Exhibit 99.2
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ASSET PURCHASE AGREEMENT
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DATED AS OF DECEMBER 9, 2001
BETWEEN
LUMINANT WORLDWIDE CORPORATION
AND
LANTE CORPORATION
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of December 9, 2001, is made by
and between Luminant Worldwide Corporation, a Delaware corporation ("Seller"),
and Lante Corporation, a Delaware corporation ("Purchaser"). Certain capitalized
terms used in this Agreement shall have the meaning ascribed to them in Annex A
to this Agreement.
RECITALS
A. Seller, along with its Subsidiaries, is in the business of providing
professional consulting services to customers (collectively, the "Business").
B. Seller, along with its Subsidiaries, intend to file a voluntary
petition (the "Petition") for relief commencing a case (the "Chapter 11 Case")
under Chapter 11 of Title 11 of the United States Code, as amended and the rules
and regulations promulgated thereunder (collectively, the "Bankruptcy Code"), in
the United States Bankruptcy Court for the Southern District of Texas (the
"Bankruptcy Court").
C. Purchaser desires to purchase and acquire, and Seller desires to
sell, convey, assign and transfer, or cause to be sold, conveyed, assigned and
transferred, to Purchaser the Acquired Assets (as hereinafter defined), and
Purchaser is willing to assume, and Seller desires to assign and delegate to
Purchaser, the Assumed Liabilities (as hereinafter defined), on the terms and
subject to the conditions set forth herein and in accordance with Sections 105,
363 and 365 of the Bankruptcy Code.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS
Section 1.1. Acquired and Excluded Assets. On the terms and subject to
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the conditions set forth in this Agreement, at the Closing, Seller shall, and
shall cause its Subsidiaries to, sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase and accept from Seller and its
Subsidiaries, free and clear of all Liens (with all Liens on the Acquired Assets
attaching to the sale proceeds payable to Seller under this Agreement), all of
Seller's and its Subsidiaries' right, title, and interest in, to and under the
assets, rights and properties, whether tangible or intangible, set forth in
paragraph A on Schedule 1.1 (collectively, the "Acquired Assets"). It is agreed
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and acknowledged that, other than the Acquired Assets, the Purchaser is not
acquiring or accepting any of the assets, rights and properties of the Seller or
its Subsidiaries. All Seller's and its Subsidiaries' assets, rights and
properties that are not Acquired Assets, including those items set forth in
paragraph B on Schedule 1.1, shall be referred to herein as the "Excluded
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Assets". Purchaser shall have the option, which shall be exercisable no later
than two business days prior to the Closing Date, to exclude any assets, rights
and properties from the Acquired Assets; provided, that the Purchase Price shall
not be reduced as a result of such exclusion. Upon exercise of the option in the
preceding sentence, the assets, rights and properties so excluded by Purchaser
shall be deemed to be Excluded Assets for all purposes of this Agreement.
Section 1.2. Contract Rejection and Assumption. Attached as Schedule
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1.2(1) is a true and complete list prepared by Seller of the following: (1) all
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potentially executory Contracts of Seller and its Subsidiaries as of the date of
this Agreement that relate to (a) the Intellectual Property of Sellers or its
Subsidiaries, (b) the alliance relationships of Seller or its Subsidiaries, or
(c) the provision of
professional consulting services by Seller or its Subsidiaries, including,
without limitation, statements of work and pending proposals to provide
professional consulting services, including for each of the Contracts identified
in clauses (a), (b) and (c), Seller's good faith estimate of the aggregate
amount or other actions required to cure any defaults or breaches under those
Contracts (the "Designated Contracts List"). Attached as Schedule 1.2(2) is a
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true and complete list prepared by Seller of any other material executory
Contracts of Seller or its Subsidiaries, including for each of the Contracts
that relate to the Acquired Assets, Seller's good faith estimate of the
aggregate amount or other actions required to cure any defaults or breaches
under those Contracts. The agreements identified on the Designated Contracts
List with an asterisk are referred to herein collectively as the "Designated
Contracts", and Seller has determined that all Designated Contracts are
executory Contracts as of the date of this Agreement. The Designated Contracts
are included within the Acquired Assets, and at the Closing Seller and its
Subsidiaries shall assign all of the Designated Contracts to Purchaser, on the
terms and subject to the conditions of this Agreement. Purchaser shall have the
option, which shall be exercisable no later than two business days prior to the
Closing Date, to exclude from the Acquired Assets any Contract or pending
proposal, whether or not previously identified as a Designated Contract, or to
add to the Acquired Assets any Contract, whether or not previously identified as
a Designated Contract, or pending proposals; provided, that in no event shall
the Purchase Price be affected by any such exclusion or addition of any Contract
from the Acquired Assets. Upon exercise of the option in the preceding sentence,
the Designated Contracts List shall be deemed to be modified to give effect to
such change as of the date hereof; provided that notwithstanding anything herein
to the contrary, the Seller shall use commercially reasonable efforts to assume
and assign to Purchaser at the Closing any Contracts added to the Acquired
Assets by Purchaser that were not previously included on the Designated
Contracts List pursuant to the exercise of the option in the previous sentence
("Added Contracts"), but in the event any Added Contracts cannot be assumed and
assigned at the Closing, Seller shall use commercially reasonable efforts to
expeditiously seek and effect the assumption and assignment to Purchaser of such
Added Contracts after the Closing. Notwithstanding anything herein to the
contrary, neither "Designated Contracts" nor "Acquired Assets" shall include any
executory Contract: (i) that gives Seller or any of its Subsidiaries the right
to use Intellectual Property; (ii) that under Section 365(c)(1) of the
Bankruptcy Code, unless otherwise ordered by the Bankruptcy Court, is not
assignable without the consent of the other party or parties to such executory
Contract ("Licensor"); and (iii) the assignment of which to Purchaser is not
agreed to, or deemed agreed to, by the Licensor.
Section 1.3. Assumed and Excluded Liabilities. On the terms and subject
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to the conditions set forth in this Agreement, at the Closing, Purchaser shall
assume from Seller and its Subsidiaries and thereafter pay, perform, or
discharge in accordance with their terms, all obligations that arise from and
after the Closing under the Designated Contracts, in addition to the aggregate
amount or other actions required to cure any defaults under the Designated
Contracts (but in no event shall the Purchaser's obligation to cure each
Designated Contract exceed the amount set forth on the Designated Contracts List
for each such Designated Contract, whether or not the Bankruptcy Court
ultimately determines a greater cure amount for a given Designated Contract).
The Liabilities to be assumed pursuant to this Agreement shall be referred to
herein as the "Assumed Liabilities" and all other Liabilities of Seller, its
Subsidiaries and its Affiliates, including, without limitation, any and all
rights, obligations or liabilities under or related to any and all Benefit Plans
that are now or ever have been maintained or contributed to by Seller or any
member of its Control Group (as defined under Code Section 414(b), (c) or (m))
or any item disclosed, or which should have been disclosed, pursuant to Section
3.11, shall be referred to herein as the "Excluded Liabilities". Purchaser shall
not assume or pay, perform, succeed to, discharge, become subject to or be
responsible for any of the Liabilities of Seller or its Subsidiaries other than
the Assumed Liabilities. Without limiting the generality of the foregoing,
Purchaser shall not assume or pay, perform, succeed to, discharge, become
subject to or be responsible for any of the Liabilities of
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Sellers or any of its Subsidiaries (a) pursuant to any Contract that is not, or
that is no longer deemed to be in accordance with the option specified in
Section 1.2, a Designated Contract or (b) other than cure amounts constituting
Assumed Liabilities, any claims related to, associated with or arising out of
the ownership, operation, use or control of the Acquired Assets existing on, or
as a result of the operations of, the Acquired Assets, before or as of the
Closing Date.
Section 1.4. Purchase Price. In consideration for the Acquired Assets,
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Purchaser shall pay to Seller at the Closing an amount equal to the lesser of
(i) the gross amount of professional services revenue recognized by Seller in
the seven week period immediately preceding the Closing Date, less any such
revenue in that period under a Contract described in Section 1.2(1)(c) as of the
date hereof and not assigned to Purchaser on the terms and subject to the
conditions of this Agreement, such revenue to be calculated in accordance with
U.S. generally accepted accounting principles, and (ii) $3,100,000, in cash (the
"Purchase Price").
Section 1.5. Allocation of Purchase Price. Prior to the Closing, the
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parties shall mutually agree upon the allocation of the Purchase Price and the
Assumed Liabilities among the Acquired Assets. Purchaser shall propose the first
draft of such allocation. To the extent required by Law after the Closing Date,
Purchaser and Seller shall prepare and file those statements or forms (including
Form 8594) required by Section 1060 of the Code and the Treasury regulations
thereunder. Unless required by Law, such statements or forms and any other tax
filings shall be consistent with the allocation of the Purchase Price and the
Assumed Liabilities among the Acquired Assets mutually agreed upon by the
parties prior to the Closing.
ARTICLE II.
THE CLOSING
Section 2.1. Closing. The consummation of the transactions contemplated
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by this Agreement (the "Closing") shall take place at the offices of Seller,
2000 Xxxx Xxx Houston Parkway South, Suite 1200, Houston, Texas, on (i) the day
during which all the conditions set forth in Article VI have been satisfied or
waived, but in no event later than the end of the day on January 4, 2002 or (ii)
such other time, date, and place as shall be agreed upon by the parties (the
actual date of the Closing being herein referred to as the "Closing Date").
Section 2.2. Certain Deliveries at Closing. The sale, transfer,
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assignment and delivery by Seller and its Subsidiaries of the Acquired Assets
(including, without limitation, all of the Designated Contracts) to Purchaser
and the assumption by Purchaser of the Assumed Liabilities, as provided herein,
shall be effected on the Closing Date by the execution and delivery by Seller
and its Subsidiaries and Purchaser of one or more assignment and assumption
agreement(s) with regard to the Designated Contracts, one or more Intellectual
Property assignment agreements and one or more bills of sale or deeds, as
applicable, with respect to the Acquired Assets, each of which shall be in form
and substance reasonably satisfactory to the parties.
Section 2.3. Additional Deliveries at Closing.
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(a) At the Closing, Seller shall (and shall cause its
Subsidiaries to) deliver to Purchaser such additional documents, instruments or
certificates required to be delivered in connection with Seller's obligations
under this Agreement, or as Purchaser or its counsel may reasonably request,
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including, without limitation, certified copies of all orders of the
Bankruptcy Court pertaining to this Agreement, such as the Bidding Procedures
Order and the Section 363/365 Order.
(b) At the Closing, Purchaser shall deliver to Seller (i) such
additional documents, instruments or certificates required to be delivered in
connection with Purchaser's obligations under this Agreement, or as Seller or
its counsel may reasonably request and (ii) the Purchase Price by wire transfer
of immediately available funds to an account or accounts designated in writing
by Seller.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedule delivered to Purchaser
with respect to specifically identified sections of this Article III, Seller
represents and warrants to Purchaser as follows:
Section 3.1. Organization. Seller and each of its Subsidiaries
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transferring Acquired Assets under this Agreement (collectively, the "Selling
Companies") is validly existing and in good standing under the laws of the
jurisdiction of its formation and has the corporate power and authority and all
necessary governmental approvals to own, lease, and operate its properties and
to carry on its Business as it is now being conducted or presently proposed to
be conducted. Each Selling Company is duly qualified to do business, and is in
good standing, in each jurisdiction where the operations of its Business are
conducted, except where the failure to be so qualified could not be reasonably
expected individually or in the aggregate to have a material adverse effect on
(i) the Selling Companies and the Business, taken as a whole, including, without
limitation, their financial condition, (ii) the Acquired Assets and the Assumed
Liabilities, taken as a whole, or (iii) the Selling Companies' ability to
consummate the transactions contemplated herein or materially hinder or delay
such consummation (any of the foregoing, a "Material Adverse Effect"); provided
that in no event shall the mere filing of the Chapter 11 Case (as opposed to any
consequences resulting from such filing or from the announcement or disclosure
of such filing) be deemed to have a Material Adverse Effect.
Section 3.2. Authority Relative to this Agreement. Subject to an order
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of the Bankruptcy Court approving the transactions contemplated by this
Agreement in accordance with Sections 363 and 365 of the Bankruptcy Code, in a
form reasonably acceptable to Purchaser (the "Section 363/365 Order"), having
been entered by the Bankruptcy Court and having become a Final Order, this
Agreement has been duly and validly authorized, executed and delivered by Seller
and constitutes a valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, and other laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
Section 3.3. Consents and Approvals. No consent, approval, or
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authorization of, waiver from or declaration, filing, or registration with, any
Governmental or Regulatory Authority or other Person (including, without
limitation, any party to any Designated Contract or Added Contract) is required
to be made or obtained in connection with the execution, delivery, and
performance of this Agreement by the Selling Companies and the consummation of
the transactions contemplated hereby, except (a) for consents, approvals, or
authorizations of, or declarations or filings with, or required by, the
Bankruptcy Court, (b) for consents, approvals, authorizations, declarations,
filings, or registrations, which, if not obtained, could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and (c)
for the items set forth on Schedule 3.3.
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Section 3.4. No Violations. Neither the execution, delivery or performance
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of this Agreement by the Selling Companies, as applicable, nor the consummation
by the Selling Companies of the transactions contemplated hereby, nor compliance
by the Selling Companies with any of the provisions hereof, will (a) violate any
order, writ, injunction, decree, statute, rule, or regulation applicable to any
of the Selling Companies or their properties or assets, (b) cause the suspension
or revocation of any permit, license, governmental authorization, consent, or
approval necessary for the Selling Companies to conduct the Business as
currently conducted, except in the case of clauses (a) and (b) for violations,
breaches, defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions, or revocations that could not individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.5. Title to Property; Acquired Assets. Upon the Section 363/365
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Order having been entered by the Bankruptcy Court and having become a Final
Order, and in accordance with the terms of the Section 363/365 Order and the
Bankruptcy Code, each Selling Company (a) shall have the power and right to
sell, assign, transfer and deliver, as the case may be, to Purchaser the
Acquired Assets and (b) on the Closing Date shall sell, assign, transfer and
deliver to the Purchaser the Acquired Assets free and clear of all Liens other
than Liens securing the performance of Assumed Liabilities that are set forth on
Schedule 3.5 (with all such Liens on the Acquired Assets attaching to the sale
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proceeds payable to Seller under this Agreement).
Section 3.6. Contracts. Schedule 1.2 is true and complete as of the date of
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this Agreement, and as amended in accordance with Section 1.2, will be true and
complete as of the Closing Date. True and complete copies of each written
Contract (or written summaries of the terms of any oral Contract) included in
the Acquired Assets have been previously made available to Purchaser. To the
Knowledge of Seller, there are no Contracts to which the Seller or its
Subsidiaries are parties that are material to the Intellectual Property of
Seller or its Subsidiaries or otherwise material to the Business, other than as
set forth on Schedule 3.6. All Designated Contracts as of the date hereof, and
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those Contracts identified in paragraph A(10) of Schedule 1.1, are valid,
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binding and enforceable in accordance with their terms and such Designated
Contracts are in full force and effect. Except as set forth on Schedule 3.6, the
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Designated Contracts as of the date hereof do not contain any non-competition or
similar covenants restricting the conduct of the Business or its Employees, and
no non-competition, non-solicitation, confidentiality or invention assignment
provisions in favor of the Selling Companies contained in the Designated
Contracts as of the date hereof, or any of the Contracts identified in paragraph
A(10) of Schedule 1.1, have been waived or released by the Selling Companies.
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Upon the cure of defaults in accordance with Section 9.1, the Selling Companies
will have cured in all material respects the obligations required pursuant to
each Designated Contract and the Bankruptcy Court to have been performed by them
through the Closing Date. Other than the defaults to be cured in accordance with
Section 9.1, there has not occurred any default under any of the Designated
Contracts as of the date hereof on the part of the Selling Companies or, to the
Knowledge of Seller and its Subsidiaries, any other party to the Designated
Contracts, nor has the Seller or its Subsidiaries received notice of default
under any of the Designated Contracts as of the date hereof from any other party
to the Designated Contracts or, except in accordance with the Bankruptcy Code,
sent notice of default under any of the Designated Contracts as of the date
hereof to any other party to the Designated Contracts. Other than the defaults
to be cured in accordance with Section 9.1, no event has occurred that, with the
giving of notice or the lapse of time, or both, could constitute a default on
the part of the Selling Companies under any of the Designated Contracts as of
the date hereof nor, to the Knowledge of Seller and its Subsidiaries, has any
event occurred which with the giving of notice or the lapse of time, or both,
could constitute a default on the part of any other party to any of the
Designated Contracts as of the date hereof. There has been no billing,
collection or prepayment under a Designated Contract prior to or in advance of
the Selling
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Companies performing a commensurate percentage of their obligations pursuant to
such Designated Contract. Except as set forth on Schedule 3.6, there has not
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occurred any default under any of the Contracts identified in paragraph A(10) of
Schedule 1.1 on the part of the Selling Companies or, to the Knowledge of Seller
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and its Subsidiaries, any other party to those Contracts, nor has the Seller or
its Subsidiaries received notice of default under any of those Contracts from
any other party to the those Contracts or, except in accordance with the
Bankruptcy Code, sent notice of default under any of the Contracts identified in
paragraph A(10) of Schedule 1.1 to any other party to those Contracts. Except as
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set forth on Schedule 3.6, no event has occurred that, with the giving of notice
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or the lapse of time, or both, could constitute a default on the part of the
Selling Companies under any of the Contracts identified in paragraph A(10) of
Schedule 1.1, nor, to the Knowledge of Seller and its Subsidiaries, has any
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event occurred which with the giving of notice or the lapse of time, or both,
could constitute a default on the part of any other party to any of those
Contracts. Each of the other parties to the Contracts identified in paragraph 2
of Exhibit A to Schedule 1.1 has been previously terminated or resigned, and the
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Selling Companies have no further severance or other obligations under any of
those Contracts. Specifically identified on Schedule 3.6 is each default, breach
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or event on the part of the Selling Companies or, to the Knowledge of the Seller
and its subsidiaries, on the part of any other party to those Contracts, under
any Contract described in Schedule 1.2(2) that has had, or could be reasonably
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be expected to have, with the giving of notice or the lapse of time, or both, a
material and adverse effect on any of the Designated Contracts as of the date
hereof or a Material Adverse Effect.
Section 3.7. Compliance with Law. None of the Selling Companies (i)
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is subject to any material pending Action or Proceeding with regard to, or (ii)
is in material violation of any Law or Order applicable to, the Acquired Assets,
the Assumed Liabilities or the Business.
Section 3.8. Intellectual Property. Schedule 3.8 of this Agreement
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contains a true and complete list of all Intellectual Property subject to
statutory registration, and all other material Intellectual Property, owned,
held, used or licensed for use by the Seller or any of its Subsidiaries. No
other material Intellectual Property, other than that identified on Schedule
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3.8, is used or necessary in the conduct by the Seller or any of its
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Subsidiaries of the Business. Except as disclosed on Schedule 3.8, (x) each
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Selling Company is the owner of all right, title and interest in and to each
item of Intellectual Property ascribed to it on Schedule 3.8 and/or has the
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valid right to use such Intellectual Property and (y) except for Intellectual
Property excluded from the Acquired Assets pursuant to the last sentence in
Section 1.2 (the "Section 365(c)(1) Intellectual Property"), all such rights,
titles and interests are part of the Acquired Assets and will be acquired, free
and clear of all Liens other than those set forth on Schedule 3.5 (with all such
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Liens on such Intellectual Property attaching to the sale proceeds payable to
Seller under this Agreement), by Purchaser upon the Closing. Except as disclosed
on Schedule 3.8, (i) all applications and registrations for each item of such
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Intellectual Property ascribed to the Selling Companies are valid and in full
force and effect and are not subject to the payment of any unpaid Taxes or
maintenance fees or the taking of any other actions by the Seller or any of its
Subsidiaries to maintain their validity or effectiveness; (ii) except for the
Section 365(c)(1) Intellectual Property, there are no restrictions on the direct
or indirect transfer of any such Intellectual Property; (iii) neither the Seller
nor any of its Subsidiaries is, and no such Person has received any notice that
it is, in default (or with the giving of notice or lapse of time or both, could
be in default) under any License to use such Intellectual Property; (iv) neither
the Seller nor any of its Subsidiaries has granted any License, authorization or
other permission to use such Intellectual Property; (v) neither the Seller nor
any of its Subsidiaries in its use of any of such Intellectual Property is
infringing or has infringed any Intellectual Property of any other Person, and
no claim is pending or, to the Knowledge of any Selling Company or any of their
Subsidiaries, has been threatened with respect to the ownership, validity,
license or use of, or any infringement resulting from, such Intellectual
Property; and (vi) except for the Section 365(c)(1)
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Intellectual Property, the Intellectual Property will be owned or available for
use by Purchaser from and after the Closing on substantially the same terms and
conditions as are applicable to Seller prior to the Closing, and the
transactions contemplated by this Agreement will not give rise to any Lien on
Purchaser's rights, title and interest in and to, or the valid and enforceable
license to use, as the case may be, the Intellectual Property transferred at the
Closing. Set forth on Schedule 3.8 is a list of the Section 365(c)(1)
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Intellectual Property.
Section 3.9. Employees. Seller has previously provided to Purchaser a
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true and complete list of all Employees as of the date of this Agreement and all
individuals providing services to Seller as independent contractors, which list
included their current hourly rates of compensation, base salaries or other
basis for and amount of compensation, their total 2000 and 2001 compensation,
their accrued vacation and sick days and the commencement date of their
employment. To the Knowledge of Seller and its Subsidiaries, as of the date of
this Agreement, no Employee at the leadership team level or above or at the
solution leader level, nor any Employee that is a delivery or sales leader for
the twenty largest customers of the Business in terms of expected future revenue
under the Designated Contracts as of the date of this Agreement, has any plans
to terminate employment with Seller, except in connection with the acceptance of
employment with Purchaser, or to decline an offer of employment from Purchaser.
Section 3.10. Litigation. Except as previously disclosed in writing to
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Purchaser, there is no Action or Proceeding pending, or to the Knowledge of
Seller and its Subsidiaries, threatened or anticipated against, related to or
affecting Seller, its Subsidiaries, the Business or the Acquired Assets.
Section 3.11. Employee Benefits. Except as disclosed on Schedule 3.11
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or as disclosed or referenced in Seller's Form 10-K, as amended, filed with the
Securities and Exchange Commission for the fiscal year ended December 31, 2000,
neither Seller, nor its Subsidiaries nor any member of its "Control Group" (as
such term is defined in Code Section 414(b), (c) or (m)) currently maintains or
participates in or contributes to nor has any material liability under any
Benefit Plan with respect to their Employees. Neither Seller nor its
Subsidiaries has ever maintained a Benefit Plan subject to Title IV of ERISA.
Each Benefit Plan maintained by Seller or its Subsidiaries, has been maintained
in material compliance with the applicable requirements of ERISA (including, but
not limited to, the fiduciary responsibilities imposed by Part 4 of Title I,
Subtitle B of ERISA), the Code and any other applicable requirements of Law
governing each Benefit Plan; and each Benefit Plan has been administered in
accordance with its terms and in material compliance with all requirements of
Law. Neither Seller nor any member of its Control Group has withdrawn from any
Multiemployer Plan or taken any action to do so, and the transactions
contemplated by this Agreement will not result in any withdrawal liability under
any Multiemployer Plan.
Section 3.12. Accounts Receivable. The accounts receivable contained
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in the Acquired Assets (i) are valid and genuine; (ii) have arisen solely out of
bona fide sales and deliveries of goods, performance of services and other
business transactions in the ordinary course of business consistent with past
practice; (iii) are, to the Knowledge of Seller and its Subsidiaries, not
subject to valid defenses, set-offs or counterclaims. No advanced billing,
advanced collection or prepayment has been made with respect to any of the
accounts receivable contained in the Acquired Assets.
Section 3.13. Certificate of Service. The parties shown on the
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Certificate of Service attached as Schedule 3.13 constitute all parties entitled
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to Notice of the Selling Companies' intent to sell the Acquired Assets (and
assume and assign the Designated Contracts) under Bankruptcy Rule 2002 and
include, without limitation, all parties owning, claiming or asserting a Lien in
or to any of the Acquired Assets.
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Section 3.14. Accuracy of Warranties. To the Knowledge of Seller, no
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representation or warranty by Seller in the Agreement contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained in the Agreement, in
light of the circumstances under which they were made, not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 4.1. Organization. Purchaser is a corporation validly
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existing and in good standing under the Laws of its jurisdiction of
incorporation and has the corporate power and authority and all necessary
governmental approvals to own, lease, and operate its properties and to carry on
its business as it is now being conducted. Purchaser is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities make such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have individually
or in the aggregate either a material adverse effect on its ability to
consummate the transactions contemplated hereby or hinder or delay such
consummation, or on the rights of Seller hereunder.
Section 4.2. Authority Relative to this Agreement. Purchaser has the
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corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Purchaser and the consummation by Purchaser of the transactions contemplated
hereby have been duly authorized by all requisite corporate actions. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes a valid and binding agreement of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other Laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
Section 4.3. Consents and Approvals. Except for any consents,
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approvals, or authorizations of, or declarations or filings with, the Bankruptcy
Court, no consent, approval, or authorization of, or declaration, filing or
registration with, any Governmental or Regulatory Authority or other Person is
required to be made or obtained by Purchaser in connection with its execution,
delivery, and performance of this Agreement.
Section 4.4. No Violations. Neither the execution, delivery or
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performance of this Agreement by Purchaser, nor the consummation by Purchaser of
the transactions contemplated hereby, nor compliance by Purchaser with any of
the provisions hereof, will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or bylaws of Purchaser, (b)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time) a default (or give rise to any right of termination,
cancellation, acceleration, vesting, payment, exercise, suspension, or
revocation) under any of the terms, conditions, or provisions of any note, bond,
mortgage, deed of trust, security interest, indenture, license, contract, plan,
or other instrument or obligation to which Purchaser is a party or by which any
of Purchaser's properties or assets may be bound or affected (c) violate any
order, writ, injunction, decree, statute, rule, or regulation applicable to
Purchaser or Purchaser's properties or assets, or (d) cause the suspension or
revocation of any permit, license, governmental authorization, consent, or
approval necessary for Purchaser to perform its obligations under this
Agreement, except in the case of clauses (b), (c) and (d) for violations,
breaches, defaults, terminations, cancellations, accelerations,
8
creations, impositions, suspensions, or revocations that could not reasonably be
expected to individually or in the aggregate have a material adverse effect on
Purchaser's ability to consummate the transactions contemplated hereby or
materially hinder or delay such consummation, or on the rights of Seller
hereunder.
Section 4.5. Financing. Purchaser has cash on hand or unconditional
---------
commitments for financing sufficient to deliver the Purchase Price to Seller.
ARTICLE V.
COVENANTS
Section 5.1. Conduct of Business by Seller Pending the Closing.
-------------------------------------------------
Except as reasonable and necessary to the continued prosecution of the Chapter
11 Case, or as otherwise required by the Bankruptcy Code, between the date of
execution of this Agreement and the Closing, Seller will cause the Acquired
Assets and the Assumed Liabilities to be operated in the ordinary course of the
Business as conducted prior to the date hereof, and shall not take any action
inconsistent with the transactions contemplated hereby and will not permit any
material transactions outside the ordinary course of the Business as conducted
prior to the date hereof without the prior written consent of Purchaser. In any
case, and without limiting the generality of the foregoing, Seller will (and
will cause its Subsidiaries to) observe the following, except with the prior
consent of Purchaser: (a) not enter into any Contract outside the ordinary
course of the Business which is dissimilar in nature, risk or magnitude to
Contracts customarily entered into in the operation of the Business prior to the
date hereof; (b) other than in the ordinary course of the Business, not enter
into, amend, modify or take, or fail to take, actions that cause a termination
(partially or completely), grant any waiver, discount or credit under, or give
any consent with respect to any Designated Contract or any License related to
any Acquired Assets; (c) except in the ordinary course of business or as set
forth on Schedule 5.1, (i) not increase the compensation payable or to become
------------
payable to its officers, directors or employees, (ii) not make any loan, or
enter into any transaction with, any of its directors, officers or employees, or
(iii) not establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, trust fund, policy or arrangement
for the benefit of any current or former directors, officers or employees,
except, in each case, as may be required by Law; (d) use commercially reasonable
efforts to maintain the tangible Acquired Assets in good working order and
condition, ordinary and reasonable wear and tear excepted; (e) not sell, assign,
transfer, convey, lease, mortgage, pledge or otherwise dispose of or create or
incur a Lien on any of the Acquired Assets, or any interests therein; (f) comply
in all material respects with all Laws and Orders applicable to the Acquired
Assets, and promptly following receipt thereof, give Purchaser copies of any
notice received from any Governmental or Regulatory Authority or other Person
alleging any violation of or any Liability under any such Law or Order; (g) not
waive any right of the Selling Companies relating to the Acquired Assets or the
Assumed Liabilities; (h) not intentionally do any other act which would cause
any representation or warranty of Seller in this Agreement to be or become
untrue in any material respect; and (i) not enter into any agreement or become
obligated to do or engage in any of the foregoing.
Section 5.2. Access and Information.
----------------------
(a) Subject in all cases to the terms of the
Confidentiality Agreement dated June 8, 2001, Seller shall afford to Purchaser
and to Purchaser's financial advisors, legal counsel, accountants, consultants,
financing sources, and other authorized representatives access during normal
business hours throughout the period prior to the Closing Date to all Books and
Records, assets and properties, and personnel of Seller or its Subsidiaries that
pertain to the Acquired Assets or the Assumed Liabilities and,
9
during such period, shall furnish as promptly as practicable to Purchaser any
and all such information as Purchaser reasonably may request pertaining to the
Acquired Assets or the Assumed Liabilities (including, without limitation,
copies of Contracts, Leases and other Books and Records).
(b) Seller shall use its reasonable efforts to preserve
the relationship with and goodwill of its clients, suppliers, employees and
others having business relations with the Selling Companies. Seller shall
promptly notify Purchaser of (i) any new business prospects or Contracts, (ii)
any claims or defaults, or alleged defaults Known by Seller, arising under any
Designated Contract, or (iii) any adverse change in the business relationship
with any clients, suppliers, employees or others having business relations with
the Selling Companies.
(c) Without limiting any other provision of this
Agreement, from and after Closing Seller shall cooperate with Purchaser to
schedule client meetings, and permit Purchaser to attend client meetings, to
assist in preserving and transitioning the Acquired Assets to Purchaser.
Section 5.3. Additional Matters. On the terms and subject to the
------------------
conditions of this Agreement, each of the parties agrees to use commercially
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper, or advisable under applicable Laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including using all commercially reasonable efforts to obtain
all necessary waivers (other than the waiver of their respective conditions to
closing), consents, and approvals required under this Agreement.
Section 5.4. Further Assurances. In addition to the provisions of
------------------
this Agreement, at any time and from time to time after the Closing Date,
Seller, its Subsidiaries and Purchaser will use all commercially reasonable
efforts to execute and deliver such other instruments of conveyance, transfer or
assumption, as the case may be, and take such other actions as may be reasonably
requested to implement more effectively, the conveyance and transfer of the
Acquired Assets to Purchaser and the assumption of the Assumed Liabilities by
Purchaser. Without limiting the foregoing, from time to time after the Closing,
Seller and its Subsidiaries shall take such actions as may be reasonably
requested by Purchaser so that (or to confirm that) all right, title and
interest of Seller and its Subsidiaries in and to the Acquired Assets are, as
requested by Purchaser, either extinguished or transferred to Purchaser.
Section 5.5. Receivable Collection.
---------------------
(a) For the period from the Closing Date until June 30,
2002 (the "Collection Period"), Purchaser will exercise its commercially
reasonable good faith efforts (but in no event will Purchaser be required to
incur any significant or third party expenses or commence or threaten litigation
or use any third party collection agency) to collect the accounts receivable of
Seller and its Subsidiaries purchased by Purchaser pursuant to this Agreement
(the "Closing Date A/R") and to xxxx in the ordinary course and to collect the
unbilled work-in-process of Seller and its Subsidiaries purchased by Purchaser
pursuant to this Agreement (the "Closing Date WIP"), but in any event such
efforts shall be consistent with Purchaser's past practices. Seller will deliver
to Purchaser within five business days after the Closing Date a true and
complete list of the Closing Date WIP and the Closing Date A/R, including an
aging report as of the Closing Date, together with such other information
relating to the Closing Date WIP and the Closing Date A/R as Purchaser may
reasonably request to assist in its collection efforts. All payments with
respect to the Closing Date WIP or the Closing Date A/R received by the
Purchaser after the Closing Date from a customer or other debtor shall be
credited to the invoice relating to the oldest Closing Date WIP or Closing Date
A/R of the Selling Companies, as applicable, with respect to that customer,
unless the customer or other debtor designates such payment as being made with
respect to a specific debt other than its oldest invoice relating to the Closing
Date WIP or Closing Date A/R, as
10
applicable. On the date which is 15 days after the expiration of the Collection
Period (the "Payment Date"), Purchaser will pay to Seller 90% of the aggregate
amount of the Closing Date WIP collected and Closing Date A/R collected by
Purchaser or its agents during the Collection Period, net of any offset amount
as provided below and any reasonable costs, charges or expenses of Purchaser and
third party collection agents that are documented out-of-pocket costs relating
to collection (collectively, "Collection Costs") of the Closing Date WIP or
Closing Date A/R, and Purchaser will retain 10% of the net aggregate amount so
collected, in addition to its Collection Costs. Notwithstanding the foregoing,
in accordance with Section 5.5(b) Purchaser shall have the right to offset any
amount that it may owe to Seller under this Section 5.5 against any Loss
incurred or reasonably expected to be incurred by Purchaser or its Affiliates.
(b) Purchaser shall give Seller written notice (the
"Offset Notice") of any claimed offset as a result of any Loss incurred or
reasonably expected to be incurred by Purchaser or its Affiliates on or before
the Payment Date. If Seller disagrees with the claimed offset amount, Seller
shall notify Purchaser of such disagreement in writing specifying in detail the
particulars of such disagreement within 10 business days after Seller's receipt
of the Offset Notice. Purchaser and Seller shall promptly use reasonable efforts
for a period not to exceed 15 business days after Purchaser's receipt of such
notice (or such longer period as they may mutually agree upon) to resolve any
disagreements raised by Seller with respect to the Offset Notice. If the parties
are unable to reach an agreement within such period, then either party may
submit the dispute for resolution as follows: (i) if the dispute is based on an
accounting issue, to a nationally recognized independent accounting firm
("Arbiter") jointly selected by Seller and Purchaser, but if Seller and
Purchaser are unable to agree on an Arbiter, then each will select two such
accounting firms (which firms shall not have been the auditor for the selecting
party during the two preceding years), and the Arbiter will be chosen from among
those four by lot; and (ii) if the dispute is not based on an accounting issue,
then to the Bankruptcy Court; provided that if a dispute under this Section is
submitted for resolution to an Arbiter or the Bankruptcy Court, then the losing
party in that resolution shall be responsible for the other party's reasonable
costs and attorneys' fees, as well as for the fees, costs, and expenses of the
resolution and of the Arbiter or the Bankruptcy Court, as the case may be.
Section 5.6. Advance Billing and Prepayments. To the extent that
-------------------------------
there has been any billing, collection or prepayment under a Designated Contract
prior to or in advance of the Selling Companies performing a commensurate
percentage of their obligations pursuant to such Designated Contract or with
respect to any accounts receivable contained in the Acquired Assets, an
appropriate adjustment may be made to the Purchase Price, at Purchaser's option,
in lieu of terminating this Agreement for breach.
Section 5.7. Enforcement of Agreements. From and after the date of
-------------------------
this Agreement, upon the written request of Purchaser, Seller shall use its
reasonable efforts to enforce the non-competition, confidentiality,
non-solicitation and other rights under Contracts of the Selling Companies as
reasonably instructed by Purchaser, and Purchaser shall reimburse Seller for its
reasonable and documented out-of-pocket costs and expenses incurred by Seller in
so enforcing those Contracts. This covenant shall survive the Closing and be in
effect so long as the Bankruptcy Case shall be pending.
Section 5.8. Covenant-Not-to-Compete. In consideration of Purchaser's
-----------------------
consummation of the transactions contemplated hereby, and as a material
inducement to Purchaser to enter into this Agreement, Selling Companies covenant
and agree as follows:
(a) During the period beginning on the Closing Date and
ending on the third anniversary of the Closing Date (the "Noncompete Period"),
no Selling Company shall at any time, in any capacity, directly or indirectly,
do any of the following: (i) be a Competing Organization or provide any
management, consulting, financial, administrative or other services to any
Competing Organization,
11
including, without limitation, participating directly or indirectly as a
stockholder, member, operator, agent, representative or partner of, or having
any direct or indirect financial interest (including, without limitation, the
interest of a creditor) in, any Competing Organization, or (ii) permit all the
present or former names of the Selling Companies or any derivation thereof to be
used by any Competing Organization. "Competing Organization" shall include any
Person (i) located or doing business any where in North America (the "Geographic
Area"), and (ii) then engaged in or about to become engaged in, a business
identical to or similar to the Business.
(b) During the Noncompete Period, no Selling Company shall at
any time in any capacity, directly or indirectly, (i) induce or attempt to
induce any employee (including leased employees) of Purchaser or any of its
Affiliates to leave their employ, or otherwise solicit the employment of any
such employee of Purchaser or any of its Affiliates, hire any such employee or
in any way interfere with the relationship between Purchaser or any of its
Affiliates and any of such employees, (ii) induce or attempt to induce any
current or prospective client, alliance partner, supplier, licensee, licensor,
franchisee or other business relation of either Purchaser or any of its
Affiliates to cease doing business with them or in any way interfere with the
business relationship between either Purchaser or any of its Affiliates with
such Persons, or (iii) solicit the business of any then existing or prospective
client, alliance partner, customer of Purchaser or any of its Affiliates.
(c) If, at the time of enforcement of any of the provisions of
this Section 5.8 a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing or are otherwise illegal,
invalid or unenforceable in any respect by reason of its duration, definition of
Geographic Area or scope of activity, or any other reason, the parties hereto
agree that the maximum period, scope or geographical area reasonable or
otherwise enforceable under such circumstances shall be substituted for the
stated period, scope or area.
(d) Without limiting any of Purchaser's rights under this
Agreement, the parties acknowledge that Purchaser shall be entitled to enforce
its rights under this Section 5.8 specifically, to recover damages and costs
(including reasonable attorneys' fees) caused by any breach of any provisions of
this Section 5.8 and to exercise all other rights existing in its favor. The
parties acknowledge and agree that the breach of any term or provision of this
Section 5.8 by Selling Companies shall materially and irreparably harm
Purchaser, that money damages shall accordingly not be an adequate remedy for
any breach of the provisions of this Section 5.8 by Selling Companies and that
Purchaser in its sole discretion and in addition to any other remedies it may
have at law or in equity may apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Section 5.8. Seller agrees to be responsible for any
breach of this Section 5.8 by any of its Subsidiaries.
Section 5.9. Change of Corporate Names. On or before the Closing
-------------------------
Date, except as otherwise agreed to in writing by Purchaser, Seller shall take
all appropriate action to cause each of the Selling Companies to change their
corporate or company names to names that are dissimilar to the names used by any
Selling Company and such changed names shall not contain any derivation or
variation of any named used by any Selling Company.
ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1. Conditions Precedent to Obligation of Seller and
------------------------------------------------
Purchaser. The respective obligations of each party to effect the transactions
---------
contemplated by this Agreement shall be subject to the satisfaction of the
following conditions:
12
(a) the Section 363/365 Order shall have been entered by the
Bankruptcy Court, shall not then be stayed and shall not have been reversed,
modified or amended; provided that, if prior to January 4, 2002, the Section
363/365 Order has been modified or amended but remains in a form reasonably
acceptable to Purchaser, then the condition in this Section 6.1(a) shall be
deemed satisfied;
(b) no Action or Proceeding by any Governmental or Regulatory
Authority shall have been instituted that is reasonably expected to prohibit the
transactions contemplated by this Agreement.
Section 6.2. Conditions Precedent to Obligation of Seller. The
--------------------------------------------
obligation of Seller to effect the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver at or prior to the Closing Date
of the following additional condition: Purchaser shall have performed in all
material respects its obligations under this Agreement required to be performed
by Purchaser at or prior to the Closing Date, and the representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects as of the Closing Date as if made at and as of such date,
except as otherwise contemplated by this Agreement.
Section 6.3. Conditions Precedent to Obligation of Purchaser. The
-----------------------------------------------
obligation of Purchaser to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following additional conditions:
(a) the Bidding Procedures Order shall have been entered on or
before December 15, 2001, and shall have become a Final Order prior to the
Closing Date;
(b) The Section 363/365 Order shall have been entered by the
Bankruptcy Court on or before January 4, 2002 and such order shall not have been
stayed, modified, reversed or amended; provided, however, that if such order is
stayed, modified or amended, and the stay is lifted, or after the order is
modified or amended, the order remains in a form reasonably acceptable to
Purchaser, then, at Purchaser's option, the condition shall be satisfied;
(c) The Section 363/365 Order shall have been entered by the
Bankruptcy Court on or before January 4, 2002, and no appeal shall have been
taken, or stay requested or reconsideration sought from the Bankruptcy Court or
other court. Notwithstanding the above, Purchaser may in its sole discretion
elect to proceed with Closing.
(d) Seller shall have performed in all material respects all of
its obligations under this Agreement required to be performed by Seller at or
prior to the Closing Date and the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
(except that any representation or warranty qualified by materiality or a
Material Adverse Effect shall be true and correct in all respects) as of the
Closing Date as if made at and as of such date;
(e) there shall not have occurred any Material Adverse Effect
on or at any time after the date of this Agreement;
(f) there shall not be in effect on the Closing Date any Order
or Law restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement, and
there shall not be pending on the Closing Date any Action or Proceeding which
could reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Purchaser or the transactions
contemplated by this Agreement of any such Law;
13
(g) with respect to any License of any right to Intellectual
Property from the Seller to any third party, such License shall continue after
the Closing only with respect to such rights to Intellectual Property as they
existed immediately before the Chapter 11 Case commenced within the meaning of
Section 365(n) of the Bankruptcy Code; provided that Seller shall reject all
Licenses (and rights thereunder) of trademarks included in the Acquired Assets
in favor of any Person other than Purchaser;
(h) none of the Chapter 11 Case shall have been dismissed or
converted to a case under Chapter 7 of the Bankruptcy Code and neither Seller
nor any of its Subsidiaries shall have filed a motion or other pleading seeking
the dismissal of any of the Chapter 11 Case under Section 1112 of the Bankruptcy
Code or otherwise; and
(i) all consents, approvals, authorizations, declarations and
filings referred to in Section 3.3(a) and on Schedule 3.3 shall have been
------------
obtained in form and substance reasonably satisfactory to Purchaser.
ARTICLE VII.
TERMINATION
Section 7.1. Termination. This Agreement may be terminated: (a) by
-----------
mutual written agreement of Seller and Purchaser prior to the Closing Date; (b)
by either Seller or Purchaser if the Bankruptcy Court approves a higher or
better offer for all or some of the Acquired Assets; (c) by Purchaser if any of
the conditions set forth in Section 6.3 or any of the covenants set forth in
Article IX shall not have been satisfied by the end of the day on January 4,
2002 or by such earlier date expressly specified in such conditions or such
covenants, and shall not have been waived by Purchaser; (d) by Seller if (i) any
of the conditions set forth in Section 6.2 shall not have been satisfied by
January 4, 2002, and shall not have been waived by Seller, or (ii) an appeal of
the Section 363/365 Order shall have been taken and the Closing shall not have
occurred before February 20, 2002; (e) by either Seller or Purchaser if any of
the conditions set forth in Section 6.1 shall not have been satisfied by the end
of the day on January 4, 2002, and shall not have been waived by the party
seeking the termination; or (f) by Purchaser if Seller shall fail to file the
Chapter 11 Case within one business day after the execution of this Agreement.
Section 7.2. Effect of Termination. If this Agreement is validly
---------------------
terminated pursuant to Section 7.1, this Agreement will immediately become null
and void, and there will be no liability or obligation on the part of Seller,
Purchaser or their respective Affiliates (or any of their respective officers,
directors, employees, agents or other representatives), except that the
provisions with respect to the Break-Up Fee and Reimbursement Expenses in
Section 7.3 and expenses in Section 10.8 will continue to apply following any
such termination.
Section 7.3. Break-Up Fee. If this Agreement is terminated, then
------------
Seller shall pay to Purchaser the following amount in cash either (A) the sum of
(1) $100,000 (the "Break-Up Fee"), plus (2) the fees and expenses, internal and
external, reasonably incurred by Purchaser in connection with the transactions
contemplated hereby, in an aggregate amount not to exceed $200,000 (the
"Reimbursement Expenses"), if the termination is pursuant to Sections 7.1(b),
7.1(d)(ii) or 7.1(f); or (B) the Reimbursement Expenses, in the event of any
other termination of this Agreement, other than pursuant to Sections 7.1(a) or
7.1(d)(i). The Break-Up Fee and Reimbursement Expenses shall be paid by Seller
(1) on the closing date of the other sale from the proceeds of such sale, if the
termination is pursuant to Section 7.1(b), and (2) within
14
five business days after the date of termination, in the event of any other
termination, other than pursuant to Sections 7.1(a) or 7.1(d)(i). The provision
for the payment of the Break-Up Fee and the Reimbursement Expenses in this
Section 7.3 is an integral part of the transactions contemplated by this
Agreement and without this provision Purchaser would not have entered into this
Agreement. Accordingly, if payment shall become due and payable pursuant to this
Section 7.3, and, in order to obtain such payment, suit is commenced which
results in a judgment against Seller, Seller shall pay to Purchaser the
reasonable costs and expenses, including attorneys' fees, of Purchaser in
connection with such suit, together with court costs and prejudgment interest.
ARTICLE VIII.
EMPLOYEE MATTERS
Section 8.1. Hiring of Employees; No Prior Service Credit.
--------------------------------------------
(a) Immediately prior to the Closing, the employment of all
Employees of Seller or its Subsidiaries (the "Business Employees") shall either
be terminated by Seller and its Subsidiaries, or Seller and its Subsidiaries
shall accept their voluntary resignations in writing, and Seller and its
Subsidiaries shall also cause Administaff Companies, Inc. to also terminate the
employment of such Employees. Purchaser may, in its sole discretion, offer
employment to any or all Business Employees or former Business Employees on such
terms and conditions as shall be determined by Purchaser in its sole discretion.
Seller recognizes that Purchaser intends to make offers of employment at terms
and conditions of employment different from those provided by Seller and its
Subsidiaries and that it is uncertain how many Business Employees of Seller and
its Subsidiaries will be offered or will accept employment.
(b) In furtherance of the foregoing, commencing on the date of
this Agreement, Purchaser shall have the right, but not the obligation, to
contact and negotiate employment terms with any Business Employees. Seller shall
reasonably cooperate with Purchaser in this regard and, without limitation,
Seller agrees to the following to the extent reasonably requested by Purchaser.
From time to time, Seller shall cooperate with Purchaser to permit Purchaser (i)
to review personnel files of Business Employees to the extent permitted under
applicable Law, (ii) to meet with supervisors and managers of Seller to discuss
employment opportunities with Purchaser and other issues such as the performance
of Business Employees who have signed authorization/release forms, and (iii) to
interview Business Employees. Purchaser shall be responsible for complying with
all applicable Laws in the interviewing and hiring process, and any liability
incurred in the interviewing and hiring process based on conduct of Purchaser
(or of Seller at the written request of Purchaser) shall be the responsibility
of Purchaser; provided, that in no event will Purchaser be responsible or liable
for any severance payments, unemployment compensation or other
termination-related benefits for or with respect to Business Employees or any
strike, work-slow down or other labor disturbance by any Business Employees
during the period prior to and as of the Closing.
(c) All such Business Employees (or any other Employees
formerly with Seller or any of its Subsidiaries) who are offered and accept
employment with Purchaser are hereinafter referred to as the "Purchaser
Employees." Each Purchaser Employee shall be eligible to participate in any and
all Benefit Plans appropriate for individuals in his or her position sponsored
by Purchaser for the benefit of its employees in those positions subject to the
terms and conditions of such plans. Purchaser expects that all Purchaser
Employees would be eligible to receive option grants consistent with Purchaser's
new hire practices, subject to the terms and conditions of Purchaser's option
plan. Except as Purchaser may otherwise agree in its sole discretion with any
Purchaser Employee, each Purchaser Employee shall be
15
deemed to have accrued no prior service credit for any purpose (including but
not limited to participation, vesting and benefit accrual under any Benefit
Plan, and seniority, title or duties with respect to employment) in respect of
their period of employment with Seller and its Subsidiaries, or any prior
employer or co-employer, in connection with their employment with Purchaser or
under any Benefit Plan. Before Closing, Seller shall take all actions necessary
to terminate Seller's retirement plan qualified under Code Sections 401(a) and
401(k) ("Seller's 401(k) Plan"). After Closing, each Purchaser Employee shall be
permitted to rollover such Employee's account from Seller's 401(k) Plan to
Purchaser's retirement plan qualified under Code Sections 401(a) and 401(k),
subject to the terms and conditions of that plan.
(d) Seller shall be responsible for any and all wages, bonuses,
commissions employee benefits, severance pay and other compensation (including
all obligations under any Benefit Plans) to the Employees arising out of their
employment and the termination of their employment with Seller and its
Subsidiaries prior to and as of the Closing. Purchaser shall be responsible for
any and all wages, bonuses, commissions, employee benefits and other
compensation that may be due to the Purchaser Employees arising out of their
employment with Purchaser after the Closing. Further, in respect of notices and
payments relating to events occurring on or prior to the Closing, Seller shall
be responsible for and assume all Liability for any and all notices, payments,
fines or assessments due to any Governmental or Regulatory Authority or to any
other Person, pursuant to any Law, Order or Contract, with respect to the
employment, discharge or layoff of Employees by the Seller or its Subsidiaries
as of or before the Closing, including but not limited to the Worker Adjustment
and Retraining Notification Act and any related rules or regulations.
(e) Seller's Welfare Plans that provide benefits to the
Business Employees shall be liable for the payment of all benefits under such
plans to eligible Business Employees and their eligible dependents for claims
arising prior to Closing including but not limited to the payment of benefits to
any of the Business Employees or his/her eligible dependents who is currently
receiving medical care as of Closing and the payment of any claims under any of
Seller's Welfare Plans that are incurred but unreported as of Closing. Purchaser
shall not be liable for payment of any disability benefit due to Business
Employees who, prior to the Closing, are in the waiting or qualifying period for
disability benefits. After the Closing, Seller shall be responsible and liable
for all disability benefits payable to such employees under the Seller's
disability plan. Seller shall assume all responsibility for any obligation and
any liability under Code Section 4980B for all Business Employees who are
terminated by Seller prior to Closing including any Business Employees who are
offered but do not accept employment with Purchaser after Closing.
(f) Nothing in this Article VIII express or implied shall
confer upon any Employee or Purchaser Employee or other Person or legal
representative thereof any rights or remedies, including any right to employment
or compensation or benefits of any nature or kind whatsoever.
ARTICLE IX.
BANKRUPTCY MATTERS
Section 9.1. Cure of Defaults. Subject to the prior approval of the
----------------
Bankruptcy Court and only to the extent required under Section 1.3, the
Purchaser shall, on or prior to the Closing, pay to the Seller the aggregate
amount necessary to cure any and all monetary defaults and breaches under and
satisfy (or, with respect to any Assumed Liability or obligation that cannot be
rendered non-contingent and liquidated prior to the Closing Date, make effective
provision reasonably satisfactory to the Bankruptcy Court for satisfaction from
funds of the Purchaser) any Assumed Liability or obligation that must be so
satisfied so that such Designated Contracts (as such list of Designated
Contracts may be modified
16
hereunder) may be assumed by the Seller and assigned to the Purchaser in
accordance with the provisions of Section 365 of the Bankruptcy Code and this
Agreement (including, without limitation, Sections 1.2 and 1.3); provided that,
subject to the provisions of Section 9.2 regarding undisclosed or new Contracts,
(i) Purchaser shall, on or prior to the date on which the Added Contracts are
assumed and assigned to Purchaser ("Assignment Date"), pay to Seller the
aggregate amount necessary to cure any and all monetary defaults and breaches
under and satisfy (or, with respect to any Assumed Liability or obligation that
cannot be rendered non-contingent and liquidated prior to the Assignment Date,
make effective provision reasonably satisfactory to the Bankruptcy Court for
satisfaction from funds of the Purchaser) any Assumed Liability or obligation
that must be so satisfied so that such Added Contracts may be assumed by the
Seller and assigned to the Purchaser in accordance with the provisions of
Section 365 of the Bankruptcy Code and this Agreement (including, without
limitation, Sections 1.2 and 1.3), and (ii) Seller shall bear the cure costs of
any Added Contract to the extent the cure amount is required to be set forth on
Schedule 1.2 and exceeds such cure amount set forth on Schedule 1.2. The Seller
------------ ------------
shall use such cure amounts solely to satisfy the obligations described in the
preceding sentence in order to consummate the Agreement. To the extent that the
cure amount for any given Designated Contract exceeds the amount for the given
Designated Contract set forth on the Designated Contracts List, Seller shall be
solely responsible for such excess amount and will pay such amount from the
proceeds of the sale contemplated by this Agreement. In no event shall the
Purchaser's obligation to cure any Designated Contract exceed the amount set
forth on the Designated Contracts List for a given Designated Contract, whether
or not the Bankruptcy Court ultimately determines a greater cure amount is
required.
Section 9.2. Undisclosed Contracts; New Contracts. Notwithstanding
------------------------------------
anything in Section 1.2, if any Selling Company or the Purchaser discovers,
whether before or after the Closing, any executory Contract of any of the
Selling Companies that was not included in the list of executory Contracts
disclosed to the Purchaser prior to the Closing or if any of the Selling
Companies shall have entered into a new Contract relating to the provision of
professional consulting services after the execution of this Agreement, then
Seller shall promptly notify Purchaser of such omission or new Contract, as
applicable, and at the Purchaser's option, Seller shall take reasonable steps to
cause such Contract to be assumed by, and assigned to, the Purchaser; provided,
however, that any such assignment or assumption of any omitted or new Contract
shall be in Purchaser's sole discretion and the cure costs for any omitted
Contract shall be borne by Seller and the cure costs for any new Contract shall
be borne by Purchaser. Under no circumstances, without the Purchaser's prior
written consent, shall the Selling Companies reject any Designated Contract or
other Contract relating to the provision of professional consulting services
without having first provided the Purchaser with five business days' advance
written notice of the Seller's intent to reject any such Contract.
17
Section 9.3. Bankruptcy Court Orders.
-----------------------
(a) The Seller hereby confirms that it is critical to the process
of arranging an orderly sale of the Seller's assets to proceed by selecting the
Purchaser to enter into this Agreement in order to present the Bankruptcy Court
with arrangements for obtaining the highest realizable prices for the assets and
that, without the Purchaser having committed substantial time and effort to such
process, the estates of the Seller would have to employ a less orderly process
of sale and thereby both incur higher costs and risk attracting lower prices.
Accordingly, the contributions of the Purchaser to the process have indisputably
provided very substantial benefit to the estates of the Seller. The Seller
acknowledges that the Purchaser would not have invested the effort in
negotiating and documenting this proposed transaction and incurring duties to
pay its outside advisors if the Purchaser were not entitled to the Break-Up Fee
and Reimbursement Expenses incurred as a result of the Purchaser's attempt to
purchase the Acquired Assets, if the Purchaser is not the successful bidder for
the Acquired Assets.
(b) Seller shall file the Chapter 11 Case within one business day
after the execution of this Agreement. On or before two business days after the
commencement of the Chapter 11 Case, Seller shall file a motion or motions with
the Bankruptcy Court to set a hearing (the "Bidding Procedures Hearing") to
consider entry of an order in a form reasonably acceptable to Purchaser (the
"Bidding Procedures Order") approving bidding procedures, including among other
things, (i) the Break-Up Fee and Reimbursement Expenses and all other payments
to Purchaser arising under this Agreement as joint and several obligations of
the Seller having priority as administrative expenses in the Chapter 11 Case,
(ii) all bidders must agree to be bound by all the terms of this Agreement,
except as modified to price only; (iii) all bidders must provide assurance
adequate to Seller (in Seller's discretion) of their ability to perform the
obligations pursuant to any bid; (iv) any competing offer must be in an amount
of at least $400,000 in excess of the Purchase Price and must provide for the
direct payment to Purchaser on or before the closing date of the other sale of
the Break-Up Fee and Reimbursement Expenses; (v) any subsequent competing offer
must be in increments of no less than $100,000; (vi) all competing offers must
be in cash and may not be contingent on financing necessary to consummate the
transaction; (vii) Purchaser shall be entitled at its option to match any
competing bids which offer shall be deemed a higher and better offer; (viii)
Purchaser shall be entitled to credit the Break-Up Fee and Reimbursement
Expenses against any competing offer; (ix) Seller shall provide notice of the
Sale Hearing to the Seller's creditors and publish such notice in the Wall
Street Journal (National Edition); and (x) Seller shall provide each
jurisdiction in which it or any of its subsidiaries are subject to tax with
copies of any motion for entry of an Section 363/365 Order.
(c) On or before two business days after the commencement of the
Chapter 11 Case, the Seller shall file with the Bankruptcy Court a motion to set
a hearing (the "Sale Hearing") to consider entry of a Section 363/365 Order on
an expedited basis; and
(d) The Seller shall use its reasonable efforts to obtain the
Bankruptcy Court's entry of (i) the Bidding Procedures Order as soon as is
reasonably practicable but in no event after December 15, 2001, and (ii) a
Section 363/365 Order on or before January 4, 2002 approving of this proposed
transaction. The Section 363/365 Order shall be in such form and substance
reasonably acceptable to the Purchaser and shall contain, among other things,
the provisions set forth in Schedule 9.3(d).
---------------
(e) In the event an appeal is taken, or a stay pending appeal is
requested or reconsideration is sought, from the Bidding Procedures Order or
Section 363/365 Order, the Seller shall immediately notify the Purchaser of such
appeal or stay request and shall provide to the Purchaser within one (1) day a
copy of the related notice of appeal or order of stay or application for
reconsideration. The
18
Seller shall also provide the Purchaser with copies of any other or further
notice of appeal, motion or application filed in connection with any appeal from
or application for reconsideration of, either of such orders and any related
briefs. Seller agrees to take all steps as may be reasonable and appropriate to
defend against such appeal, petition of motion and to use its reasonable efforts
to obtain an expedited resolution of such appeal, provided that nothing herein
shall preclude the parties hereto from consummating the transactions
contemplated herein if the Section 363/365 Order shall have been entered and not
been stayed and the Purchaser (in its sole discretion) has waived in writing the
condition set forth in Section 6.3(c), in which event Purchaser shall be able to
assert the benefits of Section 363(m) of the Bankruptcy Code as a consequence of
which such appeal shall become moot.
Section 9.4. Timing of Rejection Of Leases And Executory Contracts.
-----------------------------------------------------
(a) In the event that Seller decides to reject a lease or
executory Contract, Seller shall provide written notice of such intent to
Purchaser so as to be received by Purchaser no less than seven business days
prior to filing a motion to reject such lease or executory Contract. If the
Purchaser desires that the Seller not reject such lease or executory Contract at
that time, then, within five business days after receiving written notice from
Seller of its intent to reject, Purchaser shall notify Seller in writing of its
desire that Seller not reject such lease or executory Contract at that time;
provided that in the absence of such notice within such time, Seller may reject
any lease or executory Contract that was the subject of Seller's notice to
Purchaser. If both notices are properly given, Seller shall delay seeking to
reject the lease or executory Contract until otherwise notified by Purchaser;
provided, however, that Purchaser shall be obligated to pay the carrying costs
and any and all other documented charges and expenses for such lease or
executory Contract incurred by the Seller from the time the Seller receives
notice of the Purchaser's desire that Seller not reject such lease or executory
Contract until Purchaser notifies Seller that it may reject such lease or
executory Contract. Purchaser shall have no liability for carrying costs or any
other charges and expenses for such lease or executory Contract or any
obligations under such lease or executory Contract that were or are incurred
prior to Purchaser providing notice to the Seller of its desire that Seller not
reject such lease or executory Contract or after Purchaser notifies Seller that
it may reject such lease or executory Contract.
(b) If the Purchaser desires that the Seller not reject a lease
or executory Contract but rather have the lease or executory Contract assumed
and assigned to Purchaser, within five business days after receiving written
notice from Seller of its intent to reject, Purchaser shall so notify Seller in
writing. In such an event, Seller shall cooperate with Purchaser and use
Seller's reasonable efforts to promptly assume and promptly assign to Purchaser
such additional leases or executory Contracts of Seller that Purchaser
designates, provided that Purchaser shall be required to pay all cure costs for
any such leases or executory Contracts. In such event, these additional leases
and executory Contracts shall be deemed to be assumed Designated Contracts, but
only to the extent such leases and executory Contracts were included on the
Designated Contracts list at one time.
Section 9.5. Right of First Refusal Over Certain Other Assets. At any time
------------------------------------------------
and from time to time whether prior to or after the Closing Date, Seller hereby
agrees with Purchaser that Purchaser shall have the right of first refusal over
any assets that are not Acquired Assets of the Seller or its Subsidiaries used
or held for use in connection with the Business. To give effect to the right of
first refusal, Seller shall provide Purchaser with written notice at least seven
business days prior to any sale or other disposition by Seller or any of its
Subsidiaries, such notice to contain in reasonable detail the proposed terms of
such sale or other disposition. Purchaser shall have the right to acquire such
assets upon the same terms and conditions as set forth in such notice and may
exercise such right by giving written notice to Seller within five business days
after the receipt by Purchaser of the notice of such proposed
19
sale or other disposition; provided that in the absence of such notice from
Purchaser to Seller within such time, Seller may effect any sale or other
disposition that was the subject of Seller's notice to Purchaser.
ARTICLE X.
GENERAL PROVISIONS
Section 10.1. Survival of Representations and Warranties. The
------------------------------------------
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing until the Payment Date;
provided, however, that any right to offset claimed by Purchaser on or before
the Payment Date pursuant to Section 5.5 shall survive until resolved among the
parties. Notwithstanding any investigation or audit conducted before or after
the Closing Date or the decision of any party to complete the Closing, each
party shall be entitled to rely upon the representations and warranties set
forth herein.
Section 10.2. Taxes. All sales, use, transfer and documentary taxes or
-----
fees, if any, payable in connection with the sale, conveyance, assignments,
transfers and deliveries to be made to Purchaser hereunder shall be borne by the
party upon whom they are assessed and paid simultaneously with the Closing.
Section 10.3. Notices. All notices, claims, demands, and other
-------
communications hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission or (b) confirmed delivery by
a standard overnight carrier or when delivered by hand, in each case addressed
to the respective parties at the following addresses (or such other address for
a party as shall be specified by like notice): (a) If to Purchaser, to: Lante
Corporation, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Telecopy:
(000) 000-0000, Attention: General Counsel; with a required copy to: Xxxxxxx,
Carton & Xxxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Telecopy: (000) 000-0000, Attention: Xxxxx X. Xxxxxxxx; and (b) If to Seller,
to: Luminant Worldwide Corporation, 00000 Xxxx Xx., Xxxxxx, Xxxxx 00000-0000,
Attention: Chief Executive Officer; with a required copy to: Xxxxxx, Xxxxxx and
Xxxxxxxxx, 0000 X Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000-0000, Attention: Xxxx X.
Xxxxxxx, Esq.
Section 10.4. Publicity. No party to this Agreement shall issue any press
---------
release or other publicity concerning the proposed transaction without the prior
approval of the other party, except as otherwise required by Law. Each party
shall provide to the other party a reasonable opportunity to review any release
of such information prior to its issuance.
Section 10.5. Descriptive Headings. The headings contained in this
--------------------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.6. Entire Agreement; Assignment. This Agreement (including the
----------------------------
Exhibits, Schedules and the other documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all other prior agreements,
negotiations, drafts and understandings, both written and oral, among the
parties or any of them, with respect to the subject matter hereof, including,
without limitation, any transaction between or among the parties; provided,
however, that the terms of any confidentiality agreement executed in connection
with Purchaser's investigation and due diligence of the Acquired Assets shall
survive execution of this Agreement, and (ii) shall not be assigned by operation
of Law or otherwise. The Purchaser may designate one or more of its wholly-owned
subsidiaries to acquire and receive Acquired Assets or to assume Assumed
Liabilities on the Closing
20
Date; provided, however, in such an event, Purchaser shall not be released from
its obligations under this Agreement.
Section 10.7. Governing Law; Forum. This Agreement shall be governed by
--------------------
and construed in accordance with the Laws of the State of Illinois without
regard to the rules of conflict of Laws of the State of Illinois or any other
jurisdiction. If the Bankruptcy Court abstains from exercising or declines to
exercise jurisdiction with respect to any matter relating to this Agreement or
is without jurisdiction, such abstention, refusal or lack of jurisdiction shall
have no effect upon and shall not control, prohibit or limit the exercise of
jurisdiction of any other court having competent jurisdiction with respect to
any such matter and in such event, each of the parties irrevocably and
unconditionally consents to submit to the jurisdiction of the courts of Illinois
and the United States of America located in such state for any litigation
arising out of or relating to this Agreement and the transactions contemplated
thereby (and agrees not to commence any litigation relating thereto except in
such courts), waives any objection to the laying of venue of any such litigation
therein, and agrees not to plead or claim that such litigation has been brought
in an inconvenient forum.
Section 10.8. Expenses. Whether or not the transactions contemplated by
--------
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated thereby shall be paid by
the party incurring such expenses. The foregoing shall not affect the legal
right, if any, that any party may have to recover expenses from any other party
that breaches its obligations under this Agreement. Without limiting the
foregoing, Seller shall be responsible for the Break-Up Fee and Reimbursement
Expenses and any brokerage, financial advisory, finder's or similar fee or
commission payable in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Seller or any
Subsidiary of Seller.
Section 10.9. Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed on behalf of all the parties.
Section 10.10. Waiver. At any time prior to the Closing Date, the parties
------
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant to this
Agreement, and (c) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
Section 10.11. Counterparts; Facsimile. This Agreement may be executed in
-----------------------
two or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement. This Agreement shall
become effective when each party hereto shall have received counterparts thereof
signed by the other parties. This Agreement may be executed and delivered by
facsimile transmission, and a facsimile of this Agreement or of a signature of a
party will be effective as an original
Section 10.12. Severability; Validity; Parties in Interest. If any
-------------------------------------------
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other Persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Nothing in this Agreement, express or implied, is
intended to confer upon any Person not a party to this Agreement any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
21
Section 10.13. Bulk Sales. Purchaser and Seller hereby waive compliance
----------
with any bulk sales or other similar Laws in any applicable jurisdiction in
respect of the transaction contemplated by this Agreement.
[Signature Page Follows]
22
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
duly executed on their behalf, as of the date first above written.
LUMINANT WORLDWIDE CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Title: Chief Executive Officer
LANTE CORPORATION
By: /s/ X.X. Xxxxxxx
--------------------------------------
Title: Chief Executive Officer
23
Annex A
Definitions
As used in this Agreement, the following defined terms have the meanings
indicated below:
"Acquired Assets" has the meaning set forth in Section 1.1.
---------------
"Action or Proceeding" means any claim, action, injunction, complaint,
--------------------
counterclaim, joinder, investigation, suit, order, notice of violation,
arbitration, audit or other proceeding, whether civil or criminal, in Law or in
equity, whether or not before any court, arbitrator or other Governmental or
Regulatory Authority, by any Governmental or Regulatory Authority or by any
other Person.
"Added Contracts" has the meaning set forth in Section 1.2.
---------------
"Affiliate" means any Person that directly, or indirectly through one of
---------
more intermediaries, controls or is controlled by or is under common control
with the Person specified. Without limiting the foregoing and for avoidance of
doubt, the Subsidiaries are Affiliates of Seller and any other Affiliates of
Seller whether or not involved in the Chapter 11 Case.
"Agreement" means this Asset Purchase Agreement and the related Exhibits
---------
and the Schedules and the certificates and other documents and instruments
delivered in connection with this Agreement, as the same shall be amended from
time to time.
"Assumed Liabilities" has the meaning set forth in Section 1.3.
-------------------
"Bankruptcy Code" has the meaning set forth in the Recitals.
---------------
"Bankruptcy Court" has the meaning set forth in the Recitals.
----------------
"Benefit Plan" means any bonus, incentive compensation, deferred
------------
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, retiree medical, workmen's compensation, severance
or other employee benefit plan, practice, policy, arrangement or program of any
kind, whether written or oral, including, but not limited to, any pension plan
as defined in Section 3(2) of ERISA ("Pension Plan"), any welfare plan as
defined in Section 3(1) of ERISA ("Welfare Plan"), any Pension Plan that is
subject to the pension benefit insurance provisions of Title IV of ERISA, or
that is subject to Section 412 of the Code or Part 3 of Subtitle B of Title I of
ERISA, and any Pension Plan described at Section 4001(a)(3) of ERISA
("Multiemployer Plan").
"Bidding Procedures Hearing" has the meaning set forth in Section 9.3(b).
--------------------------
"Bidding Procedures Order" has the meaning set forth in Section 9.3(b).
------------------------
Annex A
(continued)
"Books and Records" means (in whatever form or medium) all files, data,
-----------------
documents, instruments, papers, books and records of every kind, including,
without limitation, ledgers, journals, deeds, Contracts, customer lists,
prospective customer lists, computer files, programs, retrieval programs,
operating data, marketing and sales literature, proposals, presentations, flip
charts, drawings and operating records.
"Break-Up Fee" has the meaning set forth in Section 7.3.
------------
"Business" has the meaning set forth in the Recitals.
--------
"Business Employees" has the meaning set forth in Section 8.1.
------------------
"Chapter 11 Case" has the meaning set forth in the Recitals.
---------------
"Closing " has the meaning set forth in Section 2.1.
-------
"Closing Date" has the meaning set forth in Section 2.1.
------------
"Closing Date A/R" has the meaning set forth in Section 2.1.
----------------
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
----
and regulations promulgated thereunder.
"Collection Costs" has the meaning set forth in Section 5.5.
----------------
"Collection Period" has the meaning set forth in Section 5.5.
-----------------
"Contract" means any agreement, evidence of indebtedness, bond, commitment,
--------
indemnity, indenture, instrument, lease, License, mortgage, statement of work,
security agreement or other contract, commitment, undertaking or understanding,
whether or not in writing.
"Designated Contracts" has the meaning set forth in Section 1.2.
--------------------
"Designated Contracts List" has the meaning set forth in Section 1.2.
-------------------------
"Disclosure Schedule" means the schedule (dated as of the date of the
-------------------
Agreement) delivered by Seller to Purchaser containing the exceptions to the
representation and warranties of Article III and the other information called
for by this Agreement.
"Employee" means each employee, officer or consultant of Seller or any
--------
Subsidiary of Seller.
2
Annex A
(continued)
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" has the meaning set forth in Section 1.1.
---------------
"Excluded Liabilities" has the meaning set forth in Section 1.3.
--------------------
"Final Order" shall mean an order or judgment the operation or effect of
-----------
which is not stayed, and as to which order or judgment (or any revision,
modification or amendment thereof), the time to appeal or seek review or
rehearing has expired, and as to which no appeal or petition for review or
motion for rehearing has been taken or made.
"Governmental or Regulatory Authority" means any authority, agency,
------------------------------------
commission, official, court, tribunal, arbitrator or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Intellectual Property" means, wherever located worldwide, all patents and
---------------------
patent rights, trademarks and trademark rights, trade names and trade name
rights, service marks and service xxxx rights, service names and service name
rights, copyrights and copyright rights, brand names, trade dress, business and
product names, domain names, corporate names, logos, slogans, trade secrets,
inventions, processes, formulae, industrial models, designs, specifications,
data, technology, methodologies, computer programs (including all source codes),
confidential and proprietary information, whether or not subject to statutory
registration, all related technical information, manufacturing, engineering and
technical drawings, know-how, all pending applications for and registrations of
patents, trademarks, service marks and copyrights, all obligations of third
parties relating to the protection of the foregoing, the goodwill associated
with the foregoing, and the right to xxx for past payment, if any, in connection
with any of the foregoing, and all documents, disks and other media on which any
of the foregoing is stored.
"IRS" means the United States Internal Revenue Service.
---
"Knowledge" or "awareness" of any entity means the actual knowledge or
------------------------
awareness of such entity's officers and, in the case of the Selling Companies,
limited to their leadership team and such knowledge or awareness as these
individuals should have had after reasonable investigation.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
----
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all indebtedness, obligations and other liabilities of
-----------
any kind of a Person (whether absolute or contingent, accrued or unaccrued,
known or unknown, fixed or otherwise, due or to become due, matured or
unmatured, liquidated or unliquidated).
"Licenses" means all licenses, permits, certificates of authority,
--------
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Person.
3
Annex A
(continued)
"Liens" means any lien, pledge, security interest, claim, encumbrance or
-----
interest of any kind.
"Loss" means any loss, damage, injury, decline in value, lost opportunity,
----
liability, claim, action, demand, settlement, judgment, award, fine, penalty,
tax, fee (including reasonable attorneys' fees), charge, cost (including costs
of investigation) or expense of any nature directly or indirectly suffered or
incurred by Purchaser or to which Purchaser may otherwise become subject and
which arise from or as a result of, or are directly or indirectly connected
with: (a) any material inaccuracy in or breach (except in the case of any
representation or warranty qualified by materiality or a Material Adverse
Effect, in which case this clause shall apply to any inaccuracy or breach) of
any representation or warranty of Seller set forth in this Agreement; (b) any
material breach (except in the case of any covenant or obligation qualified by
materiality or a Material Adverse Effect, in which case this clause shall apply
to any breach) of any covenant or obligation of Seller to Purchaser in this
Agreement; and (c) any debt, liability, obligation or Contract of Seller that is
not assumed by Purchaser pursuant to this Agreement or other Excluded Liability.
"Material Adverse Effect" has the meaning set forth in Section 3.1.
-----------------------
"Multiemployer Plan" has the meaning set forth in the definition of
------------------
"Benefit Plan."
"Order" means any writ, judgment, decree (including consent decrees),
-----
injunction or similar order of any Governmental or Regulatory Authority (in each
such case whether preliminary or final).
"Payment Date" has the meaning set forth in Section 5.5.
------------
"Pension Plan" has the meaning set forth in the definition of "Benefit
------------
Plan."
"Person" means any natural person, corporation, general partnership,
------
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Petition" has the meaning set forth in the Recitals.
--------
"Purchase Price" has the meaning set forth in Section 1.4.
--------------
"Purchaser" has the meaning set forth in the preamble.
---------
"Purchaser Employees" has the meaning set forth in Section 8.1.
-------------------
"Sale Hearing" has the meaning set forth in Section 9.3(c).
------------
"Section 363/365 Order" has the meaning set forth in Section 3.2.
---------------------
"Section 365(c)(1) Intellectual Property" has the meaning set forth in
---------------------------------------
Section 3.8.
4
Annex A
(continued)
"Seller" has the meaning set forth in the preamble.
------
"Selling Companies" has the meaning set forth in Section 3.1.
-----------------
"Subsidiaries" means the following direct or indirect subsidiaries of
------------
Seller: LWC Operating Corp. LWC Management Corp., Potomac I Holdings, Inc.,
Multimedia I Holdings, Inc., RSI Group, Inc., Align Solutions Corp.,
InterActive8, Inc., BD Acquisition Corp., Integrated Consulting, Inc., Free
Range Media, Inc., Align - Synapse Acquisition Corporation, Align - Fifth Gear
Acquisition Corporation, Potomac Partners Management Consulting LLC, Multimedia
Resources LLC, Resource Solutions International, LLC.
"Tax" means (i) any federal, state, local or foreign net or gross income,
---
minimum, alternative minimum, sales, value added, use, excise, franchise, real
or personal property, transfer, environmental, gross receipts, capital stock,
production, business and occupation, disability, employment, payroll, severance,
withholding or other tax, assessment, duty, fee, levy or charge of any nature
whatever, whether disputed or not, imposed by any Governmental or Regulatory
Authority, any interest, penalties (civil or criminal), additions to tax or
additional amounts related thereto or to the nonpayment thereof, and (ii) any
obligations under any Contract or other arrangement with respect to any item
described in clause (i) above.
"Welfare Plan" has the meaning set forth in the definition of "Benefit
------------
Plan."
Unless the context of this Agreement otherwise requires, (i) words of any
gender include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; (iv) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; (v) all references to "$" or "dollars"
herein means U.S. dollars; and (vi) the words "include" or "including" shall
mean "include without limitation" and "including without limitation"
respectively, whether or not expressly stated.
5
Schedule 1.1
Acquired Assets
---------------
A. "Acquired Assets" means, subject to the terms of the Agreement, all of
Seller's and its Subsidiaries' right, title and interest in and to the following
assets, rights and properties of any kind, whether tangible or intangible, real
or personal, and constituting, or used or usable in connection with, or related
to, the Business, wherever located:
1. all rights under all Designated Contracts, including, without
limitation, all pending proposals to provide professional services to customers;
2. other than the Intellectual Property excluded from the Acquired Assets
pursuant to the last sentence in Section 1.2, all Intellectual Property of
Seller and its Subsidiaries, including, without limitation, each of the names of
the Selling Companies and all derivations of such names, URLs, websites and
domain names and software;
3. all computers, peripherals, servers, associated software licenses,
cellular phones, pagers, PDA's and other personal technology assets owned by the
Selling Companies for use by Employees;
4. to the extent not included in paragraph 3 above, all other computer
hardware, servers, networks and related technology items owned by the Selling
Companies;
5. all accounts receivable of the Selling Companies arising out of the
provision of professional consulting services by the Selling Companies relating
to the other parties to the Designated Contracts and all other accounts
receivables of the Selling Companies to the extent that they are not more than
90 days old as of the Closing Date;
6. all unbilled work-in-process of the Selling Companies relating to the
provision of professional consulting services as of the Closing Date;
7. all customer lists and prospective customer lists of the Selling
Companies;
8. all solutions and other work product relating to former, present and
prospective clients of the Selling Companies;
9. all Books and Records relating to the Acquired Assets and to all
former, present and prospective clients of the Selling Companies;
10. all rights of the Selling Companies under the Luminant Worldwide
Employee Confidentiality, Non-Solicitation and Assignment Agreements and the
other employment, non-competition, confidentiality, invention assignment and/or
non-solicitation agreements set forth on Exhibit A to this Schedule;
---------
11. the office furniture and office furnishings owned by the Selling
Companies for use by Employees described on Exhibit B to this Schedule;
---------
Schedule 1.1
(continued)
12. all claims, causes of action, choses in action, rights of recovery and
rights of set-off of any kind, against any Person, in each case solely to the
extent related to Acquired Assets or Assumed Liabilities, including without
limitation, any liens, security interests, pledges or other rights to payment or
to enforce payment in connection with products or services delivered by Seller
or its Subsidiaries on or prior to the Closing Date;
but excluding from the foregoing the Excluded Assets.
Excluded Assets
---------------
B. Notwithstanding anything in this Schedule to the contrary, subject to the
terms of the Agreement, the following assets, rights and properties of Seller or
its Subsidiaries shall be excluded from and shall not constitute Acquired Assets
under this Schedule, but instead shall constitute Excluded Assets:
1. all rights of Seller and its Subsidiaries under the Agreement;
2. Seller's and its Subsidiaries' corporate charters, original minute
books, stock books, tax returns and other documents relating to the
organization, maintenance and existence of Seller or its Subsidiaries as a
corporation;
3. all cash, commercial paper, certificates of deposit and other bank
deposits, treasury bills and other cash equivalents;
4. any real property and real property leases; and
5. all avoidance actions under the Bankruptcy Code.
6. any and all rights, obligations or liabilities under or related to any
and all Employee Benefit Plans, or any plans, agreements or arrangements
relating to compensation or benefits, that are now or ever have been maintained
or contributed to by Seller or any member of its Control Group (as defined under
Code Section 414(b), (c) or (m)) and any and all Employee Benefit Plans through
which Seller or any member of its Control Group provides coverage for Business
Employees
2
Exhibit A to Schedule 1.1
List of Certain Non-Executory Agreements
1. All Luminant Worldwide Employee Confidentiality, Non-Solicitation and
Assignment Agreements for former and current employees of the Selling Companies
and all other non-executory confidentiality, non-solicitation or invention
assignment agreements signed by former and current employees of the Selling
Companies and other parties in favor of the Selling Companies or their
predecessors.
2. The following agreements:
a. Employment Agreement between Luminant Worldwide Corporation ("Luminant")
and Xxxxxx Xxxxx dated as of June 22, 2000, as amended by the First
Amendment to Employment Agreement dated as of November 30, 2001.
b. Letter Agreement between Luminant and Xxxxxx Xxxxx dated as of Xxxxx 2,
2000.
c. Employment Agreement between Luminant and Xxxxxx Xxxx dated as of
January 1, 2001.
d. Employment Agreement between Luminant and Xxxxxxx X. Xxxxxxx dated as of
September 21, 1999.
Exhibit B to Schedule 1.1
List of Office Furnishings
Houston 12th Floor
------------------
Quantity Description
---------------------------------------------------
12 three seat, triangular system work
station
---------------------------------------------------
0 one seat secretarial system stations
---------------------------------------------------
1 four seat round conference tables
---------------------------------------------------
1 twenty seat, rectangular conference
table (in main conference room)
---------------------------------------------------
1 six seat, round conference tables
---------------------------------------------------
1 eleven seat, conference table
---------------------------------------------------
13 one person office furniture sets,
work surface, credenza, bookcases,
overhead
---------------------------------------------------
1 one person Reception station
---------------------------------------------------
1 four seat reception area table
---------------------------------------------------
50 Task Chairs
---------------------------------------------------
30 Side / Reception Chairs
---------------------------------------------------
41 Conference Room Chairs
---------------------------------------------------
1 microwave, 1 refrigerator, 1
dishwasher
---------------------------------------------------
1 Nortel PBX, Meridian Voicemail,
Console
---------------------------------------------------
54 Desksets for PBX
---------------------------------------------------
All Any related bookshelves, file
cabinets, whiteboards, lamps, office
supplies
---------------------------------------------------
Exhibit C to Schedule 1.1
(continued)
List of Office Furnishings
Dallas 13/th/ Floor
-------------------
Quantity Description
---------------------------------------------------
15 three seat, triangular system work
station
---------------------------------------------------
11 one person office furniture sets,
work surface, credenza, bookcases,
overhead
---------------------------------------------------
3 one seat, tech center workstations
---------------------------------------------------
0 one seat secretarial system stations
---------------------------------------------------
3 six seat conference tables -Huddle
Rooms
---------------------------------------------------
2 six seat conference tables -Main
Conference room
---------------------------------------------------
3 four seat round kitchen tables
---------------------------------------------------
1 one person reception station
---------------------------------------------------
1 four seat reception area table
---------------------------------------------------
1 microwave, 1 refrigerator, 1
dishwasher
---------------------------------------------------
60 Task Chairs
---------------------------------------------------
52 Side / Reception Chairs
---------------------------------------------------
16 Conference Room Chairs
---------------------------------------------------
1 Nortel PBX, Meridian Voicemail,
Console
---------------------------------------------------
64 Desksets for PBX
---------------------------------------------------
All Any related bookshelves, file
cabinets, whiteboards, lamps, office
supplies
---------------------------------------------------
2
Schedule 9.3(d)
Bankruptcy Court Orders
The Section 363/365 Order shall be in such form and substance reasonably
acceptable to the Purchaser and shall provide, among other things, that:
(a) as of the Closing Date, this proposed transaction will effect a
legal, valid, enforceable and effective sale and transfer of the Acquired Assets
to the Purchaser and shall vest the Purchaser with title to the Acquired Assets
free and clear of all Liens (with all Liens on the Acquired Assets attaching to
the sale proceeds payable to Seller under this Agreement) and liabilities other
than the Liens set forth on Schedule 3.5 and the Assumed Liabilities pursuant to
------------
Section 363(f) of the Bankruptcy Code and that the Purchaser shall not incur any
liability as a successor to the Selling Companies or the Business;
(b) the consideration provided by the Purchaser pursuant to this
Agreement constitutes reasonably equivalent value and fair consideration for the
Acquired Assets;
(c) the Selling Companies are the owner of the Acquired Assets;
(d) the interest of any third party asserting an interest in the
Acquired Assets can be satisfied by money and any such interest will attach to
the proceeds of the sale and will not be assertable against the Purchaser or
attached to the Acquired Assets;
(e) all Persons are enjoined from taking any action against
Purchaser, Purchaser's Affiliates (as they existed immediately prior to the
Closing) or Purchaser's designees to recover any claim which such Person has
solely against the Selling Companies (as they existed immediately following the
Closing);
(f) the Bankruptcy Court retains exclusive jurisdiction to interpret,
construe and enforce the provisions of this Agreement and the Section 363/365
Order in all respects, provided that in the event the Bankruptcy Court abstains
from exercising or declines to exercise jurisdiction with respect to any matter
provided for in this clause (f) or is without jurisdiction, such abstention,
refusal or lack of jurisdiction shall have no effect upon and shall not control,
prohibit or limit the exercise of jurisdiction of any other court having
competent jurisdiction with respect to any such matter;
(g) the provisions of the Section 363/365 Order are nonseverable and
mutually dependent;
(h) the transactions contemplated by this Agreement are undertaken by
Purchaser and the Selling Companies at arm's length, without collusion and in
good faith within the meaning of Section 363(m) of the Bankruptcy Code, and the
Purchaser is entitled to the protections of Section 363(m) of the Bankruptcy
Code;
(i) a determination that not selling the Acquired Assets free and
clear of Liens would impact adversely on the Selling Companies' bankruptcy
estates;
Schedule 9.3(d)
(continued)
(j) a determination that a sale of the Acquired Assets other than one
free and clear of Liens would be of substantially less benefit to the Selling
Companies;
(k) provides that the sale and the assignment and assumption are
deemed to be part of a plan pursuant to Section 1146(c) of the Bankruptcy Code
and provides for the exemption of the transactions contemplated herein from
transfer, stamp, sales, use and certain other taxes, and provides for the waiver
of so called "bulk-sales" Laws in all necessary jurisdictions;
(l) provides that any stay of orders authorizing the use, sale or
lease of property or authorizing the assignment of an existing contract or
unexpired lease as provided for in Fed. R. Bankr. Proc. 6004(g) and 6006(d)
shall not apply to the Section 363/365 Order and that the Section 363/365 Order
is immediately effective and enforceable;
(m) provides that the Purchaser will not have any successor or
transferee liability for liabilities of the Selling Companies (whether under
federal or State Law or otherwise) as a result of the sale of the Acquired
Assets;
(n) provides that Purchaser shall not assume liabilities of other
than the Assumed Liabilities pursuant to Section 1.3;
(o) provides that the Selling Companies may assign and transfer to
Purchaser all of their right, title and interest (including common Law rights)
to all of their intangible property in the Designated Contracts;
(p) approves Selling Companies' assignment of the Designated
Contracts pursuant to Section 365 of the Bankruptcy Code;
(q) provides that Seller shall be responsible for paying any
ultimately determined cure amounts for Designated Contracts that exceed those
cure amounts for such Designated Contracts set forth on Schedule 1.2;
(r) finds that all cure amounts under the Designated Contracts have
been satisfied or that there has been adequate assurance given that they will be
cured;
(s) identifies the correct versions of the Designated Contracts to be
assumed by and assigned to Purchaser;
(t) enjoins the other party(ies) to the Designated Contracts from
raising after the date of assignment and assumption of the Designated Contracts
that there are any uncured defaults under such agreements;
(u) holds that the other party(ies) to the Designated Contracts who
fail to object to the assignment and assumption of the Designated Contracts is
deemed to have consented to its assignment and assumption to Purchaser in
accordance with Section 365(c) of the Bankruptcy Code;
2
Schedule 9.3(d)
(continued)
(v) provides that there shall be no acceleration of payments,
increases in payments, assignment fees or any additional fees charged to
Purchaser as a result of the assignment of the Designated Contracts to Purchaser
hereunder;
(w) provides that the Designated Contract, upon assignment to
Purchaser, shall still be deemed valid and binding, in full force and effect in
accordance with its terms and that any provision conditioning assignment or
approval by the other party to the agreement is an unenforceable restriction on
assignment pursuant to Section 365 of the Bankruptcy Code; and
(x) provides that Purchaser will not have any successor transferee
Liabilities of the Selling Companies (whether under federal Law, state Law or
otherwise) as a result of the assignment and assumption of the Designated
Contracts.
3
