1
Exhibit 2.10
- --------------------------------------------------------------------------------
AMENDED AND RESTATED PURCHASE AGREEMENT
by and among
UNICAPITAL CORPORATION
(a Delaware corporation),
PFSC ACQUISITION CORP.
(a Delaware corporation),
PFSC LIMITED ACQUISITION CORP.
(a Delaware corporation),
PORTFOLIO FINANCIAL SERVICING COMPANY, L.P.
and
THE PARTNERS
LISTED ON THE SIGNATURE PAGE HEREOF
Dated as of February 14, 1998
- --------------------------------------------------------------------------------
2
TABLE OF CONTENTS
-----------------
PAGE
----
1. SALE AND PURCHASE........................................................................................2
1.1 Agreement to Sell...............................................................................2
1.2 Agreement to Purchase...........................................................................2
2. CONSIDERATION AND EXCHANGE...............................................................................2
2.1 Consideration...................................................................................2
2.2 Exchange Procedures.............................................................................2
2.3 No Fractional Shares............................................................................3
3. POST-CLOSING ADJUSTMENT; PARTNERS' REPRESENTATIVE........................................................3
3.1 Computation.....................................................................................3
3.2 Disputes........................................................................................4
3.3 Partners' Representative........................................................................4
4. INDEMNITY ESCROW.........................................................................................5
4.1 Creation of Escrow..............................................................................5
4.2 Duration and Terms..............................................................................5
4.3 Voting and Investment...........................................................................5
5. CLOSING; CLOSING DATE....................................................................................5
5.1 Closing.........................................................................................5
5.2 Closing Date; Location..........................................................................6
6. REPRESENTATIONS AND WARRANTIES OF THE PARTNERS...........................................................6
6.1 Existence.......................................................................................6
6.2 Authorization; Enforceable Obligations..........................................................6
6.3 Authority; Ownership............................................................................6
6.4 Validity of Contemplated Transactions...........................................................7
6.5 Partnership Interests...........................................................................7
6.6 No Bonus Interest...............................................................................7
6.7 Books of Account................................................................................7
6.8 Subsidiaries....................................................................................7
6.9 Predecessor Status; etc.........................................................................7
6.10 Spin-offs.......................................................................................7
6.11 No Third Party Options..........................................................................8
6.12 Financial Statements............................................................................8
6.13 Liabilities and Obligations.....................................................................8
6.14 Accounts and Notes Receivable...................................................................9
6.15 Permits.........................................................................................9
i
3
TABLE OF CONTENTS (CONTINUED)
-----------------------------
PAGE
----
6.16 Real and Personal Property.....................................................................10
6.17 Contracts and Commitments......................................................................10
6.18 Government Contracts...........................................................................12
6.19 Title to Real Property.........................................................................12
6.20 Insurance......................................................................................12
6.21 Employees......................................................................................13
6.22 Employee Benefit Plans and Arrangements........................................................13
6.23 Compliance with Law; Authorizations............................................................17
6.24 Transactions With Affiliates...................................................................17
6.25 Litigation.....................................................................................17
6.26 Restrictions...................................................................................18
6.27 Taxes..........................................................................................18
6.28 Intellectual Property Matters..................................................................19
6.29 Completeness; No Violations....................................................................20
6.30 Existing Condition.............................................................................20
6.31 Deposit Accounts; Powers of Attorney...........................................................22
6.32 Environmental Matters..........................................................................22
6.33 No Illegal Payments............................................................................23
6.34 Disclosure.....................................................................................24
7. REPRESENTATIONS OF UNICAPITAL AND THE NEWCOS............................................................24
7.1 Corporate Existence............................................................................24
7.2 UniCapital Stock...............................................................................24
7.3 Corporate Power and Authorization..............................................................25
7.4 No Conflicts...................................................................................25
7.5 Capitalization of UniCapital...................................................................25
7.6 Compliance with Law; Authorizations............................................................25
7.7 Transactions With Affiliates...................................................................26
7.8 Litigation.....................................................................................26
7.9 Liquidated Damages.............................................................................26
7.10 Registration Rights............................................................................26
7.11 Miscellaneous..................................................................................26
8. COVENANTS OF THE PARTNERS AND THE PARTNERSHIP...........................................................27
8.1 Business in the Ordinary Course................................................................27
8.2 Existing Condition.............................................................................27
8.3 Maintenance of Properties and Assets...........................................................27
8.4 Employees and Business Relations...............................................................27
8.5 Maintenance of Insurance.......................................................................27
ii
4
TABLE OF CONTENTS (CONTINUED)
-----------------------------
PAGE
----
8.6 Compliance with Laws, etc......................................................................27
8.7 Conduct of Business............................................................................27
8.8 Access.........................................................................................28
8.9 Press Releases and Other Communications........................................................28
8.10 Exclusivity....................................................................................28
8.11 Third Party Approvals..........................................................................29
8.12 Notice to Bargaining Agents....................................................................29
8.13 Notification of Certain Matters................................................................29
8.14 Amendment of Schedules.........................................................................30
8.15 HSR Filing.....................................................................................30
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTNERSHIP AND THE PARTNERS.................................30
9.1 Representations and Warranties; Performance of Obligations.....................................30
9.2 Employment Agreements..........................................................................30
9.3 Opinion of Counsel.............................................................................31
9.4 Registration Statement.........................................................................31
9.5 HSR Act........................................................................................31
9.6 Injunction.....................................................................................31
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND THE NEWCOS........................................32
10.1 Representations and Warranties; Performance of Obligations.....................................32
10.2 No Litigation..................................................................................32
10.3 Examination of Financial Statements............................................................32
10.4 No Material Adverse Change.....................................................................32
10.5 Regulatory Review..............................................................................33
10.6 Partners' Release..............................................................................33
10.7 Employment Agreements..........................................................................33
10.8 Opinion of Counsel.............................................................................33
10.9 Consents and Approvals.........................................................................34
10.10 Good Standing Certificates.....................................................................34
10.11 Registration Statement.........................................................................34
10.12 Repayment of Indebtedness......................................................................35
10.13 Net Income.....................................................................................35
10.14 HSR Act........................................................................................35
11. COVENANTS OF UNICAPITAL.................................................................................35
11.1 UniCapital Stock Options.......................................................................35
iii
5
TABLE OF CONTENTS (CONTINUED)
-----------------------------
PAGE
----
11.2 HSR Filing.....................................................................................35
11.3 Release From Guarantees; Indebtedness..........................................................36
12. INDEMNIFICATION; SURVIVAL...............................................................................36
12.1 General Indemnification by Partners............................................................36
12.2 Specific Indemnification by Partners...........................................................37
12.3 Indemnification by UniCapital and the Newcos...................................................37
12.4 Third Party Claims.............................................................................38
12.5 Limitations on Indemnification.................................................................39
12.6 Survival of Representations and Warranties.....................................................39
13. TERMINATION OF AGREEMENT................................................................................40
13.1 Termination by UniCapital......................................................................40
13.2 Termination by the Partners....................................................................41
13.3 Automatic Termination..........................................................................41
13.4 Liquidated Damages.............................................................................41
14. NONCOMPETITION AND NONSOLICITATION......................................................................42
14.1 Noncompetition.................................................................................42
14.2 Damages........................................................................................42
14.3 Reasonable Restraint...........................................................................43
14.4 Severability; Reformation......................................................................43
14.5 Independent Covenant...........................................................................43
14.6 Materiality....................................................................................43
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION...............................................................43
15.1 Partners.......................................................................................43
15.2 UniCapital.....................................................................................44
15.3 Damages........................................................................................44
16. LOCK-UP AGREEMENTS......................................................................................44
16.1 Agreement......................................................................................44
16.2 Intended Third Party Beneficiaries.............................................................45
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON UNICAPITAL STOCK.................................45
17.1 Investment Intent..............................................................................45
17.2 Compliance with Law............................................................................45
17.3 Economic Risk; Sophistication..................................................................46
iv
6
TABLE OF CONTENTS (CONTINUED)
-----------------------------
PAGE
----
17.4 Information Supplied...........................................................................46
18. SECURITIES LEGENDS......................................................................................46
19. GENERAL.................................................................................................47
19.1 Cooperation....................................................................................47
19.2 Successors and Assigns.........................................................................47
19.3 Entire Agreement...............................................................................47
19.4 Counterparts...................................................................................48
19.5 Brokers and Agents.............................................................................48
19.6 Expenses.......................................................................................48
19.7 Notices........................................................................................48
19.8 Governing Law..................................................................................49
19.9 Exercise of Rights and Remedies................................................................49
19.10 Time...........................................................................................50
19.11 Reformation and Severability...................................................................50
19.12 Remedies Cumulative............................................................................50
19.13 Captions.......................................................................................50
20. DEFINITIONS.............................................................................................50
v
7
AMENDED AND RESTATED PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PURCHASE AGREEMENT (the "Agreement") is made
as of the 14th day of February, 1998, between UNICAPITAL CORPORATION, a Delaware
corporation ("UniCapital"); PFSC ACQUISITION CORP. and PFSC LIMITED ACQUISITION
CORP., each a newly-formed, wholly-owned subsidiary of UniCapital and each a
Delaware corporation (hereinafter referred to individually as "Newco" and
collectively as the "Newcos"); PORTFOLIO FINANCIAL SERVICING COMPANY, L.P., a
Delaware limited partnership (the "Partnership") and the holders of the
partnership interests (the "Partnership Interests") in the Partnership listed as
partners on the signature page hereto (collectively referred to as the
"Partners"), who are all of the partners of the Partnership. Certain capitalized
terms used herein are defined in Article 20 hereof.
WHEREAS, UniCapital was incorporated on October 9, 1997 under the laws
of the State of Delaware for the purpose of acquiring a number of equipment
leasing businesses in different locations; and
WHEREAS, UniCapital intends to undertake an initial public offering of
its Common Stock (the "IPO") and in connection therewith intends to file a
Registration Statement on Form S-1 with the Securities and Exchange Commission
within 90 days of the execution and delivery of this Agreement; and
WHEREAS, the Newcos were duly incorporated on January 23, 1998 under
the laws of the State of Delaware solely for the purpose of completing this
transaction, and are wholly-owned subsidiaries of UniCapital; and
WHEREAS, the Partners desire to sell to the Newcos all of the Partners'
right, title and interest in and to the Partnership Interests pursuant to this
Agreement; and
WHEREAS, the respective Boards of Directors of UniCapital and the
Newcos deem it advisable and in the best interests of such corporations and
their respective stockholders that the Newcos purchase from the Partners' all of
the Partners' right, title and interest in and to the applicable Partnership
Interests pursuant to this Agreement; and
WHEREAS, the parties hereto intend that the transactions contemplated
in this Agreement constitute part of a single transaction (the "Unified
Transaction") involving the simultaneous consummation of a number of similar
agreements between UniCapital and certain other corporations and partnerships
and the IPO.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1
8
1. SALE AND PURCHASE
1.1 AGREEMENT TO SELL. On the Closing Date hereunder (as defined in
Section 5.2), the Partners shall sell, assign and transfer to the Newcos all of
the Partnership Interests in the Partnership upon and subject to the terms and
conditions of this Agreement, such that, upon such sale, assignment and
transfer, PFSC Acquisition Corp. shall be the holder of 100% of the Partnership
Interests of Equipment Servicing Corp., the sole general Partner (the "General
Partner"), free and clear of all liens, pledges, security interests, charges,
claims, restrictions and other encumbrances of any nature whatsoever, and PFSC
Limited Acquisition Corp. shall be the holder of 100% of the Partnership
Interests of ILC Acquisition Partners, L.P., the sole limited Partner (the
"Limited Partner"), free and clear of all liens, pledges, security interests,
charges, claims, restrictions and other encumbrances of any nature whatsoever.
1.2 AGREEMENT TO PURCHASE. On the Closing Date hereunder, the Newcos
shall purchase the Partnership Interests from the Partners, as aforesaid, upon
and subject to the terms and conditions of this Agreement and upon the
representations and warranties contained herein, and the Newcos will deliver the
Consideration defined in Section 2.1.
2. CONSIDERATION AND EXCHANGE
2.1 CONSIDERATION. Upon the Closing Date, an aggregate of 184,210
shares of common stock, par value $.001 per share, of UniCapital ("UniCapital
Stock") shall be paid to the Partners by Newco (or by UniCapital, on behalf of
and at the direction of the Newcos); provided, however, in the event that the
aggregate value (based on the IPO price of the UniCapital Stock) of the 184,210
shares of UniCapital Stock is less than $2,763,165, then UniCapital, on behalf
of and at the direction of the Newcos, shall issue additional shares to the
Partners so that the aggregate value of the shares of UniCapital Stock equals
$2,763,165 (the "Effective Date Consideration").
2.2 EXCHANGE PROCEDURES.
(a) In exchange for the Partnership Interests, Newco, or
UniCapital, on behalf of and at the direction of Newco, shall cause to be made
available to the Partners the Consideration. On the Closing Date, each Partner
shall, subject to Article 4, be entitled to receive a certificate representing
that number of whole shares of UniCapital Stock which such Partner has the right
to receive, based on such Partners' pro rata interest in the Partnership, as
calculated in accordance with Annex I. The certificates evidencing the
UniCapital Stock shall bear appropriate legends pursuant to the terms of this
Agreement, and UniCapital shall be entitled to issue appropriate stop transfer
instructions to its transfer agent consistent with the terms of this Agreement.
2
9
(b) On the Closing Date or as promptly thereafter as is
practicable, and subject to and in accordance with the provisions of Article 4,
Newco, or UniCapital, on behalf of and at the direction of Newco, shall cause to
be distributed to the Indemnity Escrow Agent (as defined in Article 4) a
certificate or certificates representing the Escrow Shares (as defined in
Article 4), which shall be registered in the name of the Indemnity Escrow Agent
as nominee for the Partners and shall be held in accordance with the provisions
of Article 4 and the Indemnity Escrow Agreement referred to therein.
(c) All UniCapital Stock to be delivered on the Closing Date
in accordance with the terms hereof shall be deemed to have been delivered in
full satisfaction of and as full payment for all Partnership Interests, and
following the Closing Date the Partners shall have no further rights to, or
ownership in, the Partnership Interests. The Partners shall jointly and
severally indemnify and hold harmless UniCapital and the Newcos from and against
any and all loss, liability, cost, damage and/or expense suffered or incurred by
UniCapital or the Newcos as a result of the allocation of Consideration among or
between the Partners in any manner other than pro rata among all Partnership
Interests.
2.3 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Article 2, no fractional shares of UniCapital Stock will be issued and any
Partner entitled hereunder to receive a fractional share of UniCapital Stock but
for this Section 2.3 will be entitled hereunder to receive no such fractional
share but a cash payment in lieu thereof in an amount equal to such fraction
multiplied by $19.00.
3. POST-CLOSING ADJUSTMENT; PARTNERS' REPRESENTATIVE
3.1 COMPUTATION. As soon as practicable, but in any event within 30
days after the Closing, UniCapital shall engage Price Waterhouse LLP to prepare,
in accordance with generally accepted accounting principles ("GAAP"), and
consistent with previous practice, a balance sheet of the Partnership (the
"Closing Date Balance Sheet") as of the end of business on the day prior to the
Closing Date (as defined in Section 5). If the Partnership's net worth as shown
on the Closing Date Balance Sheet is less than $400,000, then, subject to
Section 3.2, commencing 20 business days after delivery of the Closing Date
Balance Sheet to UniCapital, the aggregate Consideration shall be adjusted
downward dollar-for-dollar in the amount of any such deficiency (the "Net Worth
Deficiency"). Upon determination of the Net Worth Deficiency, UniCapital shall
be entitled to recover from the Indemnity Escrow pursuant to Article 4 that
portion of the Net Worth Deficiency which does not exceed one-half of the
balance of the Escrow Property. For any amount by which any Net Worth Deficiency
exceeds one-half of the initial balance of the Escrow Property, such portion of
the Net Worth Deficiency shall be paid by the Partners not later than the 25th
business day after the delivery of the Closing Date Balance Sheet (or if
applicable, not later than the 5th business day after the final determination of
any Disputed Amount in accordance with Section 3.2). At its sole and exclusive
option, and at any time after such 25th business day (or if applicable, not
later than the fifth business day after the final
3
10
determination of any Disputed Amount in accordance with Section 3.2), UniCapital
shall be entitled to recover from the Escrow Property pursuant to Article 4 all
or any portion of the amount of the Net Worth Deficiency not paid by the
Partners as required by this Article 3.
3.2 DISPUTES. Notwithstanding anything in this Article 3 to the
contrary, if there is any Net Worth Deficiency and the Partners dispute any item
contained on the Closing Date Balance Sheet, then the Partners' Representative
shall notify UniCapital in writing of each disputed item (collectively, the
"Disputed Amounts") and specify the amount thereof in dispute within 20 business
days after the delivery of the Closing Date Balance Sheet to the Partners. If
UniCapital and the Partners' Representative cannot resolve any such dispute
relating to the Net Worth Deficiency, then such dispute shall be resolved by an
independent nationally recognized accounting firm which is reasonably acceptable
to UniCapital and the Partners' Representative (the "Independent Accounting
Firm"). The determination of the Independent Accounting Firm shall be made as
promptly as practical and shall be final and binding on the parties, absent
manifest error which error may only be corrected by such Independent Accounting
Firm. Any expenses relating to the engagement of the Independent Accounting Firm
shall be allocated between UniCapital and the Partners so that the Partners'
aggregate share of such costs shall bear the same proportion to the total costs
that the Disputed Amounts unsuccessfully contested by the Partners'
Representative (as finally determined by the Independent Accounting Firm) bear
to the total of the Disputed Amounts so submitted to the Independent Accounting
Firm. Pending resolution of any such dispute by the Independent Accounting Firm,
no such Disputed Amount shall be due to UniCapital. Once any such Disputed
Amount is finally determined to be due to UniCapital, UniCapital may proceed to
recover such amount in the manner set forth in Section 3.1.
3.3 PARTNERS' REPRESENTATIVE. (a) Each Partner, by signing this
Agreement, designates Mary B. Strong (or, in the event that Mary B. Strong is
unable or unwilling to serve or resigns, Craig H. Farnsworth) to be such
Partners' representative for purposes of this Agreement (the "Partners'
Representative"). The Partners shall be bound by any and all actions taken by
the Partners' Representative on their behalf.
(b) UniCapital and the Newcos shall be entitled to rely upon
any communication or writing given or executed by the Partners' Representative.
All communications or writings to be sent to Partners pursuant to this Agreement
may be addressed to the Partners' Representative and any communication or
writing so sent shall be deemed notice to all of the Partners hereunder. The
Partners hereby consent and agree that the Partners' Representative is
authorized to accept deliveries, including any notice, on behalf of the Partners
pursuant hereto.
(c) The Partners' Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Partner, with full
power in his or her name and on his or her behalf to act according to the terms
of this Agreement in the absolute discretion of the Partners' Representative,
and in general to do all things and to perform all acts including, without
4
11
limitation, executing and delivering all agreements, certificates, receipts,
instructions and other instruments contemplated by or deemed advisable in
connection with Article 12 of this Agreement. This power of attorney and all
authority hereby conferred is granted subject to and coupled with the interest
of such Partner and the other Partners hereunder and in consideration of the
mutual covenants and agreements made herein, and shall be irrevocable and shall
not be terminated by any act of any Partner, by operation of law, by such
Partner's death or any other event.
(d) Notwithstanding the foregoing, the Partners'
Representative shall inform each Partner of all notices received, and of all
actions, decisions, notices and exercise of any rights, power or authority
proposed to be done, given or taken by such Partners' Representative, and shall
act as directed by the Partners holding a majority interest in the Escrow
Property (as defined in Section 4.1(a)).
4. INDEMNITY ESCROW
4.1 CREATION OF ESCROW.
(a) At the Closing, as collateral security for the payment of
any indemnification obligations of the Partners pursuant to Sections 12.1 and
12.2 hereof and for the payment of amounts due pursuant to Article 3 hereof, ten
percent (10%) of the number of shares of UniCapital Stock issuable to each
Partner as part of the Effective Date Consideration in accordance with Annex I,
rounded up to the nearest whole share (the "Escrow Property") shall be delivered
to [American Stock Transfer and Trust Company] as indemnity escrow agent (the
"Indemnity Escrow Agent")
(b) The Escrow Property shall include all cash and non-cash
dividends and other property at any time received or otherwise distributed in
respect of or in exchange for any or all of the Escrow Property, all securities
hereafter issued in substitution for any of the foregoing, all certificates and
instruments representing or evidencing such securities, all cash and non-cash
proceeds of all of the foregoing property and, except as provided in Section
4.3, all rights, titles, interests, privileges and preferences appertaining or
incident to the foregoing property.
4.2 DURATION AND TERMS. The Escrow Property shall be held and disbursed
by the Indemnity Escrow Agent in accordance with the terms of an Indemnity
Escrow Agreement substantially in the form attached hereto as Annex II. The
Indemnity Escrow Agent shall hold the Escrow Property pursuant to the Indemnity
Escrow Agreement until the later of: (a) the first anniversary of the Closing
Date; and (b) the resolution of any claim for indemnification or payment that is
pending on the first anniversary of the Closing Date, but only to the extent of
the amount of such pending claim.
5
12
4.3 VOTING AND INVESTMENT. The Partners shall be entitled to exercise
all voting powers incident to the Escrow Property held by the Indemnity Escrow
Agent as their nominee, but shall not be entitled to exercise any investment or
dispositive powers over such Escrow Property.
5. CLOSING; CLOSING DATE
5.1 CLOSING. Concurrently with the consummation of the sale of the
shares of UniCapital Stock pursuant to the underwriting agreement relating to
the offer and sale of shares of UniCapital Stock in the IPO (the "Underwriting
Agreement"), the parties shall take all actions necessary to effect the sale of
Partnership Interests and to effect the conversion and delivery of shares
referred to in Article 2 hereof (hereinafter referred to as the "Closing").
5.2 CLOSING DATE; LOCATION. The Closing shall take place at the offices
of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, NY 10178. The date on
which the Closing shall occur shall be referred to as the "Closing Date."
6. REPRESENTATIONS AND WARRANTIES OF THE PARTNERS
As of the date hereof and as of the Closing Date each Partner, jointly
and severally, represents and warrants to UniCapital and the Newcos as follows:
6.1 EXISTENCE. The Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of Delaware and is duly
qualified to do business and is in good standing in each jurisdiction where the
conduct of its business requires it to be so qualified, all of which
jurisdictions are listed on Schedule 6.1. The Partnership has delivered to
UniCapital true, complete and correct copies of its limited partnership
agreement. The Partnership is not in violation of its limited partnership
agreement. Each subsidiary of the Partnership listed on Schedule 6.8 (each, a
"Subsidiary"), is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each
Subsidiary is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the conduct of its business requires it
to be so qualified, all of which jurisdictions are listed on Schedule 6.1.
6.2 AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Partnership has the
full legal right, requisite power and authority to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by the
Partnership has been duly authorized by the Partners and no further action is
necessary to authorize this Agreement and the performance of the transactions
contemplated hereby. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by the Partnership in
accordance with the provisions hereof (the "Partnership Documents") will be,
duly executed and delivered on
6
13
behalf of the Partnership, and this Agreement constitutes, and the Partnership
Documents when executed and delivered will constitute, the legal, valid and
binding obligations of the Partnership, enforceable against it in accordance
with their respective terms.
6.3 AUTHORITY; OWNERSHIP. Each Partner has the full legal right, power
and authority to enter into this Agreement. Upon the date of this Agreement and
as of the Closing Date, each Partner owns and will own the Partnership Interest
identified on Annex I as being held by such Partner. As a result of the
transactions contemplated hereby, the Newcos will be the record and beneficial
owner of 100% of the Partnership Interests, free and clear of all liens,
security interests, pledges, charges, voting trusts, equities, restrictions,
encumbrances and claims of every kind.
6.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by the Partnership and each Partner does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under (a) any
existing law, ordinance, or governmental rule or regulation to which the
Partnership or any Partner is subject, (b) any judgment, order, writ,
injunction, decree or award of any Governmental Entity which is applicable to
the Partnership or any Partner, or (c) any mortgage, indenture, agreement,
contract, commitment, lease, plan, Authorization, or other instrument, document
or understanding, oral or written, to which the Partnership or any Partner is a
party, by which the Partnership or any Partner may have rights or by which any
of the properties or assets of the Partnership may be bound or affected, or give
any party with rights thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of the Partnership
thereunder. Except as aforesaid and for filings under the Hart- Scott-Rodino
Antitrust Improvements Act of 1976, no authorization, approval or consent of,
and no registration or filing with, any Governmental Entity is required in
connection with the execution, delivery or performance of this Agreement by the
Partnership or any Partner.
6.5 PARTNERSHIP INTERESTS. Schedule 6.5 sets forth all of the
outstanding Partnership Interests of the Partnership and the holders thereof.
6.6 NO BONUS INTEREST. No portion of any Partnership Interest was
issued pursuant to any awards, grants or bonuses.
6.7 BOOKS OF ACCOUNT. The books, records and accounts of the
Partnership accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of the Partnership. The Partnership
has not engaged in any transaction, maintained any bank account or used any of
the funds of the Partnership except for transactions, bank accounts and funds
which have been and are reflected in the normally maintained books and records
of the business.
6.8 SUBSIDIARIES. Schedule 6.8 lists the name of each Subsidiary.
Except as set forth in Schedule 6.8, neither the Partnership nor any Subsidiary
currently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, any securities convertible into
7
14
capital stock or any other equity interest in any corporation, association or
other business entity. Except as set forth on Schedule 6.8, neither the
Partnership nor any Subsidiary is, directly or indirectly, a participant in any
joint venture, partnership or other non-corporate entity.
6.9 PREDECESSOR STATUS; ETC. Schedule 6.9 lists all names of all
predecessor companies of the Partnership and each Subsidiary, including the
names of all entities from whom the Partnership previously acquired assets
representing all or substantially all of the assets of that entity. Except as
set forth on Schedule 6.9, the Partnership has not ever been a subsidiary or
division of another corporation or been a part of an acquisition which was later
rescinded.
6.10 SPIN-OFFS. Since December 31, 1995, there has not been any sale or
spin-off of significant assets of the Partnership or any Subsidiary other than
in the ordinary course of business.
6.11 NO THIRD PARTY OPTIONS. There are no existing agreements, options,
commitments or rights with, of or to any person to acquire any properties,
assets or rights of the Partnership or any interest therein.
6.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 6.12 are copies
of the following audited financial statements of the Partnership:
(a) the balance sheets of the Partnership at December 31, 1997
(the "Audited Balance Sheet Date") and December 31, 1996, and the related
statements of income, cash flows and changes in partners' equity for the fiscal
years then ended, certified by Arthur Anderson, the Partnership's independent
public accountants, together with the report of such independent public
accountants thereon (the "Audited Financial Statements"); and
(b) the unaudited balance sheet of the Partnership at December
31, 1995, and the related statements of income and cash flows for the fiscal
year then ended (the "Unaudited Financial Statements," and together with the
Audited Financial Statements, the "Financial Statements").
All of the Audited Financial Statements have been prepared in accordance with
GAAP consistently applied throughout the periods involved. All of the balance
sheets included in the Financial Statements, including the related notes, fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Partnership at the dates indicated and
such statements of income, cash flows and changes in partners' equity fairly
present the results of operations, cash flows and changes in partners' equity of
the Partnership for the periods indicated. The Unaudited Financial Statements
fairly present the financial position of the applicable Partnership at the dates
indicated, and such statements of income, cash flows and changes in the
Partners' equity fairly present the results of operations, cash flows and
changes in Partners' equity for the periods indicated, except for normal
recurring year-end adjustments
8
15
which are not expected to be material in amount and except for the addition of
required footnotes thereto.
6.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 6.13 is an accurate list, as
of a date not more than two days prior to the date of this Agreement, of: (i)
all liabilities of the Partnership and each of its Subsidiaries which are
reflected on the audited consolidated balance sheet as of the Audited Balance
Sheet Date included in the Audited Financial Statements; (ii) all liabilities
incurred thereafter other than in the ordinary course of business; (iii) all
material liabilities incurred thereafter in the ordinary course of business; and
(iv) all liabilities (A) incurred as of the Audited Balance Sheet Date that are
not reflected on the audited balance sheet as of the Audited Balance Sheet Date
and (B) all liabilities incurred thereafter that would not have been so
reflected had such liabilities been incurred as of the Audited Balance Sheet
Date. Each of the foregoing liabilities that has not heretofore been paid or
discharged is so noted on Schedule 6.13. For purposes of this Agreement,
"liabilities" means liabilities of any kind, character or description, whether
accrued, absolute, secured or unsecured, contingent or otherwise.
(b) For each such liability for which the amount is not fixed
or is contested, Schedule 6.13 shall include a summary description of the
liability, together with copies of all relevant non-privileged documentation
relating thereto, detail of all amounts claimed and any other action or relief
sought, the names of the claimant and all other parties to the claim, suit or
proceeding, the name of each court or agency before which such claim, suit or
proceeding is pending, the date such claim, suit or proceeding was instituted,
and a best estimate of the maximum amount, if any, which is likely to become
payable with respect to each such liability. If no estimate is provided, the
best estimate shall for purposes of this Agreement be deemed to be zero. On the
Closing Date, the Partnership shall deliver, and shall cause its accountants,
outside counsel and other representatives or agents to deliver, copies of all
privileged documents related to liabilities as listed on Schedule 6.13.
(c) All of the liabilities reflected on the unaudited
consolidated balance sheet included in the Interim Financial Statements arose
only out of or were incurred only in connection with the conduct of the business
of the Partnership. Except as set forth on Schedule 6.13 and except for
liabilities not required to be set forth thereon pursuant to Section 6.13(a),
the Partnership has no liabilities or obligations with respect to their
respective businesses, whether direct or indirect, matured or unmatured,
absolute contingent or otherwise, and there is no condition, situation or set of
circumstances which would reasonably be expected to result in any such
liability.
6.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule 6.14 is
a complete and accurate list, as of a date not more than two days prior to the
date of this Agreement, of the accounts and notes receivable of the Partnership
(including, without limitation, receivables from and advances to employees and
Partners) (collectively, the "Accounts Receivable"). Schedule
9
16
6.14 includes an aging of all Accounts Receivable showing amounts due in 30-day
aging categories. On the Closing Date, the Partners will deliver to UniCapital a
complete and accurate list, as of a date not more than two days prior to the
Closing Date, of the Accounts Receivable. All Accounts Receivable represent
valid obligations arising from bona fide business transactions in the ordinary
course of business consistent with past practice. The Accounts Receivable are,
and as of the Closing Date will be, collectible net of any respective reserves
shown on the Partnership's books and records (which reserves are adequate and
calculated consistent with past practice). Subject in the case of Accounts
Receivable reflected on the Partnership's balance sheet to such reserves
reflected on such balance sheet, each of the Accounts Receivable will be
collected in full within ninety (90) days after the day on which it first became
due and payable. There is no contest, claim, counterclaim, defense or right of
set-off, other than rebates and returns in the ordinary course of business,
under any contract with any obligor of any Account Receivable relating to the
amount or validity of such Account Receivable. The allowance for collection
losses on the audited balance sheet as of the Audited Balance Sheet Date has
been determined in accordance with GAAP consistent with past practice.
6.15 PERMITS. Each material Permit, together with the name of the
Governmental Entity issuing such Permit is set forth on Schedule 6.15. Such
Permits are valid and in full force and effect and none of such Permits will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement. Upon consummation of such transactions, the
Newcos will have all of the Partnership's right, title and interest in the
Permits.
6.16 REAL AND PERSONAL PROPERTY. Attached hereto as Schedule 6.16 is an
accurate list, including substantially complete descriptions as of the Audited
Balance Sheet Date, of all the real and personal property (which in the case of
personal property had an original cost in excess of $25,000) owned or leased by
the Partnership (including the Subsidiaries), where the Partnership or its
Subsidiary is a lessee or sublessee, including true and correct copies of leases
for equipment and properties on which are situated buildings, warehouses and
other structures used in the operation of the business of the Partnership
(including the Subsidiaries) and including an indication as to which assets were
formerly owned by any Partner or affiliate (which term, as used herein, shall
have the meaning ascribed thereto in Rule 144(a)(1) promulgated under the
Securities Act of 1933, as amended (the "Securities Act")) of the Partnership.
Except as set forth on Schedule 6.16, all of the Partnership's buildings,
leasehold improvements, structures, facilities, equipment and other material
items of tangible property and assets are in good operating condition and
repair, subject to normal wear and maintenance, are usable in the regular and
ordinary course of business and conform to all applicable laws, ordinances,
codes, rules and regulations, and Authorizations relating to their construction,
use and operation. All leases set forth on Schedule 6.16 have been duly
authorized, executed and delivered and constitute the legal, valid and binding
obligations of the Partnership (or the Subsidiaries) and, to the knowledge of
the Partners, no other party to any such lease is in default thereunder and such
leases constitute the legal, valid and binding obligations of such other
parties. All fixed assets used by the Partnership (including the Subsidiaries)
in the operation of its business are either owned by the Partnership (or the
Subsidiaries) or leased under an agreement set forth on Schedule 6.16. The
10
17
Partnership and the Partners have heretofore delivered to UniCapital copies of
all title reports and title insurance policies received or held by the
Partnership (including the Subsidiaries). The Partnership and the Partners have
indicated on Schedule 6.16 a summary description of all plans or projects
involving the opening of new operations, expansion of any existing operations or
the acquisition of any real property or existing business to which management of
the Partnership (or the Subsidiaries) has devoted any significant effort or
expenditure in the two-year period prior to the date of this Agreement which, if
pursued by the Partnership (or the Subsidiaries) would require additional
expenditures of significant efforts or capital.
6.17 CONTRACTS AND COMMITMENTS. Schedule 6.17 sets forth an accurate,
correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Partnership other than Leases (the "Contracts"), to
which the Partnership is a party or is bound, or by which any of its assets are
bound, and which involve any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$10,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $10,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 6.17 and continuing over a period
of more than six months from the date hereof or exceeding $10,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other governmental
entities;
11
18
(i) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or commitment for the
borrowing or lending of money or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any other person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$10,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Partnership or any successor thereto,
or to the knowledge of the Partnership and each Partner, any employee of the
Partnership or any successor thereto, from engaging or competing in any manner
or in any business;
(m) license, franchise, distributorship or other agreement
which relates in whole or in part to any software, patent, trademark, trade
name, service mark or copyright or to any ideas, technical assistance or other
know-how of or used by the Partnership;
(n) agreement, contract, commitment, arrangement or
understanding to which the Partnership, on the one hand, and any affiliate,
officer, director or partner of the Partnership, on the other hand, are parties;
or
(o) material agreement, contract, commitment, arrangement or
understanding not made in the ordinary course of business.
Each of the Contracts listed on Schedule 6.17, or not required to be listed
therein because of the amount thereof, is valid and enforceable in accordance
with its terms; the Partnership is, and to the knowledge of the Partnership and
each Partner, all other parties thereto are, in compliance with the provisions
thereof. The Partnership is not, and to the knowledge of the Partnership and
each Partner, no other party thereto is, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein; and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. None of
the rights of the Partnership under any Contract will be impaired by the
consummation of the transactions contemplated hereby, and all such rights will
be enforceable by the Newcos after the Closing Date without the consent or
agreement of any other party. The Partnership has delivered accurate and
complete copies of each Contract to UniCapital. No Contract obligates any party
to obtain any consent in connection with the transactions contemplated hereby.
6.18 GOVERNMENT CONTRACTS. The Partnership is not now nor has it ever
been a party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
12
19
6.19 TITLE TO REAL PROPERTY. The Partnership has good and insurable
title to all real property owned and used in its business, subject to no
mortgage, pledge, lien, conditional sales agreement, encumbrance or charge,
except for:
(a) liens, if any, reflected on Schedules 6.13 and 6.16 as
securing specified liabilities (with respect to which no material default
exists);
(b) liens for current taxes and assessments not yet due or in
default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions
to title shown of record in the offices of the county clerks in which the
properties, assets and leasehold estates are located which, in UniCapital's sole
judgment, do not adversely affect UniCapital's intended use of such properties.
6.20 INSURANCE. The assets, properties and operations of the
Partnership are insured under various policies of general liability and other
forms of insurance, all of which are described in Schedule 6.20, which discloses
for each policy the risks insured against, coverage limits, deductible amounts,
all outstanding claims thereunder, and whether the terms of such policy provide
for retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which, in relation to the business and assets of the
Partnership, are consistent with the normal or customary industry practice and
all premiums due to date have been paid in full. The Partnership has not been
refused any insurance, nor has the Partnership's coverage been limited, by any
insurance carrier to which it has applied for insurance or with which it has
carried insurance during the past five years. Schedule 6.20 also contains a true
and complete description of all outstanding bonds and other surety arrangements
issued or entered into in connection with the business, assets and liabilities
of the Partnership.
6.21 EMPLOYEES. Schedule 6.21 contains the following with respect
to the Partnership:
(a) a list of all employees of the Partnership (including
name, title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each such
employee.
Except as disclosed on Schedule 6.21: (i) there have not been in the past five
years and, to the knowledge of the Partnership and the Partners, there are not
pending, any labor disputes, work
13
20
stoppages, requests for representation, pickets or work slow-downs due to labor
disagreements; (ii) there are and have been no unresolved violations of any
Laws, as defined in Section 8.6, of any Governmental Entity respecting the
employment of any employees; (iii) there is no unfair labor practice, charge or
complaint pending, unresolved or, to the knowledge of the Partnership and the
Partners, threatened before the National Labor Relations Board or similar body
in any foreign country; (iv) there is no employment handbook, personnel policy
manual, or similar document that creates prospective employment rights or
obligations; (v) the employees of the Partnership are not covered by any
collective bargaining agreement; (vi) the Partnership has provided or will
timely provide prior to Closing all notices required by law to be given prior to
Closing to all local, state, federal or national labor, wage-payment, equal
employment opportunity, unemployment insurance and related agencies; (vii) the
Partnership has paid or properly accrued in the ordinary course of business all
wages and compensation due to employees, including all vacations or vacation
pay, holidays or holiday pay, sick days or sick pay, and bonuses; and (viii) the
transactions contemplated by this Agreement will not create liability under any
Laws of any Governmental Entity respecting reductions in force or the impact of
employees on plant closing or sales of businesses. All employees of the
Partnership are legally able to work in the United States.
6.22 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. Schedule 6.22 sets forth
a complete and accurate list of each Benefit Plan covering any present or former
officers, employees or directors of the Partnership. "Benefit Plan" means each
"employee pension benefit plan" (as defined in Section 3(2) of ERISA,
hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan") and each other plan or
arrangement (written or oral) relating to deferred compensation, bonus,
performance compensation, stock purchase, stock option, stock appreciation,
severance, vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, in each case maintained or contributed to, or required to
be maintained or contributed to, by the Partnership or its affiliates or any
other person or entity that, together with the Partnership, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code") (each, together with the Partnership, a
"Commonly Controlled Entity") for the benefit of any present or former officer,
employee or director. The Partnership has no intent or commitment to create any
additional Benefit Plan or amend any Benefit Plan so as to increase benefits
thereunder. The Partnership has not created any Benefit Plan or declared or paid
any bonus compensation in contemplation of the transactions contemplated by this
Agreement. A current, accurate and complete copy of each Benefit Plan has been
made available to UniCapital. Except as disclosed on Schedule 6.22:
(a) each Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements of ERISA applicable to such Benefit
Plan;
(b) each Pension Plan which is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and, to the
14
21
knowledge of the Partnership and the Partners, no condition exists that would
adversely affect any such determination;
(c) neither any Benefit Plan, nor the Partnership, nor any
Commonly Controlled Entity, nor any trustee or agent has been or is presently
engaged in any prohibited transactions as defined by Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not applicable which could
subject the Partnership to the tax or penalty imposed by Section 4975 of the
Code or Section 502 of ERISA;
(d) there is no event or condition existing which could be
deemed a "reportable event" (within the meaning of Section 4043 of ERISA) with
respect to which the thirty-day notice requirement has not been waived; to the
knowledge of the Partnership and the Partners, no condition exists which could
subject the Partnership to a penalty under Section 4071 of ERISA;
(e) neither the Partnership nor any Commonly Controlled Entity
is or has ever been party to any "multi-employer plan," as that term is defined
in Section 3(37) of ERISA;
(f) true and correct copies of the most recent annual report
on Form 5500 and any attached schedules for each Benefit Plan (if any such
report was required by applicable law) and a true and correct copy of the most
recent determination letter issued by the Internal Revenue Service for each
Pension Plan have been provided to UniCapital;
(g) with respect to each Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of the Partnership and the Partners, threatened
against any Benefit Plan, the Partnership, any Commonly Controlled Entity or any
trustee or agent of any Benefit Plan; and
(h) with respect to each Benefit Plan to which the Partnership
or any Commonly Controlled Entity is a party which constitutes a group health
plan subject to Section 4980B of the Code, each such Benefit Plan substantially
complies, and in each case has substantially complied, with all applicable
requirements of Section 4980B of the Code.
(i) Except as set forth in Schedule 6.22:
(i) there is no outstanding liability (except for
premiums due) under Title IV of ERISA with respect to any Pension Plan;
(ii) neither the Pension Benefit Guaranty Corporation
nor the Partnership nor any Commonly Controlled Entity has instituted
proceedings to terminate any Pension Plan and the Pension Benefit Guaranty
Corporation has not informed the Partnership of its intent to institute
proceedings to terminate any Pension Plan;
15
22
(iii) full payment has been made of all amounts which
the Partnership or any Commonly Controlled Entity was required to have paid as a
contribution to the Pension Plans as of the last day of the most recent fiscal
year of each of the Pension Plans ended prior to the date of this Agreement, and
none of the Pension Plans has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such Pension
Plan ended prior to the date of this Agreement;
(iv) to the knowledge of the Partnership and the
Partners, the actuarial assumptions utilized, where appropriate, in connection
with determining the funding of each Pension Plan which is a defined benefit
pension plan (as set forth in the actuarial report for such Pension Plan) are
reasonable. Copies of the most recent actuarial reports have been furnished to
UniCapital. Based on such actuarial assumptions, as of the Audited Balance Sheet
Date, the fair market value of the assets or properties held under each such
Pension Plan exceeds the actuarially determined present value of all accrued
benefits of such Pension Plan (whether or not vested) determined on an ongoing
Pension Plan basis;
(v) each of the Benefit Plans is, and its
administration is and has been during the six-year period preceding the date of
this Agreement, in substantial compliance with, and the Partnership has not
received any claim or notice that any such Benefit Plan is not in compliance
with, all applicable laws and orders and prohibited transaction exemptions,
including without limitation, to the extent applicable, the requirements of
ERISA;
(vi) neither the Partnership nor any Commonly
Controlled Entity is in default in performing any of its contractual obligations
under any of the Benefit Plans or any related trust agreement or insurance
contract;
(vii) there are no material outstanding liabilities
of any Benefit Plan other than liabilities for benefits to be paid to
participants in the Benefit Plans and their beneficiaries in accordance with the
terms of the Benefit Plans;
(viii) each Benefit Plan may be amended or modified
by the Partnership or the applicable Commonly Controlled Entity at any time
without liability except under any defined pension benefit plan;
(ix) no Benefit Plan other than a Pension Plan,
retiree medical plan or severance plan provides benefits to any individual after
termination of employment;
(x) the consummation of the transactions contemplated
by this Agreement will not (in and of itself): (A) entitle any employee of the
Partnership to severance pay, unemployment compensation or any other payment;
(B) accelerate the time of payment or vesting, or increase the amount of
compensation due to any such employee; (C) result in any liability under Title
IV of ERISA; (D) result in any prohibited transaction described in Section
16
23
406 of ERISA or Section 4975 of the Code for which an exemption is not
available; or (E) result (either alone or in conjunction with any other event)
in the payment or series of payments by the Partnership or any of its affiliates
to any person of an "excess parachute payment@ within the meaning of Section
280G of the Code;
(xi) with respect to each Benefit Plan that is funded
wholly or partially through an insurance policy, all premiums required to have
been paid to date under the insurance policy have been paid, all premiums
required to be paid under the insurance policy through the Closing Date will
have been paid on or before the Closing Date and, as of the Closing Date, there
will be no liability of the Partnership or any Commonly Controlled Entity under
any insurance policy or ancillary agreement with respect to such insurance
policy in the nature of a retroactive rate adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or partially out of
events occurring prior to the Closing Date;
(xii) (A) each Benefit Plan that constitutes a
Welfare Plan, as defined in Section 6.22, and for which contributions are
claimed by the Partnership or any Commonly Controlled Entity as deductions under
any provision of the Code is in material compliance with all applicable
requirements pertaining to such deduction;
(B) with respect to any Welfare Plan fund
(within the meaning of Section 419 of the Code) related to a Welfare Plan, there
is no disqualified benefit (within the meaning of Section 4976(b) of the Code)
that would result in the imposition of a tax under Section 4976(a) of the Code;
and
(C) all welfare benefit funds intended to be
exempt from tax under Section 501(a) of the Code have been determined by the
Internal Revenue Service to be so exempt and no event or condition exists which
would adversely affect any such determination; and
(xiii) all benefit plans outside of the United
States, if any (the "Foreign Plans"), are in compliance with all applicable laws
and regulations and have been operated in accordance with the plans' respective
terms. There are no material unfunded liabilities under or in respect of the
Foreign Plans, and all contributions or other payments required to be made to or
in respect of the Foreign Plans prior to the Closing Date have been made or will
be made prior to the Closing Date.
6.23 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Partnership has complied
with each, and is not in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign
("Regulations"), to which the Partnership's business, operations, assets or
properties is subject. The Partnership owns, holds, possesses or lawfully uses
in the operation of its business all franchises, licenses, permits, easements,
rights, applications, filings, registrations and other authorizations
("Authorizations") which are in any manner necessary for it to conduct its
business as now or previously conducted or for the
17
24
ownership and use of the assets owned or used by the Partnership in the conduct
of the business of the Partnership, free and clear of all liens, charges,
restrictions and encumbrances and in compliance with all Regulations. All such
Authorizations are listed and described in Schedule 6.23. The Partnership is not
in default, nor has the Partnership received any notice of any claim of default,
with respect to any such Authorization. All such Authorizations are renewable by
their terms or in the ordinary course of business without the need to comply
with any special qualification procedures or to pay any amounts other than
routine filing fees. None of such Authorizations will be adversely affected by
consummation of the transactions contemplated hereby. No Partner and no
director, officer, employee or former employee of the Partnership or any
affiliates of the Partnership, or any other person, firm or corporation, owns or
has any proprietary, financial or other interest (direct or indirect) in any
Authorization which the Partnership owns, possesses or uses in the operation of
the business of the Partnership as now or previously conducted.
6.24 TRANSACTIONS WITH AFFILIATES. No Partner and no director, officer
or employee of the Partnership, or any member of his or her immediate family or
any other of its, his or her affiliates, owns or has a 5% or more ownership
interest in any corporation or other entity that is or was during the last three
years a party to, or in any property which is or was during the last three years
the subject of, any contract, agreement or understanding, business arrangement
or relationship with the Partnership.
6.25 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Partnership and the Partners, threatened against the
Partnership or which relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 6.25, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Partnership and the Partners, threatened
against the Partnership or which relates to the Partnership
(c) Neither the Partnership nor any Partner knows of any
reasonably likely basis for any litigation, arbitration, investigation or
proceeding referred to in Sections 6.25(a) or (b).
(d) The Partnership is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority.
6.26 RESTRICTIONS. The Partnership is not a party to any indenture,
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially adversely affects or
18
25
materially restricts or, so far as the Partnership or any of the Partners can
now reasonably foresee, may in the future materially adversely affect or
materially restrict, the business, operations, assets, properties, prospects or
condition (financial or otherwise) of the Partnership after consummation of the
transactions contemplated hereby.
6.27 TAXES. All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by the Partnership
(the "Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (singly, a "Tax" and collectively, the "Taxes")
have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such Tax Returns are required to be filed, and all such
Tax Returns properly reflect the liabilities of the Partnership for Taxes for
the periods, property or events covered thereby. All Taxes, including without
limitation those which are called for by the Tax Returns, required to be paid,
withheld or accrued by the Partnership and any deficiency assessments, penalties
and interest have been timely paid, withheld or accrued. The accruals for Taxes
contained in the audited balance sheet are adequate to cover the Tax liabilities
of the Partnership as of that date and include adequate provision for all
deferred Taxes, and nothing has occurred subsequent to that date to make any of
such accruals inadequate. The Partnership's Tax basis in its assets for purposes
of determining its future amortization, depreciation and other federal income
tax deductions is accurately reflected on the Partnership's Tax books and
records. The Partnership is not nor has it at any time ever been a party to a
Tax sharing, Tax indemnity or Tax allocation agreement, and the Partnership has
not assumed any Tax liability of any other person or entity under contract. The
Partnership has not received any notice of assessment or proposed assessment in
connection with any Tax Returns and there are not pending tax examinations of or
tax claims asserted against the Partnership or any of its assets or properties.
The Partnership has not extended, or waived the application of, any statute of
limitations of any jurisdiction regarding the assessment or collection of any
Taxes. There are now (and as of immediately following the Closing there will be)
no liens (other than any lien for current Taxes not yet due and payable) on any
of the assets or properties of the Partnership relating to or attributable to
Taxes. To the knowledge of the Partnership and the Partners, there is no basis
for the assertion of any claim relating to or attributable to Taxes which, if
adversely determined, would result in any lien on the assets of the Partnership
or otherwise have an adverse effect on the Partnership or its business,
operations, assets, properties, prospects or condition (financial or otherwise).
Neither the Partnership nor the Partners have any knowledge of any basis for any
additional assessment of any Taxes. All Tax payments related to employees,
including income tax withholding, FICA, FUTA, unemployment and worker's
compensation, required to be made by the Partnership have been fully and
properly paid, withheld, accrued or recorded. All Taxes required to be withheld
by the Partnership or any Subsidiary, including, but not limited to, Taxes
arising as a result of payments (or amounts allocable) to foreign partners or
foreign persons, have
19
26
been fully and properly paid, withheld, accrued or recorded. There are no
contracts, agreements, plans or arrangements, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Partnership that, individually or collectively, could give rise to any payment
(or portion thereof) that would not be deductible pursuant to Sections 280G, 404
or 162 of the Code. Two correct and complete copies of (a) all Tax examinations,
(b) all extensions of statutory limitations and (c) all federal, state and local
income tax returns and franchise tax returns of the Partnership (including, if
filed separately, its Subsidiaries) for the last five fiscal years, or such
shorter period of time as any of them shall have existed, have heretofore been
delivered by the Partnership and the Partners to UniCapital. The Partnership
currently utilizes the accrual method of accounting for income tax purposes and
has not changed its method of accounting for income tax purposes in the past
five years. The Partnership qualifies (and has since the date of its formation
qualified) to be treated as a partnership for federal income tax purposes and
none of the Partnership, or any Partner or any taxing authority has taken a
position inconsistent with such treatment. No partner is a "foreign person"
within the meaning of Section 1445 of the Code.
6.28 INTELLECTUAL PROPERTY MATTERS.
(a) The Partnership has not utilized or does not currently
utilize any patent, trademark, trade name, service mark, copyright, software,
trade secret or know-how except for those listed on Schedule 6.28 (the
"Intellectual Property"), all of which are owned by the Partnership free and
clear of any liens, claims, charges or encumbrances. The Intellectual Property
constitutes all such assets, properties and rights which are used or held for
use in, or are necessary for, the conduct of the business of the Partnership.
(b) There are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property or products or services of the Partnership.
(c) The Partnership does not infringe upon or unlawfully or
wrongfully use any patent, trademark, trade name, service mark, copyright or
trade secret owned or claimed by another. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the Partnership and
the Partners, threatened relating to any patent, trademark, trade name, service
mark, copyright or trade secret formerly or currently used by the Partnership.
None of the Intellectual Property is subject to any outstanding order, decree or
judgment. The Partnership has not agreed to indemnify any person or entity for
or against any infringement of or by the Intellectual Property.
(d) No present or former employee of the Partnership and no
other person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any patent, trademark, trade name,
service mark or copyright, or in any application therefor, or in any trade
secret, which the Partnership owns, possesses or uses in its operations as
20
27
now or heretofore conducted. Schedule 6.28 lists all confidentiality or
non-disclosure agreements currently in force and effect to which the Partnership
or any of its employees is a party.
(e) Schedule 6.28(e) sets forth a complete and accurate list
of all items of Intellectual Property duly registered in, filed in or issued by
the United States Copyright Office or the United States Patent and Trademark
Office, any offices in the various states of the United States and any offices
in other jurisdictions.
(f) All rights of the Partnership in the Intellectual Property
prior to Closing shall remain vested in the Partnership after Closing without
any consent or other approval.
(g) All Intellectual Property in the form of computer software
that is utilized by the Partnership in the operations of its business is capable
of processing date data between and within the twentieth and twenty-first
centuries, or can be rendered capable of processing such data on or before June
30, 1998 by the expenditure of no more than $150,000.
6.29 COMPLETENESS; NO VIOLATIONS. The certified copies of the
Partnership Agreement, as amended to date, of the Partnership, and the copies of
all leases, instruments, agreements, licenses, permits, certificates or other
documents which are included on schedules attached hereto or which have been
delivered or which have been made available to UniCapital in connection with the
transactions contemplated hereby, are complete and correct; neither the
Partnership (including the Subsidiaries) nor, to the knowledge of the Partners,
any other party to any of the foregoing is in material default thereunder; and,
except as set forth in the schedules and documents attached to this Agreement,
the rights and benefits of the Partnership (including the Subsidiaries)
thereunder will not be materially and adversely affected by the transactions
contemplated hereby, and the execution of this Agreement and the performance of
the obligations hereunder will not result in a material violation or breach or
constitute a material default under any of the terms or provisions thereof.
Except as set forth on Schedule 6.29, none of such leases, instruments,
agreements, contracts, licenses, permits, certificates or other documents
requires notice to, or the consent or approval of, any governmental agency or
other third party to any of the transactions contemplated hereby to remain in
full force and effect. The consummation of the transactions contemplated hereby
will not give rise to any right of termination, cancellation or acceleration or
result in the loss of any right or benefit thereunder.
6.30 EXISTING CONDITION. Since the Audited Balance Sheet Date, the
Partnership has not:
(a) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
21
28
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except for the sales in the
ordinary course of business consistent with past practice, or made any agreement
or commitment or granted any option or right with, of or to any person to
acquire any assets, properties or rights of the Partnership or any interest
therein;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of its assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except in the ordinary course of business
consistent with past practice;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, except as set
forth on Schedule 6.30 or in the ordinary course of business consistent with
past practice;
(e) declared, set aside or paid any dividend or made or agreed
to make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its shares of capital stock or other ownership interests;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $25,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) except as set forth on Schedule 6.30, suffered any
material adverse change in its business, operations, assets, properties,
prospects or condition (financial or otherwise), other than as directly caused
by adverse economic conditions not specific to, or having an extraordinary
impact upon, the Partnership;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000, except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or made
any advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its
22
29
employees or made any increase in, or any addition to, other benefits to which
any of its employees may be entitled;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles;
(l) entered into any transaction other than in the ordinary
course of business consistent with past practice;
(m) changed its authorized capital or its securities
outstanding or otherwise changed its ownership interests, or granted any
options, warrants, calls, conversion rights or commitments with respect to any
of its capital stock or other ownership interests; or
(n) agreed to take any of the actions referred to above.
6.31 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as Schedule
6.31 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Partnership (including the Subsidiaries) has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or have
access thereto; and
(e) the name of each person, corporation, firm or other entity
holding a general or special power of attorney from the Partnership and a
description of the terms of such power.
6.32 ENVIRONMENTAL MATTERS. (a) The Partnership has secured, and is in
compliance with, all Environmental Permits, with respect to any premises on
which its business is operated, all of which Environmental Permits shall vest in
the Newcos upon consummation of the transactions contemplated hereby. The
Partnership is in compliance with all Environmental Laws.
(b) Neither the Partnership nor any Partner has received any
communication from any Governmental Entity that alleges that the Partnership is
not in compliance with any Environmental Laws or Environmental Permits.
23
30
(c) The Partnership has not entered into or agreed to any
court decree or order, and the Partnership is not subject to any judgment,
decree or order, relating to compliance with any Environmental Law or to
investigation or cleanup of any Hazardous Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Partnership and the Partners,
threatened to or against any assets or properties of the Partnership pursuant to
any Environmental Law.
(e) There has been no treatment, storage, disposal or release
of any Hazardous Substance on any property owned, operated or leased by the
Partnership.
(f) The Partnership has not received a CERCLA 104(e)
information request nor has it been named a potentially responsible party for
any National Priorities List site under CERCLA or any site under analogous state
law or received an analogous notice or request from any non-U.S. Governmental
Entity, which notice, request or any resulting inquiry or litigation has not
been fully and finally resolved without possibility of reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the
Partnership and any former aboveground or underground tanks on any property
owned, operated or leased by the Partnership have been removed in accordance
with all Environmental Laws and no residual contamination, if any, remains at
such sites in excess of applicable standards.
(h) There are no polychlorinated biphenyls ("PCBs") leaking
from any article, container or equipment on, under or about any property owned,
operated or leased by the Partnership and there are no such articles, containers
or equipment containing PCBs, and there is no asbestos containing material in a
condition or location currently constituting a violation of any Environmental
Law at, on, under or within any property owned, operated or leased by the
Partnership.
(i) The Partnership and the Partners have provided to
UniCapital true and complete copies of, or access to, all written environmental
assessment materials and reports in their possession that have been prepared by
or on behalf of the Partnership during the past five years.
6.33 NO ILLEGAL PAYMENTS. The Partnership has not and, to the knowledge
of the Partnership and the Partners, no affiliate, officer, agent or employee
thereof, directly or indirectly, has, during the past five years, on behalf of
or with respect to the Partnership or any affiliate thereof, (a) made any
unlawful domestic or foreign political contributions, (b) made any payment or
provided services which were not legal to make or provide or which the
Partnership or any affiliate thereof or any such officer, agent or employee
should have known were not legal for the payee or the recipient of such services
to receive, (c) received any payment or any
24
31
services which were not legal for the payer or the provider of such services to
make or provide, (d) made any payment to any person or entity, or agent or
employee thereof, in connection with any Lease (as hereinafter defined) to
induce such person or entity to enter into a Lease transaction, (e) had any
transactions or payments related to the Partnership which are not recorded in
their accounting books and records or (f) had any off-book bank or cash accounts
or "slush funds" related to the Partnership.
6.34 DISCLOSURE. The Partnership has delivered or made available to
UniCapital true and complete copies of each agreement, contract, commitment or
other document (or, in the case of any such document not in the possession of or
reasonably available to the Partnership or a Partner, accurate and complete
summaries thereof) that is referred to in the schedules to this Agreement or
that has been requested by UniCapital or its representatives. Without limiting
any exclusion, exception or other limitation contained in any of the
representations and warranties made herein, this Agreement and the schedules
hereto and all other documents and information prepared or certified by the
Partners and provided to UniCapital and its representatives pursuant hereto do
not and will not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements herein and therein not
misleading. If any Partners become aware of any fact or circumstance that would
change a representation or warranty of any Partner in this Agreement or any
representation made on behalf of the Partnership (including the Subsidiaries),
then the Partners shall immediately give notice of such fact or circumstance to
UniCapital. However, such notification shall not relieve the Partnership or any
of the Partners of their respective obligations under this Agreement, and at the
sole option of UniCapital, the truth and accuracy of any and all warranties and
representations of the Partners, at the date of this Agreement and at the
Closing, shall be a precondition to the consummation of this transaction.
7. REPRESENTATIONS OF UNICAPITAL AND THE NEWCOS
As of the date hereof and as of the Closing Date, UniCapital and the
Newcos, jointly and severally, represent and warrant as follows:
7.1 CORPORATE EXISTENCE. UniCapital is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each Newco is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. Immediately prior to the Closing, each of
UniCapital and the Newcos is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the conduct of its
business requires it to be so qualified.
7.2 UNICAPITAL STOCK. The shares of UniCapital Stock to be issued and
delivered to the Partners on the Closing Date, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued, fully paid
and nonassessable shares, and except for restrictions upon resale, will be
legally equivalent in all respects to the UniCapital Stock issued and
outstanding as of the date hereof. The UniCapital Stock to be issued and
delivered pursuant to
25
32
this Agreement will be free and clear of all liens, encumbrances and claims of
every kind, other than restrictions upon transfer contained herein and other
than any liens, encumbrances or claims arising other than by the actions of
UniCapital or Newco.
7.3 CORPORATE POWER AND AUTHORIZATION. UniCapital and the Newcos have
the corporate power, authority and legal right to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement and
all related documents and agreements required to be executed and delivered by
UniCapital and the Newcos in accordance with the provisions hereof (the
"UniCapital Documents") have been duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by UniCapital and
the Newcos and constitutes, and the UniCapital Documents when executed and
delivered will constitute, the legal, valid and binding obligation of UniCapital
and the Newcos enforceable against UniCapital and the Newcos in accordance with
their terms.
7.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement by UniCapital and the Newcos will not violate, conflict with or result
in the breach of any term, condition or provision of, or require the consent of
any other person under (a) any existing law, ordinance, or governmental rule or
regulation to which UniCapital or the Newcos is subject, (b) any judgment,
order, writ, injunction, decree or award of any Governmental Entity that is
applicable to UniCapital or the Newcos, (c) the charter documents of UniCapital
or the Newcos, or (d) any mortgage, indenture, agreement, contract, commitment,
lease, plan, Authorization, or other instrument, document or understanding, oral
or written, to which UniCapital or the Newcos is a party, by which UniCapital or
the Newcos may have rights or by which any of the properties or assets of
UniCapital or the Newcos may be bound or affected, or give any party with rights
thereunder the right to terminate, modify, accelerate or otherwise change the
existing rights or obligations of UniCapital or the Newcos thereunder. Except
for filing under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 and
except as aforesaid, no authorization, approval or consent of, and no
registration or filing with, any Governmental Entity is required in connection
with the execution, delivery or performance of this Agreement by UniCapital or
the Newcos.
7.5 CAPITALIZATION OF UNICAPITAL. The IPO will result in an aggregate
market capitalization of UniCapital that will exceed Three Hundred Million
Dollars ($300,000,000), as determined by multiplying the outstanding shares of
UniCapital immediately following the closing of the IPO by the offering price.
7.6 COMPLIANCE WITH LAW; AUTHORIZATIONS. Each of UniCapital and the
Newcos have complied with each, and is not in violation of, Regulations to which
UniCapital's and the Newcos' respective business, operations, assets or
properties is subject. Each of UniCapital and the Newcos owns, holds, possesses
or lawfully uses in the operation of its business all Authorizations which are
in any manner necessary for it to conduct its business as now or previously
conducted or for the ownership and use of the assets owned or used by UniCapital
and the Newcos, respectively, in the conduct of the business of the Partnership,
free and clear of all
26
33
liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Neither UniCapital nor the Newcos is in default, nor has UniCapital
or the Newcos received any notice of any claim of default, with respect to any
such Authorization. All such Authorizations are renewable by their terms or in
the ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. No stockholder and no director, officer,
employee or former employee of UniCapital or the Newcos or any of their
affiliates, or any other person, firm or corporation, owns or has any
proprietary, financial or other interest (direct or indirect) in any
Authorization which UniCapital or the Newcos owns, possesses or uses in the
operation of the business of UniCapital and the Newcos as now or previously
conducted.
7.7 TRANSACTIONS WITH AFFILIATES. Except as described in the
Registration Statement, no stockholder and no director, officer or employee of
UniCapital or the Newcos, or any member of his or her immediate family or any
other of its, his or her affiliates, owns or has a 5% or more ownership interest
in any corporation or other entity that is or was during the last three years a
party to, or in any property which is or was during the last three years the
subject of, any contract, agreement or understanding, business arrangement or
relationship with UniCapital or the Newcos.
7.8 LITIGATION. (a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of UniCapital and Newco, threatened against UniCapital or Newco which
relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 7.8, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of UniCapital or Newco, threatened against
UniCapital or Newco or which relates to UniCapital or Newco.
(c) Neither UniCapital nor Newco is a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority.
7.9 LIQUIDATED DAMAGES. UniCapital has sufficient funds to cover any
liquidated damages set forth in Section 13.4(b).
7.10 REGISTRATION RIGHTS. As of the date hereof and as of the Closing
Date, no officer, director or shareholder of UniCapital will have been granted
any registration rights with respect to the registration of any shares of
capital stock of UniCapital.
7.11 MISCELLANEOUS. Prior to the consummation of the transactions
contemplated hereby, UniCapital and the Newcos have no material properties or
assets and are not party to any
27
34
contracts other than this Agreement, the letter of intent among the parties to
this Agreement, certain employment agreements with officers of UniCapital,
certain real property leases relating to the principal executive offices of
UniCapital, and those agreements and letters of intent listed on Schedule 7.11
hereto.
8. COVENANTS OF THE PARTNERS AND THE PARTNERSHIP
For purposes of this Article 8, each reference to the "Partnership"
shall be deemed to refer as well to each and all of its Subsidiaries unless the
context otherwise specifically requires. The following covenants shall apply
during the period from and after the date hereof through the Closing Date.
8.1 BUSINESS IN THE ORDINARY COURSE. The Partnership shall, and the
Partners shall cause the Partnership to, conduct its business solely in the
ordinary course and consistent with past practice.
8.2 EXISTING CONDITION. The Partnership shall not, and no Partner shall
suffer the Partnership to, cause or permit to occur any of the events or
occurrences described in Section 6.30 hereof.
8.3 MAINTENANCE OF PROPERTIES AND ASSETS. The Partnership shall, and
the Partners shall cause the Partnership to, maintain and service its properties
and assets in order to preserve their value and usefulness in the conduct of its
respective business.
8.4 EMPLOYEES AND BUSINESS RELATIONS. The Partnership shall, and the
Partners shall cause the Partnership to, use commercially reasonable efforts to
keep available the services of its current employees and agents and to maintain
its relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
8.5 MAINTENANCE OF INSURANCE. The Partnership shall, and the Partners
shall cause the Partnership to, notify UniCapital of any material changes in the
terms of the insurance policies and binders referred to on Schedule 6.20 hereto.
8.6 COMPLIANCE WITH LAWS, ETC. The Partnership shall, and the Partners
shall cause the Partnership to, comply with all laws, ordinances, rules,
regulations and orders applicable to the Partnership or its business,
operations, properties or assets, noncompliance with which might materially
affect the Partnership (collectively, the "Laws").
8.7 CONDUCT OF BUSINESS. The Partnership shall, and the Partners shall
cause the Partnership to, use its reasonable commercial efforts to conduct its
business in such a manner that on the Closing Date the representations and
warranties of the Partners contained in this Agreement shall be true, as though
such representations and warranties were made on and as of
28
35
such date (except to the extent such representations or warranties expressly
speak as of a specific date), and the Partnership shall, and the Partners shall
cause the Partnership to, use commercially reasonable efforts to cause all of
the conditions to the obligations of UniCapital and the Partners under this
Agreement to be satisfied on or prior to the Closing Date.
8.8 ACCESS. Upon prior reasonable notice, the Partners shall cause the
Partnership to, give to UniCapital's officers, employees, counsel, accountants
and other representatives free and full access to and the right to inspect,
during normal business hours, all of the premises, properties, assets, records,
contracts and other documents relating to the Partnership and shall permit them
to consult with the officers, employees, accountants, counsel and agents of the
Partnership for the purpose of making such investigation of the Partnership as
UniCapital shall desire to make, provided that such investigation shall not
unreasonably interfere with the Partnership's business operations and provided
further that UniCapital shall not contact or consult with any non-officer
employees of the Partnership without the Partnership's prior consent, which
shall not be unreasonably withheld. Furthermore, the Partnership shall, and the
Partners shall cause the Partnership to, furnish to UniCapital all such
documents and copies of documents and records and information with respect to
the affairs of the Partnership and copies of any working papers relating thereto
as UniCapital shall from time to time reasonably request. No information or
knowledge obtained in any investigation pursuant to this Section 8.8 or
otherwise shall affect or be deemed to modify any representation or warranty
contained in this Agreement or the conditions to the obligations of the parties
to consummate the transactions contemplated hereby.
8.9 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Partnership
nor any Partner shall give notice to third parties or otherwise make any press
release or other public statement concerning this Agreement or the transactions
contemplated hereby. Neither the Partnership nor any Partner shall grant any
interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Partnership, the business (current and proposed) of UniCapital,
the Registration Statement (as defined below), the IPO or any other matter
connected with any of the foregoing without the express prior written approval
of UniCapital, and all inquiries and questions with respect to any of the
foregoing shall be coordinated through Robert New, Chief Executive Officer of
UniCapital. The Partnership and each Partner shall coordinate all communications
with the employees and agents of the Partnership through UniCapital prior to
making any such communication. Notwithstanding the foregoing, this Section 8.9
shall not be interpreted to prevent the Partnership or any Partner from
disclosing (i) that the Partners have entered into an agreement to sell the
Partnership Interests, (ii) information to their attorneys under the
attorney-client privilege or (iii) information as compelled by a court order,
provided however, that prior to disclosing any information concerning this
Agreement or the transaction contemplated hereby in response to any such court
order, the Partnership or Partners, as applicable, shall provide UniCapital with
prompt notice of the court order so that UniCapital may take whatever action it
deems appropriate to prohibit such disclosure.
29
36
8.10 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, neither the Partnership nor any Partner and
none of their affiliates shall, and each of them shall cause its respective
employees, agents and representatives (including, without limitation, any
investment banking, legal or accounting firm retained by it or them and any
individual member or employee of the foregoing) (each, an "Agent") not to, (a)
initiate, solicit or seek, directly or indirectly, any inquiries or the making
or implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders or any of them) with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase of all or any portion of the
assets or any equity securities of, the Partnership (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal"), or (b) engage in
any negotiations concerning, or provide any confidential information or data to,
or have any substantive discussions with, any person relating to an Acquisition
Proposal, (c) otherwise cooperate in any effort or attempt to make, implement or
accept an Acquisition Proposal, or (d) enter into or consummate any agreement or
understanding with any person or entity relating to an Acquisition Proposal,
except for the acquisition contemplated hereby. If the Partnership or any
Partner, or any of their respective Agents, have provided any person or entity
(other than UniCapital) with any confidential information or data relating to an
Acquisition Proposal, then they shall request the immediate return thereof. The
Partnership and the Partners shall notify UniCapital immediately if any
inquiries, proposals or offers related to an Acquisition Proposal are received
by, any confidential information or data is requested from, or any negotiations
or discussions related to an Acquisition Proposal are sought to be initiated or
continued with, it or any individual or entity referred to in the first sentence
of this Section 8.10. The covenant contained in this Section 8.10 shall not
survive any termination of this Agreement pursuant to Sections 13.1, 13.2 or
13.3.
8.11 THIRD PARTY APPROVALS. Prior to the Closing Date, the Partnership
shall satisfy any requirement for notice and approval of the transactions
contemplated by this Agreement under applicable agreements with third parties,
and shall provide UniCapital with satisfactory evidence of such third party
approvals.
8.12 NOTICE TO BARGAINING AGENTS. Prior to the Closing Date, the
Partnership shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement, and shall provide UniCapital with proof that any required notice has
been provided.
8.13 NOTIFICATION OF CERTAIN MATTERS. (a) The Partnership and the
Partners shall give prompt notice to UniCapital of (i) the occurrence or
non-occurrence of any event known to any Partner or the Partnership the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in Article 6 to be untrue or inaccurate in
any material respect at or prior to the Closing Date and (ii) any material
failure of any Partner or the Partnership to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such person
hereunder.
30
37
(b) The delivery of any notice pursuant to this Section 8.13
shall not be deemed to (i) modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 8.14, (ii) modify the conditions set forth in Sections 9 and 10 or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
8.14 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Closing
Date to supplement or amend promptly the schedules hereto with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in the
schedules, provided, that no amendment or supplement to a schedule that
constitutes or reflects a material adverse change in the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the
Partnership or any Subsidiary (a "Material Adverse Amendment"), may be made
unless UniCapital consents to such Material Adverse Amendment; provided,
further, however, that if the amendment or supplement relates to changes in
facts or circumstances occurring subsequent to the date of this Agreement and
such amendment or supplement constitutes or reflects a Material Adverse
Amendment, then such amendment or supplement shall be accepted by UniCapital
subject to the provisions of Section 12.2 and 12.5 hereof. No amendment of or
supplement to a schedule shall be made later than 48 hours prior to the
anticipated effectiveness of the Registration Statement defined in Section 9.4.
Only (i) the schedules attached to this Agreement at the time of its execution
and (ii) amended schedules as accepted under the standards and provisions of
this Section 8.14, shall be deemed to be a part of this Agreement in accordance
with Section 19.3 hereof.
8.15 HSR FILING. To the extent the transaction contemplated by this
Agreement is a transaction subject to the filing requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Partnership shall use
its reasonable best efforts to (a) file all information required to be filed by
it pursuant to such act and (b) provide UniCapital with all information
reasonably requested and required by it to satisfy any filing requirements it
may have under such act.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTNERSHIP AND
THE PARTNERS
The obligations of the Partnership and the Partners hereunder are
subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of UniCapital and the Newcos contained in Article
7 shall be accurate as of the Closing Date as though such representations and
warranties had been made as
31
38
of such times; all of the terms, covenants and conditions of this Agreement to
be complied with and performed by UniCapital and the Newcos on or before the
Closing Date shall have been duly complied with and performed; and a certificate
to the foregoing effect dated the Closing Date and signed by a duly authorized
agent, the President or any Vice President of UniCapital shall have been
delivered to the Partners.
9.2 EMPLOYMENT AGREEMENTS. The Newcos shall have executed and delivered
Employment Agreements, in the form of Annex III attached hereto, to each of the
persons listed on Schedule 9.2 hereto.
9.3 OPINION OF COUNSEL. The Partners shall have received an opinion
from counsel for UniCapital, dated the Closing Date, to the effect that:
(a) UniCapital and the Newcos have been duly organized and are
validly existing in good standing under the laws of their respective states of
incorporation;
(b) this Agreement has been duly authorized, executed and
delivered by UniCapital and the Newcos and constitutes a valid and binding
agreement of UniCapital and the Newcos enforceable in accordance with its terms,
except (i) as such enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement and other similar laws relating to or
affecting the rights of creditors, (ii) as the same may be subject to the effect
of general principles of equity and (iii) that no opinion need be expressed as
to the enforceability of indemnification provisions included herein;
(c) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation or
Bylaws of UniCapital or the Newcos;
(d) the shares of UniCapital Stock to be received by the
Partners on the Closing Date shall be duly authorized, fully paid and
nonassessable; and
(e) the execution, delivery and performance of this Agreement
and the consummation of any transactions contemplated hereby will not conflict
with, or result in a breach or violation of, the Certificate of Incorporation or
Bylaws of UniCapital or the Newcos.
9.4 REGISTRATION STATEMENT. UniCapital shall have filed with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-1
covering the offer and sale of shares of UniCapital Stock in the IPO (the
"Registration Statement"). The Registration Statement shall have been declared
effective by the SEC not later than June 30, 1998, UniCapital and the
underwriters named therein shall have executed the Underwriting Agreement and
the underwriters named therein shall have agreed to acquire, subject to the
conditions set forth in the Underwriting Agreement, the shares of UniCapital
Stock covered by the Registration Statement.
32
39
There shall have been no stop-order issued (that remains in effect) by the
Securities and Exchange Commission with respect to the Registration Statement.
9.5 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 shall have expired or been terminated.
9.6 INJUNCTION. No court ordered injunction that was brought by a third
party and opposed by the Partners and the Partnership shall have been issued
directly prohibiting the Partners from fulfilling their obligations hereunder.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNICAPITAL AND THE
NEWCOS
The obligations of UniCapital and the Newcos hereunder are subject to
the satisfaction, on or prior to the Closing Date (or such earlier date
specified below), of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
Partners shall have delivered to UniCapital a certificate dated the Closing Date
and signed by them to the effect that all of the representations and warranties
of the Partners contained in this Agreement shall be true on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such dates, except for matters expressly disclosed in
the certificate or a schedule thereto (which shall not serve to modify any
representation or warranty made herein or in any other document or otherwise in
information supplied by the Partnership or any Partner); and each and all of the
agreements of the Partners and the Partnership to be performed on or before the
Closing Date pursuant to the terms hereof shall have been performed.
10.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened which, in
the reasonable judgment of counsel for UniCapital, could have a material adverse
impact on the Partnership or could restrain or prohibit the acquisition by
UniCapital of the Partnership Interests, and no governmental agency or body
shall have taken any other action or made any request of UniCapital as a result
of which the management of UniCapital deems it inadvisable to proceed with the
transactions hereunder.
10.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing Date,
UniCapital shall have had sufficient time to review the unaudited balance sheets
of the Partnership as of the end of the most recently completed calendar month,
and the unaudited statements of income, cash flows and partners' equity of the
Partnership for the periods then ended, which statements shall have disclosed no
material adverse change in the financial condition of the Partnership or the
results of its respective operations from the financial statements originally
furnished by the
33
40
Partnership as set forth in Schedule 6.12. Matters disclosed in Schedule 6.30
shall not be deemed a material adverse change for purposes of this Section 10.3.
10.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties, prospects or condition (financial or
otherwise) of the Partnership shall have occurred, and the Partnership shall not
have suffered any material loss or damage to any of its properties or assets,
whether or not covered by insurance, since the Audited Balance Sheet Date, which
change, loss or damage materially affects or impairs the ability of the
Partnership to conduct its business as now conducted or as proposed to be
conducted; and UniCapital shall have received on the Closing Date a certificate
signed by the Partners and dated the Closing Date to such effect. Matters
disclosed in Schedule 6.30 shall not be deemed a material adverse change for
purposes of this Section 10.4.
10.5 REGULATORY REVIEW. UniCapital, through its authorized
representatives, shall have completed a satisfactory review of the practices and
procedures of the Partnership including, but not limited to, environmental and
land use practices, import and export laws, compliance with contracts and
federal, state and local laws and regulations governing the operations of the
Partnership, which review reflects compliance with all applicable laws governing
the Partnership, disclosing no material actual or probable violations,
compliance problems, required capital expenditures or other substantive
environmental, real estate and land use related concerns and which review is
otherwise satisfactory in all respects to UniCapital, in its sole discretion.
10.6 PARTNERS' RELEASE. At the Closing Date, the Partners shall have
delivered to UniCapital an instrument dated the Closing Date releasing the
Partnership and its Subsidiaries from any and all claims of Partners against the
Partnership or any of its Subsidiaries, except claims for benefits accrued by
the Partners pursuant to any Benefit Plan.
10.7 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.2
shall have executed and delivered an Employment Agreement in the form of Annex
III attached hereto.
10.8 OPINION OF COUNSEL. UniCapital shall have received an opinion from
Black Helterline, counsel to the Partners, dated the Closing Date, in form and
substance satisfactory to UniCapital, to the effect that:
(a) the Partnership is validly existing and in good standing
under the laws of the state of its organization;
(b) to the knowledge of such counsel, the Partnership is duly
authorized, qualified and licensed under all applicable laws, regulations,
ordinances or orders of public authorities to carry on its business in the
places and in the manner now conducted;
34
41
(c) the Partnership Interests are held by the Partners as
represented by the Partners in this Agreement;
(d) the Partnership does not have any outstanding options,
warrants, calls, conversion rights or other commitments of any kind to issue or
sell any interests in the Partnership;
(e) this Agreement has been duly authorized, executed and
delivered by the Partnership and the Partners and constitutes a valid and
binding agreement of the Partnership and the Partners enforceable in accordance
with its terms, except as such enforceability may be subject to bankruptcy,
moratorium, insolvency, reorganization, arrangement and other similar laws
relating to or affecting the rights of creditors and except (i) as the same may
be subject to the effect of general principles of equity and (ii) that no
opinion need be expressed as to the enforceability of indemnification provisions
included herein;
(f) upon consummation of the acquisition contemplated by this
Agreement, UniCapital will receive good title to the Partnership Interests, free
and clear of all liens, security interests, pledges, charges, voting trusts,
equities, restrictions, encumbrances and claims of every kind;
(g) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.23, the Partnership is not in violation of or default under
any law or regulation, or under any order of any court, commission, board,
bureau, agency or instrumentality wherever located and there are no claims,
actions, suits or proceedings pending, or threatened against or affecting the
Partnership, at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality wherever located;
(h) to the knowledge of such counsel, except to the extent set
forth on Schedule 6.17, the Partnership is not in default under any of its
material contracts or agreements or has received notice of such default;
(i) no notice to, consent, authorization, approval or order of
any court or governmental agency or body or of any other third party is required
in connection with the execution, delivery or consummation of this Agreement by
any Partners or for the transfer to UniCapital of the Partnership Interests; and
(j) the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or constitute a
default under any of the terms or provisions of the Partnership Agreement or any
Contract listed on Schedules 6.17.
Such opinion shall include any other matters incident to the matters set forth
herein as agreed to by the parties and their respective counsel.
35
42
10.9 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
10.10 GOOD STANDING CERTIFICATES. The Partners shall have delivered to
UniCapital certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Partnership's state of incorporation and, unless waived by UniCapital, in each
state in which the Partnership is authorized to do business, showing that the
Partnership is in good standing and authorized to do business and that all state
franchise and/or income tax returns and taxes for the Partnership for all
periods prior to the dates of such certificates have been filed and paid.
10.11 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC, and UniCapital and the representatives of
the underwriters named in the Registration Statement shall have executed the
Underwriting Agreement. There shall have been no stop-order issued (that remains
in effect) by the Securities and Exchange Commission with respect to the
Registration Statement.
10.12 REPAYMENT OF INDEBTEDNESS. Prior to the Closing Date, the
Partners shall have repaid to the Partnership (including its Subsidiaries) in
full all amounts owing by the Partners to such entities.
10.13 NET INCOME. The Partnership shall have aggregate after tax net
losses for the twelve months ended December 31, 1997 as included in UniCapital's
unaudited pro forma combined (prior to pro forma and offering adjustments)
income statement for the twelve months ended December 31, 1997 included in the
Registration Statement.
10.14 HSR ACT. The waiting period applicable to the consummation of the
Unified Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 shall have expired or been terminated.
11. COVENANTS OF UNICAPITAL
11.1 UNICAPITAL STOCK OPTIONS. Upon the effective date of the
Registration Statement (but subject in all events to the consummation of the
transaction contemplated hereby), UniCapital shall make available options to
purchase that number of shares of UniCapital Stock having a fair market value on
the effective date of the Registration Statement, based upon the IPO price per
share set forth in the Underwriting Agreement, equal to 6.25% of the Effective
Date Consideration (valuing the UniCapital Stock to be issued as part of the
Effective Date Consideration at the IPO price per share for the purposes of this
Section 11.2) to be granted to those non-Partner key employees of the
Partnership or the Newcos after the Closing as are designated by the principal
executive officer of the Partnership or the Newcos who is entering
36
43
into an Employment Agreement pursuant to Section 9.2 hereof (or such other
officer designated by the Newcos and acceptable to UniCapital). Not later than
seven days prior to the effective date of the Registration Statement, the
officer designating the recipients of such options shall provide to UniCapital a
written list of the names of those designated recipients who will receive
options exercisable at the IPO price and the relative percentages of the 6.25%
option pool provided under this Section 11.2 to be awarded to each recipient, as
well as the percentage of options, if any, to be reserved for future issuance.
Any options reserved for future issuance shall be granted at an exercise price
equal to the fair market value of UniCapital Stock as of the date of grant. All
options shall be granted in accordance with UniCapital's policies, and
authorized and issued under the terms of UniCapital's principal stock option
plan for the benefit of employees of UniCapital and its subsidiaries.
11.2 HSR FILING. To the extent the transaction contemplated by this
Agreement is a transaction subject to the filing requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, UniCapital shall use its
reasonable best efforts to (a) file all information required to be filed by it
pursuant to such act and (b) provide the Partnership with all information
reasonably requested and required by it to satisfy any filing requirements it
may have under such act.
11.3 RELEASE FROM GUARANTEES; INDEBTEDNESS. Not later than 120 days
following the Closing Date, UniCapital shall cause the Partners to be released
from any and all personal guarantees of the indebtedness of the Partnership at
the Closing Date set forth on Schedule 11.3; provided, that, in the event that
the beneficiary of any such guarantee is unwilling to permit the substitution of
UniCapital's guarantee for the Partners's guarantee or the assumption by
UniCapital of the indebtedness, or in the event that the lender with respect to
the indebtedness to which such guarantee relates accelerates such indebtedness
whether or not prior to such 120 day period because of the consummation of the
transactions contemplated hereby, UniCapital shall repay up to that amount of
recourse indebtedness set forth on Schedule 11.3. The failure of the Partnership
to obtain the consent of its lenders to the change of control of the Partnership
or the substitution of a UniCapital guaranty or the assumption by UniCapital of
the indebtedness set forth on Schedule 11.3 shall not be deemed a breach
hereunder.
12. INDEMNIFICATION; SURVIVAL
12.1 GENERAL INDEMNIFICATION BY PARTNERS. Subject to the limitations
contained in Section 12.5 hereof, each Partner, jointly and severally, covenants
and agrees that such Partner will indemnify, defend, protect and hold harmless
UniCapital and the Newcos and their respective officers, stockholders,
directors, divisions, subdivisions, affiliates, subsidiaries, parents, agents,
employees, successors and assigns at all times from and after the date of this
Agreement until the Expiration Date (as defined in Section 12.6) from and
against all claims, damages, losses, liabilities, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) (collectively, "Losses") incurred by UniCapital or the Newcos as
a result of or arising from (a) any breach of the representations and warranties
made by the
37
44
Partners set forth herein or on the schedules or certificates delivered in
connection herewith, (b) any nonfulfillment of any covenant or agreement on the
part of the Partners or the Partnership under this Agreement, (c) the business,
operations or assets of the Partnership prior to the Closing Date or the actions
or omissions of the Partnership's directors, officers, stockholders, employees
or agents prior to the Closing Date, other than Losses arising from matters
expressly disclosed in the Financial Statements, this Agreement or the Schedules
to this Agreement, or (d) any liability under the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or other federal or state
law or regulation, at common law or otherwise, arising out of or based upon (i)
any untrue statement or alleged untrue statement of a material fact relating to
the Partnership (including its Subsidiaries) or the Partners contained in any
preliminary prospectus, the Registration Statement or any prospectus forming a
part thereof, or any amendment thereof or supplement thereto (including any
additional registration statement filed pursuant to Rule 462(b) under the
Securities Act), which statement was provided or was based upon information or
documents provided to UniCapital or its counsel by the Partnership (including
its Subsidiaries) or the Partners, or (ii) any omission or alleged omission to
state therein a material fact relating to the Partnership (including its
Subsidiaries) or the Partners required to be stated therein or necessary to make
the statements therein not misleading, which information was not provided to
UniCapital or its counsel by the Partnership (including its Subsidiaries) or the
Partners; provided, however, that such indemnity shall not inure to the benefit
of UniCapital or the Newcos to the extent that such untrue statement (or alleged
untrue statement) was made in, or such omission (or alleged omission) occurred
in, any preliminary prospectus and the Partners provided, in writing, corrected
information to UniCapital for inclusion in the final prospectus, and such
information was not so included.
12.2 SPECIFIC INDEMNIFICATION BY PARTNERS. Subject to the limitations
contained in Section 12.5 hereof, notwithstanding any disclosure made in this
Agreement or in the schedules or exhibits hereto, and notwithstanding any
investigation by UniCapital or the Newcos, each Partner, jointly and severally,
covenants and agrees that such Partner will indemnify, defend, protect and hold
harmless UniCapital and the Newcos and their respective officers, stockholders,
directors, divisions, subdivisions, affiliates, subsidiaries, parents, agents,
employees, successors and assigns at all times from and after the date of this
Agreement, from and against all Losses incurred by UniCapital or the Newcos as a
result of or incident to: (a) the existence of liabilities of the Partnership
(including its Subsidiaries) in excess of the liabilities set forth on Schedule
6.13, to the extent of such excess; (b) the failure of the Partnership or the
Partners to file all required Form 5500's prior to the Closing Date; (c) the
litigation matters listed on Schedule 6.25 and (d) any Material Adverse
Amendments pursuant to Section 8.14 hereof.
12.3 INDEMNIFICATION BY UNICAPITAL AND THE NEWCOS. Subject to the
limitations contained in Section 12.5 hereof, UniCapital and the Newcos, jointly
and severally, covenant and agree that they will indemnify, defend, protect and
hold harmless the Partners at all times from and after the date of this
Agreement from and against all Losses incurred by the Partners as a result of or
arising from (a) any breach of the representations and warranties made by
UniCapital and the Newcos set forth herein or on the schedules or certificates
attached hereto, (b) any
38
45
nonfulfillment of any agreement on the part of UniCapital under this Agreement,
or (c) any liability under the Securities Act, the Exchange Act or other federal
or state law or regulation, at common law or otherwise, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
relating to UniCapital (including all of the entities, other than the
Partnership, acquired by UniCapital as part of the Unified Transaction, but only
to the extent that UniCapital is actually indemnified by such other companies
for such liability) contained in any preliminary prospectus, the Registration
Statement or any prospectus forming a part thereof, or any amendment thereof or
supplement thereto (including any registration statement filed pursuant to Rule
462(b) under the Securities Act), or arising out of or based upon any omission
or alleged omission to state therein a material fact relating to UniCapital
(including all of the entities, other than the Partnership, acquired by
UniCapital as part of the Unified Transaction, but only to the extent that
UniCapital is actually indemnified by such other companies for such liability)
required to be stated therein or necessary to make the statements therein not
misleading, which liability is not the subject of indemnification of UniCapital
and the Newcos pursuant to Section 12.1(c) above.
12.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be indemnified
hereunder (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any person or entity against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the parties obligated
to provide indemnification pursuant to Section 12.1, 12.2, or 12.3 hereof (each,
an "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim within 30 business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim. To the extent the Indemnifying Party has actually paid
any amount to the Indemnified Party in respect of any Loss in connection with
such Third Party Claim, the Indemnifying Party shall have a right of subrogation
with respect to such Third Party Claim to the extent of such payment.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel (provided that such counsel is
not reasonably objected to by the Indemnified Party), any Third Party Claim as
the Indemnifying Party pursues the same in good faith and diligently and so long
as the Third Party Claim does not relate to an actual or potential Loss to which
Section 12.4(e) applies in which the Indemnified Party is UniCapital or the
Newcos. If the Indemnifying Party undertakes to defend or settle, it shall
promptly notify the
39
46
Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in the defense thereof and
in any settlement thereof. Such cooperation shall include, but shall not be
limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. Notwithstanding the foregoing, the
Indemnified Party shall have the right to participate in any matter through
counsel of its own choosing at its own expense (unless there is a conflict of
interest that prevents counsel for the Indemnifying Party from representing the
Indemnified Party, in which case the Indemnifying Party will reimburse the
Indemnified Party for the expenses of its counsel). After the Indemnifying Party
has notified the Indemnified Party of its intention to undertake to defend or
settle any such asserted liability, and for so long as the Indemnifying Party
diligently pursues such defense, the Indemnifying Party shall not be liable for
any additional legal expenses incurred by the Indemnified Party in connection
with any defense or settlement of such asserted liability, except to the extent
such participation is requested by the Indemnifying Party, in which event the
Indemnified Party shall be reimbursed by the Indemnifying Party for reasonable
additional legal expenses and out-of-pocket expenses, and except in the case of
a Third Party Claim relating to an actual or potential Loss to which Section
12.4(e) applies in which the Indemnified Party is UniCapital or the Newcos.
(c) No Indemnifying Party shall, in the defense of any Third
Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense of
any Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this Article
12, if at any time, in the reasonable opinion of UniCapital or the Newcos as the
Indemnified Party (notice of which opinion shall be given in writing to the
Indemnifying Party), any Third Party Claim seeks material prospective relief
which could have a material adverse effect on any such Indemnified Party or any
subsidiary, then such Indemnified Party shall have the right to control or
assume (as the case may be) the defense of any such Third Party Claim and the
amount of any judgment or settlement and the reasonable costs and expenses of
defense (including, but not limited to, fees and disbursements of counsel and
experts, as well as any sampling, testing, investigation, removal, treatment or
remediation undertaken by UniCapital or the Newcos and all counseling or
engineering fees and expenses related thereto) shall be included as part of the
indemnification obligations of the Indemnifying Party hereunder. If the
Indemnified Party elects to exercise such right, then the Indemnifying Party
shall have the right to participate in, but not control, the defense of such
Third Party Claim at the sole cost and expense of the Indemnifying Party.
40
47
12.5 LIMITATIONS ON INDEMNIFICATION. No Indemnified Party shall assert
any claim (other than a Third Party Claim) for indemnification hereunder until
such time as the aggregate of all claims which such Indemnified Party may have
against an Indemnifying Party shall exceed $17,500, at which time an Indemnified
Party shall be entitled to seek indemnification for all claims pursuant to this
Article 12, but only to the extent such claims, in the aggregate, exceed
$17,500. For purposes of the preceding sentence, UniCapital and the Newcos shall
be considered to be a single Indemnifying and Indemnified Party and the Partners
shall be considered to be a single Indemnifying and Indemnified Party.
Notwithstanding any other term of this Agreement, in no event shall any Partner
be liable under this Article 12 for an amount which exceeds the aggregate value
(determined at the Closing Date) of the Consideration received by such Partner
under this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, the limitations upon indemnification contained in this Section 12.5
shall not apply to Losses arising out of (i) any breach of the representations
and warranties of the Partners contained in Sections 6.3, 6.5, 6.14, 6.27 and
6.33 hereof, (ii) litigation expenses net of applicable reserves reflected on
the balance sheets of the Partnership at the Audited Balance Sheet Date and
(iii) any Material Adverse Amendments pursuant to Section 8.14 hereof.
12.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree that
representations and warranties made by the parties in this Agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
survive for a period of one year from the Closing Date (which date is
hereinafter called the "Expiration Date"), except that:
(a) the representations and warranties contained in Section
6.27 hereof shall survive until such time as the limitations period has run for
all tax periods ended prior to the Closing Date, which shall be deemed to be the
Expiration Date for purposes of this clause (a) and claims arising from a breach
of the representations and warranties contained in such Section 6.27;
(b) the representations and warranties contained in Section
6.28(g) hereof shall survive until such time as one full fiscal year's cycle of
transactions occurring entirely after December 31, 1999, shall have been
processed and UniCapital's consolidated financial statements for the fiscal year
in which the last such transaction to be processed occurred have been audited,
which shall be deemed to be the Expiration Date for purposes of this clause (b)
and claims arising from a breach of the representations and warranties contained
in such Section 6.28(g);
(c) the representations and warranties contained in Section
6.33 hereof shall survive for a period of five years from the Closing Date,
which shall be deemed the Expiration Date for purposes of this clause (c) and
claims arising from a breach of the representations and warranties contained in
such Section 6.33;
(d) solely for purposes of Section 12.1(c) hereof, and solely
to the extent that UniCapital actually incurs liability under the Securities
Act, the Exchange Act, or any other
41
48
federal or state securities laws, the representations and warranties set forth
herein shall survive until the expiration of any applicable limitations period,
which shall be deemed to be the Expiration Date for purposes of this clause (d)
and claims arising under such laws;
(e) the representations and warranties of the Partners
contained in Section 6.5 hereof shall survive the Closing Date without time
limitation; and
(f) any representations and warranties which serve as a basis
of the indemnity obligations of the Partners under Section 12.2 shall survive
the Closing Date without time limitation.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION BY UNICAPITAL. UniCapital may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Partners in the observance or due and
timely performance of any of the covenants, agreements or conditions contained
herein, and the curing of such default shall not have been made on or before the
Closing Date and shall not reasonably be expected to occur, (b) if UniCapital in
its sole judgment determines that any condition exists which has made or could
reasonably be expected to make any of the representations or warranties
contained in Article 6 hereof untrue in any material respect or (c) if
UniCapital in its sole judgment determines that information disclosed on the
schedules to the Agreement delivered pursuant to Section 8.14 has or could
reasonably be expected to have a material adverse effect on the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Partnership.
13.2 TERMINATION BY THE PARTNERS. Prior to the initial filing of the
Registration Statement with the SEC, the Partners may, by notice in the manner
hereinafter provided on or before such initial filing, terminate this Agreement
(a) in accordance with Section 17.4(b) or (b) if a material default shall be
made by UniCapital in the observance or due and timely performance of any of the
covenants, agreements or conditions contained herein, and the curing of such
default shall not have been made on or before such initial filing. From and
after the initial filing of the Registration Statement with the SEC, the
Partners shall have no right to terminate this Agreement.
13.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically:
(a) if the Registration Statement has not been declared
effective by June 30, 1998 or if the Closing has not occurred on or before July
15, 1998; or
(b) if, between the date of the execution of the Underwriting
Agreement and the Closing Date, the Underwriting Agreement is terminated
pursuant to the terms thereof.
42
49
13.4 LIQUIDATED DAMAGES. (a) If the Closing fails to occur because of
the default of the Partnership or the Partners, then, in addition to the other
remedies available to UniCapital at law for fraud, in equity or pursuant to this
Agreement, the Partners shall pay to UniCapital the sum of $500,000 as
liquidated damages. It is hereby agreed that UniCapital's damages in the event
of a termination or default by the Partnership hereunder are uncertain and
impossible to ascertain and that the foregoing constitutes a reasonable
liquidation of such damages and is intended not as penalty but as liquidated
damages.
(b) If the Closing does not occur on or before April 30, 1998
and such failure is not the result of a default of the Partnership or the
Partners, then UniCapital shall reimburse the Partners at the rate of $140,000
per month for each month (prorated for any portion of a month) between April 30,
1998 and the Closing, provided, that if Closing does not occur on or before June
30, 1998 then this Agreement shall terminate and the amount to be so paid shall
not exceed $280,000. If Closing occurs before termination of this Agreement,
then any payment under this Section shall be paid in shares of UniCapital common
stock valued at the IPO price of the UniCapital Stock; otherwise, any payment
under this Section shall be paid in cash.
14. NONCOMPETITION AND NONSOLICITATION
14.1 NONCOMPETITION.
(a) In order to protect the value and goodwill of the
Partnership and its business, each Partner covenants that, for the period ending
two years after the Closing Date, such Partner will not, directly or indirectly,
own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as a partner,
principal, agent, representative, consultant or otherwise with, or use or permit
such Partner's name to be used in connection with, any business or enterprise
which is engaged directly or indirectly in competition anywhere in the United
States with the business conducted by UniCapital, the Newcos or any of its or
their respective subsidiaries or affiliates or with any business engaged in
originating, servicing or securitizing leases or other specialty financing
products or services (the "Restricted Business"). Each Partner recognizes that
the Restricted Business is expected to be conducted throughout the United States
and that more narrow geographical limitations of any nature on this
non-competition covenant (and the non-solicitation covenant set forth in
subsection (b)) are therefore not appropriate. The foregoing restriction shall
not be construed to prohibit the ownership by a Partner as a passive investment
of not more than five percent of any class of securities of any corporation
which is engaged in any of the foregoing businesses having a class of securities
registered pursuant to Section 12 of the Exchange Act.
(b) Each Partner further covenants that for the period ending
two years after the Closing Date, such Partner will not, either directly or
indirectly, (i) call on or solicit any customers or prospective customers of the
Restricted Business, or (ii) solicit the employment of
43
50
any person who is employed by UniCapital, the Newcos or any of its or their
respective subsidiaries or affiliates in the Restricted Business during such
period.
(c) Each Partner recognizes and acknowledges that by reason of
such Partner's relationship to the Partnership, such Partner has had access to
confidential information relating to the Restricted Business. Each Partner
acknowledges that such confidential information is a valuable and unique asset
and covenants that such Partner will not disclose any such confidential
information after the Closing Date to any person for any reason whatsoever.
(d) Notwithstanding the provisions of this Section 14.1,
affiliates of the Partners may continue to own, manage and dispose of their
interests in the PLC Lease Receivables 1993-A Trust and the 1995 Pendulum
Investment Trust and the assets owned or controlled by such Trusts.
14.2 DAMAGES. Each Partner acknowledges and agrees that measuring
economic losses to UniCapital and the Newcos as a result of the breach of the
foregoing covenants in this Article 14 would be impossible, and that any breach
of the foregoing covenants would result in immediate and irreparable damage to
UniCapital and the Newcos for which they would have no other adequate remedy.
Accordingly, the Partners agree that, in the event of a breach by them of any of
the foregoing covenants, such covenants may be enforced by UniCapital or the
Newcos by, without limitation, injunctions and restraining orders.
14.3 REASONABLE RESTRAINT. The Parties agree that the foregoing
covenants in this Article 14 impose a reasonable restraint upon the Partners in
light of the activities and business of UniCapital on the date of the execution
of this Agreement and the current and future plans of UniCapital and the Newcos
(as successors to the businesses of the Partnership), and that any violation
will result in irreparable injury to UniCapital.
14.4 SEVERABILITY; REFORMATION. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, if any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
14.5 INDEPENDENT COVENANT. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Partner
against the Partnership, the Partnership's Subsidiaries, the Newcos or
UniCapital, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of such covenants. The parties
specifically agree that the period of two years stated above shall be computed
by excluding from such computation any time during which any Partner is in
violation of any provision of this Article 14 and any time during which there is
pending in any court of competent jurisdiction any action
44
51
(including any appeal from any judgment) brought by any person, whether or not a
party to this Agreement, in which action UniCapital or the Newcos seek to
enforce the agreements and covenants of the Partners or in which any person
contests the validity of such agreements and covenants or their enforceability
or seeks to avoid their performance or enforcement.
14.6 MATERIALITY. The Partners hereby acknowledge and agree that the
covenants contained in this Article 14 are a material and substantial part of
this transaction and are entered into in connection with and as an inducement to
the acquisition by UniCapital and the Newcos of the businesses of the
Partnership.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 PARTNERS. The Partners recognize and acknowledge that they have in
the past, currently have, and in the future may possibly have, access to certain
confidential information of the Partnership, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Partnership and the Partnership's business. The
Partners agree that they will not disclose any confidential information to any
person, firm, corporation, association or other entity for any purpose or reason
whatsoever, except (i) to authorized representatives of UniCapital, (ii) upon
the written consent of an authorized representative of UniCapital or (iii) as
may be required by law or order of a court of competent jurisdiction, unless the
Partners can show that such information has become known to the public generally
through no fault of the Partners. Prior to disclosing any confidential
information required by law or order of a court of competent jurisdiction, the
Partners shall provide UniCapital with prompt notice of the disclosure
requirement so that UniCapital may take whatever action it deems appropriate to
prohibit such disclosure. In the event of a breach or threatened breach by the
Partners of the provisions of this Section 15.1, UniCapital and the Newcos shall
be entitled to an injunction restraining Partners from disclosing, in whole or
in part, such confidential information. Nothing herein shall be construed as
prohibiting UniCapital and the Newcos from pursuing any other available remedy
for such breach or threatened breach, including the recovery of damages.
15.2 UNICAPITAL. UniCapital recognizes and acknowledges that it has in
the past, currently has, and prior to the Closing Date will have, access to
certain confidential information solely of the Partnership in connection with
their respective businesses. UniCapital agrees that, prior to the Closing Date,
it will not disclose any such confidential information to any person, firm,
corporation, association, or other entity for any purpose or reason whatsoever
without prior written consent of the Partners or except to authorized
representatives of UniCapital or as may be required by law or order of a court
of competent jurisdiction, unless UniCapital can show that such information has
become known to the public generally through no fault of UniCapital. Prior to
disclosing any confidential information required by law or order of a court of
competent jurisdiction, UniCapital shall provide the Partners with prompt notice
of the disclosure requirement so that the Partners may take whatever action they
deem appropriate to prohibit such
45
52
disclosure. In the event of a breach or threatened breach by UniCapital of the
provisions of this Section 15.2, the Partners shall be entitled to an injunction
restraining UniCapital from disclosing, in whole or in part, such confidential
information. Nothing contained herein shall be construed as prohibiting the
Partners from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages.
15.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused for which they would have no other
adequate remedy, UniCapital, the Newcos and the Partners agree that, in the
event of a breach by any of them of the foregoing covenant, the covenant may be
enforced against them by injunctions and restraining orders.
16. LOCK-UP AGREEMENTS
16.1 AGREEMENT. In connection with the IPO, for good and valuable
consideration, and to induce the underwriters that may participate in the IPO to
continue their efforts in connection with the IPO, each Partner hereby agrees
that, without the prior written consent of Morgan Stanley & Co. Incorporated on
behalf of such underwriters, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the final
prospectus contained in the Registration Statement relating to the IPO (the
"Prospectus"), (a) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of UniCapital Stock or any securities
convertible into or exercisable or exchangeable for UniCapital Stock or (b)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of UniCapital Stock,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of UniCapital Stock or such other securities, in cash or
otherwise. In addition, each Partner agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters that
may participate in the IPO, it will not, during the period commencing on the
date of this Agreement and ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of UniCapital Stock or any security convertible into or exercisable
or exchangeable for Common Stock.
16.2 INTENDED THIRD PARTY BENEFICIARIES. Each Partner agrees that the
foregoing shall be binding upon their transferees, successors, assigns, heirs,
and personal representatives and shall benefit and be enforceable by the
underwriters in the IPO. Each Partner acknowledges and agrees that such
underwriters and Morgan Stanley & Co. Incorporated are intended third party
beneficiaries of the provisions of this Article 16, and that Morgan Stanley &
Co. Incorporated on behalf of such underwriters shall be entitled to enforce the
covenants contained in this Article 16. In furtherance of the foregoing,
UniCapital and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Article 16. The Partners also acknowledge and agree that none of the
46
53
companies or partnerships to be acquired as part of the Unified Transaction
shall have any rights as intended third-party beneficiaries under this
Agreement.
17. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
UNICAPITAL STOCK
17.1 INVESTMENT INTENT. The Partners acknowledge and agree that the
shares of UniCapital Stock to be delivered to the Partners pursuant to this
Agreement have not been and will not be registered under the Securities Act and
therefore may not be resold without compliance with the Securities Act. The
Partners represent and warrant that the shares of UniCapital Stock to be
acquired by the Partners pursuant to this Agreement are being acquired solely
for their own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
17.2 COMPLIANCE WITH LAW. The Partners covenant, warrant and represent
that none of the shares of UniCapital Stock distributed to such Partners
pursuant to this Agreement will be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of except after full compliance
with all of the applicable provisions of the Securities Act and the rules and
regulations of the SEC thereunder, and except after full compliance with any
applicable state securities laws.
17.3 ECONOMIC RISK; SOPHISTICATION. The Partners represent and warrant
that they are able to bear the economic risk of an investment in UniCapital
Stock acquired pursuant to this Agreement and can afford to sustain a total loss
of such investment. The Partners further represent and warrant that they (a)
fully understand the nature, scope and duration of the limitations on transfer
contained in this Agreement and (b) have such knowledge and experience in
financial and business matters that they are capable of evaluating the merits
and risks of the proposed investment and therefore have the capacity to protect
their own interests in connection with the acquisition of the UniCapital Stock.
17.4 INFORMATION SUPPLIED.
(a) The Partners represent and warrant that they have had an
adequate opportunity to ask questions and receive answers from the officers of
UniCapital concerning UniCapital, its business, operations, plans and strategy,
and the background and experience of its officers and directors. The Partners
represent and warrant that they have asked any and all questions that they may
have in the nature described in the preceding sentence and that all such
questions have been answered to their satisfaction.
(b) "Each Partner represents and warrants that such Partner
has received the draft Registration Statement, including the draft preliminary
prospectus that forms a part thereof, delivered to such Partner on or about
February 14, 1998 that describes, among other things,
47
54
UniCapital, the transaction contemplated hereby, the other acquisitions proposed
to be undertaken by UniCapital simultaneously with the transaction contemplated
hereby and the target companies of such other acquisitions. Each Partner
represents and warrants that such Partner has reviewed such draft Registration
Statement and draft preliminary prospectus and has had adequate opportunity to
ask questions of and receive answers to such Partner's satisfaction from the
officers of UniCapital concerning the matters described therein."
18. SECURITIES LEGENDS
The certificates evidencing the UniCapital Stock to be received by the
Partners hereunder will bear a legend substantially in the form set forth below
and containing such other information as UniCapital may deem appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS.
SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY LAWS,
UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL SATISFACTORY TO
THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
In addition, such certificates shall also bear (a) a legend reflecting the
restrictions contained in Article 16 and (b) such other legends as counsel for
UniCapital reasonably determines are required under the applicable laws of any
state.
19. GENERAL
19.1 COOPERATION. The Partners and UniCapital shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement. The
Partners will cooperate and use their best efforts to have the officers,
directors and employees of the Partnership prior to the Closing Date cooperate
with UniCapital on and after the Closing Date in furnishing information,
evidence, testimony and other assistance in connection with any actions,
proceedings, arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date.
48
55
19.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of UniCapital, and the heirs and legal representatives of the
Partners.
19.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Partners, the
Partnership, UniCapital and the Newcos and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto,
enforceable in accordance with its terms, and may be modified or amended only by
a written instrument executed by the Partners (subject to the limitations set
forth below), the Partnership, UniCapital and the Newcos acting through their
respective officers, duly authorized by their respective Boards of Directors;
provided, that the General Partner shall have the authority to approve and
execute any amendment to this Agreement on behalf of all of the Partners and
without the necessity of such General Partner obtaining consent or authorization
from any other Partner, unless such amendment relates to any representation or
warranty made by a Partner other than such General Partner which may only be
amended by the written agreement of such person; and provided further, that no
Partner shall have any power or authority to modify or amend this Agreement in
any respect from and after the initial filing of the Registration Statement with
the SEC.
19.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
19.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and each of UniCapital and the Newcos, on the one hand, and the
Partners, on the other hand, agrees to indemnify the other against all loss,
liability, cost damages or expense arising out of or related to claims for fees
or commissions of brokers employed or alleged to have been employed by such
indemnifying party.
19.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, UniCapital will pay the fees, expenses and disbursements
of UniCapital and the Newcos and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments thereto. Whether or not the transactions herein
contemplated shall be consummated, the Partners will pay the fees, expenses and
disbursements of the Partners and the Partnership and their respective agents,
representatives, accountants and counsel incurred in connection with the subject
matter of this Agreement and any amendments hereto and all other costs and
expenses incurred in the performance of this Agreement by the Partners and the
Partnership and in compliance with all conditions to be performed by the
Partners and the Partnership under this Agreement.
49
56
19.7 NOTICES. All notices and other communications hereunder shall be
in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to UniCapital or the Newcos, addressed to them at:
UniCapital Corporation
1111 Kane Concourse, Suite 301
Bay Harbor Island, FL 33154
Telephone: (305) 861-0603
Telefax: (305) 866-8449
with a copy to:
David A. Gerson
Morgan, Lewis & Bockius LLP
One Oxford Centre, Thirty-Second Floor
301 Grant Street
Pittsburgh, PA 15219
Telephone: (412) 560-3330
Telefax: (412) 560-3399
(b) If to the Partners, addressed to them in care of
the Partners' Representative at:
Mary B. Strong
1900 Grant Building
Pittsburgh, PA 15219
Telephone: (412) 338-3616
Telefax: (412) 560-3613
with a copy to:
50
57
Daniel B. Kenney
The Travelers Insurance Company
Securities 9PB
One Tower Square
Hartford, CT 06183-2030
Telephone: (860) 277-5254
Telefax: (860) 954-3730
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 19.7 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax is transmitted to the telefax number specified in this Section 19.7
(or in accordance with the latest unrevoked written direction from such party),
and the appropriate confirmation is received.
19.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to any of the
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. Each party to this Agreement: (a) agrees that any legal
action or proceeding under this Agreement shall be brought in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; (b) irrevocably submits to the jurisdiction of such
courts; (c) agrees not to assert any claim or defense that it is not personally
subject to the jurisdiction of such courts, that any such forum is not
convenient or the venue thereof is improper, or that this Agreement or the
subject matter hereof may not be enforced in such courts; and (d) agrees to
accept service of process on it by certified or registered mail or by any other
method authorized by law.
19.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
19.10 TIME. Time is of the essence with respect to this Agreement.
19.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
51
58
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
19.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
19.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
20. DEFINITIONS
20.1 "Accounts Receivable" is defined in Section 6.14.
20.2 "Acquisition Proposal" is defined in Section 8.10.
20.3 "Agent" is defined in Section 8.10.
20.4 "Agreement" is defined in the preamble to this Agreement.
20.5 "Audited Balance Sheet Date" is defined in Section 6.12(a).
20.6 "Audited Financial Statements" are defined in Section 6.12(a).
20.7 "Authorizations" are defined in Section 6.23.
20.8 "Benefit Plan" is defined in Section 6.22.
20.9 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
20.10 "Closing" is defined in Section 5.1.
20.11 "Closing Date" is defined in Section 5.2.
20.12 "Closing Date Balance Sheet" is defined in Section 3.1.
20.13 "Code" is defined in Section 6.22.
20.14 "Commonly Controlled Entity" is defined in Section 6.22.
52
59
20.15 "Consideration" is defined in Section 2.1.
20.16 "Contracts" are defined in Section 6.17.
20.17 "Disputed Amounts" are defined in Section 3.2.
20.18 "Environmental Laws" mean any and all applicable treaties, laws,
regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to- Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
20.19 "Environmental Liabilities" mean any and all Losses arising from
or related to any claim, proceeding, investigation, response or removal action,
remediation or other clean-up brought, prosecuted or undertaken by UniCapital,
the Newcos, any Governmental Entity or any other person or entity on the basis
of any violation of any Environmental Laws or pursuant to any requirement
imposed under any Environmental Laws (including any sampling, testing,
investigation, removal, treatment or remediation undertaken by UniCapital or the
Newcos so as to avoid any claim or violation or to comply with any requirement
and all counseling or engineering fees and expenses related thereto), and
arising from pre-Closing operations, events, circumstances or conditions at, on,
under or emanating from, or as a result of any pre-Closing off-site disposal of
Hazardous Substances from, any property currently or formerly owned, operated or
leased by the Partnership.
20.20 "Environmental Permits" mean all permits, licenses, approvals or
authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the Partnership.
20.21 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
20.22 "Escrow Property" is defined in Section 4.1(a).
20.23 "Exchange Act" is defined in Section 12.1.
53
60
20.24 "Expiration Date" is defined in Section 12.6.
20.25 "Financial Statements" are defined in Section 6.12(b).
20.26 "Foreign Plans" are defined in Section 6.22(i)(xiii).
20.27 "GAAP" is defined in Section 3.1.
20.28 "General Partner" is defined in Section 1.1.
20.29 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
20.30 "Hazardous Substance" mean all explosive or regulated radioactive
materials or substances, hazardous or toxic materials, wastes or chemicals,
petroleum and petroleum products (including crude oil or any fraction thereof),
asbestos or asbestos containing materials, and all other materials or chemicals
regulated pursuant to any Environmental Law, including materials listed in 49
C.F.R. ss. 172.101 and materials defined as hazardous pursuant to Section
101(14) of CERCLA.
20.31 "Indemnified Party" is defined in Section 12.4(a).
20.32 "Indemnifying Party" is defined in Section 12.4(a).
20.33 "Indemnity Escrow Agent" is defined in Section 4.1(a).
20.34 "Independent Accounting Firm" is defined in Section 3.2.
20.35 "Intellectual Property" is defined in Section 6.28(a).
20.36 "IPO" is defined in the recitals to this Agreement.
20.37 "Laws" is defined in Section 8.6.
20.38 "Lease Documents" are defined in Section 6.35.
20.39 "Leases" are defined in Section 6.35.
20.40 "Liabilities" are defined in Section 6.13(a).
20.41 "Limited Partner" is defined in Section 1.1.
54
61
20.42 "Losses" are defined in Section 12.1.
20.43 "Material Adverse Amendment" is defined in Section 8.14.
20.44 "Net Worth Deficiency" is defined in Section 3.1.
20.45 "Newco" is defined in the preamble to this Agreement.
20.46 "Newcos" is defined in the preamble to this Agreement.
20.47 AOrdinary course@ or Aordinary course of business@ means the
conduct of business as conducted by the Partnership prior to the date of this
Agreement consistent in nature and, where relevant, amount with past practices.
20.48 "Partners" are defined in the preamble to this Agreement.
20.49 "Partnership" is defined in the preamble to this Agreement.
20.50 "Partnership Interest" is defined in the preamble to this
Agreement.
20.51 "Partnership Documents" is defined in Section 6.2.
20.52 "Partners' Representative" is defined in Section 3.3.
20.53 "PCBs" are defined in Section 6.32(h).
20.54 "Pension Plan" is defined in Section 6.22.
20.55 "Permits" mean all permits, licenses, franchises, approvals and
authorizations from any Governmental Entity that are owned or held by the
Partnership, or held by any Partners that relate to the operations of the
Partnership.
20.56 "Prospectus" is defined in Section 16.1.
20.57 "Registration Statement" is defined in Section 9.4.
20.58 "Regulations" are defined in Section 6.23.
20.59 "Release" means any spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of any
Hazardous Substance in, into, onto or through the environment (including ambient
air, surface water, ground water, soils, land surface, subsurface strata,
workplace or structure).
55
62
20.60 "Restricted Business" is defined in Section 14.1(a).
20.61 "SEC" is defined in Section 9.4.
20.62 "Securities Act" is defined in Section 6.16.
20.63 "Subsidiary" is defined in Section 6.1.
20.64 "Taxes" are defined in Section 6.27.
20.65 "Tax Returns" are defined in Section 6.27.
20.66 "Third Party Claim" is defined in Section 12.4(a).
20.67 "Unaudited Financial Statements" are defined in Section 6.12(b).
20.68 "Underwriting Agreement" is defined in Section 5.1.
20.69 "UniCapital" is defined in the preamble to this Agreement.
20.70 "UniCapital Documents" are defined in Section 7.3.
20.71 "UniCapital Stock" is defined in Section 2.1(a).
20.72 "Welfare Plan" is defined in Section 6.22.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
56
63
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNICAPITAL CORPORATION
By: /s/ Robert J. New
------------------
Name: Robert J. New
Title: Chairman and Chief Executive Officer
PFSC ACQUISITION CORP.
By: /s/ Robert J. New
------------------
Name: Robert J. New
Title: President
PFSC LIMITED ACQUISITION CORP.
By: /s/ Robert J. New
------------------
Name: Robert J. New
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
57
64
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PORTFOLIO FINANCIAL SERVICING
COMPANY, L.P.
By: Equipment Servicing Corp.
Its Sole General Partner
By: /s/ Mary B. Strong
------------------
Name: Mary B. Strong
Title: Treasurer
EQUIPMENT SERVICING CORP.
By: /s/ Mary B. Strong
------------------
Name: Mary B. Strong
Title: Treasurer
ILC ACQUISITION PARTNERS, L.P.
By: IAP Corp.
Its Sole General Partner
By: /s/ Mary B. Strong
------------------
Name: Mary B. Strong
Title: Treasurer
58
65
ANNEXES
ANNEX I [Calculation and Composition of Consideration]
ANNEX II [Form of Indemnity Escrow Agreement]
ANNEX III [Form of Employment Agreement]
SCHEDULES
SCHEDULE 6.1 [Qualified Jurisdictions]
SCHEDULE 6.5 [Partnership Interests]
SCHEDULE 6.8 [Subsidiaries]
SCHEDULE 6.9 [Predecessor Status]
SCHEDULE 6.12 [Financial Statements]
SCHEDULE 6.13 [Liabilities and Obligations]
SCHEDULE 6.14 [Accounts and Notes Receivables]
SCHEDULE 6.15 [Permits]
SCHEDULE 6.16 [Real and Personal Property]
SCHEDULE 6.17 [Contracts and Commitments]
SCHEDULE 6.20 [Insurance]
SCHEDULE 6.21 [Employees]
SCHEDULE 6.22 [Employee Benefit Plans]
SCHEDULE 6.23 [Compliance w/ Law; Authorizations]
SCHEDULE 6.25 [Litigation]
SCHEDULE 6.28 [Intellectual Property]
SCHEDULE 6.28(e) [Registered Intellectual Property]
SCHEDULE 6.29 [Approvals]
SCHEDULE 6.30 [Amended or Terminated Contracts]
SCHEDULE 6.31 [Deposit Accounts; Powers of Attorney]
SCHEDULE 7.8 [Pending Litigation]
SCHEDULE 7.11 [Other Contracts and Agreements]
SCHEDULE 9.2 [List of Employment Agreements]
The registrant agrees to furnish a copy of each omitted schedule, exhibit or
annex to this Exhibit 2.10 to the Commission supplementally upon request
therefor.