EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
THE IT GROUP, INC.
CERTAIN SUBSIDIARIES
OF
THE IT GROUP, INC.
AND
THE ▇▇▇▇ GROUP INC.
DATED AS OF JANUARY 23, 2002
LIST OF SCHEDULES AND EXHIBITS
I. Schedules to be delivered by Sellers
Schedule 2.01(a)....................................................Real Property
Schedule 2.01(b)................................................Personal Property
Schedule 2.0l(g)..........................................Intellectual Properties
Schedule 2.01(i)......................................................Investments
Schedule 3.02(b)........................Requisite Approvals, Consents and Filings
Schedule 3.05.....................................Legal and Regulatory Compliance
Schedule 3.06........................................Interim Financial Statements
Schedule 3.09.........................................Subsidiaries and Affiliates
Schedule 3.13...............................................Environmental Matters
Schedule 3.13(f)........................................Underground Storage Tanks
Schedule 3.17..................................................Sellers' Contracts
Schedule 3.19..................................................Sellers' Employees
Schedule 3.20..................................Sellers' Benefit Plans Disclosures
Schedule 3.21..........................................Litigation and Proceedings
Schedule 3.31..............................................Government Contracting
Schedule 3.32.................................................Accounts Receivable
II. Schedules to be delivered by Buyer
Schedule 1.01.................................................Assumed Liabilities
Schedule 2.02(i)........................................Included Subsidiary Stock
Schedule 2.02(b)..............................................Completed Contracts
Schedule 2.02(d)..................................................Excluded Assets
Schedule 3.12(b).............................Permitted Real Property Encumbrances
Schedule 4.08.............................................Actions and Proceedings
Schedule 5.04.....................................................Hired Employees
Schedule 5.15(b)...............................................Excluded Contracts
III. Exhibits
Exhibit A...................Form of Buyer Protection and Bidding Procedures Order
Exhibit B......................................................Form of Sale Order
Exhibit C......................................Form of Sellers' Counsel's Opinion
Exhibit D...................................Form of Registration Rights Agreement
TABLE OF CONTENTS
Page
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1. DEFINITIONS AND REFERENCES................................................2
1.01. Definitions......................................................2
1.02. Certain References..............................................12
2. SALE OF ASSETS AND RELATED MATTERS.......................................12
2.01. Sale of Assets..................................................12
2.02. Excluded Assets.................................................14
2.03. Assumed Liabilities.............................................15
2.04. Excluded Liabilities............................................15
2.05. Purchase Price..................................................16
2.06. Purchase Price Adjustment.......................................17
2.08. Addition of Sellers; Delivery of Schedules......................18
3. REPRESENTATIONS AND WARRANTIES OF SELLERS................................18
3.01. Organization....................................................18
3.02. Powers; Consents; Absence of Conflict, Etc......................19
3.03. Binding Agreement...............................................19
3.04. Subsidiaries, Investments and Third Party Rights................19
3.05. Legal and Regulatory Compliance.................................20
3.06. Financial Statements............................................20
3.07. Undisclosed Liabilities.........................................20
3.08. Recent Activities...............................................20
3.09. Subsidiaries; Assets............................................21
3.10. Equipment.......................................................21
3.11. Title to Personal Property......................................21
3.12. Real Property...................................................21
3.13. Environmental Matters...........................................22
3.14. Intellectual Properties, Computer Software, etc.................23
3.15. Insurance.......................................................23
3.16. Permits and Licenses............................................23
3.17. Agreements and Commitments......................................24
3.18. Contracts.......................................................25
3.19. Employees and Employee Relations................................25
3.20. Employee Benefit Plans..........................................26
3.21. Litigation and Proceedings......................................28
3.22. Taxes...........................................................28
3.23. Brokers and Finders.............................................29
3.24. Payments........................................................29
3.25. Intentionally Deleted...........................................29
3.26. Customer List...................................................29
3.27. Backlog.........................................................29
3.28. Investment Experience and Intent; No Registration...............29
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3.29. Accredited Investor Status......................................29
3.30. Rule 144........................................................29
3.31. Government Contracting..........................................30
3.32. Accounts Receivable.............................................30
3.33. Related Party Transactions......................................31
4. REPRESENTATIONS AND WARRANTIES OF BUYER..................................31
4.01. Organization....................................................31
4.02. Corporate Powers; Consents; Absence of Conflicts, Etc...........31
4.03. Binding Agreement...............................................31
4.04. Issuance of Share Consideration.................................31
4.05. Brokers and Finders.............................................32
4.06. Payments........................................................32
4.07. SEC Documents and Other Reports.................................32
4.08. Actions and Proceedings.........................................32
4.09. Capital Structure...............................................33
4.10. Absence of Certain Changes or Events............................33
4.11. Financing.......................................................33
5. COVENANTS AND AGREEMENTS OF THE PARTIES..................................33
5.01. Filing of Sale Motion; Entry of Buyer Protection and Bidding
Procedures Order; Additional Sellers............................33
5.02. Operations......................................................34
5.03. Certain Actions.................................................34
5.04. Employee Matters................................................35
5.05. Access to and Provision of Additional Information...............37
5.06. Post-Closing Maintenance of and Access to Information...........37
5.07. Governmental Authority Approvals: Consents to Assignment........38
5.08. Use of Names....................................................39
5.09. Allocation of Purchase Price for Tax Purposes; Type of
Consideration Paid..............................................40
5.10. Further Acts and Assurances.....................................40
5.11. Costs and Expenses..............................................40
5.12. Insurance Ratings...............................................41
5.13. Fulfillment of Conditions.......................................41
5.14. Release of Encumbrances.........................................41
5.15. Assumed Contracts; Excluded Contracts...........................41
5.16. Bankruptcy Court Approval.......................................42
5.17. Transfer Taxes..................................................43
5.18. Listing Application.............................................44
5.19. Bankruptcy Filings..............................................44
5.20. Non-Solicitation................................................44
5.21. Tail Insurance..................................................44
5.22. Cooperation with Audited Financial Statements...................45
5.23. Exception.......................................................45
5.24. Use of Office Space and Equipment...............................45
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS...........................45
6.01. Representations and Warranties; Covenants.......................46
6.02. Adverse Actions or Proceedings..................................46
6.03. Pre-Closing Confirmations.......................................46
6.05. No Buyer Material Adverse Change................................46
6.06. Deliveries at Closing...........................................46
6.07. Sale Order......................................................46
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER.............................46
7.01. Sale Order; Representations and Warranties; Covenants...........46
7.02. Adverse Actions or Proceedings..................................47
7.03. Opinion of Sellers' Counsel.....................................47
7.04. Deliveries at Closing...........................................48
8. CLOSING; TERMINATION OF AGREEMENT........................................48
8.01. Closing; Buyer Designees; Post-Closing Transfers................48
8.02. Action of Sellers at Closing....................................49
8.03. Action of Buyer at Closing......................................49
8.04. Termination Prior to Closing; Break-Up Fee and Expense
Reimbursement; Other Compensation...............................50
9. GENERAL..................................................................52
9.01. Schedules.......................................................52
9.02. Tax Effect......................................................52
9.03. Time of Essence.................................................52
9.04. Consents, Approvals and Discretion..............................53
9.05. Choice of Law; Submission to Jurisdiction.......................53
9.06. Benefit.........................................................53
9.07. No Third Party Beneficiary......................................53
9.08. Waiver of Breach, Right or Remedy...............................53
9.09. Notices.........................................................53
9.10. Misdirected Payments; Offset Rights.............................54
9.11. Severability....................................................55
9.12. Entire Agreement; Counterparts; Amendment.......................55
9.13. Drafting........................................................55
9.14. Confidentiality.................................................55
9.16. Publicity.......................................................55
9.17. Assignment......................................................55
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ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as
of the 23rd day of January, 2002, by and among THE ▇▇▇▇ GROUP INC., a Louisiana
corporation (together with its Designee(s), if any, "Buyer"), and THE IT GROUP,
INC., a
Delaware corporation ("ITG") and the Subsidiaries (as defined) of ITG
which are or become signatories to this Agreement in accordance with the terms
hereof (together with ITG, "Sellers").
RECITALS
WHEREAS, pursuant to the Letter of Intent dated January 15, 2002 (the
"Letter of Intent") by and between ITG and Buyer, Buyer and ITG set forth their
non-binding intent to, among other things, negotiate and enter into a definitive
agreement for the sale and purchase of the Assets (as defined) and the
assumption of the Assumed Contracts (as defined) and the Assumed Liabilities (as
defined) of Sellers, as more fully described and defined in this Agreement;
WHEREAS, the Assets are owned by ITG and certain of its direct and
indirect Subsidiaries, and this Agreement is being executed initially by ITG and
Buyer with the agreement of ITG as is set forth herein to cause any of its
Subsidiaries that have any right, title or interest in or to the Assets, to
become a Party to, and one of the Sellers under, this Agreement by an amendment
hereto;
WHEREAS, in order to facilitate the Transaction (as defined), ITG has
filed and has caused or intends to cause certain of the other Sellers to file,
cases under chapter 11 of the Bankruptcy Code (as defined);
WHEREAS, pursuant to this Agreement and in furtherance of the
Transaction, Sellers will covenant pursuant to this Agreement to seek the Buyer
Protection and Bidding Procedures Order (as defined), the Executory Contract
Assumption and Assignment Order (as defined) and the Sale Order (as defined)
from the Bankruptcy Court (as defined);
WHEREAS, the Parties intend to consummate the sale and purchase of the
Assets owned by the Foreign Sellers (as defined) outside of the Bankruptcy Cases
and in compliance with the Legal Requirements (as defined) of such foreign
jurisdictions governing the sale and purchase of such Assets; and
WHEREAS, Sellers desire to sell the Assets to Buyer, and Buyer desires
to purchase the Assets from Sellers, on the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the agreements, covenants, representations and warranties hereinafter set forth,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged and accepted, the Parties, intending to be legally bound,
hereby agree as follows:
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1. DEFINITIONS AND REFERENCES
1.01. Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings given:
Accounts Receivable: all accounts receivable of any Seller, of whatever
kind or nature, including all current or deferred rights to payment for projects
completed or commenced or services rendered on or prior to the Closing Date,
whether or not such services have been billed by Sellers as of the Closing Date;
Accredited Investor: as defined in Rule 501 of Regulation D promulgated
under the Securities Act;
Affiliate: any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person, including the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
securities, election or appointment of directors, by contract or otherwise;
Affiliated Group: any affiliated group within the meaning of Code
section 1504 or any similar group defined under a similar provision of state,
local or foreign law;
Agreement: this
Asset Purchase Agreement and all exhibits and schedules
attached hereto, as amended, consolidated, supplemented, novated or replaced by
the Parties from time to time;
Assets: all assets, real, personal and mixed, tangible and intangible,
owned by Sellers or leased by Sellers pursuant to capital leases, including the
assets described in Section 2.01 hereof, but excluding in any event the Excluded
Assets; for avoidance of doubt, the term "Assets" means all assets of ITG and
Subsidiaries, other than the Excluded Assets;
Assumed Contracts: all Contracts of Sellers other than the Excluded
Contracts and the Completed Contracts;
Assumed Liabilities: (i) all of Sellers' post-Closing liabilities under
the Assumed Contracts which relate to performance thereunder by Buyer, but,
subject to Buyer's obligation to pay pre-petition cure costs relating to Assumed
Contracts pursuant to clause (ii) of this definition, excluding all post-Closing
obligations under the Assumed Contracts which relate to pre-Closing performance
undertaken by Sellers, (ii) pre-petition and post-petition cure costs and
letters of credit related to the Assumed Contracts, (iii) any amounts owing
under the Credit Agreement (or any Loan Document as defined therein) at Closing,
(iv) fifty percent (50%) of ITG's liability, if any, under the WARN Act related
to a lay-off of employees of the business of Beneco, up to a maximum of fifty
percent (50%) of the amount of sixty (60) days' wages for employees of Beneco;
provided, however, that Buyer shall not assume such WARN Act liability if
Sellers are unable to sell to Buyer, free and clear of all Encumbrances, the
assets of Beneco that have not been designated by Buyer as Excluded Assets, (v)
any other liabilities specifically designated by Buyer, on or prior to the
Closing Date, as Assumed Liabilities on Schedule 1.01, and (vi) any Taxes with
respect to the ownership of the Assets or the operation of the Business after
the Closing Date and excluding specifically any Taxes, other than Taxes
described in clause
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(vii), that were accrued or should have been accrued on Sellers' financial
statements, in accordance with GAAP, as of the Closing Date and also excluding
specifically any Taxes attributable to this Transaction, and (vii) property and
similar Taxes to the extent Buyer is liable for such Taxes pursuant to Section
5.17;
Audited Financial Statements: the audited consolidated balance sheet of
ITG as of December 29, 2000 and the audited consolidated statements of
operations and consolidated income and cash flows for the three (3) fiscal years
then ended, together with the notes thereto and the report thereon of Ernst &
Young, LLP independent certified public accountants, and any audited
restatements thereof;
Average Price: as defined in Section 2.05(a);
Bankruptcy Cases: the cases under chapter 11 of the Bankruptcy Code
filed by each of the Sellers (other than the Foreign Sellers) in the Bankruptcy
Court, or any Person who hereafter becomes a Seller and files a case under
chapter 11 of the Bankruptcy Code pursuant to Section 5.01, which cases Sellers
shall seek to administratively consolidate;
Bankruptcy Code: 11 U.S.C. 101 et. seq., and applicable federal rules
of bankruptcy procedure thereunder;
Bankruptcy Court: (a) the United States District Court for the District
of
Delaware, (b) the United States District Court for the District of Utah, to
the extent the involuntary bankruptcy case of Beneco is not transferred to the
United States District Court for the District of
Delaware, (c) to the extent of
any reference under Section 157 of Title 28 of the United States Code, the unit
of either such District Court constituted under Section ▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code or (d) such other Court to which the Bankruptcy Cases may be
transferred;
Beneco: Beneco Enterprises, Inc., a Subsidiary of ITG, and one of the
Sellers;
Bid: means any quotation, bid or proposal by any Seller which, if
accepted or awarded, would lead to a contract with a Government Authority, or a
prime contractor or a higher-tier subcontractor to a Government Authority, for
the sale of goods or the provision of services by any Seller or a contracting
team of which any Seller is a member.
Bid Deadline: the date established in the Buyer Protection and Bidding
Procedures Order as the deadline for submissions of Qualified Bids;
Break-Up Fee and Expense Reimbursement: an amount equal to Six Million
Dollars ($6,000,000);
Business: any and all businesses owned, leased, managed or otherwise
operated or conducted by any of Sellers;
Buyer: as defined in the Preamble;
Buyer Material Adverse Change: a material adverse change (or event or
condition that is reasonably likely to result in a material adverse change),
whether individually or in the
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aggregate, in the business, condition (financial or other), operations, assets,
liabilities or prospects of Buyer;
Buyer Preferred Stock: as defined in Section 4.09;
Buyer Protection and Bidding Procedures Order: an Order of the
Bankruptcy Court that is substantially similar to Exhibit A attached hereto;
Buyer Schedules: the schedules to this Agreement which are to be
delivered by Buyer to ITG (and are listed as such on the List of Schedules and
Exhibits hereto) on the dates called for in Section 2.08, as the same may be
amended or supplemented as provided in this Agreement;
Buyer SEC Documents: as defined in Section 4.07;
Catastrophic Event: (i) any event, change or occurrence relating to a
worsening of current conditions caused by acts of terrorism or war (whether or
not declared) occurring after the Effective Date, or (ii) the occurrence of any
of the following: natural disaster, fire, explosion, accident, flood,
earthquake, strike, labor unrest, tornadoes, hurricanes, seismic event, civil
unrest or strife, riot, civil commotion, acts of God, or other casualty, in each
case which, individually or in the aggregate, results or would be reasonably
likely to result in a material adverse change in the Sellers' business,
condition (financial or otherwise), operations, assets or liabilities;
Cash: cash and cash equivalents;
Cash Consideration: as defined in Section 2.05(a);
Closing: as defined in Section 8.01;
Closing Date: the date on or as of which the Closing occurs;
COBRA: as defined in Section 3.20(g).
Code: the Internal Revenue Code of 1986, as amended;
Common Stock: common stock, no par value, of Buyer;
Competing Proposal: a competitive bid or proposal from a third party
(a) to purchase substantially all of the Assets, whether in a separate
transaction or series of transactions, or as part of a plan of reorganization of
Sellers or any of them, (b) for any merger, consolidation, liquidation,
dissolution or similar transaction involving Sellers or any of them which would
cause the Assets to be unable to be sold to Buyer, or (c) to provide debt or
equity financing to the Sellers or any of them;
Completion Bonds: surety bonds issued by Lender pursuant to the Credit
Agreement for payment, performance, bid, warranty or otherwise.
Completed Contracts: Contracts of Sellers (including those listed on
Schedule 2.02(b)) under which substantially all of the contractual work effort
of Sellers has been completed, even if
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such Contracts have continuing warranty obligations, administrative matters or
work related to warranty or other claims;
Completed Contracts Receivable: all Accounts Receivable related to
Completed Contracts;
Contracts: all commitments, basic ordering agreements, purchase orders,
contracts, leases, licenses, agreements and understandings, written or oral,
relating to the Assets or the operation of the Business to which any Seller is a
Party or by which it or any of its Assets are bound; provided that purchase
orders, service orders, task orders and similar items issued pursuant to basic
ordering agreements, master service agreements, master lease agreements and
similar master agreements shall, in each case for purposes hereof, be treated as
separate and independent Contracts to the extent permitted by Legal
Requirements;
Controlled Group: with respect to Sellers, a group consisting of each
trade or business (whether or not incorporated) which, together with Sellers,
would be deemed a "single employer" within the meaning of section 4001(b)(l) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code;
Credit Agreement: that certain post-petition Credit Agreement(s), dated
January 23, 2002, as amended and supplemented from time to time, by and among
Lender, as lender, and ITG and certain of its Subsidiaries, as borrowers,
providing for debtor-in-possession funding under section 364(c) and (d) of the
Bankruptcy Code;
Designee: any Affiliate of Buyer, or any other Person to whom Buyer
assigns some or all of its rights under this Agreement;
Effective Date: the date of execution of this Agreement;
Employee Benefit Plan: any (a) Employee Pension Benefit Plan,
(including any Multiemployer or Multiple Employer Plan), (b) Employee Welfare
Benefit Plan or (c) any material fringe benefit plan, arrangement, policy,
agreement or program;
Employee Payments: as defined in Section 2.05(c);
Employee Pension Benefit Plan: as defined in ERISA section 3(2);
Employee Welfare Benefit Plan: as defined in ERISA section 3(1);
Encumbrances: levies, claims, charges, assessments, mortgages, security
interests, liens, pledges, conditional sales agreements, title retention
contracts, leases, subleases, rights of first refusal, options to purchase, and
other restrictions and agreements or commitments to create or suffer any of the
foregoing;
Environmental Claim: any written notice by a Person alleging liability
(including liability for investigatory costs, cleanup costs, Governmental
Authority response costs, natural resource damages, property damages, personal
injuries, or penalties) of Sellers arising out of, based on or resulting from
(a) the presence, or release into the environment, of any Materials of
5
Environmental Concern at any location, whether or not owned by Sellers, or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Laws by Sellers or (c) circumstances in which Sellers have or may
have retained or assumed either contractually or by operation of law any
liability for any Environmental Claims alleged or asserted against any third
party;
Environmental Laws: any and all Legal Requirements relating to
pollution or protection of human health or the environment (including ground
water, land surface or subsurface strata), including Legal Requirements relating
to emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, recycling, reporting
or handling of Materials of Environmental Concern;
ERISA: the Employee Retirement Income Security Act of 1974, as amended;
ERISA Fiduciary: as defined in ERISA section 3(21);
Excluded Assets: as defined in Section 2.02;
Excluded Contracts: all Contracts other than Completed Contracts and
Immaterial Contracts (i) which are designated as such on Schedule 5.15(b) (as
amended or supplemented in accordance with this Agreement) or (ii) which are not
listed on Schedule 3.17;
Excluded Contracts Receivable: all Accounts Receivable related to
Excluded Contracts;
Excluded Liabilities: any and all liabilities or obligations of Sellers
of any kind or nature, other than the Assumed Liabilities, whether known or
unknown, fixed or contingent, recorded or unrecorded, and whether arising before
or after the Closing;
Excluded Subsidiary Stock: the capital stock of any direct or indirect
Subsidiary of ITG, other than those Subsidiaries designated by Buyer on Schedule
2.02(i);
Executory Contract Assumption and Assignment Order: an Order of the
Bankruptcy Court, which may be the Sale Order, and must be in form and substance
reasonably acceptable to Buyer, which (a) approves the provisions of Section
5.15(a), (b) authorizes and directs Sellers, pursuant to section 365 of the
Bankruptcy Code, (i) to assume and to assign to Buyer the Assumed Contracts and
(ii) to make all pre-petition and post-petition payments related thereto that
are not Assumed Liabilities, and (c) determines that Buyer or its Designee has
provided adequate assurance of future performance relative to the Assumed
Contracts;
Final Order: an order of the Bankruptcy Court, the operation or effect
of which has not been stayed, and which is not subject to any pending appeal,
request for leave to appeal or request for reconsideration and as to which the
time for any such appeal, request for leave to appeal or request for
reconsideration has expired;
Financial Statements: the Audited Financial Statements, the Unaudited
Financial Statements and the Interim Financial Statements;
6
Foreign Sellers: Sellers incorporated, or otherwise formed or
organized, and conducting business in any jurisdiction other than the United
States; provided, however, that Foreign Sellers shall not include any Sellers
that are eligible to be debtors under section 109 of the Bankruptcy Code;
GAAP: as defined in Section 3.06;
Government Contract: any Contract, teaming agreement or arrangement,
delivery order, task order, grant or change order between any Seller and (a) any
Governmental Authority, (b) any prime contractor to any Governmental Authority
or (c) any Contract or other agreement, arrangement or order described in clause
(a) or (b) which is primarily funded by, directly or indirectly, or through any
Governmental Authority;
Governmental Authorities: all agencies, authorities, bodies,
departments, boards, commissions, courts (including the Bankruptcy Court),
instrumentalities, legislatures and offices of any nature whatsoever of any
federal, state, commonwealth, territory, county, district, municipal, city,
foreign or other government or quasi-government unit or political subdivision;
Hired Employees: employees of Sellers as of the Closing Date who accept
Buyer's offer of employment under Section 5.04;
HSR Act: the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended;
Immaterial Contracts: any Contract which (i) is a Contract other than a
construction, engineering, professional services or other project-related
Contract, (ii) is below the disclosure thresholds set forth in Section 3.17, and
(iii) includes performance obligations owing by the non-debtor party to the
Sellers;
Intellectual Properties: all of Sellers' marks, names, and all
variations of the foregoing, all trademarks, service marks, assumed names,
logos, including all goodwill associated therewith, patents, patent rights,
copyrights, trade secrets and similar intangibles (including all variants
thereof, applications therefor and renewals or extensions thereof);
Interim Financial Statements: the unaudited consolidated balance sheet
of ITG as of December 28, 2001 and consolidated statement of operations of ITG
for the three (3) months ended December 28, 2001 (without notes thereto)
contained in Schedule 3.06;
Investments: shares of capital stock of any corporation, interests in
partnerships or limited liability companies, or other equity or debt instruments
issued by any Person, and proceeds from the sale thereof, excluding the
Subsidiaries;
ITG SEC Documents: all documents required to be filed with the SEC in
respect of ITG and each of its Subsidiaries;
Knowledge of Buyer: with reference to this Agreement, means the
knowledge of the executive officers of Buyer;
7
Knowledge of Sellers: with reference to this Agreement, means the
knowledge of the executive officers of ITG, the senior officers or managers of
each of the other Sellers, or with respect to any environmental matters, each
employee of each Seller responsible for supervising environmental compliance;
Landbank: Landbank, Inc., a Subsidiary of ITG.
Legal Requirements: with respect to any Person, all statutes,
ordinances, by-laws, codes, rules, regulations, restrictions, judgments, orders,
writs, injunctions, decrees, determinations, permits or awards of any
Governmental Authority having jurisdiction over such Person or any of such
Person's assets or businesses;
Lender: Sugar Acquisition (NVDIP), Inc., a Nevada corporation and a
wholly owned Subsidiary of Buyer;
Letter of Intent: as defined in the Preamble;
Material Adverse Change: a material adverse change (or event or
condition that is reasonably likely to result in a material adverse change),
whether individually or in the aggregate, in the business, condition (financial
or other), operations, assets, liabilities or prospects of Sellers;
Materials of Environmental Concern: chemicals, pollutants,
contaminants, medical waste or specimens, toxic substances, petroleum and
petroleum products, including hazardous wastes under the Resource, Conservation
and Recovery Act, 42 U.S.C. Section 6903 et seq., hazardous substances under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 9601 et seq., asbestos, polychlorinated biphenyls and urea formaldehyde,
and low-level nuclear materials, special nuclear materials or nuclear-byproduct
materials, all within the meaning of the Atomic Energy Act of 1954 as amended,
and any rules, regulations or policies promulgated thereunder;
Minimum Incremental Bid Amount: Two Million Dollars ($2,000,000) in
excess of the Break-Up Fee and Expense Reimbursement for any initial incremental
bid, and Two Million Dollars ($2,000,000) for any additional incremental bids;
Multiemployer Plan: defined in ERISA section 3(37) or section
400l(a)(3);
Multiple Employer Plan: an Employee Pension Benefit Plan which is not a
Multiemployer Plan and for which a Person who is not a member of a Controlled
Group that includes any of Sellers is or has been a contributing sponsor;
NYSE: New York Stock Exchange;
Other Plan: any bonus, deferred compensation, executive compensation,
incentive, severance, stock option, stock purchase, performance share, stock
appreciation or other equity based compensation, performance pay, loan or loan
guarantee, change of control, foreign employee benefit plan, or other plan,
program, policy, arrangement or agreement that the Sellers maintain, contribute
to or with respect to which the Sellers have any liability or obligation;
8
Party: any party to this Agreement, its successors and permitted
assigns;
Party In Interest: a "party in interest" as defined in ERISA section
3(14), or as defined in the Bankruptcy Code, as applicable;
Payroll Payments: the amount of cash required to pay the Sellers'
accrued but unpaid payroll as of the Closing Date;
PBGC: the Pension Benefit Guaranty Corporation;
Permits: all licenses, permits, consents, approvals and other
authorizations of or from all Governmental Authorities which are necessary to
the ownership of the Assets or in the conduct of the Business as presently
conducted;
Permitted Real Property Encumbrances: those Encumbrances or other
imperfections of title which would not materially impair the value of the Real
Property or the conduct of the Business, including utility easements and other
customary covenants and restrictions of record that do not materially impair the
value of the Real Property or the conduct of the Business thereon, and those
Encumbrances set forth on Schedule 3.12(b);
Person: any individual, company, body corporate, entity, association,
partnership, firm, joint venture, trust, trustee or Governmental Authority;
Personal Property: as defined in Section 2.01(b);
Pre-Closing Environmental Matters: all liabilities arising from (i) the
pre-Closing release of Materials of Environmental Concern either in, on, under
or from the Real Property or any current or former facility where any Seller has
conducted the Business including the effects of such release of Materials of
Environmental Concern on natural resources, persons or property within or
outside the boundaries of the Real Property or any such current or former
facility, (ii) the presence, from any source, as of the Closing Date of
Materials of Environmental Concern in, on or under the Real Property or any such
current or former facility, (iii) the failure on or prior to the Closing Date of
any such current or former facility or any operations of Sellers to be in
compliance in all material respects with any applicable Environmental Laws, (iv)
the disposal of Materials of Environmental Concern by the Business or
arrangement thereof at any location other than the Real Property or such current
or former facilities where any Seller has conducted the Business on or prior to
the Closing Date, and (v) any other pre-Closing act, omission or condition
existing with respect to any of the Assets or related to the Business, the Real
Property or any current or former facility where any Seller has conducted the
Business prior to the Closing Date which gives rise to liability under any
applicable Environmental Laws;
Prohibited Transaction: as defined in ERISA section 406 and Code
section 4975, but excluding any such transactions with respect to which there
exists a valid exemption;
Purchase Price: as defined in Section 2.05;
Qualified Bid: a Competing Proposal (a) whose value is greater than the
sum of (i) the value of Buyer's offer as set forth herein and (ii) the initial
Minimum Incremental Bid Amount,
9
(b) that has substantially the same terms and conditions as this Agreement and
proposes to purchase substantially all of the Assets, (c) that is accompanied by
satisfactory evidence of committed financing or other ability to perform, and
(d) that provides for the repayment of all advances outstanding under the Credit
Agreement within three (3) business days after entry by the Bankruptcy Court of
an order approving the Qualified Bid of a purchaser other than Buyer;
Qualified Bidder: a Person (a) who has delivered to ITG an executed
confidentiality agreement in form and substance substantially the same as the
one executed by ITG and Buyer (except that disclosure of the Qualified Bidder's
interest and proposal, but not its identity, shall be permitted), (b) who has
delivered to ITG a Competing Proposal (including an indication of the assets
sought to be acquired which shall include substantially all of the assets of
Sellers to be acquired by Buyer and a purchase price range) that the Board of
Directors of ITG determines, in good faith and upon the advice of an independent
financial advisor of nationally recognized reputation, would result in a
transaction more favorable to Sellers from a financial point of view than the
Transaction, and (c) whom ITG in good faith determines is reasonably likely
(based on availability of financing, experience and other considerations) to be
able to consummate a transaction based on the Competing Proposal, if selected as
the successful bidder;
Real Property: all real property owned or leased by any Seller,
together with all buildings, improvements and fixtures thereon and all
appurtenances and rights thereto;
Real Property Encumbrances: those Encumbrances related to the Real
Property disclosed in the Financial Statements as securing specified
indebtedness and Permitted Real Property Encumbrances;
Registration Rights Agreement: the Registration Rights Agreement by and
among Buyer and Sellers (and/or Sellers' assignees), which shall be in form and
substance substantially similar to Exhibit D attached hereto; ---------
Reportable Event: as defined in ERISA section 4043;
Retention Plan: a retention plan (which shall be approved by the
Bankruptcy Court promptly after the filing of the Bankruptcy Cases, and which
shall have been approved by Buyer) for employees of any Seller providing, among
other things, that each of Sellers' employees will, to the extent payable under
the Retention Plan, receive an amount equal to such employee's accrued and
unpaid vacation due as of the Closing Date, less an amount equal to one (1)
week's vacation pay;
Retention Plan Payments: an amount, subject to approval by Buyer, equal
to the aggregate amount owed to Seller's employees, as of the Closing Date,
pursuant to the Retention Plan;
Sale Motion: the motion or motions, in form and substance reasonably
acceptable to Buyer, filed by Sellers, pursuant to the provisions of sections
363 and 365 of the Bankruptcy Code, in the Bankruptcy Cases, among other things,
to obtain the Sale Order, approve the Transaction, authorize the assumption and
assignment of the Assumed Contracts to Buyer and obtain the Buyer Protection and
Bidding Procedures Order;
10
Sale Order: an Order of the Bankruptcy Court that is substantially
similar to Exhibit B attached hereto;
SEC: the Securities and Exchange Commission;
Sections: sections of the Agreement, unless the context indicates
otherwise;
Securities Act: the Securities Act of 1933, as amended.
Seller Benefit Plans: as defined in Section 3.20(a);
Seller Schedules: the schedules to this Agreement which are to be
delivered by Sellers to Buyer (and are listed as such on the List of Schedules
and Exhibits hereto) on the dates set forth in Section 2.08;
Sellers: as defined in the Preamble;
Share Consideration: as defined in Section 2.05(a);
Stand-Alone Plan: a plan of reorganization for Sellers, or any of them,
that does not involve a Qualified Bid;
Subsidiaries: as to any Person, a corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
voting power of the outstanding voting equity securities or more than fifty
percent (50%) of the outstanding economic equity interest is held or controlled,
directly or indirectly, by such Person;
Tax: any income, unrelated business income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, privilege, premium,
windfall profits, environmental (including taxes under Code section 59A),
customs duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use,
transfer, registration, notarial, unclaimed property, value added, alternative
or add-on minimum, estimated or other tax, assessment, charge, levy or fee of
any kind whatsoever, including payments in lieu of Taxes, interest or penalties
on and additions to all of the foregoing, which are due or alleged to be due to
any Governmental Authority, whether disputed or not;
Tax Return: any return, declaration, report, claim for refund,
information return or statement, including schedules and attachments thereto and
amendments, relating to Taxes;
Transaction: the sale and purchase of the Assets contemplated in this
Agreement, together with any and all related transactions designed to implement,
facilitate or expedite such sale and purchase of the Assets;
Unaudited Financial Statements: the unaudited consolidated balance
sheet of ITG as of September 28, 2001, and the unaudited consolidated statement
of operations and unaudited consolidated statement of cash flows for the three
(3)-month and nine (9)-month periods then-ended,
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together with the notes thereto as filed with ITG's quarterly report on form
10-Q for the quarter ended September 28, 2001;
WARN Act: the Worker's Adjustment and Retraining Notification Act, 29
U.S.C. Sections 2101-2109;
1.02. Certain References. As used in this Agreement, and unless the
context requires otherwise:
(a) references to "include" or "including" mean including without
limitation;
(b) references to "partners" include general and limited partners of
partnerships and members of limited liability companies;
(c) references to "partnerships" include general and limited
partnerships, joint ventures and limited liability companies;
(d) references to "hereof," "herein" and derivative or similar words
refer to this Agreement;
(e) references to any document are references to that document as
amended, consolidated, supplemented, novated or replaced by the parties thereto
from time to time;
(f) references to any law are references to that law as amended,
consolidated, supplemented or replaced from time to time and all rules and
regulations promulgated thereunder;
(g) references to time are references to Eastern time;
(h) the gender of all words includes the masculine, feminine and
neuter, and the number of all words includes the singular and plural; and
(i) the Table of Contents, the divisions of this Agreement into
articles, sections and subsections and the use of captions and headings in
connection therewith are solely for convenience and shall have no legal effect
in construing the provisions of this Agreement.
2. SALE OF ASSETS AND RELATED MATTERS
2.01. Sale of Assets. Subject to the terms and conditions of this
Agreement, at Closing Sellers shall sell, grant, assign, convey, transfer and
deliver to Buyer, or cause to be sold, granted, assigned, conveyed, transferred
and delivered to Buyer, and Buyer shall purchase from Sellers, the Assets, free
and clear of any and all Encumbrances other than the Permitted Real Property
Encumbrances, including the following (but in any event excluding all of the
Excluded Assets):
(a) the Real Property;
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(b) all equipment, vehicles, furniture and furnishings and other
tangible personal property owned or leased by Sellers in connection with the
Business (the "Personal Property");
(c) all usable supplies and inventory of Sellers;
(d) all financial, project-related, personnel and other records of the
Business (including equipment records, project plans, documents, catalogs,
books, records, files, operating manuals and drawings), other than those
relating solely to Excluded Assets, Excluded Contracts, Excluded Contracts
Receivable, Completed Contracts, Excluded Liabilities and employees who do not
become Hired Employees; provided, however, that Sellers may, at their sole cost
and expense and during normal business hours upon not less than twenty-four (24)
hours' prior notice to Buyer, make and retain copies of all books and records to
be transferred pursuant to this clause (d), and Buyer, or its Designee, as the
case may be, may at its sole cost and expense and during normal business hours
upon not less than twenty-four (24) hours' prior notice to Sellers, make and
retain copies of all books and records not being transferred pursuant to this
clause (d);
(e) all interests of Sellers in the Assumed Contracts, to the extent
transferable or assignable under applicable Legal Requirements;
(f) all Permits and other approvals (including pending approvals) of
Governmental Authorities relating to the ownership, development and operations
of the Business and the Assets, to the extent transferable or assignable under
applicable Legal Requirements;
(g) all interests of Sellers in and to all Intellectual Properties used
in connection with, or derived from or arising out of, the ownership and
operation of the Business and all computer software, programs and similar
systems owned or licensed by any Seller for use in connection with the Business,
to the extent transferable or assignable under applicable Legal Requirements;
(h) all interests of Sellers in all property, real, personal or mixed,
tangible or intangible, arising or acquired between the Effective Date and the
Closing Date;
(i) all Investments of any Seller;
(j) general intangibles of the Business, including goodwill;
(k) any and all claims and causes of action, including privileges
related thereto, of any Seller against third parties (other than those excluded
pursuant to Section 2.02(j) hereof), including but not limited to claims and
causes of action (i) relating to the value, condition or title to the Assets,
manufacturer's or vendor's warranties with respect to the Assets or products
liability related to the Assets, whether ▇▇▇▇▇▇ or inchoate, known or unknown,
contingent or otherwise, (ii) relating to the Assumed Liabilities or the Assumed
Contracts or (iii) against any current or former officer or director of any
Seller who becomes a Hired Employee;
(l) all corporate office furniture and equipment, data center hardware
and equipment, residential real property and other assets of Sellers wherever
located;
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(m) all Accounts Receivable, Completed Contracts Receivable, notes
receivable and Excluded Contracts Receivable (other than Excluded Contracts
Receivable excluded pursuant to Section 2.02(a));
(n) all Cash (other than the Cash Consideration and the Employee
Payments);
(o) all security or other deposits relating to, without limitation, the
Real Property and any equipment owned or leased by any Seller other than those
related to Excluded Assets;
(p) any prepaid expenses other than those related to Excluded Assets;
(q) all proceeds of the foregoing and all other property of Sellers of
every kind, character or description, tangible and intangible, known or unknown,
wherever located and whether or not reflected on the Financial Statements or
similar to the properties described above;
(r) all partnership and joint venture interests of any Seller with
respect to the Business.
2.02. Excluded Assets. Notwithstanding the generality of Section 2.01,
the following assets are not a part of the sale and purchase contemplated by
this Agreement and are excluded from the Assets (the "Excluded Assets"):
(a) the Excluded Contracts, all Excluded Contracts Receivable and
proceeds of Excluded Contracts Receivable (but only to the extent any such
Excluded Contracts Receivable (or its proceeds) was received by a Seller after
notification from Buyer of the designation of such Contract as an Excluded
Contract), drawings related to, and equipment specifically purchased pursuant to
the requirements of, the Excluded Contracts;
(b) the Completed Contracts and drawings related to the Completed
Contracts;
(c) inventory and supplies disposed of or exhausted and Assets
transferred or disposed of prior to the Closing Date;
(d) any avoidance claims available to Sellers under Chapter 5 of the
Bankruptcy Code and all claims relating to Excluded Liabilities;
(e) the Share Consideration, if any;
(f) the Cash Consideration;
(g) the Employee Payments;
(h) the Excluded Subsidiary Stock;
(i) any other assets excluded by mutual written agreement of the
Parties; and
(j) all claims and causes of action related to the assets described in
clauses (a)-(i) above and all claims for breach of duty against professionals,
advisors, directors, officers and employees of Sellers who do not become Hired
Employees;
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provided, however, that with respect to any Excluded Asset, Buyer may, for a
period of sixty (60) days after the Closing Date, designate any Excluded Asset
as an Asset, and to the extent such Asset is in the possession or under the
control of any Seller at the time of such notice, such Seller shall, at no
additional cost to Buyer, promptly deliver to Buyer or Buyer's Designee such
Asset and shall promptly execute, acknowledge and deliver to Buyer all deeds,
bills of sale, assignments or other documents or instruments as are necessary or
desirable to cause the assignment or conveyance of such Asset to Buyer or
Buyer's Designee. Buyer shall be responsible for, and shall promptly reimburse
Sellers for, any expenses incurred by Sellers from the time of such notice in
respect of any Excluded Asset designated by Buyer as an Asset pursuant to this
Section 2.02.
2.03. Assumed Liabilities. As of the Closing Date, Buyer shall assume
the Assumed Liabilities.
2.04. Excluded Liabilities. Under no circumstance shall Buyer assume or
be obligated to pay, and none of the Assets shall be or become liable for or
subject to, any of the Excluded Liabilities, including but not limited to the
following liabilities, which shall be and remain liabilities of Sellers:
(a) any and all liabilities or obligations other than the Assumed
Liabilities;
(b) liabilities or obligations associated with any Excluded Assets;
(c) liabilities or obligations associated with any and all indebtedness
of Sellers for borrowed money not included in the Assumed Liabilities;
(d) liabilities or obligations arising under the Excluded Contracts or
the Completed Contracts, including causes of action in connection with
performance, surety or other bonds relating to such Excluded Contracts or
Completed Contracts, and post-Closing obligations under the Assumed Contracts
which relate to pre-Closing performance undertaken by Sellers, except to the
extent, and only to the extent, that Buyer has agreed to assume pre-petition and
post-petition cure costs as part of the Assumed Liabilities;
(e) liabilities or obligations arising out of or in connection with
claims, litigation and proceedings (whether instituted prior to or after
Closing) for acts, errors or omissions which occurred, or arise from events that
occurred, prior to the Closing Date;
(f) liabilities or obligations (i) to Sellers' employees or other
service providers, including any obligations for severance, termination, salary
or other benefits, whether oral or written, other than those specifically
designated as Assumed Liabilities, (ii) with respect to the Seller Benefit
Plans, and (iii) of Sellers to the Internal Revenue Service, Department of
Labor, PBGC or any other Governmental Authority relating to Sellers' employees;
(g) penalties, fines, settlements, interest, costs and expenses arising
out of or incurred as a result of any actual or alleged violation by any of
Sellers of any Legal Requirement;
(h) liabilities or obligations under the WARN Act, if any, arising out
of or resulting from layoffs of employees by Sellers on or prior to the Closing
Date, in connection with or
15
resulting from the consummation of the Transaction, sufficient in the aggregate
to require notice under the WARN Act, except (i) to the extent Buyer has agreed
to assume a portion of the WARN Act liability, if any, associated with Beneco
and (ii) except for any WARN Act liabilities that may arise from any layoffs of
Hired Employees by Buyer after the Closing;
(i) liabilities or obligations relating to professional liability,
pending or threatened litigation or pending or future claims relating to
asbestos;
(j) liabilities related to any debtor-in-possession financing under
section 364(b), (c) or (d) of the Bankruptcy Code other than the Credit
Agreement;
(k) all liabilities: (i) for administrative claims incurred in
connection with the Bankruptcy Cases, other than pre-petition and post-petition
cure costs related to Assumed Contracts; (ii) incurred in the negotiation and
preparation of this Agreement; (iii) relating to the Transaction; (iv) relating
to the Bankruptcy Cases, in each case to the extent incurred by Sellers or any
of them and including those related to legal counsel, accounting, brokerage and
investment advisors fees and disbursements; and (v) any pending shareholder
claims, litigation or proceedings.
2.05. Purchase Price. Subject to the terms and conditions hereof, in
reliance upon the representations and warranties of Sellers and the covenants of
Sellers herein set forth, and as consideration for the sale and purchase of the
Assets (the "Purchase Price"), Buyer shall pay to Sellers (or Sellers'
assignee), at Closing, and subject to adjustment as provided in Section 2.06:
(a) cash and Common Stock having an aggregate value of One Hundred Five
Million Dollars ($105,000,000), as follows:
(i) Such cash and Common Stock shall consist of a combination
of (A) at the option of either Buyer or ITG, a number of shares of
Common Stock (the "Share Consideration"), equal to Fifty-Two Million
Five Hundred Thousand Dollars ($52,500,000) divided by the average of
the closing prices of a share of the Common Stock on the NYSE for the
ten (10) trading days ending on the trading day immediately preceding
the Closing Date (the "Actual Average Price"); provided, however, that
(x) if the Actual Average Price is less than $16.929 per share, the
average price used for purposes of calculating the Share Consideration
shall be $16.929 per share (the "Low Average Price"), and (y) if the
Actual Average Price is greater than $20.691 per share, the average
price used for purposes of calculating the Share Consideration shall be
$20.691 per share (the "High Average Price"), and (B) subject to
paragraphs (ii) and (iii) below, cash in the amount of Fifty-Two
Million Five Hundred Thousand Dollars ($52,500,000); provided, that if
neither Buyer nor ITG elects the Share Consideration set forth in
sub-paragraph (i)(A) above, the cash portion pursuant to this paragraph
(a)(i) shall equal One Hundred Five Million Dollars ($105,000,000) (the
"Cash Consideration");
(ii) If either Buyer or ITG elect the Share Consideration
option in paragraph (a)(i)(A) above, and the Actual Average Price is
less than the Low Average Price, the Cash Consideration shall be
increased by cash in an amount equal to the product of (A)
16
the difference between the Actual Average Price and the Low Average
Price, multiplied by (B) the number of shares of Common Stock actually
issued pursuant to paragraph (a)(i) above; and
(iii) If either Buyer or ITG elect the Share Consideration
option in paragraph (a)(i)(A) above, and the Actual Average Price is
higher than the High Average Price, then at the option of ITG either
(A) the Cash Consideration shall be decreased by an amount equal to the
product of (x) the difference between the High Average Price and the
Actual Average Price, multiplied by (y) the number of shares of Common
Stock actually issued pursuant to paragraph (a)(i) above, or (B) the
number of shares issued pursuant to paragraph (i)(A) shall be equal to
Fifty Two Million Five Hundred Thousand Dollars ($52,500,000) divided
by the Actual Average Price; plus
(b) the assumption by Buyer of the Assumed Liabilities; plus
(c) an amount of cash (the "Employee Payments") equal to the sum of (i)
the Payroll Payments, (ii) the Retention Plan Payments and (iii) an amount equal
to one (1) week's vacation pay for all of Sellers' employees as of the Closing
Date; provided, however, that (A) in no event shall the total amount of the
Employee Payments exceed Twenty-Two Million Five Hundred Thousand Dollars
($22,500,000), and (B) in the event an employee of any Seller leaves voluntarily
prior to the Closing Date, Buyer shall nevertheless pay to ITG fifty percent
(50%) of the sum of (x) the amount such employee would have received under the
Retention Plan plus (y) one (1) week's vacation pay for such employee.
2.06. Purchase Price Adjustment.
(a) As of January 18, 2002, Sellers represent and warrant to Buyer that
the aggregate amount of cash on hand for all Sellers is at least Eighteen
Million Dollars ($18,000,000).
(b) The Cash Consideration shall be reduced, on a dollar-for-dollar
basis, to the extent that the aggregate cash on hand for all Sellers as of
January 18, 2002 is less than Eighteen Million Dollars ($18,000,000).
(c) The Cash Consideration shall be further reduced, on a
dollar-for-dollar basis, to the extent that any use of cash by any Seller, on or
after the effective date of the Credit Agreement, is not in accordance with the
budgets approved by Lender under the terms of the Credit Agreement. The
reduction in Cash Consideration described in this Section 2.06(c) is separate
from, and in addition to, any other remedy which may be available to Lender
under the terms of the Credit Agreement.
(d) The Cash Consideration shall be further reduced, on a
dollar-for-dollar basis, to the extent of payment of salaries or benefits for
specific employees not hired by Buyer, in respect of any period of time
beginning five (5) days after Buyer notifies ITG, in accordance with Section
5.15(c) that Buyer does not intend to hire such employee.
(e) Section 5.15(b) below permits Buyer, on any Tuesday or Friday up to
seven (7) days prior to the Bid Deadline, to provide ITG with notice (in
accordance with Section 5.15) that Buyer has decided to exclude any Contract
from the Assets. In such case, Sellers shall use their
17
good faith best efforts to reduce the expenses on such Contract, but in any
event shall not spend more on such Excluded Contract than provided in the most
recent Lender-approved budget under the Credit Agreement for the seven (7) days
subsequent to the receipt of such notice from Buyer. The Cash Consideration
shall be further reduced, on a dollar-for-dollar basis, to the extent of any
expenditures, whether or not budgeted, by any Seller on any such Excluded
Contract after the expiration of the seven (7)-day period described herein;
provided, however, that this reduction is not intended to duplicate any
reduction required by clauses (c) or (d) above.
(f) The Cash Consideration shall be further reduced, on a
dollar-for-dollar basis, to the extent that any itemized expense in a
Lender-approved budget (under the terms of the Credit Agreement) is not approved
by Sellers' pre-petition bank lenders.
(g) The Cash Consideration shall be increased, on a dollar-for-dollar
basis, to the extent that any Seller receives any proceeds from the sale or
other disposition of the Excluded Assets (including insurance and condemnation
proceeds relating to the Excluded Assets) and such proceeds are used to pay down
borrowings under the Credit Agreement.
2.07. Registration Rights. Sellers (or Sellers' distributees in any of
the Bankruptcy Cases) shall be given registration rights with respect to the
Common Stock comprising the Share Consideration, subject to the terms and
conditions of the Registration Rights Agreement with respect to the resale of
such Common Stock by Sellers (or Sellers' distributees in any of the Bankruptcy
Cases).
2.08. Addition of Sellers; Delivery of Schedules.
(a) ITG agrees that, no later than twenty-one (21) days after the
Effective Date it will cause this Agreement to be amended to add as Sellers
hereunder any of its Subsidiaries that have any right, title or interest in or
to any of the Assets. ITG and Buyer agree that any references herein to Sellers
shall mean and include ITG and all such Subsidiaries, and the representations
and warranties of ITG in this Agreement shall be made with respect to all
Sellers as if all Sellers had been Parties to this Agreement on the date hereof.
(b) Sellers shall deliver the Seller Schedules to Buyer no later than
twenty-one (21) days after the Effective Date.
(c) Buyer shall deliver the Buyer Schedules other than Schedules
2.02(d), 5.04 and 5.15(b) to ITG no later than twenty-one (21) days after the
Effective Date and shall deliver Schedules 2.02(d), 5.04 and 5.15(b) to ITG no
later than seven (7) days prior to the Bid Deadline; provided, however, that
Buyer shall use commercially reasonable efforts to keep ITG informed, on a
rolling basis, of any Contract which Buyer designates as an Excluded Contract or
of any of Sellers' employees who will not be offered employment by Buyer.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller jointly and severally hereby represents and warrants to
Buyer as follows:
3.01. Organization. Each Seller is duly organized, validly existing
and, to the extent applicable in the case of Foreign Sellers, in good standing
under the laws of its jurisdiction of
18
organization or incorporation, as the case may be. Each Seller is licensed,
registered, qualified or admitted to do business in each jurisdiction in which
the ownership, use or leasing of any of Seller's assets or properties (including
the Assets), or the conduct or nature of the Business, makes such licensing,
qualification or admission necessary, except where such failure would not result
in a Material Adverse Change.
3.02. Powers; Consents; Absence of Conflict, Etc. Subject to approval
of this Agreement by the Bankruptcy Court, each Seller has the requisite
corporate, partnership or other power and authority to conduct its businesses as
now being conducted, to enter into this Agreement and to perform its respective
obligations hereunder, and the execution, delivery and performance by each
Seller of this Agreement and the consummation of the Transaction:
(a) are within such Seller's powers, are not in contravention of the
terms of its articles or certificate of incorporation or other organizational
documents, as amended to date, its bylaws and other governing documents, as
amended to date, and have been duly authorized by all requisite corporate,
partnership or other action, as the case may be;
(b) except as otherwise expressly provided in this Agreement or as set
forth on Schedule 3.02(b), do not require any approval or consent of, or filing
with, any Governmental Authority;
(c) except as excused by the Bankruptcy Court, do not conflict with or
result in any breach or contravention of, any Assumed Contract to which any
Seller is a party or by which it is bound; and
(d) do not violate any Legal Requirement to which any Seller or the
Assets may be subject;
except, in the case of the foregoing clause (b), routine notice filings, and in
the case of the foregoing clauses (b), (c) and (d), for such conflicts or
violations as to which requisite waivers or consents have been obtained or which
would not result in a Material Adverse Change.
3.03. Binding Agreement. This Agreement and all instruments and
agreements hereunder to which each Seller is or becomes a Party are (or upon
execution will be) valid and legally binding obligations of each such Seller,
enforceable against each such Seller in accordance with the respective terms
hereof or thereof, except as enforceability may be subject to general principles
of equity and, with respect to the Foreign Sellers, enforceability may be
restricted, limited or delayed by applicable bankruptcy or other laws effecting
creditors' rights generally. Sellers' (other than the Foreign Sellers)
obligations under this Agreement are subject to the approval of the Bankruptcy
Court.
3.04. Subsidiaries, Investments and Third Party Rights. Except as set
forth in the ITG SEC Documents filed prior to the Effective Date or on Schedule
2.01(i), no Seller holds any Investments. Except for the liens of Sellers'
pre-petition lenders and the transactions contemplated by this Agreement, there
are no agreements with, or options, commitments or rights in favor of, any
Person to directly or indirectly acquire any of the Assets, or any interest
therein.
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3.05. Legal and Regulatory Compliance. Except as set forth in Schedule
3.05, each Seller is in compliance in all material respects with all Legal
Requirements, and has timely filed all reports, data and other information
required to be filed with Governmental Authorities.
3.06. Financial Statements.
(a) Except as set forth on Schedule 3.06, the Interim Financial
Statements fairly present the financial condition and results of operations of
ITG as of the respective dates thereof and for the periods therein referred to,
all in accordance with generally accepted accounting principles ("GAAP"),
consistently applied, subject to normal recurring quarterly and year-end
adjustments and the absence of notes.
(b) ITG has filed all required ITG SEC Documents since March 22, 1999.
The consolidated financial statements (including in each case, any notes
thereto) of ITG included in the ITG SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect hereto, were prepared in
accordance with GAAP (except, in the case of the Unaudited Financial Statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present in all material respects in accordance with GAAP the
consolidated financial position of ITG and its consolidated Subsidiaries as at
the respective dates thereof and the consolidated results of their operations
and their consolidated cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments and to any
other adjustments described therein).
3.07. Undisclosed Liabilities. Except in connection with the Bankruptcy
Cases, since September 29, 2001, the Business has not incurred any material
liabilities or obligations, except for liabilities and obligations incurred in
the ordinary course of business.
3.08. Recent Activities.
(a) Since January 15, 2002 no Catastrophic Event has occurred which has
resulted in a Material Adverse Change.
(b) Since December 28, 2001:
(i) no Seller has increased or agreed to increase in any
material respect the compensation payable to any of its employees or
agents or made or agreed to make any bonus or severance payment to any
of its employees or agents in any material respect except in the
ordinary course of the Business and consistent with past practice or as
specifically approved by Buyer and the Bankruptcy Court;
(ii) no Seller has sold, assigned, transferred, distributed or
otherwise disposed of any of the material Assets, except in the
ordinary course of the Business consistent with past practice;
(iii) no Seller has canceled or waived any material rights in
respect of the Assets, except in the ordinary course of the Business
consistent with past practice;
20
(iv) there has been no material change in any accounting
method, policy or practice of any Seller, except as required by
announcements of the Financial Accounting Standards Board or as
disclosed in the ITG SEC Documents;
(v) there has been no material change in the manner in which
any Employee Benefit Plan and any assets or liabilities related thereto
has been administered;
(vi) no material Environmental Claim has been made against any
Seller or against or regarding the Assets or Business; and
(vii) no Seller has received from any Governmental Authority
written notice that it is in material violation of any Legal
Requirement.
3.09. Subsidiaries; Assets. Each direct and indirect Subsidiary of ITG
that owns or has any interest in the Assets is set forth on Schedule 3.09. No
Person that is not or does not become a Seller owns, holds title to or has any
other direct, indirect or beneficial interest in any of the Assets.
3.10. Equipment. All equipment that is material to the conduct of the
Business, whether reflected in the Financial Statements or otherwise, is in good
operating condition and repair, except for reasonable wear and tear. All leased
equipment that is material to the conduct of the Business is maintained in all
material respects (either by Sellers, the manufacturer or lessor, as the case
may be) in accordance with manufacturer and lessor requirements.
3.11. Title to Personal Property. Schedule 2.01(b) is a true, correct
and complete list of all Personal Property owned or leased by Sellers in
connection with the ownership and operation of the Business with a book value in
excess of Twenty-Five Thousand Dollars ($25,000). Sellers own and hold good and
valid title or leasehold title, as the case may be, to all the Assets, other
than the Real Property, free and clear of any Encumbrances (other than liens in
favor of Sellers' pre-petition bank lenders). At Closing, Sellers will convey to
Buyer good and valid title to all the Assets, other than the Real Property, free
and clear of all Encumbrances.
3.12. Real Property.
(a) Sellers own or hold indefeasible fee simple or leasehold title, as
the case may be, to the Real Property together with all buildings, improvements
and fixtures thereon and all appurtenances and rights thereto, free and clear of
any Encumbrances other than the Real Property Encumbrances.
(b) At the Closing, Sellers will convey to Buyer good and marketable
fee simple or leasehold title, as the case may be, to all Real Property, free
and clear of any Encumbrances other than the Permitted Real Property
Encumbrances.
(c) Schedule 2.01(a) is a true, correct and complete list of all of the
Real Property owned or leased by Sellers in connection with the ownership and
operation of the Business.
21
(d) The buildings and other improvements constructed on the Real
Property and material to the conduct of the Business are in a state of good
condition and repair, in all material respects.
(e) There are no pending or, to the Knowledge of Sellers, threatened
condemnation or similar proceedings or material special assessments relating to
the Real Property or any part thereof.
(f) Sellers have received all required material approvals of
Governmental Authorities (including, without limitation, Permits, zoning
approvals and material certificates of occupancy or other such certificates
permitting lawful occupancy of the Real Property) required in connection with
the use of the Real Property and all improvements thereon.
3.13. Environmental Matters. Except as set forth on Schedule 3.13:
(a) The Business is, and since January 1, 1999 has been, in compliance
in all material respects with all applicable Environmental Laws.
(b) No Seller has received any material Environmental Claim nor, to the
Knowledge of Sellers, is there any basis for any material Environmental Claim
(including knowledge of any actions, activities, circumstances, conditions,
events or incidents, including the release, emission, discharge or disposal of
any Materials of Environmental Concern, whether relating to the Assets or the
Business or otherwise).
(c) There is no existing material contamination by, and there has not
been any material release of, any Materials of Environmental Concern on, at,
under or around any of the Assets or on or in connection with the Business.
(d) True, complete and correct copies of the written reports, and all
parts thereof, of all environmental audits or assessments which have been
conducted with respect to any Seller or the Business, either by any Seller or
any environmental consultant or engineer engaged for such purpose, have been
made available to Buyer. Sellers have provided Buyer with true, complete and
correct copies of all environmental audits and assessments in the possession of
Sellers relating to any of the Assets or any Pre-Closing Environmental Matter.
(e) Each Seller has all material Permits required under applicable
Environmental Laws to own or lease its properties and to conduct the Business
thereon. All material Permits currently held by Sellers pursuant to the
Environmental Laws have been made available to Buyer.
(f) Without in any way limiting the generality of the foregoing, (i)
all Materials of Environmental Concern are handled and disposed of in material
compliance with all applicable Environmental Laws, (ii) all underground storage
tanks located on the Real Property, and the capacity and contents of such tanks,
are identified on Schedule 3.13(f), (iii) there is no material amount of exposed
friable asbestos contained in or forming part of any building, building
component, structure or office space owned or leased by Sellers and used in the
conduct of the Business, and (iv) no polychlorinated biphenyls are used or
stored at any Real Property owned or leased by Sellers.
22
(g) Notwithstanding the foregoing, the representations and warranties
in this Section 3.13 shall be deemed to be made without the benefit of any
knowledge or materiality qualifiers with respect to matters involving any
handling, storage or release of nuclear materials that constitute Materials of
Environmental Concern.
3.14. Intellectual Properties, Computer Software, etc. Schedule 2.01(g)
is a true, correct and complete list of all material Intellectual Properties
used in connection with, or derived from or arising out of, the ownership and
operation of the Business and all computer software, programs and similar
systems owned or licensed by any Seller for use at or in connection with the
Business (other than commercially available software or "off-the-shelf"
licenses). Except for customary licensing fees payable under the Contracts,
Sellers have the right to use, free and clear of any royalty or other payment
obligations, claims of infringement against Intellectual Properties or computer
software, programs or similar systems owned by any Seller or any liens (other
than liens in favor of Sellers' pre-petition bank lenders, (a) all Intellectual
Properties used or needed by Sellers in the conduct of the Business, and (b) all
computer software, programs and similar systems owned by or licensed under
Contracts to any Seller and used in the conduct of the Business, and no Seller
is in violation or infringement of, nor has any Seller received any notice
alleging any conflict with or violation or infringement of, any rights of any
other Person with respect to any such Intellectual Properties or computer
software, programs or similar systems. Except to the extent prohibited by Legal
Requirements, and except for customary licensing fees payable under the
Contracts, subsequent to the Closing and without further action or the payment
of additional fees, royalties or other compensation to any Person, Buyer will be
entitled to unrestricted use of all Intellectual Properties, computer software,
programs and similar systems as currently used in the Business.
3.15. Insurance. True and correct copies of all insurance arrangements
and policies and any endorsements thereto in place for the benefit of the Assets
and the conduct of the Business have been made available to Buyer.
3.16. Permits and Licenses. Schedule 2.01(f) contains a complete and
accurate list and summary description of all material Permits and franchises
(including applications therefor) owned or held by Sellers relating to the
ownership, development or operations of the Business or the Assets, all of which
are in good standing, and except as a result of the filing of the Bankruptcy
Cases, are not subject to challenge. Except in connection with the Bankruptcy
Cases, or as set forth on Schedule 3.16, each Seller is, with respect to the
Business, duly licensed by the appropriate Governmental Authorities. Each Seller
is, and the Business is and has at all time been conducted, in compliance in all
material respects with any and all applicable licensing requirements. Except in
connection with the Bankruptcy Cases, or as set forth on Schedule 3.16, there
are no provisions in, or agreements relating to, any such Permits or franchises
(including applications therefor) which would preclude or limit Buyer from
operating the Business and using all Assets in their current conditions and
locations, except for such provisions relating to the assignment or transfer of
any Permit or franchise.
23
3.17. Agreements and Commitments.
(a) Schedule 3.17 is a true, complete and correct list of all Contracts
conforming to the descriptions set forth in this Section 3.17 to which any
Seller, individually or through a joint venture, partnership or other
arrangement, is a party, copies of each of which have been delivered or made
available to Buyer, including:
(i) Contracts involving payments by or to any Seller,
individually or through a joint venture, partnership or other
arrangement, in excess of One Hundred Thousand Dollars ($100,000) not
made in the ordinary course of business;
(ii) any employee collective bargaining agreement or other
Contract with any labor union covering employees of any of the Sellers;
(iii) any Contract (including sales orders) involving the
obligation of any Seller, individually or through a joint venture,
partnership or other arrangement, to deliver products or services in
excess of One Hundred Thousand Dollars ($100,000);
(iv) any option or other Contract to purchase or otherwise
acquire or sell or otherwise dispose of any interest in any real
property (including the Real Property);
(v) any Contract under which any Seller, individually or
through a joint venture, partnership or other arrangement, has agreed
to indemnify any third party in any manner, including with respect to,
or to share, the Tax liability of any third party;
(vi) any Contract to make a capital expenditure or to purchase
a capital asset in excess of Two Hundred Fifty Thousand Dollars
($250,000) by or on behalf of any Seller in connection with the Assets
or the operation of the Business other than capital expenditures
relating to assets which are to become part of a project;
(vii) any Contract relating to the location of employees or
minimum number of employees to be employed by Seller with respect to
the Business;
(viii) any power of attorney (other than powers of attorney
given in the ordinary course of the Business with respect to routine
export, tax or securities matters);
(ix) any bond, indenture, note, loan or credit agreement or
other Contract relating to the borrowing of money or to the direct or
indirect guarantee or assumption of the obligations of any other Person
for borrowed money;
(x) any Contract limiting or restricting in any material
manner the operation of the Business;
(xi) any lease or similar Contract under which (i) any Seller,
individually or through a joint venture, partnership or other ownership
arrangement, is the lessee of, or holds or uses, any machinery,
equipment, vehicle or other tangible personal property or real property
owned by any third Person for an annual rent in excess of One Hundred
Thousand Dollars ($100,000) or (ii) any Seller, individually or through
a joint venture,
24
partnership or other arrangement, is the lessor of, or makes available
for use by any third Person, any tangible personal property or real
property owned by any Seller for an annual rent in excess of One
Hundred Thousand Dollars ($100,000), in each case, other than with
respect to machinery, equipment, vehicles or other tangible personal
property specifically for use in connection with a project;
(xii) employment and severance Contracts (i) to employ or
terminate executive officers or other personnel and other contracts
with present or former officers, directors or shareholders of any
Seller, individually or through a joint venture, partnership or other
arrangement, or (ii) that will or could result in the payment by or the
creation of any commitment or obligation (absolute or contingent) to
pay on behalf of Buyer or any Seller, individually or through a joint
venture, partnership or other arrangement, any severance, termination,
"golden parachute," or other similar payments to any present or former
personnel following termination of employment or otherwise as a result
of the consummation of the Transactions; and
(xiii) any joint venture or partnership (or other ownership
arrangement) Contracts.
(b) Sellers have made available to Buyer true, complete and correct
copies of any Contract (including purchase orders) involving the obligation of
any Seller to purchase products or services pursuant to which the aggregate of
payments to become due from such Seller is equal to or exceeds One Hundred
Thousand Dollars ($100,000);
3.18. Contracts.
(a) Except for events of default that arise or result from the filing
of the Bankruptcy Cases or which can be cured in connection with assumption and
assignment pursuant to this Agreement, upon assumption by any Seller which is a
debtor in the Bankruptcy Cases:
(i) the Contracts constitute lawful, valid and legally binding
obligations of the Sellers who are parties thereto and are enforceable
against such Sellers in accordance with their terms;
(ii) each Contract is in full force and effect and constitutes
the entire agreement by and between the parties thereto;
(iii) no Contract will prohibit competition or restrict the
ability of Buyer to engage in any lawful business after Closing; and
3.19. Employees and Employee Relations.
25
(a) Sellers have made available to Buyer a complete list (as of the
date set forth therein) of names, positions, current annual salaries or wage
rates, and bonus and other compensation arrangements of all full-time and
part-time employees of each Seller (indicating in such list whether each
employee is part-time or full-time, whether such employee is employed under
written Contract, and, if such employee is not actively at work, the reason
therefor).
(b) There is no pending or, to the Knowledge of Sellers, threatened
employee strike, work stoppage or slowdown or labor dispute. Except as disclosed
on Schedule 3.19, no employees of any Seller are represented by a labor union or
employee organization, and (i) no union or employee organization has made a
written demand for recognition and (ii) to the Knowledge of Sellers, no other
union organizing or collective bargaining activities by or with respect to any
employees of any Seller are taking place.
3.20. Employee Benefit Plans. Except as set forth on Schedule 3.20:
(a) Sellers have provided Buyer access to each Employee Benefit Plan
and Other Plan that any Seller or any member of the Controlled Group that
includes any Seller sponsors or maintains or has within the last three (3) years
sponsored or maintained or to which it contributes (including employee elective
deferrals) or has within the last three (3) years contributed or been required
to contribute, or with respect to which it otherwise has any liability or
obligation (collectively, the "Seller Benefit Plans").
(b) Each Seller Benefit Plan (and related trust, insurance contract or
fund if the Seller Benefit Plan is funded through a trust or third party funding
vehicle) complies in form and in operation in all material respects with
applicable Legal Requirements, and has been administered and operated in all
material respects in accordance with all applicable Legal Requirements. All
required reports and descriptions required to be filed with any Governmental
Authority (including, to the extent applicable, Form 5500 Annual Reports,
Summary Annual Reports, PBGC-1's and Summary Plan Descriptions) have been filed
or distributed appropriately with respect to each Seller Benefit Plan. Sellers
have delivered or made available to Buyer correct and complete copies of, to the
extent applicable, the plan documents and summary plan descriptions, most recent
determination letters received from the Internal Revenue Service, most recent
Form 5500 Annual Report, and all related trust agreements, insurance contracts
and other funding agreements which implement each Seller Benefit Plan (and in
the case of any Seller Benefit Plan of any Foreign Seller, any comparable
documents under the applicable Legal Requirements of the appropriate
Governmental Authorities). Since March 22, 2001 no Employee Benefit Plan has
been audited by any Governmental Authority, no Seller has received any written
notice that such an audit will or may be conducted and no event has occurred
since the date of such determination letter that would operate to jeopardize any
Seller Benefit Plan's qualification.
(c) Each Seller Benefit Plan intended to be a qualified plan under Code
section 401(a) is in material compliance with the requirements of a qualified
plan under Code section 401(a), and each such plan has received a favorable
determination letter from the Internal Revenue Service that is current and valid
and no event has occurred since the date of such
26
determination letter that would operate to jeopardize such plan's qualification.
All contributions (including employer contributions and employee salary
reduction contributions) to each Seller Benefit Plan that are required to be
paid have been paid.
(d) All required premiums or other payments relating to all periods of
coverage existing on the Closing Date have been or will have been paid with
respect to each Seller Benefit Plan which is an Employee Welfare Benefit Plan.
(e) There have been no Prohibited Transactions with respect to any
Seller Benefit Plan that would subject any Seller or any member of the
Controlled Group that includes any Seller to any material liability; no Seller
has incurred or reasonably expects to incur material excise tax liability under
Chapter 43 and Chapter 47 under Subtitle D of the Code; no ERISA Fiduciary has
any material liability for breach of fiduciary duty or any other failure to act
or comply in connection with the administration or investment of the assets of
any Seller Benefit Plan; no action, suit, proceeding, hearing or investigation
with respect to the administration or the investment of the assets of any Seller
Benefit Plan (other than routine, uncontested claims for benefits) is pending
or, to the Knowledge of Sellers, threatened; and to the Knowledge of Sellers,
there exists no basis for any such action, suit, proceeding, hearing or
investigation. No Party in Interest has any interest in any assets of any Seller
Benefit Plan which is an Employee Pension Benefit Plan other than as a
beneficiary by virtue of such Person's participation in such plan.
(f) No Seller Benefit Plan subject to Title IV or part 3 of Title I of
ERISA has incurred any "accumulated funding deficiency" or "waived funding
deficiency" within the meaning of section 302 of ERISA or section 412 of the
Internal Revenue Code of 1986, as amended (the "Code") and the Sellers have
never sought to obtain any variance from the minimum funding standards pursuant
to section 412(d) of the Code. The funding method used in connection with each
Seller Benefit Plan subject to Title IV or part 3 of Title I of ERISA meets the
requirements of ERISA and the Code and the actuarial assumptions used in
connection with each such plan are reasonable, given the experience of such
Seller Benefit Plan subject to Title IV or part 3 of Title I of ERISA and
reasonable expectations. The fair market value of the plan assets of each
Employee Pension Benefit Plan are at least equal to (i) the present value of its
benefit liabilities (as defined in ERISA section 4001(a)(16), including any
unpredictable contingent event benefits within the meaning of Code section
412(l)(7), and determined on the basis of assumptions prescribed by the PBGC for
purposes of ERISA section 4044), and (ii) the Projected Benefit Obligations
thereunder, as defined in Statement of Financial Accounting Standards No. 87,
including any allowance for indexation and ad hoc increases. No Seller Benefit
Plan has been completely or partially terminated or been the subject of a
Reportable Event under ERISA section 4043. No proceeding by the PBGC to
terminate any Seller Benefit Plan has been instituted, and the Sellers have not
incurred any liability to the PBGC (other than the PBGC premiums, all of which
have been timely paid) or otherwise under Title IV of ERISA with respect to any
Seller Benefit Plan.
(g) No Seller, and no member of the Controlled Group that includes any
Seller, contributes to, ever has contributed to, or ever has been required to
contribute to any Multiple Employer Plan or any Multiemployer Plan or has any
liability (including withdrawal liability) under any Multiple Employer Plan or
any Multiemployer Plan. No Seller, and no member of the Controlled Group that
includes any Seller, maintains or contributes, ever has maintained or
27
contributed, or ever has been required to maintain or contribute to any Employee
Welfare Benefit Plan 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 or ERISA section 601 ("COBRA")).
(h) Each Seller has complied in all material respects with the
requirements of Code sections 4980B, 9801, 9802, 9811 and 9812.
(i) With respect to each Seller Benefit Plan and any other similar
arrangement or plan either currently or previously terminated, maintained, or
contributed to by any entity which either is currently or was previously under
common control with any Seller as determined under Code section 414 or ERISA
section 3(5), no event has occurred and no condition exists that after the
Closing could subject the Buyer, directly or indirectly, to any liability
(including liability under any indemnification agreement) under section 412,
413, 4971, 4975 or 4980B of the Code or section 302, 502, 515, 601, 606 or Title
IV of ERISA.
3.21. Litigation and Proceedings. Except as disclosed in the ITG SEC
Documents, the Bankruptcy Cases or on Schedule 3.21, there are no claims,
actions, suits, litigation, arbitration, mediations, investigations or other
proceedings (including qui tam actions) pending, affecting, or to the Knowledge
of Sellers, threatened against any Seller which would cause a Material Adverse
Change, and to the Knowledge of Sellers, there exist no facts that might form
the basis of any such claim, action, suit, litigation, arbitration, mediation,
investigation or other proceeding.
3.22. Taxes.
(a) Sellers have filed all material Tax Returns required to be filed by
or on behalf of any of them; all such Tax Returns are correct and complete in
all material respects; and Sellers have duly paid or made provision in the
Audited Financial Statements for the payment of all material Taxes due and
payable as of the date of such Financial Statements; and as of Closing there
will be no Encumbrances on any Assets that relate to failure (or alleged
failure) to pay any Tax.
(b) Each Seller has withheld proper and accurate amounts from its
employees' compensation in full and complete compliance with all withholding and
similar provisions of the Code and any and all other applicable Legal
Requirements, and has withheld and paid, or caused to be withheld and paid, all
Taxes on monies paid by Sellers to independent contractors, creditors and other
Persons for which withholding or payment is required by law.
(c) No taxing authority has advised any Seller in writing that it
intends to assess any material additional Taxes for any period for which Tax
Returns have been filed. There is no dispute or claim concerning any Tax
liability of Sellers either claimed or raised by any Governmental Authority in
writing.
(d) No Seller has or may have any liability for the Taxes of any Person
other than Sellers under Reg. Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by Contract or
otherwise.
28
3.23. Brokers and Finders. No Seller nor any officer, director,
employee or agent thereof, has engaged any finder or broker in connection with
the Transaction, except that ITG has engaged ▇▇▇▇▇▇ Brothers, UBS Warburg and
▇▇▇▇▇▇▇▇ Capital Markets Group, Inc. to act as ITG's independent financial
advisors in connection with the Transaction.
3.24. Payments. No Seller has, directly or indirectly, paid or
delivered or agreed to pay or deliver any fee, commission or other sum of money
or item of property, however characterized, to any Person which is in any manner
related to the Assets or the Business in violation of any Legal Requirement. No
Seller, nor to the Knowledge of Sellers, any officer, director or employee of
any Seller has received or will receive any rebate, kickback or other improper
or illegal payment from Person with whom Sellers conduct or have conducted
business.
3.25. Intentionally Deleted.
3.26. Customer List. Sellers have made available to Buyer a complete
and accurate list of all customers of each Seller (other than Landbank) since
November 30, 2001 which generated revenues in excess of One Hundred Thousand
Dollars ($100,000) during such period.
3.27. Backlog. Sellers have made available to Buyer a complete and
accurate list of all unfilled orders for products or services of Sellers (other
than Landbank) as of September 28, 2001 setting forth the date of such order and
the current status.
3.28. Investment Experience and Intent; No Registration. ITG is
experienced in evaluating companies such as Buyer, is able to fend for itself in
transactions such as the Transaction, has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of acquiring and holding the Common Stock comprising the Share
Consideration, if any. Except as may be required in connection with or pursuant
to the Bankruptcy Cases, ITG is acquiring the Common Stock comprising the Share
Consideration, if any, for investment for its own account and not with the view
to, or for resale in connection with, any distribution thereof in violation of
applicable federal securities laws. ITG understands and acknowledges that the
Common Stock comprising the Share Consideration, if any, will not be registered
under the Securities Act, unless and solely to the extent so required pursuant
to the terms and subject to the conditions of the Registration Rights Agreement.
3.29. Accredited Investor Status. As of the Effective Date, each of ITG
and any other Seller receiving any portion of the Share Consideration, if any,
is an Accredited Investor.
3.30. Rule 144. ITG acknowledges that the Common Stock comprising the
Share Consideration, if any, must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. ITG is aware of the provisions of Rule 144 promulgated under the
Securities Act that permit resale of shares purchased in a private placement
subject to the satisfaction of certain conditions. ITG covenants that, in the
absence of an effective registration statement covering the Common Stock
comprising the Share Consideration, ITG will sell, transfer or otherwise dispose
of such securities only in a manner consistent with ITG's obligations under the
Registration Rights Agreement, in compliance with applicable federal securities
laws or as ordered by the
29
Bankruptcy Court in the Bankruptcy Cases. In connection therewith, ITG
acknowledges that Buyer will make a notation on its stock books regarding the
restrictions on transfers set forth in this Section 3.30 and the Registration
Rights Agreement and will transfer securities on the books of Buyer only to the
extent not inconsistent herewith and therewith or as ordered by the Bankruptcy
Court in the Bankruptcy Cases.
3.31. Government Contracting. Except as set forth on Schedule 3.31:
(a) (i) no Seller, nor to the Knowledge of Sellers, any director,
officer, employee, agent or consultant of any Seller, is (or for the last five
(5) years has been) under administrative, civil or criminal investigation
(including as a result of a qui tam or similar action brought under the Civil
False Claims Act or any similar state or local law, rule or regulation),
indictment or information, audit or internal investigation with respect to any
alleged irregularity, misstatement or omission arising under or relating to any
Government Contract or Bid or is (or for the last five (5) years has been) in
violation of any statutes or regulations relative to prohibited practices,
including the False Claims Act, prohibitions against "Buying In," the
Anti-Kickback Act, the Federal Election Campaign Act, Truth-In-Negotiations-Act,
the Procurement Integrity Act, the Foreign Corrupt Practices Act, International
Trade in Arms Regulation, Cost Accounting Standards, prohibitions against
conflict of interest and anti-trust laws or any governmental accounting
regulations; (ii) no Seller has made a voluntary disclosure to any Governmental
Authority with respect to any alleged irregularity, misstatement or omission
arising under or relating to any Government Contract or Bid that has led or
would reasonably be expected to lead, either before or after the Closing Date,
to any of the consequences set forth in clauses (i) or (ii) above or any other
damage, penalty assessment, recoupment of payment or disallowances of cost.
(b) No Seller, nor to the Knowledge of Sellers, any director, officer,
employee, agent or consultant of any Seller is (or for the last five (5) years
has been) suspended, proposed for debarment or debarred from doing business with
any Governmental Authority or has been declared nonresponsible or ineligible for
U.S. Government contracting. To the Knowledge of Sellers, there exist no
circumstances that would warrant the institution of suspension or debarment
proceedings or the finding of nonresponsibility or ineligibility in the future
on the part of the Sellers or Buyer as the purchaser of the Assets.
(c) Each Seller is in compliance in all material respects with all
Foreign Ownership and Control Interests ("FOCI") regulations and have received
all required approvals within the last five (5) years.
(d) Each Seller's cost accounting and procurement systems with respect
to Government Contracts are in compliance in all material respects with all
applicable governmental regulations and rules.
3.32. Accounts Receivable. Except as described on Schedule 3.32, there
is (a) no account debtor that has refused (or to the Knowledge of any Seller,
threatened to refuse) to pay its obligations with respect to any Account
Receivables for any reason, (b) to the Knowledge of Sellers, no account debtor
that is insolvent or bankrupt, (c) no Accounts Receivable that was not generated
in the ordinary course of the Business, (d) no Accounts Receivable that is not
appropriately reserved and, as reserved, is not good and collectible.
Notwithstanding the
30
foregoing, the representations and warranties in this Section 3.32 are not made
with respect to any Excluded Account Receivable.
3.33. Related Party Transactions. Except (i) for compensation and
benefits payable in the ordinary course of the Business and (ii) for normal
travel advances made in the ordinary course of the Business consistent with past
practice, no director, officer, partner or employee of any Seller (a) since
December 31, 2000 has lent or borrowed any monies to or from or has outstanding
any indebtedness or other similar obligations to any Seller, (b) is otherwise a
party to, or since December 31, 2000 has been a party to, any Contract with any
Seller involving payments equal to or in excess of One Hundred Thousand Dollars
($100,000) per year or (c) owns or has any rights in any material assets,
properties, licenses or rights which are used or leased (or, since December 31,
2000 were used or leased) by any Seller in the conduct of the Business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.01. Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Louisiana.
4.02. Corporate Powers; Consents; Absence of Conflicts, Etc. Buyer has
the requisite power and authority to conduct its business as now being
conducted, to enter into this Agreement, and to perform its obligations
hereunder. The execution, delivery and performance by Buyer of this Agreement
and the consummation of the Transaction by Buyer:
(a) are within Buyer's corporate powers and are not in contravention of
any Legal Requirement or the terms of its Articles of Incorporation or Bylaws,
each as amended to date, and have been approved by all requisite corporate and
shareholder action;
(b) except as otherwise expressly provided in this Agreement or as set
forth on Schedule 3.02(b), do not require any approval or consent of, or filing
with, any Governmental Authority;
(c) do not conflict with or result in any breach or contravention of,
any material agreement to which Buyer is a party or by which it is bound; and
(d) do not violate any Legal Requirement to which Buyer may be subject.
4.03. Binding Agreement. This Agreement and all instruments and
agreements hereunder to which Buyer is or becomes a party are (or upon execution
will be) valid and legally binding obligations of Buyer enforceable against
Buyer in accordance with the respective terms hereof and thereof, except as
enforceability against Buyer may be restricted, limited or delayed by applicable
bankruptcy or other laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity.
4.04. Issuance of Share Consideration. The issuance of the shares of
Common Stock comprising the Share Consideration, if any, has been duly and
validly authorized by all requisite
31
corporate and shareholder action, and, when issued in accordance with the terms
and conditions of this Agreement, will be duly authorized, validly issued, fully
paid, and non-assessable.
4.05. Brokers and Finders. Neither Buyer, nor any Affiliate of Buyer,
nor any officer, director, employee or agent thereof, has engaged any finder or
broker in connection with the transactions contemplated hereunder, except that
Buyer has engaged CS First Boston to act as Buyer's independent financial
advisors in connection with the Transaction.
4.06. Payments. Neither Buyer nor any Affiliate of Buyer nor any
officer, director, employee or agent thereof, has, directly or indirectly, paid
or delivered, offered to pay or deliver, or agreed to pay or deliver any fee,
commission or other sum of money or item of property, however characterized, to
any person which is now or was previously an affiliate or insider (as those
terms are defined in the Bankruptcy Code) of any Seller.
4.07. SEC Documents and Other Reports. Buyer has filed all required
documents with the SEC since January 1, 1999 (the "Buyer SEC Documents"). As of
their respective dates, the Buyer SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and, at the respective times they were filed, none of the Buyer SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements (including, in each case,
any notes thereto) of Buyer included in the Buyer SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with GAAP (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present in accordance with GAAP the consolidated financial position
of Buyer and its consolidated Subsidiaries as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements,
to any other adjustments described therein and normal year-end audit adjustments
and to any other adjustments described therein). Except as disclosed in the
Buyer SEC Documents filed prior to the Effective Date or as required by GAAP,
Buyer has not, since December 31, 2000 made any change in the accounting
practices or policies applied in the preparation of financial statements. The
books and records of Buyer and its Subsidiaries have been, and are being,
maintained in all material respects in accordance with GAAP and other applicable
legal and accounting requirements.
4.08. Actions and Proceedings. Except as set forth in the Buyer SEC
Documents filed prior to the Effective Date or on Schedule 4.08, (a) there are
no outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Authority against or involving Buyer or any of its Subsidiaries, or
involving any of its or their properties, assets or business that would have a
Buyer Material Adverse Change and (b) as of the Effective Date, there are no
actions, suits or claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of Buyer, threatened against or
involving Buyer or any of its Subsidiaries, or involving any of its or their
properties, assets or business that, individually or in the aggregate, would
have a Buyer Material Adverse Change.
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4.09. Capital Structure. The authorized stock of Buyer consists of
200,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock, no
par value (the "Buyer Preferred Stock"). At the close of business on January 9,
2002: (a) 40,053,332 shares of Common Stock were issued and outstanding, all of
which were validly issued, fully paid and nonassessable and free of preemptive
rights; and (b) no shares of Buyer Preferred Stock were issued or outstanding.
Except in connection with the Registration Rights Agreement or as disclosed in
Buyer SEC Documents filed prior to the date hereof, there are no outstanding
contractual obligations of Buyer or any of Buyer's Subsidiaries (i) restricting
the transfer of, (ii) affecting the voting rights of, (iii) requiring the
registration for sale of, or (iv) granting any preemptive or antidilutive rights
with respect to, any shares of Common Stock.
4.10. Absence of Certain Changes or Events. Since December 31, 2001,
(i) no event has occurred which constitutes a Buyer Material Adverse Change and
(ii) none of Buyer or any of its Subsidiaries has incurred any material
liability or obligations (direct, indirect or contingent), or entered into any
material oral or written agreement or other transaction, that is not in the
ordinary course of business or that would result in a Buyer Material Adverse
Change, except for any changes or effects resulting from this Agreement, the
Transaction or the announcement thereof.
4.11. Financing. Buyer has sufficient funds to enable Buyer to
consummate the Transaction.
5. COVENANTS AND AGREEMENTS OF THE PARTIES
5.01. Filing of Sale Motion; Entry of Buyer Protection and Bidding
Procedures Order; Additional Sellers. Promptly following, but no later than
three (3) business days after, the Effective Date, Sellers shall file the Sale
Motion and such other motions as are necessary to implement the Transaction.
Sellers shall request a prompt hearing relative to, and shall use commercially
reasonable efforts to obtain, entry of the Buyer Protection and Bidding
Procedures Order and the Sale Order. From and after the Effective Date, to the
extent that any direct or indirect Subsidiaries of any Seller acquires, owns or
holds any portion of the Assets or conducts any portion of the Business and
initially is not a Party hereto, Sellers shall cause each such direct or
indirect Subsidiary to become a Party as an additional Seller. In addition,
Sellers shall, and shall cause each such Subsidiary to, execute and deliver such
further documents and instruments and take such further actions as may be
necessary to file a Bankruptcy Case for each Subsidiary of ITG as, in the
reasonable judgment of Sellers after consultation with Buyer, are necessary to
consummate the Transaction.
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5.02. Operations. From the Effective Date until the Closing Date,
except as otherwise expressly provided in this Agreement (including Section
5.03), and without first obtaining the consent of Buyer, which shall not be
unreasonably withheld or delayed, and subject to the obligations of Sellers to
comply with any applicable order of the Bankruptcy Court and the provisions of
the Bankruptcy Code, and taking into account Sellers' current financial
condition and operation under the Bankruptcy Code, Sellers shall:
(a) perform when due all post-petition Legal Requirements and
obligations under Contracts (including the Assumed Contracts) relating to or
affecting the Assets or the Business;
(b) conduct the Business in substantially the same manner as they have
heretofore;
(c) maintain the Assets in good working order and condition, ordinary
wear and tear excepted;
(d) take all actions necessary and appropriate to deliver to Buyer
title to the Assets free and clear of all Encumbrances (except for the Permitted
Real Property Encumbrances) and, with respect to any Seller which is not a
debtor in the Bankruptcy Cases, obtain appropriate releases, consents,
estoppels, certificates, opinions and other instruments as Buyer may reasonably
request;
(e) keep in full force and effect present insurance policies or other
comparable insurance benefiting the Assets and the conduct of the Business;
(f) taking into account the Sellers' current financial condition and
the pendency of the Bankruptcy Cases, maintain and preserve their business
organizations and operations substantially intact; use their respective
commercially reasonable efforts to retain the present employees at the Business
(subject to the right of Sellers, after consultation with Buyer, to discharge
any employee in the ordinary course of the Business, and subject to the right of
Sellers to discharge any employee after notice from Buyer that such employee
will not become a Hired Employee); maintain their relationships with
contractors, subcontractors, suppliers, customers and other Persons doing
business with Sellers; and take such actions as are reasonably necessary and
achievable to cause the smooth, efficient and successful transition to Buyer of
the Business at Closing; and
(g) permit and allow reasonable access by Buyer to discuss and make
offers of post-Closing employment with any of Sellers' personnel, to advertise
for post-Closing employment at the Business, and to establish relationships with
contractors, subcontractors, suppliers and other Persons having business
relations with Sellers.
5.03. Certain Actions. From the Effective Date until the Closing Date,
Sellers shall not take any of the following actions without first obtaining the
consent of Buyer (which shall not be unreasonably withheld or delayed), and if
necessary the Bankruptcy Court:
(a) amend or terminate any Assumed Contract, or enter into any new
Contract involving a commitment on the part of any Seller in excess of Two
Hundred Fifty Thousand Dollars ($250,000);
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(b) make offers to any employees of the Business for employment with
any Person after Closing or make any material change in personnel, operations,
finances, accounting policies, or real or personal property of the Business;
(c) increase compensation payable or to become payable to, make a bonus
or severance payment to, or otherwise enter into one or more bonus or severance
agreements with, any employee or agent of any Seller except pursuant to the
Retention Plan or any other plan approved by the Bankruptcy Court (and Sellers'
pre-petition bank lenders);
(d) create, assume or permit to exist any new Encumbrance upon any of
the Assets, except to provide adequate protection as is required by the
Bankruptcy Court;
(e) sell, assign, transfer, distribute or otherwise transfer or dispose
of any property, plant or equipment of any Seller (other than an Excluded Asset)
having a value in excess of Fifty Thousand Dollars ($50,000);
(f) take any action (other than in connection with the Bankruptcy Cases
and filing the Sale Motion) outside the ordinary course of the Business, except
as permitted by the Bankruptcy Court;
(g) amend or agree to amend the articles or certificate of
incorporation or other organizational documents or the bylaws or other governing
documents of any Seller or otherwise take any action relating to any liquidation
or dissolution of any Seller;
(h) create, incur, assume, guarantee or otherwise become liable for any
liability of any other Seller, or agree to do any of the foregoing;
(i) cancel, forgive, release, discharge or waive any receivable or any
similar Asset or right with respect to the Business, or agree to do any of the
foregoing;
(j) change any accounting method, policy or practice in the Financial
Statements; or
(k) terminate, amend or otherwise modify any Employee Benefit Plan or
Other Plan, except for amendments required to comply with applicable Legal
Requirements or as requested by Buyer.
5.04. Employee Matters.
(a) Subject to the exclusions set forth in this Section, Buyer may
communicate (after consulting with management of ITG) directly with any
employees of any Seller and may offer, or cause its Affiliates to offer, to
employ as of the Closing Date any active employees of any Seller working at the
Business on the Closing Date. Buyer, within its sole discretion, shall determine
which, if any, such employees of Sellers shall be offered employment. It is the
intent of Buyer to make offers of employment to operating and administrative
employees of Sellers listed on Schedule 5.04 on terms and conditions which are
generally comparable to similarly situated employees of Buyer. Subject to
approval of the Retention Plan, Buyer will grant each Hired Employee, upon and
subject to such employee becoming a Hired Employee, one (1) week's paid
vacation. Buyer will not be responsible for any termination, severance, salary
or other benefits
35
owed to the Hired Employees as a result of their employment by any Seller prior
to the Closing Date. Sellers acknowledge that all employment offers are subject
to the satisfactory completion by Buyer of its customary employee background
checks, including, if applicable, pre-employment drug and alcohol screening.
Nothing contained in this Section 5.04 or elsewhere in this Agreement shall be
deemed to limit or otherwise affect in any manner the right of Buyer or any
Affiliate of Buyer to terminate at will the employment of any Hired Employee.
Except as provided in this Agreement, Sellers shall be solely responsible for
and pay any and all liabilities or obligations arising under the WARN Act, if
any, arising out of or resulting from layoffs of employees on or prior to the
Closing Date, or in connection with or resulting from the consummation of the
Transaction, and Sellers shall remain liable for any and all costs and expenses
associated with continued employment, or termination and severance, of all
employees of Sellers other than the Hired Employees, including any obligation
imposed on Sellers or Buyer to provide such employees with continued health,
disability, life or other retirement benefits (whether covered by insurance or
not). Sellers hereby, jointly and severally, indemnify, defend and hold Buyer
harmless from and against any COBRA liability with respect to any current or
former employee of any Seller, or qualified beneficiary of such employee, other
than the Hired Employees and their qualified beneficiaries. Buyer shall not, at
any time prior to ninety (90) days after the Closing Date, without complying
fully with the notice and other requirements of the WARN Act, effectuate (i) a
"plant closing," as defined in the WARN Act, affecting any site of employment or
one or more facilities or operating units within any site of employment of the
Business; or (ii) a "mass layoff," as defined in the WARN Act, affecting any
site of employment of the Business; or any similar action under applicable state
or foreign law requiring notice to employees in the event of a plant closing or
layoff; provided, however, that Sellers remain solely liable for any WARN or
similar liabilities arising as a result of the termination of its or their
employees at or before Closing as a result of the Transaction, or arising out of
any other event on or before Closing or any other Seller action. To the extent
(but only to the extent) that the assets of Sellers' 401(k) plan with respect to
the employees of the Business are not directly transferred to Buyer's 401(k)
plan by a Code section 414(l) asset transfer, Seller shall one hundred percent
(100%) vest the accounts of all participants in Seller's 401(k) plan who are
employees of the Business on the Closing Date and who and whose accounts are not
directly transferred to Buyer's 401(k) plan by a Code section 414(l) transfer;
provided, however, the transfers may only be made in respect of participants in
Sellers' 401(k) plan who become Hired Employees.
(b) Buyer will, or will cause its Affiliates, to the extent permitted
by Buyer's welfare plans or stop-loss carriers, to (i) waive all limitations as
to pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to any Hired Employee under
any welfare plan that such employees may be eligible to participate in after the
Closing Date, other than limitations or waiting periods that are already in
effect with respect to such employees and that have not been satisfied as of the
Closing Date under any welfare plan maintained for such employees immediately
prior to the Closing Date, and (ii) provide each such Hired Employee with credit
for any co-payments and deductibles paid prior to the Closing Date in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Closing Date.
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5.05. Access to and Provision of Additional Information.
(a) From the Effective Date until the Closing Date, Sellers shall
cooperate fully with Buyer and Buyer's representatives in connection with
Buyer's due diligence investigation of the prospects, business, assets,
Contracts, rights, liabilities and obligations of Sellers and the Business, and
shall provide to Buyer and Buyer's representatives reasonable access to and the
right to inspect the Business, any facilities associated with or used in the
Business, the Assets, books and records of Sellers relating to Sellers, the
Assets and the Business, and will furnish to Buyer such additional financial,
operating and other data and information regarding the Business as Buyer may
from time to time reasonably request, without regard to where such information
may be located. In addition, each Seller shall use commercially reasonable
efforts to cause its agents, representatives, employees, officers, directors,
vendors, suppliers, and customers to cooperate with Buyer and Buyer's
representatives in connection with Buyer's due diligence review as it relates to
any Contracts between any such vendors, suppliers, and customers and any Seller.
(b) From the Effective Date until the Closing Date, Sellers shall cause
their respective officers and employees to confer on a regular basis with one or
more representatives of Buyer and to answer Buyer's questions regarding matters
relating to the conduct of the Business and the status of the Transaction.
Sellers shall notify Buyer in writing of any material changes in the operations,
financial condition or prospects of the Business and of any complaints,
investigations, hearings or adjudicatory proceedings (or communications
indicating that the same may be contemplated) of any Person and shall keep Buyer
reasonably informed of such matters.
(c) Except as provided in Article 8, each Party shall be responsible
for its own costs and expenses incurred pursuant to this Section 5.05.
5.06. Post-Closing Maintenance of and Access to Information.
(a) The Parties acknowledge that after Closing each Party may need
access to information or documents in the control or possession of another Party
for the purposes of concluding the transactions herein contemplated, Tax Returns
or audits, the Assumed Contracts and other Legal Requirements, and the
prosecution or defense of third party claims. Accordingly, each Party shall
keep, preserve and maintain in the ordinary course of business, and as required
by Legal Requirements and relevant insurance carriers, all books, records,
documents and other information in the possession or control of such Party and
relevant to the foregoing purposes at least until the expiration of any
applicable statute of limitations or extensions thereof.
(b) Each Party shall cooperate fully with, and make available for
inspection and copying by, the other Party, its employees, agents, counsel and
accountants and/or Governmental Authorities, upon written request and at the
expense of the requesting Party, such books, records documents and other
information to the extent reasonably necessary to facilitate the foregoing
purposes. In addition, each Party shall cooperate with, and shall permit and use
its commercially reasonable efforts to cause, at the expense of the requesting
Party, its respective former and present directors, officers and employees to
cooperate with, the other Party after Closing in furnishing information,
evidence, testimony and other assistance in connection with any action,
proceeding, arrangement or dispute of any nature with respect to the subject
matters of this Agreement and pertaining to periods prior to the Closing Date.
37
(c) Sellers shall be entitled to remove from the Business, at Sellers'
sole risk and expense, any records that relate to events or periods prior to
Closing for purposes of pending litigation involving matters to which such
records refer, as certified in writing prior to removal by counsel retained by
Sellers in connection with such litigation. Any records so removed shall be
promptly returned to Buyer following their use by Sellers.
5.07. Governmental Authority Approvals: Consents to Assignment.
(a) From the Effective Date until the Closing Date, each Seller and
Buyer shall (i) promptly apply for and use their respective commercially
reasonable efforts to obtain prior to Closing all consents, approvals,
authorizations and clearances of Governmental Authorities required of it to
consummate the transactions contemplated hereby, (ii) provide such information
and communications to Governmental Authorities as the other party or such
Persons may reasonably request, and (iii) assist and cooperate with other
parties to obtain all Permits and clearances of Governmental Authorities that
the other parties reasonably deem necessary or appropriate, and to prepare any
document or other information reasonably required of it by any such Persons to
consummate the transactions contemplated herein or in the Registration Rights
Agreement; provided, however, that, notwithstanding the foregoing, no Party
shall have any obligation under such provisions (x) to pay any cash amounts to
Governmental Authorities other than filing fees or other customary fees, or (y)
to agree to divest assets or limit the operations of its businesses.
(b) From the Effective Date until the Closing Date, each of the Parties
shall file, if and to the extent required by law, all reports or other documents
required or requested by Governmental Authorities under the HSR Act concerning
the purchase and sale of the Assets and comply promptly with any requests by the
Governmental Authorities for additional information concerning the purchase and
sale of the Assets, so that the waiting period specified in the HSR Act with
respect to those Assets will expire as soon as reasonably possible after the
Effective Date. Each of the Parties shall furnish to the other Parties such
information as the other Parties reasonably require to perform their obligations
under the HSR Act and shall exchange drafts of the relevant portions of each
other's report forms prior to filing.
(c) Sellers shall use commercially reasonable efforts to (i) obtain
Bankruptcy Court approval of the assumption by and assignment to Buyer of the
Assumed Contracts and (ii) with respect to Government Contracts, use
commercially reasonable efforts to obtain all other consents, approvals and
novations required to assign the Assumed Contracts to Buyer.
(d) In the event that any and all novations, transfer or other
agreements, consents, approvals or waivers necessary for the assignments,
transfer or novation of any Assumed Contracts, or any claim, right or benefit
arising thereunder or resulting therefrom, shall not have been obtained prior to
the Closing Date, then as of the Closing, this Agreement, to the extent
permitted by law, shall constitute full and equitable assignment by Sellers to
Buyer of all of Sellers' right, title and interest in and to, and all of
Sellers' obligations and liabilities under, such Assumed Contracts, and Buyer
shall be deemed Sellers' agent for the purpose of completing, fulfilling and
discharging all of Sellers' liabilities under any such Assumed Contracts.
38
The Parties shall take all necessary steps and actions to provide Buyer with the
benefits of such Assumed Contracts, and to relieve Sellers of the performance
and other obligations thereunder, including entry into subcontracts for the
performance thereof.
(e) In the event Sellers shall be unable to make the equitable
assignment described in Section 5.07(d), or if such attempted assignment would
give rise to any right of termination, or would otherwise adversely affect the
rights of Sellers or Buyer under such Assumed Contracts, or would not assign all
Sellers' rights thereunder at the Closing, Sellers and Buyer shall continue to
cooperate and use commercially reasonable efforts to provide Buyer with all such
rights. To the extent that any such consents and waivers are not obtained, or
until the impediments to such assignment are resolved, Sellers shall use
commercially reasonable efforts (without the expenditure, in the aggregate, of
any material sum, taking into account Sellers' financial condition) to (i)
provide to Buyer, at the request of Buyer, the benefits of any such Assumed
Contract to the extent related to the Business or the Assets, (ii) cooperate in
any lawful arrangement designed to provide such benefits to Buyer and (iii)
enforce, at the request of and for the account of Buyer, any rights of Sellers
arising from any such Assumed Contracts against any third Person (including any
Governmental Authority) including the right to elect to terminate in accordance
with the terms thereof upon the advice of Buyer. To the extent that Buyer is
provided the benefits of any Assumed Contract referred to herein (whether from
Sellers or otherwise), Buyer shall perform at the reasonable direction of
Sellers and for the benefit of any third Person (including any Governmental
Authority) the obligations of Sellers thereunder or in connection therewith, and
Buyer agrees to pay, perform and discharge all obligations and liabilities of
Sellers relating to such performance or failure to perform, after the Closing
Date.
5.08. Use of Names. From and after Closing, Sellers shall not use any
of the names acquired pursuant to this Agreement, or any variation of the
foregoing, in the conduct of any of their businesses, except as is required in
or in connection with the Bankruptcy Cases or as required by Legal Requirements.
Promptly after Closing, Sellers shall, to the extent feasible, implement such
name changes as necessary to comply with this Section 5.08.
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5.09. Allocation of Purchase Price for Tax Purposes; Type of
Consideration Paid.
(a) Except with respect to any portion of the Transaction which the
Parties agree to treat as a reorganization under section 368(a)(1)(G) of the
Code pursuant to Section 5.09(b) hereof, Sellers and Buyer agree that, for tax
purposes, the Purchase Price shall be allocated among the Assets as Buyer may
determine, in accordance with their fair market values consistent with section
1060 of the Code, and such allocation shall be binding upon the Parties for all
applicable federal, state, local and foreign Tax purposes. Sellers and Buyer
covenant to report gain or loss or cost basis, as the case may be, in a manner
consistent with such allocation on all Tax Returns filed by any of them after
Closing and not to voluntarily take any inconsistent position therewith in any
administrative or judicial proceeding relating to such returns. Sellers and
Buyer shall exchange mutually acceptable and completed IRS Forms 8594 (including
supplemental forms, if required), which they shall use to report the transaction
contemplated hereunder to the Internal Revenue Service in accordance with such
allocation. Notwithstanding anything to the contrary, no allocation hereunder
shall supersede or otherwise usurp the jurisdiction of the Bankruptcy Court to
value the assets for purposes of distribution to the respective Debtors' estates
under the Bankruptcy Code.
(b) To the extent that the parties agree that the Transaction
qualifies, in whole or in part, as one or more reorganizations pursuant to
section 368(a)(1)(G) of the Code, then the Sellers shall provide Buyer with a
statement setting forth the adjusted tax bases of the Assets acquired in such
reorganizations and the amount of net operating losses and other tax attributes
that are unused after the liquidation of the Sellers, and Sellers and Buyer
shall report such acquisition to such extent as a reorganization described in
section 368(a)(1)(G) of the Code. If requested by Buyer, Sellers shall cooperate
in taking actions necessary so that all or part of the Transaction constitutes
one or more reorganizations pursuant to section 368(a)(1)(G) of the Code;
provided however, that Sellers shall not be required to take any action that
reduces, or modifies the type of, consideration payable to Sellers pursuant to
this Agreement, increases the liabilities retained by Seller, or increases in
any material respect the amount of Tax payable to one or more Governmental
Authorities for periods prior to the date of the final liquidation of the
Sellers.
5.10. Further Acts and Assurances. At any time and from time to time at
and after the Closing, upon request of Buyer, each Seller shall do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such further acts, deeds, assignments, transfers, conveyances, powers
of attorney, confirmations and assurances as Buyer may reasonably request to
more effectively convey, assign and transfer to and vest in Buyer, its
successors and assigns, full legal right, title and interest in and actual
possession of the Assets and the Business, to confirm such Seller's capacity and
ability to perform its pre-Closing and post-Closing covenants and agreements
under this Agreement, and to generally carry out the purposes and intent of this
Agreement. Each Seller shall also furnish Buyer with such information and
documents in its possession or under its control, or which such Seller can
execute or cause to be executed, as will enable Buyer to prosecute any and all
petitions, applications, claims and demands relating to or constituting a part
of the Assets and the Business.
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5.11. Costs and Expenses.
(a) Except as otherwise expressly set forth in this Agreement, all
expenses of the negotiation and preparation of this Agreement and related to the
Transaction, including legal counsel, accounting, brokerage and investment
advisor fees and disbursements, shall be borne by the respective Party incurring
such expense, whether or not the Transaction is consummated. Sellers shall be
responsible for paying any allowed fees and expenses of ▇▇▇▇▇▇ Brothers, UBS
Warburg and ▇▇▇▇▇▇▇▇ Capital Markets Group, Inc. in connection with the
transactions contemplated by this Agreement.
(b) Buyer shall pay the cost of any owner's title insurance policies it
may obtain, and Sellers shall pay the cost of removing Encumbrances that are not
Permitted Real Property Encumbrances. Buyer shall pay the cost of any land title
surveys of the Real Property, and environmental, engineering and other
professional studies undertaken by Buyer.
(c) In the event any Party elects to incur legal fees or expenses to
enforce or interpret any provision of this Agreement and subject to any required
approvals of the Bankruptcy Court, the prevailing Party will be entitled to
recover such legal fees and expenses, including attorneys' fees, costs and
necessary disbursements, in addition to any other relief to which such Party
shall be entitled.
5.12. Insurance Ratings. From the Effective Date until the Closing
Date, Sellers will take all actions reasonably requested by Buyer to enable
Buyer to succeed to the Workers' Compensation and Unemployment Insurance
ratings, insurance policies, deposits and other interests of Sellers and the
Business for insurance or other purposes. Buyer shall not be obligated to
succeed to any such rating, insurance policy, deposit or other interest, except
as it may elect to do so.
5.13. Fulfillment of Conditions. Each Party will execute and deliver at
Closing each agreement, instrument or other document that such Party is required
by this Agreement to execute and deliver as a condition to Closing, and will
take all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each other condition to the obligations
of the Parties contained in this Agreement, to the extent that satisfaction of
such condition is within the control of such Party.
5.14. Release of Encumbrances. Sellers shall cause all Encumbrances
other than the Permitted Real Property Encumbrances to be released and
discharged at or prior to Closing, which Encumbrances, as to Sellers that have
filed Bankruptcy Cases, may be released and discharged by the Bankruptcy Court
in the Sale Order.
5.15. Assumed Contracts; Excluded Contracts.
(a) Assumed Contracts. Subject to the approval of the Bankruptcy Court
and pursuant to the Executory Contract Assumption and Assignment Order, the
Assumed Contracts will be assumed by Sellers and assigned to Buyer or Buyer's
designee on the Closing Date under section 365 of the Bankruptcy Code. Sellers
shall, consistent with their current financial condition and the Bankruptcy
Cases, use commercially reasonable efforts to promptly comply with and perform
any obligations under the Assumed Contracts arising from and after the Effective
Date and through the Closing Date. In the Sale Motion, or in such additional or
41
subsequent motions as may be appropriate, Sellers will seek authority to assume
and assign the Assumed Contracts to Buyer (or Buyer's Designee) in accordance
with section 365 of the Bankruptcy Code. All Assumed Contracts shall be assigned
to and assumed by Buyer (or Buyer's Designee) at Closing. Subject to the
following right of Sellers to reject any Contract, the final determination of
which Contracts Sellers will assume and assign to Buyer shall be within the sole
discretion of Buyer.
(b) Excluded Contracts. Buyer may, on any Tuesday or Friday up to seven
(7) business days prior to the Bid Deadline, provide written notice to ITG of
any Contract which Buyer desires to exclude from the Assets. Upon receipt of
such notice, Sellers shall use their good faith best efforts to reduce the
expenses on any such contract, but in any event Sellers shall not spend more on
any such contract than is provided in the most recent Lender-approved budget
(pursuant to the terms of Credit Agreement) for the seven (7)-day period
subsequent to receipt of such notice. No later than seven (7) days prior to the
Bid Deadline, Buyer shall deliver to ITG an amended Schedule 5.15(b). Subsequent
to the Court's approval of this Agreement and prior to Closing, Sellers shall
consult with Buyer about any Contract Sellers seek to reject and consider in
good faith Buyer's opinions on any such rejection, in recognition of Buyer's
bona fide interest in preserving to the maximum extent possible the Contracts
which Buyer believes are reasonably necessary to the continued operation and
financial viability of the Business after Closing, but Sellers shall have the
right in their discretion to reject any Contract which in their judgment Sellers
believe must be rejected to maintain the viability of the Business prior to the
Closing Date or to comply with any order of the Bankruptcy Court.
(c) Buyer may, on any Tuesday or Friday prior to the Closing Date,
provide written notice to ITG that Buyer does not intend to hire an employee of
Seller.
5.16. Bankruptcy Court Approval.
(a) Sellers shall use commercially reasonable efforts to obtain the
Sale Order which, among other things, (i) determines that this Agreement was
proposed by Buyer in good faith and represents the highest and best offer for
the Assets and should be approved, (ii) determines that Buyer is a good faith
purchaser under section 363(m) of the Bankruptcy Code and that the provisions of
section 363(n) of the Bankruptcy Code have not been violated, (iii) authorizes
and directs Sellers to assume this Agreement and sell the Assets to Buyer
pursuant to this Agreement and sections 363 and 365 of the Bankruptcy Code, free
and clear of all liens, claims, interests, liabilities and Encumbrances
(including any and all "interests" in the Assets within the meaning of section
363(f) of the Bankruptcy Code), other than the Assumed Liabilities and the
Permitted Real Property Encumbrances, such that Buyer shall not incur any
liability as a successor to the Business, (iv) authorizes and directs Sellers to
execute, deliver, perform under, consummate and implement, this Agreement,
together with all additional instruments and documents, that may be reasonably
necessary or desirable to implement the foregoing, and (v) determines that Buyer
is not a successor to Sellers, or otherwise liable for any Excluded Liability,
and permanently enjoins each and every holder of an Excluded Liability from
commencing, continuing or otherwise pursuing or enforcing any remedy, claim or
cause of action against Buyer relative to such Excluded Liability.
42
(b) Sellers shall use commercially reasonable efforts obtain the
Executory Contract Assumption and Assignment Order.
(c) Sellers shall use commercially reasonable efforts obtain the Buyer
Protection and Bidding Procedures Order which, among other things, shall (i)
approve the Break-Up Fee and Expense Reimbursement, (ii) provide that Buyer's
claim to the Break-Up Fee and Expense Reimbursement shall be entitled to
superpriority administrative claim treatment in the Bankruptcy Cases, senior to
all other superpriority claims, (iii) establish a date by which initial
Qualified Bids must be submitted, (iv) establish the Sale Hearing procedures for
an auction at which only Qualified Bidders who have previously submitted a
Qualified Bid may bid, (v) set the Minimum Incremental Bid Amount as specified
in the definition of such term, (vi) require Sellers to promptly provide a copy
of any Qualified Bid to Buyer and to any Qualified Bidder who has submitted a
Qualified Bid and (vii) provide that notwithstanding the definition of
"Qualified Bidder" the pre-petition bank lenders of the Sellers may not credit
bid the secured debt of the Sellers held by such lenders. The Buyer Protection
and Bidding Procedures Order shall be in form and substance reasonably
acceptable to Buyer and its counsel. The Buyer Protection and Bidding Procedures
Order shall survive any termination of this Agreement.
(d) Sellers shall promptly make any filings, take all actions, and use
commercially reasonable efforts to obtain any and all other approvals and orders
necessary or appropriate for consummation of the Transaction, subject to their
obligations to comply with any order of the Bankruptcy Court.
(e) In the event an appeal is taken, or a stay pending appeal is
requested, from the Sale Order, the Executory Contract Assumption and Assignment
Order or the Buyer Protection and Bidding Procedures Order, Sellers shall
immediately notify Buyer of such appeal or stay request and shall provide to
Buyer within one business day a copy of the related notice of appeal or order of
stay. Sellers shall also provide Buyer with written notice of any motion or
application filed in connection with any appeal from either of such orders.
(f) Buyer shall cooperate in providing such information and evidence as
is necessary to obtain the orders described in this Section 5.16.
5.17. Transfer Taxes. In accordance with section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer, including
the filing of any deed or other document of transfer to evidence, effectuate or
perfect the rights, transfers and interest contemplated by this Agreement, shall
be in contemplation of a plan or plans of reorganization to be confirmed in the
Bankruptcy Cases, and as such shall be free and clear of any and all transfer
Tax, stamp Tax or similar Taxes. The instruments transferring the Assets to
Buyer shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order of the
United States Bankruptcy Court for the District of
Delaware, in
contemplation of a plan of reorganization of the Grantor, it is exempt
from transfer taxes, stamp taxes or similar taxes pursuant to 11 U.S.C.
Section 1146(c)."
43
In the event real estate transfer Taxes are required to be paid in order to
record the deeds to be delivered to Buyer in accordance herewith, or in the
event any such Taxes are assessed at any time thereafter, such real estate
transfer Taxes incurred as a result of the transactions contemplated hereby
shall be paid by Buyer; provided however, that Buyer shall not be liable for any
ad valorem or other property tax or special assessment levied against any of the
Real Property for any period of time on or prior to the Closing Date to the
extent such Tax is allocable, on a per diem basis, to the period prior to and
including the Closing Date. In the event sales, use, notarial or other transfer
Taxes are assessed at Closing or at any time thereafter on the transfer of any
other Assets, such Taxes incurred as a result of the transactions contemplated
hereby shall be paid by Sellers.
5.18. Listing Application. Buyer shall make an application to list the
shares of Common Stock comprising the Share Consideration, if any, on the New
York Stock Exchange and shall execute and deliver such further documents or
instruments and take such further actions necessary to consummate such listing
on or prior to the Closing.
5.19. Bankruptcy Filings. From and after the Effective Date until the
Closing Date, Sellers shall deliver to Buyer (a) copies of all pleadings,
motions, notices, statements, schedules, applications, reports and other papers
that Sellers file in the Bankruptcy Cases within a reasonable time after filing,
but with respect to any such papers that relate, in whole or in part, to this
Agreement, the Transaction, or Buyer, its Designee(s) or its or their agents or
representatives, Sellers shall use all their respective commercially reasonable
efforts to provide such prior notice as may be reasonable under the
circumstances before the filing of such papers and (b) copies of all pleadings,
motions, notices, statements, schedules, applications, reports and other papers
filed in the Bankruptcy Cases.
5.20. Non-Solicitation. From and after the Effective Date, neither
Sellers nor any of their respective directors, employees, accountants,
attorneys, or other agents or representatives shall, directly or indirectly,
solicit, initiate, encourage or enter into discussions or negotiations
regarding, or respond to any inquiries or proposals for, a Competing Proposal.
Notwithstanding the foregoing, ITG shall be entitled to solicit, initiate,
encourage or enter into discussions or negotiations, or to respond to inquiries
or proposals from Persons that ITG reasonably believes would qualify as a
Qualified Bidder, in order to provide information to such Persons and to
negotiate and to discuss any Qualified Bid made by such Person in the event such
Person qualifies as a Qualified Bidder. Sellers shall keep Buyer informed on a
current basis of the status of all Competing Proposals received (whether written
or oral and regardless of when received) and provide Buyer with copies of any
written Competing Proposals received from such third party within one (1)
business day after the Sellers' receipt thereof. Nothing in this Section 5.20
shall require the divulgence of the identity of any third party making a
Competing Proposal in violation of any confidentiality agreement with such third
party.
5.21. Tail Insurance. On or prior to the Closing (unless waived by
Buyer), Sellers shall use commercially reasonable efforts to purchase and obtain
an extended claims reporting provision for all primary and excess insurance
policies, including directors and officers liability, errors and omissions and
professional liability, in force as of the Effective Date which cover any Seller
and each employee of any Seller (or for which Seller otherwise has an obligation
to provide such insurance), which are written on a claims made insuring
agreement and which shall
44
have a term of no less than three (3) years after the Closing Date. At Closing,
Buyer shall reimburse ITG (i) for the portion of the premiums allocable to the
period of time after the Closing Date in respect of the policies renewed by
Sellers prior to Closing in order to comply with Section 5.02(e) hereof, and
(ii) for the cost of the policies (other than directors and officers liability
policies) obtained by ITG; provided that if the cost of the policies to be
purchased pursuant to this Section 5.21 exceeds Three Million Dollars
($3,000,000), then ITG shall not purchase such policies unless and until
requested to do so by Buyer. At the election of Buyer, Seller shall use
commercially reasonable efforts to designate, to the extent permitted by Legal
Requirements, Buyer and other Persons reasonably designated by Buyer as
additional named insureds with respect to all such policies except for Sellers'
directors and officers, fiduciary duty and wrongful termination policies, and,
to the extent such designation requires additional premiums, Buyer shall pay
such additional premiums.
5.22. Cooperation with Audited Financial Statements. Through the
Closing Date, Sellers shall cooperate, and shall cause their auditors and
accountants to cooperate, with Buyer and Buyer's auditors and accountants, to
prepare audited financial statements for Sellers as of and for the period ending
on the Closing Date. Buyer shall pay for the preparation of any audited
financial statements unless Sellers have elected to receive the Share
Consideration and such audited financial statements are required to be included
in the Registration Statement to be filed pursuant to the Registration Rights
Agreement, in which case ITG shall pay for the preparation of such audited
financial statements.
5.23. Exception. Notwithstanding anything herein to the contrary, Buyer
acknowledges and agrees that any action taken or not taken by Sellers at Buyer's
request or direction, or as a result of Lender's refusal to fund a requested
expenditure, shall not be deemed to be a breach of any of the representations,
warranties or covenants contained in this Agreement.
5.24. Use of Office Space and Equipment. After the Closing, Buyer shall
lease to Sellers, at no cost, (i) such equipment of Buyer (purchased by Sellers
under the terms of an Excluded Contract) as is reasonably necessary for Sellers
to perform their post-Closing obligations under the Excluded Contracts, and (ii)
reasonable access to office space, telephones, facsimile machines and other
items of Personal Property (acquired by Buyer pursuant to this Agreement) as is
reasonably necessary to wind down the operation of Sellers. Prior to Closing,
ITG shall notify Buyer of the equipment, office space or items of Personal
Property to be leased by Sellers under the terms of this Section 5.24. After
Closing, Buyer and ITG, or the appropriate Seller as the case may be, shall
enter into a lease for such equipment, office space or Personal Property. The
lease shall have terms and conditions acceptable to Buyer and Seller, but shall
provide at a minimum: (a) that Seller shall carry and pay for all appropriate
policies of insurance with respect to such leased goods; (b) that Seller shall
return the leased goods to Buyer upon lease expiration in good condition,
reasonable wear and tear excepted; and (c) that Seller shall indemnify Buyer for
any loss, cost, expense or damage incurred by Buyer as a result of Seller's use
of such item during the term of the lease, reasonable wear and tear excepted.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder are subject to the satisfaction on
or prior to the Closing Date of the following conditions unless waived in
writing by Sellers:
45
6.01. Representations and Warranties; Covenants.
(a) Each of the representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects on and as of
the Effective Date and except where expressly limited to a specific date, on and
as of the Closing Date.
(b) Each and all of the terms, covenants and agreements to be complied
with or performed by Buyer on or before the Closing Date shall have been
complied with and performed in all material respects, including the obligations
of Buyer in Section 8.03.
6.02. Adverse Actions or Proceedings. There shall not be in effect any
order issued by a Governmental Authority restraining or prohibiting this
Agreement, or the consummation of the Transaction.
6.03. Pre-Closing Confirmations. Sellers shall have obtained
documentation or other evidence reasonably satisfactory to Sellers that Sellers
and Buyer have received or will receive all consents, approvals, authorizations
and clearances of Governmental Authorities required of it to consummate the
transactions contemplated hereby and that all applicable waiting periods under
the HSR Act have expired.
6.05. No Buyer Material Adverse Change. No event shall have occurred
that constitutes a Buyer Material Adverse Change.
6.06. Deliveries at Closing. Buyer shall have delivered to Sellers, in
form reasonably acceptable to Sellers, all agreements, instruments, certificates
or other documents contemplated or required to be executed by Buyer pursuant to
this Agreement.
6.07. Sale Order. The Sale Order, in form and substance satisfactory to
Sellers, shall have been entered by the Bankruptcy Court and shall have become
effective in accordance with its terms and shall not be stayed or reversed,
ordered to be reconsidered, or amended or modified in any material respect that
is not approved by Sellers.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the satisfaction on
or prior to the Closing Date of each of the following conditions, unless waived
in writing by Buyer:
7.01. Sale Order; Representations and Warranties; Covenants.
(a) The Bankruptcy Court shall have entered the Sale Order, acceptable
to Buyer, on or prior to the later of forty-five (45) days after execution of
this Agreement or the first day on which the Bankruptcy Court can schedule a
hearing thereon (which in no event shall be later than sixty (60) days after the
Effective Date): (i) approving the sale of the Assets to Buyer free and clear of
all Encumbrances (other than the Permitted Real Property Encumbrances), claims
and interests pursuant to sections 363(b) and 363(f) of the Bankruptcy Code and
the assignment of the Assumed Contracts to Buyer pursuant to section 365 of the
Bankruptcy Code; and (ii) containing, among other things, findings of fact and
rulings that Buyer is a good faith purchaser entitled to the protections of
section 363(m) of the Bankruptcy Code.
46
(b) Unless Buyer and Sellers agree in writing to waive this provision,
the Sale Order shall have become a final order.
(c) From and after the date of the Letter of Intent, there shall not
have been a Catastrophic Event.
(d) The Buyer Protection and Bidding Procedures Order shall have been
entered and shall have remained in full force and effect and shall not have been
stayed, vacated, modified or supplemented in any material respect without
Buyer's prior written consent.
(e) Sellers shall have operated their business in the ordinary course
consistent with past practices, except for pendency of the Bankruptcy Cases, and
except to the extent any Seller's current financial condition and operation
under chapter 11 of the Bankruptcy Code does not reasonably permit operation
consistent with past practices.
(f) No Seller shall have breached any of the representations,
warranties or covenants contained herein, as of the Effective Date, or except
where expressly limited to a specific date, on and as of such date, or on the
Closing Date, unless such breach or breaches individually, or in the aggregate,
would not result, in a Material Adverse Change. To the extent any such
representations, warranties or covenants are qualified by materiality or
Material Adverse Change, compliance by Sellers with this Section 7.01(f) shall
be measured as if such qualifications had not been made.
(g) Sellers shall have continued to provide Buyer with access as
provided in Section 5.05.
(h) Any and all approvals under the HSR Act, or any other similar laws
of foreign countries, as applicable, shall have been obtained, and any
applicable waiting periods shall have expired.
(i) The requisite percentage of Sellers' pre-petition bank lenders
shall have consented, or the Bankruptcy Court shall have entered an order to the
effect, that the obligations of ITG and its Subsidiaries under the Credit
Agreement are secured by a first priority, priming security interest in all of
Sellers' assets, including Cash.
7.02. Adverse Actions or Proceedings. There shall not be in effect any
order issued by a Governmental Authority restraining or prohibiting this
Agreement, or the consummation of the Transaction.
7.03. Opinion of Sellers' Counsel. Buyer shall have received an opinion
from counsel to any Seller which is a not a debtor in the Bankruptcy Cases,
dated as of the Closing Date and addressed to Buyer, substantially in the form
attached as Exhibit C, and which may be subject to standard qualifications,
limitations and exceptions. In rendering such opinion, such counsel may rely
upon certificates of governmental officials and may place reasonable reliance
upon certificates of officers of any such Seller.
47
7.04. Deliveries at Closing. Sellers shall have delivered to Buyer, in
form reasonably acceptable to Buyer and approved by Buyer's counsel, deeds,
bills of sale, assignments or other instruments of transfer, and estoppels,
consents and waivers by others, necessary or appropriate to transfer to and
effectively vest in Buyer the Assets and all agreements, instruments,
certificates or other documents contemplated or required to be executed by any
Seller pursuant to this Agreement.
8. CLOSING; TERMINATION OF AGREEMENT
8.01. Closing; Buyer Designees; Post-Closing Transfers.
(a) Consummation of the sale and purchase of the Assets and the
Business and the other transactions contemplated by and described in this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ at 10:00 a.m. on
the first business day following satisfaction or waiver of the conditions set
forth in Article 6 and Article 7, or at such time or place as the Parties may
mutually agree. Unless otherwise agreed in writing by the Parties at Closing,
the Closing shall be effective for accounting purposes as of 12:01 A.M. on the
day following the Closing Date.
(b) At or before Closing, Buyer may designate one or more Designees to
take title to the Assets, and references to instruments or agreements to be
executed and delivered to or by Buyer in this Agreement at Closing shall apply
to each such Designee with respect to the Assets acquired by it; provided
however, that any such designation shall not release Buyer from any of its
obligations under this Agreement. Buyer shall notify Sellers at or prior to
Closing of the names of such Designees and, from and after Closing, the rights,
privileges and benefits of this Agreement applicable to Buyer shall benefit each
such Designee, subject to the terms, covenants and conditions of this Agreement,
with respect to the Assets acquired by it. In addition, at or before Closing,
Buyer may designate certain Assets which will be acquired by Buyer at Closing
but which will be held in trust by Sellers for the benefit of Buyer, for a
period not longer than sixty (60) after Closing. At any time during such period,
Buyer may designate a Designee to take title to such Assets, and Sellers shall
promptly execute, acknowledge and deliver to such Designee deeds, bills of sale,
assignments or other documents or instruments as are necessary or desirable to
cause the assignment or conveyance of such Assets to the Designee named by
Buyer. Buyer shall be responsible for, and shall promptly reimburse Sellers for,
any expenses incurred by Sellers after the Closing Date in respect of any Assets
being held in trust by Sellers for the benefit of Buyer or its Designees
pursuant to this Section 8.01(b).
(c) If any Seller notifies Buyer of any Contract which was not included
in Schedule 3.17 delivered to Buyer, or if Buyer discovers any Contract which
was not included in the such schedules, Buyer may, within ten (10) days after
receipt of such notice from Sellers or discovery by Buyer, notify ITG that Buyer
wishes to assume such Contract. Upon receipt of such notice, which may occur
within sixty (60) days after Closing, Sellers shall cooperate with Buyer to
cause the assignment of such Contract to Buyer, including promptly filing with
the Bankruptcy Court a motion to cause such Contract to be assigned to Buyer. No
additional consideration shall be due or payable as a result of such assignment.
Buyer shall promptly reimburse Sellers for any expenses incurred by Sellers in
respect of any Contract assumed by Buyer pursuant to this Section 8.01(c).
48
8.02. Action of Sellers at Closing. At the Closing unless otherwise
waived in writing by Buyer, Sellers shall deliver:
(a) to Buyer deeds containing general warranties of title, fully
executed and acknowledged by Sellers in recordable form, conveying to Buyer good
and marketable fee simple title to the Real Property, free and clear of all
Encumbrances other than the Permitted Real Property Encumbrances;
(b) to Buyer bills of sale and assignment, fully executed by Sellers,
in form and substance acceptable to Buyer, conveying to Buyer good and valid
title to all Assets other than the Real Property, free and clear of all
Encumbrances;
(c) to Buyer assignments, fully executed by Sellers, in form and
substance acceptable to Buyer, conveying Sellers' interests in the Assumed
Contracts to Buyer;
(d) to Buyer the Registration Rights Agreement, fully executed by
Sellers;
(e) to Buyer copies of resolutions or equivalent instruments duly
adopted by the governing body of each Seller that is not a debtor and, if
required, the partners or members of such Seller, authorizing and approving the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, certified as true and in full force and effect
as of the Closing Date by the appropriate officers or partners of such Seller;
(f) to Buyer certificates of the duly authorized President or Vice
President or similar officer of each Seller certifying the fulfillment of the
conditions set forth in Section 7.01(f);
(g) to Buyer evidence of appropriate power of attorney for the
respective directors or officers of each Seller that is not a debtor executing
the Agreement and other Closing documents, dated as of the Closing Date;
(h) to Buyer certificates of existence and good standing from each
jurisdiction in which each Seller that is not a debtor is incorporated or
organized, each dated the most recent practical date prior to Closing;
(i) to Buyer, appropriate letters or other documentation necessary to
transfer and sell to Buyer the Accounts Receivable, the Completed Contracts
Receivable and those Excluded Contracts Receivable to which Buyer is entitled
pursuant to Section 2.01(m) hereof, and to advise the account debtors of such
transfer and sale;
(j) to Buyer such other instruments, agreements, certificates and
documents as Buyer reasonably deems necessary to effect the transactions
contemplated hereby; and
(k) to Buyer the opinion of Sellers' counsel described in Section 7.03.
8.03. Action of Buyer at Closing. At the Closing and unless otherwise
waived in writing by Sellers, Buyer shall deliver:
(a) to Sellers the Cash Consideration;
49
(b) if deliverable, to Sellers the Share Consideration;
(c) to Sellers the Employee Payments;
(d) to Sellers an assumption agreement, fully executed by Buyer, in
form and substance reasonably acceptable to Sellers, pursuant to which Buyer
shall assume the future payment and performance of the Assumed Liabilities;
(e) to Sellers the Registration Rights Agreement, fully executed by
Buyer;
(f) to Sellers copies of resolutions duly adopted by the board of
directors of Buyer authorizing and approving Buyer's execution and delivery of
this Agreement and the Transaction, certified as true and in full force and
effect as of the Closing Date by an appropriate officer of Buyer;
(g) to Sellers certificates of the duly authorized President or a Vice
President of Buyer certifying the fulfillment of the conditions set forth in
Section 6.01;
(h) to Sellers certificates of incumbency for the officers of Buyer
executing this Agreement and other Closing documents, dated as of the Closing
Date;
(i) to Sellers certificates of existence and good standing of Buyer
from the jurisdiction in which it is incorporated, dated within seven (7)
business days date prior to Closing; and
(j) to Sellers such other agreements, instruments and documents as
Sellers reasonably deem necessary to effect the transactions contemplated
hereby.
8.04. Termination Prior to Closing; Break-Up Fee and Expense
Reimbursement; Other Compensation.
(a) Notwithstanding anything herein to the contrary, this Agreement may
be terminated, and the transactions contemplated by this Agreement abandoned,
upon notice by the terminating Party to the other Parties:
(i) at any time before the Closing, by mutual consent of Buyer
and Sellers;
(ii) at any time before the Closing, by Buyer on the one hand,
or ITG on the other hand, in the event of a breach of this Agreement by
the non-terminating Party which would give rise to the failure of a
condition set forth in Section 6.01 or 7.01(f), as applicable, or if
the satisfaction of a condition set forth in Section 6.01 or 7.01(f)
becomes impossible or impracticable with the use of commercially
reasonable efforts and the failure of such condition to be satisfied is
not caused by a breach by the terminating Party;
(iii) at any time after April 30, 2002, by ITG or Buyer if the
Transaction has not been consummated on or before such date;
50
(iv) by Buyer, if any of the following shall occur:
(A) the Bankruptcy Court approves a
Qualified Bid by a Qualified Bidder other than Buyer,
or Sellers or any of them accept or support a
Qualified Bid by a Qualified Bidder other than Buyer;
(B) any or all of the Sellers elect not to
pursue the Transaction or elect to pursue a
Stand-Alone Plan;
(C) any of the Bankruptcy Cases is dismissed
or converted to chapter 7 of the Bankruptcy Code or a
trustee is appointed for any of the Sellers;
(D) the Buyer Protection and Bidding
Procedures Order shall not have been entered by
February 5, 2002; or
(E) both the Sale Order and the Executory
Contract Assumption and Assignment Order shall not
have been entered by March 31, 2002.
(b) If this Agreement is validly terminated pursuant to this Section
8.04, this Agreement will be null and void, and there will be no liability on
the part of any Party (or any of their respective officers, directors, trustees,
employees, agents, consultants or other representatives) except that Sellers'
obligations under Section 8.04(c) and (d) shall survive any termination or lack
of approval by the Bankruptcy Court of this Agreement and shall apply thereafter
to the extent applicable and as set forth herein.
(c) If (i) the Buyer Protection and Bidding Procedures Order has not
been entered (other than as a result of Buyer's action or conduct) and (ii) (A)
any Seller, without accepting a Competing Proposal, either (I) chooses to pursue
a Stand-Alone Plan or (II) breaches this Agreement so as to cause Buyer to
terminate this Agreement, or (B) Buyer is otherwise entitled to terminate this
Agreement due to the actions of Sellers or due to Sellers' pre-petition bank
lenders credit bidding in the Bankruptcy Cases, and does so terminate such
Agreement, then Buyer shall be entitled to be paid by the Seller fifty percent
(50%) of the Break-Up Fee and Expense Reimbursement on the first business day
following the occurrence of the events described in subparagraphs (ii) (A) or
(B) above; provided, however, that if within twelve (12) months after the
occurrence of such events, Sellers or any of them enters into a definitive
agreement with respect to a Competing Proposal, then ITG shall pay Buyer an
additional amount equal to fifty percent (50%) of the Break-Up Fee and Expense
Reimbursement on the first business day following the consummation of the
transaction contemplated by such Competing Proposal.
(d) After the Buyer Protection and Bidding Procedures Order has been
entered and provided that Buyer is not in default under this Agreement, ITG
shall pay Buyer or Buyer's Designee, as the case may be, the Break-Up Fee and
Expense Reimbursement by wire transfer of immediately available funds to an
account designated by Buyer or such designee, in accordance with the following
provisions:
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(i) if Buyer elects to terminate this Agreement pursuant to
Section 8.04(a)(iv)(A), on the earlier of (x) three (3) months after
the date of the approval of the Qualified Bid by a Qualified Bidder
other than Buyer or the date that Sellers or any of them accept a
Qualified Bid by a Qualified Bidder other than Buyer, as the case may
be, and (y) the closing of the transaction involving such Qualified Bid
by a Qualified Bidder other than Buyer approved by the Bankruptcy Court
or accepted by Sellers or any of them; and
(ii) if Buyer elects to terminate this Agreement pursuant to
Sections 8.04(a)(ii) or 8.04(a)(iv)(B), and does so terminate this
Agreement, on the first business day following such termination.
(e) If the Bankruptcy Court, notwithstanding the lack of another
Qualified Bid and despite Sellers' compliance with this Agreement, including its
obligation to pursue approval of this Agreement in good faith, fails to enter
the Sale Order and the Executory Contract Assumption and Assignment Order on or
prior to March 31, 2002, then ITG shall pay Buyer or Buyer's Designee, as the
case may be, by wire transfer of immediately available funds to an account
designated by Buyer or such Designee a termination fee equal to fifty percent
(50%) of the Break-Up Fee and Expense Reimbursement; provided, however, that if
within twelve (12) months after the date the Bankruptcy Court fails to approve
this Agreement, Sellers or any of them enter into a definitive agreement with
respect to a Competing Proposal, ITG shall pay Buyer or Buyer's Designee, as the
case may be, by wire transfer of immediately available funds to an account
designated by Buyer or such Designee an additional amount equal to fifty percent
(50%) of the Break-Up Fee and Expense Reimbursement, payable on the first
business day after the consummation of the transaction, or the first of any
series of transactions, contemplated by the Competing Proposal.
(f) The Break-Up Fee and Expense Reimbursement shall have superpriority
administrative claim status in the Bankruptcy Cases pursuant to section 507(b)
of the Bankruptcy Code, senior to all other superpriority administrative expense
claims.
9. GENERAL
9.01. Schedules. The schedules and all exhibits and documents referred
to in or attached to this Agreement are integral parts of this Agreement as if
fully set forth herein and all statements appearing therein shall be deemed to
be representations. Nothing in the schedules shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
schedule identifies the exception with reasonable particularity.
9.02. Tax Effect. None of the Parties (nor such Parties' counsel or
accountants) has made or is making in this Agreement any representation to any
other Party (or such Party's counsel or accountants) concerning any of the Tax
effects or consequences on the other Party of the transactions provided for in
this Agreement. Each Party represents that it has obtained, or may obtain,
independent Tax advice with respect thereto and upon which it, if so obtained,
has solely relied.
9.03. Time of Essence. Time is of the essence in the performance of
this Agreement.
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9.04. Consents, Approvals and Discretion. Except as herein expressly
provided to the contrary, whenever this Agreement requires any consent or
approval to be given by either Party that is not in such Party's sole discretion
or either Party must or may exercise discretion (other than its sole
discretion), such consent or approval shall not be unreasonably withheld or
delayed and such discretion shall be reasonably exercised.
9.05. Choice of Law; Submission to Jurisdiction. Except as otherwise
provided in this Section 9.05, this Agreement shall be governed by and construed
in accordance with the laws of the State of
Delaware without regard to such
state's conflicts of laws rules. Each of the Parties hereby submits to the
exclusive jurisdiction of (a) the
Delaware chancery court for purposes of all
legal proceedings arising out of or relating to this Agreement or the
Transaction and irrevocably waives, to the fullest extent permitted by law, any
objection to the laying of venue of any such proceeding brought in such court
and any claim that such court is an inconvenient forum or (b) with respect to
the Bankruptcy Cases and issues relating thereto that are properly within the
jurisdiction of the Bankruptcy Court, each of the Parties hereby submits to the
exclusive jurisdiction of the Bankruptcy Court for such purposes and irrevocably
waives, to the fullest extent permitted by law, any objection to the laying of
venue of any such proceeding brought in such Bankruptcy Court and any claim that
such Bankruptcy Court is an inconvenient forum; provided, however, that if the
Bankruptcy Court abstains or otherwise determines not to hear such proceeding,
then the provisions of clause (a) above shall apply.
9.06. Benefit. This Agreement shall inure to the benefit of and be
binding upon the Parties hereto and their respective legal representatives,
successors and assigns.
9.07. No Third Party Beneficiary. The terms and provisions of this
Agreement (including provisions regarding employee and employee benefit matters)
are intended solely for the benefit of the Parties, and their respective
successors and permitted assigns, and are not intended to confer third-party
beneficiary rights upon any other Person.
9.08. Waiver of Breach, Right or Remedy. The waiver by any Party of any
breach or violation by another Party of any provision of this Agreement or of
any right or remedy of the waiving Party in this Agreement (a) shall not waive
or be construed to waive any subsequent breach or violation of the same
provision, (b) shall not waive or be construed to waive a breach or violation of
any other provision and (c) shall be in writing and may not be presumed or
inferred from any Party's conduct. No remedy conferred by this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall be
in addition to every other remedy granted in this Agreement or now or hereafter
existing at law or in equity, by statute or otherwise. The election of any one
or more remedies by a Party shall not constitute a waiver of the right of such
waiving Party to pursue other available remedies. In addition to any other
rights and remedies any Party may have at law or in equity for breach of this
Agreement, each Party shall be entitled to seek an injunction to enforce the
provisions of this Agreement.
9.09. Notices. Any notice, demand or communication required, permitted
or desired to be given hereunder shall be deemed effectively given if given in
writing (a) on the date tendered by personal delivery, (b) on the date received
by facsimile or other electronic means, or (c) one (1) day after the date
tendered for delivery by nationally recognized overnight courier:
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If to Buyer:
The ▇▇▇▇ Group Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller:
The IT Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
One ▇▇▇▇▇▇ Square
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or number, and to the attention of such other
Person, as any Party may designate at any time in writing in conformity
with this Section.
9.10. Misdirected Payments; Offset Rights. After Closing, Sellers shall
remit to Buyer with reasonable promptness any monies received by Sellers
constituting or in respect of the Assets, Assumed Contracts and Assumed
Liabilities. After Closing, Buyer shall remit to ITG with reasonable promptness
any monies received by Buyer constituting or in respect of the Excluded Assets,
Excluded Contracts and Excluded Liabilities. If any Person determines that funds
previously paid or credited to any Seller or the Business in respect of services
rendered prior to the Closing Date have resulted in an overpayment or must be
repaid, Sellers shall be responsible for the repayment of said monies (and the
defense of such actions), except to the extent that the repayment obligation was
an Assumed Liability. After Closing, any amounts due Buyer by Sellers, or due
Sellers by Buyer, may be offset against monies or other funds held by the party
entitled to payment of such amounts.
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9.11. Severability. If any provision of this Agreement is held or
determined to be illegal, invalid or unenforceable under any present or future
law: (a) such provision will be fully severable; (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom; and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
9.12. Entire Agreement; Counterparts; Amendment. This Agreement
supersedes all prior or contemporaneous contracts, agreements, letters of intent
and understandings and constitutes the entire agreement of whatsoever kind or
nature existing between or among the Parties representing the subject matter of
this Agreement, and no Party shall be entitled to benefits other than those
specified herein. As between or among the Parties, any oral or written
representation, agreement or statement not expressly incorporated herein,
whether given prior to or on the Effective Date, shall be of no force and effect
unless and until made in writing and signed by the parties on or after the
Effective Date. The representations and warranties set forth in this Agreement
shall not survive the Closing and shall terminate at the Closing. This Agreement
may be executed in two or more counterparts, each and all of which shall be
deemed an original and all of which together shall constitute but one and the
same instrument. This Agreement may not be amended except in a written
instrument executed the Parties.
9.13. Drafting. No provision of this Agreement shall be interpreted for
or against any Person on the basis that such Person was the draftsman of such
provision, and no presumption or burden of proof shall arise favoring or
disfavoring any Person by virtue of the authorship of any provision of this
Agreement.
9.14. Confidentiality. The provisions of the confidentiality agreement
between Buyer and Sellers dated November 19, 2001 are hereby incorporated by
this reference as if fully set forth herein, and shall apply and remain in full
force and effect through the Closing Date.
9.16. Publicity. No Party to this Agreement shall, prior to the
Closing, without prior consultation with the other Parties, to the extent
practicable under the circumstances taking into account applicable laws and
stock exchange requirements, make any public disclosure with respect to the
Transaction, any negotiations or discussions concerning the Transaction or the
existence of this Agreement.
9.17. Assignment. Except as otherwise provided herein, neither this
Agreement, nor any right, remedy, obligation or liability arising hereunder or
by reason hereof, nor any of the documents executed in connection herewith, may
be assigned by any Party without the consent of the other Parties.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in multiple originals by their duly authorized officers as of the
Effective Date.
THE IT GROUP, INC. THE ▇▇▇▇ GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer Title: Corporate Secretary and General
Counsel
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