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Title: |
Asset Purchase Agreement |
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Entities: |
IT Group, Inc.; Shaw Group Inc.; Gibson, Dunn & Crutcher; Skadden, Arps, Slate, Meagher & Flom LLP |
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Date: |
2002 |
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Size: |
Preview shows 24KB of 195KB total |
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Price: |
$55 |
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ID: |
#382507 |
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ASSET PURCHASE AGREEMENT
BY AND AMONG
THE IT GROUP, INC.
CERTAIN SUBSIDIARIES
OF
THE IT GROUP, INC.
AND
THE SHAW GROUP INC.
DATED AS OF JANUARY 23, 2002
{PAGE}
LIST OF SCHEDULES AND EXHIBITS
I. Schedules to be delivered by Sellers
Schedule 2.01(a)..................................................Real Property
Schedule 2.01(b)..............................................Personal Property
Schedule 2.0l(g)........................................Intellectual Properties
Schedule 2.01(i)....................................................Investments
Schedule 3.02(b)......................Requisite Approvals, Consents and Filings
Schedule 3.05...................................Legal and Regulatory Compliance
Schedule 3.06......................................Interim Financial Statements
Schedule 3.09.......................................Subsidiaries and Affiliates
Schedule 3.13.............................................Environmental Matters
Schedule 3.13(f)......................................Underground Storage Tanks
Schedule 3.17................................................Sellers' Contracts
Schedule 3.19................................................Sellers' Employees
Schedule 3.20................................Sellers' Benefit Plans Disclosures
Schedule 3.21........................................Litigation and Proceedings
Schedule 3.31............................................Government Contracting
Schedule 3.32...............................................Accounts Receivable
II. Schedules to be delivered by Buyer
Schedule 1.01...............................................Assumed Liabilities
Schedule 2.02(i)......................................Included Subsidiary Stock
Schedule 2.02(b)............................................Completed Contracts
Schedule 2.02(d)................................................Excluded Assets
Schedule 3.12(b)...........................Permitted Real Property Encumbrances
Schedule 4.08...........................................Actions and Proceedings
Schedule 5.04...................................................Hired Employees
Schedule 5.15(b).............................................Excluded Contracts
III. Exhibits
Exhibit A.................Form of Buyer Protection and Bidding Procedures Order
Exhibit B....................................................Form of Sale Order
Exhibit C....................................Form of Sellers' Counsel's Opinion
Exhibit D.................................Form of Registration Rights Agreement
{PAGE}
TABLE OF CONTENTS
{Table}
{Caption}
Page
----
{S} {C}
1. DEFINITIONS AND REFERENCES..............................................2
1.01. Definitions....................................................2
1.02. Certain References............................................12
2. SALE OF ASSETS AND RELATED MATTERS.....................................12
2.01. Sale of Assets................................................12
2.02. Excluded Assets...............................................14
2.03. Assumed Liabilities...........................................15
2.04. Excluded Liabilities..........................................15
2.05. Purchase Price................................................16
2.06. Purchase Price Adjustment.....................................17
2.08. Addition of Sellers; Delivery of Schedules....................18
3. REPRESENTATIONS AND WARRANTIES OF SELLERS..............................18
3.01. Organization..................................................18
3.02. Powers; Consents; Absence of Conflict, Etc....................19
3.03. Binding Agreement.............................................19
3.04. Subsidiaries, Investments and Third Party Rights..............19
3.05. Legal and Regulatory Compliance...............................20
3.06. Financial Statements..........................................20
3.07. Undisclosed Liabilities.......................................20
3.08. Recent Activities.............................................20
3.09. Subsidiaries; Assets..........................................21
3.10. Equipment.....................................................21
3.11. Title to Personal Property....................................21
3.12. Real Property.................................................21
3.13. Environmental Matters.........................................22
3.14. Intellectual Properties, Computer Software, etc...............23
3.15. Insurance.....................................................23
3.16. Permits and Licenses..........................................23
3.17. Agreements and Commitments....................................24
3.18. Contracts.....................................................25
3.19. Employees and Employee Relations..............................26
3.20. Employee Benefit Plans........................................26
3.21. Litigation and Proceedings....................................28
3.22. Taxes.........................................................28
3.23. Brokers and Finders...........................................29
3.24. Payments......................................................29
3.25. Intentionally Deleted.........................................29
3.26. Customer List.................................................29
3.27. Backlog...................................................... 29
3.28. Investment Experience and Intent; No Registration.............29
{/Table}
i
{PAGE}
{Table}
{S} {C}
3.29. Accredited Investor Status....................................29
3.30. Rule 144......................................................29
3.31. Government Contracting........................................30
3.32. Accounts Receivable...........................................30
3.33. Related Party Transactions....................................31
4. REPRESENTATIONS AND WARRANTIES OF BUYER................................31
4.01. Organization..................................................31
4.02. Corporate Powers; Consents; Absence of Conflicts, Etc.........31
4.03. Binding Agreement.............................................31
4.04. Issuance of Share Consideration...............................31
4.05. Brokers and Finders...........................................32
4.06. Payments......................................................32
4.07. SEC Documents and Other Reports...............................32
4.08. Actions and Proceedings.......................................32
4.09. Capital Structure.............................................33
4.10. Absence of Certain Changes or Events..........................33
4.11. Financing.....................................................33
5. COVENANTS AND AGREEMENTS OF THE PARTIES................................33
5.01. Filing of Sale Motion; Entry of Buyer Protection and
Bidding Procedures Order;
Additional Sellers............................................33
5.02. Operations....................................................34
5.03. Certain Actions...............................................34
5.04. Employee Matters..............................................35
5.05. Access to and Provision of Additional Information.............36
5.06. Post-Closing Maintenance of and Access to Information.........37
5.07. Governmental Authority Approvals: Consents to Assignment......38
5.08. Use of Names..................................................39
5.09. Allocation of Purchase Price for Tax Purposes; Type of
Consideration Paid............................................40
5.10. Further Acts and Assurances...................................40
5.11. Costs and Expenses............................................40
5.12. Insurance Ratings.............................................41
5.13. Fulfillment of Conditions.....................................41
5.14. Release of Encumbrances.......................................41
5.15. Assumed Contracts; Excluded Contracts.........................41
5.16. Bankruptcy Court Approval.....................................42
5.17. Transfer Taxes................................................43
5.18. Listing Application...........................................44
5.19. Bankruptcy Filings............................................44
5.20. Non-Solicitation..............................................44
5.21. Tail Insurance................................................44
5.22. Cooperation with Audited Financial Statements.................45
5.23. Exception.....................................................45
5.24. Use of Office Space and Equipment.............................45
{/Table}
ii
{PAGE}
{Table}
{S} {C}
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS.........................45
6.01. Representations and Warranties; Covenants.....................46
6.02. Adverse Actions or Proceedings................................46
6.03. Pre-Closing Confirmations.....................................46
6.05. No Buyer Material Adverse Change..............................46
6.06. Deliveries at Closing.........................................46
6.07. Sale Order....................................................46
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER...........................46
7.01. Sale Order; Representations and Warranties; Covenants.........46
7.02. Adverse Actions or Proceedings................................47
7.03. Opinion of Sellers' Counsel...................................47
7.04. Deliveries at Closing.........................................48
8. CLOSING; TERMINATION OF AGREEMENT......................................48
8.01. Closing; Buyer Designees; Post-Closing Transfers..............48
8.02. Action of Sellers at Closing..................................49
8.03. Action of Buyer at Closing....................................49
8.04. Termination Prior to Closing; Break-Up Fee and Expense
Reimbursement; Other Compensation.............................50
9. GENERAL................................................................52
9.01. Schedules.....................................................52
9.02. Tax Effect....................................................52
9.03. Time of Essence...............................................52
9.04. Consents, Approvals and Discretion............................53
9.05. Choice of Law; Submission to Jurisdiction.....................53
9.06. Benefit...................................................... 53
9.07. No Third Party Beneficiary....................................53
9.08. Waiver of Breach, Right or Remedy.............................53
9.09. Notices.......................................................53
9.10. Misdirected Payments; Offset Rights...........................54
9.11. Severability..................................................55
9.12. Entire Agreement; Counterparts; Amendment.....................55
9.13. Drafting......................................................55
9.14. Confidentiality...............................................55
9.16. Publicity.....................................................55
9.17. Assignment....................................................55
{/Table}
iii
{PAGE}
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as
of the 23rd day of January, 2002, by and among THE SHAW GROUP INC., a Louisiana
corporation (together with its Designee(s), if any, "Buyer"), and THE IT GROUP,
INC., a Delaware corporation ("ITG") and the Subsidiaries (as defined) of ITG
which are or become signatories to this Agreement in accordance with the terms
hereof (together with ITG, "Sellers").
RECITALS
WHEREAS, pursuant to the Letter of Intent dated January 15, 2002 (the
"Letter of Intent") by and between ITG and Buyer, Buyer and ITG set forth their
non-binding intent to, among other things, negotiate and enter into a definitive
agreement for the sale and purchase of the Assets (as defined) and the
assumption of the Assumed Contracts (as defined) and the Assumed Liabilities (as
defined) of Sellers, as more fully described and defined in this Agreement;
WHEREAS, the Assets are owned by ITG and certain of its direct and
indirect Subsidiaries, and this Agreement is being executed initially by ITG and
Buyer with the agreement of ITG as is set forth herein to cause any of its
Subsidiaries that have any right, title or interest in or to the Assets, to
become a Party to, and one of the Sellers under, this Agreement by an amendment
hereto;
WHEREAS, in order to facilitate the Transaction (as defined), ITG has
filed and has caused or intends to cause certain of the other Sellers to file,
cases under chapter 11 of the Bankruptcy Code (as defined);
WHEREAS, pursuant to this Agreement and in furtherance of the
Transaction, Sellers will covenant pursuant to this Agreement to seek the Buyer
Protection and Bidding Procedures Order (as defined), the Executory Contract
Assumption and Assignment Order (as defined) and the Sale Order (as defined)
from the Bankruptcy Court (as defined);
WHEREAS, the Parties intend to consummate the sale and purchase of the
Assets owned by the Foreign Sellers (as defined) outside of the Bankruptcy Cases
and in compliance with the Legal Requirements (as defined) of such foreign
jurisdictions governing the sale and purchase of such Assets; and
WHEREAS, Sellers desire to sell the Assets to Buyer, and Buyer desires
to purchase the Assets from Sellers, on the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the agreements, covenants, representations and warranties hereinafter set forth,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged and accepted, the Parties, intending to be legally bound,
hereby agree as follows:
1
{PAGE}
1. DEFINITIONS AND REFERENCES
1.01. Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings given:
Accounts Receivable: all accounts receivable of any Seller, of whatever
kind or nature, including all current or deferred rights to payment for projects
completed or commenced or services rendered on or prior to the Closing Date,
whether or not such services have been billed by Sellers as of the Closing Date;
Accredited Investor: as defined in Rule 501 of Regulation D promulgated
under the Securities Act;
Affiliate: any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person, including the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
securities, election or appointment of directors, by contract or otherwise;
Affiliated Group: any affiliated group within the meaning of Code
section 1504 or any similar group defined under a similar provision of state,
local or foreign law;
Agreement: this Asset Purchase Agreement and all exhibits and schedules
attached hereto, as amended, consolidated, supplemented, novated or replaced by
the Parties from time to time;
Assets: all assets, real, personal and mixed, tangible and intangible,
owned by Sellers or leased by Sellers pursuant to capital leases, including the
assets described in Section 2.01 hereof, but excluding in any event the Excluded
Assets; for avoidance of doubt, the term "Assets" means all assets of ITG and
Subsidiaries, other than the Excluded Assets;
Assumed Contracts: all Contracts of Sellers other than the Excluded
Contracts and the Completed Contracts;
Assumed Liabilities: (i) all of Sellers' post-Closing liabilities under
the Assumed Contracts which relate to performance thereunder by Buyer, but,
subject to Buyer's obligation to pay pre-petition cure costs relating to Assumed
Contracts pursuant to clause (ii) of this definition, excluding all post-Closing
obligations under the Assumed Contracts which relate to pre-Closing performance
undertaken by Sellers, (ii) pre-petition and post-petition cure costs and
letters of credit related to the Assumed Contracts, (iii) any amounts owing
under the Credit Agreement (or any Loan Document as defined therein) at Closing,
(iv) fifty percent (50%) of ITG's liability, if any, under the WARN Act related
to a lay-off of employees of the business of Beneco, up to a maximum of fifty
percent (50%) of the amount of sixty (60) days' wages for employees of Beneco;
provided, however, that Buyer shall not assume such WARN Act liability if
Sellers are unable to sell to Buyer, free and clear of all Encumbrances, the
assets of Beneco that have not been designated by Buyer as Excluded Assets, (v)
any other liabilities specifically designated by Buyer, on or prior to the
Closing Date, as Assumed Liabilities on Schedule 1.01, and (vi) any Taxes with
respect to the ownership of the Assets or the operation of the Business after
the Closing Date and excluding specifically any Taxes, other than Taxes
described in clause
2
{PAGE}
(vii), that were accrued or should have been accrued on Sellers' financial
statements, in accordance with GAAP, as of the Closing Date and also excluding
specifically any Taxes attributable to this Transaction, and (vii) property and
similar Taxes to the extent Buyer is liable for such Taxes pursuant to Section
5.17;
Audited Financial Statements: the audited consolidated balance sheet of
ITG as of December 29, 2000 and the audited consolidated statements of
operations and consolidated income and cash flows for the three (3) fiscal years
then ended, together with the notes thereto and the report thereon of Ernst &
Young, LLP independent certified public accountants, and any audited
restatements thereof;
Average Price: as defined in Section 2.05(a);
Bankruptcy Cases: the cases under chapter 11 of the Bankruptcy Code
filed by each of the Sellers (other than the Foreign Sellers) in the Bankruptcy
Court, or any Person who hereafter becomes a Seller and files a case under
chapter 11 of the Bankruptcy Code pursuant to Section 5.01, which cases Sellers
shall seek to administratively consolidate;
Bankruptcy Code: 11 U.S.C. 101 et. seq., and applicable federal rules
of bankruptcy procedure thereunder;
Bankruptcy Court: (a) the United States District Court for the District
of Delaware, (b) the United States District Court for the District of Utah, to
the extent the involuntary bankruptcy case of Beneco is not transferred to the
United States District Court for the District of Delaware, (c) to the extent of
any reference under Section 157 of Title 28 of the United States Code, the unit
of either such District Court constituted under Section 151, Title 28 of the
United States Code or (d) such other Court to which the Bankruptcy Cases may be
transferred;
Beneco: Beneco Enterprises, Inc., a Subsidiary of ITG, and one of the
Sellers;
Bid: means any quotation, bid or proposal by any Seller which, if
accepted or awarded, would lead to a contract with a Government Authority, or a
prime contractor or a higher-tier subcontractor to a Government Authority, for
the sale of goods or the provision of services by any Seller or a contracting
team of which any Seller is a member.
Bid Deadline: the date established in the Buyer Protection and Bidding
Procedures Order as the deadline for submissions of Qualified Bids;
Break-Up Fee and Expense Reimbursement: an amount equal to Six Million
Dollars ($6,000,000);
Business: any and all businesses owned, leased, managed or otherwise
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