Exhibit 10.1
January 19, 2006
Xx. Xxxxxx X. Xxxxxxx, Xx. Chairman and Chief Executive Officer
ITA Holdings, Inc.
00 Xxxxxx Xxxxxxxxx
Xxxxx 0
Xxxxxxx, Xxxxxxxxxxxxx 00000
Dear Xx. Xxxxxxx:
This letter agreement (the "Agreement") confirms and sets forth the terms and
conditions of the engagement between Mesirow Financial Interim Management, LLC
("MFIM") and ITA Holdings, Inc. (the "Company"), including the scope of the
services to be performed and the basis of compensation for those services. Upon
execution of this letter by each of the parties below, this letter will
constitute an agreement between the Company and MFIM.
1. Scope of Services
a. Personnel. As requested by the Board of Directors of the Company
(the "Board"), MFIM shall make available to the Company the
following individuals:
(i) Xxxxxxx X. Xxxx to serve as the President and Treasurer of
the Company (the "President"). He will report directly to
the Board and will be granted the right to attend meetings
of the Board as an observer only. The duties of the
President shall include the following:
1. Manage the Company's planned sale of its Wizcom
business to eLutions, or such other buyer for such
business;
2. Assist in developing and implementing strategies,
tactics and processes to wind up the business affairs
of the Company, including the sale or disposition of
all assets;
3. To the extent funds are available, distribute the funds
to the Company's creditors and shareholders;
4. Cause final tax returns to be filed on behalf of the
Company;
5. Assist in the communication and/or negotiation with
creditors, their advisors, and other outside
stakeholders;
6. Render such other assistance or administrative support
as the Board of Directors or counsel may deem necessary
as part of the restructuring or wind-down process that
are consistent with the role of the president of the
Company.
The President may be supported by other employees of MFIM (collectively,
the "Temporary Employees"). We will keep the Board informed as to the
Temporary Employees assisting the President and the areas of responsibility
being filled by such Temporary Employees.
2. No Assurance on Financial Data; Reliance; Limitation of Duties.
Because of the time and scope implicit in this Agreement, the depth of
our analyses and verification of the data is significantly limited. It
is understood that neither the President, the Temporary Employees nor
MFIM are being requested to perform an audit, review or compilation,
or any other type of financial statement reporting engagement that is
subject to the rules of the AICPA, SEC or other state or national
professional or regulatory body. The services to be rendered by the
President and the Temporary Employees may, however, include the
preparation of analyses, projections, other forward-looking statements
and settlement proposals, and the Company understands that numerous
factors can affect the actual results achieved, which may materially
and adversely differ from any such analyses, projections, other
forward-looking statements and settlement proposals. In addition, the
President and the Temporary Employees will be relying on information
provided by the Company, including the Company's other officers,
directors, former employees, advisors, counsel, professionals,
representatives and agents, in the preparation of those analyses,
projections, other forward-looking statements and settlement
proposals. The President and the Temporary Employees are entitled to
rely on the accuracy and validity of the data disclosed to them or
supplied to them by the Company's other officers, directors, former
employees, advisors, counsel, professionals, representatives and
agents. Neither the President nor the Temporary Employees will be
under any obligation to update any data submitted to them or extend
their activities beyond the scope set forth herein, unless they agree
to do so upon your specific request. Further, due to the factors
referenced in this paragraph, any periodic oral and/or written reports
provided by the President or the Temporary Employees will not provide
assurances concerning the integrity of the information used in our
analyses and on which our findings and advice to you may be based.
3. Compensation
a. MFIM shall be compensated by the Company for those services
rendered by the President at a rate of $590 per hour or such
other rate for the President as adjusted by MFIM in the ordinary
course of its business (with at least 30 days notice to the
Company) less an allowed discount of 30%.
The Company shall compensate MFIM for services rendered by other
Temporary Employees at those hourly rates currently in effect for
such Temporary Employees, less an allowed discount of 30%. These
hourly rates are adjusted from time to time in the ordinary
course of MFIM's business provided that MFIM must first give
Company 30 days notice of any rate change.
b. In addition, MFIM will be reimbursed by the Company for the
reasonable out-of-pocket expenses of the President and the
Temporary Employees incurred in connection with this assignment,
such as travel, lodging, photocopying, computer research,
messenger and telephone charges as well as for the reasonable
fees and expenses of its counsel incurred in connection with the
preparation, negotiation and enforcement of this Agreement. All
fees and expenses due to MFIM will be billed on a bi-weekly basis
or, at MFIM's reasonable discretion, more frequently and such
invoices shall be due upon receipt.
4. Term
The Agreement will commence as of the date hereof and shall continue
in effect until April 30, 2006, unless extended by mutual agreement.
This Agreement may be terminated by either party without cause by
giving five (5) days' written notice to the other party, and the
termination will be effective on the 5th day after the date of the
written notice (the "Termination Date"). In the event of such
termination, any fees and expenses due to MFIM through and including
the Termination Date shall be remitted promptly (including fees and
expenses that accrued prior to but were invoiced subsequent to such
termination).
5. No Third Party Beneficiary.
The Company acknowledges that all advice (written or oral) given by
the President , the Temporary Employees or MFIM to the Company in
connection with this engagement is intended solely for the benefit and
use of the Company (limited to its Board and management) in
considering the matters to which this engagement relates. The Company
agrees that no such advice shall be used for any other purpose or
reproduced, disseminated, quoted or referred to at any time in any
manner or for any purpose other than accomplishing the tasks referred
to herein without MFIM's prior approval (which shall not be
unreasonably withheld), except as required by law.
6. Conflicts.
MFIM performed an internal search for any potential conflicts of
interest based upon the names of the parties the Company provided.
MFIM has not found any conflict of interest with respect to any of
these parties. MFIM cannot assure that, following our employment by
you, an engagement will not be accepted by us for another party that
may bear on this engagement. Should a potential conflict of interest
come to our attention, the engagement team will advise you within a
reasonable time.
7. Confidentiality.
MFIM shall keep as confidential all non-public information
("Information") received from the Company or its outside counsel or
other advisors in conjunction with this engagement, except (i) as
requested by the Company or its legal counsel; (ii) if required by
court order, subpoena or otherwise by law; provided, however, that in
such case MFIM shall give Company ten (10) days notice prior to any
such disclosure to allow Company the opportunity to intervene and
protect its interests in the Information, or (iii) as reasonably
required in the performance of this engagement and in furtherance of
Company's interests. However, the President and Temporary Employees
may make reasonable disclosures of Information to third parties in
connection with the obligations and assignments hereunder. All
obligations as to non-disclosure shall cease as to any part of such
information to the extent that such information is or becomes public
other than as a result of a breach of this provision.
8. Indemnification.
The Company shall indemnify and hold harmless the President, the
Temporary Employees and MFIM as set forth in Exhibit A hereto, which
is incorporated herein by reference as if fully restated herein.
The Company has a director and officer liability insurance policy in
the amount of $5,000,000.00and the Company shall cause the President
to be covered by that insurance policy. If the Company is unable to
add the President to its existing insurance policy or if its existing
insurance policy is cancelled for any reason, it is agreed that MFIM
will attempt to purchase a separate director and officer liability
policy that will cover the President and that the cost of such a
policy will be invoiced to the Company as an out-of-pocket expense and
the Company hereby agrees to pay such cost. If MFIM is unable to
purchase such coverage, then it shall have the right to terminate this
Agreement immediately upon written notice to the Company. In the event
that other Temporary Employees become officers of the Company, such
individuals will be entitled to the same insurance benefits as the
President hereunder.
The provisions of this section 8 are in the nature of contractual
obligations and no change in applicable law or the Company's charter,
bylaws, operating agreement or other organizational documents or
policies shall affect the President's or MFIM's rights hereunder and
the provisions of this section 8 shall survive termination of this
Agreement.
9. Limitation of Liability
Subject to the indemnification provisions set forth in Exhibit A, MFIM
shall not be liable to the Company for any actions, damages, claims,
liabilities, costs, expenses or losses in any way arising out of or
relating to the services performed under the Agreement for an
aggregate amount in excess of the fees paid to MFIM for services
rendered by MFIM under the Agreement. In no event shall MFIM be liable
for consequential, special, indirect, incidental, punitive or
exemplary damages, costs, expenses, or losses (including, without
limitation, lost profits and opportunity costs). The provisions of
this Section 9 shall apply regardless of the form of action, damage,
claim, liability, cost, expense, or loss, whether in contract,
statute, tort or otherwise.
10. Miscellaneous
(a) This Agreement shall (together with the attached indemnity
provisions) be governed and construed in accordance with the laws of
the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflict of laws thereof.
(b) This Agreement incorporates the entire understanding of the
parties with respect to the subject matter thereof.
(c) This Agreement may not be amended or modified except in writing
executed by each of the parties hereto.
(d) If any provision of this Agreement shall be deemed invalid or
unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed
excluded from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated
herein as so modified or as if such provision had not been originally
incorporated herein, as applicable.
(f) All notices required or permitted to be delivered under this
Agreement shall be sent, if to MFIM, to the address set forth above to
the attention of Xxxxxxx Xxxx, and to the Company, to the address set
forth above, to the attention of Xxxxxx X. Xxxxxxx, or to such other
name or address as may be given in writing to the other party. All
notices under the Agreement shall be sufficient if delivered by
facsimile or overnight mail. Any notice shall be deemed to be given
upon actual receipt.
If the foregoing is acceptable to you, kindly sign the enclosed copy to
acknowledge your agreement with its terms.
Very truly yours,
Mesirow Financial Interim Management, LLC
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Senior Managing Director
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Agreed to and Accepted:
ITA Holdings, Inc.
By: /s/Xxxxxx X. Xxxxxxx Xx.
Date:1/19/2006
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INDEMNIFICATION AGREEMENT
This indemnity agreement (the "Indemnity Agreement"), is entered into as of
January 18, 2006 by and between Mesirow Financial Interim Management, LLC
("MFIM") and ITA Holdings, Inc. (the "Company") in connection with that certain
letter agreement (the "Engagement Letter") dated as of January 19, 2006 for
services to be rendered to the Company by MFIM. The Engagement Letter and the
Indemnification Agreement shall be collectively referred to as the "Agreement".
A. The Company agrees to indemnify and hold harmless MFIM, the President, the
Temporary Employees (as such term is defined in the Engagement Letter) and
MFIM's shareholders, affiliates, principals, members, managers, officers,
directors, employees, subcontractors, attorneys, professionals, representatives
and agents (each, an "Indemnified Party" and collectively, the "Indemnified
Parties") against any and all losses, claims, damages, liabilities, penalties,
obligations and expenses, including, without limitation, the costs, fees and
expenses for counsel or others (including employees of MFIM, based on their then
current hourly billing rates) in investigating, preparing or defending any loss,
damage, liability, expense, action or claim, whether or not in connection with
litigation in which any Indemnified Party is a party, as and when incurred,
caused by, relating to, based upon or arising out of (directly or indirectly)
the Indemnified Parties' acceptance of or the performance or nonperformance of
their obligations under the Agreement; provided, however, such indemnity shall
not apply to any such loss, claim, damage, liability, action or expense to the
extent it is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) to have resulted primarily and directly from such
Indemnified Party's gross negligence or willful misconduct. The Company also
agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company for or in connection
with the engagement of the President, the Temporary Employees or MFIM, except to
extent of any final judgment by a court of competent jurisdiction (not subject
to further appeal) to have resulted primarily and directly from such Indemnified
Party's gross negligence or willful misconduct. The Company further agrees that
they will not, without the prior consent of an Indemnified Party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which such Indemnified Party
seeks indemnification hereunder (whether or not such Indemnified Party is an
actual party to such claim, action, suit or proceedings) unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liabilities arising out of such claim, action, suit or
proceeding, unless otherwise agreed to by the Indemnified Parties.
B. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to the Indemnified Parties.
C. If any action, proceeding or investigation is commenced to which any
Indemnified Party proposes to demand indemnification hereunder, such Indemnified
Party will notify the Company with reasonable promptness; provided, however,
that any failure by such Indemnified Party to notify the Company will not
relieve the Company from their obligations hereunder. The Company shall promptly
pay expenses reasonably incurred by any Indemnified Party in defending,
participating in, or settling any action, proceeding or investigation in which
such Indemnified Party is a party or is threatened to be made a party or
otherwise is participating in by reason of the engagement under the Agreement,
upon submission of invoices therefore, whether in advance of the final
disposition of such action, proceeding, or investigation or otherwise. Each
Indemnified Party hereby undertakes, and the Company hereby accepts its
undertaking, to repay any and all such amounts so advanced if it shall
ultimately be determined that such Indemnified Party is not entitled to be
indemnified therefor. If any such action, proceeding or investigation in which
an Indemnified Party is a party is also against the Company, the Company may, in
lieu of advancing the expenses of separate counsel for such Indemnified Party,
provide such Indemnified Party with legal representation by the same counsel who
represents the Company, provided such counsel is reasonably satisfactory to such
Indemnified Party, at no cost to such Indemnified Party; provided, however, that
if such counsel or counsel to the Indemnified Party shall determine that due to
the existence of actual or potential conflicts of interest between such
Indemnified Party, on one hand, and the Company, on the other hand, such counsel
is unable to represent both the Indemnified Party and the Company, the
Indemnified Party shall be entitled to use separate counsel of its own choice,
and the Company shall promptly pay the reasonable fees and expenses of such
separate counsel upon submission of invoices therefor. Nothing herein shall
prevent an Indemnified Party from using separate counsel of its own choice at
its own expense. The Company will be liable for any settlement of any claim
against an Indemnified Party made with the Company's written consent, which
consent shall not be unreasonably withheld.
D. In order to provide for just and equitable contribution if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification, then the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements, acts or omissions which
resulted in the losses, claims, damages, liabilities and costs giving rise to
the indemnification claim and other relevant equitable considerations shall be
considered; and further provided that in no event will the Indemnified Parties'
aggregate contribution for all losses, claims, damages, liabilities and expenses
with respect to which contribution is available hereunder exceed the amount of
fees actually received by the Indemnified Parties pursuant to the Agreement. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution hereunder from any person who is not also found liable for such
fraudulent misrepresentation.
E. If multiple claims are brought against any Indemnified Party or Indemnified
Parties in any proceeding related to, arising out of or in connection with the
Agreement, with respect to at least one of which such claims indemnification is
permitted and provided for under the Agreement, the Company agree that any
judgment, arbitration award or other ruling shall be conclusively deemed to be
based on claims as to which indemnification is permitted and provided for under
the Agreement, except to the extent such judgment, arbitration award or ruling
expressly states that the award, or any portion thereof, is based solely on a
claim as to which indemnification is unavailable.
F. In the event the Company, on the one hand, and MFIM, on the other hand, seek
judicial approval for the assumption of the Agreement or authorization to enter
into a new engagement agreement pursuant to either of which the President or
MFIM would continue to be engaged by the Company as part of a bankruptcy filing,
the Company shall promptly pay the fees and expenses reasonably incurred by the
Indemnified Parties, including attorneys' fees and expenses, in connection with
any such motion, action or claim made either in support of or in opposition to
any such retention or authorization, whether in advance of or following any
judicial disposition of such motion, action or claim, promptly upon submission
of invoices therefor and regardless of whether such retention or authorization
is approved by any court. The Company will also promptly pay the Indemnified
Parties for any fees and expenses reasonably incurred by them, including
attorneys' fees and expenses, in seeking payment of all amounts owed it under
the Agreement (or any new engagement agreement) whether through submission of a
fee application or in any other manner, without offset, recoupment or
counterclaim, whether as a secured claim, an administrative expense claim, an
unsecured claim, a prepetition claim or a postpetition claim.
G. Neither termination of the Agreement nor termination of MFIM's engagement nor
the filing of a petition under Chapter 7 or 11 of the United States Bankruptcy
Code (nor the conversion of an existing case to one under a different chapter)
shall affect these indemnification provisions, which shall hereafter remain
operative and in full force and effect.
H. In addition to the indemnification rights herein, MFIM, the President and any
Temporary Employees serving as officers of the Company shall be entitled to the
benefit of the most favorable indemnification provided by the Company to its
officers and directors, whether under the certificate of incorporation or bylaws
of the Company, any other agreements, any vote of stockholders, members or
disinterested directors of the Company, any insurance policy, any applicable law
or otherwise.
ITA Holdings, Inc. Mesirow Financial Interim Management, LLC
By: /s/ Xxxxxx X. Xxxxxxx Xx. By: /s/ Xxxxxxx X. Xxxx
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Xxxxxx X. Xxxxxxx Xx. Xxxxxxx X. Xxxx
Chairman Senior Managing Director
