FORM OF LOAN AGREEMENT
Exhibit 10
(iii) 49.
THE IT GROUP,
INC.
LOAN
AGREEMENT
THIS LOAN AGREEMENT, made and entered into
this
day of
, 199 , by and among The
IT Group, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (the “Company”) and
, an officer of the Company (“Borrower
”). Capitalized terms used but not otherwise defined in this Agreement
that are defined in the Program (as defined below) shall have the meanings
specified in the Program.
W I T N E S S E T
H:
WHEREAS, the Company has adopted the Ownership
Guidelines which require designated employees of the Company or an affiliate
to own a specified number of securities of the Company; and
WHEREAS, Borrower is an employee subject to
the Ownership Guidelines; and
WHEREAS, the Company has adopted The IT Group,
Inc. Executive Stock Ownership Program (the “Program”) to be
administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”); and
WHEREAS, the Committee has notified Borrower
that he/she is eligible to participate in the Program, the terms of which
allow Borrower to borrow money from the Company to apply toward the purchase
of shares of the Company’s Common Stock in satisfaction of the
Ownership Guidelines; and
WHEREAS, Borrower desires to participate in
the Program; and
WHEREAS, Borrower desires to obtain a term
loan as further described below (the “Loan”) to be used as
financing for the purchase of shares of the Company’s Common Stock;
and
WHEREAS, Borrower is willing and has agreed to
execute all documents necessary to evidence his/her obligations to the
Company, including but not limited to a promissory note evidencing the Loan
(the “Promissory Note”).
NOW, THEREFORE, in consideration of the
promises and agreements herein exchanged, the sufficiency and mutuality of
which are jointly acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE
I
THE
LOAN
Section 1.1
LOAN. Subject to the terms and conditions of this Agreement,
and for the consideration and purposes herein set forth, on the Closing
Date, the Company agrees to extend to Borrower the Loan in the amount of
Dollars ($
), as
THE IT GROUP,
INC.
LOAN
AGREEMENT
increased under
Sections 1.4 and 1.5 hereof. The term of this Agreement shall commence on
the execution of this Agreement and end on the Maturity Date as defined in
the Promissory Note unless such Maturity Date is accelerated in accordance
with Section 1.6.2 or Section 1.7 hereof.
Section 1.2
PROMISSORY NOTE. The Loan shall be
evidenced by and payable on the terms and conditions set forth in the
Promissory Note, a copy of which is attached as Exhibit A and incorporated
herein by this reference.
Section 1.3 INTEREST
RATE. The Promissory Note shall bear interest at
a fixed rate of interest equal to the Applicable Federal Rate in effect on
, 199 , which was
percent (
%) per annum.
Section 1.4
PRINCIPAL AMOUNT. The principal amount
of the Promissory Note shall be as stated therein. The principal amount of
the Promissory Note shall be increased by all accrued and interest unpaid as
of the Maturity Date on the Promissory Note under Section 1.5.
Section 1.5
INTEREST. Interest shall accrue on the
unpaid principal balance of the Promissory Note compounded semiannually with
an interest rate as set forth in Section 1.3 herein from the date of the
Promissory Note until final payment of the Promissory Note. Such interest
shall be payable on the Maturity Date unless maturity of the Promissory Note
is accelerated in accordance with Section 1.6.2 or Section 1.7.
Section 1.6
MANDATORY REPAYMENTS OF PRINCIPAL.
1.6.1 The principal
amount of the Promissory Note shall be due on the Maturity Date unless
maturity of the Promissory Note is accelerated in accordance with Section
1.6.2 or Section 1.7.
1.6.2 Notwithstanding
the foregoing, the unpaid principal amount and accrued interest on the
Promissory Note shall be due in full at the following times upon occurrence
of the following events:
(a) Termination
of Employment of Borrower. In the
event Borrower’s employment is terminated for Cause prior to the
Maturity Date, the outstanding interest and principal payments under this
Promissory Note shall become immediately due and payable on the Termination
Date. In the event Borrower terminates his or her employment with the
Company and all affiliates voluntarily prior to the Maturity Date, any
outstanding interest and principal payments under this Promissory Note shall
become immediately due and payable on the Termination Date. Subject to
Section 1.6.2 (d), below, in the event Borrower’s employment is
terminated involuntarily (other than for Cause) by the Company or an
affiliate prior to the Maturity Date, any outstanding interest and principal
payments under this Promissory Note shall become due and payable no later
than seven (7) months following the Termination Date.
THE IT GROUP,
INC.
LOAN
AGREEMENT
(b) Retirement of
Borrower. In the event Borrower’s
employment terminates on or after his or her Retirement Date prior to the
Maturity Date, any outstanding balance (including accrued and unpaid
interest) under this Promissory Note shall become due and payable no later
than thirteen (13) months following the Retirement Date.
(c) Death or
Disability of Borrower. In the event
Borrower dies or becomes Permanently Disabled prior to the Maturity Date,
any outstanding balance (including accrued and unpaid interest) under this
Promissory Note shall become due and payable no later than thirteen (13)
months following the date of death or the Disability Date.
(d) Change of
Control. In the event an involuntary
termination of employment, other than for Cause, occurs within 18 months of
a Change of Control and prior to Maturity Date, any outstanding balance
(including accrued and unpaid interest) under this Promissory Note shall
become immediately due and payable on the Termination Date.
Section 1.7 OPTIONAL
PREPAYMENTS. The Loan may be prepaid in whole or
in part at any time. Any partial prepayments shall be applied first to
accrued and unpaid interest, and then to principal.
Section 1.8
SECURITY. The Loan is
unsecured.
Section 1.9
RECOURSE. The Loan is full recourse, and
neither collection nor enforcement of the Loan is limited to any particular
assets of Borrower.
ARTICLE
II
BORROWER’S
REPRESENTATIONS AND WARRANTIES
To induce the Company to enter into and extend
and advance funds to Borrower pursuant to this Agreement, in addition to any
other warranties set forth herein, Borrower hereby warrants and represents
to the Company as follows, acknowledging that the Company is relying on the
truth and accuracy of the following representations and warranties in
entering into this Agreement with Borrower:
Section 2.1
VALIDITY. This Agreement has been duly
executed by Borrower and constitutes Borrower’s valid and binding
obligation enforceable against Borrower in accordance with its
terms.
Section 2.2 ADEQUATE
RESOURCES. Borrower currently has, or on the
dates upon which payments are due under the Promissory Note reasonably
expects to have, adequate personal financial resources from which to repay
the Loan.
THE IT GROUP,
INC.
LOAN
AGREEMENT
ARTICLE
III
DEFAULT; REMEDIES;
WAIVER
Section 3.1 EVENTS
OF DEFAULT. The following events shall constitute
Events of Default under this Agreement:
3.1.1 Failure to
Pay. If Borrower fails to pay any amount of
principal or interest as required herein, when such amount becomes due, and
such failure continues, in whole or in part, for 90 days after the date such
payment was due.
3.1.2 Insolvency or
Bankruptcy. Borrower becomes insolvent or unable
to pay his debts as such debts become due, or Borrower files a voluntary
petition in bankruptcy or has an involuntary petition for bankruptcy filed
against him or her.
Section 3.2
REMEDIES. Upon the occurrence of either
Event of Default under Section 3.1 hereof, the Company shall have the
following remedies:
3.2.1 Insolvency or
Bankruptcy. If such event is an Event of Default
specified in Section 3.1.2 above, the Loan and all other amounts owing under
this Agreement and Promissory Note shall immediately become due and
payable.
3.2.2 Failure to
Pay. If such default is an Event of Default
specified in Section 3.1.1, the Company may, by 30 days’ prior written
notice to Borrower, declare the Loan and all other amounts owing under this
Agreement and the Promissory Note to be due and payable in full, whereupon
the same shall immediately become due and payable.
3.2.3 Other
Remedies; Setoff. The Company may exercise any
and all other remedies granted to it under this Agreement or at law. Without
limiting the generality of the foregoing, the Company shall have the right
to setoff any amount due hereunder against any amount owed by Borrower to
Company.
3.2.4 Remedies Not
Exclusive. In addition to the foregoing remedies,
the Company shall have all the rights and remedies available to it under
applicable law.
Section 3.3
NONWAIVER. The failure of the Company,
for any reason, to declare a default, or to enforce or insist on the strict
performance of the covenants of this Agreement, or to seek any redress
available to the Company under this Agreement, shall not be deemed a waiver
of such default or of strict performance of any covenant, obligation or
condition of this Agreement, nor prevent a subsequent act by Borrower from
having all the force and effect of any original default or
breach.
THE IT GROUP,
INC.
LOAN
AGREEMENT
ARTICLE
IV
GENERAL
PROVISIONS
Section 4.1
ASSIGNABILITY. Borrower’s rights
and interests under this Agreement (a) may not be sold, assigned,
transferred, pledged, hypothecated, gifted, bequeathed or otherwise disposed
of to any other party by Borrower or any beneficiary, executor,
administrator, heir, distributee or other person claiming under such
Borrower, and (b) shall not be subject to execution, attachment or similar
process. Any attempted sale, assignment, transfer, pledge, hypothecation,
gift, bequest or other disposition of such rights, interests or benefits
contrary to the foregoing provisions of this Section shall be null and void
and without effect.
Section 4.2
MODIFICATION. This Agreement may only be
amended, modified, or supplemented by written agreement executed by the
Company and Borrower.
Section 4.3
NOTICES. Any notice or demand given
under the terms of this Agreement shall be deemed delivered when mailed via
United States certified mail, addressed to the other party, at the following
address:
|
| COMPANY:
|
| Corporate
Secretary
|
| The IT Group,
Inc.
|
| 0000 Xxxxxxx
Xxxxxxxxx
|
| Xxxxxxxxxxx, XX
00000
|
| BORROWER:
|
|
|
|
|
|
Alternatively, notice
or demand given under the terms of this Agreement may be given by hand
delivery to the other party. If to Company, such delivery will be effective
when actually delivered to: Corporate Secretary, The IT Group, Inc., 0000
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, XX 00000; if to Borrower, when delivered to
the same address as listed above for mailing to Borrower.
Section 4.4 BINDING
EFFECT. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto.
Section 4.5 ATTORNEY
’S FEES. In the event any action or suit is
taken or instituted to enforce this Agreement or the Promissory Note, the
prevailing party shall be entitled to receive
THE IT GROUP,
INC.
LOAN
AGREEMENT
from the defaulting
party all costs, expenses and fees, including reasonable attorney’s
fees, incurred by the prevailing party in enforcing this Agreement or the
Promissory Note.
Section 4.6
TERMINATION. This Agreement shall be of
no further force and effect when the Loan and all obligations owed to the
Company by Borrower in connection with this Agreement have been
satisfied.
Section 4.7
SEVERABILITY. In the event that any
provision of this Agreement is found to be invalid or otherwise
unenforceable by a court or other tribunal of competent jurisdiction, such
invalidity or unenforceability shall not be construed as rendering any other
provision contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though
the invalid and unenforceable provision was not contained
herein.
Section 4.8
INCORPORATION OF EXHIBITS. All exhibits
referred to in this Agreement are incorporated by reference and made a part
of the terms, provisions and covenants of this Agreement.
Section 4.9
GOVERNING LAW. This Agreement shall be
governed by and construed and enforced in accordance and with the laws of
the State of Delaware, without regard to the application of the conflicts of
law provisions thereof.
Section 4.10
CUMULATIVE REMEDIES. All the Company
’s rights and remedies, whether evidenced under the terms of this
Agreement or any other document or instrument referred to herein are
cumulative and are not intended to exclude any other remedies or means of
redress to which the Company may be entitled by statute or
otherwise.
IN WITNESS WHEREOF, the parties have executed
this Loan Agreement on the day and year first above written.
|
| THE IT GROUP,
INC.
|
| By:
|
|
|
| Title: Senior
Vice President, Human Resources
| | | | | | | | | | | | |
