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EXHIBIT 10.5
CONTRIBUTION AGREEMENT
BY AND AMONG
XXXXXX X. XXXX,
ITC HOLDING COMPANY, INC.
AND
XXXXXXXXXX.XXX, INC.
DATED AS OF JULY 15, 1998
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CONTENTS
ARTICLE 1. - CONTRIBUTION AND RECEIPT OF SHARES 1
1.1. Contribution. 1
1.2. Issuance of Shares of the Company's Capital Stock. 2
1.3. Time and Place of Closing. 2
1.4. Default by Any Contributor at the Closing. 2
1.5. Legend on the Company's Capital Stock. 2
ARTICLE 2. - REPRESENTATIONS AND WARRANTIES OF BARE 3
2.1. Organization, Standing, and Power of Sub 3
2.2. Ownership of Sub Shares. 3
2.3. Authority; No Breach By Agreement. 3
2.4. Capital Stock. 3
2.5. Investments; Subsidiaries. 4
2.6. Financial Statements. 4
2.7. Absence of Undisclosed Liabilities. 4
2.8. Absence of Certain Changes or Events. 4
2.9. Tax Matters. 4
2.10. Assets. 5
2.11. Compliance with Laws. 5
2.12. Labor Relations. 5
2.13. Employee Benefit Plans. 5
2.14. Material Contracts. 6
2.15. Legal Proceedings. 7
2.16. Purchase for Investment; Accredited Investor Status. 7
2.17. Statements True and Correct. 7
ARTICLE 3. - REPRESENTATIONS AND WARRANTIES OF ITC 7
3.1. Organization, Standing, and Power of ITC 7
3.2. Ownership of ITC LLC Units. 8
3.3. Authority; No Breach By Agreement 8
3.4. Units 8
3.5. Legal Proceedings 8
3.6. Purchase for Investment; Accredited Investor Status 9
3.7. Statements True and Correct. 9
ARTICLE 4. - COVENANTS 9
4.1. Covenants of Bare. 9
4.2. Covenants of ITC. 10
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ARTICLE 5. - TERMINATION 10
5.1. Termination. 10
5.2. Effect of Termination. 10
ARTICLE 6. - SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS; INDEMNIFICATION 10
ARTICLE 7. - REGISTRATION RIGHTS 10
ARTICLE 8. - MISCELLANEOUS 11
8.1. Definitions 11
8.2. Expenses 13
8.3. Entire Agreement 13
8.4. Amendments 13
8.5. Assignment 13
8.6. Notices 13
8.7. Governing Law 14
8.8. Severability 14
8.9. Counterparts 14
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made and
entered into as of this July 15, 1998, by and among Xxxxxx X. Xxxx, a resident
of Georgia ("Bare"), ITC Holding Company, Inc., a Delaware corporation ("ITC"),
and XxxxXxxxxx.XXX, Inc., a Georgia corporation (the "Company"). Certain terms
used in this Agreement are defined in Section 8.1 of this Agreement.
SECTION 351 PLAN
This Agreement provides for the contribution to the Company of
(i) all of the issued and outstanding shares of capital stock of HNET, Inc., a
Georgia corporation formerly known as XxxxXxxxxx.XXX, Inc. ("Sub"), by Bare and
(ii) 2,750,000 preferred units of HeadHunters, L.L.C., a Delaware limited
liability company ("HH LLC") by ITC, which constitutes 55% of all outstanding
equity interests in HH LLC, in exchange for shares of the Company's capital
stock as set forth in Exhibit 1 attached hereto. It is the intention of the
parties to this Agreement that the transactions contemplated by this Agreement
for federal income tax purposes shall qualify for treatment under Section 351 of
the Internal Revenue Code.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE 1. - CONTRIBUTION AND RECEIPT OF SHARES
1.1. CONTRIBUTION.
(a) BARE. For the consideration hereinafter provided and subject to the
terms and conditions of this Agreement, at the Closing Bare shall assign,
transfer, convey and deliver to the Company, free and clear of all Liens, and
the Company shall acquire from Bare (the "Bare Contribution"), all right, title
and interest in and to 26,000 shares of common stock of Sub held by Bare (the
"Sub Shares"). At Closing, Bare shall deliver to the Company certificate(s)
representing the Sub Shares contributed by Bare hereunder, together with
accompanying stock power(s) or instrument(s) of assignment, duly endorsed in
blank for the transfer of the Sub Shares to the Company.
(b) ITC. For the consideration hereinafter provided and subject to the
terms and conditions of this Agreement, at Closing, ITC shall assign, transfer,
convey and deliver to the Company, free and clear of all Liens, and the Company
shall acquire from ITC (the "ITC Contribution"), all right, title and interest
of ITC in and to 2,750,000 preferred units of HH LLC held by ITC (the "ITC LLC
Units"). At Closing, ITC shall deliver to the Company certificates or other
documents representing the ITC LLC Units contributed by ITC hereunder, together
with accompanying instrument(s) of assignment, duly endorsed in blank for the
transfer of the ITC LLC Units to the Company.
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1.2. ISSUANCE OF SHARES OF THE COMPANY'S CAPITAL STOCK.
(a) BARE. Subject to the provisions of this Agreement, at Closing the
Company shall deliver to Bare, in exchange for the Sub Shares, certificates
representing the number of shares of each class of the Company's capital stock
as set forth on Exhibit 1 hereto.
(b) ITC. Subject to the provisions of this Agreement, at Closing, the
Company shall deliver to ITC, in exchange for the ITC LLC Units, certificates
representing the number of shares of each class of the Company's capital stock
as set forth on Exhibit 1 hereto.
1.3. TIME AND PLACE OF CLOSING.
The Closing will take place on the Closing Date and shall be effective as of the
close of business on such date. The place of Closing shall be at the offices of
Xxxxxx & Bird LLP, located at One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx, 00000 or at such other place as the parties hereto mutually
agree.
1.4. DEFAULT BY ANY CONTRIBUTOR AT THE CLOSING.
If either Bare or ITC fails or refuses to deliver the Sub Shares or the ITC LLC
Units, as the case may be, or if either fails or refuses to consummate any of
the transactions described in this Agreement prior to or on the Closing Date,
the non-defaulting party, at its option and without prejudice to its rights
against any such defaulting party, may (i) acquire the shares of the Company's
stock which it is entitled to acquire hereunder, (ii) delay the Closing while
taking appropriate judicial action, or (iii) refuse to make such acquisition and
thereby terminate all of its obligations hereunder without liability therefore.
The parties acknowledge that the shares of the Company's capital stock, the Bare
Contribution and the ITC Contribution are each unique and otherwise not
available and agree that, in addition to any other remedies, the non-defaulting
party may invoke any equitable remedies to enforce delivery of the shares of the
Company's capital stock, the Bare Contribution or the ITC Contribution hereunder
including, without limitation, any action or suit for specific performance.
1.5. LEGEND ON THE COMPANY'S CAPITAL STOCK.
Bare and ITC agree and understand that the shares of the Company's capital stock
to be received hereunder have not been, and will not be, registered under the
1933 Act or the securities laws of any state, and that such shares may be sold
or disposed of only in one or more transactions (i) registered under the 1933
Act and/or under any applicable state securities laws or (ii) exempt from the
registration requirements of the 1933 act and/or applicable state securities
laws. Bare and ITC understand and agree that each certificate representing
shares of the Company's capital stock shall bear a restrictive legend that sets
forth the applicable restrictions on each class of the Company's capital stock.
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ARTICLE 2. - REPRESENTATIONS AND WARRANTIES OF BARE
Bare hereby represents and warrants to ITC and the Company as follows:
2.1. ORGANIZATION, STANDING, AND POWER OF SUB.
Sub is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Georgia, and has the corporate power and
authority to carry on its business as now conducted and to lease, operate and
own its assets, including 2,200,000 common units of HH LLC and 50,000 preferred
units of HH LLC (collectively, the "Sub Units"), which comprise 45% of all
outstanding equity interests in HH LLC.
2.2. OWNERSHIP OF SUB SHARES.
Bare is the owner of all right, title and interest (legal and beneficial) in and
to the Sub Shares, free and clear of any and all Liens of any nature whatsoever,
except for ITC's right to purchase such shares pursuant to that certain Limited
Liability Company Agreement dated October 30, 1997, as amended (the "Limited
Liability Company Agreement"), which ITC waives pursuant to this Agreement. The
consummation of the Bare Contribution pursuant to the provisions of this
Agreement will transfer to the Company valid title to the Sub Shares free and
clear of any and all Liens. No person or entity has any Contract or Right
(whether preemptive or contractual) to purchase the Sub Shares or other capital
stock of Sub.
2.3. AUTHORITY; NO BREACH BY AGREEMENT.
(a) Bare has duly executed and delivered this Agreement, and upon such
execution and delivery, this Agreement constitutes a legal, valid, and binding
obligation of Bare, enforceable against Bare in accordance with its terms,
except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought.
(b) Neither (i) Bare's execution and delivery of this Agreement nor (ii)
his consummation of the transactions contemplated hereby, nor (iii) his
compliance with any of the provisions hereof will (1) conflict with or result in
a breach of any provision of Sub's Articles of Incorporation or Bylaws, (2)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any asset of Sub (including, without
limitation, the Sub Units) or the Sub Shares under, any Contract of Sub or Bare,
or (3) violate any law or order applicable to Sub or Bare or any assets of Sub
or the Sub Shares.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Bare or Sub of the transactions
contemplated herein.
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2.4. CAPITAL STOCK.
As of the date hereof, the authorized capital stock of Sub consists of 50,000
shares of common stock, of which the Sub Shares are and will be the only issued
and outstanding shares of common stock. There are no other outstanding shares of
any capital stock of Sub. All of the Sub Shares are duly and validly issued and
outstanding and are fully paid and nonassessable under the Georgia Business
Corporation Code. None of the Sub Shares have been issued in violation of any
preemptive rights of current or past shareholders of Sub. There are no
outstanding options, warrants, securities or other rights which are exercisable
for or convertible into shares of Sub's capital stock.
2.5. INVESTMENTS; SUBSIDIARIES.
Except for a 45% equity interest in HH LLC, Sub holds no securities of any other
entity and has no subsidiaries.
2.6. FINANCIAL STATEMENTS.
Sub has provided to ITC and the Company copies of all Sub audited financial
statements for the years ended December 31, 1995, December 31, 1996 and December
31, 1997 and unaudited financial statements for the quarter ended June 30, 1998
prior to the date hereof and will deliver to ITC and the Company copies of all
Sub financial statements prepared subsequent to the date hereof through the
Closing Date. The Sub financial statements (as of the dates thereof and for the
periods covered thereby) (i) are or, if dated after the date of this Agreement,
will be in accordance with GAAP and (ii) present or will present, as the case
may be, fairly the financial position of Sub as of the dates indicated
2.7. ABSENCE OF UNDISCLOSED LIABILITIES.
Sub has no Liabilities of the type normally reflected on a balance sheet or the
notes thereto prepared in accordance with GAAP that are reasonably likely to
have, individually or in the aggregate, a material adverse effect on Sub, other
than Liabilities which are accrued or reserved against in the financial
statements of Sub previously delivered to ITC and the Company. Sub has not
incurred or paid any Liability since December 31, 1997, of the type normally
reflected on a balance sheet or the notes thereto prepared in accordance with
GAAP.
2.8. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Since December 31, 1997, (i) there have been no events, changes, or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a material adverse effect on Sub, and (ii) neither Sub nor Bare has
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of the
covenants and agreements of Bare provided in this Agreement.
2.9. TAX MATTERS.
(a) Sub is and has been a validly electing S corporation (as defined in
Section 1371 of the Internal Revenue Code) since November 29, 1995. Other than
the execution and delivery of
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this Agreement, Bare has not taken any actions which has or will result in the
termination or revocation of Sub's S corporation status.
(b) All Tax returns required to be filed by or on behalf of (i) Sub and
(ii) Bare in connection with any Tax returns required to be filed by Bare in
connection with the Sub, have been timely filed or requests for extensions have
been timely filed, granted, and have not expired for periods ended on June 30,
1998, and on the date of the most recent fiscal year end immediately preceding
the Closing, and all returns filed are complete and accurate. All Taxes shown on
filed returns for Sub and Bare have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes of Sub. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(c) Neither Sub nor Bare has executed an extension or waiver of any
statute of limitations on the assessment or collection of any Tax due (excluding
such statutes that relate to years currently under examination by the Internal
Revenue Service or other applicable taxing authorities) that is currently in
effect.
(d) Sub and Bare are in compliance with all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
laws.
2.10. ASSETS.
Sub has good and marketable title to all of its assets free and clear of any and
all Liens, including, without limitation, the Sub Units.
2.11. COMPLIANCE WITH LAWS.
Sub has been and is in compliance in all material respects with all applicable
laws and orders of any court or governmental authorities applicable to it, its
assets or its conduct of business.
2.12. LABOR RELATIONS.
Sub is not the subject of any Litigation asserting that it has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment, nor is there any strike or
other unfair labor practice (as defined above) dispute involving Sub pending or
threatened, nor, to the knowledge of Bare, is there any activity involving any
of the employees of Sub seeking to certify a collective bargaining unit or
engaging in any other organization activity.
2.13. EMPLOYEE BENEFIT PLANS.
(a) Sub does not have and has never had any pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, incentive, medical, vision, dental, health, life
insurance, employee benefit or fringe benefit plans, including "employee benefit
plans" as that term is defined in Section 3(3) of ERISA (collectively, the "Sub
Benefit Plans"). Sub does not now, and has never sponsored, in whole or
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in part, or contributed to any such "employee benefit plan" for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries. Sub has not adopted, maintained, sponsored, in whole or in
part, or contributed to (i) a "defined benefit plan" (as defined in Section
414(j) of the Internal Revenue Code); (ii) a plan which is subject to Section
412 of the Internal Revenue Code; (iii) a plan which is subject to Title IV of
ERISA; or (iv) a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) Sub does not have any current or projected Liability in respect of
post-employment or post-retirement health or medical or life insurance benefits
for retired or former employees of Sub.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any current or former employee of Sub
from Sub under any Sub Benefit Plan or otherwise; (ii) increase any benefits
otherwise payable under any Sub Benefit Plan; or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(d) There is no contract, agreement, plan or arrangement covering any
employee or former employee of Sub that, individually or collectively, could
give rise to the payment of any amount by Sub that would not be deductible
pursuant to the terms of Section 280G of the Internal Revenue Code.
(e) No tax under Section 4980B of the Internal Revenue Code has been
incurred in respect of any Sub Benefit Plan that is a group health plan, as
defined in Section 5000(b)(1) of the Internal Revenue Code.
2.14. MATERIAL CONTRACTS.
(a) Sub is not a party to, or is bound or affected by, or receives
benefits under, (i) any Contract which shall survive the Closing under which Sub
has created, incurred, assumed, or guaranteed (or may create, incur, assume, or
guarantee) indebtedness for borrowed money (including capitalized lease
obligations) involving more than $25,000, (ii) any Contract with Bare, (iii) any
Contract (including the lease of real or personal property from or to third
parties) providing for payments in excess of $25,000 per annum or in excess of
$50,000 for the remaining term of the Contract, (iv) any Contract in which Sub
is participating as a general partner or joint venturer, (v) any Contract
concerning noncompetition, (vi) any written employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $25,000, and (vii) any Contract that is
terminable upon a change in ownership of Sub.
(b) With respect to each Sub material Contract (i) such material Contract
is in full force and effect; (ii) Sub is not in Default thereunder; (iii) Sub
has not repudiated or waived any material provision of any such Contract; and
(iv) no other party to any such Contract is, to the knowledge of Bare, in
Default in any respect or has repudiated or waived any material provision
thereunder.
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(c) With respect to any lease to which Sub is a party, (i) all rents and
other amounts currently due thereunder have been paid; (ii) no waiver or
indulgence or postponement of any obligation thereunder has been granted by any
lessor or sublessor or been requested by any lessee or sublessee; and (iii) Sub
has not received any notice that it has breached any term, condition or covenant
under any such lease.
(d) All of the indebtedness of Sub for money borrowed is prepayable at any
time by Sub without penalty or premium.
2.15. LEGAL PROCEEDINGS.
There is no Litigation instituted or pending, or, to the knowledge of Bare,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable material
outcome) against (i) Sub, (ii) any asset, interest, or right of Sub, including,
without limitation, the Sub Units, or (iii) the Sub Shares, nor are there any
orders of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against Sub, any asset, interest or right of Sub, or the
Sub Shares.
2.16. PURCHASE FOR INVESTMENT; ACCREDITED INVESTOR STATUS.
Bare is an "Accredited Investor" (as defined in Rule 501 of Regulation D
promulgated under the 0000 Xxx) and is acquiring shares of the Company's capital
stock for investment purposes and not with a present view toward, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the shares of the Company's capital stock so acquired.
Bare has such knowledge and experience in financial and business matters that he
is capable of evaluating the merits and risks of his investment in the Company's
capital stock. Bare is able to bear any economic risks associated with such
investment in the Company for an indefinite period of time.
2.17. STATEMENTS TRUE AND CORRECT.
No statement, certificate, instrument, or other writing furnished or to be
furnished by Bare or Sub or any Affiliate thereof to ITC or the Company pursuant
to this Agreement or any other document, agreement, or instrument referred to
herein contains or will contain any untrue statement of material fact or will
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
ARTICLE 3. - REPRESENTATIONS AND WARRANTIES OF ITC
ITC hereby represents and warrants to Bare and the Company as follows:
3.1. ORGANIZATION, STANDING, AND POWER OF ITC.
ITC is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its material assets, including the ITC LLC Units.
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3.2. OWNERSHIP OF ITC LLC UNITS.
ITC is the owner of all right, title and interest (legal and beneficial) in and
to the ITC LLC Units free and clear of any and all Liens of any nature
whatsoever, except for Bare's right to purchase such units pursuant to the
Limited Liability Company Agreement, which Bare shall waive pursuant to this
Agreement prior to Closing. The consummation of the ITC Contribution pursuant to
the provisions hereof will transfer to the Company valid title to the ITC LLC
Units free and clear of any and all Liens. No person or entity has any Contract
or Right to purchase the ITC LLC Units.
3.3. AUTHORITY; NO BREACH BY AGREEMENT.
(a) ITC has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of ITC. This Agreement represents a legal, valid, and
binding obligation of ITC, enforceable against ITC in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither ITC's execution and delivery of this Agreement, nor ITC's
consummation of the transactions contemplated hereby, nor ITC's compliance with
any of the provisions hereof, will (i) conflict with or result in a breach of
any provision of ITC's Certificate of Incorporation, or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on the Preferred Units of ITC under, any
material Contract of ITC, or (iii) violate any law or order applicable to ITC or
the ITC LLC Units.
(c) No notice to, filing with, or Consent of, any public body or authority
is necessary for the consummation by ITC of the transactions contemplated in
this Agreement.
3.4. UNITS.
As of the date hereof, the ITC LLC Units and the Sub Units are the only
outstanding equity interests of HH LLC. Schedule 1 attached hereto is a true and
accurate list that sets forth all options granted by HH LLC which are
exercisable for common units of HH LLC. There are no other outstanding options
or warrants or securities which are exercisable for or convertible into units of
HH LLC.
3.5. LEGAL PROCEEDINGS.
There is no Litigation instituted or pending or, to the knowledge of ITC,
threatened against ITC relating to, or affecting in any way, the ITC LLC Units,
nor are there any orders of any
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Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against ITC relating to, or affecting in any way, the ITC LLC Units.
3.6. PURCHASE FOR INVESTMENT; ACCREDITED INVESTOR STATUS.
ITC is an "Accredited Investor" and is acquiring shares of the Company's capital
stock for investment purposes and not with a present view toward, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the shares of the Company's capital stock so acquired.
ITC has such knowledge and experience in financial and business matters that ITC
is capable of evaluating the merits and risks of its investment in the Company's
capital stock. ITC is able to bear any economic risks associated with such
investment in the Company for an indefinite period of time.
3.7. STATEMENTS TRUE AND CORRECT.
No statement, certificate, instrument or other writing furnished or to be
furnished by ITC or any Affiliate thereof to Bare or the Company pursuant to
this Agreement or any other document, agreement or instrument referred to herein
contains or will contain any untrue statement of material fact or will omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE 4. - COVENANTS
4.1. COVENANTS OF BARE.
(a) Bare hereby consents to the ITC Contribution and waives any and all
rights that Bare and Sub have or may have to acquire the ITC LLC Units pursuant
to the Limited Liability Company Agreement or otherwise.
(b) Bare shall not take any affirmative action to terminate or revoke
Sub's S corporation status under the Internal Revenue Code.
(c) As soon as reasonably practicable after the Closing Date, Bare shall
timely file any and all Tax returns on behalf of himself and Sub for the short
Tax year commencing January 1, 1998 and ending on the Closing Date related to
the termination of operation of law of Sub's S corporation status.
(d) Bare hereby waives any and all registration rights that Bare and Sub
have or may have pursuant to the Limited Liability Company Agreement or
otherwise (except for the registration rights granted hereunder).
4.2. COVENANTS OF ITC.
(a) ITC hereby consents to the Bare Contribution and waives any and all
rights that ITC has or may have to acquire the Sub Units or Sub Shares pursuant
to the Limited Liability Company Agreement or otherwise.
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(b) ITC hereby waives any and all registration rights that ITC may have
pursuant to the Limited Liability Company Agreement or otherwise (except for the
registration rights granted hereunder).
ARTICLE 5. - TERMINATION
5.1. TERMINATION.
Notwithstanding any other provision of this Agreement, this Agreement may be
terminated and the Contributions abandoned at any time prior to the Closing:
(a) By mutual consent of Bare and ITC; or
(b) By Bare or ITC (provided that the terminating party is not then in
material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach
by the other party of any representation, warranty or covenant contained
in this Agreement which cannot be or has not been cured within 10 days
after written notice was sent to such party of such breach.
5.2. EFFECT OF TERMINATION.
In the event of the termination of this Agreement pursuant to this Section, this
Agreement shall become void and have no effect.
ARTICLE 6. - SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
The respective representations, warranties, obligations, covenants, and
agreements of the parties shall survive the Closing for a period of one year
commencing from the Closing Date. Each party hereto shall indemnify (the
"Indemnitor") the other party (the "Indemnitee") for any Liability incurred or
any loss suffered by the Indemnitee which was caused by a breach of any
representation, warranty or covenant set forth herein by the Indemnitor.
ARTICLE 7. - REGISTRATION RIGHTS
If at any time the Company proposes to make a registered public offering
of its common stock, no par value per share, under the 1933 Act other than (A)
its initial public offering registered on Form S-1, or (B) an offering
registered on Form X-0, Xxxx X-0 or similar forms in connection with (i) the
resale of shares issued to the Company's employees pursuant to the exercise of
stock options granted by the Company or (ii) a business combination with another
entity, the Company shall give written notice of the proposed registration to
Bare and ITC not less than 30 days prior to the proposed filing date of the
registration statement. At the written request of ITC or Bare within 15 days
after receipt of such notice, the Company shall include in
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such registered offering all shares of common stock held by ITC and Bare that
each has requested to be included in such offering; provided, however, that if
the managing underwriters advise the Company in writing that, in their opinion,
the number of shares requested to be included in such offering exceeds the
number of shares that can be sold in the offering without adversely affecting
the marketability of the offering, the Company will include in such registered
offering the primary shares that the Company proposes to sell and then, if
additional shares are to be sold in such offering, ITC and Bare shall each
include their pro-rata number of shares based on the number of shares requested
by them to be included in such offering.
ARTICLE 8. - MISCELLANEOUS
8.1. DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity
or voting interest of such Person; or (iii) any other Person for which a
Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Contribution Agreement, including the
Schedules and Exhibits delivered pursuant hereto and incorporated herein by
reference.
"CLOSING" shall mean the Closing of the transactions contemplated hereby.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, law or order.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of any
kind or character, or other document to which any Person is a party or that
is binding on any Person or its capital stock, assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default under any
Contract or Order, (ii) any occurrence of any event that with the passage of
time or the giving of notice or both would constitute a breach or violation
of or default under any Contract or Order, or (iii) any occurrence of any
event that with or without the passage of time or the giving of notice would
give rise to a right to terminate or revoke, change the current terms
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15
of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract or Order.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
costs of investigation, collection and defense), deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course
of business) of any type, whether accrued, absolute or contingent, liquidated
or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, and (ii) Liens in the form of easements and
restrictive covenants on real property which do not materially adversely
affect the use of such property by the current owner thereof.
"LITIGATION" shall mean any action, arbitration, complaint, criminal
prosecution, governmental or other examination or investigation, hearing,
inquiry, administrative or other proceeding relating to or affecting a party,
its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement.
"MATERIAL" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality
in that instance.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in
a representative capacity.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any
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16
character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of the capital stock of a Person or by which a
Person is or may be bound to issue additional shares of its capital stock
or other Rights.
"TAX" or "TAXES" shall mean any federal, state, county, local, or foreign
income, profits, franchise, gross receipts, payroll, sales, employment, use,
property, withholding, excise, occupancy, and other taxes, assessments,
charges, fares, or impositions, including interest, penalties, and additions
imposed thereon or with respect thereto.
8.2. EXPENSES.
Each of the parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder.
8.3. ENTIRE AGREEMENT.
This Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
8.4. AMENDMENTS.
This Agreement may not be amended except by a writing signed by all parties
hereto.
8.5. ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto (whether by operation of Law or otherwise)
without the prior written consent of each other party. Any such attempt to
assign this Agreement or the rights, interests or obligations hereunder without
the other party's consent shall be void.
8.6. NOTICES.
All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail (postage pre-paid) or by courier
or overnight carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
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If to Bare: c/o XxxxXxxxxx.XXX, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
If to ITC: ITC Holding Company, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx,
General Counsel
8.7. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Georgia, without regard to the conflicts of laws principles
thereof.
8.8. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable shall
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement.
8.9. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.
(signatures on following page)
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18
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
/s/ Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx
ITC HOLDING COMPANY, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
--------------------------------
Title: Chief Financial Officer
-------------------------------
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------
Title: President
-------------------------------
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