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EXHIBIT 10.11
INVESTMENT AGREEMENT
AMONG
ITC HOLDING COMPANY, INC.,
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
AND
▇▇▇▇▇▇ ▇▇▇▇
DATED AS OF OCTOBER 30, 1997
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TABLE OF CONTENTS
Page
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1. DEFINED TERMS...................................................................................5
2. CAPITAL CONTRIBUTIONS; LOAN COMMITMENT..........................................................5
2.1. Capital Contribution of ITC..........................................................5
2.2. Capital Contribution of HeadHunter...................................................5
2.3. Loan to LLC..........................................................................6
3. ADDITIONAL UNDERTAKINGS AND COVENANTS...........................................................6
3.1. Consents and Approvals...............................................................6
3.2. Access to Information; Confidentiality...............................................6
3.2.1. ITC Access to Information and Confidentiality Obligation..................6
3.2.2. HeadHunter and Shareholder Confidentiality Obligations....................7
3.2.3. Effect of Investigation...................................................7
3.3. Operation of Business of HeadHunter..................................................8
3.3.1. Preserve Business.........................................................8
3.3.2. Conduct Business in Ordinary Course.......................................8
3.3.3. Distribution to the Shareholder...........................................8
3.3.4. Notice of Adverse Change..................................................9
3.3.5. Books of Record and Account...............................................9
3.4. No Inconsistent Negotiations.........................................................9
3.5. News Releases........................................................................9
3.6. Subsequent Events....................................................................10
3.7. Employment of the Shareholder........................................................10
3.8. ITC Stock Options....................................................................10
4. REPRESENTATIONS AND WARRANTIES OF HEADHUNTER AND THE SHAREHOLDER................................11
4.1. Organization and Standing............................................................11
4.2. Subsidiaries.........................................................................11
4.3. Certificate or Articles of Incorporation and Bylaws..................................12
4.4. Ownership of HeadHunter..............................................................12
4.5. Directors, Officers and Employees....................................................12
4.6. Financial Statements.................................................................12
4.7. No Liabilities.......................................................................13
4.8. Accounts Receivable..................................................................13
4.9. Taxes................................................................................13
4.9.1. Filed Returns.............................................................13
4.9.2. Tax Liability.............................................................13
4.9.3. Tax Audits................................................................14
4.10. Conduct of Business; Absence of Material Adverse Change..............................14
4.11. Real Property........................................................................14
4.12. Assets...............................................................................14
4.13. Intellectual Property................................................................14
4.14. Debt Instruments.....................................................................15
4.15. Leases...............................................................................15
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4.16. Other Agreements.....................................................................16
4.17. Books and Records....................................................................16
4.18. Litigation; Disputes.................................................................16
4.19. Pension and Benefit Plans............................................................16
4.20. Environmental........................................................................17
4.21. Restrictions and Consents............................................................17
4.22. Authorization........................................................................17
4.23. Absence of Violation.................................................................17
4.24. Binding Obligation...................................................................18
4.25. Disclosure...........................................................................18
5. REPRESENTATIONS AND WARRANTIES OF ITC...........................................................18
5.1. Organization and Standing............................................................18
5.2. Authorization........................................................................19
5.3. Binding Obligation...................................................................19
6. RESTRICTED SECURITIES...........................................................................19
6.1. No Registration Under the Securities Act.............................................19
6.2. Acquisition for Investment...........................................................19
6.3. Evaluation of Merits and Risks of investment.........................................20
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF HEADHUNTER AND THE SHAREHOLDER...........................20
7.1. Representations, Warranties and Covenants............................................20
7.2. Legal Proceedings....................................................................20
7.3. Consents.............................................................................20
7.4. Business Plan........................................................................21
7.5. Documents at Closing.................................................................21
7.6. Formation of LLC.....................................................................21
7.7. Deliveries by LLC....................................................................21
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF ITC......................................................21
8.1. Representations, Warranties and Covenants............................................21
8.2. Absence of Material Adverse Changes..................................................22
8.3. Legal Proceedings....................................................................22
8.4. Consents.............................................................................22
8.4.1. ITC Consents..............................................................22
8.4.2. HeadHunter Consents.......................................................22
8.5. Board of Directors Approval..........................................................22
8.6. Business Plan........................................................................22
8.7. Documents at Closing.................................................................23
8.8. Formation of LLC.....................................................................23
8.9. Deliveries by LLC....................................................................23
9. CLOSING.........................................................................................23
9.1. Closing of LLC Investment............................................................23
9.2. Deliveries by HeadHunter on the Closing Date.........................................23
9.3. Deliveries by ITC on the Closing Date................................................24
9.4. Deliveries by the LLC................................................................24
9.5. Deliveries by the Shareholder........................................................24
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10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION;...................................................25
10.1. Survival of Representations and Warranties...........................................25
10.2. Agreement of HeadHunter and the Shareholder to Indemnify.............................25
10.3. Agreement of ITC to Indemnify........................................................25
10.4. Conditions of Indemnification........................................................26
10.4.1. Notice....................................................................26
10.4.2. Counsel...................................................................26
10.4.3. Joint Liability...........................................................26
10.5. Specific Performance.................................................................26
10.6. Remedies Cumulative..................................................................27
11. TERMINATION AND EFFECT THEREOF..................................................................27
11.1. Termination..........................................................................27
11.2. Effect of Termination................................................................27
12. MISCELLANEOUS...................................................................................28
12.1. Additional Actions and Documents.....................................................28
12.2. No Brokers...........................................................................28
12.3. Expenses.............................................................................28
12.4. Assignment...........................................................................29
12.5. Entire Agreement; Amendment..........................................................29
12.6. Waiver...............................................................................29
12.7. Severability.........................................................................29
12.8. Governing Law........................................................................29
12.9. Notices..............................................................................30
12.10. Headings.............................................................................31
12.11. Execution in Counterparts............................................................31
12.12. Limitation on Benefits...............................................................31
12.13. Binding Effect.......................................................................31
EXHIBITS SECTION REFERENCES
Exhibit 1 Definitions.......................................................................... 1
Exhibit 2 Loan and Security Agreement..........................................................2.3
Exhibit 3 Employment Letter....................................................................3.7
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INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT is entered into as of October 30, 1997, by
and among ITC Holding Company, Inc., a Delaware corporation ("ITC")
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Georgia corporation ("HEADHUNTER") and ▇▇▇▇▇▇ ▇▇▇▇, the
sole shareholder of HeadHunter (the "SHAREHOLDER").
WHEREAS, ITC and HeadHunter have agreed to form a limited liability
company pursuant to the provisions of the Delaware Limited Liability Act (the
"DELAWARE LLC ACT") under the name "HeadHunters, L.L.C." (the "LLC") pursuant to
a Certificate of Formation (the "LLC CERTIFICATE") and a Limited Liability
Company Agreement (the "LLC AGREEMENT") to be entered into by ITC and
HeadHunter;
WHEREAS, ITC believes that it is in its best interest to acquire an
ownership interest in the LLC (an "LLC INTEREST") on the terms and conditions
set forth herein; and
WHEREAS, HeadHunter believes that it is in its best interest to
contribute to the LLC all of its assets and certain liabilities in exchange for
an LLC Interest on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
1. DEFINED TERMS
For all purposes of this Investment Agreement, all capitalized terms
used herein shall have the meanings specified in Exhibit 1, except as otherwise
expressly provided in this Investment Agreement.
2. CAPITAL CONTRIBUTIONS; LOAN COMMITMENT
2.1. CAPITAL CONTRIBUTION OF ITC
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, ITC agrees to
contribute to the LLC $1,100,000 in cash (the "ITC CAPITAL CONTRIBUTION") in
exchange for its LLC Interest.
2.2. CAPITAL CONTRIBUTION OF HEADHUNTER
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, HeadHunter
agrees to contribute to the LLC, in exchange for its LLC Interest, (i) all of
its Assets, including the right to use the name "▇▇▇▇▇▇▇▇▇▇.▇▇▇" (and all
variations thereof) and (ii) the Liabilities (collectively, the "HEADHUNTER
CAPITAL CONTRIBUTION").
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2.3. LOAN TO LLC
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, ITC agrees to
enter into the Loan and Security Agreement substantially in the form attached
hereto as Exhibit 2 (the "LOAN AND SECURITY AGREEMENT") pursuant to which ITC
shall be obligated to make available to the LLC a revolving credit facility not
to exceed a maximum outstanding aggregate principal amount of $1,000,000, for
the three (3) year period beginning on the Closing Date, on the term and
conditions set forth in the Loan and Security Agreement (the "CREDIT FACILITY"),
which the LLC may convert to a term loan in accordance with the terms and
conditions of the Loan and Security Agreement (any such term loan is referred to
herein as the "Term Loan").
3. ADDITIONAL UNDERTAKINGS AND COVENANTS
ITC, HeadHunter and the Shareholder hereby covenant and agree with each
other as follows:
3.1. CONSENTS AND APPROVALS
Each of them shall take all measures reasonably necessary or advisable
to secure such consents, authorizations and approvals of governmental
authorities and of private persons or entities with respect to the transactions
contemplated by this Investment Agreement, and to the performance of all other
obligations of such parties hereunder, as may be required by any applicable
statute or regulation of the United States or any country, state or other
jurisdiction or by any Agreement of any kind whatsoever to which it is a party
or by which it is bound.
3.2. ACCESS TO INFORMATION; CONFIDENTIALITY
3.2.1. ITC ACCESS TO INFORMATION AND CONFIDENTIALITY
OBLIGATION
HeadHunter and Shareholder shall, through the Closing Date, provide to
representatives of ITC full access to the offices, books, agreements, records
(including, without limitation, tax returns and correspondence with
accountants), officers, directors, employees, consultants and contractors of
HeadHunter and will furnish representatives of ITC such financial and operating
data and other information with respect to the business and Assets and
Liabilities of HeadHunter as ITC may reasonably request, including, without
limitation, Agreements with clients, customers, vendors, lessors, licensors and
suppliers of HeadHunter. ITC agrees to use reasonable efforts, at least as
stringent as those employed by it with respect to its own confidential
information, (i) to keep confidential all such information of HeadHunter and/or
the Shareholder that is identified by HeadHunter or the Shareholder as being of
a confidential nature, (ii) not to use such confidential information on its own
behalf, except in connection with the transactions
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contemplated hereby, or on behalf of any other person, firm or entity, and (iii)
not to disclose such confidential information to any third party (other than to
ITC's counsel, accountants and other consultants in connection with the
transactions contemplated hereby) without HeadHunter's or the Shareholder's
advance written authorization; provided however that ITC shall have no such
obligations with respect to confidential information that (A) was lawfully
obtained by it not subject to restrictions of confidentiality; (B) is a matter
of public knowledge; or (C) has been or is hereafter publicly disclosed other
than by or through ITC. In the event of a breach or threatened breach by ITC of
the provisions of this Section, HeadHunter and the Shareholder shall be entitled
to an injunction restraining ITC from disclosing, in whole or in part, such
information, in addition to any other remedy to which ITC may be entitled in law
or in equity.
3.2.2. HEADHUNTER AND SHAREHOLDER CONFIDENTIALITY
OBLIGATIONS
HeadHunter and the Shareholder each hereby acknowledges that, as a
result of the transactions contemplated by this Investment Agreement, from time
to time it may obtain knowledge of and access to confidential and valuable
business information relating to ITC and its Affiliates not generally known by
or available to the general public. HeadHunter and the Shareholder each agrees
to use reasonable efforts, at least as stringent as those employed by it with
respect to its own confidential information, (i) to keep confidential all such
information of ITC that is identified by ITC as being of a confidential nature,
(ii) not to use such confidential information on its own behalf, except in
connection with the transactions contemplated hereby, or on behalf of any other
person, firm or entity, and (iii) not to disclose such confidential information
to any third party (other than to its counsel, accountants and other consultants
in connection with the transactions contemplated hereby) without ITC's advance
written authorization; provided, however that HeadHunter and the Shareholder
shall have no such obligations with respect to confidential information that:
(A) was lawfully obtained by them not subject to restrictions of
confidentiality; (B) is a matter of public knowledge; or (C) has been or is
hereafter publicly disclosed other than by or through it. In the event of a
breach or threatened breach by HeadHunter or the Shareholder of the provisions
of this Section, ITC shall be entitled to an injunction restraining HeadHunter
or the Shareholder, as the case may be, from disclosing, in whole or in part,
such information, in addition to any other remedy to which ITC may be entitled
in law or in equity.
3.2.3. EFFECT OF INVESTIGATION
ITC's investigation of the financial and operating data, Assets and
Liabilities, and other information with respect to the business of HeadHunter
shall in no way affect the obligations of HeadHunter or the Shareholder with
respect to the agreements, representations, warranties, covenants and
indemnification provisions set forth in this Investment Agreement.
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3.3. OPERATION OF BUSINESS OF HEADHUNTER
3.3.1. PRESERVE BUSINESS
HeadHunter shall through the Closing Date: (i) preserve its business
organization and present relationships with customers, suppliers, consultants,
employees and any other persons having business relations with it; and (ii)
maintain its Assets in customary repair and condition.
3.3.2. CONDUCT BUSINESS IN ORDINARY COURSE
Except as contemplated by this Investment Agreement or as reasonably
required to carry out its obligations hereunder, HeadHunter, through the Closing
Date, shall conduct its business only in the Ordinary Course of Business and, in
addition, shall not: (i) issue any capital stock or any options, warrants or
other rights to subscribe for or purchase any of its capital stock or any
securities convertible into or exchangeable for its capital stock; (ii) declare,
set aside or pay any dividend or distribution with respect to its capital stock
to its Shareholder other than distributions made to permit the Shareholder to
pay estimated taxes with respect to the taxable income of HeadHunter; (iii)
directly or indirectly redeem, purchase or otherwise acquire any of its capital
stock; (iv) effect a split, reclassification or other change in or of any of its
capital stock; (v) amend its certificate or articles of incorporation or its
bylaws (except for such changes and amendments in the certificate or articles of
incorporation of HeadHunter as may be required by or pursuant to this Investment
Agreement); (vi) grant any increase in the compensation payable or to become
payable by HeadHunter to officers or employees of HeadHunter, or enter into any
bonus, insurance, pension or other benefit plan, payment or arrangement for or
with any of such officers or employees other than in the Ordinary Course of
Business; (vii) borrow or agree to borrow any funds, or directly or indirectly
guarantee or agree to guarantee the obligations of others; (viii) enter into any
Agreement which may have a material effect on its business and operations; (ix)
place, or allow to be placed, an Encumbrance on any of its Assets; (x) cancel
any indebtedness owing to HeadHunter or any Claims which HeadHunter may possess,
or waive any rights of substantial value; (xi) sell, assign or transfer any
Intellectual Property; (xii) or otherwise dispose of any interest in any Asset
(other than in the Ordinary Course of Business); (xiii) violate any Law; (xiv)
commit any act or omit to do any act, or engage in any activity or transaction
or incur any obligation (by conduct or otherwise), which (individually or in the
aggregate) reasonably could be expected to have a material adverse effect on its
business or Assets; or (xv) make any loan or advance to any stockholder, officer
or director of HeadHunter or to any other person, firm or corporation.
3.3.3. DISTRIBUTION TO THE SHAREHOLDER
Notwithstanding SECTION 3.3.2., HeadHunter may borrow and distribute or
loan to the Shareholder up to $100,000 prior to the Closing Date. In the event
that ITC makes a loan to HeadHunter to fund all or any portion of such
distribution or loan prior to the
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Closing, the parties shall cause the LLC to assume the obligation to repay such
loan and to repay ITC's loan, together with all accrued but unpaid interest, at
the closing.
3.3.4. NOTICE OF ADVERSE CHANGE
HeadHunter and Shareholder shall notify ITC promptly of any adverse
change in the business, operations, prospects, condition (financial or
otherwise), Assets or liabilities of HeadHunter occurring at any time through
the Closing Date.
3.3.5. BOOKS OF RECORD AND ACCOUNT
HeadHunter shall keep proper books of record and account in which true
and complete entries will be made of all transactions.
3.4. NO INCONSISTENT NEGOTIATIONS
Subject to fiduciary obligations under law as advised by counsel in writing,
through the Closing Date, neither HeadHunter nor the Shareholder shall take any
of the following actions, or permit any agent of HeadHunter, directly or
indirectly, to take any of the following actions:
(i) take any action to solicit, initiate or encourage the
submission of a Proposal; or
(ii) participate in any negotiations regarding, or furnish to any
other person any non-public information with respect to, or
otherwise cooperate in any way with, or assist or participate
in, facilitate, or encourage, any effort or attempt by any
other person to do or seek any of the foregoing.
HeadHunter and the Shareholder shall notify ITC promptly if any Proposal, or any
inquiry or contact with any person with respect thereto, is made and shall, in
any such notice to ITC, indicate in reasonable detail the identity of the
offeror and the terms and conditions of the Proposal, including the proposed
financing for such Proposal. HeadHunter shall respond to any such Proposal only
to the extent required by fiduciary obligations under law, as advised by its
counsel in writing.
3.5. NEWS RELEASES
Except as may be otherwise required for compliance with securities
laws, neither ITC nor HeadHunter shall issue or approve any news release or
other public announcement concerning the transactions contemplated by this
Investment Agreement without the prior approval of ITC and HeadHunter.
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3.6. SUBSEQUENT EVENTS
Head-Hunter and the Shareholder shall notify ITC promptly in writing of
the occurrence of any event, or the failure of any event to occur, prior to the
Closing that results in an omission from, or breach of, any of the covenants,
representations or warranties made by HeadHunter or the Shareholder in this
Investment Agreement, the Disclosure Schedule or any other Document furnished in
connection with or pursuant to this Investment Agreement, but such notification
shall not excuse breaches of representations, warranties, covenants or
agreements disclosed in such notification.
3.7. EMPLOYMENT OF THE SHAREHOLDER
ITC and HeadHunter shall cause the LLC to employ the Shareholder, and
the Shareholder shall agree to serve, as the President and Chief Executive
Officer of the LLC pursuant to the terms of an Employment Letter substantially
in the form attached hereto as Exhibit 3 to be entered into by the LLC and the
Shareholder at the Closing.
3.8. ITC STOCK OPTIONS
As soon as practicable following the Closing, ITC will grant the
Shareholder options to purchase 5,000 shares of ITC's Common Stock (the "Option
Shares") at the fair market value of such shares on the date of grant, as
determined in good faith by ITC's Board of Directors. Shareholder acknowledges
that the options will not constitute qualified incentive stock options within
the meaning of Section 422 of the Code. The options will be evidenced by a
written option agreement containing general terms and conditions that are
consistent with the general terms and conditions of ITC's non-incentive stock
option agreements. The term of such options shall be ten (10) years from the
date of grant. The options shall be vest and become exercisable as follows:
(i) if at any time up to and including the third anniversary of
the Closing Date the LLC pays in full all amounts owed to LLC
under the Credit Facility and the Credit Facility is canceled
(either by the terms of such Credit Facility or by the LLC
providing ITC with written notice that it is canceling the
Credit Facility), options for 100% of the Option Shares shall
be exercisable at any time after the date of such repayment
and cancellation;
(ii) in the event ITC elects to convert the amount of indebtedness
outstanding under the Credit Facility on the third anniversary
of the Closing Date into an additional interest in the LLC in
accordance with the terms and conditions of the Loan and
Security Agreement, options for 100% of the Option Shares
shall be exercisable at any time after such conversion; or
(iii) if any amount of indebtedness remains outstanding under the
Credit Facility as of the third anniversary of the Closing
Date and ITC does not elect to convert such amount into an
additional interest in the LLC, the options
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shall be exercisable as of the third anniversary of the
Closing Date and as of each anniversary thereafter for that
number of Option Shares determined by multiplying the total
number of Option Shares (i.e., 5,000) by a fraction, the
numerator of which is equal to $1,000,000 less the principal
amount of the LLC indebtedness to ITC outstanding under the
Credit Facility or the Term Loan as of such anniversary, and
the denominator of which is equal to $1,000,000. For example,
if on the third anniversary of the Closing Date $500,000
remains outstanding under the Credit Facility and is to be
converted to the Term Loan, options for 50% of the Option
Shares would then be exercisable. If on the next anniversary
of the Closing Date the principal amount of indebtedness
outstanding under the Term Loan is reduced to $250,000,
options for 75% of the Option Shares (to the extent not
previously exercised) would then be exercisable.
4. REPRESENTATIONS AND WARRANTIES OF HEADHUNTER AND THE SHAREHOLDER
Except as specifically set forth in the Disclosure Schedule (with a
specific reference in the Disclosure Schedule to the Section of this Investment
Agreement to which each such disclosure applies), each of HeadHunter and the
Shareholder jointly and severally represents and warrants to ITC as follows:
4.1. ORGANIZATION AND STANDING
HeadHunter is a corporation duly organized, validly existing and in
good standing under the laws of the State of Georgia, and has the full and
unrestricted corporate power and authority to own, operate and lease its Assets,
to carry on its business as currently conducted, to execute and deliver this
Investment Agreement and to carry out the transactions contemplated hereby.
HeadHunter is duly qualified to conduct business as a foreign corporation and is
in good standing in the states, countries and territories listed on the
Disclosure Schedule. HeadHunter is not qualified to conduct business in any
other jurisdiction, and neither the nature of the business conducted by
HeadHunter nor the character of the Assets owned, leased or otherwise held by it
make any such qualification necessary. To the best of HeadHunter's and the
Shareholder's knowledge after reasonable inquiry, there is no state, country or
territory wherein the absence of licensing or qualification as a foreign
corporation would have a material adverse effect upon the business of HeadHunter
as currently conducted.
4.2. SUBSIDIARIES
HeadHunter has no Subsidiaries and no equity investment or other
interest in, nor has HeadHunter made advances or loans to, any corporation,
association, partnership, joint venture or other entity.
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4.3. CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS
HeadHunter has furnished to ITC a true and complete copy of the
certificate or articles of incorporation of HeadHunter, as currently in effect,
and a true and complete copy of the bylaws of HeadHunter, as currently in
effect, which are attached as exhibits to, and are part of, the Disclosure
Schedule.
4.4. OWNERSHIP OF HEADHUNTER
As of the Closing Date, the Shareholder owns all of the issued and
outstanding shares of stock of HeadHunter and there are no outstanding
securities convertible into or exchangeable for, and no outstanding options,
rights (preemptive or otherwise), or warrants to purchase or to subscribe for,
any shares of stock or other securities of HeadHunter. There are no outstanding
agreements affecting or relating to the voting, issuance, purchase, redemption,
repurchase or transfer of shares of stock or any other securities of HeadHunter.
4.5. DIRECTORS, OFFICERS AND EMPLOYEES
The Disclosure Schedule lists all current directors, officers and
employees of HeadHunter, showing each such person's name, positions, and annual
remuneration.
4.6. FINANCIAL STATEMENTS
HeadHunter has prepared and Furnished to ITC and there are included as
exhibits that are part of the Disclosure Schedule, the balance sheets of
HeadHunter as of the end of the fiscal year ending in each of 1995 and 1996 and
the statements of income, shareholders' equity and changes in financial position
for each of such fiscal years. HeadHunter also has prepared and furnished to
ITC, and there are included as exhibits that are part of the Disclosure
Schedule, the unaudited balance sheets of HeadHunter as of the end of the fiscal
quarters ended March 31, 1997, June 30, 1997, September 30, 1997, and the
unaudited statements of income and shareholders' equity for the periods then
ended. All of the financial statements, including, without limitation, the notes
thereto, referred to in this Section or furnished to ITC after the date hereof
pursuant to this Investment Agreement: (a) are in accordance with the books and
records of HeadHunter, (b) present fairly the financial position of HeadHunter
as of the respective dates and the results of operations and changes in
financial position for the respective periods indicated, and (c) have been
prepared on a basis consistent with prior accounting periods except as specified
in the Disclosure Schedule. The Disclosure Schedule sets forth all changes in
accounting methods (for financial accounting purposes) at any time made, agreed
to, requested or required with respect to HeadHunter.
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4.7. NO LIABILITIES
Except as reflected in the financial statements furnished pursuant to
this Investment Agreement or as described on the Disclosure Schedule, to the
best of HeadHunter's and the Shareholder's knowledge, after reasonable inquiry,
there exist no liabilities (whether contingent or absolute, matured or
unmatured) of HeadHunter. Except as described in the Disclosure Schedule,
HeadHunter has not incurred any liabilities (whether contingent or absolute,
matured or unmatured) other than in the Ordinary Course of Business.
4.8. ACCOUNTS RECEIVABLE
The accounts receivable of Head-Hunter shown on the balance sheets
furnished pursuant to SECTION 4.6, or thereafter acquired by it, have been
collected or in the best judgment of HeadHunter and the Shareholder are
collectible in amounts not significantly less than the amounts thereof carried
on the books of HeadHunter, except to the extent of the allowance for doubtful
accounts shown on such, balance sheets.
4.9. TAXES
4.9.1. FILED RETURNS
HeadHunter has (or, in the case of returns becoming due after the date
hereof and on or before the Closing Date, will have prior to the Closing Date)
duly filed all HeadHunter Tax Returns required to be filed by HeadHunter on or
before the Closing Date with respect to all applicable Taxes to the best of
HeadHunter's and the Shareholder's knowledge, after reasonable inquiry. No
penalties or other charges of a material amount are or will become due with
respect to any of the HeadHunter Tax Returns as the result of the late filing
thereof. All of the HeadHunter Tax Returns are (or, in the case of returns
becoming due after the date hereof and on or before the Closing Date, will be)
true and complete in all material respects to the best of HeadHunter's and the
Shareholder's knowledge, after reasonable inquiry. HeadHunter has paid all Taxes
due or claimed to be due by any Taxing authority in connection with any of the
HeadHunter Tax Returns (without regard to whether or not such Taxes are shown as
due on such HeadHunter Tax Returns).
4.9.2. TAX LIABILITY
Other than as set forth in the Disclosure Schedule, to the best of
HeadHunter's and the Shareholder's knowledge, after reasonable inquiry,
HeadHunter, either in its own right or as a transferee, does not have, and on
the Closing Date will not have, any liability for Taxes payable for or with
respect to any periods prior to and including the Closing Date materially in
excess of the amounts actually paid prior to the Closing Date or reserved for in
financial statements furnished to ITC pursuant to SECTION 4.6.
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4.9.3. TAX AUDITS
Other than as set forth in the Disclosure Schedule, there is no action,
suit, proceeding, audit, investigation or claim pending or, to the knowledge of
HeadHunter, threatened in respect of any Taxes for which HeadHunter is or may
become liable, nor has any deficiency or claim for any such Taxes been proposed,
asserted or, to the knowledge of HeadHunter, threatened.
4.10. CONDUCT OF BUSINESS; ABSENCE OF MATERIAL ADVERSE CHANGE
Other than as set forth in the Disclosure Schedule, there has been no
material adverse change, and no change except in the Ordinary Course of
Business, in the business, operations, prospects, condition (financial or
otherwise), Assets or Liabilities of HeadHunter since December 31, 1996. Except
as set forth in the Disclosure Schedule, HeadHunter has conducted its business
diligently and substantially in the manner heretofore conducted and only in the
Ordinary Course of Business.
4.11. REAL PROPERTY
HeadHunter owns no real property.
4.12. ASSETS
HeadHunter has good, valid and marketable title to all Assets owned by
it, including, without limitation, all Assets reflected in the most recent
balance sheet furnished pursuant to SECTION 4.6 and all Assets acquired by
HeadHunter since the date of that balance sheet (except for Assets which have
been sold or otherwise disposed of in the Ordinary Course of Business), free and
clear of all Encumbrances to the best of HeadHunter's and the Shareholder's
knowledge, after reasonable inquiry. All personal property of HeadHunter is in
good operating condition and repair and is suitable and adequate for the uses
for which it is intended or is being used.
4.13. INTELLECTUAL PROPERTY
The Disclosure Schedule lists all franchises, license, trademarks,
service marks, trade names, copyrights, patents and applications therefor owned
or licensed by or registered in the name of HeadHunter. Except as set forth in
the Disclosure Schedule, to the best of HeadHunter's and the Shareholder's
knowledge, after reasonable inquiry, HeadHunter owns all of the Intellectual
Property listed in the Disclosure Schedule purported to be owned by it, pays no
royalty to anyone with respect to any Intellectual Property, and has the right
to bring action for the infringement of such Intellectual Property. HeadHunter
owns or possesses adequate rights to use all Intellectual Property necessary to
the conduct of the present business of HeadHunter. Except as set forth in the
Disclosure Schedule, HeadHunter and the Shareholder have no knowledge and have
not received any notice to the effect, that any product HeadHunter sells or that
any service
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HeadHunter renders, or that the marketing or use by HeadHunter or another of any
such product or service, may or is claimed to infringe any Intellectual Property
or legally protectable right of another person.
4.14. DEBT INSTRUMENTS
The Disclosure Schedule lists and briefly describes the material terms,
provisions and conditions of all mortgages, indentures, notes, guarantees and
other Agreements for or relating to borrowed money (including, without
limitation, conditional sales agreements and capital leases) to which HeadHunter
is a party or which have been assumed by HeadHunter or to which any Assets of
HeadHunter are subject. To the best of HeadHunter's and the Shareholder's
knowledge, after reasonable inquiry, HeadHunter has performed all the
obligations required to be performed by it to date and is not in default in any
material respect under any of the foregoing, and there has not occurred any
event which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default.
4.15. LEASES
The Disclosure Schedule lists and briefly describes all leases and
other Agreements under which HeadHunter is lessee or lessor of any Asset, or
holds, manages or operates any Asset owned by any third party, or under which
any Asset owned by HeadHunter is held, operated or managed by a third party.
HeadHunter is the owner and holder of all leasehold estates purported to be
granted by the Documents described in the Disclosure Schedule to it, free and
dear of all Encumbrances. To the best of HeadHunter's and the Shareholder's
knowledge, after reasonable inquiry, each such lease and other Agreement is in
full force and effect and constitutes a legal, valid and binding obligation of,
and is legally enforceable against, the respective parties thereto and grants
the leasehold estate it purports to grant free and clear of all Encumbrances to
the extent described in such leases. To the best of HeadHunter's and the
Shareholder's knowledge, after reasonable inquiry, HeadHunter has obtained any
governmental approvals reasonably necessary with respect thereto, and has made
all reasonably necessary filings or registrations therefor that it is required
to make, and there have been no threatened cancellations thereof and are no
outstanding disputes thereunder. HeadHunter has in all material respects
performed all obligations thereunder reasonably necessary to be performed by it
to date. To the best of HeadHunter's and the Shareholder's knowledge, after
reasonable inquiry, no party is in default in any material respect under any of
the foregoing, and there has not occurred any event which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute such a default. To the best of HeadHunter's and the
Shareholder's knowledge, after reasonable inquiry, all of the Assets subject to
such leases are in good operating condition and repair.
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4.16. OTHER AGREEMENTS
The Disclosure Schedule lists and briefly describes all significant
Agreements to which HeadHunter is a party or by which HeadHunter is bound at the
date hereof. To the best of HeadHunter's and the Shareholder's knowledge, after
reasonable inquiry, each such Agreement is in full force and effect and
constitutes a legal, valid and binding obligation of, and is legally enforceable
against, the respective parties thereto. To the best of HeadHunter's and the
Shareholder's knowledge, after reasonable inquiry, all reasonably necessary
governmental approvals with respect thereto have been obtained, all reasonably
necessary filings or registrations therefor have been made, and there have been
no threatened cancellations thereof and are no outstanding disputes thereunder.
HeadHunter has in all material respects performed all the obligations thereunder
reasonably necessary to be performed by it to date. To the best of HeadHunter's
and the Shareholder's knowledge, after reasonable inquiry, no party is in
default in any material respect under any of the Agreements described in the
Disclosure Schedule, and there has not occurred any event which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute such a default.
4.17. BOOKS AND RECORDS
The books of account, stock records, minute books and other records of
HeadHunter are true and complete and have been maintained in accordance with
good business practices.
4.18. LITIGATION; DISPUTES
There are no actions, suits, claims, arbitrations, proceedings or
investigations pending or, to the best of HeadHunter's and Shareholder's
knowledge after reasonable inquiry, threatened or reasonably anticipated
against, affecting or involving HeadHunter or its business or Assets, or the
transactions contemplated by this Agreement, at law or in equity or admiralty,
or before or by any court, arbitrator or governmental authority, domestic or
foreign. HeadHunter is not operating under, subsequent or in default with
respect to any order, award, writ, injunction, decree or judgment of any court,
arbitrator or governmental authority. HeadHunter is not currently involved in
and does not reasonably anticipate any dispute with any of its current or former
employees, agents, brokers, distributors, vendors, customers, business
consultants, franchisees, franchisors, representatives or independent
contractors (or any current or former employees of any of the foregoing persons
or entities) affecting the business or Assets of HeadHunter.
4.19. PENSION AND BENEFIT PLANS
Other than as set forth in the Disclosure Schedule, HeadHunter (i) does
not maintain and never has maintained any Plan or Other Arrangement, (ii) is not
and never has been a party to any Plan or Other Arrangement, and (iii) has no
obligations under any Plan or Other Arrangement.
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4.20. ENVIRONMENTAL
HeadHunter has complied and is in compliance with, all Environmental
Laws.
4.21. RESTRICTIONS AND CONSENTS
There are no Agreements, Laws or other restrictions of any kind to
which HeadHunter is party or subject that would prevent or restrict the
execution, delivery or performance of this Investment Agreement or result in any
penalty, forfeiture, Agreement termination, or restriction on business
operations of the LLC, ITC or HeadHunter as a result of the execution, delivery
or performance of this Investment Agreement. The Disclosure Schedule lists all
such Agreements and Laws that reasonably could be interpreted or expected to
require the consent or acquiescence of any person or entity not party to this
Investment Agreement with respect to any aspect of the execution, delivery or
performance of this Investment Agreement by HeadHunter and the Shareholder.
4.22. AUTHORIZATION
The execution, delivery and performance by HeadHunter and the
Shareholder of this Investment Agreement and all other Documents contemplated
hereby, the fulfillment of and compliance with the respective terms and
provisions hereof and thereof, and the consummation by HeadHunter and the
Shareholder of the transactions contemplated hereby and thereby have been duly
authorized by HeadHunter's Board of Directors (which authorization has not been
modified or rescinded and is in full force and effect), and do not and will not:
(a) require any consent or approval which has not been obtained; (b) conflict
with, or violate any provision of, any Law applicable to HeadHunter or the
Shareholder, or any provision of the certificate or articles of incorporation or
bylaws of HeadHunter; (c) conflict with, or result in any breach of, or
constitute a default under any Agreement to which HeadHunter or Shareholder is a
party or by which HeadHunter, the Shareholder, or any of the Assets may be
bound; or (d) result in or require the creation or imposition of or result in
the acceleration of any indebtedness, or of any Encumbrance of any nature upon,
or with respect to, HeadHunter or any of the Assets now owned or hereafter
acquired by HeadHunter. No other corporate action is necessary for HeadHunter to
enter into this Investment Agreement and all other Documents contemplated hereby
and to consummate the transactions contemplated hereby and thereby.
4.23. ABSENCE OF VIOLATION
HeadHunter is not in violation of or default under, nor has it
breached, any term or provision of its certificate or articles of incorporation
or bylaws or any Agreement or restriction to which it is a party or by which it
is bound or any Asset is affected. To the best of HeadHunter's and the
Shareholder's knowledge after reasonable inquiry, HeadHunter has complied and is
in full compliance with all Laws. Neither HeadHunter nor any of its officers,
directors, employees or agents (or stockholders, distributors,
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representatives or other persons acting on the express, implied or apparent
authority of HeadHunter) have paid, given or received or have offered or
promised to pay, give or receive, any bribe or other unlawful, questionable or
unusual payment of money or other thing of value, any extraordinary discount, or
any other unlawful or unusual inducement, to or from any person, business
association or governmental official or entity in the United States or elsewhere
in connection with or in furtherance of the business of HeadHunter (including,
without limitation, any offer, payment or promise to pay money or other thing of
value (i) to any foreign official or political party (or official thereof) for
the purposes of influencing any act, decision or omission in order to assist
HeadHunter in obtaining business for or with, or directing business to, any
person, or (ii) to any person, while knowing that all or a portion of such money
or other thing of value will be offered, given or promised to any such official
or party for such purposes). The business of HeadHunter is not in any manner
dependent upon the making or receipt of such payments, discounts or other
inducements.
4.24. BINDING OBLIGATION
This Investment Agreement constitutes a valid and binding obligation of
HeadHunter and the Shareholder, enforceable in accordance with its terms. Each
Document to be executed by HeadHunter and the Shareholder pursuant hereto, when
executed and delivered in accordance with the provisions hereof, shall be a
valid and binding obligation of HeadHunter and the Shareholder, enforceable in
accordance with its terms.
4.25. DISCLOSURE
All facts of importance to the business, operations, prospects,
condition (financial or otherwise), Assets or liabilities of HeadHunter have
been truthfully and completely disclosed to ITC in this Agreement. No
representation or warranty by HeadHunter or the Shareholder in this Agreement,
and no Document furnished or to be furnished to ITC pursuant to this Agreement,
or in connection herewith or with the transactions contemplated hereby, contains
or will contain any untrue or misleading statement or omits or win omit any fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which made, not misleading in any material respect.
5. REPRESENTATIONS AND WARRANTIES OF ITC
ITC hereby represents and warrants to HeadHunter and the Shareholder as
follows:
5.1. ORGANIZATION AND STANDING
ITC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the full and
unrestricted corporate power and
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authority to carry on its business as currently conducted, to enter into this
Investment Agreement and to carry out the transactions contemplated hereby.
5.2. AUTHORIZATION
The execution, delivery and performance by ITC of this Investment
Agreement and all other Documents contemplated hereby, the fulfillment of and
the compliance with the respective terms and provisions hereof and thereof, and
the consummation by ITC of the transactions contemplated hereby and thereby have
been duly authorized by its Board of Directors (which authorization has not been
modified or rescinded and is in full force and effect), and do not and win not:
(a) conflict with, or violate any provision of, any term or provision of, any
law having applicability to ITC, or any provision of the certificate or articles
of incorporation or bylaws of ITC or (b) conflict with, or result in any breach
of, or constitute a default under, any Agreement to which ITC is a party or by
which ITC is bound. No other corporate action is necessary for ITC to enter into
this Investment Agreement and all other Documents contemplated hereby and to
consummate the transactions contemplated hereby and thereby.
5.3. BINDING OBLIGATION
This Investment Agreement constitutes a valid and binding obligation of
ITC, enforceable in accordance with its terms. Each Document to be executed by
ITC pursuant hereto, when executed and delivered in accordance with the
provisions hereof, shall be a valid and binding obligation of ITC, enforceable
in accordance with its terms.
6. RESTRICTED SECURITIES
ITC, HeadHunter, and the Shareholder hereby mutually represent, warrant
and covenant to each other as follows:
6.1. NO REGISTRATION UNDER THE SECURITIES ACT
Each party understands that the LLC Interests to be acquired by ITC and
HeadHunter pursuant to this Investment Agreement have not been registered under
the Securities Act, in reliance upon exemptions contained in the Securities Act
or interpretations thereof, and cannot be offered for sale, sold or otherwise
transferred unless such LLC Interests being acquired hereunder subsequently are
so registered or qualify for exemption from registration under the Securities
Act.
6.2. ACQUISITION FOR INVESTMENT
ITC and HeadHunter are acquiring the LLC Interests solely for their own
respective accounts, for investment and not with a view toward resale or other
distribution within the meaning of the Securities Act. ITC and HeadHunter will
not offer for sale, sell
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or otherwise transfer by their LLC Interests without either registration or
exemption from registration under the Securities Act.
6.3. EVALUATION OF MERITS AND RISKS OF INVESTMENT
ITC and HeadHunter, as the case may be, has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment in the LLC Interests it is acquiring. ITC
and HeadHunter, as the case may be, understands and is able to bear any economic
risks associated with such investment (including, without limitation, the
necessity of holding such LLC Interests for an indefinite period of time,
inasmuch as such LLC Interests have not been registered under the Securities
Act).
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF HEADHUNTER AND THE SHAREHOLDER
The obligations of HeadHunter and the Shareholder under this Investment
Agreement are subject to the fulfillment, at or prior to the Closing, of each of
the following conditions, and failure to satisfy any such condition shall excuse
and discharge all obligations of HeadHunter and the Shareholder to carry out the
provisions of this Agreement, unless such failure is agreed to in writing by
HeadHunter and the Shareholder:
7.1. REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations and warranties made by ITC in this Investment
Agreement or in any Document furnished by ITC pursuant to this Investment
Agreement shall be true and complete when made and on and as of the Closing Date
as though such representations and warranties were made on and as of such date,
except for any changes expressly permitted by this Agreement, and ITC shall have
performed and complied with all Agreements and conditions required by this
Investment Agreement to be performed or complied with by ITC prior to the
Closing Date, and HeadHunter shall have received a certificate from ITC to such
effect signed by a duly authorized officer thereof.
7.2. LEGAL PROCEEDINGS
No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently dismissed, settled or
otherwise terminated) which is reasonably expected to restrain, prohibit or
invalidate the transactions contemplated by this Agreement, other than an action
or proceeding instituted or threatened by HeadHunter or the Shareholder.
7.3. CONSENTS
HeadHunter shall have received all consents, authorizations and
approvals of governmental and private parties that are required to be obtained
in order for it to
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consummate the transactions contemplated hereby, and all such consents,
authorizations and approvals shall be in full force and effect on the Closing
Date.
7.4. BUSINESS PLAN
HeadHunter and ITC shall have developed a mutually acceptable five (5)
year business plan for the LLC.
7.5. DOCUMENTS AT CLOSING
All Documents required to be furnished by ITC to HeadHunter or the
Shareholder prior to or at the Closing shall have been so furnished.
7.6. FORMATION OF LLC
The LLC Certificate shall have been filed with the Office of the
Secretary of State of the State of Delaware.
7.7. DELIVERIES BY LLC
All Documents required to be furnished by the LLC to HeadHunter or the
Shareholder prior to or at the Closing shall have been so furnished.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF ITC
The obligations of ITC under this Investment Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of ITC to carry out the provisions of this Agreement, unless
such failure is agreed to in writing by ITC:
8.1. REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations and warranties made by HeadHunter and the
Shareholder in this Investment Agreement and the statements contained in the
Disclosure Schedule and Exhibits attached hereto or in any Document furnished by
HeadHunter or the Shareholder pursuant to this Investment Agreement shall be
true and complete when made, and on and as of the Closing Date as though such
representations and warranties were made on and as of such date, except for any
changes expressly permitted by this Agreement, and HeadHunter and the
Shareholder shall have performed and complied with all Agreements and conditions
required by this Investment Agreement to be performed or complied with by it
prior to the Closing Date, and ITC shall have received a certificate from
HeadHunter to such effect signed by a duly authorized officer thereof.
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8.2. ABSENCE OF MATERIAL ADVERSE CHANGES
There shall have been no material adverse changes in the business,
operations, prospects, condition (financial or otherwise), Assets or liabilities
of HeadHunter (regardless of whether or not such events or changes are
inconsistent with the representations and warranties given herein by
HeadHunter), except changes contemplated by this Investment Agreement.
8.3. LEGAL PROCEEDINGS
No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently settled, dismissed or
otherwise terminated) which is reasonably expected to restrain, prohibit or
invalidate the transactions contemplated by this Investment Agreement, other
than an action or proceeding instituted or threatened by ITC.
8.4. CONSENTS
8.4.1. ITC CONSENTS
ITC shall have received all consents, authorizations and approvals of
governmental and private parties that are required to be obtained in order for
it to consummate the transactions contemplated hereby shall be in full force and
effect on the Closing Date.
8.4.2. HEADHUNTER CONSENTS
HeadHunter shall have received all consents, authorizations and
approvals of governmental and private parties that are required to be obtained
in order for it to consummate the transactions contemplated hereby, and all such
consents, authorizations and approvals shall be in full force and effect on the
Closing Date.
8.5. BOARD OF DIRECTORS APPROVAL
The Board of Directors of ITC shall have approved the execution and
delivery of this Agreement and the other Documents to be executed and delivered
by ITC pursuant hereto and the consummation of the transactions contemplated
hereby and thereby.
8.6. BUSINESS PLAN
HeadHunter and ITC shall have developed a mutually acceptable five(5)
year business plan for the LLC.
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8.7. DOCUMENTS AT CLOSING
All Documents required to be furnished by HeadHunter or the Shareholder
to ITC prior to or at the Closing shall have been so furnished.
8.8. FORMATION OF LLC
The LLC Certificate shall have been filed with the Office of the
Secretary of State of the State of Delaware.
8.9. DELIVERIES BY LLC
All Documents (including, without limitation, a key man insurance
policy on the life of the Shareholder in the amount of at least $2,000,000 in a
form reasonably satisfactory to ITC (the "KEY MAN LIFE INSURANCE POLICY"))
required to be furnished by the LLC to ITC prior to or at the Closing shall have
been so furnished.
9. CLOSING
9.1. CLOSING OF LLC INVESTMENT
Subject to the terms and conditions of this Investment Agreement, the
Closing shall take place on the Closing Date.
9.2. DELIVERIES BY HEADHUNTER ON THE CLOSING DATE
At the Closing, HeadHunter shall deliver or shall cause to be delivered
to ITC the following:
(i) a certified copy of the resolutions adopted by the Board of
Directors of HeadHunter authorizing the execution and delivery of this Agreement
and the other Documents to be executed and delivered by it pursuant to this
Agreement and the consummation of the transactions contemplated hereby and
thereby;
(ii) executed copies of the LLC Agreement;
(iii) the Key Man Life Insurance Policy;
(iv) copies of all consents required pursuant to SECTION 8.4.2;
(v) executed copy of the officer's certificate required pursuant
to SECTION 8.1; and
(vi) such other Documents as ITC may reasonably request.
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At the Closing, HeadHunter shall deliver to the LLC the HeadHunter
Capital Contribution.
9.3. DELIVERIES BY ITC ON THE CLOSING DATE
At the Closing, ITC shall deliver to HeadHunter the following:
(i) a certified copy of the resolutions adopted by the Board of
Directors of ITC authorizing the execution and delivery of this Agreement and
the other Documents to be executed and delivered by it pursuant to this
Agreement and the consummation of the transactions contemplated by this hereby
and thereby;
(ii) executed copy of the LLC Agreement;
(iii) executed copy of the Loan and Security Agreement;
(iv) executed copy of the officer's certificate required pursuant
to SECTION 7.1; and
(v) such other Documents as HeadHunter may reasonably request.
At the Closing, ITC shall deliver to the LLC the ITC Capital Contribution.
9.4. DELIVERIES BY THE LLC
At the Closing, the parties shall cause the LLC to deliver the
following.
(i) the Employment Letter to the Shareholder;
(ii) the Loan and Security Agreement and the Promissory Note to
ITC; and
(iii) to any party hereto, such other Documents as such party
reasonably may request.
9.5. DELIVERIES BY THE SHAREHOLDER
At the Closing, the Shareholder shall execute and deliver to the LLC
the Employment Letter.
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10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties by any party to this Investment
Agreement herein or pursuant hereto also shall be deemed made on and as of the
Closing Date as though such representations and warranties were made on and as
of such date, and all such representations and warranties shall survive and
shall be unaffected by (and shall not be deemed waived by) any investigation,
audit or inspection at any time made by or on behalf of any party hereto.
10.2. AGREEMENT OF HEADHUNTER AND THE SHAREHOLDER TO INDEMNIFY
Subject to the conditions and provisions of this ARTICLE 10, HeadHunter
and the Shareholder jointly and severally agree to indemnify, defend and hold
harmless the ITC Indemnified Persons from and against and in any respect of all
Claims asserted against, resulting to, imposed upon or incurred by the ITC
Indemnified Persons (whether such Claims are by, against or relate to
HeadHunter, the Shareholder or any other party, including a governmental
entity), directly or indirectly, by reason of or resulting from any
misrepresentation or breach of any representation or warranty, or noncompliance
with any conditions or other Agreements, given or made by HeadHunter or the
Shareholder in this Investment Agreement or in the Disclosure Schedule or
Exhibits attached hereto or in any Document furnished by or on behalf of
HeadHunter or the Shareholder pursuant to this Investment Agreement.
Notwithstanding the foregoing, (i) HeadHunter and the Shareholder shall have no
liability for Claims made more than two (2) years following the Closing Date,
and (ii) the liability of HeadHunter and the Shareholder for Claims hereunder
shall not exceed, in the aggregate, One Million Dollars ($1,000,000.00).
10.3. AGREEMENT OF ITC TO INDEMNIFY
Subject to the conditions and provisions of this ARTICLE 10, ITC hereby
agrees to indemnify, defend and hold harmless the HeadHunter Indemnified Persons
from and against and in respect of all Claims asserted against, resulting to,
imposed upon or incurred by the HeadHunter Indemnified Persons (whether such
Claims are by, against or relate to ITC or any other party, including, without
limitation, a governmental entity), directly or indirectly, by reason of or
resulting from any misrepresentation or breach of any representation or
warranty, or noncompliance with any conditions or other Agreements, given or
made by ITC in this Investment Agreement or in the Exhibits or in any Document
furnished by or on behalf of the ITC pursuant to this Investment Agreement.
Notwithstanding the foregoing, (i) ITC shall have no liability for Claims made
more than two (2) years following the Closing Date, and (ii) the liability of
ITC for Claims hereunder shall not exceed, in the aggregate, One Million Dollars
($1,000,000.00).
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10.4. CONDITIONS OF INDEMNIFICATION
The obligations and liabilities of HeadHunter, the Shareholder and ITC
hereunder with respect to their respective indemnities pursuant to this ARTICLE
10, resulting from any Claim shall be subject to the following terms and
conditions:
10.4.1. NOTICE
The indemnified party shall give prompt written notice to the
indemnifying party of any Claim which is asserted against, resulting to, imposed
upon or incurred by such indemnified party and which may give rise to liability
of the indemnifying party pursuant to this Article 10, stating (to the extent
known or reasonably anticipated) the nature and basis of such Claim and the
amount thereof.
10.4.2. COUNSEL
The indemnified party may engage counsel or representatives of its own
choosing with respect to any such Claim, such representation (including the
compromise or settlement of any Claim) to be undertaken on behalf of and for the
account and risk of the indemnifying party. In the event the indemnified party
elects not to undertake such defense by its own representatives, the indemnified
party shall give prompt written notice of such election to the indemnifying
party, and the indemnifying party will undertake the defense thereof by counsel
or other representatives designated by it whom the indemnified party determines
in writing to be satisfactory for such purposes. The consent of the indemnified
party to the indemnifying party's choice of counsel or other representative
shall not be unreasonably withheld.
10.4.3. JOINT LIABILITY
In the event that any Claim shall arise out of a transaction or cover
any period or periods wherein HeadHunter or the Shareholder, on the one hand,
and ITC, on the other hand, shall each be liable hereunder for part of the
liability or obligation arising therefrom, then the parties shall, each choosing
its or his own counsel and bearing its or his own expense, defend such Claim,
and no settlement or compromise of such Claim may be made without the joint
consent or approval of HeadHunter, the Shareholder and ITC (which consent shall
not be unreasonably withheld), except where the respective liabilities and
obligations of HeadHunter, the Shareholder and ITC are dearly allocable or
attributable on the basis of objective facts.
10.5. SPECIFIC PERFORMANCE
In addition to any other remedies which a party hereto may have at law
or in equity, HeadHunter, the Shareholder and ITC each hereby acknowledges that
the LLC Interests and the LLC are unique, and that the harm to a party resulting
from breaches by the other of its obligations cannot be adequately compensated
by damages. Accordingly,
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HeadHunter, the Shareholder and ITC agree that each party shall have the right
to have all obligations, undertakings, Agreements, covenants and other
provisions of this Investment Agreement specifically performed by the other and
that each party shall have the right to obtain an order or decree of such
specific performance in any of the courts of the United States of America or of
any state or other political subdivision thereof.
10.6. REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall not preclude
the assertion by HeadHunter, the Shareholder or ITC of any other rights or the
seeking of any other remedies against the other, or their respective successors
or assigns.
11. TERMINATION AND EFFECT THEREOF
11.1. TERMINATION
This Investment Agreement may be terminated at any time before the
Closing Date under any one or more of the following circumstances:
(i) by the mutual consent of the parties hereto;
(ii) by ITC, by written notice of termination delivered to
HeadHunter and the Shareholder, if any of the conditions set
forth in ARTICLE 8 have not been fulfilled by the Closing
Date;
(iii) by HeadHunter or the Shareholder, by written notice of
termination delivered to ITC, if any of the conditions set
forth in ARTICLE 7 have not been fulfilled by the Closing
Date;
(iv) by ITC upon ITC's determination, at any time prior to the
Closing Date, in its sole discretion based on its
investigation and review of the business, operations,
prospects, condition (financial or otherwise), assets or
liabilities of HeadHunter that it is not in ITC's best
interest to proceed with the transactions contemplated by this
Investment Agreement; and
(v) by ITC, the Shareholder or HeadHunter, by written notice of
termination to the other parties hereto, if the Closing has
not occurred by December 31, 1997.
11.2. EFFECT OF TERMINATION
In the event this Investment Agreement is terminated as provided in
this ARTICLE 11, this Investment Agreement shall forthwith become wholly void
and of no effect, and the parties shall be released from all future obligations
hereunder; provided however that the obligations of ITC, the Shareholder and
HeadHunter as to confidentiality provided in
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SECTION 3.2, and the provisions of SECTION 12.3 relating to the payment of
expenses, shall not be extinguished but shall survive such termination. The
parties hereto shall have any and all remedies to enforce such obligations
provided at law or in equity (including, without limitation, specific
performance).
12. MISCELLANEOUS
12.1. ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be taken
such further actions, to execute, deliver and file or cause to be executed,
delivered and filed such further Documents, and will obtain such consents, as
may be necessary or as may be reasonably requested in order to fully effectuate
the purposes, terms and conditions of this Investment Agreement.
12.2. NO BROKERS
Each of the parties hereto represents and warrants to the other parties
(and to each of them) that such party has not engaged any broker, finder or
agent in connection with the transactions contemplated by this Investment
Agreement and has not incurred (and will not incur) any unpaid liability to any
broker, finder or agent for any brokerage fees, finders' fees or commissions,
with respect to the transactions contemplated by this Investment Agreement. Each
party agrees to indemnify, defend and hold harmless each of the other parties
from and against any and all claims asserted against such parties for any such
fees or commissions by any persons purporting to act or to have acted for or on
behalf of the indemnifying party.
12.3. EXPENSES
Each party hereto shall pay its own expenses incident to this
Investment Agreement and the transactions contemplated hereunder, including all
legal and accounting fees and disbursements. Notwithstanding the foregoing, the
parties agree to cause the LLC (i) to reimburse ITC up to $20,000 for fees and
expenses of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. in connection with the formation and
organization of the LLC and the preparation of this Agreement, the Loan
Agreement, and the other legal documents contemplated hereby or thereby, (ii) to
reimburse HeadHunter up to $20,000 for fees and expenses incurred by HeadHunter
in connection with the formation and organization of the LLC and the preparation
of this Agreement, the Loan Agreement, and the other documents contemplated
hereby or thereby, and (iii) to bear the cost of all filings made in order to
obtain any regulatory approvals, or comply with any regulatory requirements, in
connection with the formation and organization of the LLC.
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12.4. ASSIGNMENT
No party hereto shall assign its or his rights and obligations under
this Investment Agreement, in whole or in part, whether by operation of law or
otherwise, without the prior written consent of the other parties hereto, and
any such assignment contrary to the terms hereof shall be null and void and of
no force and effect.
12.5. ENTIRE AGREEMENT; AMENDMENT
This Investment Agreement, including the Disclosure Schedule, the
Exhibits hereto and the other Documents referred to herein or furnished pursuant
hereto, constitutes the entire Agreement among the parties hereto with respect
to the transactions contemplated herein, and supersede all prior oral or written
Agreements, commitments or understandings with respect to the matters provided
for herein. No amendment, modification or discharge of this Investment Agreement
shall be valid or binding unless set forth in writing and duly executed and
delivered by the party against whom enforcement of the amendment, modification,
or discharge is sought.
12.6. WAIVER
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Investment Agreement or under any other
Documents furnished in connection with or pursuant to this Investment Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
12.7. SEVERABILITY
If any part of any provision of this Investment Agreement or any other
agreement or document given pursuant to or in connection with this Investment
Agreement shall be invalid or unenforceable in any respect, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the remaining parts of such provision or the remaining
provisions of this Investment Agreement.
12.8. GOVERNING LAW
This Investment Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Georgia (excluding the
choice of law rules thereof).
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12.9. NOTICES
All notices, demands, requests, or other communications which may be or
are required to be given, served, or sent by any party to any other party
pursuant to this Investment Agreement, shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
(i) If to ITC:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
ITC Holding Company, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FACSIMILE: 706/643-5067
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, General Counsel and Secretary
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 703/619-9720
(ii) If to HeadHunter or the Shareholder:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FACSIMILE: 770/495-6363
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed, telecopied or telexed in the manner described above, or which
shall be delivered to a telegraph company, shall be deemed sufficiently given,
served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
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12.10. HEADINGS
Article and Section headings contained in this Investment Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Investment Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
12.11. EXECUTION IN COUNTERPARTS
To facilitate execution, this Investment Agreement way be executed in
as many counterparts as may be required. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
Agreement. It shall not be necessary in making proof of this Investment
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
12.12. LIMITATION ON BENEFITS
The covenants, undertakings and agreements set forth in this Investment
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns, except that the
agreements set forth in Article 10 also shall be for the benefit of, and
enforceable by, ITC Indemnified Persons, HeadHunter Indemnified Persons and
their respective successors, heirs, executors, administrators, legal
representatives or permitted assigns.
12.13. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Investment Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Investment Agreement, or have caused this Investment Agreement to be duly
executed on their behalf, as of the day and year first above written.
ITC HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General Counsel and
Secretary
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇
President
/s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
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