encumbrances, charges or
claims.
3.2. Authority. Such Member has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Member pursuant
to this Agreement and to carry out the transactions contemplated hereby and
thereby. This Agreement and each agreement, document and instrument executed and
delivered by such Member pursuant to this Agreement constitutes a valid and
binding obligation of such Member, enforceable in accordance with their
respective terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity,
including, without limitation, the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law, and such Member has full power and authority to
transfer, sell and deliver the Shares to Buyer pursuant to
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this Agreement. The execution, delivery and performance of this Agreement and
each such agreement, document and instrument:
(i) does not and will not violate any provision of any laws
of the United States or any state or other jurisdiction applicable to
such Member, or require such Member to obtain any approval, consent or
waiver from, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(ii) does not and will not result in a breach of, constitute
a default under, accelerate any obligation under, or give rise to a
right of termination of, any indenture or loan or credit agreement or
any other agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Member is a party or
by which the property of such Member is bound or affected, or result
in the creation or imposition of any mortgage, pledge, lien, security
interest or other charge or encumbrance on any assets of the Company
or on Shares owned by such Member.
3.3. Finder's Fee. Such Member has not incurred or become liable for
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
3.4. Agreements. Other than as set forth on Schedule 3.4, each such
Member is not a party to any non-competition, trade secret or confidentiality
agreement with any party other than the Company, other than any such agreement
that may be entered into in connection with such Member's employment by the
Company. There are no agreements or arrangements not contained herein or
disclosed in a Schedule hereto, to which such Member is a party relating to the
business of the Company or to such Member's rights and obligations as a Member,
director or officer of the Company. Except as set forth on Schedule 3.4, such
Member does not own, directly or indirectly, on an individual or joint basis,
any material interest in, or serve as an officer or director of, any customer,
competitor or supplier of the Company, or any organization which has a contract
or arrangement with the Company.
3.5. Experience; Accredited Investor. Such Member has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Buyer, Nextera and Holdings so that it is
capable of evaluating the merits and risks of acquiring the Nextera Class A
Units as partial consideration for sale of the Shares and Holdings Class A Units
(as hereinafter defined) pursuant to his employment agreement as provided in
Sections 6.4 and 7.1(j) and has the capacity to protect its own interests. Such
Member must bear the economic risk of holding the Nextera Class A Units and
Holdings Class A Units indefinitely unless such securities are registered
pursuant to the Securities Act, or an exemption from registration is available
for the disposition thereof. Such Member understands that there is no assurance
that any exemption from registration under the Securities Act will be available.
Member is an "accredited investor" as defined in Rule 501 under the Securities
Act.
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3.6. Investment. Such Member is acquiring the Nextera Class A Units
and Holdings Class A Units for such Member's own account for investment only,
and not with the view to, or for resale in connection with, any distribution
thereof. It understands that the Nextera Class A Units and Holdings Class A
Units acquired have not been, and will not be, registered under the Securities
Act by reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Member's
representations as express herein.
3.7. No Public Market. Purchaser understands that no public market now
exists for any of the securities issued by Nextera or Holdings and that neither
Nextera nor Holdings has made any assurances that a public market will ever
exist for such securities.
3.8. Access to Data. Such Member has received and read the Nextera
Operating Agreement, Holdings Operating Agreement, Nextera business plan and
financial statements and has had an opportunity to discuss Nextera's business,
management and financial affairs with its management. Such Member has also had
an opportunity to ask questions of and receive answers from officers of Nextera
regarding the terms and conditions of acquiring the Nextera Class A Units and
Holdings Class A Units, which questions were answered to such Member's
satisfaction.
3.9. Residence. The residence of the Member in which its investment
decision was made is located at the address of the Member set forth on the
signature page hereto.
SECTION 4. COVENANTS OF THE COMPANY AND THE MEMBERS.
4.1. Making of Covenants and Agreements. The Members jointly and
severally hereby make the covenants and agreements set forth in this Section 4
and the Members agree to cause the Company to comply with such agreements and
covenants. No Member shall have any right of indemnity or contribution from the
Company with respect to the breach of any covenant or agreement hereunder.
4.2. Conduct of Business. Between the date of this Agreement and the
date of the Closing, the Company will:
(a) Use reasonable efforts to conduct its business only in the
ordinary course consistent with past operations and refrain from changing or
introducing any method of management or operations except in the ordinary course
of business and consistent with prior practices;
(b) Refrain from making any purchase, sale or disposition of any
asset or property other than in the Excluded Interests or the ordinary course of
business, from purchasing any capital asset costing more than $25,000 and from
mortgaging, pledging, subjecting to a lien or otherwise encumbering any of its
properties or assets other than in the ordinary course of business;
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(c) Refrain from incurring any contingent liability as a
guarantor or otherwise with respect to the obligations of others, and from
incurring any other contingent or fixed obligations or liabilities except in the
ordinary course of business;
(d) Except as expressly contemplated by this Agreement, refrain
from making any change or incurring any obligation to make a change in the
Company Operating Agreement or its outstanding membership interests other than
accruing for the Working Capital Payable pursuant to Section 1.8 hereto;
(e) Except as expressly contemplated by this Agreement, refrain
from declaring, setting aside or paying any dividend, making any other
distribution in respect of its membership interests or making any direct or
indirect redemption, purchase or other acquisition of its membership interests
other than accruing for the Working Capital Payable pursuant to Section 1.8
hereto;
(f) Refrain from making any change in the compensation (whether
salary or bonus) payable or to become payable to any of its employees and use
all reasonable efforts in the ordinary course of business to maintain the
Company's workforce at its current level and make no material adjustment in
wages or hours of work, nor enter into any employment agreement, or adopt any
new Employee Program or other benefit or severance plan or amend or otherwise
modify any existing employment agreement, Employee Program or other benefit or
severance plan except for the customary and usual year end employee raises to be
awarded consistent with past practices and a bonus obligation to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
in the approximate amount of $50,000;
(g) Refrain from entering into any arrangement or amending any
existing arrangement between the Company and any officer, director or Member (or
any entity affiliated with such persons);
(h) Refrain from prepaying any loans (if any) from its Members,
officers or directors, borrowing any funds or making any other change in its
borrowing arrangements;
(i) Use its commercially reasonable efforts to prevent any
change with respect to its management and supervisory personnel and banking
arrangements;
(j) Use its commercially reasonable efforts to keep intact its
business organization, to keep available its present officers and employees and
to preserve the goodwill of all suppliers, customers, independent contractors
and others having business relations with it;
(k) Have in effect and maintain at all times all insurance of
the kind, in the amount and with the insurers set forth in the Schedule 2.19
hereto or equivalent insurance with any substitute insurers approved in writing
by Nextera;
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(l) Maintain the working capital of the Company in the ordinary
course of business at levels consistent with past operations;
(m) Furnish Nextera with unaudited monthly balance sheets and
statements of income and retained earnings and cash flows of the Company within
fifteen (15) days after each month end for each month ending more than fifteen
(15) days before the Closing;
(n) Permit Nextera and its authorized representatives to have
full access to all its properties, assets, records, tax returns, contracts and
documents and furnish to Nextera or its authorized representatives such
financial and other information with respect to its business or properties as
Nextera may from time to time reasonably request provided that Nextera shall
keep such information confidential in accordance with the terms of the
Confidentiality and Non-Disclosure Agreement between the Company and Nextera
dated August 4, 1997 (the "Confidentiality Agreement").
4.3. Authorization from Others. Prior to the date of the Closing, the
Members and the Company will use commercially reasonable efforts to obtain all
authorizations, consents and permits of others required to permit the
consummation by the Members and the Company of the transactions contemplated by
this Agreement (including, without limitation, the consent of KIS Imaging
Services, Inc., a Danka company, and confirmation of the outstanding balance
from Manufacturers and Traders Trust Company).
4.4. Notice of Default. Promptly upon the occurrence of, or promptly
upon the Company or a Member becoming aware of the impending or threatened
occurrence of, any event which would cause or constitute a breach or default of
any of the representations, warranties or covenants of the Company or the
Members contained in or referred to in this Agreement or in any Schedule or
Exhibit referred to in this Agreement, the Company shall give detailed written
notice thereof to Nextera and the Company and the Members shall use their
commercially reasonable efforts to prevent or promptly remedy the same.
4.5. Consummation of Agreement. The Company and each of the Members
shall use their commercially reasonable efforts to perform and fulfill all
conditions and obligations on their parts to be performed and fulfilled under
this Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out. To this end, the Company will obtain prior to the
Closing all necessary authorizations or approvals of its Members and Management
Committee.
4.6. Cooperation of the Company and Members. The Company and each of
the Members shall cooperate with all reasonable requests of Nextera and
Nextera's counsel in connection with the consummation of the transactions
contemplated hereby.
4.7. No Solicitation of Other Offers. Neither the Company, the
Members, nor any of their officers, directors, agents, employees or
representatives will, directly or indirectly, solicit, encourage, assist,
initiate discussions or engage in negotiations with, provide any
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information concerning the operations, properties or assets of the Company to,
entertain or enter into any agreement or transaction with, any person, other
than Nextera , relating to the possible acquisition of the Shares, the Company
or any of its assets, except for the sale of assets in the ordinary course of
business of the Company consistent with the terms of this Agreement. If such a
proposal is received, the Company will promptly notify Nextera of the terms of
such proposal and the identity of the party making the proposal.
4.8. Tax Returns. The parties shall cooperate in all reasonable
respects with each other to permit the Company in accordance with applicable law
to promptly prepare and file on or before the due date or any extension thereof
all federal, state and local tax returns required to be filed by the Company and
shall cooperate with respect to all tax matters, including, but not limited to,
any federal or state tax audit.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER, NEXTERA AND HOLDINGS.
5.1. Making of Representations and Warranties. As a material
inducement to the Company and the Members to enter into this Agreement and
consummate the transactions contemplated hereby, each of Buyer, Nextera and
Holdings hereby makes the representations and warranties to the Company and the
Members contained in this Section 5.
5.2. Organization. Each of Buyer, Nextera and Holdings is a limited
liability company organized, validly existing and in good standing under the
laws of the State of Delaware with full limited liability company to own or
lease its properties and to conduct its business in the manner and in the places
where such properties are owned or leased or such business is conducted by it.
5.3. Authority. Each of Buyer, Nextera and Holdings has full right,
authority and power to enter into this Agreement and each agreement, document
and instrument to be executed and delivered by Buyer, Nextera and Holdings
pursuant to this Agreement and, subject to the representation of the Company and
the Members in Section 2.2 hereto, to carry out the transactions contemplated
hereby. The execution, delivery and performance by Buyer, Nextera and Holdings
of this Agreement and each such other agreement, document and instrument have
been duly authorized by all necessary corporate action of Buyer, Nextera and
Holdings and no other action on the part of Buyer, Nextera or Holdings is
required in connection therewith. This Agreement and each other agreement,
document and instrument executed and delivered by Buyer, Nextera and Holdings
pursuant to this Agreement constitutes, or when executed and delivered will
constitute, valid and binding obligations of Buyer, Nextera and Holdings, as
applicable, enforceable in accordance with their terms, subject to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject to the effect of general
principles of equity, including, without limitation, the possible unavailability
of specific performance or injunctive relief, regardless of whether considered
in a proceeding in equity or at law. The execution, delivery and performance by
Buyer, Nextera and Holdings of this Agreement and each such agreement, document
and instrument:
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(i) does not and will not violate any provision of the
certificate of formation of Buyer, the Limited Liability Company
Agreement of Buyer (the "Buyer Operating Agreement"), the certificate
of formation of Nextera, the Nextera Operating Agreement, the
certificate of formation of Holdings or the Holdings Operating
Agreement;
(ii) does not and will not violate any laws of the United
States or of any state or any other jurisdiction applicable to Buyer,
Nextera or Holdings or require Buyer, Nextera or Holdings to obtain
any approval, consent or waiver of, or make any filing with, any
person or entity (governmental or otherwise) which has not been
obtained or made; and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture, loan or credit
agreement, or other agreement mortgage, lease, permit, order, judgment
or decree to which Buyer, Nextera or Holdings is a party and which is
material to the business and financial condition of Buyer, Nextera or
Holdings on a consolidated basis.
5.4. Litigation. There is no litigation pending or, to its knowledge,
threatened against Buyer, Nextera or Holdings which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
5.5. Finder's Fee. Neither Buyer, Nextera nor Holdings has incurred or
become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
5.6. Available Funds. Nextera has sufficient capital available to
consummate the transactions contemplated by this Agreement and is not relying on
obtaining additional financing in connection with such transactions.
5.7. Membership Interests of Nextera and Holdings. Schedule 5.7 sets
forth all of the issued and outstanding membership interests of Nextera and
Holdings. Except as set forth on Schedule 5.7, there are no outstanding options,
warrants, rights, commitments, preemptive rights or agreements of any kind for
the issuance and sale of, or outstanding securities convertible into, any
additional membership interests of any class of Nextera or Holdings. All of the
Nextera Class A Units to be issued to the Members as partial consideration for
sale of the Shares and all Holdings Class A Units (as hereinafter defined) to be
issued pursuant to employment agreements as contemplated by Section 6.4 will be
duly issued under the Nextera Operating Agreement and the Holdings Operating
Agreement (as hereinafter defined), as applicable.
5.8. Financial Statements.
(a) Nextera has delivered to the Company the following financial
statements, copies of which are attached hereto as Schedule 5.8: a balance sheet
of Nextera and a statement of profit and loss of Nextera as of September 30,
1997 (the "Nextera Financial Statements"). The
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September 30, 1997 balance sheet is hereinafter referred to as the "Nextera
Balance Sheet." The Financial Statements, have been prepared in accordance with
generally accepted accounting principles applied consistently during the period
covered thereby, and said Financial Statements, present fairly in all material
respects the financial condition of Nextera at the date of said statements and
the results of its operations for the period covered thereby.
(b) As of the date of the Nextera Balance Sheet, Nextera did not
have any liabilities of any nature, whether accrued, absolute or contingent
(including without limitation, liabilities as guarantor or otherwise with
respect to obligations of others, liabilities for taxes due or then accrued or
to become due, or contingent or potential liabilities relating to activities of
Nextera or the conduct of its business prior to the date of the Nextera Balance
Sheet), except liabilities stated or adequately reserved against on the Nextera
Balance Sheet.
(c) As of the date hereof and as of the Closing, Nextera has not
had and will not have any liabilities of any nature, whether accrued, absolute
or contingent (including without limitation, liabilities as guarantor or
otherwise with respect to obligations of others, or liabilities for taxes due or
then accrued or to become due or contingent or potential liabilities relating to
activities of Nextera or the conduct of its business prior to the date hereof or
the Closing, as the case may be, regardless of whether claims in respect thereof
had been asserted as of such date), except liabilities (i) stated or adequately
reserved against on the Nextera Balance Sheet or the notes thereto, or (ii)
incurred in the ordinary course of business of Nextera.
5.9. Taxes.
(a) As used in this Section 5.9, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, VAT,
service, service use, ad valorem, transfer, franchise, profits, license, lease,
withholding, social security, payroll, employment, excise, estimated, severance,
stamp, recording, occupation, real and personal property, gift, windfall profits
or other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, whether computed on a separate, consolidated, unitary, combined or
other basis, together with any interest, fines, penalties, additions to tax or
other additional amounts imposed thereon or with respect thereto imposed by any
taxing authority (domestic or foreign).
(b) All returns, declarations, reports, estimates, statements,
schedules or other information or documents with respect to Taxes (collectively,
"Tax Returns") required to be filed by Nextera and Holdings have been timely
filed (giving effect to extensions granted with respect thereto), and all such
Tax Returns are true, correct, and complete in all material respects.
(c) Nextera and Holdings have timely paid all Taxes due from them
or claimed to be due from then by any federal, state, local, foreign or other
taxing authority.
(d) There are no liens for Taxes upon any of the assets of
Nextera or Holdings, except liens for taxes not yet due and payable.
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(e) No Tax Returns of Nextera or Holdings have been examined by
the relevant taxing authority. No deficiency for any Taxes has been proposed,
asserted or assessed against Nextera or Holdings that has not been resolved and
paid in full. There are no outstanding waivers, extensions, or comparable
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns that have been given by Nextera (including the time for
filing of Tax Returns or paying Taxes) and neither Nextera nor Holdings has
pending requests for any such waivers, extensions, or comparable consents.
(f) No audit or other proceeding by any federal, state, local or
foreign court, governmental, regulatory, administrative or similar authority is
presently pending with respect to any Taxes or Tax Return of Nextera or
Holdings, and neither Nextera nor Holdings have received written notice of any
pending audits or proceedings.
(g) Nextera and Holdings have established adequate reserves in
accordance with generally accepted accounting principles for all Taxes not yet
due and payable, which reserves are set forth in Schedule 5.9.
(h) Nextera and Holdings have complied in all respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes (including, without limitation, withholding of Taxes pursuant to
Sections 1441, 1442, 1445 and 1446 of the Code or similar provisions under any
applicable state and foreign laws) and has, within the time and the manner
prescribed by law, paid over to the proper governmental authorities all amounts
so withheld.
(i) Neither Nextera nor Holdings is a party to or is bound by or
has any obligation under any Tax sharing allocation or indemnity agreement or
similar contract or arrangement.
(j) Nextera and Holdings are, and have been at all times since
their formation, properly characterized as partnerships for federal and
applicable state and local income tax purposes.
(k) No power of attorney granted by Nextera or Holdings with
respect to any Taxes is currently in force.
(l) Other than its own operating agreement, neither Nextera nor
Holdings is subject to any joint venture, partnership or other arrangement or
contract that is treated as a partnership for U.S. federal income tax purposes.
(m) There is no expectation that any taxing authority may claim
or assess any additional Taxes payable by Nextera or Holdings for any period
ending on or prior to the Closing Date and there are no facts of which Nextera
or Holdings is aware which would constitute grounds for the assessment of any
Taxes payable by Nextera or Holdings for any period ending on or prior to the
Closing Date.
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(n) Schedule 5.9 sets forth each state, local and foreign
jurisdiction in which Nextera is required, or has been at any time required, to
file or be included in a Tax Return. No written claim has ever been received by
Nextera or Holdings from a taxing authority in a jurisdiction where neither
Nextera nor Holdings pays Taxes or files Tax Returns that Nextera or Holdings is
or may be subject to Taxes assessed by such jurisdiction, and, to the knowledge
of Nextera and Holdings, no such claim has been threatened by a taxing
authority.
(o) Nextera and Holdings have disclosed on their federal income
Tax Returns all positions taken therein that could give rise to a substantial
understatement of federal income Taxes within the meaning of Section 6662 of the
Code.
(p) Neither Nextera nor Holdings has agreed, or is required, to
make any adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise.
(q) No property of Nextera or Holdings is "tax exempt use
property" within the meaning of Section 168(h) of the Code.
(r) Neither Nextera nor Holdings has entered into any installment
sale contract pursuant to Section 453 of the Code whereby the installments have
not been fully collected, and neither Nextera nor Holdings has entered into an
interest rate swap, currency swap, or similar transaction.
5.10. Absence of Certain Changes.
Except as disclosed in Schedule 5.10 attached hereto, since September
30, 1997 there has not been:
(a) Any change in the business, properties, assets, results of
operations, financial condition, liabilities, or prospects of Nextera or
Holdings, which change by itself or in conjunction with all other such changes,
whether or not arising in the ordinary course of business, has been materially
adverse with respect to Nextera or Holdings;
(b) Any contingent liability incurred by Nextera or Holdings as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of, Nextera or Holdings;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of Nextera or Holdings which remains in existence on the date hereof
or will remain on the date of the Closing;
(d) Any obligation or liability of any nature, whether accrued,
absolute or contingent (including without limitation liabilities for Taxes due
or to become due or contingent or potential liabilities relating to products or
services provided by Nextera or Holdings or the conduct of the business of
Nextera or Holdings since the date of the Nextera Balance Sheet regardless of
whether claims in respect thereof have been asserted), incurred by Nextera other
than obligations and liabilities incurred in the ordinary course of business (it
being understood that
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product or service liability claims shall not be deemed to be incurred in the
ordinary course of business);
(e) Any purchase, sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of Nextera or Holdings other than in the ordinary course of
business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of Nextera or Holdings;
(g) Any declaration, setting aside or payment of any dividend by
Nextera or Holdings, or the making of any other distribution in respect of the
membership interests of Nextera or Holdings, or any direct or indirect
redemption, purchase or other acquisition by Nextera or Holdings of its
respective membership interests;
(h) Any labor trouble or claim of unfair labor practices
involving Nextera or Holdings; any change in the compensation payable or to
become payable by Nextera or Holdings to any of its officers, employees, agents
or independent contractors other than normal merit increases in accordance with
its usual practices; or any bonus payment or arrangement made to or with any of
such officers, employees, agents or independent contractors;
(i) Any change with respect to the officers or management of
Nextera or Holdings;
(j) Any payment or discharge of a material lien or liability of
Nextera which was not shown on the Nextera Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by Nextera or Holdings
to any of its officers, directors, members or employees, or any loans or
advances made by Nextera or Holdings to any of its officers, directors, members
or employees, except normal compensation and expense allowances and advances
payable to officers or employees;
(l) Any change in accounting methods or practices, credit
practices or collection policies used by Nextera or Holdings;
(m) Any other transaction entered into by Nextera or Holdings
other than transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for Nextera or Holdings to take any of the actions specified in
paragraphs (a) through (m) above.
5.11. Compliance with Laws. Each of Nextera and Holdings is in
compliance with all applicable statutes, ordinances, orders, judgments, decrees,
rules and regulations promulgated by any federal, state, municipal entity,
agency, court or other governmental authority which apply to Nextera or Holdings
or to the conduct of its business, except where noncompliance with such
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statute, ordinance, order, judgment, decree, rule or regulation would not have a
material adverse effect on Nextera or Holdings, and neither Nextera nor Holdings
has received notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation.
5.12. Operating Agreements. The Nextera Operating Agreement attached
as Schedule 5.12(a) and the Holdings Operating Agreement attached as Schedule
5.12(b) are in full force and effect and shall be amended as provided in Section
7.2 prior to closing.
SECTION 6. COVENANTS OF BUYER, NEXTERA AND HOLDINGS.
6.1. Consummation of Agreement. Buyer, Nextera and Holdings shall each
use its commercially reasonable efforts to perform and fulfill all conditions
and obligations on its part to be performed and fulfilled under this agreement,
to the end that the transactions contemplated by this agreement shall be fully
carried out. To this end, Buyer, Nextera and Holdings will each obtain prior to
the Closing all necessary authorizations or approvals of its Board of Directors.
6.2. 1997 Bonus Pool. Buyer agrees that it will allow each of the
Members to participate in a one-time bonus pool to be based upon the Company's
net income (determined in accordance with generally accepted accounting
principles, but computed before the bonuses to Members set forth on Schedule 6.2
and excluding any revenue recognized in 1997 with respect to the Excluded
Interests)for the year ending December 31, 1997. The aggregate amount of such
bonus pool shall equal fifty percent (50%) of the amount by which the Company's
net income (determined in accordance with generally accepted accounting
principles, but computed before the bonuses to Members set forth on Schedule 6.2
and excluding any revenue recognized in 1997 with respect to the Excluded
Interests) for the year ending December 31, 1997 exceeds Two Million Two Hundred
Thousand Dollars ($2,200,000). The bonus pool distribution shall be determined
by Messrs. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, subject to the approval of Nextera
which shall not be unreasonably withheld, and the bonuses shall be paid within
thirty (30) days after completion of the audit of the Company's financial
statements for the year ending December 31, 1997.
6.3. Option Pool. Nextera agrees to make available for distribution to
Company employees and new hires a pool of options to purchase two hundred twenty
thousand (220,000) Nextera Class A Units or stock appreciation rights with
respect to Nextera Class A Units (the "Nextera SARs"). The options shall have an
exercise price of $5.00 per share and shall vest at the rate of 25% per year
over four years. The Members acknowledge that (a) under the Nextera Operating
Agreement, the Board of Directors of Holdings will have the authority to
determine the remaining terms and conditions of such options and stock
appreciation rights, including making amendments to the Nextera Operating
Agreement, and (b) the tax consequences of the options and stock appreciation
rights are materially different in a limited liability company as compared to a
corporate structure. The distribution of the Nextera SARs shall be determined by
Messrs. ▇▇▇▇▇▇, Martindale and ▇▇▇▇▇▇, subject to the approval of Nextera which
shall not be unreasonably withheld.
6.4. Holdings Class A Units.
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Holdings agrees that, in connection with, and pursuant to the terms
and conditions of, the employment agreements to be entered into by each Member
and Buyer as contemplated by Section 7.1(j), it shall issue Class A Common Units
of Holdings ("Holdings Class A Units") pursuant to the Limited Liability Company
Agreement of Nextera Enterprises Holdings, L.L.C. dated as of April 9, 1997 (the
"Holdings Operating Agreement"), in the amounts set forth opposite the names of
the Members on Exhibit A-2. The value of a Holdings Class A Unit as of the date
hereof is $0.10 per unit.
6.5. Books and Records; Tax Matters.
(a) Books and Records. Each Party agrees that it will cooperate
with and make available to the other parties, during normal business hours, all
books and records, information and employees (without substantial disruption of
employment) which are necessary or useful in connection with any tax inquiry,
audit, investigation or dispute, any litigation or investigation or any other
matter requiring any such books and records, information or employees for any
reasonable business purpose. The party requesting any such books and records,
information or employees shall bear all of the out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys' fees, but excluding
reimbursement for salaries and employee benefits) reasonably incurred in
connection with providing such books and records, information or employees. All
information received pursuant to this Section 6.5(a) shall be subject to the
terms of the Confidentiality Agreement.
(b) Cooperation and Records Retention. The Members and Nextera
shall (i) each provide the other with such assistance as may reasonably be
requested in connection with the preparation of any return, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to liability for Taxes, (ii) each retain and provide the others with
any records or other information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide the others with
any final determination of any such audit or examination, proceeding, or
determination that affects any amount required to be shown on any tax return of
the others for any period. Without limiting the generality of the foregoing, the
Members and Nextera shall each retain, until the applicable statutes of
limitations (including any extensions) have expired, copies of all tax returns,
supporting work schedules, and other records or information that may be relevant
to such returns for all tax periods or portions thereof ending on or before the
Closing Date and shall not destroy or otherwise dispose of any such records
without first providing the other parties with a reasonable opportunity to
review and copy the same.
SECTION 7. CONDITIONS.
7.1. Conditions to the Obligations of Buyer, Nextera and Holdings. The
obligation of Buyer, Nextera and Holdings to consummate this Agreement and the
transactions contemplated hereby are subject to the fulfillment, prior to or at
the Closing, of the following conditions precedent:
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(a) Representations; Warranties; Covenants. Each of the
representations and warranties of the Company and the Members contained in
Section 2 shall be true and correct in all material respects as of the date of
this Agreement and as of the date of the Closing as though made on and as of the
Closing; and the Company and each of the Members shall, on or before the
Closing, have performed all of their obligations hereunder which by the terms
hereof are to be performed on or before the Closing.
(b) No Material Change. There shall have been no material adverse
change in the business, properties, assets, results of operations, financial
condition, liabilities, or prospects of the Company since the date hereof,
whether or not in the ordinary course of business.
(c) Certificate from Officers. The Members shall have delivered
to Nextera a certificate of the Company's Chief Operating Officer dated as of
the Closing to the effect that the statements set forth in paragraph (a) and (b)
above in this Section 7.1 are true and correct.
(d) Approval of Nextera's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this Agreement shall have been approved by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ as counsel for
Nextera, and such counsel shall have received on behalf of Nextera such other
certificates, opinions, and documents in form satisfactory to such counsel, as
Nextera may reasonably require from the Company and the Members to evidence
compliance with the terms and conditions hereof as of the Closing and the
correctness as of the Closing of the representations and warranties of the
Members and the Company and the fulfillment of their respective covenants.
(e) Approval of Schedules. The Company and the Members shall have
delivered and Nextera shall have approved all Schedules to this Agreement.
(f) Escrow Agreement. Each of the Company, Buyer, Nextera, the
Members and the Escrow Agent shall have executed and delivered the Escrow
Agreement, substantially in the form attached hereto as Exhibit C.
(g) Opinion of Counsel. On the date of the Closing, Nextera shall
have received from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as
counsel for the Company and the Members, an opinion as of said date, in the form
attached hereto as Exhibit E.
(h) No Litigation. There shall have been no determination by
Nextera, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state or other
governmental authority of litigation.
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(i) Consents. The Company or the Members shall have made all
filings with and notifications of governmental authorities, regulatory agencies
and other entities required to be made by the Company or the Members in
connection with the execution and delivery of this Agreement, the performance of
the transactions contemplated hereby and the continued operation of the business
of the Company by Buyer subsequent to the Closing; and the Company, the Members
and Buyer and Nextera shall have received all authorizations, waivers, consents
and permits, in form and substance reasonably satisfactory to Nextera, from all
third parties, including, without limitation, applicable governmental
authorities, regulatory agencies, lessors, lenders and contract parties
(including, without limitation, KIS Imaging Services, Inc., a Danka company),
required to permit the continuation of the business of the Company and the
consummation of the transactions contemplated by this Agreement, and to avoid a
breach, default, termination, acceleration or modification of any material
indenture, loan or credit agreement or any other material agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award as a result of, or in
connection with, the execution and performance of this Agreement.
(j) Employment Agreements. Each of Messrs. Glavin, Martindale,
▇▇▇▇▇▇, Guck, Smith, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall have executed and delivered to
Buyer an Employment Agreement in substantially the form of Exhibit F-1 through
F-7, respectively, attached hereto; provided, however, that the employment
agreement for ▇▇. ▇▇▇▇▇▇▇▇ shall not include the right to purchase Holdings
Class A Units.
(k) Transfer of Investments. The Company shall have transferred
all the Excluded Interests held by the Company to the Excluded Entity in a
manner acceptable to Nextera and shall have obtained a consent to assignment and
release of the Company from each of New Med Corporation, Screening Technologies,
Inc. and ReCall Services, Inc.
(l) Working Capital. At the Closing, the Company shall have at
least One Million Two Hundred Thousand Dollars ($1,200,000) of working capital,
determined in accordance with generally accepted accounting principles.
(m) Payment of Indebtedness; Lien Release. The Company shall have
obtained written confirmation in form and substance satisfactory to Nextera of
the outstanding balance under that certain Grid Note dated as of April 8, 1997,
as amended, between the Company and Manufacturers and Traders Trust Company and
confirmation that upon payment of such balance all liens under such Grid Note
and related security agreement shall be released.
(n) ▇▇▇▇ of Sale. The Company shall have executed and delivered
to Buyer a ▇▇▇▇ of Sale, in the form attached hereto as Exhibit G, conveying in
the aggregate all of the Company's owned personal property included in the
Purchased Assets to Buyer.
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(o) Urbanus Noncompete, Nonsolicitation and Confidentiality
Agreement. ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have executed a Noncompete, Nonsolicitation and
Confidentiality Agreement, in the form attached hereto as Exhibit H.
(p) Excluded Entity Noncompete, Nonsolicitation and
Confidentiality Agreement. The Excluded Entity shall have executed a Noncompete,
Nonsolicitation and Confidentiality Agreement, in the form attached hereto as
Exhibit I.
(q) Amendment of Operating Agreement. Prior to the date of the
Closing, the Company Operating Agreement shall be amended to provide for the
allocation of membership interests in the Company as indicated on Exhibit A-1
hereto.
7.2. Conditions to Obligations of the Company and the Members. The
obligation of the Company and the Members to consummate this Agreement and the
transactions contemplated hereby is subject to the fulfillment, prior to or at
the Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Buyer, Nextera and Holdings contained in
Section 5 shall be true and correct in all material respects as though made on
and as of the Closing; Buyer, Nextera and Holdings shall, on or before the
Closing, each have performed all of its obligations hereunder which by the terms
hereof are to be performed on or before the Closing; and Buyer, Nextera and
Holdings each shall have delivered to the Company and the Members a certificate
of its President or any Vice President dated on the Closing to such effect.
(b) Approval of the Company's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this agreement shall have been approved by Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C. counsel to the Company and the Members, and such counsel shall
have received on behalf of the Company and the Members such other certificates,
opinions and documents in form satisfactory to such counsel as the Company may
reasonably require from Buyer, Nextera and Holdings to evidence compliance with
the terms and conditions hereof as of the Closing and the correctness as of the
Closing of the representations and warranties of Buyer, Nextera and Holdings and
the fulfillment of its covenants.
(c) No Litigation. There shall have been no determination by the
Company, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state or other
governmental authority of material litigation, proceedings or other action
against Buyer, Nextera, Holdings, the Company or any Member.
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(d) Opinion of Counsel. On the date of the Closing, the Company
and the Members shall have received from Maron & Sandler, counsel for Buyer,
Nextera and Holdings, an opinion as of said date, in form attached hereto as
Exhibit J.
(e) Amendment of Operating Agreements. Prior to the date of the
Closing, (i) the Nextera Operating Agreement shall be amended and restated to
provide for certificated membership units and allow for the issuance of options
and stock appreciation rights as contemplated herein and (ii) the Holdings
Operating Agreement shall be amended and restated to make certain changes to
reflect the transactions contemplated by this Agreement.
SECTION 8. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED.
8.1. Termination. At any time prior to the Closing, this Agreement may
be terminated as follows:
(i) by mutual written consent of all of the parties to this
Agreement;
(ii) by Nextera, pursuant to written notice by Nextera to
the Company and the Members, if any of the conditions set forth in
Section 7.1 of this Agreement have not been satisfied at or prior to
the Closing, or if it has become reasonably and objectively certain
that any of such conditions, other than a condition within the control
of the Company or any Member, will not be satisfied at or prior to the
Closing, such written notice to set forth such conditions which have
not been or will not be so satisfied; and
(iii) by the Company and the Members, pursuant to written
notice by the Company and the Members to Nextera, if any of the
conditions set forth in Section 7.2 of this Agreement have not been
satisfied at or prior to the Closing, or if it has become reasonably
and objectively certain that any of such conditions, other than a
condition within the control of Nextera, will not be satisfied at or
prior to the Closing, such written notice to set forth such conditions
which have not been or will not be so satisfied.
8.2. Effect of Termination.
All obligations of the parties hereunder shall cease upon any
termination pursuant to Section 8.1, provided, however, that the provisions of
this Section 8, Section 11.1 and Section 11.10 hereof shall survive any
termination of this Agreement.
SECTION 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
9.1. Survival of Warranties.
Each of the representations, warranties, agreements, covenants and
obligations herein are material, shall be deemed to have been relied upon by the
other party and shall survive the Closing regardless of any investigation and
shall not merge in the performance of any obligation by either party hereto;
provided, however, that such
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representations and warranties shall expire on the same dates as and to the
extent that the rights to indemnification with respect thereto under Section 10
shall expire.
9.2. Release. Each Member hereby releases and discharges
(i) the Company, Buyer and Nextera and any and all
affiliates of the Company, Buyer and Nextera and any of their
respective successors and assigns, of and from any and all
commitments, indebtedness, suits, demands, obligations and liabilities
of every kind and nature, including claims and causes of action both
in law and in equity, and
(ii) each of the present and former Members, directors,
officers, employees, attorneys and agents of the Company, and any of
their respective successors and assigns (each, together with the
Company, Buyer and Nextera, a "Released Party"), of and from any and
all commitments, indebtedness, suits, demands, obligations and
liabilities relating to the business of the Company, Buyer and Nextera
and relating to this transaction, including claims and causes of
action both in law and in equity,
which such Holder and/or his heirs, executors, administrators, successors or
assigns ever had, now has, to the extent arising from or in connection with any
action, omission or state of facts taken or existing on or prior to the date
hereof or prior to the Closing, against any Released Party, whether asserted,
unasserted, absolute, contingent, known or unknown, including without limitation
commitments, obligations, liabilities and claims arising under or pursuant to
(1) the Company Operating Agreement, as amended through the date hereof and
through the date of the Closing of the Company, (2) any contracts to which such
Member and any Released Party are parties, including, without limitation, the
Company Operating Agreement and any agreement between such Member and the
Company, with respect to the employment of such Member prior to the date of the
Closing, (3) the Excluded Interests; provided, however, that such Member does
not release any Released Party from (A) commitments, obligations, liabilities
and claims arising under or pursuant to the following provisions of this
Agreement: Section 1 (Sale of Shares and Purchase Price), Section 5
(Representations and Warranties of Buyer, Nextera and Holdings), ▇▇▇▇▇▇▇ ▇▇
(▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ (▇▇▇▇▇▇▇▇▇▇▇▇▇), (▇) commitments, obligations,
liabilities and claims, if any, arising under or pursuant to the employment
agreement, entered into by such Member and Buyer or the Company pursuant to the
Agreement, (C) commitments, obligations, liabilities and claims arising under or
pursuant to agreements entered into after the date hereof with the written
consent of the Company, and (D) any claims for accrued vacation benefits and
claims for compensation earned prior to the date of the Closing.
Such Member represents and warrants to each Released Party that he (i)
has received such information as he has deemed relevant regarding the
properties, assets, business, condition (financial or otherwise), results of
operations or prospects of the Company and its affiliates, (ii) has such
knowledge and experience in financial and business matters so as to be capable
of
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evaluating the merits and risks of his or her sale of equity interests in the
Company hereunder and/or has engaged and consulted with one or more advisers
with such capabilities, and (iii) has been afforded the opportunity to ask
questions and receive answers from management of the Company and its advisers
regarding the transactions contemplated by this Agreement and the properties,
assets, business, condition (financial and otherwise), results of operations and
prospects of the Company. In furtherance and not in limitation of the foregoing,
such Member represents that he has read carefully, fully understood, and if
appropriate, discussed with his legal and financial advisers, (A) materials
described in clause (i) above and, (B) the financial statements and projections
set forth in Schedule 2.7 to this Agreement and such Member hereby represents
that he has not relied upon any representations, warranties or agreements of any
person other than those set forth in this Agreement.
Such Member acknowledges and agrees that the provisions hereof are
reasonable in context and scope, are a material condition to the Company's
willingness to enter into and effect this Agreement and effect the transactions
contemplated hereby and are intended to be and shall be enforced to the full
extent set forth herein.
SECTION 10. INDEMNIFICATION.
10.1. Indemnification by the Members.
The Members jointly and severally agree subsequent to the Closing to
indemnify and hold the Company, Buyer, Nextera, Holdings, and their respective
subsidiaries and affiliates and persons serving as officers, directors,
partners, managers, stockholders, members, employees and agents thereof (other
than the Members, except to the extent of liabilities incurred in their
capacities as such an officer, director or employee after the Closing)
(individually a "Buyer Indemnified Party" and collectively the "Buyer
Indemnified Parties") harmless from and against any damages, liabilities,
losses, taxes, fines, penalties, costs, and expenses (including, without
limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any of the following
matters:
(a) fraud, intentional misrepresentation or the cause or
knowledge of a deliberate or willful breach of any representations, warranties
or covenants of the Company or the Members under this Agreement or in any
certificate, schedule or exhibit delivered pursuant hereto (collectively, "Fraud
Claims");
(b) any breach of any representation or warranty of the Members
set forth in Section 2.3 of this Agreement (collectively, "Ownership Claims");
(c) any liability of the Company or the Members for Taxes arising
from the activities of the Company and all events and transactions on or prior
to the Closing and any breach of the representations and warranties set forth in
Section 2.8 hereof and any covenant with respect to Taxes or tax related matters
(collectively, "Tax Claims");
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(d) any liability of the Company, Buyer or Nextera with respect
to the Excluded Interests (collectively, "Excluded Liability Claims"); and
(e) other than Fraud Claims, Ownership Claims, Tax Claims or
Excluded Liability Claims, any other breach of any representation, warranty or
covenant of the Members under this Agreement or in any schedule or exhibit
delivered pursuant hereto, or by reason of any claim, action or proceeding
asserted or instituted growing out of any matter or thing constituting a breach
of such representations, warranties or covenants (collectively, "General
Claims").
Each Member severally, but not jointly, agrees subsequent to the
Closing to indemnify and hold all Buyer Indemnified Parties harmless from and
against any damages, liabilities, losses, taxes, fines, penalties, costs, and
expenses (including, without limitation, reasonable fees of counsel) of any kind
or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by any of them arising out of or
based upon fraud, intentional misrepresentation or any breach (whether or not
deliberate or willful) of any representation or warranty of such Member
contained in Section 3, or by reason of any claim, action or proceeding asserted
or instituted growing out of any matter or thing constituting a breach of such
representation or warranty (collectively, "Individual Claims").
In the event that an indemnification claim is payable with respect to
a breach of a representation or warranty of the Members under Section 2.9 that
relates to a receivable or unbilled revenue not being enforceable or collectible
or which is subject to set off or counterclaim, the amount payable by the
Members to the Buyer Indemnified Party with respect to such claim shall be
determined as follows:
(i) any claim with respect to a receivable or unbilled
revenues related to Company revenue for 1997 in excess of $10 million
shall not be the basis for any recovery for breach of Section 2.9;
provided, however, that such events may still be subject to
indemnification by the Members to the Buyer Indemnified Party to the
extent that such event resulted in an overpayment to the Members under
Section 1.8 or Section 6.2;
(ii) for any claim not covered by (i) above, the amount
payable by the Members to the Buyer Indemnified Party with respect to
up to $750,000 of such receivables or unbilled revenues shall be twice
the amount of the receivable or unbilled revenue which is not
enforceable or collectible or subject to set off or counterclaim,
together with all other items otherwise subject to indemnification
under this Section 10.1; and
(iii) for any claim not covered by (i) or (ii) above, the
standard provisions for indemnification set forth in Section 10 shall
apply.
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10.2. Limitations on Indemnification by the Members.
Anything contained in this Agreement to the contrary notwithstanding,
the liability of the Members to provide any indemnification to any Buyer
Indemnified Party and right of Buyer Indemnified Parties to indemnification
under Section 10.1 shall be subject to the following provisions:
(a) No claims for indemnification shall be made under this
Agreement against any Member, and no indemnification shall be payable to any
Buyer Indemnified Party, with respect to General Claims after the date which is
eighteen (18) months following the Closing.
(b) No claims for indemnification shall be made under this
Agreement against any Member, and no indemnification shall be payable to any
Buyer Indemnified Party, with respect to any Tax Claim after expiration of all
applicable statute of limitations with respect to the Tax that is the subject of
the indemnification claim and the expiration of all applicable statutes of
limitation with respect to collection of the Tax.
(c) The aggregate amount to be payable to all Buyer Indemnified
Parties for claims for indemnification with respect to General Claims shall in
no event exceed Five Million Dollars ($5,000,000).
(d) The amount to be payable by a Member to all Buyer Indemnified
Parties for claims for indemnification hereunder shall in no event exceed such
Member's pro rata share of the total amount to be paid to all Buyer Indemnified
Parties for claims for indemnification hereunder. The pro rata shares of the
Members for this purpose shall be the same percentages as the Members respective
ownership interests in the Company as set forth on Exhibit A-1.
(e) In the event that any claim for indemnification arises from a
breach of representation, warranty or covenant which was made or undertaken by a
Member, by the express terms of this Agreement severally and not jointly, the
Members shall be severally, but not jointly, liable for indemnification in
respect of such a claim.
(f) The Members shall have no obligation for indemnification with
respect to General Claims hereunder until aggregate claims for indemnification
with respect to General Claims hereunder exceed $50,000, in which case the
Members shall be obligated for indemnification of all General Claims including
the initial $50,000 of such claims.
(g) Claims for indemnification with respect to Fraud Claims,
Ownership Claims, Tax Claims or Excluded Liability Claims made under this
Agreement by any Buyer Indemnified Party shall not be subject to any of the
limitations set forth in this Section 10.2 other than Section 10.2(b).
10.3. Indemnification by Nextera. Nextera agrees to indemnify and hold
the Members (individually a "Member Indemnified Party" and collectively the
"Member Indemnified Parties") harmless from and against any damages,
liabilities, losses and expenses (including,
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without limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any breach of any
representation, warranty or covenant made by Nextera in this Agreement or in any
certificate delivered by Nextera hereunder, or by reason of any claim, action or
proceeding asserted or instituted growing out of any matter or thing
constituting such a breach.
10.4. Limitation on Indemnification by Nextera. Notwithstanding the
foregoing, (a) no indemnification shall be payable to the Members with respect
to claims asserted pursuant to Section 10.3 above after the date which is
eighteen (18) months after the Closing and the aggregate amount to be payable to
Members pursuant to Section 10.3 shall not exceed Five Million Dollars
($5,000,000) and (b) Nextera shall have no obligation for indemnification
hereunder until aggregate claims for indemnification hereunder exceed $50,000,
in which case Nextera shall be obligated for indemnification of all claims,
including the initial $50,000 of such claims; provided, however, that the
limitations set forth herein shall not apply to a claim for indemnification
based upon a breach of Section 5.2 or 5.3 or covenants to be performed
post-Closing. Claims for indemnification with respect to fraud, intentional
misrepresentation or the cause or knowledge of a deliberate or willful breach of
any representations, warranties or covenants of Nextera under this Agreement or
in any certificate, schedule or exhibit delivered pursuant hereto made under
this Agreement by any Member Indemnified Party shall not be subject to any of
the limitations set forth in this Section 10.4.
10.5. Notice; Defense of Claims. An indemnified party shall make
claims for indemnification hereunder by giving written notice thereof to the
indemnifying party within the period in which indemnification claims can be made
hereunder. If indemnification is sought for a claim or liability asserted by a
third party, the indemnified party shall also give written notice thereof to the
indemnifying party promptly after it receives notice of the claim or liability
being asserted, but the failure to do so shall not relieve the indemnifying
party from any liability except to the extent that it is prejudiced by the
failure or delay in giving such notice. Such notice shall summarize the bases
for the claim for indemnification and any claim or liability being asserted by a
third party. Within 20 days after receiving such notice the indemnifying party
shall give written notice to the indemnified party stating whether it disputes
the claim for indemnification and whether it will defend against any third party
claim or liability at its own cost and expense. If the indemnifying party fails
to give notice that it disputes an indemnification claim within 20 days after
receipt of notice thereof, it shall be deemed to have accepted and agreed to the
claim, which shall become immediately due and payable. The indemnifying party
shall be entitled to direct the defense against a third party claim or liability
with counsel selected by it (subject to the consent of the indemnified party,
which consent shall not be unreasonably withheld) as long as the indemnifying
party is conducting a good faith and diligent defense. The indemnified party
shall at all times have the right to fully participate in the defense of a third
party claim or liability at its own expense directly or through counsel;
provided, however, that if the named parties to the action or proceeding include
both the indemnifying party and the indemnified party and the indemnified party
is advised that representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified party may engage separate counsel at the expense of the indemnifying
party. If no such notice of intent to
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dispute and defend a third party claim or liability is given by the indemnifying
party, or if such good faith and diligent defense is not being or ceases to be
conducted by the indemnifying party, the indemnified party shall have the right,
at the expense of the indemnifying party, to undertake the defense of such claim
or liability (with counsel selected by the indemnified party), and to compromise
or settle it, exercising reasonable business judgment. If the third party claim
or liability is one that by its nature cannot be defended solely by the
indemnifying party, then the indemnified party shall make available such
information and assistance as the indemnifying party may reasonably request and
shall cooperate with the indemnifying party in such defense, at the expense of
the indemnifying party.
10.6. Satisfaction of Member Indemnification Obligations. In order to
satisfy the indemnification obligations of the Members hereunder, a Buyer
Indemnified Party shall proceed first directly against the Escrow Deposit as
further set forth in the Escrow Agreement and then directly against the Members,
subject to the limitations set forth in Section 10.2(c) and (d), as applicable.
As further set forth in the Escrow Agreement, all claims against the Escrow
Amount shall be satisfied first against the cash portion thereof and then
against the Nextera Class A Units.
SECTION 11. MISCELLANEOUS.
11.1. Fees and Expenses.
Each of the parties will bear its own expenses in connection with the
negotiation and the consummation of the transactions contemplated by this
Agreement.
11.2. Governing Law.
This Agreement shall be construed under and governed by the internal
laws of the Commonwealth of Massachusetts without regard to its conflict of laws
provisions.
11.3. Notices.
Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been given
if delivered or sent by facsimile transmission, upon receipt, or if sent by
registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of three days after deposit in United States post
office facilities properly addressed with postage prepaid. All notices to a
party will be sent to the addresses set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
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TO BUYER: SGM Consulting, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With an additional copy to: Maron & Sandler
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO NEXTERA: Nextera Enterprises, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With an additional copy to: Maron & Sandler
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO HOLDINGS: Nextera Enterprises Holdings, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With an additional copy to: Maron & Sandler
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO COMPANY: SiGMA Consulting, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TO ANY MEMBER: To the address last by provided by such
Member to the Company
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
11.4. Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, reflects the entire agreement of the parties with respect to
its subject matter, and supersedes all previous written or oral negotiations,
commitments and writings. No promises, representations, understandings,
warranties and agreements have been made by any of the parties hereto except as
referred to herein or in such Schedules and Exhibits; and all inducements to the
making of this Agreement relied upon by either party hereto have been expressed
herein or in such Schedules or Exhibits.
11.5. Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer and Nextera to a corporation or partnership controlling,
controlled by or under common control with Buyer or Nextera upon written notice
to the Company and the Members. This Agreement may not be assigned by any
Members or the Company without the prior written consent of Nextera. This
Agreement shall be binding upon and enforceable by, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
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11.6. Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
11.7. Execution in Counterparts. For the convenience of the parties
and to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
11.8. Amendments. This Agreement may not be amended or modified, nor
may compliance with any condition or covenant set forth herein be waived, except
by a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
11.9. Publicity and Disclosures. No press releases or public
disclosure, either written or oral, of the transactions contemplated by this
Agreement, shall be made by a party to this Agreement without the prior
knowledge and written consent of Nextera and the Company.
11.10. Specific Performance. The parties agree that it would be
difficult to measure damages which might result from a breach of this Agreement
by the Company or the Members and that money damages would be an inadequate
remedy for such a breach. Accordingly, if there is a breach or proposed breach
of any provision of this Agreement by the Company or the Members, and Nextera
does not elect to terminate under Section 8, Nextera shall be entitled, in
addition to any other remedies which it may have, to an injunction or other
appropriate equitable relief to restrain such breach without having to show or
prove actual damage to Nextera.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives, as of the date first written
above.
BUYER:
SGM CONSULTING, L.L.C., a Delaware limited
liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Treasurer
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NEXTERA:
NEXTERA ENTERPRISES, L.L.C., a Delaware limited
liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Treasurer
---------------------------------------
HOLDINGS:
NEXTERA ENTERPRISES HOLDINGS, L.L.C., a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Treasurer
---------------------------------------
HOLDINGS:
NEXTERA ENTERPRISES HOLDINGS, L.L.C., a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Treasurer
---------------------------------------
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COMPANY:
SIGMA CONSULTING, LLC, a New York limited
liability company
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Chief Operating Officer
---------------------------------------
MEMBERS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
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