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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October
___, 1996, by and among Service Experts, Inc., a Delaware corporation ("SEI"),
________________ Acquisition Sub, Inc., a Tennessee corporation and a wholly
owned subsidiary of SEI ("Sub"), and __________________, ______________
corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company operates a heating, ventilating and air
conditioning ("HVAC") service and replacement business;
WHEREAS, the Boards of Directors of SEI and the Company each have
determined that a business combination between SEI and the Company is in the
best interests of their respective companies and shareholders and presents an
opportunity for their respective companies to achieve long-term strategic and
financial benefits, and, accordingly, have agreed to effect the merger provided
for herein upon the terms and subject to the conditions set forth herein;
WHEREAS, for federal income tax purposes, it is intended that the
merger provided for herein shall qualify as a reorganization within the meaning
of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, SEI, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the merger.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. The Merger.
(a) The Merger. Subject to the terms and
conditions of this Agreement, at the Effective Time (as defined in Section
1(c)), the Company shall be merged with and into Sub in accordance with this
Agreement, and the separate corporate existence of the Company shall thereupon
cease (the "Merger"). Sub shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"). The Merger
shall have the effect set forth under the applicable provisions of the
Tennessee Business Corporation Act and the ___________ Business Corporation Act.
(b) The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place, following
satisfaction of all of the conditions set forth in Sections 8, 9 and 10 hereof,
or the waiver thereof (the "Closing Date"), at the offices of Waller Lansden
Dortch & Davis, A Professional Limited Liability Company, in Nashville,
Tennessee, or at such other location as the parties shall mutually agree.
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(c) Effective Time. If all the conditions to the
Merger set forth in Sections 8, 9 and 10 shall have been fulfilled or waived in
accordance herewith and this Agreement shall not have been terminated as
provided in Section 11, the parties hereto shall cause Articles of Merger to be
properly executed and filed in accordance with the relevant provisions of the
Tennessee Business Corporation Act and the ___________ Business Corporation Act
on the Closing Date. The Merger shall become effective at the time of filing of
the Articles of Merger with the Secretaries of State of each of Tennessee and
_____________, or at such later time which the parties hereto shall have
agreed upon and designated in such filing as the effective time of the Merger
(the "Effective Time").
Section 2. Charter and Bylaws of the Surviving Corporation.
(a) Charter. The Charter of Sub in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation, until duly amended in accordance with applicable
law.
(b) Bylaws. The Bylaws of Sub in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation, until duly amended in accordance with applicable law.
Section 3. Directors and Officers of the Surviving Corporation.
(a) Directors. The directors of Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable law.
(b) Officers. The officers of Sub immediately
prior to the Effective Time shall be the officers of the Surviving Corporation
as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable law.
Section 4. Effect of the Merger on Securities of Sub and the
Company.
(a) Sub Stock. At the Effective Time, each share
of Common Stock, $.01 par value per share, of Sub outstanding immediately prior
to the Effective Time shall be converted into and exchanged for one validly
issued, fully paid and non-assessable share of Common Stock, $.01 par value, of
the Surviving Corporation.
(b) Company Securities.
(i) At the Effective Time, the shares of
Common Stock, $_____ par value per share (the "Company Common Stock"),
of the Company issued and outstanding immediately prior to the
Effective Time, other than shares to be cancelled pursuant to Section
4(b)(iii) and other than Dissenting Shares (as defined in Section
4(b)(iv), shall, by virtue of the Merger and without any action on the
part of the holder
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thereof, be converted into the right to receive shares of Common
Stock, $.01 par value per share (the "SEI Common Stock"), of SEI and
cash in accordance with Section 4(c) hereof.
(ii) As a result of the Merger and
without any action on the part of the holder thereof, at the Effective
Time all shares of Company Common Stock (other than Dissenting Shares)
shall cease to be outstanding and shall be cancelled and retired and
shall cease to exist, and each holder of shares of Company Common
Stock shall thereafter cease to have any rights with respect to such
shares of Company Common Stock, except the right to receive, without
interest, the SEI Common Stock and cash payable in accordance with
Section 4(c)(i) upon the surrender of a certificate representing such
shares of Company Common Stock.
(iii) Each share of Company Common Stock
issued and held in the Company's treasury at the Effective Time shall,
by virtue of the Merger, cease to be outstanding and shall be
cancelled and retired without payment of any consideration therefor.
(iv) Shares of Company Common Stock (the
"Dissenting Shares") held by a shareholder who has properly exercised
dissenters rights with respect thereto in accordance with Section
_______ of the ____________ Business Corporation Act shall not be
converted into shares of SEI Common Stock or cash, but shall, from and
after the Effective Time, represent only the right to receive such
consideration as may be determined to be due such dissenting
shareholder pursuant to the Business Corporation Act. From and after
the Effective Time, a shareholder of the Company who has properly
exercised such dissenters rights shall no longer retain any rights of
a shareholder of the Company, except those provided by the __________
Business Corporation Act.
(c) Purchase Price; Exchange of Certificates.
(i) As of the Effective Time and except
as provided in Section 4(c)(ii) below, SEI shall deliver to the
holders of shares of Company Common Stock (the "Shareholders") an
aggregate of $_______ (the "Purchase Price"), consisting of the
certificates representing shares of SEI Common Stock based on a per
share price of $_____ per share and the cash to be issued pursuant to
Section 4(b) and paid pursuant to this Section 4(c) in exchange for
certificates representing outstanding shares of Company Common Stock.
The Purchase Price shall be allocated among the Shareholders as set
forth on Schedule 4(c)(i) attached hereto.
(ii) An aggregate of 10% of the shares of
SEI Common Stock to be issued pursuant to this Section 4(c) shall be
held in escrow pursuant to the terms and conditions of the escrow
agreement attached hereto as Schedule 4(c)(ii) (the "Escrow
Agreement").
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(iii) At or after the Effective Time,
there shall be no transfers on the stock transfer books of the Company
of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time.
(iv) No fractional shares of SEI Common
Stock shall be issued pursuant hereto. In lieu of the issuance of any
fractional share of SEI Common Stock, cash adjustments will be paid to
holders in respect of any fractional share of SEI Common Stock that
would otherwise be issuable, and the amount of such cash adjustment
shall be equal to such fractional proportion of the "Average Price" of
a share of SEI Common Stock. The "Average Price" of a share of SEI
Common Stock shall be the average of the closing sales prices thereof
as quoted on The Nasdaq Stock Market's National Market (the "Nasdaq
National Market") (as reported by The Wall Street Journal or, if not
reported thereby, by another authoritative source) over the ten (10)
business days immediately preceding the Closing Date.
(d) Adjustment of Shares of Stock. In the event
that, subsequent to the date of this Agreement but prior to the Effective Time,
the outstanding shares of SEI Common Stock shall have been changed into a
different number of shares or a different class as a result of a stock split,
reverse stock split, stock dividend, subdivision, reclassification, split,
combination, exchange, recapitalization or other similar transaction, the
number of shares of SEI Common Stock to be delivered pursuant to this Agreement
shall be appropriately adjusted.
(e) Pre-Closing Adjustments to Purchase Price. As
promptly as practicable after the date hereof, the parties shall make initial
adjustments to the Purchase Price (the "Pre-Closing Adjustments") based on the
differences between (i) the Company's net income for the 12 month period ended
______________ (the "Valuation Period"), as presented in the Company's
financial statements for such period, with such adjustments as are set forth on
Schedule 4(e) attached hereto, and (ii) the Company's net income for the
Valuation Period, as presented in the "Final Valuation Statement" with such
adjustments as are deemed appropriate by SEI's independent certified public
accountants. SEI will cause a restated statement of income for the Valuation
Period (the "Final Valuation Statement") to be prepared utilizing any
adjustments identified as a result of the audit and/or review of the financial
statements of the Company by SEI's independent certified public accountants.
SEI shall deliver a schedule to the Shareholders detailing any Pre-Closing
Adjustments and describing in detail the differences between the Purchase
Price, as adjusted, and the amount set forth as the Purchase Price in this
Agreement. Such schedule shall be delivered to the Shareholders with a copy of
the Final Valuation Statement. The Final Valuation Statement shall be prepared
in accordance with generally accepted accounting principles.
(f) Post Closing Adjustments to Purchase Price.
(i) Promptly following the Closing Date,
SEI will cause to be prepared by its independent certified public
accountants a balance sheet of the Company as of the close of business
on the Closing Date (the "Closing Balance Sheet"). SEI shall
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furnish to the Shareholders the Closing Balance Sheet within forty-five (45)
days after the Closing Date.
(ii) Subject to the provisions of Section
4(f)(iii) below, within ninety (90) days after the Closing Date (or as
soon thereafter as possible), the parties shall make final adjustments
to the Purchase Price (the "Post Closing Adjustments") based on the
following:
(A) In the event the Company's
shareholders' equity (as presented in the Company's Closing
Balance Sheet) as a percentage of net sales (as presented in
the Company's Final Valuation Statement) is less than ten
percent (10%), the Purchase Price will be reduced by an amount
equal to the capital contribution required to result in
shareholders' equity as a percentage of net sales equaling ten
percent (10%).
(B) In the event the Company's
shareholders' equity (as presented in the Company's Closing
Balance Sheet) as a percentage of net sales (as presented in
the Company's Final Valuation Statement) is greater than ten
percent (10%), the Purchase Price will be increased by an
amount equal to the distribution required to result in
shareholders' equity as a percentage of net sales equaling ten
percent (10%). Any such increase in Purchase Price shall be
offset by the reduction in Purchase Price, if any, set forth
in subparagraph (D) below.
(C) In the event a Shareholder is
indebted to the Company, the Purchase Price payable to such
Shareholder will be reduced by an amount equal to the
indebtedness owing to the Company at the time of the Closing.
Any such reduction shall first be applied to the cash portion
of the Purchase Price and then to the shares of the SEI Common
Stock.
(D) In the event the Company's
Closing Balance Sheet includes any indebtedness, other than
indebtedness incurred in connection with the purchase of fixed
assets subsequent to the Valuation Period, the Purchase Price
will be reduced by an amount equal to the indebtedness
outstanding on the Closing Date. Any such reduction shall
first be applied to the cash portion of the Purchase Price and
then to the shares of the SEI Common Stock.
(E) SEI shall deliver a schedule to
the Shareholders detailing any Post Closing Adjustments and
detailing the differences between the Purchase Price, as
adjusted, and the amount paid as the Purchase Price on the
Closing Date. Such schedule shall be delivered to the
Shareholders with a copy of the Closing Balance Sheet.
(iii) Should the Shareholders dispute the
Post Closing Adjustments proposed by SEI or the accuracy of the
Closing Balance Sheet, they shall
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promptly (and in no event later than twenty (20) days after receipt of
the Closing Balance Sheet and the required schedule of Post Closing
Adjustments) advise SEI in writing. If after thirty (30) days after
delivery of the Closing Balance Sheet, SEI and the Shareholders are
unable to agree upon the amount of the Post Closing Adjustments, the
Shareholders and SEI shall engage any "Big Six" certified public
accounting firm not under contract with either the Company or SEI (the
"Accountants") to review the Closing Balance Sheet and the proposed
Post Closing Adjustments and determine the amount thereof, such
determination to be made as soon as practicable. In making such review
and determination, the Accountants shall utilize the terms and
provisions of this Agreement including, without limitation, the
provisions of Section 4(f)(v) hereof. The decision of the Accountants
shall be binding on both the Shareholders and SEI. Each of SEI and the
Shareholders shall pay one-half the reasonable expenses of engagement
of the Accountants.
(iv) Within thirty (30) days of the
Shareholders' receipt of the Closing Balance Sheet and the required
schedule of Post Closing Adjustments (or, if the Shareholders dispute
the Post Closing Adjustments, within ten (10) days of the resolution
or determination of the adjustments in accordance with Section
4(f)(iii) above), either (A) the Shareholders shall pay SEI in cash or
in the form of shares of SEI Common Stock (based on a price of $______
per share) the amount by which the Purchase Price paid on the Closing
Date exceeds the Purchase Price, as adjusted, or (B) SEI shall pay the
Company in cash or in the form of shares of SEI Common Stock (based on
a price of $______ per share) the amount by which the Purchase Price
paid on the Closing Date is less than the Purchase Price, as adjusted.
(v) The Closing Balance Sheet shall be
prepared in accordance with generally accepted accounting principles.
Section 5. Representations and Warranties of the Company. The
Company represents and warrants to SEI as follows as of the date hereof and
also as of the Closing Date:
(a) Corporate Organization; Governing Documents
of the Company.
(i) The Company is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation. The Company has all requisite corporate power
and authority to own or lease all of its properties or assets and
holds all licenses, permits and other required authorizations from
governmental authorities necessary to conduct its business as it is
now being conducted. The Company is duly qualified to do business and
is in good standing in the jurisdictions set forth in Schedule 5(a),
which includes every jurisdiction in which the failure to be so
qualified or in good standing would have a material adverse effect on
(A) the Company's ability to perform its obligations under this
Agreement and all accompanying documents to be executed and delivered
by the Company in connection with the Merger (the "Transaction
Documents") or (B) the assets, results of operations or prospects of
the Company.
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(ii) A copy of the Company's Articles of
Incorporation and Bylaws, as amended to the date hereof, the books of
account, minute books, stock record books and other records of the
Company, all of which have been made available to SEI, are complete
and correct and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal
controls. The minute books of the Company contain accurate and
complete records of all meetings of, and corporate action taken by,
the Shareholders, the Board of Directors and committees of the Board
of Directors of the Company, and no meeting of any such Shareholders,
Board of Directors or committee has been held for which minutes have
not been prepared and are not contained in such minute books.
(b) Capitalization.
(i) The authorized capital stock of the
Company consists of ________ shares of Company Common Stock, ________
shares of which are issued and outstanding as of the date hereof.
There are no other classes of securities of the Company outstanding.
All of the shares of Company Common Stock are listed and held of
record as indicated on Schedule 5(b) and have been duly authorized and
validly issued and are fully paid and nonassessable. There are no
contracts relating to the issuance, sale, transfer or registration of
the Company Common Stock or any other securities of the Company. There
are no options, warrants, preemptive rights or other rights to
purchase the shares of Company Common Stock or any other securities of
the Company. None of the shares of Company Common Stock or other
securities of the Company were issued in violation of the Securities
Act or preemptive rights of any past or present holder of the Company
Common Stock. There has been no transaction or action taken with
respect to the Company Common Stock in contemplation of the Merger
that would prevent the Company from accounting for the Merger as a
reorganization within the meaning of Section 368 of the Code.
(ii) There is no plan or intention by any
of the Shareholders who own one percent (1%) or more of the Company
Common Stock, and to the best knowledge of management of the Company,
there is no plan or intention on the part of the remaining
Shareholders to sell, exchange or otherwise dispose of a number of
shares of SEI Common Stock to be received by them in the Merger that
would reduce the Shareholders' ownership of SEI Common Stock to a
number of shares having a value, as of the Effective Time, of less
than seventy-five percent (75%) of the value of all of the formerly
outstanding shares of Company Common Stock as of the Effective Time.
(c) Authorization and Validity. The Company has
full corporate power and authority to execute and deliver this Agreement and,
subject to the approval of the Shareholders, to consummate the transactions
contemplated hereby. The Board of Directors of the Company has duly and validly
approved this Agreement and the transactions contemplated hereby, has
authorized the execution and delivery of this Agreement, has directed that this
Agreement and the transactions contemplated hereby be submitted to the
Shareholders for
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approval at a meeting of such Shareholders and, except for the adoption of this
Agreement by the Shareholders, no other corporate proceedings on the part of
the Company are necessary to consummate the transactions contemplated hereby.
This Agreement, when executed, will constitute the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(d) No Defaults; Absence of Conflicts. The
Company is not in default under, nor has any event occurred which, with the
lapse of time or action by a third party, could result in a default under, any
outstanding indenture, mortgage, contract or agreement to which the Company is
a party. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement will not (i)
violate any provision of, or result in the breach of, or constitute a default
under, or conflict with, (A) any terms or provisions of the Articles of
Incorporation or Bylaws of the Company or any resolution of the Company's Board
of Directors, (B) any law the violation of which would result in a material
liability to the Company, or (C) any order, writ, injunction or decree of any
court, governmental agency or arbitration tribunal; (ii) constitute a violation
of or a default under, or a conflict with, any term or provision of any
contract, commitment, indenture, lease or other agreement, or any other
restriction of any kind to which the Company is a party or by which the Company
is bound; (iii) cause, or give any party grounds to cause (with or without
notice, the passage of time or both) the maturity of any liability or
obligation of the Company to be accelerated, or increase any such liability or
obligation; or (iv) create any lien, encumbrance or restriction upon any of the
assets or properties of the Company.
(e) Subsidiaries, Investments and Predecessors.
Except as set forth on Schedule 5(e), the Company has not owned and does not
currently own, directly or indirectly, beneficially or equitably, any capital
stock or other equity, ownership or proprietary interest in any corporation,
partnership, limited liability company, association, trust, joint venture or
other entity. Set forth on Schedule 5(e) is a listing of all predecessor
companies of the Company, including the names of any entities from whom the
Company previously acquired material assets, and any other entity of which the
Company has been a subsidiary or division. Except as listed on Schedule 5(e),
the Company has not sold or disposed of, by way of asset sale, stock sale,
spin-off or otherwise, any material assets or business of the Company.
(f) Financial Statements. The financial
statements of the Company for the fiscal years ended December 31, 1993, 1994
and 1995 and the audit report thereon of _______________, independent auditors,
copies of which are attached hereto as Schedule 5(f)(i), are true, correct and
complete, have been prepared in accordance with generally accepted accounting
principles, and fairly and accurately present the financial and business
condition of the Company as of the dates thereof and the results of the
operations of the Company for the periods covered thereby. The financial
statements set forth in Schedule 5(f)(i) are collectively, together with the
notes thereto, referred to as the "Financial Statements."
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Except as reflected on Schedule 5(f)(ii), the Financial Statements accurately
reflect or adequately provide for all claims against, and all debts and
liabilities of, the Company, fixed or contingent, existing at the dates
thereof.
(g) Accounts Receivable and Payable. The accounts
receivable reflected on the Financial Statements arose in the ordinary course
of business and, except as reserved against on the Financial Statements, are
collectible in the ordinary course of business and consistent with past
practices, free of any claims, rights or defenses of any account debtor. Except
as set forth on Schedule 5(g), no accounts payable of the Company are, at this
date, over 45 days old and no accounts payable of the Company will be over 45
days old at the Closing Date.
(h) Absence of Certain Changes. Except as
disclosed on Schedule 5(h) or as reflected on the Financial Statements, the
Company has not, since December 31, 1995, except in the ordinary course of
business consistent with past practice:
(i) changed the Company's authorized or
issued capital stock; granted any stock option or right to purchase
shares of capital stock of the Company; issued any security
convertible into such capital stock; granted any registration rights;
purchased, redeemed, retired, or otherwise acquired any shares of any
such capital stock; or declared or paid any dividend or other
distribution or payment in respect of shares of capital stock;
(ii) amended the Articles of
Incorporation, Bylaws or other organizational documents of the
Company;
(iii) incurred any indebtedness or other
liabilities (whether accrued, absolute, contingent or otherwise),
guaranteed any indebtedness or sold any assets;
(iv) suffered any damage, destruction or
loss to any of the tangible assets of the Company, whether or not
covered by insurance;
(v) increased the regular rate of
compensation payable by it to any employee or increased such
compensation by bonus, percentage, compensation service award or
similar arrangement theretofore in effect for the benefit of any of
its employees, and no such increase is required;
(vi) hired, committed to hire or
terminated any employee;
(vii) established or agreed to establish
any pension, retirement or welfare plan for the benefit of its
employees not theretofore in effect;
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(viii) experienced any labor organizational
efforts, strikes or formal complaints or entered into any collective
bargaining agreements with any union;
(ix) suffered any change in its financial
condition, assets, liabilities, business or prospects or suffered any
other event or condition of any character which individually or in the
aggregate has or might reasonably be expected to have a material
adverse effect on its business or prospects;
(x) entered into any commitments or
transactions or made any capital expenditures involving aggregate
amount or value in excess of $25,000 or made any single capital
expenditure which exceeded $10,000;
(xi) disposed of any of its assets,
written down the value of any assets, written off as uncollectible any
accounts receivable or revalued any of its assets;
(xii) subjected any of its assets,
tangible or intangible, to any lien, encumbrance or restriction
whatsoever, except for liens for current property taxes not yet due
and payable;
(xiii) paid, discharged or satisfied any
claims, liabilities or obligations (absolute, accrued, contingent or
otherwise);
(xiv) entered into, terminated or received
notice of termination of (A) any license, distributorship, dealer,
sales representative, joint venture, credit, or similar agreement, or
(B) any contract or transaction involving a total remaining commitment
by or to the Company of at least $10,000;
(xv) cancelled or waived any claims or
rights with a value to the Company in excess of $10,000;
(xvi) made any change in any method of
accounting or accounting practice;
(xvii) canceled, or failed to continue,
insurance coverage; or
(xviii) agreed, whether in writing or
otherwise, to take any action described in this Section 5(h).
(i) Ownership of Properties. Schedule 5(i)(i)
sets forth a list of all of the material assets of the Company owned, leased or
used by the Company in connection with the operation of its business (the
"Assets"), including, as to real property owned or leased by the Company (the
"Real Property"), the legal description of the Real Property. The present
zoning, subdivision, building and other ordinances and regulations applicable
to the Real Property permit the continued operation, use, occupancy and
enjoyment of the Real Property
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consistent with past practices, and the Company is in compliance with, and has
received no notices of violations of, any applicable zoning, subdivision or
building regulation, ordinance or other law, regulation, or requirement. Except
as set forth on Schedule 5(i)(ii), the Company has good and marketable title to
all of the Assets owned by it including furniture, fixtures and equipment,
fixed assets and inventory, and all contract rights and intangible assets, and
good and valid leasehold estates in all of the Assets leased by it, free and
clear of mortgages, security interests, liens, defects, charges, encumbrances,
restrictions and rights of third parties (excluding accounts payable in the
ordinary course of business). Schedule 5(i)(ii) also includes a UCC lien search
for the Company showing security interests of record relating to the Assets in
every place where such security interests are legally required to be filed and
include copies of all such financing statements. All equipment and other
personal property constituting a portion of the Assets is in good operating
condition and repair, ordinary wear and tear excepted. The Assets constitute
all of the operating assets of the Company necessary or appropriate for the
continued operation of the business of the Company. The Company has sufficient
title in and to the Assets necessary or advisable to operate and conduct the
business of the Company in the same fashion as the Company was conducting such
business.
(j) Taxes. The Company has timely filed all
federal, state and local tax returns or information returns required to be
filed by it. All of such returns have been prepared accurately and filed in
accordance with applicable laws and regulations. Except as set forth on
Schedule 5(j), the Company has paid all taxes and assessments (including,
without limitation, income, excise, unemployment, social security, occupation,
franchise, property, sales and use taxes, import duties or charges, and all
penalties and interest in respect thereof) due and payable by it. The Company
and any predecessors in interest have withheld or collected from each payment
made to each of their employees the amount of all taxes required to be withheld
or collected therefrom, and the Company and any predecessors in interest have
paid the same to the proper tax depositories or collecting authorities. Except
as set forth on Schedule 5(j), the Company has not (i) been audited by any
taxing authority, (ii) received notice that any taxing authority contemplates
such an audit, (iii) signed any extension agreement with any taxing authority,
(iv) received notice of any deficiencies, adjustments, assessments or other
charges with respect to taxes paid or payable or (v) made any payment, or
provided any benefit, to any officer, employee, former officer or former
employee that is not allowable as a deduction under the Code or the regulations
thereunder.
(k) Insurance. The Company maintains in full
force and effect, with no premium arrearages, insurance policies bearing the
numbers, for the terms, with the companies, in the amounts and providing the
coverage set forth on Schedule 5(k). True and correct copies of all such
policies, and all endorsements thereto, have been delivered to SEI. All such
policies are valid, outstanding and enforceable and taken together, provide
adequate insurance coverage for the Assets and operations of the Company and
will continue in full force and effect following the consummation of the
Merger. Except as set forth on
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Schedule 5(k), there are no pending claims against such insurance by the
Company as to which insurers are defending under reservation of rights or have
denied liability, and except as set forth on Schedule 5(k), there exists no
claim under such insurance that has not been properly filed by the Company.
(l) Environmental Conditions.
(i) The Company is currently in
compliance with all Environmental Laws (as defined below), which
compliance includes, without limitation, the possession by the Company
of all permits and other governmental authorization required under
applicable Environmental Laws to operate the business as currently
operated, and is in compliance with the terms and conditions thereof.
(ii) The Company has not stored any
Hazardous Substances (as defined below) on any of the Real Property,
except in compliance with applicable Environmental Laws.
(iii) The Company has not disposed of or
released any Hazardous Substances on any of the Real Property.
(iv) The Company has not utilized any
transporters or disposal facilities for the transport or disposal of
Hazardous Substances except as indicated on Schedule 5(l)(iv).
(v) The Company has not received any
communication (written or oral), whether from a governmental
authority, citizen's group, employee or otherwise, that alleges that
such entity is not in full compliance with Environmental Laws, and
there are no circumstances that may prevent or interfere with such
full compliance in the future. There is no Environmental Claim (as
defined below) pending or threatened against the Company.
(vi) There have been no actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or
disposal of any Hazardous Substances that could form the basis of any
Environmental Claim against the Company, and the Company knows of no
such actions, activities, circumstances, conditions, events or
incidents.
(vii) The Real Property and, to the best
knowledge of the Company, adjoining properties, have never been
utilized for any industrial or commercial operation involving any
Hazardous Substance except in the ordinary course of business.
The following terms shall have the following
meanings:
"Environmental Claim" means any claim,
action, cause of action, investigation or notice (written or oral) by
any person or entity alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup
costs,
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governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the environment, of
Hazardous Substances at any location which is or has been owned,
leased, operated or utilized by the Company or (b) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means the federal,
state, regional, county or local environmental, health or safety laws,
regulations, ordinances, rules and policies and common law in effect
on the date hereof and the Closing Date relating to the use,
refinement, handling, treatment, removal, storage, production,
manufacture, transportation or disposal, emissions, discharges,
releases or threatened releases of Hazardous Substances, or otherwise
relating to protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), as the same may be amended or modified
to the date hereof and the Closing Date.
"Hazardous Substances" means any toxic or
hazardous waste, pollutants or substances, including, without
limitations, asbestos containing materials ("ACMs"), polychlorinated
biphenyls ("PCBs"), petroleum products, byproducts, or other
hydrocarbon substances, substances defined or listed as a "hazardous
waste", "hazardous substance", "toxic substance", "toxic pollutant",
or similarly identified substance or mixture, in or pursuant to any
Environmental Law and medical or infectious waste.
(m) Contracts and Commitments. Except as
described on Schedule 5(m) hereto, the Company is not a party or subject to any
of the following (whether written or oral, express or implied): (i) any
agreement restricting competition or (ii) any commitments or obligations,
contingent or otherwise, under any contract or agreement (A) for the purchase
or sale of supplies, services or other items in excess of $10,000 in any one
instance, (B) for the purchase or sale of any equipment or machinery which is
capitalized or which is expensed and in excess of $10,000, (C) for the
performance of services for others in excess of $10,000 in any one instance or
for a period of more than 90 days, (D) for the lease of any property, tangible
or intangible, (E) with any Shareholder, partner, officer or director of the
Company or any affiliate of such persons, (F) not in the ordinary course of
business or (G) for any power of attorney, whether limited or general, granted
by or to the Company. The Company has delivered to SEI true and complete copies
of all of the contracts, leases and agreements described on Schedule 5(m) (the
"Company Agreements"). Except as noted in such Schedule, the Company Agreements
are valid and in full force and effect, there has been no threatened
cancellation thereof and there are no outstanding disputes thereunder; each is
with unrelated third parties and was entered into on an arms-length basis in
the ordinary course of business; all will continue to be binding in accordance
with their terms after consummation of the transactions contemplated herein;
and to the knowledge of the Company, there is no pending or threatened
bankruptcy, insolvency or similar proceeding with respect to any other party to
the Company Agreements. There are no contracts, leases, agreements or other
instruments to which the
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Company is a party or is bound (other than insurance policies) which could
either singularly or in the aggregate have an adverse effect on the value of
the Company.
(n) No Undisclosed Liabilities. With the
exception of the liabilities set forth on Schedule 5(n) or as reflected on the
Financial Statements, the Company does not have any material liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
or whether due or to become due, and the Company knows or has no reason to know
of any basis for the assertion against the Company of any such liability or
obligation of any nature not described in Schedule 5(n).
(o) Employees and Labor Matters.
(i) Schedule 5(o) contains a complete
and accurate list of the following information for each employee or
director of the Company: name; job title; current compensation paid or
payable and any change in compensation since December 31, 1995;
vacation accrued; and service credited for purposes of vesting and
eligibility to participate under any pension, retirement,
profit-sharing, thrift-savings, deferred compensation, stock bonus,
stock option, cash bonus, employee stock ownership (including
investment credit or payroll stock ownership), severance pay,
insurance, medical, welfare, or vacation plan, or any other employee
benefit plan or any director plan.
(ii) No employee or director of the
Company is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee or director and
any other person or entity that in any way adversely affects or will
affect (A) the performance of his duties as an employee or director of
the Company, or (B) the ability of the Company to conduct its
business. To the Company's knowledge, no director, officer, or other
key employee of the Company intends to terminate his employment with
the Company.
(iii) The Company is in compliance in all
material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages and
hours, occupational safety and health, including laws concerning
unfair labor practices within the meaning of Section 8 of the National
Labor Relations Act, and the employment of non-residents under the
immigration Reform and Control Act of 1986.
(iv) Except as disclosed on Schedule 5(o),
(A) there are no charges,
governmental audits, investigations, administrative
proceedings or complaints concerning the Company's employment
practices pending or, to the knowledge of the Company,
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threatened before any federal, state or local agency or court,
and, to the knowledge of the Company, no basis for any such
matter exists;
(B) the Company is not a party to
any union or collective bargaining agreement, and, to the
knowledge of the Company, no union attempts to organize the
employees of the Company have been made, nor are any such
attempts now threatened; and
(C) the Company has not experienced
any organized slowdown, work interruption, strike or work
stoppage by its employees.
(p) Employee Benefit Matters. The employee
benefit plans and agreements described in Schedule 5(p) hereto are the only
employee benefit plans and agreements maintained by the Company for the benefit
of its Shareholders, officers, directors, employees, former employees, or
independent contractors, including, without limitation, (i) profit sharing,
pension, ESOP, 401(k) or other retirement plans or programs, (ii) current and
deferred compensation, severance, vacation, stock purchase, stock option, bonus
and incentive compensation benefits and (iii) medical, hospital, life, health,
accident, disability, death and other fringe and welfare benefits, including
any split-dollar life insurance policies, all of which plans, programs,
practices, policies and other individual and group arrangements and agreements,
including any unwritten compensation, fringe benefit, payroll or employment
practices, procedures or policies of any kind or description are hereinafter
referred to as the "Benefit Plans." Except as disclosed on Schedule 5(p), there
are no contributions or payments due with respect to any of the Benefit Plans,
nor will any such contributions or payments be due or required to be paid on or
prior to the Closing Date. Each Benefit Plan of the Company has been operated
and administered in substantial compliance with the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and the provisions of the
Code applicable to it. No Benefit Plan of the Company that is subject to the
minimum funding standards of ERISA or the Code, if any, has incurred any
accumulated funding deficiency within the meaning of ERISA or the Code. All
contributions with respect to a Benefit Plan of the Company that is subject to
Code Section 412 or ERISA Section 302 have been timely made and there is no
lien or expected to be a lien under Code Section 412(n) or ERISA Section 302(f)
or tax under Code Section 4971. No Benefit Plan of the Company has a "liquidity
shortfall" as defined in Code Section 412(m)(5). The Company is not subject to
and cannot reasonably be expected to become subject to a lien under Code
Section 401(a)(29). No event has occurred in connection with a Benefit Plan of
the Company that could result in liability to the Company under Title IV of
ERISA. The Company has not incurred any liability to the Pension Benefit
Guaranty Corporation in connection with any Benefit Plan of the Company which
is subject to Title IV of ERISA, if any. The assets of each Benefit Plan of the
Company that is subject to Title IV of ERISA, if any, are sufficient to provide
all "benefit liabilities" (as defined in ERISA Section 4001(a)(16)) under such
Benefit Plan if such Benefit Plan terminated, and are also sufficient to
provide all other benefits due under the Benefit Plan (including, but not
limited to, ancillary, disability, shutdown, early retirement and welfare
benefits). The Company has not had an "obligation to contribute" (as defined in
ERISA Section 4212) to a "multi-employer pension
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plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)) at any time. No
event which constitutes a reportable event as defined in Section 4043 of ERISA
has occurred or is continuing with respect to any Benefit Plan covered by
ERISA. No facts exist which will result in a material increase in the premium
costs of any Benefit Plan for which benefits are insured or a material increase
in benefit costs of any Benefit Plan which provides self-insured benefits. No
"prohibited transaction" (as defined in ERISA Section 406 or Code Section 4975)
has occurred with respect to any Benefit Plan. None of the Benefit Plans has
any current or projected liability in respect of post-employment or
post-retirement health or medical or life insurance benefits for former or
retired employees of the Company, except as required to avoid excise taxes
under Code Section 4980B. All Benefit Plans subject to Code Section 4980B or
Part 6 of Title I of ERISA have been maintained in compliance with the
requirements of Code Section 4980B and Part 6 of Title I of ERISA. There is no
contract, agreement, plan or arrangement covering any employee or former
employee of the Company that could result in the payment of any amount that
would not be deductible under Code Sections 162(m) or 280G. As of the Closing
Date, the Company has no material liabilities under any Benefit Plan that is
not reflected in the Financial Statements.
(q) Trademarks, Trade Names, Etc. Set forth on
Schedule 5(q) is a description of each trademark, trade name, service mark,
patent or copyright held by the Company and any current registration or
application with respect thereto. The Company is not currently in receipt of
any notice of any violation of, and has no reason to believe that the Company's
operations are violating the rights of others with respect to any such matter,
and the Company has taken reasonable measures to protect its rights with
respect to any such matters as are proprietary to the Company.
(r) Litigation. Except as set forth in Schedule
5(r), there is no litigation, arbitration, governmental claim, investigation or
proceeding pending or threatened against the Company, at law or in equity,
before any court, arbitration tribunal or governmental agency. No such
proceeding set forth in Schedule 5(r) concerns the ownership or other rights
with respect to the Company Common Stock. The Company knows of no facts on
which material claims may be hereafter made against the Company. All claims and
litigation against the Company are fully covered by insurance, except as
indicated on Schedule 5(r).
(s) Compliance with Laws, Regulations and Court
Orders. There is not outstanding or threatened any order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal against or
affecting the Company, its Shareholders or the Company Common Stock. The
Company is in compliance with all applicable federal, state and local laws,
regulations and administrative orders, including without limitation those
concerning the sale of insurance in connection with the warranties provided for
pursuant to the Company's service and maintenance agreements, and have received
no notices of alleged violations thereof except as disclosed in Schedule 5(s)
hereof. Neither the Company, nor, to the knowledge of the Company, any
licensed technician or other individual affiliated with the Company has, during
the past three (3) years, been the subject of any inspection, investigation,
survey, audit, monitoring or other form of review by any governmental
regulatory entity, trade association,
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professional review organization, accrediting organization or certifying agency
for the purpose of any alleged improper activity on the part of such
individual, nor has the Company received any notice of deficiency in connection
with its operation. No governmental authorities are currently conducting
proceedings against the Company and no such investigation or proceeding is
pending or being threatened.
(t) Certain Payments. Neither the Company nor any
Shareholder, director, officer, agent, or employee of the Company, or any other
person associated with or acting for or on behalf of the Company, has directly
or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any person, private or public, regardless
of form, whether in money, property, or services (A) to obtain favorable
treatment in securing business, (B) to pay for favorable treatment for business
secured, (C) to obtain special concessions or for special concessions already
obtained, for or in respect of the Company or any affiliate of the Company, or
(D) in violation of any law, or (ii) established or maintained any fund or
asset that has not been recorded in the books and records of the Company.
(u) Consents and Approvals. Except as set forth
on Schedule 5(u), no consents, approvals, authorizations or orders of third
parties, including governmental authorities, are necessary for the
authorization, execution and performance by the Company of this Agreement.
(v) No Broker's Fees. The Company has no
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.
(w) Disclosure.
(i) No representation or warranty made
herein by the Company, nor in any statement, certificate or instrument
to be furnished to SEI by the Company pursuant to any Transaction
Document, contains or will contain any untrue statement of material
fact or omits or will omit to state a material fact necessary to make
these statements contained herein and therein not misleading.
(ii) There is no fact known to the
Company that has specific application to the Company (other than
general economic or industry conditions) and that materially adversely
affects the Company Common Stock, the Assets or the business,
prospects, financial condition, or results of operations of the
Company that has not been set forth in this Agreement.
(x) Reliance on Representations. The Company
understands and intends that SEI and its management will rely upon the
representations of the Company made in this Agreement, and they are entitled to
rely upon each and all of the same without further inquiry.
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Section 6. Representations and Warranties of SEI and Sub. SEI
and Sub hereby represent and warrant to the Company as follows as of the date
hereof and as of the Closing Date:
(a) Corporate Organization. Each of SEI and Sub
is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, has all requisite corporate power and
authority to execute and deliver this Agreement and holds all licenses, permits
and other required authorizations from governmental authorities necessary to
conduct its business as it is now being conducted.
(b) Capitalization. As of the date hereof, SEI's
authorized capital stock consists of (i) 30,000,000 shares of SEI Common Stock,
8,576,610 of which are issued and outstanding and (ii) 10,000,000 shares of
Preferred Stock, $.01 par value per share, none of which are issued and
outstanding. All issued and outstanding shares of SEI Common Stock have been
duly and validly authorized, issued, fully paid and nonassessable. No
shareholder of SEI has any preemptive rights with respect to the issuance of
shares of SEI Common Stock.
(c) Authorization and Validity. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and approved by all
necessary corporate action. This Agreement, when executed, will constitute the
legal, valid and binding obligation of SEI and Sub, enforceable against each in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
and subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) Absence of Conflicting Agreements or Required
Consents. The execution, delivery and performance by SEI and Sub of the
Transaction Documents to be executed and delivered by each (i) do not require
the consent of or notice to any governmental or regulatory authority or any
other third party; (ii) will not conflict with any provision of SEI's Restated
Certificate of Incorporation or Bylaws or Sub's Charter or Bylaws; (iii) will
not conflict with or result in a violation of any law, ordinance regulation,
ruling, judgement, order or injunction of any court or governmental
instrumentality to which SEI or Sub is a party or by which SEI or Sub or any of
their properties are bound; (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, require any
notice under, or accelerate or permit the acceleration of any performance
required by the terms of any agreement, instrument, license or permit to which
SEI or Sub is a party or by which any of their properties are bound; and (v)
will not create any lien, encumbrance or restriction upon any of the assets or
properties of SEI or Sub.
(e) Governing Documents. True and correct copies
of the organizational documents and all amendments thereto of SEI and Sub
(certified by the applicable Secretary of State) and copies of the Bylaws of
SEI and Sub have been provided to the Company. The Company has previously been
provided with access to SEI's and Sub's minutes,
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and such minutes accurately reflect all proceedings of the shareholders and
board of directors of SEI and Sub (and all committees thereof). The stock
record books of SEI and Sub, which have been made available to the Company for
review, contain true, complete and accurate records of the stock ownership of
SEI and Sub.
(f) Litigation and Claims. There are no claims,
lawsuits, actions, arbitrations, administrative or other proceedings,
governmental investigations or inquiries pending or threatened against SEI or
Sub affecting the performance by SEI or Sub of the Transaction Documents and
there is no basis for any such action or any state of facts or occurrence of
any event which might give rise to the foregoing.
(g) No Broker's Fees. Except as set forth on
Schedule 6(g), SEI and Sub do not have any liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
(h) Statements True and Correct. No
representation or warranty made herein by SEI or Sub, nor in any statement,
certificate or instrument to be furnished to the Company by SEI or Sub pursuant
to any Transaction Document, contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact necessary to make
these statements contained herein and therein not misleading.
Section 7. Additional Covenants and Agreements.
(a) Access to Information. The Company shall
accord to SEI and Sub, their counsel, accountants and other representatives
full access throughout the period prior to the Closing to all of the
properties, books, records, contracts, commitments and records of the Company
and furnish SEI and Sub during such period with all such information concerning
the business and properties of the Company as SEI and Sub and their
representatives reasonably may request. Such parties shall also be allowed
access, upon reasonable notice, to consult with the officers, employees,
accountants, counsel and agents of the Company in connection with such
investigation of the properties and business of the Company. In addition, at
all times prior to the Closing, SEI and Sub will afford to the Company and
their representatives access, upon reasonable notice, to all of SEI's and Sub's
properties, books and records as the Company may reasonably request. No such
investigation shall diminish or otherwise affect any of the representations,
warranties, covenants or agreements of any party under the Agreement.
(b) Affirmative Covenants of the Company. During
the period from the date of this Agreement to the Closing Date, the Company
will (i) continue to operate its business in the usual, regular, and ordinary
course of business, consistent with past practices, (ii) obtain the written
approval of SEI prior to making any capital expenditure in excess of $25,000 in
the aggregate, (iii) maintain in effect adequate casualty, public liability,
professional malpractice and workers' compensation insurance coverage, (iv)
maintain the Assets in their present condition, (v) comply with all laws and
regulations of governmental agencies or authorities, including applicable tax
laws and regulations, (vi) operate its business in the manner
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necessary to maintain its reputation and the goodwill of its customers,
vendors, lessors and others having business relations with the Company, and
(vii) to keep in force all licenses, permits and approvals necessary to the
operation of its business as now conducted.
(c) Negative Covenants of the Company. During the
period from the date of this Agreement to the Closing Date, the Company will
not, without the prior written consent of SEI, and unless otherwise expressly
permitted herein:
(i) enter into, renew, amend, breach or
terminate any contract or agreement to which it is a party other than
in the ordinary course of business;
(ii) increase the salary of or declare or
pay any bonus to any employee;
(iii) incur any additional debt obligation
or other obligation for borrowed money in excess of an aggregate of
$25,000 except in the ordinary course of business of the Company
consistent with past practices, or impose, or suffer the imposition,
on any Asset of the Company of any lien or permit any such lien to
exist;
(iv) issue, sell, repurchase, redeem, or
otherwise acquire or exchange, directly or indirectly, any share of
Company Common Stock or any securities convertible into any share of
Company Common Stock, or declare or pay any dividend or make any other
distribution in respect of the share of Company Common Stock;
(v) purchase or acquire any of the
Assets, whether real or personal, tangible or intangible, or sell or
dispose of any of the Assets, whether real or personal, tangible or
intangible, except in the ordinary course of business and consistent
with past practices;
(vi) purchase any securities or make any
material investment, either by purchase of stock or other securities,
contributions to capital, asset transfers, or purchase of any assets,
in any entity, or otherwise acquire direct or indirect control over
any other entity;
(vii) except in the ordinary course of
business (and, even if in the ordinary course of business, then not in
an amount to exceed $25,000 in the aggregate), make or commit to make
any capital expenditure, or enter into any lease of capital equipment
as lessee or lessor;
(viii) make any loan to any person or
increase the aggregate amount of any loan currently outstanding to any
person;
(ix) engage in any transaction other than
in the ordinary course of business and consistent with past practice;
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(x) adopt any new employee benefit plan
or make any material change in or to any Benefit Plan other than any
such change that is required by law or that, in the opinion of
counsel, is necessary or advisable to maintain the tax qualified
status of any such Benefit Plan;
(xi) commence any litigation other than
in accordance with past practice, settle any litigation involving any
liability of the Company for material money damages or restrictions
upon the operations of the Company;
(xii) fail to deliver to SEI any notice or
other information regarding pending or threatened litigation in
respect of it or its operations;
(xiii) take, fail to take, or permit any
action, the result of which would be to make any representation or
warranty of Section 5 untrue, or prevent the satisfaction of any
condition set forth in Sections 8 and 10;
(xiv) change or alter any method of
accounting; or
(xv) change any provision of its Articles
of Incorporation or Bylaws.
(d) Notice of Adverse Change. The Company will
advise SEI in writing of any material adverse change in the Assets, the
business, financial condition or prospects of the Company from the date of this
Agreement to the Closing Date.
(e) Best Efforts. The Company will use its best
efforts to take all action and to do all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement. The Company will
use its best efforts to secure all consents and approvals required to carry out
the transactions contemplated by this Agreement and to satisfy all other
conditions to the obligations of the Company and SEI hereunder.
(f) Licenses; Permits. The Company will cooperate
in all reasonable respects with SEI in its applications to obtain such licenses
and permits, if any, as may be necessary in order for SEI to operate the
business as it is currently operated.
(g) No Solicitation of Other Offers. The Company,
acting through any director, officer or other agent (including any investment
banker, attorney, accountant or other representative retained by it), shall not
solicit or encourage, including by way of furnishing information, any inquiries
or the making of any proposal which may reasonably be expected to lead to the
acquisition of any of the shares of Company Common Stock or a substantial
portion of the Assets. The Company will not, prior to the Closing, enter into
or conduct any discussions with any other prospective purchaser of any or all
of the Company Common Stock or the Assets regarding such a purchase or enter
into any agreement or negotiations with respect to the disposition of any or
all of the Company Common Stock or the Assets, regardless of the form
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of the transaction, without the consent of SEI, other than in the ordinary
course of business. The Company shall promptly advise SEI in writing of any
such inquiries, proposals or discussions received by the Company after the date
hereof.
(h) Confidentiality and Public Announcements. The
Company shall keep confidential all information concerning the Merger or
provided to it by SEI and, in the event of termination of the Merger pursuant
to Section 11, shall deliver to SEI all documents and other materials
previously delivered (and copies thereof) concerning the transactions
contemplated hereby. Neither the Company nor its Shareholders nor any of their
representatives shall make any public announcement with respect to this
Agreement without the prior written consent of SEI.
(i) Risk of Loss. The Company shall retain all
risk of condemnation, destruction, loss or damage due to fire or other casualty
from the date of this Agreement until the Closing. If the condemnation,
destruction, loss or damage is such that the operation of the Company is
materially interrupted or curtailed or any of the Assets are materially
affected, then SEI shall have the right to terminate this Agreement. If SEI
nonetheless elects to close, the Company shall remit all net condemnation
proceeds or third party insurance proceeds to SEI, and either the number of
shares of SEI Common Stock to be delivered or the cash to be paid pursuant to
Section 4(b)(i) shall be adjusted at the Closing to reflect such condemnation,
destruction, loss or damage to the extent that insurance or condemnation
proceeds are not sufficient to cover such destruction, loss or damage.
(j) Subchapter S Matters. If the Company is an
"S" corporation, the Company shall prepare and file, at its expense, the short
period tax returns of the Company ending on the Closing Date. Such returns
shall be provided for SEI's prior review and approval, which approval shall not
be unreasonably withheld or delayed. The Company shall file as an "S"
corporation for that short period. SEI shall make available any information in
its or the Company's possession which is reasonably required by the Company to
complete such returns at no cost to the Company.
(k) Affiliates. Each person who is an "Affiliate"
of the Company, as that term is defined in the Securities Act of 1933, as
amended (the "Act"), hereby acknowledges and agrees to the following: (i) the
shares of Common Stock issuable to such Affiliate will be held by such
Affiliate pursuant to the provisions of the Act and the rules and regulations
thereunder, (ii) no sale or disposition of such shares of Common Stock will be
made except pursuant to the terms of SEI's "shelf" Registration Statement on
Form S-4 (the "Registration Statement"), the post-effective amendment and the
prospectus contained therein, the Act, and Rule 145(d) thereunder, and (iii)
each such certificate representing the shares of Common Stock issued to an
Affiliate will bear a restrictive legend setting forth the restrictions on
transfer referred to above.
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Section 8. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) This Agreement and the transactions
contemplated hereby shall have been approved in the manner required by
applicable law, by the applicable regulations of the Nasdaq National Market and
by any regulatory body, as the case may be, and by the requisite vote of the
Shareholders.
(b) Any waiting period applicable to the
consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 shall have expired or been terminated.
(c) Neither of the parties hereto shall be
subject to any order or injunction of a court of competent jurisdiction which
prohibits the consummation of the transactions contemplated by this Agreement.
In the event any such order or injunction shall have been issued, each party
agrees to use its reasonable efforts to have any such injunction lifted.
(d) SEI's Registration Statement shall have
become effective and shall be effective at the Effective Time, and no stop
order suspending effectiveness of the Registration Statement shall have been
issued, no action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and all
necessary approvals under state securities laws relating to the issuance or
trading of the SEI Common Stock to be issued to the Shareholders in connection
with the Merger shall have been received.
(e) All consents, authorizations, orders and
approvals of (or filings or registrations with) any governmental commission,
board or other regulatory body required in connection with the execution,
delivery and performance of this Agreement shall have been obtained or made,
except for filings in connection with the Merger and any other documents
required to be filed after the Effective Time and except where the failure to
have obtained or made any such consent, authorization, order, approval, filing
or registration would not have a material adverse effect on the business of SEI
and the Company (and their respective subsidiaries), taken as a whole,
following the Effective Time.
(f) The SEI Common Stock to be issued to the
Shareholders in connection with the Merger shall have been approved for listing
on the Nasdaq National Market, subject only to official notice of issuance.
Section 9. Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
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(a) Representations and Warranties. The
representations and warranties of SEI and Sub set forth herein in Section 6
above shall be true and correct in all material respects as of the Closing Date
with the same effect as though made on and as of such date.
(b) Performance; Document Delivery. SEI and Sub
shall have performed in all material respects, at or prior to the Closing Date,
all acts in accordance with its covenants set forth herein, including, but not
limited to, delivery to the Company of the following documents:
(i) Certificates for the Shares of SEI
Common Stock and the cash payable pursuant to Section 4;
(ii) A good standing certificate
regarding SEI certified by the Secretary of State of the State of
Delaware dated within five business days prior to Closing;
(iii) A certificate dated as of the
Closing Date signed by a duly authorized officer of SEI certifying
that the representations and warranties of SEI set forth herein are
true and correct in all material respects as of the Closing Date and
that SEI has fulfilled all of the conditions of this Section 9;
(iv) Resolutions adopted by the Board of
Directors of SEI approving the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, certified by the Secretary of SEI; and
(v) An incumbency certificate certifying
the identity of the officers of SEI.
(c) Opinion of Counsel. SEI shall have delivered
to the Company an opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company, counsel to SEI, dated the Closing Date,
substantially in the form attached hereto as Schedule 9(c). In addition, the
Company shall have received an opinion of counsel to the Company in form and
substance satisfactory to the Company concerning the tax consequences of the
Merger to the Company and the Shareholders.
(d) No Injunction, Etc. No action proceeding,
investigation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain,
prohibit or obtain substantial damages in respect of, or which is related to or
arises out of, this Agreement or the consummation of the transactions
contemplated hereby, or which is related to or arises out of the business or
operations of SEI, if such action, proceeding, investigation or legislation, in
the reasonable judgment of the Company or its counsel, would make it
inadvisable to consummate such transactions.
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Section 10. Conditions to Obligation of SEI and Sub to Effect the
Merger. The obligations of SEI and Sub to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) Due Diligence Review; Delivery of Schedules.
SEI shall have completed, and in its sole discretion be satisfied with the
results of, its due diligence review of the operations and financial condition
of the Company. The Company shall have delivered to SEI the Schedules called
for by this Agreement, and such Schedules shall be satisfactory to SEI in its
sole discretion.
(b) Representations and Warranties. The
representations and warranties of the Company contained in this Agreement, or
any document or instrument delivered to SEI hereunder, shall be true and
correct in all material respects as of the Closing Date with the same effect as
though made on and as of such date.
(c) Performance; Document Delivery. The Company
shall have performed in all material respects, at or prior to the Closing Date,
all acts in accordance with their covenants herein, including, but not limited
to, delivery to SEI of the following documents:
(i) A good standing certificate
regarding the Company and any Shareholder that is not a natural
person, certified by the Secretary of State of such party's state of
organization dated within five business days prior to Closing;
(ii) A certificate dated as of the
Closing Date signed by the duly authorized officers of the Company
certifying that the representations and warranties of the Company set
forth herein are true and correct in all material respects as of the
Closing Date and that the Company has fulfilled all of the conditions
of this Section 10;
(iii) Resolutions of the Board of
Directors and Shareholders of the Company and any Shareholder that is
not a natural person in form and substance satisfactory to SEI
approving the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby,
certified by an appropriate officer of the Company and any such
Shareholder;
(iv) An incumbency certificate certifying
the identity of the officers of the Company and any Shareholder that
is not a natural person;
(v) Certificates representing the shares
of Company Common Stock being converted, together with accompanying
stock transfer powers or instruments of assignment, duly endorsed in
blank;
(vi) Resignations of each of the officers
and directors of the Company effective as of the Closing Date;
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(vii) Releases of each Shareholder and
each officer and director of the Company concerning any claim against
the Company other than current accrued wages and benefits;
(viii) All books and records of the
Company, including all corporate and other records, minute books,
stock record books, stock registers, books of accounts, contracts,
agreements and such other documents or certificates as shall be
reasonably requested by SEI; and
(ix) Evidence that all agreements or
arrangements, whether written or oral, among the Shareholders and/or
the Company that relate in any manner to the Company Common Stock have
been terminated.
(d) No Adverse Change. There shall not have been
any change between the date of the latest Financial Statements and the Closing
Date which has had or will have a material adverse effect on the business,
operations, financial condition, Assets or prospects of the Company, and a
certificate shall have been delivered to SEI to such effect signed by each of
the Shareholders and such executive officers of the Company as SEI may request.
(e) Opinion of Counsel. SEI shall have been
furnished with a favorable opinion of counsel to the Company, dated the Closing
Date, substantially in the form attached hereto as Schedule 10(e).
(f) Consents and Approvals. The Company shall
have obtained all necessary consents and approvals, in form and substance
satisfactory to SEI, required under all leases and other material contracts
pertaining to the Assets or the business of the Company and satisfying any
approval or permit or licensing requirements for consummation of this
transaction and necessary to carry on the business of the Company as it is
currently being conducted.
(g) No Injunction, Etc. No action, proceeding,
investigation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain,
prohibit or obtain substantial damages in respect of, or which is related to or
arises out of, this Agreement or the consummation of the transactions
contemplated hereby, or which is related to or arises out of the business or
operations of the Company, if such action, proceeding, investigation or
legislation, in the reasonable judgment of SEI or its counsel, would make it
inadvisable to consummate such transactions.
(h) Lockup Agreements. Each person listed on
Schedule 10(h)(i) shall have entered into an agreement with SEI restricting the
resale of shares of Common Stock substantially in the form attached hereto as
Schedule 10(h)(ii).
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(i) Employment Agreements. SEI and certain
employees of the Company shall have entered into employment agreements
substantially in the form attached hereto as Schedule 10(i).
(j) Indemnification Agreements. SEI and each of
the Shareholders shall have entered into Indemnification Agreements
substantially in the form attached hereto as Schedule 10(j).
(k) Escrow Agreements. SEI and each of the
Shareholders shall have entered into the Escrow Agreement pursuant to Section
4(c)(ii).
(l) Pension Plan Liability. SEI shall be
satisfied that it will incur no liability with respect to pension or other
post-retirement benefits, except pursuant to SEI's pension plan in which all
full-time Company employees, who will remain employed by the Company after the
Closing, are eligible to participate.
(m) Board Approval. This Agreement and the Merger
shall have been approved and authorized by the Board of Directors of SEI.
Section 11. Termination.
(a) Means of Termination. This Agreement may
be terminated at any time prior to the Closing in the following ways:
(i) by the mutual consent in writing of
the Company and SEI;
(ii) by SEI if there has been a material
violation or breach by the Company of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived by SEI in writing, or if any of the conditions set
forth in Sections 8 and 10 hereof have not been satisfied within six
(6) months of the date hereof or have not been waived by SEI in
writing;
(iii) by the Company if there has been a
material violation or breach by SEI or Sub of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived by the Company in writing, or if any of the conditions
set forth in Sections 8 and 9 hereof have not been satisfied within
six (6) months of the date hereof or have not been waived by the
Company in writing; or
(b) Effect of Termination. Except as provided
in Section 12(b) hereof, in the event this Agreement is terminated in
accordance with this Section 11, this Agreement shall become void and of no
further force or effect, except the obligations of each party to preserve the
confidentiality of documents, certificates and information furnished to such
party pursuant hereto and for any obligation or liability of any party based on
or arising from
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any breach or default by such party with respect to its representations,
warranties, covenants or agreements contained in the Transaction Documents.
Section 12. Expenses and Remedies.
(a) Expenses. Except as provided in
section 12(b) hereof, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the Merger,
including its own legal, accounting and audit fees.
(b) Remedies.
(i) The Company agrees that if the
Company terminates this Agreement pursuant to Section 11(a)(iii)
because of the failure to receive approval of the Merger by the
Shareholders, all expenses, including, without limitation, all legal
and accounting expenses, incurred by SEI or Sub in connection with the
negotiations among the parties, and the authorization, preparation,
execution and performance of this Agreement and the transactions
contemplated hereby shall be paid by the Company.
(ii) The Company agrees that in the event
of a termination of this Agreement pursuant to Section 11, for a
period of six months from the date of such termination, neither the
Company nor any of its officers, directors, management employees,
affiliated persons or agents, or the Shareholders, will, directly or
indirectly, (A) negotiate or discuss with any other person or entity
any transaction involving a merger of the Company, or the sale of any
shares in or assets of the Company (except for sales of inventory in
the ordinary course of business) or any other business combination
involving the Company, (B) reveal the terms of this Agreement to any
person or entity except for the purpose of carrying out the
transactions contemplated herein or (C) solicit, encourage, negotiate,
discuss or accept any offer, bid or proposal from any person or entity
respecting any transaction involving a merger of the Company, the sale
of any shares in or assets of the Company (except for sales of
inventory in the ordinary course of business) or any other business
combination involving the Company.
Section 13. Indemnification.
(a) Indemnification of SEI. The Company agrees to
indemnify and hold harmless SEI, each officer, director, employee or agent
thereof, their respective controlling persons, and their respective estates,
successors, and assigns (each an "Indemnified Party"), from and against any and
all claims, losses, damages, liabilities and expenses (including, without
limitation, settlement costs and any legal or other expenses for investigating
or defending any actions or threatened actions) (the "Losses") reasonably
incurred by such Indemnified Party as a result of:
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(i) the untruth, inaccuracy or breach of
any representation or warranty made by the Company pursuant to Section
5 of this Agreement or any other Transaction Document;
(ii) the nonfulfillment or breach of any
covenant, agreement or obligation of the Company contained in this
Agreement or any other Transaction Document;
(iii) any untrue statement of a material
fact relating to the Company that was made in reliance upon and in
conformity with information furnished by the Company to SEI and is
contained in any preliminary prospectus, the Registration Statement or
any prospectus forming a part thereof, or any amendment thereof or
supplement thereto, or any omission by the Company to state therein a
material fact relating to the Company required to be stated therein or
necessary to make such statements therein not misleading, and which is
not provided in writing to SEI by the Company;
(iv) any and all amounts of federal,
state, and/or local income, franchise, property, and/or sales and use
taxes that may be assessed against SEI with respect to any taxable
period(s) ending on or before the date of this Agreement for which
adequate provisions therefor have not been made through the Closing
Date, as reflected on the Company's books of account and in the
Company's financial statements as of the Closing Date; and the
amount(s) of any interest and/or penalties that may be assessed with
respect to said tax assessments. The amount(s) of any
indemnification(s) arising under this Agreement is to be computed net
of any and all tax benefits received by SEI as a result of the tax
assessment(s);
(v) any matter on any Schedule hereto as
may be specifically identified for indemnification in this Agreement
or any other Transaction Document; and
(vi) any claim or demand by any person
asserting any interest in any share of Company Common Stock or seeking
dissenters' or appraisal rights or any other claim in respect to the
Merger.
(b) Limitations on the Company's Indemnity. The
Company shall be obligated to indemnify and hold harmless SEI pursuant to
Section 13(a) only to the extent that the aggregate of all indemnifiable Losses
exceeds $25,000.
(c) Indemnification of the Shareholders of the
Company. SEI shall indemnify and hold harmless the Shareholders pro rata in
accordance with their holdings of shares of Company Common Stock as of the
Effective Time (each an "Indemnified Party") from and against any and all
Losses reasonably incurred by such Indemnified Party as a result of:
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(i) the untruth, inaccuracy or breach of
any representation or warranty made by SEI in this Agreement or in any
other Transaction Document;
(ii) the nonfulfillment or breach of any
covenant, agreement or obligation of SEI contained in this Agreement
or in any other Transaction Document; or
(iii) any untrue statement or alleged
untrue statement of a material fact relating to SEI (other than those
that relate to the Company) contained in any preliminary prospectus,
the Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto, or arising out of or
based on any omission or alleged omission to state therein a material
fact relating to SEI (other than the Company) required to be stated
therein or necessary to make the statements therein not misleading.
(d) Notification. Whenever any claim shall arise
for indemnification hereunder, the Indemnified Party shall notify the
indemnifying party promptly after such Indemnified Party has actual knowledge
of the facts constituting the basis for such claim, except that, in the event
of any claim for indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, such Indemnified Party shall
give prompt notice to the indemnifying party of such claim or the commencement
of legal proceedings in respect of which recovery may be sought against the
indemnifying party pursuant to the provisions of this Section 13. The notice to
the indemnifying party shall specify, if known, the amount or an estimate of
the amount of the liability arising therefrom. The Indemnified Party shall not
settle or compromise any such claim without the prior written consent of the
indemnifying party unless suit shall have been instituted against the
Indemnified Party and the indemnifying party shall have failed, within fifteen
(15) days after notice of institution of the suit, to take control of such suit
as provided in Section 13(e) below.
(e) Defense of Actions. In connection with any
claim giving rise to indemnity hereunder resulting from or arising out of any
claim or legal proceeding by a person who is not a party to this Agreement, the
indemnifying party, at its sole cost and expense, may, upon written notice to
the Indemnified Party, assume the defense of such claim or legal proceeding, to
the extent that the indemnifying party admits in writing its liability to the
Indemnified Party with respect to all material elements thereof. If the
indemnifying party assumes the defense of any such claim or legal proceeding,
the obligations of the indemnifying party hereunder as to such claim or legal
proceeding shall be limited to taking all steps necessary in the defense or
settlement thereof and to holding the Indemnified Party harmless from and
against any losses, damages, expenses, or liability caused by or arising out of
any settlement approved by the indemnifying party or any judgment in connection
with such claim or legal proceeding. Each Indemnified Party agrees that it will
cooperate with the indemnifying party in the defense of any such action, the
defense of which is assumed by the indemnifying party. Except with the consent
of the Indemnified Party, the indemnifying party shall not consent to the entry
of any judgment arising from any such claim or legal proceeding which, in each
case, does not include as an unconditional term thereof the delivering by the
claimant or the plaintiff
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to the Indemnified Party of a release from all liability in respect thereof,
unless the indemnifying party has actually paid to the Indemnified Party the
full amount of such judgment or settlement. If the indemnifying party does not
assume the defense of any claim or litigation, any Indemnified Party may defend
against such claim or litigation in such manner as it may deem appropriate,
including, but not limited to, settling such claim or litigation, after giving
notice of the same to the indemnifying party, on such terms as the Indemnified
Party may deem appropriate. The indemnifying party will promptly reimburse the
Indemnified Party in accordance with the provisions hereof.
(f) Payment. All indemnification hereunder shall
be effected by payment of cash or delivery of a certified or official bank
check in the amount of the indemnification liability or by set-off against (i)
any amounts otherwise owed by SEI to the Company or by the Company to SEI, as
the case may be, or (ii) the escrowed shares of SEI Common Stock and cash
pursuant to the Escrow Agreement.
Section 14. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be personally delivered,
mailed by first-class registered or certified mail, postage prepaid, return
receipt requested or delivered by an overnight courier service, delivery charge
prepaid:
(a) If to the Company, to such address furnished
to SEI or at such other address as may be furnished to SEI by it in writing.
(b) If to SEI, to:
Service Experts, Inc.
P. O. Box 17102
Nashville, Tennessee 37217
Attention: Alan R. Sielbeck
with a copy to:
Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
511 Union Street, Suite 2100
Nashville, Tennessee 37219
Attention: J. Chase Cole, Esq.
or at such other address as may have been furnished to the Company by
SEI in writing.
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Section 18. Miscellaneous.
(a) Entire Agreement. This Agreement and the
Schedules, certificates and other documents delivered pursuant hereto contain
and constitute the entire agreement and understanding between the Company and
SEI and supersede and cancel all prior agreements and understandings relating
to the subject matter hereof, whether written or oral, which shall remain in
effect. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except in writing signed by the parties hereto.
(b) Severability. Should any one or more of the
provisions of this Agreement or any agreement entered into pursuant hereto be
determined to be illegal or unenforceable, all other provisions of this
Agreement and such other agreements shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall not
be affected thereby.
(c) Governing Law. This Agreement shall be
construed and enforced in accordance with the laws of the State of Tennessee
without regard to its principles of conflicts of laws.
(d) Further Assurances. Each party covenants that
at any time, and from time to time, after the Closing, it will execute such
additional instruments and take such actions as may be reasonably requested by
the other parties to confirm or perfect or otherwise to carry out the intent
and purposes of this Agreement.
(e) Waiver. Any failure on the part of any party
to comply with any of its obligations, agreements or conditions hereunder may
be waived by any other party to whom such compliance is owed. No waiver of any
provision of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.
(f) Assignment. SEI and Sub may assign their
rights under this Agreement to any affiliated entity, but otherwise this
Agreement shall not be assignable by any of the parties hereto without the
written consent of all other parties.
(g) Binding Effect. All of the terms of this
Agreement, whether so expressed or not, shall be binding upon the respective
personal representatives, successors and assigns of the parties hereto and
shall inure to the benefit of and be enforceable by the respective personal
representatives, successors and assigns of the parties hereto. This Agreement
shall survive the Closing and not be merged therein.
(h) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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(i) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(j) Survival of Representations and Warranties.
The representations and warranties of the parties contained in this Agreement
or any other Transaction Document shall survive the Closing and shall not be
extinguished thereby notwithstanding any investigation or other examination by
any party.
(k) Construction of Terms. The language used in
the Agreement shall be construed, in all cases, according to its fair meaning,
and not for or against either party hereto. The parties acknowledge that each
party has reviewed this Agreement and that normal rules of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement. Whenever the masculine
gender is used herein, it shall be deemed to include the feminine and the
neuter.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and date first above written.
SERVICE EXPERTS, INC.
By:
---------------------------------
Title: Chief Executive Officer
ACQUISITION SUB, INC.
-------------
By:
---------------------------------
Title:
------------------------------
By:
--------------------------------
Title:
-----------------------------
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LIST OF SCHEDULES TO BE PROVIDED BY THE COMPANY
Schedule 4(c)(i) Allocation of Purchase Price
Schedule 5(a) Jurisdictions Where Qualified
Schedule 5(b) Capitalization
Schedule 5(e) Predecessor Companies; Disposition of Assets
Schedule 5(f)(i) Financial Statements
Schedule 5(f)(ii) Exceptions to Financial Statements
Schedule 5(g) Accounts Receivable and Payable
Schedule 5(h) Absence of Certain Changes
Schedule 5(i)(i) Ownership of Properties
Schedule 5(i)(ii) Exceptions to Ownership of Properties
Schedule 5(j) Taxes
Schedule 5(k) Insurance
Schedule 5(l)(iv) Environmental Conditions
Schedule 5(m) Contracts and Commitments
Schedule 5(n) Liabilities
Schedule 5(o) Employees and Labor Matters
Schedule 5(p) Employee Benefit Plans and Agreements
Schedule 5(q) Trademarks, Trade Names, Etc.
Schedule 5(r) Litigation
Schedule 5(s) Compliance with Laws, Regulations and Court
Orders
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Schedule 5(u) Consents and Approvals
Schedule 10(e) Form of Opinion of Counsel to the Company
Schedule 10(h)(i) Persons Subject to Lockup
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LIST OF SCHEDULES TO BE PROVIDED BY SEI
Schedule 4(c)(ii) Form of Escrow Agreement
Schedule 4(e) Adjustments to Net Income
Schedule 6(g) No Broker's Fees
Schedule 9(c) Form of Opinion of Waller Lansden
Dortch & Davis, A Professional
Limited Liability Company
Schedule 10(h)(ii) Form of Lockup Agreement
Schedule 10(i) Form of Employment Agreement
Schedule 10(j) Form of Indemnification Agreement
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