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EXHIBIT 10.17
[FORM OF STOCK PURCHASE AGREEMENT]
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
__________, 1998, is by and among Service Experts, Inc., a Delaware corporation
("SEI"), and each of the shareholders (each, a "Shareholder" and collectively,
the "Shareholders") of _____________________, Inc., a ___________ 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 Shareholders own all of the issued and outstanding shares
of capital stock of the Company (the "Shares"); and
WHEREAS, the Shareholders desire to transfer to SEI, and SEI desires to
purchase, all of the Shares in a transaction (the "Transfer") intended to
qualify as a reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and to be accounted for as a
pooling of interests for financial accounting purposes.
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. Transfer of Shares. In accordance with the terms and
conditions set forth herein, on the Closing Date (as hereinafter defined), the
Shareholders will transfer, convey, assign and deliver, and SEI will purchase,
all of the Shares free and clear of any and all liens, claims and encumbrances
whatsoever.
Section 2. Purchase Price; Exchange of Certificates.
(a) Purchase Price. As of the Closing Date (as hereinafter
defined) and subject to the provisions of this Section 2, in exchange for
certificates representing all of the Shares, the Shareholders will receive from
SEI aggregate consideration of $____________ (the "Purchase Price"), consisting
of (i) the assumption by SEI of certain indebtedness of the Company in the
amount of $________ and described on Schedule 2(a) hereto (the "Assumed Debt")
and (ii) certificates representing that number of shares of Common Stock, par
value $.01 per share, of SEI (the "SEI Common Stock") which is equal to the
quotient of the Purchase Price (subject to the adjustments set forth in this
Section 2) less the Assumed Debt, divided by the Closing Price. The "Closing
Price" shall equal the average closing sales price of a share of SEI Common
Stock as reported on the New York Stock Exchange for the five (5) trading days
ending on the second trading day immediately preceding the Closing Date.
(b) Escrow Agreement. Certificates representing shares of SEI
Common Stock equal to, in the aggregate, ten percent (10%) of the Purchase
Price, as adjusted pursuant to this Section 2, shall be held in escrow pursuant
to the terms and conditions of the escrow agreement attached hereto as Schedule
2(b) (the "Escrow Agreement").
(c) Fractional Shares. 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, each Shareholder shall be entitled to receive a cash
payment equal to such fractional proportion of the Closing Price of a share of
SEI Common Stock.
(d) Adjustment of Shares of Stock. In the event that,
subsequent to the date of this Agreement but prior to the Closing Date, 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,
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recapitalization or other similar transaction, the number of shares of SEI
Common Stock to be delivered pursuant to this Agreement shall be appropriately
adjusted.
Section 3. The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place, following the satisfaction of
all of the conditions set forth in Sections 8, 9 and 10 hereof, or the waiver
thereof, on a date (the "Closing Date") and at a place to be specified by the
parties.
Section 4. Deliveries at Closing. At the Closing, the Shareholders
shall deliver to SEI the various certificates, instruments and documents
referenced in Section 10 below, including without limitation stock certificates
representing the Shares, together with accompanying stock transfer powers or
instruments of assignment, duly endorsed in blank. At the Closing, SEI shall
deliver to the Shareholders the various certificates, instruments and documents
referenced in Section 9 below.
Section 5. Representations and Warranties of the Shareholders. Each of
the Shareholders, jointly and severally, 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 to carry on its business as it
is now being conducted. The Company has in effect and holds all licenses,
permits and other required authorizations from governmental authorities
necessary for it to own or lease its properties and 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 the Transaction Documents (as hereinafter defined) to be
executed and delivered by the Company or (B) the assets, results of operations
or prospects of the Company. As used in this Agreement, "Transaction Documents"
shall mean all documents to be executed and delivered by the Company or by a
Shareholder in connection with the Transfer.
(ii) True and complete copies 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
have been delivered to SEI. All of such records 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 Common Stock, par value $___________ per
share (the "Company Common Stock"), ___________ shares of which are issued and
outstanding as of the date hereof and constitute the Shares. All of the Shares
are owned by the Shareholders as set forth on Schedule 5(b) hereto. There are no
other classes of securities of the Company outstanding. All of the shares of
Company Common Stock have been duly authorized, validly issued and are fully
paid, nonassessable and free of preemptive rights. Other than this Agreement,
there are no contracts, commitments, understandings or arrangements relating to
the issuance, sale, transfer or registration of the Company Common Stock or any
other securities of the Company. Other than this Agreement, there are no
options, warrants, preemptive rights, calls, subscriptions, convertible
securities or other rights, agreements or commitments that obligate the Company
or a Shareholder to issue, transfer or sell any shares of Company Common Stock
or any other securities of the Company.
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(ii) All offers and sales of Company Common Stock,
and any other securities issued by the Company, prior to the date hereof were at
all relevant times exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and were duly registered or the
subject of an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
(iii) Each Shareholder is the legal and beneficial
owner of and has good and marketable title to the shares of Company Common Stock
set forth opposite its name on Schedule 5(b), free and clear of any and all
liens, claims, pledges, encumbrances, charges, options and contractual
restrictions whatsoever. Each Shareholder has full, absolute and unrestricted
right, power, capacity and authority to sell, transfer, assign and deliver its
Shares to SEI and the delivery of such Shares to SEI will convey to SEI valid,
marketable and indefeasible title to such Shares, free and clear of any and all
liens, claims, pledges, encumbrances, charges, options or contractual
restrictions whatsoever.
(iv) There is no plan or intention by any of the
Shareholders to sell, exchange or otherwise dispose of any of the shares of SEI
Common Stock to be received by such Shareholders in the Transfer.
(c) Authorization and Validity. Each Shareholder is a natural
person and has the full authority and legal capacity to execute and deliver this
Agreement and all other Transaction Documents to be executed and delivered by
such Shareholder and to consummate the transactions contemplated hereby or
thereby. No 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 each Shareholder,
enforceable against each Shareholder 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 or without notice or the
lapse of time or action by a third party, could result in a default under, any
outstanding indenture, mortgage, contract, lease, insurance policy or agreement
to which the Company is a party or by which its assets, business or operation
may be bound or affected. 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, any resolution of the
shareholders or Board of Directors of the Company or any agreements between or
among the Shareholders and the Company or between the Company and any current or
former owner of the Company Common Stock, (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 (or an event that with or without notice or
lapse of time or both would constitute a) default under, termination of 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 or a Shareholder is a party or by which the Company or a Shareholder 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, security interest, charge, encumbrance or restriction upon any
of the assets or properties of the Company or upon any share of Company Common
Stock.
(e) Subsidiaries and Investments. Except as set forth on
Schedule 5(e), neither the Company nor the Shareholders 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. Neither
the Company nor the Shareholders own any shares of SEI Common Stock or other
securities convertible into SEI Common Stock.
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(f) Financial Statements. Schedule 5(f) contains the financial
statements of the Company for the fiscal years ended __________ 1995, 1996 and
1997, and the audit report thereon of ________, independent auditors (the
"Financial Statements"). The Financial Statements have been prepared from the
books and records of the Company which accurately and fairly reflect in all
material respects the transactions of the Company. The Financial Statements are
true, correct and complete, have been prepared in accordance with generally
accepted accounting principles, consistently applied, 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 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. The Company has adequately funded all
accrued employee benefit costs and such funding is reflected on the Financial
Statements.
(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. No accounts payable of the
Company are over forty-five (45) days old.
(h) Absence of Certain Changes. Except as disclosed on
Schedule 5(h), the Company has not since _______________, 19___:
(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, except in the ordinary course of business
consistent with past practice;
(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;
(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 Twenty-Five Thousand and No/100 Dollars ($25,000.00) or made any single
capital expenditure which exceeded Ten Thousand and No/100 Dollars ($10,000.00);
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(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, except in the ordinary course of business consistent
with past practice;
(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), except
in the ordinary course of business consistent with past practice;
(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 Ten Thousand and No/100 Dollars ($10,000.00);
(xv) canceled or waived any claims or rights with
a value to the Company in excess of Ten Thousand and No/100 Dollars
($10,000.00);
(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. The Company owns the assets (the
"Assets") reflected on the ____________, 19___, balance sheet which 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 is currently
conducting such business. Except as set forth on Schedule 5(i), 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). All equipment and other
personal property constituting a portion of the Assets are in good operating
condition and repair, ordinary wear and tear excepted. The inventory of the
Company consists of supplies and purchased parts, all of which are merchantable
and fit for the purpose for which it was procured, and none of which is
obsolete, damaged or defective, subject only to the reserve for inventory
writedown as set forth on the balance sheet of the Company dated
_______________, 19__. Following the Transfer, the Company will have all of its
rights under the leases for the premises now leased by the Company free and
clear of any claims, liens and encumbrances, except to the extent expressly set
forth in said leases, and the Transfer will not result in any increase in rents
or charges under such leases.
(j) Taxes. The Company has timely filed all federal, state and
local tax returns or information returns required to be filed by it and has
delivered to SEI true and correct copies of such returns for the fiscal years 19
through 19 . All of such returns have been prepared accurately and filed in
accordance with applicable laws and regulations. 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 and the reserves for taxes contained on the most recent Financial
Statements (other than any reserve for deferred taxes established to reflect
timing differences between book and tax income) are adequate to cover all tax
liabilities as of the date of this Agreement. 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
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therefrom, and the Company and any predecessors in interest have paid the same
to the proper tax depositories or collecting authorities. 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. True and correct copies of all insurance
policies maintained by the Company, 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. All such policies are in full force and effect, with
no premium arrearages, and will continue in full force and effect following the
completion of the Transfer. Except as set forth on 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) Neither the Company nor any Shareholder has
stored any Hazardous Substances (as defined below) on any of the real property
owned or leased by the Company (the "Real Property"), except in compliance with
applicable Environmental Laws.
(iii) Neither the Company nor any Shareholder has
disposed of or released any Hazardous Substances on any of the Real Property.
(iv) The Company has not arranged for disposal or
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 the Company is not in full compliance
with Environmental Laws, and there are no circumstances that may prevent,
interfere with, or make more expensive 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 generation, handling, transportation, treatment, storage, release, emission,
discharge, presence or disposal of any Hazardous Substances that could form the
basis of any Environmental Claim against the Company, and neither the Company
nor any Shareholder knows of any such actions, activities, circumstances,
conditions, events or incidents.
(vii) The Real Property and, to the best knowledge
of the Company and the Shareholders, adjoining properties, have never been
utilized for any industrial or commercial operation involving any Hazardous
Substance.
(viii) Without in any way limiting the generality of
the foregoing, (A) all underground storage tanks, and the capacity, uses, date
of installation, and contents of such tanks, located on the Real Property, are
identified on Schedule 5(l)(viii); (B) there are no, nor have there ever been,
collection dumps, pits, and disposal facilities or surface impoundments located
on the Real Property, except as identified on Schedule 5(l)(viii); (C) all
underground storage tanks are in
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full compliance with the Environmental Laws; (D) there is no asbestos contained
in or forming part of the Real Property; and (E) no polychlorinated biphenyls
("PCBs") have been used or stored on the Real Property.
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, 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 agreement, commitment,
contract or obligation, whether written or oral, express or implied:
(i) that limits the right of the Company to engage
in or to compete with any person or entity in any business;
(ii) for the purchase or sale of supplies, services
or other items in excess of Ten Thousand and No/100 Dollars ($10,000.00) in any
one instance;
(iii) for the purchase or sale of any equipment or
machinery in excess of Ten Thousand and No/100 Dollars ($10,000.00);
(iv) for the performance of services for others in
excess of Ten Thousand and No/100 Dollars ($10,000.00) in any one instance;
(v) for the performance of services for others in
excess of Ten Thousand and No/100 Dollars ($10,000.00) for a period of more than
ninety (90) days;
(vi) for the lease of any property, tangible or
intangible;
(vii) with any shareholder, partner, officer or
director of the Company or any affiliate of such persons;
(viii) not in the ordinary course of business;
(ix) for any power of attorney, whether limited or
general, granted by or to the Company; or
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(x) otherwise material to the assets, business or
operations of 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 Schedule 5(m), the Company Agreements are valid
and in full force and effect; each is a legal, valid and binding contract; 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; there is no material default (or an event which, with the
giving of notice or lapse of time or both would be a material default) by the
Company; and to the knowledge of the Company and the Shareholders, 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 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, asserted or unasserted, contingent or
otherwise or whether due or to become due, relating to or arising out of any
act, omission, transaction, circumstance, sale of goods or services or other
condition which occurred or existed on or before the date hereof, and neither
the Company nor any Shareholder knows or has 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 __________, 19___; 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 knowledge of the Company and each Shareholder, 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 and
each Shareholder, threatened before any federal, state or local agency or court,
and, to the knowledge of the Company and each Shareholder, no basis for any such
matter exists;
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(B) the Company is not a party to any union
or collective bargaining agreement, and, to the knowledge of the Company and
each Shareholder, 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
during the last three (3) years.
(p) Employee Benefit Plans.
(i) Set forth on Schedule 5(p)(i) is a list of all
"employee benefit plans" as defined by Section 3(3) of the Employment Retirement
Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder (collectively, "ERISA"), all specified fringe benefit
plans as defined in Section 6039D of the Code, and all other bonus, incentive
compensation, deferred compensation, profit sharing, stock option, stock
appreciation right, stock bonus, stock purchase, employee stock ownership,
savings, severance, supplemental unemployment, layoff, salary continuation,
retirement, pension, health, life insurance, disability, group insurance,
vacation, holiday, sick leave, fringe benefit or welfare plan, or any other
similar plan, agreement, policy or understanding (whether written or oral,
qualified or nonqualified), and any trust, escrow or other agreement related
thereto, which (i) is maintained or contributed to by the Company, or (ii) with
respect to which the Company has any officer, employee, service provider, former
officer or former employee, or the dependents of any thereof, regardless of
whether funded that maintain or contribute to such plans (the "Employee Plans").
The Company has delivered or made available to SEI true, accurate and complete
copies of the documents comprising each Employee Plan and any related trust
agreements, annuity contracts or any other funding instruments ("Funding
Arrangements").
(ii) There have been no prohibited transactions,
breaches of fiduciary duty or other breaches or violations of any law applicable
to the Employee Plans and related Funding Arrangements that could subject the
Company or SEI to any liability. Each Employee Plan intended to be qualified
under Section 401(a) of the Code has a current favorable determination letter
and no event has occurred which, to the knowledge of the Company, could cause
any Employee Plan to become disqualified for purposes of section 401(a) of the
Code. Each Employee Plan has been operated in compliance with applicable law,
including Section 401(a) of the Code as applicable, and in accordance with its
terms.
(iii) All required reports and descriptions of the
Employee Plans (including Internal Revenue Service Form 5500 annual reports,
summary annual reports and summary plan descriptions) have been timely filed
with the Internal Revenue Service, the United States Labor Department (the
"DOL"), and the Pension Benefit Guaranty Corporation (the "PBGC") and, as
appropriate, provided to participants in the Employee Plans.
(iv) There are no pending claims, lawsuits or
actions relating to any Employee Plan (other than ordinary course claims for
benefits) and, to the best knowledge of the Company, none are threatened.
(v) No written or oral representations have been
made to any employee or former employee of the Company promising or guaranteeing
any employer payment or funding, and no Employee Plans provide, for the
continuation of medical, dental, life or disability insurance coverage for any
former employee of the Company for any period of time beyond the end of the
current plan year (except to the extent of coverage required under Title I, Part
6, of ERISA). The consummation of the transactions contemplated by this
Agreement will not accelerate the time of vesting, of payment, or increase the
amount, of compensation to any employee, officer, former employee or former
officer of the Company. No Employee Plans or other contracts or arrangements
provide for payments that would be triggered by the consummation of the
transactions contemplated by this Agreement that would subject any person to
excise tax under Section 4999 of the Code (i.e., "golden parachute" taxes). All
compensation amounts that have been paid or are payable are or will become
deductible by SEI pursuant to Section 162 of the Code.
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(vi) The Company and its affiliates have complied
with the continuation coverage provisions of Title I, Part 6, of ERISA ("COBRA")
with respect to all current employees and former employees. Schedule 5(p)(vi)
lists all of the former employees of the Company and their beneficiaries who
have elected or are eligible to elect COBRA continuation of health insurance
coverage under the Company's group health plans and who are so covered as of the
date hereof, and as of the Closing Date.
(vii) Neither the Company nor any other employer who
has participated or is participating in any Employer Plan (a "Sponsor") has
incurred any liability to the DOL, the PBGC or the Internal Revenue Service in
connection with any of the Employee Plans, and no condition exists that presents
a risk to the Company or any Sponsor of incurring any liability to the DOL, the
PBGC or Internal Revenue Service.
(viii) The Company has not been liable at any time
for contributions to a plan that is subject to Title IV of ERISA.
(ix) Full payment has been made of all amounts
which are required under the terms of each Employee Plan or Funding Arrangement
to have been paid as of the due date for such payments that have occurred on or
before the date of this Agreement, and no accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code) has been incurred
with respect to such Employee Plan, whether or not waived.
(x) Neither the Company nor any other Sponsor has
any liability, nor will the transactions contemplated under this Agreement
result in any liability (i) for the termination of or withdrawal from any plan
under Sections 4062, 4063, or 4064 of ERISA, (ii) for any lien imposed under
Section 302(f) of ERISA or Section 412(n) of the Code, (iii) for any interest
payments required under Section 302(e) of ERISA or Section 412(m) of the Code,
(iv) for any excise tax imposed by Section 4971 of the Code, (v) for any minimum
funding contributions under Section 302(c)(11) of ERISA or Section 412(c)(11) of
the Code, or (vi) for withdrawal from any multi-employer plan under Section 4201
of ERISA.
(xi) Any Employee Plan that provides for severance
payments to employees after termination of employment is in writing, has been
operated in compliance with ERISA, and expressly provides that no severance
benefits are payable as the result of a termination of employment to an employee
who is hired by a successor entity, or who otherwise continues employment with a
successor, in connection with a merger or acquisition transaction.
(q) Trademarks, Trade Names, Etc. The Company owns or has the
right to use each trademark, trade name, service xxxx, patent, copyright or
other intellectual property (the "Intellectual Property") necessary or desirable
for the operation of the business of the Company as presently conducted, and
following the Transfer, the Company will own or be able to use the Intellectual
Property on the identical terms and conditions. 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 the
Intellectual Property, and the Company has taken reasonable measures to protect
its rights with respect to Intellectual Property that is 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 to which the Company or a Shareholder is a party, 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. Neither the Company nor any
Shareholder knows of any 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 otherwise 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 or the Company Common Stock. The Company is in compliance with all
applicable federal, state and local laws, regulations and
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administrative orders and has received no notices of alleged violations thereof
except as disclosed in Schedule 5(s) hereof. Except as disclosed in Schedule
5(s), no warranty provided pursuant to the Company's service and maintenance
agreements is subject to any federal, state or local laws or regulations
concerning the sale of insurance. 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, 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 each Shareholder of this Agreement and the
Transaction Documents.
(v) No Broker's Fees. The Shareholders and the Company have 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 any
Shareholder, nor in any statement, certificate or instrument to be furnished to
SEI by the Company or any Shareholder 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 or any
Shareholder 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. Each Shareholder understands
and intends that SEI and its management will rely upon the representations of
the Company and each Shareholder made in this Agreement, and they are entitled
to rely upon each and all of the same without further inquiry.
(y) No Conflict of Interest. None of the Shareholders or any
of their respective affiliates owns, directly or indirectly (except in the
capacity as a shareholder), in whole or in part, any real or personal property,
tangible or intangible, which the Company is presently using or the use of which
is necessary for the business of the Company as presently conducted. The Company
is not indebted to any of its officers, directors or shareholders or to their
respective spouses, children or other family members, and none of such officers,
directors or shareholders has any claim of any nature against the Company,
except for accrued compensation. No officer, director or shareholder of the
Company, or any person in the family of or who is a partner of any officer,
director or shareholder of the Company, (i) is indebted to the Company, or (ii)
has any direct or indirect ownership interest in (A) any entity that sells goods
or services to the Company, (B) any
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other entity with which the Company is affiliated or with which it has a
business relationship or (C) in any entity that competes with the Company.
(z) Pooling Matters. To the best knowledge of the
Shareholders, neither the Company nor any of its affiliates has taken or agreed
to take any action that (without giving effect to any actions taken or agreed to
be taken by SEI or any of its affiliates) would prevent SEI from accounting for
the business combination to be effected by the Transfer as a
pooling-of-interests for financial reporting purposes in accordance with
Accounting Principles Board Opinion No. 16, the interpretative releases issued
pursuant thereto, and the pronouncements of the Securities and Exchange
Commission (the "SEC") thereon.
Section 6. Representations and Warranties of SEI. SEI hereby represents
and warrants to each Shareholder as follows as of the date hereof and as of the
Closing Date:
(a) Corporate Organization. SEI 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, par value
$.01 per share, and (ii) 10,000,000 shares of Preferred Stock, par value $.01
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, 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) Absence of Conflicting Agreements or Required Consents.
The execution, delivery and performance by SEI of the Transaction Documents to
be executed and delivered by it (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; (iii) will not conflict with or result in a violation of any law,
ordinance regulation, ruling, judgment, order or injunction of any court or
governmental instrumentality to which SEI is a party or by which SEI or any of
its 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 is a party or by which any of its properties are bound; and (v) will not
create any lien, encumbrance or restriction upon any of the assets or properties
of SEI.
(e) Litigation and Claims. There are no claims, lawsuits,
actions, arbitrations, administrative or other proceedings, governmental
investigations or inquiries pending or threatened against SEI affecting the
performance by SEI of the Transaction Documents.
(f) No Broker's Fees. SEI does 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.
(g) Statements True and Correct. No representation or warranty
made herein by SEI, nor in any statement, certificate or instrument to be
furnished to the Shareholders by SEI pursuant to any Transaction Document,
contains or will contain any untrue statement of
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material fact or omits or will omit to state a material fact necessary to make
these statements contained herein and therein not misleading.
(h) Ownership of Company Common Stock. SEI does not own any
shares of Company Common Stock or other securities convertible into Company
Common Stock.
Section 7. Additional Covenants and Agreements.
(a) Access to Information. From the date hereof to the Closing
Date, the Shareholders shall cause the Company to accord to SEI, its counsel,
accountants and other representatives full access to all of the properties,
books, records, contracts, commitments and records of the Company and furnish
SEI during such period with all such information concerning the business and
properties of the Company as SEI and its 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. 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 Shareholders. During the
period from the date of this Agreement to the Closing Date, the Shareholders
shall cause the Company to (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 Twenty-Five Thousand and No/100 Dollars ($25,000.00) 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, ordinary wear and tear excepted, (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
necessary to maintain its reputation and the goodwill of its customers, vendors,
lessors and others having business relations with the Company, and (vii) keep in
force all licenses, permits and approvals necessary to the operation of its
business as now conducted.
(c) Negative Covenants of the Shareholders. Without the prior
written consent of SEI or unless otherwise expressly permitted herein, from the
date of this Agreement to the Closing Date, the Shareholders shall cause the
Company not to:
(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 Twenty-Five Thousand
and No/100 Dollars ($25,000.00), 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;
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(vii) except in the ordinary course of business
(and, even if in the ordinary course of business, then not in an amount to
exceed Twenty-Five Thousand and No/100 Dollars ($25,000.00) 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;
(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 Shareholders shall cause the
Company to 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. Each Shareholder 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. Each Shareholder
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 parties hereunder.
(f) Licenses; Permits. The Shareholders will cause the Company
to 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 of the Company as it is currently operated.
(g) No Solicitation of Other Offers. The Shareholders shall
cause the Company (acting through any director, officer or other agent including
any investment banker, attorney, accountant or other representative retained by
it) not to, and the Shareholders (acting through any agent including any
investment banker, attorney, accountant or other representative retained by it)
shall not (i) 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; (ii) 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 of the transaction, without the
consent of SEI, other than in the ordinary course of
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business. Each Shareholder shall promptly advise SEI in writing of any such
inquiries, proposals or discussions received by the Shareholder or the Company
after the date hereof.
(h) Confidentiality and Public Announcements. Each Shareholder
shall cause the Company to, and each Shareholder shall, keep confidential all
information concerning the Transfer, this Agreement or provided to it by SEI
and, in the event of termination of the Transfer pursuant to Section 11, shall
deliver to SEI all documents and other materials previously delivered concerning
the transactions contemplated hereby. The Shareholders shall cause the Company
to, and each Shareholder shall, refrain from making, any public announcement
with respect to this Agreement without the prior written consent of SEI. SEI and
the Company will consult with each other before issuing any press release or
otherwise making any public statement with respect to the transaction
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation except as may be
required by applicable law or the requirements of the New York Stock Exchange
(i) Risk of Loss. The Shareholders and 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 transactions contemplated hereby, the
Shareholders shall cause the Company to remit all net condemnation proceeds or
third party insurance proceeds to SEI, and the Purchase Price 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 Shareholders shall prepare, at their 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 Shareholders shall file such returns on
behalf of the Company 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 Shareholders to complete such returns.
(k) Resale of SEI Common Stock. Each Shareholder hereby
acknowledges and agrees to the following: (i) the shares of Common Stock
issuable to such Shareholder will be held by such Shareholder pursuant to the
provisions of the Securities Act of 1933, as amended (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 the rules and
regulations thereunder; and (iii) each such certificate representing the shares
of Common Stock issued to a Shareholder will bear a restrictive legend setting
forth the restrictions on transfer referred to above.
(l) Prohibited Activities. From and after the date hereof and
until the Effective Time, each party hereto agrees that it shall not (i)
knowingly take any action or knowingly fail to take any action that would
jeopardize the treatment of the Transfer as a "pooling of interests" for
financial accounting purposes; (ii) knowingly take any action or knowingly fail
to take any action that would jeopardize qualification of the Transfer as a
reorganization within the meaning of Section 368 of the Code; or (iii) enter
into any contract, agreement, commitment or other arrangement with respect to
either of the foregoing.
(m) Closing Date Balance Sheet.
(i) The Company's shareholders' equity at the Closing
Date will be not less than $___________. If the Company's shareholders' equity
at the Closing Date is more than $__________, SEI will increase the Purchase
Price by the over-equity amount. However, such increase in the Purchase Price
for the over-equity shall not exceed the increase in the net working capital,
excluding any increase in inventory between the last day of the Valuation Period
and the Closing Date.
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(ii) None of the Shareholders will be indebted to
the Company as of the Closing Date.
(iii) As of the Closing Date, the Company will not
have any indebtedness, other than (i) accounts payable less than forty-five (45)
days old as of the Closing Date and (ii) the Assumed Debt.
(n) Right of First Refusal. The Shareholders agree that if,
during the twelve (12) month period commencing with the execution of this
Agreement, the Company receives and desires to accept a bona fide offer (an
"Offer") relating to a merger or other business combination of the Company or
for the acquisition of a substantial equity interest in the Company or the
acquisition of a substantial portion of the Company's assets (other than the
transactions contemplated by this Agreement), the Shareholders shall promptly
notify SEI in writing of each such Offer. This notice shall contain a copy of
the Offer and all other terms and conditions applicable to the Offer. SEI shall
have the right to consummate the transaction set forth in the Offer on
substantially the same terms and conditions as set forth in the Offer. SEI shall
exercise its right of first refusal, if at all, by giving written notice to the
Shareholders within thirty (30) days of receipt of the Shareholders' notice of
the Offer. Notwithstanding the foregoing, nothing contained in this Section 7(n)
shall in any way limit or relieve the Shareholders of their obligations under
Section 7(g) hereof.
(O) TITLE COMMITMENTS AND SURVEYS. THE SHAREHOLDERS SHALL
CAUSE THE COMPANY TO OBTAIN AS SOON AS REASONABLY POSSIBLE, AT THE EXPENSE OF
THE COMPANY, A TITLE COMMITMENT FROM _________________ (THE "TITLE COMPANY") FOR
AN OWNER'S TITLE POLICY/ALTA FORM 1987 (REVISED 10-17-92) TITLE INSURANCE POLICY
FOR THE REAL PROPERTY (THE "OWNED PROPERTY") OWNED BY THE COMPANY (THE "TITLE
COMMITMENT"), ALONG WITH COPIES OF ALL RECORDED DOCUMENTS AFFECTING OR RELATING
TO THE OWNED PROPERTY. THE COMPANY SHALL OBTAIN AS SOON AS REASONABLY POSSIBLE,
AT THE EXPENSE OF THE COMPANY, AN ALTA/ACSM SURVEY OF THE OWNED PROPERTY (THE
"SURVEY"), SHOWING, INTER ALIA, THE PERIMETER BOUNDARIES OF THE OWNED PROPERTY,
ALL IMPROVEMENTS THEREON, AND ALL TITLE EXCEPTIONS NOTED ON THE TITLE
COMMITMENT. THE COMPANY WILL PROVIDE SEI WITH COPIES OF THE TITLE COMMITMENT AND
SURVEY.
Section 8. Conditions to the Parties' Obligations to Effect the
Transfer. The respective obligations of the parties to effect the Transfer 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 New York Stock Exchange and by any applicable
regulatory body.
(b) Any waiting period applicable to the consummation of the
Transfer under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 shall
have expired or been terminated.
(c) None 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 remain effective at the
Closing, and no stop order suspending the 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 in connection with
the Transfer 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 where the
failure to have obtained or made any such consent, authorization, order,
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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 Closing.
(f) The SEI Common Stock to be issued in connection with the
Transfer shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
Section 9. Conditions to the Obligations of the Shareholders to Effect
the Transfer. The obligations of the Shareholders to effect the Transfer shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of SEI 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 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 Shareholders of the following documents:
(i) A good standing certificate regarding SEI
certified by the Secretary of State of the State of Delaware dated within five
(5) business days prior to Closing;
(ii) 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;
(iii) 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
(iv) An incumbency certificate certifying the
identity of the officers of SEI.
(c) Opinion of Counsel. SEI shall have delivered to the
Shareholders an opinion of Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, A Professional Limited
Liability Company, counsel to SEI, dated the Closing Date, substantially in the
form attached hereto as Schedule 9(c).
(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 Shareholders or their counsel, would make it inadvisable to consummate such
transactions.
Section 10. Conditions to the Obligations of SEI to Effect the
Transfer. The obligations of SEI to effect the Transfer 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,
including, without limitation, the Financial Statements. The Shareholders 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 each Shareholder contained in this Agreement, or any document or
instrument
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delivered to SEI hereunder, shall be true and correct as of the Closing Date
with the same effect as though made on and as of such date.
(c) Performance; Document Delivery. Each Shareholder shall
have performed, 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 (5)
business days prior to Closing;
(ii) A certificate dated as of the Closing Date
signed by each Shareholder certifying that the representations and warranties of
each Shareholder set forth herein are true and correct as of the Closing Date
and that each Shareholder has fulfilled all of the conditions of this Section
10;
(iii) Certificates representing the Shares, together
with accompanying stock transfer powers or instruments of assignment, duly
endorsed in blank by the applicable Shareholder;
(iv) Resignations of each of the officers and
directors of the Company effective as of the Closing Date;
(v) 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), including any claims for indemnification,
contribution or otherwise arising with respect to this Agreement, the
representations, warranties and agreements contained herein and the transactions
contemplated hereby;
(vi) 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
(vii) 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 Shareholders, dated the Closing Date,
substantially in the form attached hereto as Schedule 10(e).
(f) Consents and Approvals. The Shareholders 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.
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(h) Lock-up Agreements. Each Shareholder shall have entered
into an agreement with SEI restricting the resale of shares of SEI Common Stock
substantially in the form attached hereto as Schedule 10(h).
(i) Non-Compete Agreements. Each Shareholder shall have
entered into a non-compete agreement substantially in the form attached hereto
as Schedule 10(i).
(j) Employment Agreements. The Company and certain employees
of the Company shall have entered into employment agreements substantially in
the form attached hereto as Schedule 10(j).
(k) Escrow Agreement. SEI and each of the Shareholders shall
have entered into the Escrow Agreement, and each Shareholder who is a party to
the Escrow Agreement shall have executed and delivered to SEI a stock power with
respect to the shares of SEI Common Stock to be held in escrow.
(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) Environmental Audit. SEI shall have received a
satisfactory phase one environmental audit of the Real Property conducted by an
entity or individual acceptable to SEI at the Shareholders' sole expense.
(n) UCC Lien Search. SEI shall have received a satisfactory
UCC lien search on the Company from the office of the Secretary of State of the
Company's state of incorporation and each state listed in Schedule 5(a), and
from the appropriate office in each county in which the Company has business
operations. Such lien searches will be conducted by an entity or individual
acceptable to SEI at the Shareholders' sole expense.
(o) Lease. The Company shall have entered into a lease
substantially in the form of Schedule 10(o) attached hereto with the owners of
the building and land in and upon which the Company operates as of the date
hereof. The lease of such land and building in effect immediately prior to the
Closing shall be terminated.
(p) Board Approval. This Agreement and the Transfer shall have
been approved and authorized by the Board of Directors of SEI.
(q) Pooling Accounting Treatment. SEI shall be satisfied that
the Transfer will qualify for as a pooling of interests for financial accounting
purposes under generally accepted accounting principles and under applicable
rules and regulations of the SEC.
(R) TITLE COMMITMENT. SEI SHALL HAVE BEEN ISSUED A TITLE
COMMITMENT IN THE AMOUNT OF $__________ INSURING AS OF THE DATE AND TIME OF THE
RECORDING OF THE WARRANTY DEED SEI'S GOOD, INDEFEASIBLE AND MARKETABLE TITLE TO
THE OWNED PROPERTY WHICH SHALL CONTAIN NO LIENS OR OTHER TITLE EXCEPTIONS OR
ENCUMBRANCES EXCEPT FOR THOSE LIENS OR OTHER TITLE EXCEPTIONS OR ENCUMBRANCES
APPROVED IN WRITING BY SEI. SUCH TITLE COMMITMENT SHALL BE ACCEPTABLE TO SEI AND
SHALL PROVIDE FULL COVERAGE AGAINST MECHANIC'S OR MATERIALMAN'S LIENS ARISING
OUT OF ANY WORK, LABOR, MATERIALS OR SERVICES FURNISHED OR CLAIMED TO HAVE BEEN
FURNISHED TO THE OWNED PROPERTY OR ANY PORTION THEREOF PRIOR TO THE CLOSING
DATE, AND SHALL CONTAIN SUCH ENDORSEMENTS AS SPECIFIED HEREIN OR AS MAY BE
REASONABLY REQUIRED BY SEI.
Section 11. Termination.
(a) Means of Termination. This Agreement may be terminated at
any time prior to the Closing in the following ways:
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(i) by the mutual consent in writing of the
Shareholders and SEI;
(ii) by SEI if (A) there has been a material
violation or breach by the Shareholders of any of the agreements,
representations or warranties contained in this Agreement which has not been
waived by SEI in writing, (B) 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, or (C) the Transfer will not qualify for
accounting by SEI as a "pooling of interests" under generally accepted
accounting principles and under the applicable rules and regulations of the SEC;
or
(iii) by the Shareholders if there has been a
material violation or breach by SEI of any of the agreements, representations or
warranties contained in this Agreement which has not been waived by the
Shareholders 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 Shareholders in writing.
(b) Effect of Termination. 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 for the following agreements and
obligations of the parties, which shall survive the termination of this
Agreement: (i) the obligations of each party to preserve the confidentiality of
documents, certificates and information furnished to such party pursuant hereto,
(ii) any obligation or liability of any party based on or arising from any
breach or default by such party with respect to its representations, warranties,
covenants or agreements contained in the Transaction Documents, (iii) the right
of first refusal provided for in Section 7(n) hereof and (iv) the obligation of
each party to bear its own expenses as set forth in Section 12 hereof.
Section 12. Expenses. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
Transfer, including its own legal, accounting and audit fees.
Section 13. Indemnification.
(a) Indemnification of SEI. The Shareholders, jointly and
severally, agree 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:
(i) the untruth, inaccuracy or breach of any
representation or warranty made by the Shareholders 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 Shareholders contained in this Agreement or any
other Transaction Document;
(iii) any untrue statement of a material fact
relating to the Company and/or Shareholders that was made in reliance upon and
in conformity with information furnished by the Company and/or the Shareholders
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 and/or Shareholders to state
therein a material fact relating to the Company and/or Shareholders 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 Shareholders or 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
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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;
(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 Transfer.
(b) Limitations on the Shareholders' Indemnity. The
Shareholders shall be obligated to indemnify and hold harmless SEI pursuant to
Section 13(a) only in the event that the aggregate of all indemnifiable Losses
exceeds one percent (1%) of the Purchase Price; provided, however, that in the
event the aggregate of all indemnifiable Losses exceeds one percent (1%) of the
Purchase Price, the Shareholders shall be obligated to indemnify SEI for all
indemnifiable Losses beginning with the first dollar. Notwithstanding the
foregoing sentence, the Shareholders shall be obligated to indemnify and hold
harmless SEI pursuant to Section 13(a) for all Losses arising from or relating
to a breach of Section 7(m) hereof.
(c) Indemnification of the Shareholders. SEI shall indemnify
and hold harmless the Shareholders pro rata in accordance with their holdings of
shares of Company Common Stock as of the Closing (each an "Indemnified Party")
from and against any and all Losses reasonably incurred by such Indemnified
Party as a result of:
(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
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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; provided that (i) the indemnifying party shall permit the
Indemnified Party to participate in such settlement or defense through counsel
chosen by the Indemnified Party, provided that the fees and expenses of such
counsel shall not be borne by the indemnifying party, and (ii) the indemnifying
party shall not settle any indemnifiable claim without the Indemnified Party's
consent. 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 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 Shareholders or by the Shareholders to SEI, as the
case may be, or (ii) the shares of SEI Common Stock held 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 Shareholders, to:
----------------------------------
----------------------------------
----------------------------------
or at such other address as may be furnished to SEI by the Shareholders
in writing.
(b) If to SEI, to:
Service Experts, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx,
A Professional Limited Liability Company
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: X. Xxxxx Xxxx, Esq.
or at such other address as may be furnished to the Shareholders by SEI
in writing.
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Section 15. 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,
Shareholders 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 may assign its rights under this Agreement
to any affiliated entity, but otherwise this Agreement shall not be assignable
by any of the parties hereto, by operation of law or otherwise, 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.
(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. The representations, warranties and covenants of
the parties contained in this Agreement, including without limitation the
provisions of Section 13 hereof, or in 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 any 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.
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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:
--------------------------------
SHAREHOLDERS
--------------------------------------
Signature
--------------------------------------
Name (please print)
--------------------------------------
Signature
--------------------------------------
Name (please print)
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LIST OF SCHEDULES TO BE PROVIDED BY THE SHAREHOLDERS
Schedule 2(a) Assumed Debt
Schedule 5(a) Jurisdictions Where Qualified
Schedule 5(b) Stock Ownership
Schedule 5(e) Subsidiaries and Investments
Schedule 5(f) Financial Statements
Schedule 5(h) Absence of Certain Changes
Schedule 5(i) Exceptions to Ownership of Assets
Schedule 5(k) Insurance
Schedule 5(l)(iv) Environmental Disposal
Schedule 5(l)(viii) Underground Storage Tanks
Schedule 5(m) Contracts and Commitments
Schedule 5(n) Liabilities
Schedule 5(o) Employees and Labor Matters
Schedule 5(p)(i) Employee Benefit Plans and Agreements
Schedule 5(p)(vi) COBRA
Schedule 5(r) Litigation
Schedule 5(s) Compliance with Laws, Regulations and Court Orders
Schedule 5(u) Consents and Approvals
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LIST OF SCHEDULES TO BE PROVIDED BY SEI
Schedule 2(b) Form of Escrow Agreement
Schedule 9(c) Form of Opinion of Counsel to SEI
Schedule 10(e) Form of Opinion of Counsel to the Shareholders
Schedule 10(h) Form of Lock-up Agreement
Schedule 10(i) Form of Non-Compete Agreement
Schedule 10(j) Form of Employment Agreement
Schedule 10(o) Form of Lease Agreement
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