Exhibit 2.1
ASSET PURCHASE AGREEMENT
by
and
among
Tradingear Acquisition LLC,
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
and
TGFIN Holdings, Inc.
Dated: January 27, 2003
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2. Other Definitional Provisions. . . . . . . . . . . . . . . . . .8
ARTICLE 2. PURCHASE AND SALE OF ACQUIRED ASSETS. . . . . . . . . . . .8
2.1. Purchase and Sale of Assets. . . . . . . . . . . . . . . . . . .8
2.2. Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . . .9
2.3. Payment of Purchase Price. . . . . . . . . . . . . . . . . . . .9
2.4. Assumption of Liabilities. . . . . . . . . . . . . . . . . . . .9
2.5. The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.6. Deliveries at the Closing. . . . . . . . . . . . . . . . . . . 10
ARTICLE 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 10
3.1. Representations and Warranties of the Company and TGFIN. . . . 10
3.2. Representations and Warranties of Buyer. . . . . . . . . . . . 20
ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1. The Company and TGFIN Pre-Closing Covenants.. . . . . . . . . 21
4.2. Further Covenants. . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 5. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . 24
5.1. Conditions to Obligations of Buyer.. . . . . . . . . . . . . . 24
5.2. Conditions to Obligations of the Company.. . . . . . . . . . . 25
ARTICLE 6. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 25
6.1. Survival of Representations and Warranties.. . . . . . . . . . 25
6.2. Indemnification Provisions for Buyer's Benefit.. . . . . . . . 25
6.3. Indemnification Provisions for the Company and TGFIN's Benefit.26
6.4. Indemnification Claim Procedures.. . . . . . . . . . . . . . . 26
6.5. Purchase Price Escrow. . . . . . . . . . . . . . . . . . . . . 27
6.6. Other Indemnification Provisions.. . . . . . . . . . . . . . . 27
ARTICLE 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1. Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 27
7.2. Cooperation After Closing. . . . . . . . . . . . . . . . . . . 27
ARTICLE 8. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . 28
8.1. Stockholder Approval.. . . . . . . . . . . . . . . . . . . . . 28
8.2. Preparation of the Information Statement.. . . . . . . . . . . 28
8.3. Cooperation and Exchange of Information. . . . . . . . . . . . 28
ARTICLE 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 29
9.1. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.2. Procedure and Effect of Termination. . . . . . . . . . . . . . 29
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ARTICLE 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 30
10.1. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 30
10.2. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.3. Assignments. . . . . . . . . . . . . . . . . . . . . . . . . 30
10.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.5. Specific Performance.. . . . . . . . . . . . . . . . . . . . 31
10.6. Time.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.7. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . 31
10.8. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.9. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 31
10.10. Amendments and Waivers.. . . . . . . . . . . . . . . . . . . 32
10.11. Severability.. . . . . . . . . . . . . . . . . . . . . . . . 32
10.12. Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.13. Construction.. . . . . . . . . . . . . . . . . . . . . . . . 32
10.14. Incorporation of Exhibits, Annexes, and Schedules. . . . . . 32
10.15. No Third Party Beneficiaries.. . . . . . . . . . . . . . . . 32
ii
ATTACHMENTS
Exhibits
Exhibit A - Assignment Agreement
Exhibit B - Assumption Agreement
Exhibit C - Purchase Price Escrow Agreement
Exhibit D - Agreement Not To Compete
Exhibit E - Company and TGFIN's Counsel's Opinion
Exhibit F - Agreements to be Executed by Developers
Exhibit G(1) - Officer's Certificate
Exhibit G(2) - Secretary's Certificate
Schedules
Schedule 1.1(a) - Accounts Receivable
Schedule 1.1(b) - Assumed Contracts
Schedule 1.1(c) - Excluded Assets
Schedule 3.1(b) - Required Consents
Schedule 3.1(f) - Exceptions to Title
Schedule 3.1(j)(i) - Benefit Plans
Schedule 3.1(j)(iii) - Former Employees Receiving Benefits
Schedule 3.1(k)(i) - Employees/Consultants
Schedule 3.1(k)(ii) - Employee Details
Schedule 3.1(o) - Real Property
Schedule 3.1(p)(i)(A) - Intellectual Property
Schedule 3.1(p)(i)(B) - Developers
Schedule 3.1(p)(i)(C) - Preexisting Intellectual Property
Schedule 3.1(p)(i)(D) - Third Party Interests in Intellectual Property
Schedule 3.1(q)(ii) - Assumed Contracts with Restrictions on Transfer
Schedule 3.1(r) - Financial Statements
Schedule 3.1(s) - Events Subsequent to Most Recent Fiscal Year End
Schedule 3.1 (u) - Tangible Assets
iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") dated January 27, 2003,
is by and among (i) Tradingear Acquisition LLC, a Delaware limited liability
company ("Buyer"), (ii) ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), and (iii) TGFIN Holdings, Inc., a Delaware corporation ("TGFIN").
Buyer, the Company and TGFIN are referred to collectively herein as the
"Parties".
RECITALS:
A. TGFIN owns (beneficially and of record) 100% of the Company's
outstanding capital stock.
B. Buyer desires to purchase from the Company and the Company desires
to sell to Buyer the Acquired Assets (as defined herein) in return for the
Purchase Price (as defined herein), in accordance with this Agreement's terms
and conditions.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants contained herein, the Parties agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. Defined Terms. When used in this Agreement, the following terms
shall have the respective meanings set forth below:
"Accounts Receivable" means accounts, notes, and other receivables and
all other rights to receive payments.
"Acquired Assets" means all right, title, and interest in and to all of
the following assets of the Company: (a) all the Tangible Assets; (b) all of
the Intellectual Property set forth in Schedule 3.1(p)(i)(A), goodwill
associated therewith, licenses and sublicenses granted and obtained (to the
extent of its ability under a transferable license or sublicense) with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions;
(c) the Assumed Contracts; (d) the Accounts Receivable set forth in Schedule
1.1(a); (e) all of its transferable franchises, approvals, permits, licenses,
orders, registrations, certificates, variances, authorizations and similar
rights obtained from any Government Authority relating to the Acquired Assets;
(f) to the extent necessary to consummate the Transactions, all of its manuals
for hardware and software, invoices, maintenance protocols, technicians and
support logs and reports, databases, evaluations, books, general, financial,
Tax and personnel records (unless prohibited by Law), ledgers, files,
documents, correspondence, lists, plans, drawings, specifications, studies,
reports, and other printed or written materials, whether in hard copy or
computer format related to the Acquired Assets; and (g) all of the goodwill
attributable to and going-concern value of the Acquired Assets; provided,
however, that the Acquired Assets shall not include the Excluded Assets.
1
"Action" means any civil or criminal claim, action or causes of action,
appeal, petition, plea, civil or criminal charge or complaint, suit, demand,
litigation, arbitration, mediation, hearing, assessments or investigation by
or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, a Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.
"Agreement" means this Asset Purchase Agreement as amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Agreement Not To Compete" means the Agreement Not To Compete
substantially in the form attached as Exhibit D, to be executed and delivered
by the Company to Buyer at Closing.
"Agreements to be Executed by Developers" means the Agreements to be
executed by Developers substantially in the form attached as Exhibit F, to be
executed by the Developers and delivered by the Company to Buyer at Closing.
"Assignment Agreement" means the Assignment and ▇▇▇▇ of Sale
substantially in the form attached as Exhibit A, to be executed and delivered
by the Company to Buyer at Closing.
"Assumption Agreement" means the Assumption Agreement substantially in
the form attached as Exhibit B, to be executed and delivered by Buyer to the
Company at Closing.
"Assumed Contracts" means the agreements set forth in Schedule 1.1(b).
"Breach" means any failure to perform, failure to comply, default,
violation, acceleration, termination, cancellation, modification, or failure
to provide a required notification.
"Business Day" shall mean any day on which the principal offices of the
Securities and Exchange Commission in Washington D.C. are open to accept
filings, or, in the case of determining a date when payment is due, any day on
which banks are not required or authorized to close in New York City.
"Buyer" has the meaning set forth in the preamble to this Agreement.
"Buyer Indemnitees" means the Company and TGFIN and each of their
officers, directors, employees, agents, representatives, controlling Persons,
stockholders, and their Affiliates.
"CA" means Computer Associates International Inc.
"COBRA" shall mean the obligations and Liabilities arising under the
continuation of coverage requirements of Section 4980B of the Code and Part 6
of Subtitle B of Title I of ERISA.
"Code" means the Internal Revenue Code of 1986, as amended.
2
"Commitment" means (a) options, warrants, convertible securities,
exchangeable securities, subscription rights, conversion rights, exchange
rights, or other Contracts that could require a Person to issue any of its
Equity Interests or to sell any Equity Interests it owns in another Person;
(b) any other securities convertible into, exchangeable or exercisable for, or
representing the right to subscribe for any Equity Interest of a Person or
owned by a Person; (c) statutory pre-emptive rights or pre-emptive rights
granted under a Person's organizational documents; and (d) stock appreciation
rights, phantom stock, profit participation, or other similar rights with
respect to a Person.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company and TGFIN's Counsel's Opinion" means the Company and TGFIN's
Counsel's Opinion substantially in the form attached as Exhibit E, to be
executed by the Counsel of the Company and TGFIN and delivered by the Company
to Buyer at Closing.
"Company and TGFIN Indemnitees" means Buyer and each of its respective
members, officers, directors, employees, agents, representatives, controlling
Persons, stockholders, and their Affiliates.
"Company Common Stock" has the meaning set forth in Section 3.1(e).
"Competing Transaction" means any of the following (other than the
transactions contemplated by this Agreement) involving the Company or any of
its Subsidiaries: (i) any merger, consolidation, share exchange, exchange
offer, business combination, recapitalization, liquidation, dissolution or
other similar transaction involving the Company or any of its Subsidiaries;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of Acquired Assets representing substantially all of the Acquired
Assets of the Company; (iii) any tender offer for a majority of 50% or more of
the outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith;
(iv) any person or group other than ▇▇▇ ▇▇▇▇ having acquired beneficial
ownership of 25% or more or such person or group having increased its
beneficial ownership beyond 25% of the outstanding shares of capital stock of
TGFIN; or (v) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing.
"Confidential Information" means any plans or information, including
information of a technological or business nature and all copies, extracts, or
summaries thereof (including all Trade Secrets, Technology, Intellectual
Property, data, marketing plans, summaries, reports, or mailing lists, whether
written or oral or otherwise expressed or stored in any electronic, magnetic,
graphic, optical or other medium) related to the Acquired Assets and/or the
business of the Company or TGFIN prior to the date hereof that is marked
confidential, or bears the marking of like import, or that Company or TGFIN
states to be confidential, or that would reasonably be considered confidential
except to the extent such information: (a) is publicly available other than as
the result of an unauthorized disclosure by Buyer; (b) Buyer can demonstrate
was rightfully known or in a third Person's possession without obligation to
maintain its confidentiality prior to disclosure by the Company or TGFIN to
the third Person, as evidenced by written records made prior to such
disclosure; or (c) is independently developed by a third Person, without the
use of any Confidential Information or other assistance provided by the Buyer.
3
"Consent" means any consent, approval, or waiver.
"Contract" means any contract, agreement, commitment, letter of intent,
memorandum of understanding, promise, obligation, instrument, or document,
whether written or oral.
"Copyrights" means all copyrights in both published works and
unpublished works.
"Damages" means all damages (including incidental and consequential
damages), amounts paid in settlement, losses, obligations, fines, penalties,
costs, expenses (including reasonable fees, disbursements and expenses of
outside attorneys) in connection with any Action.
"Disclosure Schedules" has the meaning set forth in Section 3.1.
"Equity Interest" means (a) with respect to a corporation, any and all
shares of capital stock and any Commitments with respect thereto, (b) with
respect to a partnership, limited liability company, trust or similar Person,
any and all units, interests or other partnership/limited liability company
interests, and any Commitments with respect thereto, and (c) any other direct
or indirect equity ownership or participation in a Person.
"Encumbrance" means any Order, Security Interest, easement, covenant,
community property interest, equitable interest, right of first refusal, or
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"Enforceable" means, with respect to a Contract, that it is the legal,
valid, and binding obligation of the applicable Person enforceable against
such Person in accordance with its terms, except as such enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization, moratorium,
or other Laws relating to or affecting the rights of creditors, and general
principles of equity.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Excluded Assets" means all assets of the Company which are not
expressly assumed under this Agreement, including the assets and Contracts set
forth in Schedule 1.1(c).
"Excluded Liabilities" means any Liability other than those expressly
assumed under this Agreement.
"Financial Statements" has the meaning set forth in Section 3.1(r).
"Governmental Authority" means any United States (federal state or
local) or any foreign government or governmental regulatory or administrative
authority agency or other instrumentality thereof or any commission, court,
tribunal or judicial or arbitral body.
"Indemnification Claim" has the meaning set forth in Section 6.4.
"Indemnitees" means, individually and as a group, the Buyer Indemnitees
and the Company and TGFIN Indemnitees.
4
"Indemnitor" means any Party having any Liability to any Indemnitee
under this Agreement.
"Information Effective Date" means 20 days after the Information
Statement is first mailed to stockholders of TGFIN.
"Information Statement" has the meaning set forth in Section 8.2.
"Intellectual Property" means: (a) all Technology and inventions
(whether patentable or unpatentable and whether or not reduced to practice),
all improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-in-
part, revisions, extensions, and reexaminations thereof; (b) all copyrightable
works, all Copyrights, and all applications, registrations, and renewals in
connection therewith; (c) all mask works and all applications, registrations,
and renewals in connection therewith; (d) all domain names; (e) all Trade
Secrets and Confidential Information relating to the Acquired Assets
(including ideas, research and development, Know-How, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and
cost information, and business and marketing plans and proposals); (f) all
Software (including data and related documentation); (g) all other proprietary
rights; and (h) all copies and tangible embodiments thereof (in whatever form
or medium).
"Know-How" means any and all technical, industrial, commercial,
scientific, confidential or proprietary information, business opportunities,
specifications, test results, analyses and data, inventions, methods,
discoveries, improvements, processes, formulae, mixtures, compositions,
delivery systems, designs, plans, engineering, technical and shop drawings,
techniques, applications, ideas or concepts, whether or not reduced to
practice, including, but not limited to, technology that is or could be the
subject matter of a foreign or domestic patent or patent application, whether
or not reduced to writing in a patent application and all goodwill associated
with any of the foregoing.
"Knowledge" means, with respect to: (a) an individual, that such
individual has Knowledge of a particular fact or other matter if: (i) such
individual is actually aware of such fact or other matter; or (ii) a
reasonably prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a
reasonable investigation concerning the existence of such fact or other
matter; and (b) a Person other than an individual, that such Person has
Knowledge of a particular fact or other matter if (i) any individual who is
serving, or who has at any time served, as a director, or officer of such
Person (or in any similar capacity) or (ii) any employee, officer or director
who is charged with or who has at any time been charged with, responsibility
for a particular area of the Company's or TGFIN's operations (e.g. an employee
in the environmental section with respect to knowledge of environmental
matters), has, or at any time had, Knowledge of such fact or other matter.
"Law" means any law (statutory, common, or otherwise), constitution,
treaty, convention, ordinance, equitable principle, code, rule, regulation,
executive order, or other similar authority enacted, adopted, promulgated, or
applied by any Governmental Authority, each as amended and now in effect.
5
"Liability" means any liability or obligation, whether absolute or
contingent, matured or unmatured, conditional or unconditional, accrued or
unaccrued, liquidated or unliquidated, or due or to become due.
"Material and Adverse Effect" shall mean a material adverse effect
resulting in more than $25,000 in aggregate Liabilities.
"Most Recent Financial Statement" has the meaning set forth in Section
3.1(r).
"Most Recent Fiscal Month End" has the meaning set forth in Section
3.1(r).
"Most Recent Fiscal Year End" has the meaning set forth in Section
3.1(r).
"Nymex" means New York Mercantile Exchange, Inc., a Delaware corporation.
"Nymex Contract" means the Agreement for Software License, Software
Development and Software Support between the Company and Nymex dated December
13, 2002.
"Object Code" means the machine-readable form of any Software.
"Officer's Certificate" means the Officer's Certificate in the form
attached as Exhibit G(1) to be executed by a duly authorized officer of the
Company and delivered by the Company to Buyer at Closing.
"Order" means any order, ruling, decision, verdict, decree, writ,
subpoena, mandate, precept, command, directive, consent, approval, award,
judgment, injunction, or other similar determination or finding by, before or
under any Governmental Authority, arbitrator, or mediator.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Parties" has the meaning set forth in the preamble to this Agreement.
"Permit" means any permit, license, certificate, approval, consent,
notice, waiver, franchise, registration, filing, accreditation, or other
similar authorization required by any Law, Governmental Authority, or
Contract.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a Governmental Authority (or any department,
agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2.2 below.
"Purchase Price Escrow Amount" means the amount set forth in Section
2.3(a).
"Purchase Price Escrow Agent" means the agent appointed pursuant to the
Purchase Price Escrow Agreement.
6
"Purchase Price Escrow Agreement" means the agreement between the
Company, Buyer and the Escrow Agent, substantially in the form attached as
Exhibit C, to be executed and delivered by the parties thereto and delivered
at Closing.
"Secretary's Certificate" means the Secretary's Certificate in the form
attached as Exhibit G(2) to be executed by the Secretary of the Company and
delivered by the Company to Buyer at Closing.
"Security Interest" means with respect to any property or asset, any
mortgage, deed of trust, pledge, hypothecation, security interest,
encumbrance, easement, right of way, encroachment, claim, lien, lease
(including any capitalized lease), charge or other security interest of any
kind, whether voluntarily incurred or arising by operation of Law or
otherwise, including any agreement to give or grant any of the foregoing, any
conditional sale or other title retention agreement and the filing of, or
agreement to give, any financing statement with respect to any assets or
property under the Uniform Commercial Code of any state or comparable Law.
"Software" means computer software or middleware consisting of Object
Code or Source Code. If not otherwise specified in this Agreement, Software
shall include both Object Code and Source Code.
"Source Code" means the human readable form of Software and related
system documentation, including all comments and any procedural code such as
job control language which, when compiled or assembled, becomes the Object
Code of a software program and including all logic diagrams, flow charts and
developer comments and other work product that may be prepared by a developer
concerning the relevant Software.
"Superior Proposal" means any bona fide written proposal to acquire,
directly or indirectly, for consideration consisting of cash and/or
securities, all of the shares of TGFIN Common Stock then outstanding or all or
substantially all of the Acquired Assets of the Company or TGFIN and the
assumption of the Liabilities and obligations of the Company to be followed by
a pro rata distribution of the sale proceeds to stockholders of the Company,
that: (i) provides holders of TGFIN Common Stock with per share consideration
that the Independent Committee determines in good faith, after receipt of
advice of its financial advisor, is more favorable from a financial point of
view than the consideration to be received by holders of TGFIN Common Stock in
the Transaction; (ii) is determined by the TGFIN Board of Directors in its
good faith judgment, after receipt of advice of its advisors and outside legal
counsel, to be likely of being completed (taking into account all legal,
financial, regulatory and other aspects of the proposal, the Person making the
proposal and the expected timing to complete the proposal); (iii) does not, in
the definitive agreement, contain any "due diligence" conditions; and (iv) has
not been obtained by or on behalf of the Company in violation of this
Agreement.
"Tangible Assets" means all tangible personal property set forth in
Schedule 3.1(u).
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs, ad valorem, duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, gains,
7
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, including, without limitation, any tax imposed under Treasury
Regulations Section 1.1502-6, or any similar provision of state, local or
foreign law or any liability for Taxes as a transferee or successor, by
contract or otherwise.
"Tax Return" means any return, declaration, election, estimate, notice,
report, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
"Technology" means any form of knowledge, discoveries, developments,
devices or inventions, whether or not capable of expression in a tangible
medium, and including, without limitation, all algorithms, concepts, data,
designs, documentation, Know-How, methods, techniques, Object Code, Source
Code, procedures, programs, graphics, text, websites, computer hardware,
multimedia files, tools, skills, architecture, flow charts, flow diagrams,
electronic data interfaces, database structures, forms, engines, and mask
works.
"TGFIN/X Business" means the business of the Company with respect to
trading systems software development and support services for facility-based
trading of energy and metals derivatives.
"Threatened" means a demand or statement has been made (orally or in
writing) or a notice has been given (orally or in writing).
"Trade Secrets" means any information, including, but not limited to,
technical or nontechnical data, formulae, patterns, compilations, Software,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans, or lists of actual or potential customers or suppliers
that: (a) have economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from their disclosure or use; and (b)
are the subject of efforts that are reasonable under the circumstances to
maintain their secrecy.
"Transaction Documents" means this Agreement, the Assignment Agreement,
the Assumption Agreement, the Purchase Price Escrow Agreement, the Agreement
Not To Compete and the Agreements to be Executed by Developers.
"Transactions" means the transactions contemplated by the Transaction
Documents.
1.2. Other Definitional Provisions. The word "including" and similar
words when used in this Agreement shall mean "including, without limitation"
unless otherwise specified.
ARTICLE 2.
PURCHASE AND SALE OF ACQUIRED ASSETS
2.1. Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Company,
and the Company agrees to sell, transfer, convey, and deliver to the Buyer,
all of the Acquired Assets at the Closing for the consideration specified
below.
8
2.2. Purchase Price. For and in consideration of the conveyances and
assignments described herein and in addition to the assumption of Liabilities
as set forth in Section 2.4, Buyer agrees to pay to the Company, and the
Company agrees to accept, a total purchase price (the "Purchase Price") equal
to three million dollars ($3,000,000) subject to the terms of this Agreement.
The Purchase Price shall be payable as described in Section 2.3. Buyer and
the Company and TGFIN agree to allocate the Purchase Price in accordance with
Code Section 1060 and shall agree on the contents of the Form 8594 to be filed
by Buyer, the Company and TGFIN in connection with the Transaction
contemplated by this Agreement. For all Tax purposes, Buyer, the Company and
TGFIN agree to report the Transaction contemplated in this Agreement in a
manner consistent with the terms of this Agreement, and neither of them will
take any position inconsistent therewith in any Tax Return, in any refund
claim, Tax related proceeding or otherwise.
2.3. Payment of Purchase Price. The Purchase Price shall be payable to
the Company at the Closing as follows:
(a) Buyer shall deliver the amount of one hundred thousand dollars
($100,000) (the "Purchase Price Escrow Amount") to the Purchase Price
Escrow Agent by wire transfer of immediately available funds to an
account identified in writing by the Purchase Price Escrow Agent to
Buyer not less than three Business Days prior to the Closing Date, said
amount to be held by the Purchase Price Escrow Agent for a period of one
(1) year after the Closing Date in accordance with the terms and
conditions of the Purchase Price Escrow Agreement.
(b) The balance of the Purchase Price in the amount of two million
nine hundred thousand dollars ($2,900,000), shall be delivered by Buyer
by wire transfer of immediately available funds to an account which will
be identified by the Company to Buyer not less than three Business Days
prior to the Closing Date.
2.4. Assumption of Liabilities. At the Closing, Buyer shall assume only
the Liabilities and obligations of the Company with respect to the Acquired
Assets arising from and accruing exclusively with respect to the period after
the Closing Date. Without limiting the generality of the foregoing, Buyer
shall not assume, and the Company shall continue to bear sole responsibility
for, any and all actions, causes of actions and claims to recover under any
one or more of Sections 544 through 550 and 553 of the United States
Bankruptcy Code or under any corresponding provision of state law.
2.5. The Closing. The closing of the Transactions (the "Closing") shall
take place at the offices of Buyer on the second Business Day following the
satisfaction or waiver of all conditions set forth in Article 5, but in any
event prior to March 31, 2003, unless another time, date or place is mutually
agreed upon in writing by the Company and Buyer. The date of the Closing is
referred to as the "Closing Date".
9
2.6. Deliveries at the Closing. At the Closing, (i) the Company will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 5.2 below; (ii) the Buyer will deliver to the Company
the various certificates, instruments, and documents referred to in Section
5.1 below; (iii) the Company will execute and deliver to the Buyer the
following documents, the form of which the parties agree to negotiate in good
faith, including the Assignment Agreement, the Purchase Price Escrow
Agreement, the Agreement Not To Compete (executed by TGFIN and the Company),
and will deliver to Buyer executed copies of the Company and TGFIN's Counsel's
Opinion, the Agreements to be Executed by Developers, the Officer's
Certificate and the Secretary's Certificate and such other instruments of
sale, transfer, conveyance, and assignment as the Buyer and its counsel
reasonably request; (iv) the Buyer will execute and deliver to the Company the
following documents, the form of which the parties agree to negotiate in good
faith, including the Assumption Agreement and the Purchase Price Escrow
Agreement (executed by the Escrow Agent and Buyer) and such other instruments
of assumption as the Company and its counsel reasonably request; and (v) the
Buyer will deliver to the Company the consideration specified in Section
2.3(b) above.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Company and TGFIN. The
Company and TGFIN represent and warrant to Buyer that the statements
contained in this Section 3.1 are correct and complete as of the date of this
Agreement, except as set forth in the disclosure schedules to this Agreement
("Disclosure Schedules").
(a) Status of the Company. The Company is a corporation duly
created, formed or organized, validly existing, and in good standing
under the Laws of the jurisdiction of its creation, formation, or
organization. There is no pending or, to the Company and TGFIN's
Knowledge, Threatened, Action for the dissolution, liquidation,
insolvency, or reorganization of the Company.
(b) Power and Authority; Enforceability. The Company has full
corporate and other power and authority to execute and deliver each
Transaction Document, to perform its obligations thereunder and to
consummate the Transactions. TGFIN has full corporate power and other
authority to execute and deliver each Transaction Document to which it
is a party, perform its obligations thereunder and consummate the
Transactions. The execution, delivery and performance of this Agreement
and of the other Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action of the respective boards of directors
of the Company and TGFIN and by any other necessary corporate or
shareholder actions of the Company and TGFIN (none of which actions has
been modified or rescinded and all of which actions are in full force
and effect); provided that as to TGFIN, such action will not be
effective until the Information Effective Date. This Agreement
constitutes, and upon execution and delivery each other Transaction
Document will constitute, a valid and binding agreement and obligation
of the Company and TGFIN, enforceable in accordance with its respective
terms. Except as specified in Schedule 3.1(b), the execution, delivery
and performance by the Company and TGFIN of this Agreement and of the
10
other Transaction Documents will not require the Consent, approval or
authorization of any Person or Governmental Authority.
(c) No Violation. The execution and the delivery of the
Transaction Documents by the Company and, where applicable, TGFIN, and
the performance and consummation of the Transactions by the Company and,
where applicable, TGFIN will not: (i) Breach any Law or Order to which
the Company or TGFIN is subject or any provision of their respective
organizational documents; (ii) Breach any Contract, Order, or Permit to
which the Company or TGFIN is a party or by which the Company or TGFIN
is bound or to which any of such Acquired Assets is subject; or (iii)
require any Consent; except for the mailing of the Information Statement
and the consummation of the Transactions cannot occur until the
Information Effective Date, except where such Breach or failure to
obtain such Consent will not have a Material Adverse Effect on the
Acquired Assets, the Company or the business of the Company as currently
conducted and will not prevent or delay the consummation of the
Transactions or restrict the use by Buyer of the Acquired Assets as
contemplated thereby. To its Knowledge, the Company has not Breached
any Contract by which any of the Acquired Assets are subject except
where such Breach of Contract will not have a Material Adverse Effect on
the Acquired Assets, the Company or the business of the Company as
currently conducted and will not prevent or delay the consummation of
the Transactions or restrict the use by Buyer of the Acquired Assets as
contemplated thereby.
(d) Brokers' Fees. Neither the Company nor TGFIN has any Liability
to pay any compensation to any broker, finder, or agent with respect to
the Transactions for which Buyer could become directly or indirectly
Liable.
(e) Shares; Shareholder Information. The Company's authorized
capital stock consists of one thousand (1,000) shares of common stock,
.002 par value per share ("Company Common Stock"), of which one thousand
(1,000) shares are issued and outstanding. TGFIN owns (beneficially and
of record) all shares of Company Common Stock.
(f) Title to Acquired Assets. Except as set forth in Schedule
3.1(f), the Company has good, marketable, and indefeasible title to, or
a valid leasehold interest in the Acquired Assets, free and clear of all
Encumbrances and restrictions on transfer or assignment.
(g) Sufficiency of Acquired Assets. The Acquired Assets include
all assets necessary for or used in the operation of the TGFIN/X
Business of the Company.
(h) Solvency. The Company is not rendered insolvent by the
execution and performance of this Agreement. In addition, after
execution and delivery of this Agreement, the Company will be able to
pay its debts as they become due, the Company's property does not and
will not constitute unreasonably small capital and will not have
insufficient capital with which to conduct its present or proposed
business and, taking into account pending and Threatened Actions, final
judgments against the Company are not reasonably anticipated to be
rendered at a time when, or in amounts such that, the Company will be
11
unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum probable amount of such judgments
in any such actions and the earliest reasonable time at which such
judgments might be rendered). The cash available to the Company, after
taking into account all other anticipated uses of its cash, will be
sufficient to pay all such known or reasonably anticipated Orders
promptly in accordance with their terms. As used in this Section,
"insolvent" means that the present fair saleable value of the Company's
assets does not and will not exceed its debts and other Liabilities to
the Knowledge of the Company and TGFIN.
(i) Litigation. Neither the Company, TGFIN nor any shareholders,
directors or employees of either the Company or TGFIN are subject to any
outstanding Order related to the Acquired Assets and none of the
Acquired Assets are subject to any outstanding Order. Neither the
Company nor TGFIN nor any shareholders, directors or employees is a
party to any Action with respect to the Acquired Assets and, to the
Company and TGFIN's Knowledge, no Action is Threatened with respect to
the Acquired Assets.
(j) Benefit Plans.
(i) Except as set forth on Schedule 3.1(j)(i), the Company
does not maintain (or ever has maintained), contribute to (or ever
has contributed to), or ever has had any obligation to contribute
to, any employee benefit plan (as defined in Section 3(3) of
ERISA), fringe benefit plan or other bonus, incentive-
compensation, deferred-compensation, stock-option, stock-
appreciation-right, stock-bonus, severance, retirement, pension,
health, insurance, or other similar plan, policy, program,
agreement or arrangement of any nature, whether formal or
informal, written or unwritten.
(ii) Prior to the Closing Date the requirements of COBRA
and New York State law (with regard to conversion and continuation
of benefits, including, but not limited to Section 3221 of New
York State Insurance Law) have been met with respect to each such
employee benefit plan of the Company which is an employee welfare
benefit plan (as defined in Section 3(1) of ERISA).
(iii) The Company has provided the Buyer with a complete
list, as set forth on Schedule 3.1(j)(iii), of all former
employees of the Company who are currently receiving, or eligible
to receive, any benefits under COBRA or New York State law (with
regard to conversion and continuation of benefits, including, but
not limited to Section 3221 of New York State Insurance Law).
(iv) The Company does not maintain (or ever has
maintained), contribute to (or ever has contributed to), or ever
has been required to contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA), policy, program,
agreement or arrangement of any nature, whether formal or
informal, written or unwritten, providing medical, health, or life
insurance or other welfare type benefits for current or future
retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).
12
(v) The Company does not contribute to, ever has
contributed to, or ever has been required to contribute to any
multiemployer plan (as that term is defined in Section 3(37) of
ERISA) or has any liability (including withdrawal liability as
defined in ERISA Section 4201) under any multiemployer plan (as that
term is defined in Section 3(37) of ERISA)
(vi) The Company shall, with respect to employees or former
employees, as appropriate, listed on Schedules 3.1(j)(iii),
3.1(k)(i) and 3.1(k)(ii), be responsible after the Closing Date
for welfare benefits or claims (whether submitted before or after
the Closing Date), which will, by reason of events which took
place prior to the Closing Date, become payable on or after the
Closing Date, under any life insurance policy, accidental death
and dismemberment policy or health program (including medical and
dental benefits). In the case of health benefits, the event
referred to in the immediately preceding sentence is the provision
of the service for which the reimbursement or payment is sought by
the Employee.
(vii) The Company shall, with respect to former employees of
the Company listed on Schedule 3.1(j)(iii), be responsible after
the Closing Date for Liabilities and obligations arising under
COBRA or New York State law (with regard to conversion and
continuation of benefits, including, but not limited to Section
3221 of New York State Insurance Law) with respect to any employee
or "qualified beneficiary" who has had a "qualifying event"
(within the meaning of COBRA) or is otherwise subject to a
termination of group coverage (within the meaning of New York
State law, including, but not limited to, Section 3221 of New York
State Insurance Law) on or before the Closing Date, and has
previously elected to (or is eligible to elect to) receive COBRA
coverage, or any other continuation of benefits coverage or
conversion privilege (within the meaning of New York State law,
including, but not limited to, Section 3221 of New York State
Insurance Law) as of the Closing Date. The Company shall provide
the Buyer with documentation sufficient to establish its
compliance with the provisions of COBRA or New York State law
(with regard to conversion and continuation of benefits,
including, but not limited to Section 3221 of New York State
Insurance Law).
(k) Employees.
(i) As of the date of this Agreement, the Company has no
employees other than as set forth on Schedule 3.1(k)(i).
(ii) Schedule 3.1(k)(ii) sets forth each employee Buyer has
advised the Company it intends to offer employment or a consulting
arrangement as of the Closing Date.
(iii) Intentionally Omitted.
13
(iv) To the Knowledge of the Company, no executive, key
employee, or group of employees has any plans to terminate
employment with the Company. The Company is not a party to or
bound by any collective bargaining agreement, nor has either of
them experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. The Company
has not committed any unfair labor practice. The Company has no
Knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to
employees of the Company.
(l) No Subsidiaries. The Company does not own an Equity Interest
in any Person.
(m) Legal Compliance. The Company, its predecessors and each of
its employees have, to the Knowledge of the Company and TGFIN, complied
with all Laws applicable to the Acquired Assets, and no Action is
pending or Threatened against the Company alleging any failure to so
comply.
(n) Tax Matters. The Company has timely filed all Tax Returns
required to be filed, and has paid in full all Taxes (regardless of
whether disclosed on a Tax Return), which have become due. All such Tax
Returns are true, correct and complete, and the Company is not required
to pay any other Taxes except as shown on such Tax Returns. The amount
established as a liability for income and other Taxes in the Financial
Statements is sufficient for all accrued and unpaid Taxes of the
Company, whether or not disputed, during or applicable to the periods
ended on the date of such Financial Statements and all years and periods
prior thereto for which the Company may be liable, and the Company will
continue to make adequate provision for such Taxes on the Company's
books and records prior to the Closing Date. The Federal income tax
returns of the Company has not been examined by the Internal Revenue
Service. The Company is not a party to any pending action or
proceeding, and there is no action or proceeding threatened by any
Governmental Authority against the Company, for assessment or collection
of Taxes; and no unresolved claim for assessment or collection of Taxes
has been asserted against the Company. The Company shall pay all Tax
assessments or other Tax Liabilities when due with respect to the
ownership, business or operations of the Acquired Assets prior to the
Closing Date. There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any Tax Return of the
Company for any period. The Company has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid
and owing to any employee, independent contractor, creditor,
stockholder, or other third party. There are no liens on any of the
Acquired Assets that arose in connection with any failure (or alleged
failure) to pay any Tax.
(o) Real Property. The Company does not own any real property.
Schedule 3.1(o) lists and describes briefly all real property leased or
subleased by the Company and the Company has delivered to Buyer correct
and complete copies of the leases and subleases listed therein.
14
(p) Intellectual Property.
(i) Schedule 3(p)(i)(A) contains a complete and accurate
list of all Intellectual Property: (A) which forms part of the
Acquired Assets; and (B) includes all Intellectual Property
currently licensed or otherwise provided to Buyer pursuant to the
Nymex Contract as of the date of this Agreement and required for
Buyer to continue to use such Intellectual Property after the
consummation of the Transactions. Schedule 3.1(p)(i)(B) lists all
originators, developers or programmers, contractors or agents, who
have written any portion of or otherwise contributed to the
development of any Intellectual Property constituting part of the
Acquired Assets (collectively, the "Developers"), each of whom
have executed, or will execute prior to Closing, Agreements to be
Executed by Developers, Confidential Information, Invention
Assignment and Non-Competition Agreements in the form attached
hereto as Exhibit F (executed copies of which have been supplied
to Buyer), and none of whom have retained any right, title or
interest in and to such Intellectual Property. Schedule
3.1(p)(i)(C) contains a complete and accurate list of all
Intellectual Property that is proprietary to any third Person and
that constitutes part of the Acquired Assets (the "Preexisting
IP"). Schedule 3.1(p)(i)(D) contains a complete and accurate list
of all such Preexisting IP that has been incorporated into any
Intellectual Property that constitutes part of the Acquired Assets
and indicates what ownership interest, if any, any third Person
proprietor of such Preexisting IP has in and to such Intellectual
Property. The Acquired Assets include the right by Buyer to use
the Preexisting IP as currently utilized by Buyer pursuant to the
Nymex Contract after the consummation of the Transactions, and to
sublicense to others the right to use, any such Preexisting IP as
incorporated into Intellectual Property constituting part of the
Acquired Assets.
(ii) With respect to each Trade Secret or element of Know-
How constituting part of the Acquired Assets, if the documentation
relating to such Trade Secret or element of Know-How is not
current, accurate, or sufficient in detail and content to identify
it or explain it or to allow its full use without reliance on the
knowledge or memory of any individual, Company has taken all
necessary steps to update, correct, or supplement the
documentation to allow such full use, including making available,
at Company's expense, any individuals or documents necessary for
such purpose. With respect to each Trade Secret or element of
Know-How constituting part of the Acquired Assets, the Company has
taken reasonable precautions to protect the secrecy of such Trade
Secret or Know-How, and its confidentiality and value. No such
Trade Secret or element of Know-How is part of the public
knowledge or literature, or has been used, divulged, or
appropriated either for the benefit of any third Person or to the
Company's detriment. No such Trade Secret or Know-How is subject
to any adverse claim nor has any adverse claim been Threatened
with respect to any such Trade Secret or Know-How.
(iii) The Acquired Assets include the right to use pursuant
to a valid Assumed Contract all Intellectual Property proprietary
to any third Person that is necessary for the operation and use of
the Acquired Assets as currently utilized by Buyer pursuant to the
Nymex Contract after the consummation of the Transactions. Each
15
item of Intellectual Property constituting part of the Acquired
Assets will be owned or available for use by Buyer on terms and
conditions identical to those applicable to the Company (excluding
terms and conditions that vary with the number of users of the
relevant item and similar variances) immediately subsequent to the
date hereof. The Company has taken all reasonably prudent action
necessary to maintain and protect each item of Intellectual
Property constituting part of the Acquired Assets.
(iv) The Company has delivered to Buyer correct and
complete copies of all written documentation evidencing ownership
of each item of Intellectual Property constituting part of the
Acquired Assets.
(v) With respect to each item of Intellectual Property
constituting part of the Acquired Assets:
(A) pursuant to the Transaction Documents Buyer is
acquiring all right, title, and interest in and to the item,
free and clear of any Encumbrance;
(B) the item is not subject to any outstanding Order;
(C) no Action is pending or, to the Company's
Knowledge, Threatened which challenges the Enforceability,
use, or ownership of the item;
(D) neither the Company nor any predecessor in interest
has ever agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other
conflict with respect to the item.
(vi) The Company's use of the Acquired Assets has not
interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any other Person's rights in and to any
Intellectual Property. The Company has never received any notice
alleging that its use of the Assets infringed, misappropriated, or
violated any other Person's rights in and to any Intellectual
Property (for example, any claim that the Company or TGFIN must
license or refrain from using any other Person's Intellectual
Property). After the date hereof, neither the Company nor TGFIN
will have any right, title or interest in or to any Intellectual
Property that interferes or would be likely to interfere with
Buyer's use of any of the Intellectual Property constituting part
of the Acquired Assets and Buyer will not interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of the Company or TGFIN after the
date hereof as a result of the use of the Acquired Assets. To the
Company or TGFIN's Knowledge, no other Person has interfered with,
infringed upon, misappropriated, or otherwise come into conflict
with the Company's right in and to any Intellectual Property
constituting part of the Acquired Assets.
(vii) The Company has no Knowledge of any new products,
inventions, procedures, or methods of manufacturing or processing
that any competitors or other Person have developed which
16
reasonably could be expected to supersede or make obsolete any
Intellectual Property constituting part of the Acquired Assets.
(q) Assumed Contracts. Schedule 1.1(b) lists all Assumed Contracts
and with respect to each such Assumed Contract:
(i) to the Knowledge of the Company and TGFIN, the Assumed
Contracts are Enforceable;
(ii) to the Knowledge of the Company and TGFIN, the Assumed
Contracts will continue to be Enforceable on identical terms
(other than with respect to terms that vary with the number of
users or similar variances) following the execution and delivery
of this Agreement (except that certain Assumed Contracts contain
express limits on assignability, which Assumed Contracts are
specifically identified on Schedule 3.1(q)(ii));
(iii) no party is in Breach, and no event has occurred
which, with notice or lapse of time, would constitute a Breach
under an Assumed Contract; no party to the Assumed Contracts has
repudiated, revoked, cancelled or limited any provision of the
Assumed Contracts;
(iv) the Company has provided to Buyer a correct and
complete copy of each Assumed Contract (and all modifications and
amendments thereto) prior to the execution of this Agreement; and
(v) the Assumed Contracts are all of the contracts,
agreements, leases, Commitments, arrangements and understandings
(both written and oral) relating to the Acquired Assets or the
TGFIN/X Business.
(r) Financial Statements. Attached hereto as Schedule 3.1(r) are
the following financial statements (collectively the "Financial
Statements"): (i) audited consolidated and unaudited consolidating
balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended December 31,
2000, and December 31, 2001 (the "Most Recent Fiscal Year End") for
TGFIN and the Company; and (ii) unaudited consolidated balance sheets
and statements of income, changes in stockholders' equity, and cash flow
(the "Most Recent Financial Statements") as of and for the nine months
ended September 30, 2002 (the "Most Recent Fiscal Month End") for TGFIN
and the Company. The Financial Statements (including the notes thereto)
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the financial
condition of TGFIN and the Company as of such dates and the results of
operations of TGFIN and the Company for such periods, are correct and
complete, and are consistent with the books and records of TGFIN and the
Company (which books and records are correct and complete in all
material respects); provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and lack footnotes and other
presentation items.
17
(s) Events Subsequent to Most Recent Fiscal Year End. Since the
Most Recent Fiscal Year End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of any of the Company. Without limiting
the generality of the foregoing, since that date (except as provided in
Schedule 3.1(s)):
(i) the Company has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than for
a fair consideration in the Ordinary Course of Business;
(ii) the Company has not entered into any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) either involving more than
$25,000 or outside the Ordinary Course of Business;
(iii) no party (including the Company) has accelerated,
terminated, modified, or cancelled any agreement, contract, lease,
or license (or series of related agreements, contracts, leases,
and licenses) involving more than $25,000 to which the Company is
a party or is bound;
(iv) no Security Interest has been placed upon any of the
Company's assets, tangible or intangible;
(v) the Company has not made any capital expenditure (or
series of related capital expenditures) either involving more than
$25,000 or outside the Ordinary Course of Business;
(vi) the Company has not made any capital investment in,
any loan to, or any acquisition of the securities or assets of,
any other Person (or series of related capital investments, loans,
and acquisitions) either involving more than $10,000 or outside
the Ordinary Course of Business;
(vii) the Company has not issued any note, bond, or other
debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation
either involving more than $10,000 singly or $15,000 in the
aggregate;
(viii) the Company has not delayed or postponed the payment
of accounts payable and other Liabilities outside the Ordinary
Course of Business;
(ix) the Company has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and
claims) either involving more than $10,000 or outside the Ordinary
Course of Business;
(x) the Company has not granted any exclusive license or
sublicense of any rights under or with respect to any Intellectual
Property;
(xi) there has been no change made or authorized in the
charter or bylaws of the Company;
18
(xii) the Company has not issued, sold, or otherwise
disposed of any of its capital stock, or granted any options,
warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(xiii) the Company has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xiv) the Company has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property;
(xv) the Company has not made any loan to, or entered into
any other transaction with, any of its directors, officers, and
employees outside the Ordinary Course of Business;
(xvi) the Company has not entered into any employment
contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement
outside the Ordinary Course of Business;
(xvii) the Company has not granted any increase in the base
compensation of any of its directors, officers, and employees
outside the Ordinary Course of Business;
(xviii) there has not been any other material
occurrence, event, incident, action, failure to act, or
transaction outside the Ordinary Course of Business involving the
Company; and
(xix) the Company has not committed to any of the
foregoing.
(t) Undisclosed Liabilities. The Company has no Liability (and
there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any
of them giving rise to any Liability), except for: (i) Liabilities set
forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto); and (ii) Liabilities which have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business (none of
which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law).
(u) Tangible Assets. Schedule 3.1(u) sets forth a list of all of
the tangible personal property of the Company to be acquired by Buyer
pursuant to this Agreement. Each such Tangible Asset is free from
defects (patent and latent), has been maintained in accordance with
normal industry practice, is in good operating condition and repair
(subject to normal wear and tear), and is suitable for the purposes for
which it presently is used and presently is proposed to be used.
(v) Intentionally Omitted.
19
(w) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
(x) Accuracy of Information Furnished; Reliance on Representations
and Warranties. No representation, statement, or information contained
in this Agreement (including the Exhibits hereto), or any Contract or
document executed in connection herewith or delivered pursuant hereto or
thereto or made available or furnished to Buyer or its representatives
by the Company contains or will contain any untrue statement of a
material fact or omits or will omit any material fact necessary to make
the information contained therein not misleading. The Company has
provided Buyer with correct and complete copies of all documents listed
or described in the Exhibits and Schedules hereto.
3.2. Representations and Warranties of Buyer. Buyer represents and
warrants to the Company that the statements contained in this Section 3.2 are
correct and complete as of the date of this Agreement.
(a) Status of Buyer. Buyer is a limited liability company duly
organized, validly existing and in good standing under the Laws of the
state of Delaware. There is no pending or, to Buyer's Knowledge,
Threatened, Action for the dissolution, liquidation, insolvency, or
rehabilitation of Buyer.
(b) Power and Authority; Enforceability. Buyer has full corporate
and other power and authority to execute and deliver each Transaction
Document to which it is party, to perform its obligations thereunder and
consummate the Transactions. The execution, delivery and performance of
this Agreement and of the other Transaction Documents to which it is a
party, and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary action of
Buyer by any other necessary corporate or member action (none of which
actions has been modified or rescinded and all of which actions are in
full force and effect). This Agreement constitutes, and upon execution
and delivery each other Transaction Document will constitute, a valid
and binding agreement and obligation of Buyer, enforceable in accordance
with its respective terms.
(c) No Violation. The execution and delivery of the Transaction
Documents to which Buyer is a party by Buyer and the performance and
consummation of the Transactions by Buyer will not: (i) Breach any Law
or Order to which Buyer is subject or any provision of its
organizational documents; (ii) Breach any Contract, Order, or Permit to
which Buyer is a party or by which it is bound or to which any of its
Acquired Assets is subject; or (iii) require any Consent.
(d) Brokers' Fees. Buyer has no Liability to pay any compensation
to any broker, finder, or agent with respect to the Transactions for
which either the Company or TGFIN could become Liable.
20
ARTICLE 4.
COVENANTS
4.1. The Company and TGFIN Pre-Closing Covenants. The Company and
TGFIN agree that, except as otherwise agreed in writing by Buyer, between the
execution of this Agreement and the Closing:
(a) General. The Company and TGFIN will use reasonable best
efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the Transactions
(including satisfaction, but not waiver, of the closing conditions set
forth in Article 5 below).
(b) Notices and Consents. The Company and TGFIN will give any
notices to third parties, and the Company and TGFIN will use reasonable
best efforts to obtain any necessary Consents to effect the
Transactions.
(c) Operation of Business. The Company will not engage in any
practice, take any action, or enter into any transaction outside the
Ordinary Course of Business.
(d) Preservation of Acquired Assets. Unless otherwise agreed by
Buyer, the Company will keep the Acquired Assets and its business
substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers, and employees.
(e) Full Access. The Company will permit representatives of the
Buyer to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company to
all premises, properties, personnel, books, records (including Tax
records), contracts, and documents of or pertaining to the Company.
(f) Notice of Developments. The Company and TGFIN will give prompt
written notice to Buyer of any material adverse development causing a
breach of any of its own representations and warranties in this
Agreement. No disclosure by the Company or TGFIN pursuant to this
Section 4.1.(f), however, shall be deemed to amend or supplement any
disclosure schedules hereto or to prevent or cure any material
misrepresentation, breach of warranty, or breach of covenant.
(g) Bulk Sales. Take all necessary action to provide for the
payment of any applicable state sales, transfer or use taxes and to
comply with all applicable bulk transfer and similar laws in connection
with the Transactions.
(h) Hiring. The Company shall (i) not hire any Person; (ii) not
increase or otherwise change the rate or nature of the compensation
(including wages, salaries and bonuses) that is paid or payable to any
Person employed by the Company, except in the Ordinary Course of
Business consistent with past practices, but in no event may any such
increase exceed 4% of the base salary of any such Person paid during the
year ended December 31, 2002; (iii) not enter into or renew any
employment or consulting agreement or other contract or arrangement with
respect to the performance of personal services for the Company or (iv)
agree or commit to do any of the foregoing;
21
(i) New Contracts. Except with Buyer's prior written consent, such
consent not to be unreasonably withheld or delayed, the Company shall
not enter into, change, amend, terminate or otherwise modify or agree or
commit to change, amend, terminate or modify any Contract relating to
any Acquired Assets in any material respect except for those Contracts
that terminate or expire prior to the Closing Date by their own terms.
(j) Approval of Transaction. TGFIN as sole shareholder of the
Company, shall duly authorize and vote its shares to approve the
Transaction.
(k) Accounts Receivable. The Company shall not, without the prior
consent of Buyer, waive or modify any Accounts Receivable set forth on
Schedule 1.1(a).
(l) Compliance with Laws. The Company and TGFIN will fully comply
with all Laws, including Federal and State securities laws.
4.2. Further Covenants. The Company, TGFIN and Buyer further agree as
follows with respect to the period following the date hereof:
(a) General. In case at any time after the date hereof any further
action is necessary (in Buyer's reasonable good faith opinion) to carry
out the purposes of this Agreement, each Party will take such further
action (including the execution and delivery of such further instruments
and documents) as any other Party may reasonably request, all at the
requesting Party's sole cost and expense (unless the requesting Party is
entitled to indemnification therefor under Article 6). The Company
acknowledges and agrees that after the Closing Buyer will be entitled to
possession of all documents, books, records, agreements, and financial
data of any sort relating to the Acquired Assets.
(b) Confidentiality. The Buyer will treat and hold as such all of
the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver
promptly to Company or TGFIN or destroy, at the request and option of
Company or TGFIN, all tangible embodiments (and all copies) of the
Confidential Information which are in the possession of the Buyer. If
the Buyer is requested or required (by oral question or request for
information or documents in any Action) to disclose any Confidential
Information, that the Buyer will notify Company or TGFIN promptly of the
request or requirement so that Company or TGFIN may seek an appropriate
protective Order or waive compliance with this Section. If, in the
absence of a protective Order or the receipt of a waiver hereunder, the
Buyer is, on the written advice of counsel, compelled to disclose any
Confidential Information to any Governmental Authority, arbitrator, or
mediator or else stand Liable for contempt, the Buyer, as applicable may
disclose the Confidential Information to the Governmental Authority,
arbitrator, or mediator; provided, however; that the Buyer so disclosing
will use its best efforts to obtain, at the reasonable request of
Company or TGFIN and at Company's or TGFIN's expense, an Order or other
assurance that confidential treatment will be accorded to such portion
of the Confidential Information required to be disclosed as Company or
TGFIN will designate.
22
(c) Intellectual Property Matters. If Buyer shall desire to file
any document, whether related to a patent, Copyright or other similar
application necessary or desirable to perfect the title in and to any
Acquired Assets, the Company will, at any time upon request, execute and
deliver any and all papers, make all rightful oaths and do all lawful
acts requisite for the filing of such patent, Copyrights or other
similar application, including divisions, continuations, reexaminations,
and reissues thereof, without further compensation, but at Buyer's
expense. The Company will, at any time upon request, communicate to
Buyer all facts relating to the Acquired Assets, including any patents,
Copyrights or the file history thereof, as may be known to the Company,
and testify as to the same in any interference or other litigation when
requested so to do, without further compensation but at Buyer's expense.
(d) Taxes. The Company and TGFIN shall be liable for and shall
hold Buyer harmless against any applicable real property transfer or
gains, sales, use, transfer, value added, stock transfer, and stamp
taxes, any transfer, recording, registration, and other fees, and any
similar Taxes which become payable in connection with the Transaction
contemplated by this Agreement. The Company and TGFIN, after review and
consent by Buyer, shall file such applications and documents as shall
permit any such Tax to be assessed and paid on or prior to the Closing
Date in accordance with any pre-sale filing procedure. Buyer shall
execute and deliver all instruments and certificates necessary to enable
the Company and TGFIN to comply with the foregoing. Buyer agrees to
file, and Company and TGFIN agree to cooperate in filing, any applicable
notices or other documents necessary to comply timely with the
provisions of Section 1141(c) of the New York State Tax Law and the
regulations issued thereunder, including, but not limited to, any
applicable provisions relating to notification of the New York State Tax
Commission prior to a bulk sale of business assets.
(e) Competing Transactions. Nothing contained in this Agreement
shall prohibit the Company from, prior to the Information Effective
Date: (a) furnishing information to, or entering into discussions or
negotiations with, any person that makes an unsolicited written, bona
fide proposal to the Company with respect to a Competing Transaction
which could reasonably be expected to result in a Superior Proposal, if:
(i) the failure to take such action would be inconsistent with the
Board's fiduciary duties to the Company's stockholders under applicable
law; and (ii) prior to furnishing such information to, or entering into
discussions or negotiations with, such person, the Company (x) provides
reasonable notice to Buyer to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such
person and (y) receives from such person a fully executed
confidentiality agreement; (b) complying with Rule 14d-9 or Rule 14e-2
promulgated under the Securities Exchange Act of 1934 with regard to a
tender or exchange offer; or (c) failing to make or withdrawing or
modifying its approval or recommending an unsolicited, bona fide
proposal with respect to a Competing Transaction which could reasonably
be expected to result in a Superior Proposal, following the receipt of
such a proposal, if the failure to take such action would be
inconsistent with the Board's fiduciary duties to the Company's
stockholders under applicable law.
23
(f) No Action. The Company and TGFIN will not bring any Action
claiming any use by Buyer of the Acquired Assets as contemplated by the
Transactions infringes or violates any of the Intellectual Property
comprised within the Excluded Assets.
ARTICLE 5.
CONDITIONS TO CLOSING
5.1. Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the Transactions are subject to the satisfaction or fulfillment at
or prior to Closing of the following conditions, any of which may be waived in
whole or in part by Buyer in writing: (i) all representations and warranties
of the Company contained in this Agreement being true and correct in all
material respects at and as of the Closing; (ii) the Company performing and
complying in all material respects with all the covenants, obligations and
agreements required by this Agreement to be performed or complied with at or
prior to the Closing, except that representations and warranties that are
confined to a specific date shall speak only as of such date; (iii) receipt of
any requisite approvals from any applicable Governmental Authority (or written
waiver thereof), and there being no Law or injunction making illegal or
otherwise prohibiting or restraining the consummation of the transactions
contemplated by this Agreement; (iv) the Company executing and delivering to
Buyer, or causing to be executed and delivered to Buyer, such bills of sale,
leases, assignments and other instruments of transfer as Buyer may reasonably
require to transfer title to the Acquired Assets free and clear of all
Encumbrances, together with all Transaction Documents; (v) the Company
delivering to Buyer the Officer's Certificate, executed by a duly authorized
officer of the Company, that certifies that the conditions set forth in
Section 5.1 are fully satisfied as of Closing; (vi) the Company delivering to
Buyer the Secretary's Certificate, executed by a duly authorized secretary or
assistant secretary of the Company, with corporate and authority documents
attached as exhibits to each certificate; (vii) all required waivers, Consents
and approvals shall have been obtained and delivered, each on terms reasonably
satisfactory to Buyer, including: (A) receipt by Buyer of satisfactory written
evidence from CA that either: (x) CA has consented to the assignment of the
Independent Software Vendor Agreement between CA and the Company, dated March
18, 2002 ("CA Agreement") to Buyer; or (y) that CA shall provide the services
and rights theretofore provided to the Company under the CA Agreement to Buyer
or Nymex on such terms as shall be satisfactory to Buyer, from and after
Closing; and (B) written consent to the assignment of the Software License,
Development and Service Agreement between the Company and Exchange Cubed LLC
dated as of December 13, 2001; in form and substance satisfactory to Buyer;
(viii) the Company and TGFIN having received the requisite shareholder
approval of this Agreement; (ix) the Buyer shall have received from the
Counsel to the Company and TGFIN the Company and TGFIN's Counsel's Opinion,
addressed to Buyer and dated as of the Closing Date; (x) the Company having
delivered to Buyer documentary evidence, in form and substance satisfactory to
Buyer, of the termination of: (A) the License Agreement between the Company
and Vortex Trading LLC dated as of February 28, 2001; and (B) the License
Agreement between the Company and Civilian Trading Company Inc. dated as of
October 18, 2002; and (C); (xi) each of ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇ (collectively, "Retained Employees")
having executed and delivered to Buyer employment agreements or comparable
consulting agreements with Nymex, dated as of the Closing Date, each in a form
24
reasonably agreed between the Retained Employees and Nymex; and (xii) all
actions, proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement, and all other legal matters
required for such transactions, shall have been reasonably satisfactory to
Buyer prior to Closing.
5.2. Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or fulfillment at or prior to the Closing of the
following conditions, any of which may be waived in whole or in part by the
Company in writing: (i) all representations and warranties of Buyer contained
in this Agreement being true and correct in all material respects at and as of
the Closing; (ii) Buyer performing and complying in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with at or prior to the Closing; (iii) there being no Law or
injunction issued by a court of competent jurisdiction making illegal or
otherwise prohibiting or restraining the consummation of the transactions
contemplated by this Agreement; (iv) Buyer having paid the Purchase Price in
accordance with Article 2 hereof; (v) Buyer delivering to the Company an
officer's certificate, duly executed by an authorized officer of Buyer, that
certifies that the conditions set forth in Section 5.2 are fully satisfied;
(vi) Buyer delivering to the Company a secretary's or assistant secretary's
certificate, duly executed by such authorized officer, with corporate and
authority documents attached as exhibits to each certificate; (vii) there
being no Law or injunction making illegal or otherwise prohibiting or
restraining the consummation of the transactions contemplated by this
Agreement; (viii) Buyer executing and delivering the Assumption Agreement and
Purchase Price Escrow Agreement; and (ix) all actions, proceedings,
instruments and documents required to carry out the transactions contemplated
by this Agreement, and all other legal matters required for such transactions,
shall have been reasonably satisfactory to counsel for the Company prior to
Closing.
ARTICLE 6.
INDEMNIFICATION
6.1. Survival of Representations and Warranties. Each representation,
warranty, covenant and obligation in this Agreement will survive the date
hereof for a period of one (1) year and Buyer on the one hand and the Company
and TGFIN jointly and severally on the other, will be Liable for any Damages
resulting from any Breaches thereof; provided, however, that the
representations and warranties contained in: (i) Section 3.1(n) (Tax Matters)
shall survive until one hundred and twenty (120) days beyond the lapse of the
applicable statute of limitations (including any extensions thereof); and (ii)
Section 3.1(f) (Title to Acquired Assets) will survive the date hereof for a
period of six (6) years.
6.2. Indemnification Provisions for Buyer's Benefit.The Company and
TGFIN, jointly and severally, will defend, indemnify and hold the Company and
TGFIN Indemnitees harmless from, against and with respect to any and all
Actions and Damages (whether absolute, accrued, contingent or otherwise and
whether a contractual, tax or any other type of Liability, obligation or
claim) asserted against, imposed upon or incurred by Buyer, directly or
indirectly, by reason of or resulting from, relating to, arising out of, or
attributable to:
25
(a) any misrepresentation or Breach of any representation or
warranty the Company or TGFIN has made in this Agreement, or any other
certificate or document the Company or TGFIN has delivered pursuant to
this Agreement;
(b) any Breach by the Company or TGFIN of any covenant or
obligation of the Company or TGFIN contained in or made pursuant to this
Agreement or any other Transaction Document; or
(c) any Excluded Liabilities.
6.3. Indemnification Provisions for the Company and TGFIN's Benefit.
Buyer will defend, indemnify and hold the Buyer Indemnitees harmless from,
against and with respect to any and all Actions and Damages (whether absolute,
accrued, contingent or otherwise and whether a contractual, tax or any other
type of Liability, obligation or claim) asserted against, imposed upon or
incurred by the Company or TGFIN directly or indirectly, by reason of or
resulting from, relating to, arising out of, or attributable to:
(a) any misrepresentation or Breach of any representation or
warranty Buyer has made in this Agreement or any other certificate or
document Buyer has delivered by Buyer pursuant to this Agreement; and
(b) any Breach by Buyer of any covenant or obligation of Buyer
contained in or made pursuant to this Agreement or any other Transaction
Document in this Agreement.
6.4. Indemnification Claim Procedures.
(a) If any Action is commenced in which any Indemnitee is a party
which may give rise to a claim for indemnification against any
Indemnitor pursuant to this Section 6 ("Indemnification Claim") then
such Indemnitee will promptly give notice to the Indemnitor. Failure to
promptly notify the Indemnitor will not relieve the Indemnitor of any
Liability that it may have to the Indemnitee, except to the extent that
the Indemnitor shall have suffered actual Damages by reason of such
failure.
(b) The Indemnitor shall have the right to undertake, by counsel or
other representatives reasonably satisfactory to the Indemnitee, the
defense of such Indemnification Claim at the Indemnitor's risk and
expense.
(c) In the event that the Indemnitor shall elect not to undertake
such defense, or within a reasonable time after notice of any such
Indemnification Claim from the Indemnitee shall fail to defend, the
Indemnitee (upon further written notice to the Indemnitor) shall have
the right to undertake the defense, compromise or settlement of such
Indemnification Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of the Indemnitor
(subject to the right of the Indemnitor to assume defense of such
Indemnification Claim at any time prior to settlement, compromise or
final determination thereof with counsel reasonably satisfactory to the
Indemnitee). In such event, the Indemnitor shall pay to the Indemnitee,
in addition to the other sums required to be paid hereunder, the costs
26
and expenses incurred by the Indemnitee in connection with such defense,
compromise or settlement as and when such costs and expenses are so
incurred.
(d) Anything in this Section 6.4 to the contrary notwithstanding,
if there is a reasonable probability that an Indemnification Claim may
materially and adversely affect the Indemnitee, (i) the Indemnitee shall
have the right, at its own cost and expense, to participate in the
defense, compromise or settlement of the Indemnification Claim, (ii) the
Indemnitor shall not, without the Indemnitee's written consent, settle
or compromise any Indemnification Claim or consent to entry of any
judgment which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnitee of a release
from all liability in respect of such Indemnification Claim in form and
substance satisfactory to the Indemnitee, (iii) in the event that the
Indemnitor undertakes defense of any Indemnification Claim, the
Indemnitee, by counsel or other representative of its own choosing and
at its sole cost and expense, shall have the right to consult with the
Indemnitor and its counsel or other representatives concerning such
Indemnification Claim and the Indemnitor and the Indemnitee and their
respective counsel or other representatives shall cooperate with respect
to such Indemnification Claim, and (iv) in the event that the Indemnitor
undertakes defense of any Indemnification Claim, the Indemnitor shall
have an obligation to keep the Indemnitee informed of the status of the
defense of such Indemnification Claim and to furnish the Indemnitee with
all documents, instruments and information that the Indemnitee shall
reasonably request in connection therewith.
6.5. Purchase Price Escrow. On the Closing Date, Buyer shall deposit
the Purchase Price Escrow Amount in cash in an escrow account with the
Purchase Price Escrow Agent for the purpose of satisfying: (i) any
unascertained claims Buyer may have under this Section 6 after the Closing
Date; and (ii) any amounts otherwise payable by the Company to Buyer after the
Closing Date. Such amount shall be held by the Purchase Price Escrow Agent
for a period of one (1) year after the Closing Date in accordance with the
terms and conditions of the Purchase Price Escrow Agreement. Buyer's right to
recover any funds held pursuant to the Purchase Price Escrow Agreement shall
be in addition to and not in limitation of any other rights or remedies of
Buyer at law or in equity.
6.6. Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any remedy at Law or
in equity that any Party may have with respect to the Transactions.
Indemnitee's rights and remedies set forth in this Agreement will survive the
date hereof and will not be deemed waived by consummation of the Transactions.
ARTICLE 7.
ACCOUNTS RECEIVABLE
7.1. Intentionally Omitted.
7.2. Cooperation After Closing. From time to time after Closing, upon
the reasonable request and expense of Buyer, the Company and TGFIN shall
promptly execute and deliver, or cause to be executed or delivered, such
further instruments of conveyance, assignment or transfer and take such
27
further action as Buyer may reasonably request, to facilitate Buyer's
collection of any outstanding Accounts Receivable set forth in Schedule 1.1(a)
in accordance herewith.
ARTICLE 8.
ADDITIONAL AGREEMENTS
8.1. Stockholder Approval.Promptly after execution of this Agreement,
the Company shall take all appropriate steps to have ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and up to six other stockholders having in the aggregate a
majority of the outstanding TGFIN Common Stock approve the Agreement and
Transaction.
8.2. Preparation of the Information Statement. The Company shall as
promptly as practicable prepare and file an information statement relating to
the Transaction (together with all amendments, supplements and exhibits
thereto, the "Information Statement") with the SEC and will diligently respond
to any comments of the SEC or its staff and cause the Information Statement to
be mailed to the Company's stockholders at the earliest practical time;
provided, however, that the Company shall (i) furnish to Buyer a copy of the
Information Statement and allow Buyer a reasonable opportunity to comment
thereon prior to the filing of the Information Statement with the SEC; and
(ii) furnish to Buyer a copy of any applicable proxy or related information
provided to stockholders with respect to the Information Statement and allow
Buyer five (5) business days to comment thereon prior to dispatch to the
Company stockholders. The Company will notify Buyer promptly of the receipt
of any comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Information Statement or for
additional information and will supply Buyer with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the
SEC or its staff, on the other hand, with respect to the Information Statement
or the Transaction. If at any time prior to the Information Effective Date
there shall occur any event that the Company determines must or should be set
forth in an amendment or supplement to the Information Statement, the Company
will promptly prepare and mail to its stockholders such an amendment or
supplement with a copy to Buyer. The Company shall perform all its
obligations pursuant to this Section 8.2 at its own expense.
8.3. Cooperation and Exchange of Information.The Company, TGFIN and
Buyer will provide each other with such cooperation and information as either
of them reasonably may request of the other in filing any Tax Return, amended
Tax Return or claim for refund, determining a liability for Taxes or a right
to a refund of Taxes, or conducting any audit or other proceeding in respect
of Taxes. Such cooperation and information shall include providing copies of
relevant Tax Returns or portions thereof, together with accompanying
schedules, related work papers and documents relating to rulings or
determinations by Tax authorities. The Company, TGFIN and Buyer each shall
make its employees available to the other on a basis mutually convenient to
both parties to provide explanations of any documents or information provided
hereunder. Each of the Company, TGFIN and Buyer shall retain all Tax Returns,
schedules and work papers, records and other documents in its possession
relating to Tax matter of the Company and TGFIN and the Acquired Assets for
each taxable period first ending after the Closing Date and for all prior
taxable periods until the later of (i) the expiration of the statute of
28
limitations of the taxable periods to which such Tax Returns and other
documents relate, or (ii) six years following the due date for such Tax
Returns. Any information obtained under this Section 8.3 shall be kept
confidential except as may be otherwise necessary in connection with the
filing of Tax Returns or claims for refund or in conducting an audit or other
proceeding.
ARTICLE 9.
TERMINATION
9.1. Termination. This Agreement and the transactions contemplated by
this Agreement may be terminated at any time prior to the Closing: (i) by the
mutual written consent of the Parties; (ii) by Buyer if the Closing has not
occurred on or prior to 5:00 p.m., Eastern Standard Time, on March 31, 2003;
provided, however, that the right to terminate this Agreement under this
Section 9.1(ii) shall not be available to Buyer if its action or inaction has
resulted in a willful and material breach of this Agreement; (iii) by either
the Company and TGFIN or Buyer if any Governmental Authority issues a final
and non-appealable Order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement; provided, the
party seeking to so terminate has exercised commercially reasonable efforts to
oppose any such Order or to have the Order vacated or made inapplicable to the
transactions contemplated by this Agreement; (iv) by Buyer, if the Company or
TGFIN materially breaches any representation, warranty, covenant or other
agreement to be performed by it contained in this Agreement, and such breach
is incapable of being cured or is not cured within ten (10) days after receipt
of written notice from Buyer by the Company or TGFIN; (v) by the Company and
TGFIN, if Buyer materially breaches any representation, warranty, covenant or
other agreement contained in this Agreement, and such breach is incapable of
being cured or is not cured within ten (10) days after Buyer's receipt of
written notice from the Company; (vi) by Buyer, if the TGFIN Board of
Directors authorizes the Company to enter into a written agreement with
respect to a Competing Transaction that the Board has determined is a Superior
Proposal; provided, however, that the Company shall not terminate this
Agreement pursuant to this Section 9.1(i) and enter into an agreement for such
a Competing Transaction until the expiration of five business days following
Buyer's receipt of a written notice advising Buyer that the Company has
received a Superior Proposal specifying the material terms and conditions of
such Superior Proposal (and including a copy thereof with all accompanying
written documentation) and identifying the Person making such Superior
Proposal. After providing such notice, the Company shall provide a reasonable
opportunity to Buyer during such five business day period to make such
adjustments in the terms and conditions of this Agreement as would enable the
Company to proceed with the Transaction on such adjusted terms; (vii) by Buyer
if the satisfaction of any condition to the obligations of Buyer set forth in
Section 5.1 becomes impossible; or (viii) by the Company if the satisfaction
of any condition to the obligations of the Company set forth in Section
5.2becomes impossible.
9.2. Procedure and Effect of Termination. If either party terminates
this Agreement pursuant to Section 9.1, this Agreement, other than the
obligations of the parties under Sections 4.2(Confidentiality), Section 9.2
(Procedure and Effect of Termination), and Section 10 (Miscellaneous) (each of
which shall survive termination), shall forthwith become void and have no
effect, without any liability on the part of any terminating party or its
officers, directors or shareholders. In the event of termination of this
Agreement pursuant to Section 9.1, written notice of the termination must be
given by the terminating party at least three (3) Business Days prior to the
29
date of termination. If this Agreement is properly terminated, all filings,
applications and other submissions made pursuant to this Agreement, to the
extent practicable, shall be withdrawn from the agency or other person to
which they were made.
ARTICLE 10.
MISCELLANEOUS
10.1. Entire Agreement. This Agreement, together with the Exhibits
and Schedules hereto, the other Transaction Documents and the certificates,
documents, instruments and writings that are delivered pursuant hereto,
constitutes the entire agreement and understanding of the Parties in respect
of its subject matters and supersedes all prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof or the Transactions.
10.2. Successors. All of the terms, agreements, covenants,
representations, warranties, and conditions of this Agreement are binding
upon, and inure to the benefit of and are enforceable by, the Parties and
their respective successors and permitted assigns.
10.3. ▇▇▇▇▇▇▇▇▇▇▇.▇▇ Party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
approval of the Company and TGFIN or Buyer, as applicable; provided, however,
that Buyer may: (a) assign any or all of its rights and interests hereunder to
one or more of its Affiliates; and (b) designate one or more of its Affiliates
to perform its obligations hereunder (in any or all of which cases Buyer
nonetheless will remain responsible for the performance of all of its
obligations hereunder).
10.4. Notices. All notices, requests, demands, and claims hereunder
will be in writing. Any notice, request, demand, claim or other communication
hereunder will be deemed duly given if (and then three business days after) it
is sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
If to Buyer:
New York Mercantile Exchange, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Company or TGFIN:
TGFIN Holdings, Inc.
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇, President
Facsimile:
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Sachs Sax ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
10.5. Specific Performance. Each Party acknowledges and agrees that
the other Parties would be damaged irreparably if any provision of this
Agreement is not performed in accordance with its specific terms or is
otherwise Breached. Accordingly, each Party agrees that the other Parties
will be entitled to an injunction or injunctions to prevent Breaches of the
provisions of this Agreement and to enforce specifically this Agreement and
its terms and provisions in any Action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the
matter, subject to the following Sections, in addition to any other remedy to
which they may be entitled, at Law or in equity.
10.6. Time. Time is of the essence in the performance of this
Agreement.
10.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
10.8. Headings. The article and section headings contained in this
Agreement are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Agreement.
10.9. Governing Law. This Agreement and the performance of the
Transactions and obligations of the Parties hereunder will be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of Law principles.
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10.10. Amendments and Waivers. No amendment, modification,
replacement, termination or cancellation of any provision of this Agreement
will be valid, unless the same will be in writing and signed by Buyer, The
Company and TGFIN. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, may
be deemed to extend to any prior or subsequent default, misrepresentation, or
Breach of warranty or covenant hereunder or affect in any way any rights
arising because of any prior or subsequent such occurrence.
10.11. Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions hereof; provided
that if any provision of this Agreement, as applied to any Party or to any
circumstance, is adjudged by a Governmental Authority, arbitrator, or mediator
not to be enforceable in accordance with its terms, the Parties agree that the
Governmental Authority, arbitrator, or mediator making such determination will
have the power to modify the provision in a manner consistent with its
objectives such that it is enforceable, and/or to delete specific words or
phrases, and in its reduced form, such provision will then be enforceable and
will be enforced.
10.12. Expenses. Except as otherwise expressly provided in this
Agreement, each Party will bear its own costs and expenses incurred in
connection with the preparation, execution and performance of this Agreement
and the Transactions including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants, whether or
not the Transactions are consummated.
10.13. Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if
drafted jointly by the Parties and no presumption or burden of proof will
arise favoring or disfavoring any Party because of the authorship of any
provision of this Agreement. Any reference to any federal, state, local, or
foreign Law will be deemed also to refer to Law as amended and all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty, and covenant contained
herein will have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating
to the same subject matter (regardless of the relative levels of specificity)
which the Party has not breached will not detract from or mitigate the fact
that the Party is in breach of the first representation, warranty, or
covenant. The words "herein," "hereof" and words of similar import refer to
this Agreement as a whole and not to any particular Article or Section.
10.14. Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
10.15. No Third Party Beneficiaries. Neither this Agreement nor any
provision hereof, nor any Exhibit, Annex or Schedule hereto or document
executed or delivered herewith, shall create any right in favor of or impose
any obligation upon any Person or entity other than the Parties hereto and
their respective successors and permitted assigns.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first above written.
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:/s/▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
TGFIN HOLDINGS, INC.
By:/s/▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
TRADINGEAR ACQUISITION LLC
By:/s/J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Title: President
Subject to the terms and conditions of this
Agreement, the undersigned hereby
guarantees the due and punctual performance
of Buyer's obligation to pay the Purchase
Price at Closing pursuant to Section 2.2 of
this Agreement.
NEW YORK MERCANTILE EXCHANGE, INC.
By:/s/J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Title: President
33