Exhibit 2.44
AMENDED AND RESTATED
MERGER AGREEMENT
by and among
CENTERPRISE ADVISORS, INC.,
SSLD MERGERSUB LLC,
and
SIMIONE, SCILLIA, XXXXXX & XXXXXXX LLC
September 24, 1999
TABLE OF CONTENTS
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ARTICLE I
THE MERGER 2
1.1 The Merger 2
1.2 Effects of the Merger 2
1.3 Managers and Officers of the Surviving Company 2
ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT 3
2.1 Merger Consideration 3
2.1.1 Basic Purchase Consideration 3
2.1.2 Intentionally Omitted 3
2.1.3 Intentionally Omitted 3
2.1.4 Conversion of Company Interests 3
2.1.5 Exchange of Certificates 3
2.2 Post-Closing Adjustments to Basic Purchase Consideration 4
2.2.1 Adjustments for Net Working Capital Shortfall/Excess 4
2.2.2 Preliminary Balance Sheet and Adjustment 4
2.2.3 Interim Adjustment 4
2.2.4 Final Adjustment 4
2.2.5 Disputes 4
2.2.6 Payment of Adjustments 5
2.3 Post-Closing Management of AR 5
2.4 Assignment of Uncollected AR. 5
2.5 Definitions 5
ARTICLE III
THE CLOSING AND CONSUMMATION DATE 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER 6
4.1 Organization and Qualification 7
4.2 Company Subsidiaries 7
4.3 Authority; Non-Contravention; Approvals 7
4.4 Capitalization 9
4.5 Year 2000 10
4.6 Financial Statements 10
4.7 Absence of Undisclosed Liabilities 10
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4.8 Unbilled Fees and Expenses 10
4.9 Absence of Certain Changes or Events 11
4.10 Litigation 13
4.11 Compliance with Applicable Laws 14
4.12 Licenses 14
4.13 Material Contracts 14
4.14 Properties 17
4.15 Intellectual Property 19
4.16 Taxes 19
4.17 Employee Benefit Plans; ERISA 20
4.18 Labor Matters 22
4.19 Environmental Matters 23
4.20 Insurance 23
4.21 Interest in Customers and Suppliers; Affiliate Transactions 23
4.22 Business Relationships 24
4.23 Compensation 24
4.24 Bank Accounts 25
4.25 Professional Credentials 25
4.26 Disclosure; No Misrepresentation 25
ARTICLE V
[RESERVED] 25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CENTERPRISE 25
6.1 Organization And Qualification 25
6.2 Capitalization 26
6.3 No Subsidiaries 27
6.4 Authority; Non-Contravention; Approvals 27
6.5 Absence of Undisclosed Liabilities 28
6.6 Litigation 28
6.7 Compliance with Applicable Laws 28
6.8 No Misrepresentation 29
ARTICLE VII
CERTAIN COVENANTS AND OTHER TERMS 29
7.1 Conduct of Business by the Seller and the Company
Prior to the Effective Time 29
7.2 No-Shop 31
7.3 Schedules 32
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7.4 Company Member Meeting; Seller Member Meeting 33
7.5 Asset Transfer 33
ARTICLE VIII
ADDITIONAL AGREEMENTS 34
8.1 Access to Information 34
8.2 Registration Statements 34
8.3 Expenses and Fees 36
8.4 Agreement to Cooperate 36
8.5 Public Statements 36
8.7 Centerprise Covenants. 36
8.8 Release of Guarantees 36
8.9 [Reserved] 36
8.10 Preparation and Filing of Tax Returns 37
8.11 Maintenance of Insurance 37
8.12 Administration 37
8.13 Member Representative 37
ARTICLE IX
[RESERVED] 37
ARTICLE X
CLOSING CONDITIONS 37
10.1 Conditions to Each Party's Obligation to Effect the Merger 37
10.2 Conditions to Obligation of the Seller and the
Company to Effect the Merger 39
10.3 Conditions to Obligation of Centerprise to Effect the Merger 40
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER 42
11.1 Termination 42
11.2 Effect of Termination 43
11.3 Amendment 43
11.4 Waiver 43
ARTICLE XII
[RESERVED] 44
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ARTICLE XIII
[RESERVED] 44
ARTICLE XIV
[RESERVED] 44
ARTICLE XV
GENERAL PROVISIONS 44
15.1 Brokers 44
15.2 Notices 44
15.3 Interpretation 45
15.4 Certain Definitions 46
15.5 Entire Agreement; Assignment 46
15.6 Applicable Law 46
15.7 Counterparts 46
15.8 Parties in Interest 46
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LIST OF SCHEDULES
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Schedule 2.1 Consideration
Schedule 2.5 Net Working Capital Adjustment Items
Schedule 4.2 Company Subsidiaries
Schedule 4.3.2 Required Consents
Schedule 4.4 Capitalization
Schedule 4.7 Liabilities
Schedule 4.9 Certain Changes and Events
Schedule 4.10 Litigation
Schedule 4.11 Noncompliance with Applicable Laws
Schedule 4.12 Licenses and Permits
Schedule 4.13 Material Contracts
Schedule 4.14.1-1 Real Property
Schedule 4.14.1-2(a) Exceptions Regarding Owned Property
Schedule 4.14.1-2(b) Exceptions Regarding Leased Property
Schedule 4.14.2 Tangible Personal Property; Liens
Schedule 4.15 Intellectual Property
Schedule 4.16.1-1 Taxes
Schedule 4.16.1-2 Tax Audits
Schedule 4.17.1 Employee Plans
Schedule 4.17.2 Unwritten Employee Plans
Schedule 4.18 Labor Matters
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Schedule 4.19 Environmental Matters
Schedule 4.20 Insurance
Schedule 4.21 Affiliate Transactions
Schedule 4.22 Business Relationships
Schedule 4.23 Compensation
Schedule 4.24 Bank Accounts
Schedule 6.2 Centerprise's Capitalization
Schedule 6.5 Liabilities
Schedule 7.1.4 Terminated Employee Plans and Agreements
Schedule 7.5 Retained Assets and Retained Liabilities
Schedule 8.8 Release of Guarantees
Schedule 15.1 Brokers
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LIST OF EXHIBITS
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Exhibit 10.2(c) Form of Opinion of Centerprise's Counsel
Exhibit 10.2(d) Form of Incentive Compensation Agreement
Exhibit 10.2(f) Form of Stockholders Agreement
Exhibit 10.3(c) Form of Opinion of Counsel to the Company
Exhibit 10.3(d)(A) Form of Separate Practice Agreement
Exhibit 10.3(d)(B) Form of Services Agreement
Exhibit 10.3(j) Form of Release
Exhibit 10.3(t) Form of Company Member Agreement
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DEFINED TERMS
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Accounting Licenses Section 4.12
Acquisition Introduction
Actions Section 4.10.1
Affiliate Section 15.4
Affiliate Transactions Section 4.21
Agreement Introduction
AR Section 2.5(a)
Arbitrator Section 2.2.5
Asset Transfer Introduction
Attestation Practice Introduction
Basic Purchase Consideration Section 2.1.1
Business Introduction
Cash Consideration Section 2.1.1
Centerprise Introduction
Centerprise Accountants Section 2.2.2
Centerprise Common Stock Section 2.1.1
Centerprise Material Adverse Effect Section 6.4.3
Centerprise Representatives Section 8.1.1
Centerprise Required Statutory Approvals Section 6.4.3
Closing Article III
Closing Balance Sheet Section 2.2.2
Closing Date Article III
Code Introduction
Company Introduction
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Company Interests Section 2.1.1
Company Material Adverse Effect Section 4.3.3
Company Subsidiary(ies) Section 4.2
Contracts Section 4.13
Copyrights Section 4.15
Disputed Item Section 2.2.5
Effective Time Section 1.1
Employee Plan Section 4.17.5(a)
Environmental and Safety Requirements Section 4.19
ERISA Section 4.17.5(b)
Final Adjustment Section 2.2.4
Financial Statements Section 4.6
First Person Section 4.17.5(c)
Form S-1 Section 4.3.3
Form S-4 Section 4.3.3
Founding Companies Introduction
GAAP Section 4.6
general increase Section 4.23
Governmental Authority Section 4.3.2
Hazardous Materials Section 4.19
herein Section 15.3
hereof Section 15.3
hereunder Section 15.3
HSR Act Section 4.3.3
Incentive Compensation Agreement Section 10.2(d)
Intellectual Property Section 4.15
Intellectual Property Licenses Section 4.15
Interim Adjustment Section 2.2.3
IPO Introduction
Knowledge Section 15.4
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Latest Balance Sheet Section 4.6
Laws Section 4.11
Leased Property Section 4.14.1
Licenses Section 4.12
Lien(s) Section 4.3.2
Liquidated Damages Amount Section 7.3
Marks Section 4.15
Material Contracts Section 4.13
Member Representative Section 8.13
Merger Introduction
Merger Documents Section 1.1
Mergersub Introduction
Net Working Capital Section 2.5(b)
1933 Act Section 4.3.3
NewCo Introduction
Organizational Documents Section 4.1
Other Agreements Introduction
Other Mergers Introduction
Owned Property Section 4.14.1
Patents Section 4.15
Person Section 15.4
Plan Affiliate Section 4.17.5(c)
Real Property Section 4.14.1
Registration Statements Section 4.3.3
Resolution Period Section 2.2.5
Retained Assets Section 7.5
Retained Liabilities Section 7.5
Returns Section 4.16.1
Schedules Section 7.3
SEC Section 4.3.3
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Securities Act Section 4.3.3
Seller Introduction
Seller Interests Section 4.4
Seller Representatives Section 8.1.1
Special Bonus Plan Section 2.5(c)
Stock Consideration Section 2.1.1
Stockholders Agreement Section 10.2(f)
Surviving Company Section 1.2
Target Section 2.5(d)
Tax Accrual Section 2.5(e)
Taxes Section 4.16.2
Territory Section 13.1(a)
Trade Secrets Section 4.15
Underwriters Section 8.1.1
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AMENDED AND RESTATED
MERGER AGREEMENT
THIS AMENDED AND RESTATED MERGER AGREEMENT (this "Agreement") is made as of
September 24, 1999, by and among Centerprise Advisors, Inc., a Delaware
corporation ("Centerprise "), SSLD Mergersub LLC, a Delaware limited liability
company and wholly-owned subsidiary of Centerprise ("Mergersub"), and Simione,
Scillia, Xxxxxx & Xxxxxxx LLC, a Connecticut limited liability company (the
"Seller").
WITNESSETH:
WHEREAS, the Seller engages directly, and indirectly through the Company
Subsidiaries, in the business of providing accounting, tax and other related
services (such business provided by the Seller is referred to as the
"Business");
WHEREAS, prior to, and in anticipation of, completion of the transactions
contemplated hereby (a) the Seller will form and transfer, assign and convey to
a wholly-owned limited liability company ("Newco" or the "Company") all of the
Seller's right, title and interest in and to all of its assets and liabilities
(the "Asset Transfer") other than the Retained Assets and Retained Liabilities,
and (b) the Seller will retain those Retained Assets and Retained Liabilities
required to provide services related to the practice of accounting that,
pursuant to applicable laws and regulations, may only be conducted by certified
public accountants (the "Attestation Practice");
WHEREAS, the Managers and Board of Directors of the Seller, the Company,
Mergersub and Centerprise, respectively, deem it advisable and in the best
interests of their respective security holders to approve and consummate the
business combination transactions provided herein in which the Company would
merge with and into Mergersub, with Mergersub being the surviving entity in the
merger (the "Merger");
WHEREAS, Centerprise is entering into other agreements (the "Other
Agreements") substantially similar to this Agreement with each of Xxxxxxx Xxxxxx
& Xxxxxxxxx, P.C., Xxxxxx X. Driver Company, Inc., Xxxx Frankfort Xxxxx & Xxxx,
P.C., The Xxxxxxx Company, Inc., Xxxxxxx Administrators, LLC, Verasource Excess
Risk Ltd., Berry, Dunn, XxXxxx & Xxxxxx, Chartered, Xxxxxx Xxxx & Xxxxxx PC,
Self Funded Benefits, Inc. d/b/a Insurance Design Administrators, Grace &
Company, P.C., and Xxxxxxx Rudzewicz & Co., P.C. (which companies together with
the Seller are collectively referred to herein as the "Founding Companies"),
which agreements provide for the merger of a wholly-owned subsidiary of
Centerprise with each such Founding Company (the "Other Mergers") simultaneously
with the Merger; Centerprise has provided a side letter to each holder of equity
interests of the Seller to such effect;
WHEREAS, the Voting Agreement, dated as of March 31, 1999, among
Centerprise and certain of the managers of the Seller has been terminated and is
and is no longer in force and effect;
WHEREAS, simultaneously with the consummation of the Merger, Centerprise
will close an initial public offering (the "IPO") of Centerprise Common Stock
(as defined in Section 2.1.1); and
WHEREAS, the parties intend the acquisition of Centerprise Common Stock
pursuant to the terms hereof to be tax-free under the provisions of Section 351
of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, for and in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth in this
Agreement and in reliance upon the representations and warranties set forth
herein, the Company shall be merged with and into Mergersub, the result of which
will cause the separate corporate existence of the Company to cease and
Mergersub to continue under the laws of the State of Delaware. As promptly as
possible on the Closing Date, the parties shall cause the Merger to be completed
by filing certificates of merger (the "Merger Documents"), with the Secretary of
State of the State of Delaware, as provided in the Delaware Limited Liability
Company Act. The Merger shall become effective (the "Effective Time") upon the
filing of the Merger Documents with the Secretary of State of the State of
Delaware or at such later time, contemporaneously with the closing of the IPO,
as agreed by Centerprise and the Company and specified in the Merger Documents.
1.2 Effects of the Merger. At the Effective Time (i) the separate existence of
the Company shall cease and the Company shall be merged with and into Mergersub,
with Mergersub being the surviving company in the Merger (the Mergersub is
sometimes referred to herein as the "Surviving Company"), (ii) the Certificate
of Formation and Operating Agreement of the Mergersub shall survive and continue
as specified in the Merger Documents, (iii) the Merger shall have all the
effects provided by applicable law, and (iv) the Surviving Company shall be a
wholly-owned subsidiary of Centerprise.
1.3 Managers and Officers of the Surviving Company. From and after the
Effective Time, the managers and officers of Mergersub shall be the managers and
officers of the Surviving Company until their successors are duly elected and
qualified.
ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT
2.1 Merger Consideration.
2.2.1 Basic Purchase Consideration. At the Closing, by virtue of the Merger
and without any action on the part of the holders thereof, the outstanding
membership interests of the Company (collectively, the "Company Interests")
shall be converted into the right to receive: (a) that number of shares of
Centerprise common stock, par value $.01 per share (the "Centerprise Common
Stock ") shown on line T of Schedule 2.1; provided, however, that if the initial
public offering price of the Centerprise Common Stock is below $11.90 per share,
the number of shares of Centerprise Common Stock received at the Closing shall
be increased such that the value of the shares, using the actual public offering
price, equals the amounts shown on line U of Schedule 2.1 (the "Stock
Consideration") and (b) the amount of cash shown on line S of Schedule 2.1 (the
"Cash Consideration "). The sum of the Cash Consideration and the Stock
Consideration is herein referred to as "Basic Purchase Consideration."
2.1.2 Intentionally Omitted.
2.1.3 Intentionally Omitted.
2.1.4 Conversion of Company Interests. At the Effective Time, the Company
Interests shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become interests of the Surviving
Company. Such newly issued interests shall thereafter constitute all of the
issued and outstanding membership interests of the Surviving Company.
2.1.5 Exchange of Certificates. At the Closing, the Seller shall deliver to
Centerprise the original Company Interest certificates, if any, duly endorsed in
blank by the Seller or accompanied by blank assignments separate from
certificate or other applicable documents of conveyance satisfactory to
Centerprise, in exchange for the allocated share of (a) Centerprise Common Stock
certificates representing the Stock Consideration and (b) payment of the Cash
Consideration by certified check, cashier's check or wire transfer of
immediately available funds to a bank account or bank accounts in the amounts
and manner specified by the Member Representative in a writing delivered to
Centerprise at least three (3) business days prior to the Closing Date. The
interests represented by the Company Interest certificates (or other documents
of ownership, if any) so delivered to Centerprise shall be canceled. Until
surrendered as contemplated by this Section 2.1.5, each certificate (or other
documents of ownership, if any) representing the Company Interests represents
only the right to receive Basic Purchase Consideration, as adjusted in
accordance with this Article II.
2.2 Post-Closing Adjustments to Basic Purchase Consideration.
2.2.1 Adjustments for Net Working Capital Shortfall/Excess. The Basic
Purchase Consideration shall be (a) reduced dollar-for-dollar to the
extent Net Working Capital on the Closing Date is less than the Target or
(b) increased dollar-for-dollar to the extent Net Working Capital on the
Closing Date is greater than the Target.
2.2.2 Preliminary Balance Sheet and Adjustment. At or about the Closing,
the Company will prepare, and the firm of PricewaterhouseCoopers LLP (the
"Centerprise Accountants") will review, a balance sheet of the Company, as
of the Closing Date, in accordance with GAAP and consistent with the
accounting policies and practices used in connection with the preparation
of the Financial Statements (the "Closing Balance Sheet") along with a
preliminary calculation of any excess or shortfall of Net Working Capital
as compared to the Target.
2.2.3 Interim Adjustment. As soon as practicable, the Company will prepare
and deliver to Centerprise a revised calculation of Net Working Capital
reflecting all collections of AR up to the date 90 days from the Closing
Date. Within 10 days of receipt of such calculation, Centerprise will
deliver to the Member Representative a written report indicating the
amount and nature of any adjustment to the Basic Purchase Consideration
determined in accordance with Section 2.2.1 (the "Interim Adjustment").
2.2.4 Final Adjustment. As soon as practicable, the Company will prepare
and deliver to Centerprise a final calculation of Net Working Capital
revised to reflect all collections of AR up to the date 180 days from the
Closing Date. Centerprise will review such calculation and any records,
work papers and other documents related thereto. Within 10 days of receipt
of such calculation, Centerprise will deliver to the Member Representative
a written report indicating the amount and nature of any adjustment to the
Basic Purchase Consideration determined in accordance with Section 2.2.1
(the "Final Adjustment").
2.2.5 Disputes. The parties hereto shall not object to the Interim
Adjustment which shall be binding on the parties hereto, and shall
withhold all objections until delivery of the Final Adjustment report. If
the Member Representative does not object (or otherwise respond) in
writing to the Final Adjustment report within 30 days after its delivery,
the Final Adjustment shall automatically become final, binding and
conclusive on all parties hereto. Any objection to the Final Adjustment
report shall be in writing and shall specify the item or items in dispute
(each a "Disputed Item").
If the Member Representative and Centerprise are unable to resolve
any Disputed Item within 30 days after notice from the Member
Representative that a dispute exists (the "Resolution Period"), then a
representative from the office of a nationally recognized accounting firm
chosen by the Member Representative and Centerprise (the "Arbitrator") will
arbitrate the dispute. The Member Representative and Centerprise shall,
within 20 days after expiration of the Resolution Period, present their
respective positions with respect to any Disputed Item to the Arbitrator
together with such materials as the Arbitrator deems appropriate. To the
extent any Disputed Item is similar to a disputed item under the Other
Agreements, the Arbitrator shall arbitrate the Disputed Item based on the
submitted materials and without regard to the disputed item under the Other
Agreements. The Arbitrator shall, after the submission of the materials,
submit a written decision on each Disputed Item to the Member
Representative and Centerprise and such determination shall be final and
binding on the parties hereto. The arbitration shall be conducted in
Chicago, Illinois. The parties hereto agree that the cost of the Arbitrator
shall be borne by the non-prevailing party or as determined by the
Arbitrator.
2.2.6 Payment of Adjustments. In the event Net Working Capital is less
than the Target, the Seller's members shall pay the amount of the shortfall
to Centerprise. In the event Net Working Capital is greater than the
Target, Centerprise shall pay the amount of the excess to the Seller's
members. Any payment required to be made pursuant to this paragraph shall
be made, within ten days of delivery of the report indicating any
adjustment, by wire transfer of immediately available funds to an account
designated in writing by the party that is to receive payment of such
adjustment. In respect of the Final Adjustment, the party making a payment
required by such adjustment shall make such payment within ten days after
the Final Adjustment becomes final and shall receive credit for or return
of any amount previously paid in connection with the Interim Adjustment.
2.3 Post-Closing Management of AR. Following the Closing, the billing,
servicing, administering and collection of the AR shall be conducted by the
Company. The Company shall take all such actions as may be necessary or
advisable to collect the AR in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Company's credit and collection policy in effect at Closing. The Company may
modify, adjust or write-off AR from time to time in accordance with the
Company's credit and collection policy in effect at Closing. Unless otherwise
required by contract or law, payments by an obligor in respect of services
rendered or expenses advanced by the Company shall be applied as follows: in the
event any such payment specifically references the invoice being paid or clearly
relates to an outstanding invoice, the payment will be applied to the
corresponding invoice; and, in any other case, the payment will be applied to
satisfy AR relating to such obligor in the order that such AR arose. Any
adjustment, modification or write-off affecting AR and fees and expenses
receivable and unbilled fees and expenses of the Company incurred after Closing
with respect to the same client engagement shall be allocated ratably to the
pre-Closing and post-Closing periods.
2.4 Assignment of Uncollected AR. If any AR remain uncollected by the Company
as of 180 days after the Closing Date, the Company will assign the uncollected
AR to the Seller's members. Notwithstanding the foregoing, the Company will
retain the sole right to service, administer and collect the uncollected AR in
accordance with Section 2.3.
2.5 Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
(a) "AR" means any fees and expenses receivable and unbilled fees
and expenses of the Company on the Closing Date.
(b) "Net Working Capital" means an amount determined as of the
Closing Date, whenever calculated, equal to the difference between: (i) the
sum of any AR, prepaid expenses and other current assets less (ii) the sum
of accounts payable, accrued current liabilities, the items listed on
Schedule 2.5, the Tax Accrual and the portion of employer-paid FICA
attributable to Medicare, payable in connection with deferred compensation
and the Special Bonus Plan. For purposes of this Section 2.5(b), the
Special Bonus Plan accrual shall not constitute a current liability.
(c) "Special Bonus Plan" means the Seller's Special Bonus Plan.
(d) "Target" means an amount equal to 1% of the Company's net
revenues for the four quarter period ending on the last day of the calendar
quarter prior to Closing.
(e) "Tax Accrual" means an amount equal to the product of (i) Net
Working Capital (calculated before deduction of the Tax Accrual) less an
amount equal to any tax deductions realized by Centerprise as a result of
any payments pursuant to the Special Bonus Plan and (ii) the sum of 34%
plus the effective state tax rate on the Company (net of any federal tax
benefit). A negative Tax Accrual shall be treated as a current asset for
purposes of Section 2.5(b)(i).
ARTICLE III
THE CLOSING AND CONSUMMATION DATE
The consummation of the Merger and the other transactions contemplated by
this Agreement (the "Closing ") shall take place at the offices of Xxxxxx Xxxxxx
& Xxxxx, Chicago, Illinois, contemporaneously with the closing of the IPO, or at
such other time and date as the parties hereto may mutually agree (the "Closing
Date ").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to Centerprise, as of March 31, 1999
and, subject to Section 7.3, as of the date on which Centerprise and the lead
Underwriter (as defined in Section 8.1.1) execute and deliver the Underwriting
Agreement related to the IPO and as of the Closing Date, as follows (provided,
however, that all representations and warranties with respect to the Company
shall be as of the Closing Date):
4.1 Organization and Qualification. The Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Connecticut. The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company Interests are free and clear of all Liens, and the Seller has good
and marketable title to such Company Interests. Each Company Subsidiary (as
defined in Section 4.2) is duly organized, validly existing and in good standing
under the laws of the state of its organization set forth on Schedule 4.2. Each
of the Company and the Company Subsidiaries has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted, and is qualified to do business and
is in good standing in each jurisdiction in which the properties owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary. True, accurate and complete copies of the Seller's and
each Company Subsidiary's Organizational Documents, in each case as in effect on
March 31, 1999 have heretofore been delivered to Centerprise. "Organizational
Documents" means (a) the articles or certificate of incorporation and the bylaws
of a corporation (professional or otherwise), (b) the partnership agreement and
any statement of partnership of a general partnership, (c) the limited
partnership agreement and the certificate of limited partnership of any limited
partnership, (d) the operating or limited liability company agreement and
certificate of formation of any limited liability company, (e) any charter or
similar document adopted and filed in connection with the creation, formation,
organization or governance (as applicable) of any Person and (f) any amendment
to any of the foregoing.
4.2 Company Subsidiaries. Schedule 4.2 sets forth the name (including any
assumed names), jurisdiction of organization and ownership of the issued and
outstanding equity interests of each Person in which the Seller or the Company
owns, directly or indirectly, securities or other interests having the power to
elect a majority of such Person's board of directors or similar governing body,
or otherwise having the power to direct the business and policies of such Person
(each a "Company Subsidiary" and collectively, the "Company Subsidiaries").
Except as set forth on Schedule 4.2, the Seller or the Company does not,
directly or indirectly, own, of record or beneficially, or control any capital
stock, securities convertible into capital stock or any other equity interest in
any Person.
4.3 Authority; Non-Contravention; Approvals.
4.3.1 The Seller has full right, power and authority to enter into this
Agreement and, subject to the approval of the Merger and the transactions
contemplated hereby by the Seller's managers and members, to consummate the
transactions contemplated hereby. The execution, delivery and performance
of this Agreement by the Seller have been duly authorized by all necessary
corporate action on the part of the Company and the Seller, subject to the
approval of the Merger and the transactions contemplated hereby by the
Seller's managers and members. This Agreement has been duly executed and
delivered by the Seller, and, assuming the due authorization, execution and
delivery hereof by Centerprise, constitutes a valid and legally binding
agreement of the Seller, enforceable against the Seller in accordance with
its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
4.3.2 The execution and delivery of this Agreement by the Seller does not
violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of,
or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any claim,
lien, privilege, mortgage, charge, hypothecation, assessment, security
interest, pledge or other encumbrance, conditional sales contract, equity
charge, restriction, or adverse claim of interest of any kind or nature
whatsoever (each a "Lien" and collectively, the "Liens"), upon any of the
properties or assets of the Seller, the Company or any Company Subsidiary
under, any of the terms, conditions or provisions of (i) the Organizational
Documents of the Seller, the Company or any Company Subsidiary, (ii) any
statute, law, ordinance, rule, regulation, judgment, decree, order,
injunction, writ, permit or license of any court or federal, state,
provincial, local or foreign government, or any subdivision, agency or
authority of any thereof ("Governmental Authority ") applicable to the
Seller, the Company, any Company Subsidiary, or the Business, properties or
assets of the Seller, the Company or any Company Subsidiary, except for
those items discussed in (ii) above relating to regulating, licensing or
permitting the practice of public accountancy, or (iii) any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of any kind to
which the Seller, the Company or any Company Subsidiary is a party or by
which the Seller, the Company, any Company Subsidiary or any of the
properties or assets of the Seller, the Company or any Company Subsidiary
may be bound or affected. The consummation by the Seller and the Company of
the transactions contemplated hereby will not result in a violation,
conflict, breach, right of termination, creation or acceleration of Liens
under the terms, conditions or provisions of the items described in clauses
(i) through (iii) of the immediately preceding sentence, subject in the
case of the terms, conditions or provisions of the items described in
clause (iii) above, to obtaining (prior to the Closing Date) such consents
required from
third parties set forth on Schedule 4.3.2 and except for those items
described in (ii) and (iii) above, relating to regulating, licensing or
permitting the practice of public accountancy and any filing which may be
required under the HSR Act.
4.3.3 Except for (i) the declaration of effectiveness of a registration
statement on Form S-1 (the "Form S-1") and a post-effective amendment to
the registration statement on Form S-4 (the "Form S-4") (Form S-1 and Form
S-4 are collectively the "Registration Statements") with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as
amended (the "Securities Act" or the "1933 Act"), and filings, if required,
with various state securities or "blue sky" authorities, (ii) any filing
which may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act
of 1976, as amended (the "HSR Act"), and (iii) any filing which may be
required by any Governmental Authority or self-regulatory organization
regulating, licensing or permitting the practice of public accountancy, no
declaration, filing or registration with, notice to, or authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by the Seller or the consummation
by the Seller of the transactions contemplated hereby, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not made or obtained, as the case may be, would not,
individually or in the aggregate, have a "Company Material Adverse Effect,"
which, for purposes of this Agreement means a material adverse effect on
the operations, assets, condition (financial or other), operating results,
employee or client relations, or prospects of the Seller, the Company or
any Company Subsidiary.
4.4 Capitalization.
4.4.1 The equity ownership of the Seller and the Company as of March 31,
1999 is truly and accurately set forth on Schedule 4.4 hereto. The
authorized capital stock (or other equity ownership interests) of each of
the Company Subsidiaries, if any, and the number of such shares (or other
equity ownership interests) issued and outstanding is completely and
accurately set forth in Schedule 4.4. All of the membership interests of
the Seller, the Company, and such Company Subsidiary's issued and
outstanding shares (or other equity ownership interests), are validly
issued and are fully paid, nonassessable and free of preemptive rights. The
Seller's members own beneficially and of record all of the membership
interests of the Seller (the "Seller Interests") as set forth in Schedule
4.4, which interests constitute all of the outstanding membership interests
of the Seller. The Seller is the sole member of the Company and owns
beneficially and of record all of the membership interests of the Company
as set forth on Schedule 4.4, which interests constitute all of the
outstanding membership interests of the Company. The Seller or the Company,
as applicable, owns all shares (or other equity ownership interests) of the
Company Subsidiaries as indicated on Schedule 4.4, in each case free and
clear of all Liens, and the Seller or the Company, as applicable, has good
and marketable title to such shares (or other equity ownership interests)
of the Company Subsidiaries. All of such issued and outstanding shares (or
other equity
ownership interests) are validly issued, fully paid, nonassessable and free
of preemptive rights. Upon the delivery of and payment for the Company
Interests at the Closing as provided in this Agreement, Centerprise will
acquire good and valid title to such Company Interests, free and clear of
any Lien other than any Lien created by Centerprise.
4.4.2 Except as set forth on Schedule 4.4 or in connection with the
Conversion, there are no outstanding subscriptions, options, calls,
contracts, commitments, undertakings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement to issue, deliver or
sell, or cause to be issued, delivered or sold, additional membership
interests (or other equity ownership interests) of the Seller or the
Company or equity interests of any Company Subsidiary or obligating the
Seller or the Company or any Company Subsidiary to grant, extend or enter
into any such agreement or commitment or obligating the Seller or the
Company or any Company Subsidiary to convey or transfer any membership
interests in the Company or Company Subsidiary stock (or other equity
ownership interests), as the case may be. As of the Closing Date, there
will be no voting trusts, proxies or other agreements or understandings to
which the Seller or the Company or any Company Subsidiary is a party or is
bound with respect to the voting of any shares of capital stock or other
equity interests of the Seller, the Company or any Company Subsidiary.
4.5 Year 2000. To the Knowledge of the Seller, all of the computer software,
computer firmware, computer hardware (whether general or special purpose), and
other similar or related items of automated, computerized, and/or software
system(s) that are used or relied on by the Seller, the Company or any Company
Subsidiary in the conduct of the Business will not malfunction, will not cease
to function, will not generate incorrect data, and will not produce incorrect
results when processing, providing, and/or receiving (i) date-related data into
and between the twentieth (20th) and twenty-first (21st) centuries and (ii)
date-related data in connection with any valid date in the twentieth (20th) and
twenty-first (21st) centuries, except for any malfunctions or generations of
incorrect data or results that would not individually or in the aggregate have a
Company Material Adverse Effect. Nothing in this Section 4.5 is intended or
shall be construed as a representation or warranty with respect to embedded
systems.
4.6 Financial Statements. The Seller has previously furnished to Centerprise
copies of the audited consolidated balance sheet of the Seller as of December 31
in each of the years 1997 and 1998 (the "Latest Balance Sheet"), and the related
audited consolidated statements of income, members' equity and cash flow for
each of the years in the three (3) year period ended December 31, 1998,
including all notes thereto (collectively, the "Financial Statements"). Each of
the Financial Statements is accurate and complete in all material respects, is
consistent with the books and records of the Seller and the Company Subsidiaries
(which, in turn, are accurate and complete in all material respects), and fairly
presents in all material respects the financial condition, assets and
liabilities of the Seller and the Company Subsidiaries as of its
date and the results of operations and cash flows for the periods related
thereto, in each case in accordance with generally accepted accounting
principles, applied on a consistent basis ("GAAP").
4.7 Absence of Undisclosed Liabilities. Except as disclosed in Schedule
4.7, neither the Seller, the Company nor any Company Subsidiary had, as of the
date of the Latest Balance Sheet, nor has it incurred since that date, any
liabilities or obligations of any nature (whether known or unknown, absolute,
contingent, accrued, direct, indirect, perfected, inchoate, unliquidated or
otherwise), except (i) to the extent clearly and accurately reflected or accrued
or fully reserved against in the Financial Statements or (ii) liabilities and
obligations which have arisen after the date of the Latest Balance Sheet in the
ordinary course of business and consistent with past custom and practices (none
of which is a liability resulting from a breach of contract, breach of warranty,
tort, infringement claim, legal violation or lawsuit).
4.8 Unbilled Fees and Expenses. At the Closing, all unbilled fees and expenses
at net realizable value reflected in the records of the Company and the Company
Subsidiaries arose in the ordinary course of business and will be billable in
the ordinary course of business using normal billing practices and adjustments
employed as of the date of this Agreement by the Company and each Company
Subsidiary. Upon such billing any such amounts will be collectible in the
ordinary course of business using normal collection practices and policies
employed by the Company and each Company Subsidiary (net of any allowance for
doubtful accounts determined in accordance with the Seller's and the Company
Subsidiaries' past practice and custom).
4.9 Absence of Certain Changes or Events. Except as set forth on Schedule 4.9,
since the date of the Latest Balance Sheet, each of the Seller, the Company and
the Company Subsidiaries has conducted its business only in the ordinary course
consistent with past custom and practices. Except as set forth on Schedule 4.9
(setting forth, without limitation, payments of accounts receivable to Seller's
members and employees of the Company or Seller as bonus compensation or
otherwise), since the date of the Latest Balance Sheet, there has not been any:
(a) material adverse change in the operations, condition (financial or
otherwise), operating results, assets, liabilities, employee or client
relations or prospects of the Seller, the Company or any Company
Subsidiary;
(b) damage, destruction or loss of any property owned by the Seller, the
Company or any Company Subsidiary, or used in the operation of the
Business, whether or not covered by insurance, having a replacement cost or
fair market value in excess of five percent (5%) of the amount of net
property, plant and equipment shown on the Latest Balance Sheet, in the
aggregate;
(c) voluntary or involuntary sale, transfer, surrender, cancellation,
abandonment, waiver, release or other disposition of any kind by the
Seller, the Company or any Company Subsidiary of any right, power, claim,
or debt, except the collection of
accounts and billing of work-in-process, each in the ordinary course of
business consistent with past custom and practices;
(d) strike, picketing, boycott, work stoppage, union organizational
activity, allegation, charge or complaint of employment discrimination or
other labor dispute or similar occurrence that is reasonably expected to
adversely affect the Seller, the Company, a Company Subsidiary or the
Business;
(e) loan or advance by the Seller, the Company or any Company Subsidiary to
any Person, other than as a result of services performed for, or expenses
properly and reasonably advanced for the benefit of, customers in the
ordinary course of business consistent with past custom and practices;
(f) notice (formal or otherwise) of any liability, potential liability or
claimed liability relating to environmental matters;
(g) declaration, setting aside, or payment of any dividend or other
distribution in respect of the Seller's or the Company's capital stock or
other equity interests or any direct or indirect redemption, purchase, or
other acquisition of the Seller's or the Company's or any Company
Subsidiary's capital stock or other equity interests, or the payment of
principal or interest on any note, bond, debt instrument or debt to any
Affiliate (as defined in Section 15.4) of the Seller, the Company or any
Company Subsidiary, except bonuses and distributions to employees and
members of the Seller disclosed to Centerprise in writing that are
consistent with the Seller's past custom and practices or as otherwise
contemplated by this Agreement;
(h) incurrence by the Seller, the Company or any Company Subsidiary of
debts, liabilities or obligations except current liabilities incurred in
connection with or for services rendered or goods supplied in the ordinary
course of business consistent with past custom and practices, liabilities
on account of taxes and governmental charges (but not penalties, interest
or fines in respect thereof), and obligations or liabilities incurred by
virtue of the execution of this Agreement;
(i) issuance by the Seller, the Company or any Company Subsidiary of any
notes, bonds, or other debt securities or any equity securities or
securities convertible into or exchangeable for any equity securities;
(j) entry by the Seller, the Company or any Company Subsidiary into, or
amendment or termination of, any material commitment, contract, agreement,
or transaction, other than in the ordinary course of business and other
than expiration of contracts in accordance with their terms;
(k) loss or threatened loss of, or any material reduction or threatened
material reduction in revenues from, any client of the Seller, the Company
or any Company
Subsidiary that accounted for revenues during the last twelve months in
excess of one percent (1%) of the consolidated net revenues of the Seller,
the Company and the Company Subsidiaries, or change in the relationship of
the Seller, the Company or any Company Subsidiary with any client or
Governmental Authority that is reasonably expected to adversely affect the
Seller, the Company, any Company Subsidiary or the Business;
(l) change in accounting principles, methods or practices (including,
without limitation, any change in depreciation or amortization policies or
rates) utilized by the Seller, the Company or any Company Subsidiary;
(m) discharge or satisfaction by the Seller, the Company or any Company
Subsidiary of any material liability or encumbrance or payment by the
Seller, the Company or any Company Subsidiary of any material obligation or
liability, other than current liabilities paid in the ordinary course of
its business consistent with past custom and practices;
(n) sale, lease or other disposition by the Seller, the Company or any
Company Subsidiary of any tangible assets (having an aggregate replacement
cost or fair market value in excess of five percent (5%) of the amount of
net property, plant and equipment shown on the Latest Balance Sheet) other
than in the ordinary course of business, or the sale, assignment or
transfer by the Seller, the Company or any Company Subsidiary of any
trademarks, service marks, trade names, corporate names, copyright
registrations, trade secrets or other intangible assets, or disclosure of
any proprietary confidential information of the Seller, the Company or any
Company Subsidiary to any Person other than an employee, agent, attorney,
accountant or other representative of the Seller or the Company that has
agreed to maintain the confidentiality of any such proprietary confidential
information;
(o) capital expenditures or commitments therefor by the Seller, the Company
or any Company Subsidiary in excess of $50,000 individually or $100,000 in
the aggregate;
(p) mortgage, pledge or other encumbrance of any asset of the Seller, the
Company or any Company Subsidiary or creation of any easements, Liens or
other interests against or on any of the Real Property (as defined in
Section 4.14.1);
(q) adoption, amendment or termination of any Employee Plan (as defined in
Section 4.17.5(a)) or increase in the benefits provided under any Employee
Plan, or promise or commitment to undertake any of the foregoing in the
future; or
(r) an occurrence or event not included in clauses (a) through (q) that has
resulted or, based on information of which the Seller or the Company has
Knowledge, is reasonably expected to result in a Company Material Adverse
Effect.
4.10 Litigation. Except as set forth on Schedule 4.10 (which shall disclose
the parties to, nature of and relief sought for each matter to be disclosed on
Schedule 4.10):
4.10.1 There is no suit, action, proceeding, investigation, claim or order
pending or, to the Knowledge of the Seller, threatened against the Seller,
the Company or any Company Subsidiary, or with respect to the Merger, or
with respect to any Employee Plan, or any fiduciary of any such plan (or
pending or, to the Knowledge of the Seller, threatened against any of the
officers, directors, stockholders, members, partners or employees of the
Seller, the Company or any Company Subsidiary with respect to its business
or proposed business activities), or to which the Seller, the Company or
any Company Subsidiary is otherwise a party, or that is reasonably expected
to have a Company Material Adverse Effect, before any court, or before any
Governmental Authority (each an "Action" and collectively, the "Actions");
nor, to the Knowledge of the Seller, is there any basis for any such
Action.
4.10.2 Neither the Seller, the Company nor any Company Subsidiary is
subject to any unsatisfied or continuing judgment, order or decree of any
court or Governmental Authority. Neither the Company nor any Company
Subsidiary, to the Seller's Knowledge, is otherwise exposed, from a legal
standpoint, to any liability or disadvantage that is reasonably expected to
result in a Company Material Adverse Effect, and neither the Seller, the
Company nor any Company Subsidiary is a party to any legal action to
recover monies due it or for damages sustained by it, other than collection
of past due charges for services rendered or expenses incurred by the
Seller or the Company.
4.10.3 Schedule 4.10 lists the insurer for each Action covered by insurance
or designates such Action, or a portion of such Action, as uninsured and
lists the individual and aggregate policy limits for the insurance covering
each insured Action and the applicable policy deductibles for each insured
Action.
4.10.4 Schedule 4.10 sets forth all material closed litigation matters to
which the Company or any Company Subsidiary was a party during the five (5)
year period preceding the Closing Date, the date such litigation was
commenced and concluded, and the nature of the resolution thereof
(including amounts paid in settlement or judgment).
4.11 Compliance with Applicable Laws. Except as set forth on Schedules
4.11 and 4.19, each of the Seller, the Company and the Company Subsidiaries has
complied in all material respects with all laws, rules, regulations, writs,
injunctions, decrees, and orders (collectively, the "Laws") applicable to it or
to the operation of the Business, and neither the Seller, the Company nor any
Company Subsidiary has received any notice of any alleged claim or threatened
claim, violation of or liability or potential responsibility under any such Law
which has not heretofore been cured and for which there is no remaining
liability and, to the Knowledge of the Seller, no event has occurred or
circumstances exist that (with or without notice or lapse of time) is reasonably
expected to constitute or result in a violation by the
Seller, the Company or any Company Subsidiary of any Law that gives rise to any
liability on the part of the Seller, the Company or any Company Subsidiary under
any Law.
4.12 Licenses. Schedule 4.12 lists all Licenses used by the Seller, the
Company and the Company Subsidiaries that are material to the conduct of the
Business. "Licenses" means all notifications, licenses, permits, franchises,
certificates, approvals, exemptions, classifications, registrations and other
similar documents and authorizations, and applications therefor, held by the
Company or any Company Subsidiary and issued by, or submitted by the Seller, the
Company or any Company Subsidiary to, any Governmental Authority or other
Person, other than those relating to the practice of public accountancy.
Section B of Schedule 4.12 lists all licenses, certificates, approvals,
registrations and other similar documents and authorizations, and applications
therefor, relating to the practice of public accountancy (the "Accounting
Licenses") held by the Seller, the Company or a Company Subsidiary and issued
by, or submitted by the Seller, the Company or any Company Subsidiary to, any
Governmental Authority or other Person. All such Licenses and Accounting
Licenses are valid, binding and in full force and effect. Except as described
on Schedule 4.12, the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not adversely
affect any such Licenses. To the Knowledge of the Seller, the Seller, the
Company and the Company Subsidiaries have taken all necessary action to maintain
such Licenses. Except as set forth on Schedule 4.12, no loss or expiration of
any such License is pending or, to the Seller's Knowledge, threatened or
reasonably foreseeable.
4.13 Material Contracts. Except as listed or described on Schedule 4.13 (such
contracts, or those which should have been listed on Schedule 4.13, are herein
referred to as the "Material Contracts"), as of or on the date hereof, neither
the Seller, the Company nor any Company Subsidiary is a party to or bound by,
any written or oral leases, agreements or other contracts or legally binding
contractual rights or contractual obligations or contractual commitments (each a
"Contract" and collectively, the "Contracts") relating to or in any way
affecting the operation or ownership of the Business that are of a type
described below and no such agreements are currently in negotiation or proposed:
(a) any consulting agreement pursuant to which the Seller, the Company or a
Company Subsidiary is to receive consulting services (other than consulting
agreements that may be terminated by the Seller, Company or a Company
Subsidiary on not more than 30 days notice without penalty), employment
agreement, change-in-control agreement, or collective bargaining
arrangement with any labor union;
(b) any Contract for capital expenditures or the acquisition or
construction of fixed assets in excess of $50,000;
(c) any Contract for the purchase, maintenance or acquisition, or the sale
or furnishing, of materials, supplies, merchandise, machinery, equipment,
parts or other property or services (except if such Contract is made in the
ordinary course of business and requires aggregate future payments of less
than $25,000);
(d) any Contract, other than trade payables in the ordinary course of
business, relating to the borrowing of money, or the guaranty of another
Person's borrowing of money, including, without limitation, any notes,
mortgages, indentures and other obligations, guarantees of performance,
agreements and instruments for or relating to any lending or borrowing,
including assumed indebtedness;
(e) any Contract granting any Person a Lien on all or any part of the
assets of the Seller, the Company or any Company Subsidiary;
(f) any Contract for the cleanup, abatement or other actions in connection
with Hazardous Materials (as defined in Section 4.19), the remediation of
any existing environmental liabilities or relating to the performance of
any environmental audit or study;
(g) any Contract granting to any Person an option, first refusal, first-
offer or similar preferential right to purchase or acquire any material
assets of the Company or any Company Subsidiary;
(h) any Contract with any agent, distributor or representative which is not
terminable by the Seller, the Company or a Company Subsidiary upon ninety
(90) calendar days or less notice without penalty;
(i) any Contract under which the Seller, the Company or any Company
Subsidiary is (A) a lessee or sublessee of any machinery, equipment,
vehicle or other tangible personal property, or (B) a lessor of any
tangible personal property owned by the Seller, the Company or any Company
Subsidiary, in either case having an original purchase price or requiring
aggregate lease payments in excess of $50,000;
(j) any Contract under which the Seller, the Company or any Company
Subsidiary has granted or received a license or sublicense or under which
it is obligated to pay or has the right to receive a royalty, license fee
or similar payment, in any case which provides for payments over the life
of such Contract in excess of $25,000;
(k) any Contract concerning an Affiliate Transaction (as defined in Section
4.21);
(l) any Contract providing for the indemnification or holding harmless of
any officer, director, employee or other Person;
(m) any Contract (A) for purchase or sale by the Seller, the Company or any
Company Subsidiary of any real property on which the Seller, the Company or
any Company Subsidiary conducts any aspect of the Business, (B) granting
any options to lease or purchase all or any portion of the Real Property,
or (C) providing for labor,
services or materials to the Real Property (including, without limitation,
brokerage or management services) involving aggregate future payments of
more than $25,000;
(n) any Contract limiting, restricting or prohibiting the Seller, the
Company or any Company Subsidiary from conducting business anywhere in the
United States or elsewhere in the world;
(o) any joint venture or partnership Contract;
(p) any lease, sublease or associated agreements relating to the Leased
Property (as defined in Section 4.14.1);
(q) any Contract requiring prior notice, consent or other approval upon a
change of control in the equity ownership of the Seller, the Company or any
Company Subsidiary, which, if amended, modified or terminated as a result
of, relating to or in connection with a failure to provide prior notice, or
gain such consent or approval, would result in a Company Material Adverse
Effect; or
(r) any other Contract, whether or not made in the ordinary course of
business, which involves future payments by the Seller, the Company or any
Company Subsidiary in excess of $25,000.
The Seller has provided Centerprise with a true and complete copy of each
written Material Contract and a true and complete summary of each oral Material
Contract, in each case including all amendments or other modifications thereto.
Except as set forth on Schedule 4.13, each Material Contract is a valid and
binding obligation of, and enforceable in accordance with its terms against, the
Seller, the Company or a Company Subsidiary, as applicable, and, to the
Knowledge of the Seller, the other parties thereto, and is in full force and
effect, subject only to bankruptcy, reorganization, receivership and other laws
affecting creditors' rights generally and equitable principles. Except as set
forth on Schedule 4.13, the Seller, the Company or one of the Company
Subsidiaries, as applicable, has performed in all material respects all
obligations required to be performed by it as of the date hereof and will have
performed in all material respects all obligations required to be performed by
it as of the Closing Date under each Material Contract and neither the Seller,
the Company nor any Company Subsidiary, as applicable, nor, to the Knowledge of
the Seller, any other party to any Material Contract is in breach or default
thereunder, and, to the Knowledge of the Seller, there exists no condition which
would, with or without the lapse of time or the giving of notice, or both,
constitute a breach or default thereunder. The Seller has not been notified
that any party to any Material Contract intends to cancel, terminate, not renew,
or exercise an option under any Material Contract, whether in connection with
the transactions contemplated hereby or otherwise.
4.14 Properties.
4.14.1 Schedule 4.14.1-1 is a correct and complete list, and a brief
description of, all real estate in which the Seller, the Company or any of
the Company Subsidiaries has an ownership interest (the "Owned Property")
and all real property leased by the Seller and the Company (the "Leased
Property"). Except as lessee of Leased Property, neither the Seller, the
Company nor any Company Subsidiary is a lessee under or otherwise a party
to any lease, sublease, license, concession or other agreement, whether
written or oral, pursuant to which another Person has granted to the
Seller, the Company or any Company Subsidiary the right to use or occupy
all or any portion of any real property.
The Seller, the Company or one or more of the Company Subsidiaries has
good and marketable fee simple title to the Owned Property and, assuming
good title in the landlord, a valid leasehold interest in the Leased
Property (the Owned Property and the Leased Property being sometimes
referred to herein as "Real Property"), in each case free and clear of all
Liens, assessments or restrictions (including, without limitation, inchoate
liens arising out of the provision of labor, services or materials to any
such real estate) other than (a) mortgages shown on the Financial
Statements as securing specified liabilities or obligations, with respect
to which no default (or event that, with notice or lapse of time or both,
would constitute a default) exists, (b) Liens for current taxes not yet
due, (c) (i) minor imperfections of title, including utility and access
easements depicted on subdivision plats for platted lots that do not impair
the intended use of the property, if any, none of which materially impairs
the current operations of the Seller, the Company, any Company Subsidiary
or the Business, and (ii) zoning laws and other land use restrictions or
restrictive covenants that do not materially impair the present use of the
property subject thereto and (d) Liens, assessments and restrictions
pursuant to and by virtue of the terms of the lease of the Leased Property.
The Real Property constitutes all real properties reflected on the
Financial Statements or used or occupied by the Seller, the Company or any
Company Subsidiary in connection with the Business or otherwise.
With respect to the Owned Property, except as reflected on Schedule
4.14.1-2(a):
(a) the Seller, the Company or one of the Company Subsidiaries is in
exclusive possession thereof and no easements, licenses or rights are
necessary to conduct the Business thereon in addition to those which exist
as of the date hereof;
(b) no portion thereof is subject to any pending condemnation proceeding
or proceeding by any public or quasi-public authority materially adverse to
the Owned Property and, to the Knowledge of the Seller, there is no
threatened condemnation or proceeding with respect thereto;
(c) there is no violation of any covenant, condition, restriction,
easement or agreement of any Governmental Authority that affects the Owned
Property or the ownership, operation, use or occupancy thereof;
(d) no portion of any parcel of the Owned Property is subject to any roll-
back tax, dual or exempt valuation tax, and no portion of any Owned
Property is omitted from the appropriate tax rolls; and
(e) all assessments and taxes currently due and payable on such Owned
Property have been paid.
With respect to the Leased Property, except as reflected on Schedule
4.14.1-2(b):
(i) the Seller, the Company and/or one of the Company
Subsidiaries is in exclusive, peaceful and undisturbed possession thereof
and, to the Knowledge of the Seller, no easements, licenses or rights are
necessary to conduct the Business thereon in addition to those which exist
as of the date hereof; and
(ii) to the Knowledge of the Seller, no portion thereof is
subject to any pending condemnation proceeding or proceeding by any public
or quasi-public authority materially adverse to the Leased Property and
there is no threatened condemnation or proceeding with respect thereto.
4.14.2 The Latest Balance Sheet and/or Schedule 4.14.2 reflect all material
tangible personal property owned by the Seller or any Company Subsidiary,
except as sold or otherwise disposed of or acquired in the ordinary course
of business. Except as set forth on Schedule 4.14.2, the Seller, the
Company or one of the Company Subsidiaries has good and marketable title
to, or a valid leasehold interest in, or valid license of, such personal
property (including, without limitation, machinery, equipment and
computers), in each case free and clear of any Liens (other than Liens that
are part of such leasehold or license), and each such asset is in working
order and has been maintained in a commercially reasonable manner and does
not contain, to the Knowledge of the Seller, any material defect. Except as
set forth in Schedule 4.14.2, no personal property (including, without
limitation, software and databases maintained on off-premises computers)
used by the Seller, the Company or any Company Subsidiary in connection
with the Business is held under any lease, security agreement, conditional
sales contract or other title retention or security arrangement or is
located other than on the Real Property.
4.15 Intellectual Property. The (i) patents, patent applications, inventions
and discoveries that may be patentable (collectively, the "Patents"), (ii)
registered and unregistered trademarks, trade names, company names, assumed
business names and service marks (collectively, the "Marks"), (iii) copyrights
(the "Copyright"), and (iv) know how, trade secrets, confidential information,
client lists, software, technical information, data, process
technology, plans and drawings (collectively, the "Trade Secrets") owned, used
or licensed by the Seller, the Company or any Company Subsidiary (collectively,
the "Intellectual Property") are all those necessary to enable the Seller, the
Company and the Company Subsidiaries to conduct and to continue to conduct the
Business substantially as it is currently conducted. Schedule 4.15 contains a
complete and accurate list of all material Patents, Marks and Copyrights and a
brief description of all material Trade Secrets owned, used by or directly
licensed to the Seller, the Company or any Company Subsidiary, and a list of all
material license agreements and arrangements with respect to any of the
Intellectual Property to which the Seller, the Company or any Company Subsidiary
is a party, whether as licensee, licensor or otherwise (collectively, the
"Intellectual Property Licenses"). Except as set forth on Schedule 4.15, (i)
all of the Intellectual Property is owned or, to the Knowledge of Seller, used
under a valid Intellectual Property License, by the Seller, the Company or one
of the Company Subsidiaries, and is free and clear of all Liens and other
adverse claims; (ii) neither the Seller, the Company nor any Company Subsidiary
has received any written notice that it is or has infringed on, misappropriated
or otherwise conflicted with, or otherwise has Knowledge that it is infringing
on, misappropriating, or otherwise conflicting with the intellectual property
rights of any third parties; (iii) there is no claim pending or, to the
Knowledge of Seller, threatened against the Seller, the Company or any Company
Subsidiary with respect to the alleged infringement or misappropriation by the
Seller, the Company or any Company Subsidiary, or a conflict with, any
intellectual property rights of others; (iv) the operation of any aspect of the
Business in the manner in which it has heretofore been operated or is presently
operated does not give rise to any such infringement or misappropriation; and
(v) there is no infringement or misappropriation of the Intellectual Property by
a third party or claim, pending or, to the Knowledge of the Seller, threatened,
against any third party with respect to the alleged infringement or
misappropriation of the Intellectual Property.
4.16 Taxes.
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4.16.1 Except as set forth on Schedule 4.16.1-1, each of the Seller,
the Company and the Company Subsidiaries has timely and accurately prepared
and filed or been included in or will timely and accurately prepare and
file or be included in all federal, state, local and foreign returns,
declarations and reports, information returns and statements (collectively,
the "Returns") for Taxes (as defined in Section 4.16.2) required to be
filed by or with respect to the Company or the Company Subsidiaries before
the Closing Date, and has paid or caused to be paid, or has made adequate
provision or set up an adequate accrual or reserve for the payment of, all
Taxes required to be paid in respect of the periods for which Returns are
due on or prior to the Closing Date, and will establish an adequate accrual
or reserve for the payment of all Taxes payable in respect of the period,
including portions thereof, subsequent to the last of said periods required
to be so accrued or reserved, in each case in accordance with GAAP up to
and including the Closing Date. All such Returns are or will be true and
correct in all material respects. The Seller and the Company have delivered
to Centerprise true and complete copies of all Returns referred to in the
first sentence of this Section 4.16.1 (including any amendments thereof)
for the five (5) most recent taxable years. Neither the Company nor any
Company Subsidiary is delinquent in the payment of any Tax, and no material
deficiencies for any Tax, assessment or governmental charge have been
threatened, claimed, proposed or assessed, in each case in writing. No
waiver or extension of time to assess any Taxes has been given or
requested. No written claim, or any other claim, by any taxing authority in
any jurisdiction where the Seller, the Company or any Company Subsidiary
does not file Tax returns is pending pursuant to which the Seller, the
Company or Company Subsidiary, as applicable, is or may be subject to
taxation by that jurisdiction. The Seller's, the Company's and the Company
Subsidiaries' Returns were last audited by the Internal Revenue Service or
comparable state, local or foreign agencies on the dates set forth on
Schedule 4.16.1-2.
4.16.2 For purposes of this Agreement, the term "Taxes" shall mean all
taxes, charges, withholdings, fees, levies, penalties, additions, interest
or other assessments, including, without limitation, income, gross
receipts, excise, property, sales, employment, withholding, social
security, occupation, use, service, service use, license, payroll,
franchise, transfer and recording taxes, fees and charges, windfall
profits, severance, customs, import, export, employment or similar taxes,
charges, fees, levies or other assessments, imposed by the United States,
or any state, local, foreign or provincial government or subdivision or any
agency thereof, whether computed on a separate, consolidated, unitary,
combined or any other basis.
4.17 Employee Benefit Plans; ERISA.
-----------------------------
4.17.1 Except as described in Schedule 4.17.1, neither the Seller, the
Company nor any Company Subsidiary has or is reasonably expected to have
any liability (including contingent liability) whether direct or indirect
(and regardless of whether it would be
derived from a current or former Plan Affiliate, as defined in Section
4.17.5(c)) with respect to any of the following (whether written, unwritten
or terminated): (i) any employee welfare benefit plan, as defined in
Section 3(1) of ERISA (as defined in Section 4.17.5(b)), including, but not
limited to, any medical plan, life insurance plan, short-term or long-term
disability plan or dental plan; (ii) any "employee pension benefit plan,"
as defined in Section 3(2) of ERISA, including, but not limited to, any
excess benefit plan, top hat plan or deferred compensation plan or
arrangement, nonqualified retirement plan or arrangement, qualified defined
contribution or defined benefit arrangement; or (iii) any other benefit
plan, policy, program, arrangement or agreement, including, but not limited
to, any material fringe benefit plan or program, personnel policy, bonus or
incentive plan, stock option, restricted stock, stock bonus, holiday pay,
vacation pay, sick pay, bonus program, service award, moving expense,
reimbursement program, tool allowance, safety equipment allowance, deferred
bonus plan, salary reduction agreement, change-of-control agreement,
employment agreement or consulting agreement.
4.17.2 A complete copy of each written Employee Plan (as defined in
Section 4.17.5(a)) as amended to the Closing, together with audited
financial statements, if any, for the three (3) most recent plan years; a
copy of each trust agreement or other funding vehicle with respect to each
such plan; a copy of any and all determination letters, rulings or notices
issued by a Governmental Authority with respect to such plan; a copy of the
Form 5500 Annual Report for the three (3) most recent plan years; and a
copy of each and any general explanation or communication which was
required to be distributed or otherwise provided to participants in such
plan and which describes all or any relevant aspect of each plan, including
summary plan descriptions and/or summary of material modifications, have
been delivered to Centerprise. A description of each unwritten Employee
Plan, including a description of eligibility, participation, benefits,
funding arrangements and assets or other relevant aspects of the
obligation, is set forth in Schedule 4.17.2.
4.17.3 Except as is not reasonably expected to give rise to any
liability (including contingent liability), whether direct or indirect, to
the Seller, the Company or any Company Subsidiary, each Employee Plan (i)
has been and is operated and administered in compliance with its terms;
(ii) has been and is operated, administered, maintained and funded in
compliance with the applicable requirements of the Code in such a manner as
to qualify, where appropriate and intended, for both Federal and state
purposes, for income tax exclusions, tax-exempt status, and the allowance
of deductions and credits with respect to contributions thereto; (iii)
where appropriate, has received a favorable determination letter from the
Internal Revenue Service upon which the sponsor of the plan may currently
rely; (iv) has been and currently complies in form and in operation in all
respects with all applicable requirements of ERISA and the Code and any
applicable reporting and disclosure requirements of Federal and state laws,
including but not limited to the requirement of Part 6 of subtitle B of
Title I of ERISA and Section 4980B of the Code. With respect to each
Employee Plan, no Person has:
(i) entered into any nonexempt "prohibited transaction," as such terms are
defined in ERISA or the Code; (ii) breached a fiduciary obligation or (iii)
any liability for any failure to act or comply in connection with the
administration or investment of the assets of such plan; and no Employee
Plan has any liability and there is no liability in connection with any
Employee Plan, other than a liability (i) which is expressly and adequately
reflected in the Latest Balance Sheets, (ii) which is discretionary or
terminable at will by the Seller, the Company or one of the Company
Subsidiaries without incurring any such liability, or (iii) which is
adequately funded under a funding arrangement separate from the assets of
the Seller, the Company, any Company Subsidiary or a Plan Affiliate (and
only to the extent of such funding). Any contribution made or accrued with
respect to any Employee Plan is fully deductible by the Seller, the
Company, a Company Subsidiary or a Plan Affiliate.
4.17.4 Neither the Seller, the Company nor any Company Subsidiary or
Plan Affiliate has ever sponsored, maintained, contributed to or been
required to contribute to, or has any liability, whether direct or indirect,
with respect to any Employee Plan which is or has ever been (i) a
"multiemployer plan" as defined in Section 4001 of ERISA, (ii) a
"multiemployer plan" within the meaning of Section 3(37) of ERISA, (iii) a
"multiple employer plan" within the meaning of Code Section 413(c), (iv) a
"multiple employer welfare arrangement" within the meaning of Section 3(40)
of ERISA, (v) subject to the funding requirements of Section 412 of the Code
or to Title IV of ERISA, or (vi) provides for post-retirement medical, life
insurance or other welfare-type benefits.
4.17.5 As used in this Agreement, the following terms shall have the
following respective meanings:
(a) the term "Employee Plan" shall mean any plan, policy,
program, arrangement or agreement described in Section 4.17.1, whether or
not scheduled;
(b) the term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended; and
(c) with respect to any Person ("First Person"), the term
"Plan Affiliate" shall mean any other Person with whom the First Person
constitutes or has constituted all or part of a controlled group, or which
would be treated or have been treated with the First Person as under common
control or whose employees would be or have been treated as employed by the
First Person, under Section 414 of the Code or Section 4001(b) of ERISA and
any regulations, administrative rulings and case law interpreting the
foregoing.
4.18 Labor Matters. Except as set forth in Schedule 4.18, there is no, and
within the last three (3) years neither the Seller, the Company nor any Company
Subsidiary has experienced any, strike, picketing, boycott, work stoppage or
slowdown or other similar labor dispute,
union organizational activity, allegation, charge or complaint of unfair labor
practice, employment discrimination or other matters relating to the employment
of labor pending or, to the Knowledge of the Seller, threatened against the
Seller, the Company or any Company Subsidiary, or that is reasonably expected to
affect the Seller, the Company or any Company Subsidiary; nor, to the Knowledge
of the Seller, is there any basis for any such allegation, charge, or complaint.
There is no request for representation pending and, to the Knowledge of the
Seller, no question concerning representation has been raised. There is no
grievance pending that is reasonably expected to result in a Company Material
Adverse Effect nor any arbitration proceeding arising out of a union agreement.
To the Knowledge of the Seller, no employee who is key to the Business and no
group of employees has announced or otherwise indicated any plans to terminate
employment with the Seller, the Company or any Company Subsidiary. Each of the
Seller, the Company and any Company Subsidiary has complied with all applicable
laws relating to the employment of labor, including provisions thereof relating
to wages, hours, equal opportunity, collective bargaining and the payment of
social security and other taxes. Neither the Seller, the Company nor any Company
Subsidiary is liable for any arrears of wages or any taxes or penalties for
failure to comply with any such laws, ordinances or regulations.
4.19 Environmental Matters. Other than as disclosed on Schedule 4.19, (i)
each of the Seller, Company and the Company Subsidiaries is operating and has
operated its business in compliance with all applicable Environmental and Safety
Requirements (as defined later in this Section); (ii) to the actual knowledge of
the managers of the Seller, without any duty to inquire (notwithstanding the
definition of "Knowledge" in Section 15.4), there are no Hazardous Materials (as
defined later in this Section) present at, on or under any real property
currently or formerly owned, leased or used by the Seller, the Company or
Company Subsidiary (other than those present in office supplies and
cleaning/maintenance materials) for which the Seller, the Company or a Company
Subsidiary is or is reasonably expected to be responsible, or otherwise have any
liability, for response costs under any Environmental and Safety Requirements;
(iii) each of the Seller, the Company and the Company Subsidiaries has disposed
of all waste materials generated by the Seller, the Company or such Company
Subsidiary at any real property currently or formerly owned, leased or used by
the Seller, the Company or Company Subsidiary in compliance with applicable
Environmental and Safety Requirements; and (iv) there are and have been no
facts, events, occurrences or conditions at or related to any real property
currently or formerly owned, leased or used by the Seller, the Company or
Company Subsidiary that is reasonably expected to cause or give rise to
liabilities or response obligations of the Seller, the Company or any Company
Subsidiary under any Environmental and Safety Requirements. The term
"Environmental and Safety Requirements" means any federal, state and local
laws, statutes, regulations or other requirements relating to the protection,
preservation or conservation of the environment or worker health and safety, all
as amended or reauthorized. The term "Hazardous Materials" means "hazardous
substances," as defined by the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S) 9601 et seq., "hazardous wastes,"
as defined by the Resource Conservation Recovery Act, 42 U.S.C. (S) 6901 et
seq., asbestos in any form or condition, polychlorinated biphenyls and any other
material, substance or waste to which
liability or standards of conduct may be imposed under any Environmental and
Safety Requirement.
4.20 Insurance. Each of the Seller, the Company and the Company Subsidiaries
has in full force and effect commercially reasonable amounts of insurance to
protect the Seller's the Company's and Company Subsidiaries' ownership or
interest in, and operation of, its assets against the types of liabilities,
including professional malpractice, customarily insured against in connection
with operations similar to the Business, and all premiums due on such policies
have been paid. To the Seller's Knowledge, each of the Seller, the Company and
the Company Subsidiaries has complied with the provisions of all such policies
and is not in default under any of such policies. Schedule 4.20 contains a
complete and correct list of all such insurance policies. Neither the Company
nor any Company Subsidiary has received any notice of cancellation or intent to
cancel or increase premiums with respect to such insurance policies. Schedule
4.20 also contains a list of all claims or asserted claims reported to insurers
under such policies relating to the ownership or interest in the Seller's, the
Company's and the Company Subsidiaries' assets, or operation of the Business,
including all professional malpractice claims and similar types of claims,
actions or proceedings asserted against the Seller, the Company or any Company
Subsidiary arising out of the Business at any time within the past three (3)
years.
4.21 Interest in Customers and Suppliers; Affiliate Transactions. Except
as described on Schedule 4.21 and except for ownership as an investment of not
more than one percent (1%) of any class of capital stock of any publicly-traded
company, none of the Seller, any of its members, any Affiliate of its members,
any Affiliate of the Seller, the Company nor any Company Subsidiary (i)
possesses, directly or indirectly, any financial interest in, or is a director,
officer, employee or affiliate of, any Person that is a client, supplier,
customer, lessor, lessee or competitor of the Seller, the Company or any Company
Subsidiary, (ii) owns, directly or indirectly, in whole or in part, or has any
interest in any tangible or intangible property used in the conduct of the
Business, or (iii) is a party to an agreement or relationship, that involves the
receipt by such Person of compensation or property from the Seller, the Company
or any Company Subsidiary other than through a customary employment relationship
or through distributions made with respect to the Seller Interests or equity
interests in any Company Subsidiary (provided such distributions have been made
consistent with the Seller's, the Company's or any Company Subsidiary's, as the
case may be, past custom and practices). Schedule 4.21 sets forth the parties
to and the date, nature and amount of each transaction during the last five
years involving the transfer of any cash, property or rights to or from the
Seller, the Company or any Company Subsidiary from, to or for the benefit of any
Affiliates (other than customary employment relationships or distributions made
with respect to the Seller Interests) ("Affiliate Transactions"), and any
existing commitments of the Seller, the Company or any Company Subsidiary to
engage in the future in any Affiliate Transactions. Except as disclosed, each
Affiliate Transaction and each transaction with former Affiliates of the Seller,
the Company or any Company Subsidiary was effected on terms equivalent to those
that would have been established in an arm's-length transaction.
4.22 Business Relationships. Schedule 4.22 lists all clients of the Seller, the
Company and each Company Subsidiary representing one percent (1%) or more of the
Seller's or the Company's, as applicable, consolidated net revenues for the
twelve (12) months ended December 31, 1998. Except as set forth on Schedule
4.22, since December 31, 1998, none of such clients has canceled or
substantially reduced its business with the Seller, the Company or Company
Subsidiary, as applicable, nor are any of such clients threatening to do so. To
the Knowledge of the Seller, no client that accounts for one percent (1%) or
more of the Seller's or the Company's consolidated net revenue, or supplier of
the Seller, the Company or any Company Subsidiary, will cease to do business
with, or substantially reduce its business with, the Seller, the Company or any
Company Subsidiary, as applicable, after the consummation of the transactions
contemplated hereby.
4.23 Compensation. Schedule 4.23 is a complete list setting forth the names
and current total compensation, including, without limitation, salary and
bonuses paid to employees and draws or other distributions paid to partners,
members or owners of each Person who earned from the Seller, the Company or a
Company Subsidiary in 1998 total compensation in excess of $100,000. Except as
set forth in Schedule 4.23, no Person listed thereon has received any bonus or
increase in compensation and there has been no "general increase" in the
compensation or rate of compensation payable to any employees, partners, members
or owners of the Seller, the Company or any Company Subsidiary since the date of
the Latest Balance Sheet, other than in the Seller's or the Company's and
Company Subsidiaries' ordinary course of business, consistent with past custom
and practices, nor since that date has there been any oral or written promise to
employees, partners, members or owners of any bonus or increase in compensation,
other than in the Seller's or the Company's and Company Subsidiaries ordinary
course of business, consistent with past custom and practices. The term
"general increase" as used herein means any increase generally applicable to a
class or group, but does not include increases granted to individuals for merit,
length of service or change in position or responsibility made on the basis of
the custom and past practices of the Seller, the Company or any Company
Subsidiary. Schedule 4.23 includes the date and amount of the last bonus or
similar distribution or increase in compensation for each listed individual.
4.24 Bank Accounts. Schedule 4.24 is a true and complete list of each bank in
which the Seller, the Company or any Company Subsidiary has an account or safe
deposit box, the number of each such account or box, and the names of all
Persons authorized to draw thereon or to have access thereto.
4.25 Professional Credentials. Each member of Seller is a Certified Public
Accountant in good standing in one of the States of the United States or the
District of Columbia, and entitled to practice in one of the jurisdictions in
which the Seller, the Company or any Company Subsidiary maintains an office, and
there are no disciplinary proceedings pending or threatened against the Seller,
the Company, any Company Subsidiary or any of the members of the Seller by any
Governmental Authority or self-regulatory organization regulating, licensing or
permitting the practice of public accountancy.
4.26 Disclosure; No Misrepresentation. No representation or warranty of the
Seller contained in this Agreement or in any of the certification, schedules,
lists, documents, exhibits, or other instruments delivered or to be delivered to
Centerprise as contemplated by any provision hereof contains any untrue
statement regarding a material fact or omits to state a material fact necessary
in order to make the statements made herein or therein not misleading. To the
Knowledge of the Seller, there is no fact or circumstance that has not been
disclosed to Centerprise herein that has or is reasonably expected to have a
Company Material Adverse Effect.
ARTICLE V
[RESERVED]
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CENTERPRISE
Centerprise represents and warrants to the Company as of March 31, 1999
and, subject to Section 7.3, as of the date on which Centerprise and the lead
Underwriter execute and deliver the Underwriting Agreement related to the IPO
and as of the Closing Date as follows:
6.1 Organization And Qualification. Centerprise is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being
conducted. True, accurate and complete copies of Centerprise's Certificate of
Incorporation and By-laws, as in effect on the date hereof, including all
amendments thereto, have heretofore been delivered to the Seller. Mergersub is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted. True, accurate and complete copies
of Mergersub's Certificate of Formation and Operating Agreement, as in effect on
the date hereof, including all amendments thereto, have heretofore been
delivered to the Seller.
6.2 Capitalization.
6.2.1 The authorized capital stock of Centerprise consists of 20,000
shares of Centerprise Common Stock, of which 17,500 shares are outstanding
as of the date hereof. All of the issued and outstanding shares of
Centerprise Common Stock are validly issued and are fully paid,
nonassessable and free of preemptive rights. Immediately prior to the
Closing Date, the authorized capital stock of Centerprise will consist of
50,000,000 shares of Centerprise Common Stock, of which the number of
shares set forth in the Form S-1 will be issued and outstanding, and
10,000,000 shares of Preferred Stock, par value $0.01 per share, none of
which will be issued and outstanding. Other than (i) shares of Centerprise
Common Stock issued pursuant to a split of the shares outstanding as of the
date of this Agreement, (ii) shares of Centerprise Common Stock issued in
accordance with the Merger and the Other Mergers, and (iii) shares of
Centerprise Common Stock that may be issued to new members of management in
lieu of shares previously issued to current members of management, but
which will not increase the number of shares of outstanding Centerprise
Common Stock, no shares of Centerprise Common Stock will be issued prior to
the consummation of the IPO. Mergersub's authorized equity ownership
consists solely of the membership interests owned by Centerprise, all of
which are issued and outstanding, are owned free and clear of any Liens by
Centerprise, and are fully paid, nonassessable and free of preemptive
rights.
6.2.2 Except as set forth on Schedule 6.2, as of the date hereof, there
are no outstanding subscriptions, options, calls, contracts, commitments,
understandings, restrictions, arrangements, rights or warrants, including
any right of conversion or exchange under any outstanding security,
instrument or other agreement obligating Centerprise to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of the
capital stock of Centerprise or obligating Centerprise to grant, extend or
enter into any such agreement or commitment. There are no voting trusts,
proxies or other agreements or understandings to which Centerprise is a
party or is bound with respect to the voting of any shares of capital stock
of Centerprise. The shares of Centerprise Common Stock issued to the Seller
in the Merger will at the Closing Date be duly authorized, validly issued,
fully paid and nonassessable and free of preemptive rights and issued
pursuant to a registration statement as required by the 1933 Act or an
exemption therefrom.
6.3 No Subsidiaries. Except for Centerprise's ownership of 100% of the capital
stock of each of Professional Service Group, Inc., a Delaware corporation, and
Mergersub (and similar entities created for similar purposes with respect to the
Other Agreements), Centerprise has no subsidiaries and it does not own any
capital stock of any corporation or any equity or other interest of any nature
whatsoever in any Person.
6.4 Authority; Non-Contravention; Approvals.
6.4.1 Each of Centerprise and Mergersub has all requisite right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been approved by the Boards of
Directors of Centerprise and Mergersub, and no other corporate proceedings
on the part of Centerprise or Mergersub are necessary to authorize the
execution and delivery of this Agreement or the consummation by Centerprise
and Mergersub of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Centerprise and Mergersub and, assuming
the due authorization, execution and delivery hereof by the Seller,
constitutes a valid and legally binding agreement of Centerprise and
Mergersub, enforceable against each of them in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
6.4.2 The execution and delivery of this Agreement by Centerprise and
Mergersub does not violate, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of
any Lien upon any of the properties or assets of Centerprise and Mergersub
under any of the terms, conditions or provisions of (i) the Certificate of
Incorporation or By-laws of Centerprise, (ii) the Certificate of Formation
or Operating Agreement of Mergersub, (iii) any statute, law, ordinance,
rule, regulation, judgment, decree, order, injunction, writ, permit or
license of any court or Governmental Authority applicable to Centerprise,
Mergersub or any of their respective properties or assets, or (iv) any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of
any kind to which Centerprise or Mergersub is now a party or by which
Centerprise, Mergersub or any of their respective properties or assets, may
be bound or affected, except those items described in clause (iii) relating
to regulating, licensing or permitting the practice of public accountancy.
The consummation by Centerprise and Mergersub of the transactions
contemplated hereby will not result in any violation, conflict, breach,
right of termination or acceleration or creation of Liens under any of the
terms, conditions or provisions of the items described in clauses (i)
through (iii) of the immediately preceding sentence, subject, in the case
of the terms, conditions or provisions of the items described in clause
(ii) above, to obtaining (prior to the Closing Date) Centerprise Required
Statutory Approvals and except for those items described in (iii) above
relating to regulating, licensing or permitting the practice of public
accountancy.
6.4.3 Except with respect to (i) the declaration of the effectiveness of
the Registration Statements by the SEC and filings, if required, with
various state securities or "blue sky " authorities, (ii) any filing which
may be required under the HSR Act, (iii) any filing
which may be required by any Governmental Authority or self-regulatory
organization regulating, licensing or permitting the practice of public
accountancy (the filings and approvals referred to in clauses (i) through
(iii) are collectively referred to as the "Centerprise Required Statutory
Approvals") no declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body
or authority is necessary for the execution and delivery of this Agreement
by Centerprise or Mergersub or the consummation by Centerprise or Mergersub
of the transactions contemplated hereby, other than such declarations,
filings, registrations, notices, authorizations, consents or approvals
which, if not made or obtained, as the case may be, are not reasonably
expected to, in the aggregate, have a material adverse effect on the
business operations, properties, assets, condition (financial or other),
results of operations or prospects of Centerprise and its subsidiaries,
taken as a whole (a "Centerprise Material Adverse Effect").
6.5 Absence of Undisclosed Liabilities. Except as set forth on Schedule 6.5,
neither Centerprise nor Mergersub has incurred any liabilities or obligations
(whether known or unknown, absolute, contingent, direct, indirect, perfected,
inchoate, unliquidated or otherwise) of any nature. Except as set forth on
Schedule 6.5, neither Centerprise nor Mergersub has engaged in any business
activities of any type or kind whatsoever, nor entered into any agreements nor
is it bound by any obligation or undertaking.
6.6 Litigation. There are no claims, suits, actions or proceedings pending or,
to the Knowledge of Centerprise, threatened against, relating to or affecting
Centerprise or Mergersub, before any court, Governmental Authority or any
arbitrator that seek to restrain or enjoin the consummation of the Merger or the
IPO or which could reasonably be expected, either alone or in the aggregate with
all such claims, actions or proceedings, to have a Centerprise Material Adverse
Effect. Centerprise is not subject to any unsatisfied or continuing judgement,
order or decree of any court or Governmental Authority. Centerprise is not a
party to any legal action to recover monies due it or for damages sustained by
it.
6.7 Compliance with Applicable Laws. Each of Centerprise and Mergersub has
complied in all material respects with all Laws applicable to it, and has not
received any notice of any alleged claim or threatened claim, violation of or
liability or potential responsibility under any such Law which has not
heretofore been cured and for which there is no remaining liability and, to the
Knowledge of Centerprise, no event has occurred or circumstances exist that
(with or without notice or lapse of time) may constitute or result in a
violation by Centerprise or Mergersub of any Law or may give rise to any
liability on the part of the Centerprise or Mergersub under any Law.
6.8 No Misrepresentation. None of the representations and warranties of
Centerprise or Mergersub set forth in this Agreement or in any of the
certificates, schedules, lists, documents, exhibits, or other instruments
delivered or to be delivered to the Company as contemplated by any provision
hereof contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading. To
the Knowledge of Centerprise, there is no fact or circumstance
that has not been disclosed to the Seller herein that has or is reasonably
expected to have a Company Material Adverse Effect.
ARTICLE VII
CERTAIN COVENANTS AND OTHER TERMS
7.1 Conduct of Business by the Seller and the Company Prior to the Effective
Time.
7.1.1 Except as otherwise contemplated by this Agreement, after the date
hereof and prior to the Closing Date or earlier termination of this Agreement,
unless Centerprise shall otherwise agree in writing, the Seller shall, and shall
cause the Company and each Company Subsidiary to:
(a) in all material respects conduct the Business in the ordinary and usual
course and consistent with past customs and practices;
(b) not (i) amend its Organizational Documents, (ii) split, combine or
reclassify its outstanding equity ownership or (iii) declare, set aside or
pay any dividend or distribution payable in cash, stock, property or
otherwise except dividends or distributions which (A) are consistent with
past customs and practices, (B) do not result in a Company Material Adverse
Effect and (C) as set forth on Schedule 7.5;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge
or dispose of (i) any additional membership interests of, or any options,
warrants or rights of any kind to acquire any of its membership interests
or equity interests of any class, (ii) any debt with voting rights or (iii)
any debt or equity securities convertible into or exchangeable for, or any
rights, warrants, calls, subscriptions, or options to acquire, any such
membership interests, debt with voting rights or convertible securities;
(d) not (i) incur or become contingently liable with respect to any
indebtedness for borrowed money other than (A) borrowings in the ordinary
course of business in a manner consistent with past customs and practices
or (B) borrowings to refinance existing indebtedness on commercially
reasonable terms, (ii) redeem, purchase, acquire or offer to purchase or
acquire any shares of its capital stock or equity interests or any options,
warrants or rights to acquire any of its capital stock or equity interests
or any security convertible into or exchangeable for its capital stock or
equity interests, (iii) sell, pledge, dispose of or encumber any assets or
businesses other than dispositions in the ordinary course of business in a
manner consistent with past customs and
practices (iv) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(e) use commercially reasonable efforts to (i) preserve intact its business
organizations and goodwill, (ii) keep available the services of its present
officers and key employees, and (iii) preserve the goodwill and business
relationships with clients and others having business relationships with it
and not engage in any action, directly or indirectly, with the intent to
adversely impact the transactions contemplated by this Agreement;
(f) confer on a regular and frequent basis with one or more representatives
of Centerprise to report operational matters of materiality and the general
status of ongoing operations;
(g) except as contemplated on Schedule 4.9, not (i) increase in any manner
the base compensation of, or enter into any new bonus or incentive
agreement or arrangement with, any of its employees, partners, members or
owners, except in the ordinary course of business in a manner consistent
with past customs and practices of the Company or any Company Subsidiary,
as applicable, (ii) pay or agree to pay any additional pension, retirement
allowance or other employee benefit under any Employee Plan to any such
Person, whether past or present, (iii) enter into any new employment,
severance, consulting, or other compensation agreement with any of its
existing employees, partners, members or owners, (iv) amend or enter into a
new Employee Plan (except as required by Law) or amend or enter into a new
collective bargaining agreement, or (v) engage in any new Affiliate
Transaction;
(h) comply in all material respects with all applicable Laws;
(i) not make any material investment in, directly or indirectly, acquire or
agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or substantial portion of the assets of, or
by any other manner, any businesses or any Person or division thereof or
otherwise acquire or agree to acquire any assets in each case which are
material to it other than in the ordinary course of business in a manner
consistent with past customs and practices;
(j) other than as set forth on Schedule 7.5, not sell, lease, license,
encumber or otherwise dispose of, or agree to sell, lease, license,
encumber or otherwise dispose of, any of its assets other than in the
ordinary course of business, consistent with past customs and practices;
(k) maintain with financially responsible insurance companies insurance on
its tangible assets and its businesses in such amounts and against such
risks and
losses in a manner consistent with past customs and practices in all
material respects; and
(l) collect and xxxx receivables in the ordinary and usual course and
consistent with past custom and practices.
7.1.2 [Reserved]
7.1.3 Notwithstanding the fact that such action might otherwise be permitted
pursuant to this Article, neither the Seller nor the Company shall take, or
permit any Company Subsidiary to take, any action that would or is reasonably
likely to result in any of the representations or warranties of the Seller set
forth in this Agreement being untrue or in any of the conditions to the
consummation of the transactions contemplated hereunder set forth in Article X
not being satisfied.
7.1.4 Prior to the Closing, (i) the Seller shall terminate, without any
liability to the Company or the Company Subsidiaries, all agreements relating to
the voting of the Company's membership interests, and all agreements and
obligations of the Company and the Company Subsidiaries relating to borrowed
money and/or involving payments to or for the benefit of a present or former
member of the Company, or an Affiliate or family member of a present or former
member of the Company, including, without limitation, those set forth on
Schedule 7.1.4, but excluding (A) debt reflected on Schedule 2.1 as Debt Assumed
By Centerprise, (B) items reflected on Schedule 2.5, (C) agreements and
obligations to the extent such agreements and obligations result in Indirect
Costs under the Incentive Compensation Agreement, (D) that certain lease between
the Seller and S&S Realty dated on or about the Closing Date, and (E) items
approved by Centerprise in writing.
7.2 No-Shop.
(a) After the date hereof and prior to the Closing Date or earlier
termination of this Agreement, the Company and the Seller shall (i) (not
and each of Seller and the Company shall use its diligent efforts to cause
the Company Subsidiaries and any officer, director or employee of, or any
attorney, accountant, investment banker, financial advisor or other agent
retained by the Company, the Seller or any Company Subsidiary not to),
initiate, solicit, negotiate, encourage, or provide non-public or
confidential information to facilitate, any proposal or offer to acquire
all or any substantial part of the business and properties of the Seller,
the Company or any Company Subsidiary, or any equity ownership interests of
the Seller, the Company or any Company Subsidiary, whether by merger,
purchase of assets or otherwise, whether for cash, securities or any other
consideration or combination thereof, or enter into any joint venture or
partnership or similar arrangement, and (ii) promptly advise Centerprise of
the terms of any communications the Seller or the Company may receive or
become aware of relating to any bid for part or all of the Seller, the
Company or any Company Subsidiary. Notwithstanding the foregoing, if the
underwriters' internal sales force presentation or "road show" for the IPO
has not started by October 15, 1999, then from and after such date, the
Seller may (through its authorized agents) conduct limited discussions with
potential acquirers of the Seller for the sole purpose of assessing the
potential terms and conditions of an acquisition proposal involving the
Seller. Notwithstanding the preceding sentence, the Seller shall not (i)
disclose any non-public or confidential information regarding the Seller to
any such third party or (ii) enter into any agreement (including, without
limitation, any letter of intent or term sheet) with such third party
unless this Agreement has been terminated pursuant to Article XI.
(b) The Seller and the Company (i) acknowledge that a breach of any of
their covenants contained in this Section 7.2 will result in irreparable
harm to Centerprise which will not be compensable in money damages, and
(ii) agree that such covenant shall be specifically enforceable and that
specific performance and injunctive relief shall be a remedy properly
available to the other party for a breach of such covenant.
7.3 Schedules. Each party hereto agrees that with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the continuing obligation until the Closing promptly to
supplement or amend and deliver to the other parties all the schedules to this
Agreement (the "Schedules") to correct any matter which would constitute a
breach of any such party's representations and warranties herein; provided,
however, that no amendment or supplement to a Schedule that constitutes or
reflects a Company Material Adverse Effect or affects Schedule 4.2, Schedule 4.4
or Schedule 8.8 may be made unless Centerprise and a majority of the Founding
Companies consent to such amendment or supplement. No amendment of or
supplement to a Schedule shall be made later than three (3) business days prior
to the anticipated effectiveness of the Form S-1. For all purposes of this
Agreement, including, without limitation, for purposes of determining whether
the conditions set forth in Sections 10.2 and 10.3 have been fulfilled, the
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this Section 7.3. In the event that (i) one of the other Founding
Companies seeks to amend or supplement a Schedule pursuant to Section 7.3 of one
of the Other Agreements, (ii) such amendment or supplement constitutes or
reflects a Company Material Adverse Effect (as defined in such Other Agreement)
or affects Schedule 4.2, Schedule 4.4 or Schedule 8.8 of such Other Agreement,
and (iii) Centerprise and a majority of the Founding Companies consent to such
amendment or supplement, but the Seller does not, the Seller may terminate this
Agreement at any time prior to the Closing Date. In the event that (i) the
Seller seeks to amend or supplement a Schedule pursuant to this Section 7.3,
(ii) such amendment or supplement constitutes or reflects a Company Material
Adverse Effect or affects Schedule 4.2, Schedule 4.4 or Schedule 8.8, and (iii)
Centerprise and a majority of the Founding Companies do not consent to such
amendment or supplement, this Agreement shall be deemed terminated.
No party to this Agreement shall be liable to any other party if this
Agreement shall be terminated pursuant to the provisions of this Section 7.3,
unless this Agreement is so terminated in connection with an amendment of or
supplement to a Schedule relating to Seller's or the Company's breach of a
representation or warranty as of March 31, 1999, in which case the Seller or the
Company shall pay to Centerprise, as Centerprise's exclusive remedy
(notwithstanding anything to the contrary) and as liquidated damages, and not as
a penalty, an amount equal to $2,000,000 (the "Liquidated Damages Amount"). The
Seller agrees that in the case of such termination Centerprise and the Founding
Companies (excluding the Seller) will sustain immediate and irreparable economic
harm and loss of goodwill and that actual losses suffered by such parties will
be difficult, if not impossible, to ascertain, but the Liquidated Damages Amount
set forth herein is reasonable and has been arrived at after a good faith effort
to estimate such losses. Payment of the Liquidated Damages Amount shall be made
in cash to Centerprise within thirty (30) days of a termination pursuant to this
Section 7.3 in connection with an amendment of or supplement to a Schedule
relating to a breach of a representation or warranty as of the date of this
Agreement.
7.4 Company Member Meeting; Seller Member Meeting. The Seller shall take, and
shall cause the Company to take, all action in accordance with applicable Laws
and its respective Organizational Documents necessary to duly call, give notice
of, convene and hold a meeting of the Company's members and the Seller's members
to be held on the earliest practicable date determined in consultation with
Centerprise to consider and vote upon approval of the Merger, this Agreement and
the transactions contemplated hereby. The Seller shall solicit, and the Seller
shall cause the Company to solicit, the approval of the Merger, this Agreement
and the transactions contemplated hereby by the Company's members and the
Seller's members, respectively, and each of the Company's managers and the
Seller's managers shall recommend approval of the Merger, this Agreement and the
transactions contemplated hereby by the Company's members and the Seller's
members. If the Merger, this Agreement and the transactions contemplated hereby
are approved by the Company's members and the Seller's members, neither the
Company nor the Seller shall call, give notice of, convene or hold any
other meeting of their respective members to rescind or modify such approval or
to consider any other transaction.
7.5 Asset Transfer. Prior to the Closing, in addition to those actions
specified in Section 7.1.2 to be taken, the Seller shall (i) cause Seller to
form Newco pursuant to Organizational Documents in form and substance acceptable
to Centerprise, and (ii) cause Seller to complete the Asset Transfer to Newco
(including, without limitation, obtaining any necessary third party consents to
such Asset Transfer) pursuant to conveyance documents in form and substance
acceptable to Centerprise, except that those liabilities and/or assets set forth
on Schedule 7.5 attached hereto (the "Retained Liabilities" and the "Retained
Assets", respectively) shall not be transferred to Newco. Notwithstanding
anything to the contrary contained herein or any related agreement, Newco will
not assume, agree to pay, perform or discharge or in any way be responsible for
any debts, liabilities or obligations of Seller or any member of Seller of any
kind or nature whatsoever set forth on Schedule 7.5 as a Retained Liability or
relating to the Retained Assets.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Access to Information.
8.1.1 The Seller shall and shall cause the Company and the Company
Subsidiaries to afford to Centerprise and its accountants, counsel,
financial advisors and other representatives, including without limitation
the underwriters engaged in connection with the IPO (each an "Underwriter"
and collectively, the "Underwriters") and their counsel (collectively, the
"Centerprise Representatives"), and to the other Founding Companies and
their accountants, counsel, financial advisors and other representatives,
and Centerprise shall afford to the Seller and the Company and their
accountants, counsel, financial advisors and other representatives (the
"Seller Representatives"), upon reasonable notice, full access during
normal business hours throughout the period prior to the Closing Date to
all of its respective properties, books, contracts, commitments and records
(including, but not limited to, financial statements and Tax Returns) and,
during such period, shall furnish promptly to one another all due diligence
information requested by the other party. Centerprise shall hold and shall
use its best efforts to cause the Centerprise Representatives to hold, and
the Seller shall hold and shall use their best efforts to cause the Seller
Representatives to hold, in strict confidence all non-public information
furnished to it in connection with the transactions contemplated by this
Agreement, except that each of Centerprise, Seller and the Company may
disclose any information that it is required by law or judicial or
administrative order to disclose. In addition, Centerprise will cause each
of the other Founding Companies and their members and stockholders, as
applicable, to enter into a provision similar to this Section 8.1 requiring
each such Founding Company to keep confidential any information obtained by
such Founding Company in connection with the transactions contemplated by
this Agreement.
8.1.2 In the event that this Agreement is terminated in accordance with
its terms, each party shall promptly return to the disclosing party all
non-public written material provided pursuant to this Section 8.1 or
pursuant to the Other Agreements and shall not retain any copies, extracts
or other reproductions of such written material. In the event of such
termination, all documents, memoranda, notes and other writings prepared by
Centerprise or the Company based on the information in such material shall
be destroyed (and Centerprise and the Seller shall use their respective
reasonable best efforts to cause their advisors and representatives to
similarly destroy such documents, memoranda and notes), and such
destruction (and reasonable best efforts) shall be certified in writing by
an authorized officer supervising such destruction.
8.2 Registration Statements.
8.2.1 Centerprise has filed the Registration Statements with the SEC and
shall use all reasonable efforts to have the Registration Statements
declared effective by the SEC as promptly as practicable. Centerprise shall
also take any action required to be taken under applicable state "blue sky"
or securities laws in connection with the issuance of Centerprise Common
Stock. Centerprise and the Seller shall promptly furnish to each other all
information, and take such other actions, as may reasonably be requested in
connection with making such filings. All information provided and to be
provided by Centerprise and the Seller, respectively, for use in the
Registration Statements shall be true and correct in all material respects
without omission of any material fact which is required to make such
information not false or misleading as of the date thereof and in light of
the circumstances under which given or made. The Seller agrees promptly to
advise Centerprise if at any time during the period in which a prospectus
relating to the offering or the Merger is required to be delivered under
the Securities Act, any information contained in the prospectus concerning
the Company, the Seller, or the Company Subsidiaries becomes incorrect or
incomplete in any material respect, and to provide the information needed
to correct such inaccuracy or remedy such incompletion.
8.2.2 Centerprise agrees that it will provide to the Seller and its
counsel copies of drafts of the Registration Statements (and any amendments
thereto) containing material changes to the information therein as they are
prepared and will not (i) file with the SEC, (ii) request the acceleration
of the effectiveness of or (iii) circulate any prospectus forming a part
of, the Registration Statements (or any amendment thereto) unless the
Seller and its counsel (x) have had at least two days to review the revised
information contained therein (which changes shall be highlighted by
computer generated marks indicating the additions and deletions made from
the prior draft reviewed by the Seller's counsel) and (y) have not objected
to the substance of the information contained therein. Any objections posed
by the Seller or its counsel shall be in writing and state with specificity
the material in question, the reason for the objection, and the Seller's
proposed alternative. If the objection is founded upon a rule promulgated
under the Securities Act, the objection shall cite the rule.
Notwithstanding the foregoing, during the five (5) business days
immediately preceding the date scheduled for the filing of the Registration
Statements and any amendment thereto, the Seller and its counsel shall be
obligated to respond to proposed changes electronically transmitted to them
within two (2) hours from the time the proposed changes (in the case of the
initial filing of the Registration Statements, from the last circulated
draft of the Registration Statements; and, in the case of any subsequent
filing of the Registration Statements or any amendment thereof, from the
most recently filed Registration Statements or amendment thereof) are
transmitted to the Seller's counsel; provided, that, Centerprise has
provided to the Seller or its counsel reasonable advance notice of such
proposed changes; provided, further, that such changes are highlighted by
computer generated marks
indicating the additions and deletions made from the prior draft reviewed
by the Seller's counsel.
8.2.3 Centerprise will advise the Member Representative of the
effectiveness of the Registration Statements, advise the Member
Representative of the entry of any stop order suspending the effectiveness
of the Registration Statements or the initiation of any proceeding for that
purpose, and, if such stop order shall be entered, use its best efforts
promptly to obtain the lifting or removal thereof. Upon the written request
of the Seller, Centerprise will furnish to the Seller a reasonable number
of copies of the final prospectus associated with the IPO.
8.3 Expenses and Fees. Centerprise shall pay the fees and expenses of the
independent public accountants and legal counsel to Centerprise and all filing,
printing and other reasonable, documented fees and expenses associated with the
IPO and Form S-4. Neither Seller, nor the Company, nor its respective members,
will be liable for any portion of the above expenses in the event the IPO is not
completed. Centerprise shall also pay the underwriting discounts and commissions
payable in connection with the sale of Centerprise Common Stock in the IPO. All
other costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.
8.4 Agreement to Cooperate. Subject to the terms and conditions herein
provided, each of the parties hereto shall use all reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
8.5 Public Statements. Except as may be required by law, no party hereto nor
any Affiliate of any party hereto shall issue any press release or any written
public statement with respect to this Agreement or the transactions contemplated
by this Agreement or the Other Agreements without the prior written consent of
Centerprise and the Seller.
8.6 [Reserved]
8.7 Centerprise Covenants. After the date hereof and prior to the Closing Date
or earlier termination of this Agreement in accordance with its terms,
Centerprise shall comply in all material respects with all applicable Laws.
Centerprise shall not take any action that would or is reasonably likely to
result in any of the representations or warranties of Centerprise set forth in
this Agreement being untrue or in any of the conditions to the consummation of
the transactions contemplated hereunder set forth in Article X not being
satisfied.
8.8 Release of Guarantees. Centerprise shall use all commercially reasonable
efforts and good faith to have the Seller's members released from any and all
guarantees on any indebtedness and leases that they personally guaranteed for
the benefit of the Company as set
forth on Schedule 8.8, with all such guarantees on indebtedness and leases being
assumed by Centerprise, if necessary to achieve such releases. If any guaranteed
indebtedness is repaid in full with proceeds from the IPO and the Seller's
members guarantees thereafter shall have no further force or effect, then
Centerprise shall not be obligated to use any efforts to obtain a release of
such guarantee. In the event that Centerprise cannot obtain such releases from
the lenders of any such guaranteed indebtedness or lessors of any guaranteed
leases, Centerprise agrees to indemnify, defend and hold harmless the Seller's
members against any and all claims made by lenders or landlords under such
guarantees.
8.9 [Reserved]
8.10 Preparation and Filing of Tax Returns.
8.10.1 The Company shall be responsible for causing the timely filing of
the final pre-Closing Returns for the Company and the Company Subsidiaries;
provided, however, that Centerprise and its advisors shall have the right
to review and approve such returns prior to filing, which approval shall
not be unreasonably withheld. Centerprise shall, and shall cause its
Affiliates to, provide to the Company such cooperation and information
reasonably requested in filing any return, amended return or claim for
refund, determining a liability for Taxes or a right to refund of Taxes or
in conducting any audit or other proceeding in respect of Taxes. The
Company shall bear all costs of filing such returns.
8.10.2 Each of Seller and Centerprise shall (and the Seller and
Centerprise, as applicable, shall cause the Company to) comply with the tax
reporting requirements of Section 1.351-3 of the Treasury Regulations
promulgated under the Code, and shall treat the transaction as subject to
the provisions of Section 351 of the Code.
8.11 Maintenance of Insurance. The Seller covenants and agrees that all
insurance policies listed, or required to be listed, on Schedule 4.20 will be
maintained in full force and effect through the Closing Date.
8.12 Administration. After the Closing, at the request of the Member
Representative, Centerprise shall, directly or through one or more of its
subsidiaries, administer and manage the collection of amounts referred to on
Schedule 7.5 using reasonable care and in accordance with the Company's policies
in effect at Closing.
8.13 Member Representative. The Seller appoints, and shall cause the Company
to appoint, Xxxxxxx X. Xxxxxxx (the "Member Representative"), as its agent and
representative with full power and authority to agree, contest or settle any
claim or dispute affecting the Seller or Company made under Article II and to
otherwise act on behalf of the Seller and the Company and their respective
members in accordance with the terms of this Agreement.
ARTICLE IX
[RESERVED]
ARTICLE X
CLOSING CONDITIONS
10.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing of the following conditions:
(a) the Underwriting Agreement related to the IPO shall have been executed
and the closing of the sale of Centerprise Common Stock to the Underwriters
pursuant thereto shall have occurred simultaneously with the Closing
hereunder;
(b) the closings of the transactions contemplated under each of the Other
Agreements shall have occurred simultaneously with the Closing hereunder,
unless terminated in accordance with Section 7.3 of the applicable Other
Agreement;
(c) the Registration Statements shall have become effective in accordance
with the provisions of the Securities Act, and no stop order suspending
such effectiveness shall have been issued and remain in effect and no
proceeding for that purpose shall have been instituted by the SEC or any
state regulatory authorities;
(d) no preliminary or permanent injunction or other order or decree shall
be pending before or issued by any federal or state court which seeks to
prevent or prevents the consummation of the IPO, the Merger or any of the
Other Mergers shall have been issued and remain in effect;
(e) the minimum price condition set forth on Schedule 2.1 shall have been
satisfied;
(f) no action shall have been taken, and no statute, rule or regulation
shall have been enacted, by any state or federal government or governmental
agency in the United States which would prevent the consummation of the
Merger or any of the Other Mergers or make the consummation of the Merger
or any of the Other Mergers illegal;
(g) all material governmental and third party waivers, consents and
approvals required for the consummation of the Merger or any of the Other
Mergers and the transactions contemplated hereby and by the Other
Agreements (including, without limitation, any consents listed on Schedules
4.3.2 or 4.12) shall have been obtained and be in effect;
(h) no action, suit or proceeding with respect to the Merger has been filed
or threatened by a third party and remains threatened or remains pending
before any court, Governmental Authority or regulatory Person;
(i) this Agreement, the Merger and the transactions contemplated hereby
shall have been approved and adopted by the Company's member and Seller's
members in the manner required by any applicable Law and the respective
Organizational Documents and such approval shall remain in full force and
effect; and
(j) Centerprise shall have entered into one or more credit facilities
providing for aggregate commitments of not less than $75 million;
10.2 Conditions to Obligation of the Seller and the Company to Effect the
Merger. Unless waived by the Company, the obligation of the Seller and the
Company to effect the Merger shall be subject to the fulfillment at or prior to
the Closing of the following additional conditions:
(a) Centerprise, Mergersub and each of the other Founding Companies shall
have performed in all material respects their respective agreements
contained in this Agreement and each Other Agreement required to be
performed on or prior to the Closing Date and the representations and
warranties of Centerprise contained in this Agreement and each Other
Agreement shall be true and correct in all material respects on and as of
the date made and on and as of the Closing Date as if made at and as of
such date, and Seller shall have received a certificate of the Chief
Executive Officer or President of Centerprise to that effect;
(b) no Governmental Authority or self-regulatory organization regulating,
licensing or permitting the practice of public accountancy shall have
promulgated or formally proposed any statute, rule or regulation which,
when taken together with all such promulgations, would materially impair
the value to the Seller of the Merger;
(c) the Seller shall have received an opinion from Xxxxxx Xxxxxx & Zavis,
dated as of the Closing Date, containing the substantive opinions set forth
in Exhibit 10.2(c), the final form of such opinion to be in form and
substance reasonably acceptable to Seller;
(d) each of the members of Seller shall have been afforded the opportunity
to enter into an incentive compensation agreement (the "Incentive
Compensation Agreement ") with Centerprise substantially in the form
attached hereto as Exhibit 10.2(d);
(e) Centerprise shall have delivered to the Seller a certificate, dated as
of a date no later than ten days prior to the Closing Date, duly issued by
the Delaware Secretary of State, showing that Centerprise is in good
standing;
(f) each of the members of Seller, the partners, members and stockholders of
the other Founding Companies who are to receive shares of Centerprise Common
Stock pursuant to the Other Agreements, and the other stockholders of
Centerprise other than those acquiring stock in the IPO shall have entered into
an agreement (the "Stockholders Agreement") substantially in the form attached
hereto as Exhibit 10.2(f);
(g) all conditions to the Other Mergers, on substantially the same terms as
provided herein, shall have been satisfied or waived by the applicable party and
the Company;
(h) the Seller shall have been afforded the opportunity to review the
executed employment agreement by and between Centerprise and Xxxxxx X. Xxxxxx;
and
(i) the Seller shall have received an opinion from Xxxxxx Xxxxxx & Zavis,
dated as of the Closing Date and based on certain factual representations and
assumptions, that for federal income tax purposes there will be no gain or loss
recognized with respect to the Centerprise Common Stock received in exchange for
the Company Interest in the Merger pursuant to Section 351 of the Code, the
final form of such opinion to be in form and substance reasonably acceptable to
the Seller.
10.3 Conditions to Obligation of Centerprise to Effect the Merger. Unless waived
by Centerprise, the obligation of Centerprise and Mergersub to effect the Merger
shall be subject to the fulfillment at or prior to the Closing of the additional
following conditions:
(a) each of the Company and the Seller shall have performed in all
material respects each of their agreements contained in this Agreement
required to be performed on or prior to the Closing Date and the
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the date
made and on and as of the Closing Date as if made at and as of such date,
and Centerprise and the Underwriters shall have received a Certificate of
the Managing Principal of the Seller to that effect;
(b) [Reserved];
(c) Centerprise and the Underwriters shall have received an opinion from
Xxxxxxx, Xxxxxxx & Xxxxxxx, counsel to the Company and the Seller dated the
Closing Date, in the form attached hereto Exhibit 10.3(c), the final form
of such opinion to be in form and substance reasonably acceptable to the
Underwriters and Centerprise;
(d) the Company and the other parties thereto, as applicable, shall have
executed and delivered the Separate Practice Agreement substantially in the
form attached hereto as Exhibit 10.3(d)(A) and the Services Agreement
substantially in the form attached hereto as Exhibit 10.3(d)(B);
(e) each member of Seller shall have executed and delivered the Incentive
Compensation Agreement substantially in the form attached hereto as Exhibit
10.2(d);
(f) Centerprise and the Underwriters shall have received "Comfort" letters in
customary form from the Company's independent public accountants, dated the
effective date of the Form S-1 and the Closing Date (or such other date
reasonably acceptable to Centerprise), with respect to certain financial
statements and other financial information included in the Form S-1 and any
subsequent changes in specified balance sheet and income statement items,
including total assets, working capital, total member's equity, total revenues
and the total and per share amounts of net income;
(g) each of the Seller and the Company shall have delivered to Centerprise and
the Underwriters a certificate, dated as of a date no later than ten days prior
to the Closing Date, duly issued by the appropriate Governmental Authority in
the state of organization of the Company and each Company Subsidiary and, unless
waived by Centerprise, in each state in which the Seller, the Company or any
Company Subsidiary is authorized to do business, showing the Seller, the Company
and Company Subsidiary (as applicable) is in good standing;
(h) no Governmental Authority or self-regulatory organization regulating,
licensing or permitting the practice of public accountancy shall have
promulgated or formally proposed any statute, rule or regulation which, when
taken together with all such promulgations, would materially impair the value to
Centerprise of the Merger;
(i) the members of Seller shall have executed the Stockholders Agreement;
(j) Seller and its members shall have delivered to Centerprise an instrument in
the form attached hereto as Exhibit 10.3(j), dated the Closing Date, releasing
the Company and the Company Subsidiaries from any and all claims of such Persons
against the Company and the Company Subsidiaries and obligations of the Company
and the Company Subsidiaries to such Persons;
(k) the members and other principals of the Seller shall have delivered a
release to Centerprise regarding any unallocated guaranteed allocations in form
and substance satisfactory to Centerprise including, without limitation, that as
of the Closing the amount of debt of the Company and the Company Subsidiaries
shall not exceed the amount reflected on Schedule 2.1 as Debt Assumed by
Centerprise;
(l) Seller, the Company and the members of Seller, as applicable, shall have
terminated or have caused the termination of any voting trusts, proxies or other
agreements or understandings to which Seller, the Company or any member of
Seller is a party or is bound with respect to any shares of capital stock or
other equity interests
of the Company and the Company Subsidiaries and shall have provided Centerprise
evidence of such termination that is acceptable to Centerprise's counsel;
(m) the Company shall have adopted Amended and Restated Articles of
Organization and Operating Agreement in form and substance acceptable to
Centerprise;
(n) the Seller shall have caused to be completed the formation of Newco and
consummation of the Asset Transfer (including receipt of any required third-
party consents) and other actions specified in Section 7.5 and shall have
presented evidence of completion of such actions in accordance with Section 7.5;
(o) the Company shall have delivered to Centerprise a payoff letter including a
statement of per diem interest amounts and other applicable release documents
from all such institutional lenders or creditors of the Company and the Company
Subsidiaries regarding the payment in full of such indebtedness at Closing, in
each case in form and substance satisfactory to Centerprise (including, without
limitation, applicable UCC-3 termination statements);
(p) the Seller and/or the Company shall have paid in full any indebtedness owed
by Seller and/or the Company to the members of Seller or non member principals
of the Seller, and shall have provided evidence of same reasonably satisfactory
to Centerprise;
(q) the Seller shall have caused all automobile leases to which the Seller is a
party (together with all vehicle insurance policies and maintenance agreements,
if any) to be assigned in full to the individual beneficiary of such lease or
terminated, and shall have provided evidence of same reasonably satisfactory to
Centerprise;
(r) the Seller shall have entered into or shall have caused the Company to
enter into a written lease regarding the Hamden, Connecticut office in form and
substance reasonably acceptable to Centerprise;
(s) the Managing Principal of the Seller and the Company shall have delivered
certified copies of the resolutions of the managers and members of the Seller
and the Company approving execution and delivery of this Agreement, the Merger
and the other actions, agreements and documents necessary or desirable to
complete the transactions contemplated herein; and
(t) the Seller's members (including managers) shall have executed and to
Centerprise a member agreement (the "Company Member Agreement") in the form of
Exhibit 10.3(t) attached hereto.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a) pursuant to Section 7.3;
(b) by the Seller,
(i) if the Merger is not completed by November 15, 1999 other than on
account of delay or default on the part of Seller, the Company or any of
their affiliates or associates;
(ii) if the Merger is enjoined by a final, unappealable court order not
entered at the request or with the support of Seller, the Company or any of
their affiliates or associates;
(iii) if Centerprise (A) fails to perform in any material respect any of its
material covenants in this Agreement and (B) does not cure such default in
all material respects within thirty (30) days after written notice of such
default is given to Centerprise; or
(c) by Centerprise,
(i) if the Merger is not completed by November 15, 1999 other than on
account of delay or default on the part of Centerprise or any of its
stockholders or any of their affiliates or associates;
(ii) if the Merger is enjoined by a final, unappealable court order not
entered at the request or with the support of Centerprise or any of its
stockholders or any of their affiliates or associates;
(iii) if the Seller (A) fails to perform in any material respect any of its
material covenants in this Agreement and (B) does not cure such default in
all material respects within thirty (30) days after written notice of such
default is given to the Seller or the Company by Centerprise; or
(d) by mutual consent of the managers of the Seller and the Board of
Directors of Centerprise.
11.2 Effect of Termination. In the event of termination of this Agreement by
either Centerprise or the Seller, as provided in Section 11.1, this Agreement
shall forthwith become
void and there shall be no further obligation on the part of the Seller,
Centerprise, Mergersub or their respective officers or directors (except the
obligations set forth in this Section 11.2 and in Sections 8.1, 8.3, and 8.5,
all of which shall survive the termination). Nothing in this Section 11.2 shall
relieve any party from liability for any breach of this Agreement.
11.3 Amendment. This Agreement may not be amended except by action taken
by the Boards of Directors or managers of the Seller and Centerprise, as
applicable, or duly authorized committees thereof and then only by an instrument
in writing signed on behalf of each of the parties hereto and in compliance with
applicable law. Centerprise covenants and agrees that it shall not amend,
modify or supplement the material terms of any Other Agreement following the
Closing without the prior written consent of at least two thirds (2/3rds) of the
members of Centerprise's Board of Directors; provided, that, no waiver of any
restriction set forth in Article XII shall be of any effect unless consented to
by a majority of the members of Centerprise's Board of Directors who do not at
the time of such proposed waiver hold Restricted Shares within the meaning of
this Agreement, any Other Agreement or the Stockholders Agreement.
11.4 Waiver. At any time prior to the Closing Date, the parties hereto may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant thereto and
(c) waive compliance with any of the agreements or conditions contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party.
ARTICLE XII
[RESERVED]
ARTICLE XIII
[RESERVED]
4
ARTICLE XIV
[RESERVED]
ARTICLE XV
GENERAL PROVISIONS
15.1 Brokers. The Seller represents and warrants that no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee (except
for any fee described in Schedule 15.1) or commission in connection with the
Merger or the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. Centerprise represents and
warrants that no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Centerprise or its stockholders (other than underwriting
discounts and commission to be paid in connection with the IPO).
15.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, sent by nationally
recognized overnight delivery service, mailed by registered or certified mail
(return receipt requested) or sent via facsimile to the parties at the following
addresses (or at such other address for a party as shall be specified by notice
given in accordance with this Section):
If to Centerprise or Mergersub, to:
Centerprise Advisors, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
with a copy to:
Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Seller, to:
Simione, Scillia, Xxxxxx & Xxxxxxx LLC
000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Member Representative, to:
Simione, Scillia, Xxxxxx & Xxxxxxx LLC
000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
15.3 Interpretation. The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. In this Agreement, unless a
contrary intention appears, (i) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision and (ii) reference to any
Article or Section means such Article or Section hereof. No provision of this
Agreement shall be interpreted or construed against any party hereto solely
because such party or its legal representative drafted such provision.
15.4 Certain Definitions. As used in this Agreement, (i) the term "Person"
shall mean any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated association, corporation, entity, firm, association,
organization or other business in any form whatsoever or government (whether
Federal, state, county, city or otherwise, including, without limitation, any
instrumentality, division, agency or department thereof), (ii) the term
"Affiliate" shall have the meaning given for that term in Rule 405 under the
Securities Act, and shall include each past and present Affiliate of a Person
and the members of such Affiliate's immediate family or their spouses or
children and any trust the beneficiaries of which are such individuals or
relatives, and (iii) an individual will be deemed to have "Knowledge" of a
particular fact or other matter if: (a) such individual is actually aware of
such fact or matter, or (b) a prudent individual could be expected to discover
or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or other
matter and a prudent individual would conduct such investigation; a Person,
other than an individual, will be deemed to have "Knowledge" of a particular
fact or other matter if any Person who is a partner, member or shareholder of
such Person or who is otherwise serving, or who has served, as a director,
officer, partner, member or trustee (or any capacity) of such Person has, or at
any time had, knowledge of such fact or other matter.
15.5 Entire Agreement; Assignment. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof and
(b) shall not be assigned by operation of law or otherwise, except that
Centerprise may assign this Agreement to any wholly-owned subsidiary of
Centerprise.
15.6 Applicable Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Illinois applicable to contracts executed and to be performed wholly within such
state, without giving effect to its choice of law rules.
15.7 Counterparts. This Agreement may be executed via facsimile or otherwise
in two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
15.8 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and their respective successors,
permitted assigns, heirs, legal representatives and executors and except as
expressly set forth in herein, nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
* * *
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the date first written above.
CENTERPRISE ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Its: President and Chief Executive Officer
-------------------------------------
SSLD MERGERSUB LLC
By: Centerprise Advisors, Inc., its sole member
-------------------------------------------
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------------
Its: President
------------------------------------------
SIMIONE, SCILLIA, XXXXXX & XXXXXXX LLC
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Name:
-----------------------------------------
Its:
------------------------------------------
