exv10w1



 



Exhibit 10.1



FOURTH AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT


between


IIT RESEARCH INSTITUTE


and


ALION SCIENCE AND TECHNOLOGY CORPORATION


 







 



FOURTH AMENDED AND RESTATED ASSET PURCHASE AGREEMENT



     This Fourth Amended and Restated Asset Purchase Agreement (“Agreement”) is
made on November 18, 2002, with effect as of June 4, 2002 (the “Effective
Date”), by and between Alion Science and Technology Corporation (formerly known
as Beagle Holdings, Inc.), a Delaware corporation (“Purchaser”) and IIT
Research Institute, a not-for-profit Illinois corporation (“Seller”) controlled
by the Illinois Institute of Technology, a not-for-profit Illinois corporation
(“IIT”).


PREAMBLE



     WHEREAS, Seller is engaged, directly and indirectly through wholly-owned
subsidiaries, in providing advanced technological and scientific services in
the fields of research and development, engineering, and ordnance and explosive
waste remediation, for governmental and private sponsors (collectively,
“Seller’s Business”);


     WHEREAS, Seller intends to monetize certain of the assets of Seller’s
Business thereby freeing up additional funds that may be used directly in
pursuit of its charitable research and educational programs;


     WHEREAS, Purchaser has been established as a for-profit corporation to
purchase assets from the Seller and operate businesses utilizing these assets;


     WHEREAS, Purchaser and Seller entered into that certain Asset Purchase
Agreement, dated as of June 4, 2002 and amended as of August 2, 2002, as of
August 9, 2002, as of August 16, 2002, as of August 23, 2002 and as of August
30, 2002 (as amended, the “Original Purchase Agreement”), pursuant to which the
Purchaser agreed to purchase from the Seller, and the Seller agreed to sell to
the Purchaser, on the terms and conditions set forth therein, all of the
assets, rights and liabilities pertaining to Seller’s Business with the
exception of (i) the Retained Assets defined and specified in Section 3.01
below, and (ii) the Retained Liabilities defined and specified in Section 3.02
below;


     WHEREAS, Purchaser and Seller entered into that certain Amended and
Restated Asset Purchase Agreement dated September 6, 2002, with effect as of
June 4, 2002, and amended on September 13, 2002 (as amended, the “First
Restated Purchase Agreement”), pursuant to which, the Original Purchase
Agreement was amended and restated;



     WHEREAS, Purchaser
and Seller entered into that certain Second Amended and Restated
Asset Purchase Agreement dated October 3, 2002, with effect as of
June 4, 2002 (the “Second Restated Purchase Agreement”),
pursuant to which, the First Restated Purchase Agreement was amended
and restated;



     WHEREAS, Purchaser and Seller entered into that certain Third Amended and
Restated Asset Purchase Agreement dated October 4, 2002, with effect as of June
4, 2002 (the “Third Restated Purchase Agreement”), pursuant to which, the
Second Restated Purchase Agreement was amended and restated;



     WHEREAS, Purchaser
and Seller desire to amend the Third Restated Purchase
Agreement as set forth herein. The assets and rights of Seller in the Seller’s
Business (other than the Retained Assets), all of which are to be transferred
to Purchaser hereunder, are referred to







 



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 collectively as the “Transferred Assets”, and that portion of the Seller’s
Business other than the Retained Assets and Retained Liabilities is referred to
as the “Transferred Business”; and



     WHEREAS, Purchaser and the Alion Science and Technology Corporation
Employee Ownership, Savings and Investment Trust (the “Trust”) intend to enter
into a stock purchase agreement pursuant to which Purchaser will issue and sell
to the Trust, and the Trust will purchase from Purchaser, shares of Purchaser’s
$0.01 par value per share common stock (“Common Stock”).


     NOW, THEREFORE, Purchaser and Seller (collectively, the “Parties”),
intending to be legally bound, hereby agree as follows:


ARTICLE I


SALE AND PURCHASE AND TRANSFER OF ASSETS


     Upon the terms and subject to the conditions set forth in this Agreement,
at the Closing Date (as hereinafter defined in Article XI), Seller will sell,
convey, assign, transfer and deliver to Purchaser, free and clear of all liens,
encumbrances and adverse charges of any nature except for Permitted Liens as
defined in Section 5.18 below, and Purchaser will purchase and acquire from
Seller, all of Seller’s right, title and interest in and to the Transferred
Assets, wherever located, including the following (in each case, except for the
Retained Assets as specified in Section 3.01 below):


          Section 1.01; Real Property: all real property interests of Seller,
including all parcels and tracts of land in which Seller has a leasehold estate
and all real property operated or used by Seller, and all buildings,
structures, fixtures and other improvements located thereon and all easements
and appurtenances thereto, including those listed on Schedule 1.01;


          Section 1.02; Tangible Personal Property: all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies, materials, vehicles
and other items of tangible personal property (other than inventories, as
referred to hereinafter) of every kind owned or leased by Seller, together with
any express or implied warranty by the manufacturers or sellers or lessors of
any item or component part thereof, and all maintenance records and other
documents relating thereto, existing as of the date hereof, including those
listed in Schedule 1.02 attached hereto, less any such assets disposed of
between the date hereof and the Closing Date in the ordinary course of
business, and plus any such assets acquired prior to the Closing Date;


          Section 1.03; Accounts Receivable; Cash: (i) all trade accounts receivable
and other billed and unbilled rights to payment from sponsors of Seller
(“Accounts Receivable”) pertaining to the Transferred Business and the Life
Sciences Operation (as defined in Section 3.01 below), and the full benefit of
all security for such accounts or rights to payment, including all trade
accounts receivable pertaining to the Transferred Business and the Life
Sciences Operation representing amounts receivable in respect of goods shipped,
products sold or services rendered to sponsors of Seller, (ii) all other
accounts, bank accounts, or notes receivable of Seller pertaining to the
Transferred Business and the Life Sciences Operation and the full benefit of
all security for such accounts, bank accounts, or notes, (iii) any claim,
remedy or other right related to any of the foregoing, and (iv) all cash and
cash equivalents, marketable securities and short-term investments
(collectively, “Cash”) of Seller pertaining to the Transferred Business and the
Life Sciences Operation, each (i) through (iv) existing as of the Closing Date;








 



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          Section 1.04; Inventories: all inventories of Seller, wherever located,
including all finished goods, work in process, raw materials, spare parts and
all other materials and supplies to be used or consumed by Seller in the
production of finished goods existing as of the date hereof, less any such
inventories disposed of between the date hereof and the Closing Date in the
ordinary course of business, and plus any such inventories acquired prior to
the Closing Date;


          Section 1.05; Seller’s Contracts: all of Seller’s contracts, orders and
proposals and all outstanding offers or solicitations made by or to Seller to
enter into any contracts, including those sponsor, teaming, research and
development and license agreements listed in Schedule 1.05 attached hereto,
which Schedule shall be updated as of the Closing Date (collectively, “Seller
Contracts”), and including any positive rate adjustments with respect to such
Seller’s Contracts;


          Section 1.06; Governmental Authorizations: any consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any law and all pending
applications therefor or renewals thereof, in each case to the extent
transferable to Purchaser; “Governmental Body” meaning any (i) nation, region,
state, county, city, town, village, district or other jurisdiction, (ii)
Federal, State, local, municipal, foreign or other government, (iii)
governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department or other entity and any court or other
tribunal), (iv) multinational organization, (v) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, policy,
regulatory or taxing authority or power of any nature, or (vi) official of any
of the foregoing;


          Section 1.07; Intellectual Property: all Federal, State and foreign
registered and unregistered trademarks, service marks, trademark and service
mark registrations, trade names, model designations, copyrights, copyright
registrations, patents, patent registrations, applications for any of the
above, and any other intellectual property used in connection with the
Transferred Business, as well as all goodwill of the Transferred Business
(collectively, “Seller Intellectual Property Rights”), including those listed
in Schedule 1.07 attached hereto, which Schedule shall be updated as of the
Closing Date;


          Section 1.08; Insurance: all rights and interests of Seller pertaining to
the Transferred Business and Assumed Liabilities under each insurance policy
(including any dividends and retroactive positive premium adjustments on such
policies) under which Seller or any of the Transferred Assets or Assumed
Liabilities is or has been insured (collectively, the “Insurance Policies”),
including those listed on Schedule 1.08 attached hereto, which Schedule shall
be updated as of the Closing Date;


          Section 1.09; Software: all of the computer software and programs owned by
Seller together with the source code and application methodology therefor used
in the Transferred Business, together with all available instruction manuals
relating thereto (collectively, “Seller’s Software”);








 



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          Section 1.10; Prepaid Expenses: all prepaid expenses and deposits relating
to the Transferred Business made by or on behalf of Seller, including those
listed on Schedule 1.10 attached hereto;


          Section 1.11; Interests in Other Companies: all capital stock of
corporations, interests in limited liability companies, partnership interests
and joint ventures and interest in any other business entities owned by Seller
as listed on Schedule 1.11 attached hereto; and


          Section 1.12; Other Assets: all other assets of the Seller or of any of
its Affiliates (as defined hereinafter) held for or otherwise relating to the
Transferred Business (other than the Retained Assets described in Section 3.01
below), as at the Closing Date, including those of a type described in Sections
1.01 through 1.11 above, regardless whether such assets are listed in the
Schedules referred to therein, and further including all goodwill, engineering
drawings, design data, correspondence, credit, sales and other records, all
financial statements, general journals and all other books and records (except
corporate minute books, income tax records and other books and records that
Seller is required by law to retain in its possession), computer printouts,
production software programs, source codes, files, vendor lists, price sheets,
distribution and marketing information, advertising materials, stationery,
catalogues, brochures, trade show exhibits, sales and other literature, tax
refunds, plates, supplies, personnel files of employees, labels and trade
rights, inventions, discoveries, manufacturing data, improvements, processes,
formulae (secret or otherwise), proprietary rights and data, trade secrets,
ideas, and know-how, whether patentable or not, and all shop rights of Seller
or of any of its Affiliates held for or otherwise relating to the Transferred
Business. For the purposes of this Agreement, the term “Affiliate” shall have
the meaning attributed to it in Rule 144 of the rules of the Securities and
Exchange Commission adopted pursuant to the Securities Act of 1933, as amended.


ARTICLE II


ASSUMPTION OF LIABILITIES


          Effective as of the Closing Date and subject to the terms and conditions
set forth in this Agreement, Purchaser will assume and agree to discharge all
liabilities of Seller arising out of the Transferred Business, whether known or
unknown, whether absolute, accrued, contingent, choate, inchoate or otherwise,
whether due or to become due, whether or not determined or determinable
(“Liabilities”) which were incurred after October 1, 1997 and were not
fulfilled, settled or waived prior to the Closing Date, but excluding all
Retained Liabilities as defined and specified in Section 3.02 below
(collectively, the “Assumed Liabilities”). The Assumed Liabilities include the
following, in each case except for Retained Liabilities as specified in Section
3.02 below:


          Section 2.01; Trade Creditors: all Liabilities of Seller to trade
creditors for accounts payable which arose in the ordinary course of business
with respect to the Transferred Business for goods or services actually
received by the Seller or its subsidiaries after October 1, 1997 and prior to
the Closing Date;








 



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          Section 2.02; Employees: except as provided in Section 7.09, all
Liabilities of Seller with respect to (i) Transferred Employees (as defined in
Section 7.09.1 below) incurred or arising from acts or omissions after October
1, 1997, (ii) employees of Seller engaged in the Transferred Business whose
employment was terminated prior to the Closing Date (“Terminated Employees”)
incurred or arising from acts or omissions between October 1, 1997 and the
Closing Date (even if asserted after the Closing Date), and (iii) the General Counsel Employment
Agreement (as defined in Section 7.09.1) and any other employment agreements
entered into by Seller with respect to Transferred Employees and Terminated Employees, and
such Liabilities in
(i), (ii)  and (iii) above shall include but not be limited to Liabilities assumed by
Purchaser as described in Section 7.09 and Liabilities incurred or arising from
acts or omissions in said time periods (A) under Seller’s Welfare Plans (as
defined in Section 5.12.1 below), (B) for accrued vacation, sick leave, holiday
pay or other compensation, and (C) for employment discrimination, unemployment
benefits and wrongful termination claims arising from employment by Seller in
the Transferred Business, but notwithstanding the foregoing, Purchaser shall
not assume any Liabilities under or relating to any employment agreements that
are to be terminated under Section 7.09.1 below;


          Section 2.03; Contracts: all Liabilities of Seller which arose after
October 1, 1997 and prior to the Closing Date or which arise after the Closing
Date under Seller’s Contracts;


          Section 2.04; Existing Claims: all Liabilities of Seller for workers
compensation, general liability, product liability and automobile liability
claims which have been made against Seller with respect to the Transferred
Business (but not paid) after October 1, 1997 and prior to the Closing Date or
which arise after the Closing Date as a result of events occurring in the
Transferred Business after October 1, 1997 and prior to the Closing Date, and
all Liabilities arising out of any retroactive premium adjustments assessable
against the Seller for any insurance policies in effect at the Closing Date, if
the adjustments result from events occurring in the Transferred Business after
October 1, 1997 and before the Closing Date;


          Section 2.05; Previous Business of Seller first engaged in after October
1, 1997: all Liabilities of Seller arising out of any business or operation
which Seller first engaged in after October 1, 1997, but which is not part of
Seller’s Business at the date hereof; and


          Section 2.06; Transaction Liabilities: all Liabilities (including any
Liabilities under applicable federal and state securities laws) of Seller
arising in connection with the investment election offered to employees of
Seller to acquire a beneficial interest in Purchaser’s common stock by
investing their eligible rollover or transfer funds in certain Seller’s Plans
(as defined in Section 5.12.1 below) in the employee stock ownership plan
established by Purchaser (“ESOP”) or the other transactions undertaken in connection
therewith (excluding Seller’s Liabilities under this Agreement and the agreements executed in connection
herewith), including without limitation, Liabilities arising from or related to any act of Seller
with respect to Seller’s Employee Pension Plan, Tax Shelter Annuity Plan, HFA’s Profit
Sharing and 401(k) Plan or other Seller’s Plan taken in connection with such election, or
liquidation of participant’s investment therein, or any other act or omission of Purchaser
(or its officers, directors  or employees) the ESOP or its trustee, or any of their respective
agents or representatives that results, directly or indirectly, in a
Liability to Seller in connection with the transactions contemplated
by this Agreement or the transactions described in
the Registration Statement (as defined in Section 7.13).








 



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ARTICLE III


RETAINED ASSETS AND RETAINED LIABILITIES


          Section 3.01; Retained Assets: The following assets of Seller
(collectively, the “Retained Assets”) are not subject to the sale and purchase
contemplated by this Agreement, are excluded from the Transferred Assets, and
shall be retained by Seller (and if an asset which by its nature, function or
purpose is a Retained Asset mistakenly is shown on a Schedule referred to in
Section 1 above, such asset still shall be deemed to be a Retained Asset and
shall be excluded from the Transferred Assets and shall be retained by Seller):


          (a) except as set forth in Section 1.03, all right, title and interest of
Seller in all property and assets (other than Cash and Accounts Receivable),
wherever located, and in all contracts, leases, licenses and agreements, each
used only in Seller’s activities in the field of contract research in
toxicology, microbiology and immunology (“Life Sciences Operation”), which
property and assets include those listed in Schedule 3.01(a);


          (b) the real property interest of Seller in the real estate described in
Schedule 3.01(b)-1, including all buildings, structures, fixtures and other
improvements located thereon (“Chemistry Building”), the real property interest
of Seller in the real estate described in Schedule 3.01(b)-2, including all
buildings, structures, fixtures and other improvements located thereon (“INFAC
Building”), the real property interest of Seller in the real estate described
in Schedule 3.01(b)-3, including all buildings, structures, fixtures and other
improvements located thereon (“KOP”); and the real property interest of Seller
in the real estate described in Schedule 3.01(b)-4, including all buildings,
structures, fixtures and other improvements located thereon (“Life Sciences
Building”);


          (c) all right, title and interest of Seller under the IIT/IITRI
Facilities/Security Services Agreement dated January 1, 2001, between Seller
and IIT relating to the Chemistry Building, the INFAC Building and the Life
Sciences Building;


          (d) all right, title and interest of Seller in all of Seller’s Plans
except as set forth in Section 7.09 below;


          (e) all corporate minute books, income tax records and other books and
records that Seller is required by law to retain in its possession;


          (f) subject to Section 7.05(b) below, Seller’s title to the Cooperative
Agreement with the U.S. Army Aviation and Missile Command, Redstone Arsenal,
Alabama, regarding the Electronic Circuit Board Manufacturing Development
Center (the “Redstone Arsenal Agreement”);


          (g) all rights of Seller under this Agreement or any of the ancillary
agreements to which Seller is a party;








 



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          (h) all right, title and interest of Seller to the trademarks “IIT
Research Institute” and “IITRI”;



          (i)  all right, title and interest of Seller under the letter agreement
dated December 8, 2000, between Seller and Houlihan Lokey Howard &
Zukin Capital;


          (j)  all right, title and interest of Seller under the Professional
Services Agreement dated February 1, 2002, between Seller and
Willamette Management Associates; and


          (k) any interest of Seller in the Indian company Illinois Institute of
Technology (India) Private Limited.


          Section 3.02; Retained Liabilities: The Retained Liabilities will remain
the sole responsibility of and will be retained, paid, performed and discharged
solely by Seller. “Retained Liabilities” will mean each of the following
Liabilities and only the following Liabilities:


          (a) any Liability arising out of or relating to any Retained Asset except
those Liabilities assumed by Purchaser pursuant to Section 2.02;


          (b) any Liability for Taxes (as defined in Section 5.14) arising with
respect to Seller, the Transferred Business or any of the Transferred Assets
for any and all periods ending at, or prior to, the Closing Date;


          (c) any Liability of Seller to IIT or its Affiliates, including any
Liability of Seller to pay, grant, distribute, deliver or transfer to IIT or
otherwise apply all or any part of the consideration received under this
Agreement;


          (d) any Liability arising from Seller, or any Affiliate of Seller,
contributing to or maintaining, or having contributed to or maintained, or
having any obligation to contribute to or maintain any multiemployer plan as
that term is used in Section 3(37) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”);


          (e) any Liability of Seller to Purchaser under this Agreement or any other
document executed in connection herewith;


          (f) any Liability of Seller arising out of or related to any business or
operation which Seller engaged in prior to October 1, 1997 but which is not
part of Seller’s Business at the date hereof;


          (g) any Liability of Seller (whether or not related to or arising from the
Transferred Business) which arose before October 1, 1997 or which arose or
arises after October 1, 1997 as a result of events occurring prior to October
1, 1997;


          (h) any Liability of Seller not directly related to the operation of the
Transferred Business (except as set forth in Section 2.05);


          (i) any Liability with respect to employees of Seller other than as
described in Section 2.02 above, including all Liabilities that are described
in Section 7.09 below as being the responsibility of Seller;


          (j) any Liability relating to or arising under any of Seller’s Plans (as
defined in Section 5.12.1 below) except for any of Seller’s Plans expressly
assumed and continued by Purchaser in accordance with
Section 7.09 and except for Liabilities assumed by Purchaser
pursuant to Section 2.06; and








 



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          (k) any Liability based upon Seller’s acts or omissions occurring after
the Closing Date.


ARTICLE IV


PURCHASE PRICE AND PURCHASE PROCEDURES


          Section 4.01; Purchase Price. The purchase price to be paid by Purchaser
to Seller in consideration for the transfer of ownership in the Transferred
Assets under this Agreement shall be $ 117,100,000 (One Hundred Seventeen
Million and One Hundred Thousand Dollars), subject to Sections 4.01(ii) and
4.02 below (the “Purchase Price”), plus Purchaser’s assumption of the Assumed
Liabilities. Except as set forth in Sections 4.01(ii) and 4.02 below, the
Purchase Price shall be paid to Seller on the Closing Date by delivery of:


          (i) $ 56,000,000 (Fifty-Six Million Dollars) in immediately available
funds paid by wire transfer (as adjusted pursuant to Section 4.02.3, the “Cash
Purchase Price”) to an account designated by Seller in writing;


          (ii) a Mezzanine Investment Note (“Mezzanine Investment Note”) issued by
Purchaser in the principal amount of $21,200,000 (Twenty-One Million Two
Hundred Thousand Dollars) minus, dollar for dollar, the aggregate amount held
by Seller for the benefit of Bahman Atefi (y) under the Retention Agreement
between Bahman Atefi and Seller dated September 1, 2001 (“Atefi Retention
Agreement), and (z) under the Deferred Compensation Plan (as defined in Section
7.09.9 below), in each case as of 5 p.m. EDT on the third business day prior to
the Closing Date, and which such principal amount is subject to adjustment
pursuant to Section 4.02.3(b) below, pursuant to a Mezzanine Note Securities
Purchase Agreement in substantially the form attached hereto as Exhibit 4.01-A
(“Mezzanine Note Securities Purchase Agreement”), and a warrant agreement in
substantially the form attached hereto as Exhibit 4.01-B (“Mezzanine Note
Warrant”), and;


          (iii) a Seller Investment Note (“Seller Investment Note”) issued by
Purchaser in the principal amount of $39,900,000 (Thirty-Nine Million Nine
Hundred Thousand Dollars), which such principal amount is subject to adjustment
pursuant to Section 4.02.3(c) below, pursuant to a Seller Note Securities
Purchase Agreement in substantially the form attached hereto as Exhibit 4.01-C
(“Seller Note Securities Purchase Agreement”), and a warrant agreement in
substantially the form attached hereto as Exhibit 4.01-D (“Seller Note
Warrant”). The principal amount of the Seller Investment Note, as described
above and as adjusted pursuant to Section 4.02.3, shall hereinafter be referred
to as the “Seller Principal Amount”


          Section 4.02; Purchase Price Adjustments. The Purchase Price shall be
adjusted as follows:


          Section 4.02.1; Net Income Purchase Price Adjustment.








 



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          (a) If the Closing (as defined in Article XI below) occurs after October
15, 2002, the Purchase Price shall be adjusted by adding 75% of the net income
(as determined in accordance with United States Generally Accepted Accounting
Principles (“GAAP”), as adjusted to exclude the impact of the expenses in
connection with the transactions contemplated in this Agreement, pursuant to
the provisions of Section 4.02.1(b) below earned by the Seller’s Business from
October 1, 2002 to the Closing Date (“Net Income Purchase Price”). The Net
Income Purchase Price shall be paid to Seller in immediately available funds
paid by wire transfer to an account designated by Seller within 10 days after
the Net Income Calculation has become binding and conclusive between the
Parties pursuant to the provisions of Section 4.02.1(c) below.


          (b) If the Closing occurs after October 15, 2002 then, within 60 days
after the Closing Date, Purchaser will provide to Seller a calculation of the
net income earned by the Seller’s Business from October 1, 2002 to the Closing
Date (the “Net Income Calculation”) prepared in accordance with GAAP applied on
a basis consistent with the preparation of the financial statements of Seller
for the fiscal year ended September 30, 2001.


          (c) If within 15 days following delivery of the Net Income Calculation,
Seller does not deliver to Purchaser written notice of any objection thereto
(which notice must contain a reasonably detailed statement of the basis of all
objections), then the Net Income Calculation will be binding and conclusive on
the Parties and will be used in calculating the Net Income Purchase Price.
Seller and Purchaser will act in good faith to resolve between themselves any
objections to the Net Income Calculation. If they are unable to do so within 30
days after Purchaser’s receipt of Seller’s notice of objection, then the issues
in dispute may be submitted by either Party to Ernst & Young, certified public
accountants (the “Accountants”), for resolution. The Accountants shall be
instructed to review the issues in dispute and render a final determination of
the Net Income Calculation. Each Party will furnish to the Accountants such
work papers and other documents and information relating to the disputed issues
as the Accountants may reasonably request and are available to that Party (or
its independent public accountants), and will be afforded the opportunity to
present to the Accountants any material relating to the disputed issues and to
discuss the issues with the Accountants. The resolution of the issues in
dispute and the determination of the Net Income Calculation by the Accountants,
as set forth in a notice delivered to Purchaser and Seller by the Accountants,
will be binding and conclusive on the Parties, and may be enforced in any court
of competent jurisdiction. Purchaser and Seller will each bear 50% of the
Accountants’ fees and expenses for such resolution.


          Section 4.02.2; LSO Purchase Price Adjustments.


          (a) The Purchase Price shall be adjusted by adding an amount (“LSO
Purchase Price Adjustment”) equal to the aggregate amount of (i) any Cash held
by Seller representing deferred revenues of the Life Sciences Operation as of
the Closing Date, as determined in the LSO Calculation (as defined in Section
4.02.2(b) below)(“LSO Deferred Revenues”), (ii) any accrued payroll
expenses and any accrued accounts payable of the Life Sciences Operation as of
the Closing Date as determined in the LSO Calculation (“LSO Accrued Expenses”), and (iii) $1,000,000 (One Million Dollars).
The LSO Purchase Price Adjustment shall be paid by Purchaser to Seller in the
form of a transfer of Accounts Receivable of the Life Sciences Operation in the
face value amount of








 



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 the LSO Purchase Price Adjustment by Purchaser to Seller within 10 days
after the LSO Calculation has become binding and conclusive between the Parties
pursuant to the provisions of Section 4.02.2(b) below. To the extent the amount
of the LSO Purchase Price Adjustment exceeds the aggregate amount of all
Accounts Receivable of the Life Sciences Operation, such excess portion of the
LSO Purchase Price Adjustment shall be paid by Purchaser to Seller in
immediately available funds paid by wire transfer to an account designated by
Seller in writing within 10 days after the LSO Calculation has become binding
and conclusive between the Parties pursuant to the provisions of Section
4.02.2(b) below.


          (b) Within 60 days after the Closing Date, Seller will provide to
Purchaser a calculation of each of the LSO Deferred Revenues and the LSO
Accrued Expenses as of the Closing Date, prepared in accordance with GAAP
applied on a basis consistent with the preparation of the financial statements
of Seller for the fiscal year ended September 30, 2001 (“LSO Calculation”).


          (c) If within 15 days following delivery of the LSO Calculation, Purchaser
does not deliver to Seller written notice of any objection thereto (which
notice must contain a reasonably detailed statement of the basis of all
objections), then the LSO Calculation will be binding and conclusive on the
Parties and will be used in calculating the LSO Purchase Price Adjustment.
Seller and Purchaser will act in good faith to resolve between themselves any
objections to the LSO Calculation. If they are unable to do so within 30 days
after Seller’s receipt of Purchaser’s notice of objection, then the issues in
dispute may be submitted by either Party to the Accountants for resolution. The
Accountants shall be instructed to review the issues in dispute and render a
final determination of the LSO Calculation. Each Party will furnish to the
Accountants such work papers and other documents and information relating to
the disputed issues as the Accountants may reasonably request and are available
to that Party (or its independent public accountants), and will be afforded the
opportunity to present to the Accountants any material relating to the disputed
issues and to discuss the issues with the Accountants. The resolution of the
issues in dispute and the determination of the LSO Calculation by the
Accountants, as set forth in a notice delivered to Purchaser and Seller by the
Accountants, will be binding and conclusive on the Parties, and may be enforced
in any court of competent jurisdiction. Purchaser and Seller will each bear 50%
of the Accountants’ fees and expenses for such resolution.








 



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          Section 4.03; Allocation of Purchase Price. The Purchaser and the Seller
shall endeavor in good faith to agree upon an allocation among the Transferred
Assets of the sum of the Purchase Price and the Assumed Liabilities consistent
with Section 1060 of the Internal Revenue Code of 1986, as amended, (the
“Code”) and the Treasury Regulations thereunder within ninety (90) days after
the Closing Date. In the event that the Parties cannot agree on a mutually
satisfactory allocation within said time period, Ernst & Young shall, at the
Seller’s and the Purchaser’s joint expense (to be shared equally), determine
the appropriate allocation. The finding of Ernst & Young shall be binding on
the Parties. Upon determination of the allocation by agreement of the Parties
or by binding determination of Ernst & Young, the Purchaser and the Seller
agree to file Internal Revenue Service Form 8594, and all federal, state, local
and foreign (if any) tax returns, in accordance with such allocation. The
Purchaser and the Seller shall report the transactions contemplated by this
Agreement for federal tax and all other tax purposes in a manner consistent
with the allocation determined pursuant to this Section 4.04. The Purchaser and
the Seller agree to provide the other promptly with any information required to
complete Form 8594. The Purchaser and the Seller shall notify and provide the
other with reasonable assistance in the event of an examination, audit or other
proceeding regarding the agreed upon allocation of the Purchase Price.



          Section 4.04; Renegotiation.


          (a)  If, immediately prior to Closing, the total amount of cash available
to the Trust (as a result of the one-time ESOP investment election offered by
Purchaser to Seller’s employees and HFA’s employees) for the Trust’s purchase
of Common Stock from Purchaser, is more than $26,000,000, then the Purchaser
shall be entitled to notify the Seller of its desire to renegotiate the terms
of this Agreement.


          (b)  If, immediately prior to Closing, the total amount of cash available
to the Trust (as a result of the one-time ESOP investment election offered by
Purchaser to Seller’s employees and HFA’s employees) for the Trust’s purchase
of Common Stock from Purchaser, is less than $24,000,000, then the Seller shall
be entitled to notify the Purchaser of its desire to renegotiate the terms of
this Agreement.


          (c)  Following notice by one Party to the other pursuant to either Section
4.04(a) or Section 4.04(b) above, the Parties shall commence renegotiation, in
good faith, of the terms relating to the purchase and sale of the Transferred
Business. If such renegotiation has not resulted in an amendment to this
Agreement executed by both Parties within fourteen (14) days of the sending of
such notice, either Party may terminate this Agreement.


ARTICLE V


REPRESENTATIONS AND WARRANTIES OF SELLER


          All representations and warranties contained herein shall survive the
Closing Date and shall be subject to the terms and conditions set forth in
Article XIV of this Agreement. Seller represents and warrants to Purchaser as
the Effective Date and as of the Closing Date that:


          Section 5.01; Organization, Corporate Standing and Investments. Seller is
a not-for-profit corporation duly organized, validly existing, and in good
standing under the laws of the State of Illinois. As a not-for profit
corporation organized under the laws of State of Illinois, Seller has no shares
authorized, issued or outstanding. Except as set forth in Schedule 1.11, Seller
has no direct or indirect equity interest in or loans to any partnership,
corporation, joint








 



12



 venture, business association or other entity. Seller has full corporate
authority to own, lease and operate the Seller’s Business, and is in good
standing and is qualified to transact business as a foreign corporation in all
states in which the nature of its business or the properties owned by it
require it to qualify to transact business, except for such failures to qualify
as would not have a Material Adverse Effect (as defined hereinafter) on the
Transferred Business or the Transferred Assets.


          As used in this Agreement, the term “Material Adverse Effect” used in
connection with a Party hereof means any event, change or effect that (i) is
materially adverse to the condition (financial or otherwise), assets,
liabilities, businesses, operations, or results of operations of such Party or
of the Transferred Business each taken as a whole, or (ii) adversely affects
the ability of such Party to consummate the transactions contemplated in this
Agreement; provided, however, that (x) the impact of general industry
conditions, or (y) the announcement of the transactions contemplated hereby on
Seller’s or Purchaser’s business will not be deemed to constitute a Material
Adverse Effect with respect to Seller, Purchaser or the Transferred Business,
respectively, for any purpose under this Agreement.


          Section 5.02; Authority; Binding Effect. Seller has the full corporate
power and authority to enter into, execute and deliver this Agreement and all
Exhibits hereto to which Seller is a party (the “Seller Agreements”), and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Seller Agreements and the consummation of
all transactions contemplated herein have been duly authorized by all necessary
corporate action of Seller. No other corporate proceeding on the part of Seller
is necessary to authorize this Agreement and the Seller Agreements or the
performance of Seller’s obligations hereunder or thereunder or the consummation
of the transactions contemplated hereby or thereby. This Agreement and the
Seller Agreements, when executed and delivered by Seller, shall be valid and
binding obligations of Seller and enforceable against Seller in accordance with
the terms hereof and thereof, subject to bankruptcy, insolvency and other
similar laws affecting the rights of creditors generally and except that the
remedies of specific performance, injunction and other forms of equitable
relief may not be available.


          Section 5.03; Conflict. Subject to satisfaction of the conditions set
forth in Articles IX and X, and except as shown in Schedule 5.03, neither the
execution and delivery of this Agreement, nor the execution and delivery of the
Seller Agreements, nor the consummation of the transactions contemplated hereby
or thereby will (i) conflict with or violate, (ii) result in any breach or
default (with or without notice or lapse of time, or both) under, (iii) give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or (iv) result in the creation of a
lien or encumbrance on any of the Transferred Assets pursuant to


          (a) any provision of the Articles of Association or Certificate of
Incorporation or By-laws or other charter documents of Seller;


          (b) any law, rule, regulation, ordinance, order, writ, injunction,
judgment or decree applicable to the Seller or the Transferred Business or by
which any of the Transferred Assets are bound or affected; or








 



13


          (c) any agreement, contract, note, mortgage, indenture, lease, instrument,
permit, concession, franchise or license to which Seller is a party or by which
Seller or the Transferred Business or any of the Transferred Assets may be
bound or affected,


          in each case except where such conflict, violation, breach, default,
termination, cancellation, acceleration, creation or encumbrance would not have
a Material Adverse Effect on Seller or the Transferred Business.


          Section 5.04; Filings and Authority’s Approvals. Subject to satisfaction
of the conditions set forth in Articles IX and X, and except as shown in
Schedule 5.04 attached hereto, Seller is not required to submit any notice,
declaration, report or other filing or registration with, or request the
consent, approval, order or authorization of, any Governmental Body in
connection with the execution, delivery or performance by Seller of this
Agreement or the Seller Agreements or the consummation of the transactions
contemplated hereby or thereby, except where the failure to make such
submission or request would not have a Material Adverse Effect on Seller or the
Transferred Business.


          Section 5.05; Financial Statements. Seller has furnished Purchaser with
copies of the unaudited balance sheet and statement of income of Seller for the
24-week period ending March 15, 2002, and audited balance sheets and statements
of income of Seller for its fiscal years ending September 30, 2001, September
30, 2000 and September 30, 1999 (collectively, the “Seller Financial
Statements”). The Seller Financial Statements have been prepared in accordance
with GAAP consistently applied (except as may be indicated in the notes
thereto), and fairly present in all material respects the financial position of
Seller as at the dates thereof and the results of operations and changes in
financial position for the periods then ended. To the best knowledge of Seller,
all reserves established by Seller with respect to the Transferred Assets and
all management accruals are adequate. There has been no change in Seller’s
accounting policies, except as described in the notes to the Seller Financial
Statements. For purposes of this Agreement, “knowledge of Seller” means the
knowledge of Bahman Atefi, Stacy Mendler, Steve Trichka, C. Randall Crawford,
Barry S. Watson, Jack Hughes and Gary Amstutz, in their capacities as officers of Seller and
after due inquiry of the appropriate personnel of Seller who have internal
responsibility for the subject matter (the “Management Group”).


          Section 5.06; Compliance with Law. Seller is in compliance and has
conducted the Transferred Business so as to comply with all laws, rules and
regulations, judgments, decrees or orders of any Governmental Body applicable
to its operations or with respect to which compliance is a condition of
engaging in the business thereof, except to the extent that failure to comply
would, individually or in the aggregate, not have had and is reasonably
expected not to have a Material Adverse Effect on Seller or the Transferred
Business. There are no material judgments or orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency or
by arbitration) against Seller or against any of the Transferred Assets or the
Transferred Business.


          Section 5.07; No Defaults. Seller is not in violation of any provision of
the Articles, the Certificate of Incorporation or By-laws (or other
organizational or charter








 



14



 document) of Seller. Seller has not received written notice that it is or
would be with the passage of time, in default or violation of any term,
condition or provision of (a) any judgment, decree, order, injunction or
stipulation applicable to Seller or (b) any agreement, note, mortgage,
indenture, contract, lease or instrument, permit, concession, franchise or
license to which Seller is a party or by which Seller or the Transferred Assets
or the Transferred Business may be bound, except for such defaults and
violations that would not have a Material Adverse Effect on Seller or the
Transferred Business.


          Section 5.08; Litigation. Except as shown in Schedule 5.08, there is no
action, suit, proceeding, claim or investigation pending or, to the best
knowledge of Seller, threatened, against Seller which could reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect
on Seller or the Transferred Business or which in any manner challenges or
seeks to prevent, enjoin, alter or delay any of the transactions contemplated
hereby. Schedule 5.08 sets forth with respect to each pending action, suit,
proceeding, claim or investigation to which Seller is a party to the extent
that the aggregate damages claimed for all such complaints exceed $50,000, the
forum, the parties thereto, a brief description of the subject matter thereof
and the amount of damages claimed.


          Section 5.09; No Material Adverse Effect. Since September 30, 2001, Seller
has conducted the Transferred Business in the ordinary course and, except for
the transactions contemplated in this Agreement and except as set forth in
Schedule 5.09, there has not occurred:


          (a) any Material Adverse Effect with respect to the Transferred Assets;


          (b) any amendments or changes in the Articles of Association, Certificate
of Incorporation or By-laws or other charter documents of Seller that adversely
affects the ability of the Seller to consummate the transactions contemplated
in this Agreement;


          (c) any damage, destruction or loss, whether covered by insurance or not,
that could reasonably constitute a Material Adverse Effect on Seller or the
Transferred Business;


          (d) any declaration, setting aside or payment of any distribution of Cash
or other assets of Seller to IIT or any Affiliates of IIT;


          (e) any increase in or modification of the compensation or benefits
payable or to become payable by Seller to any of its directors or employees,
except in the ordinary course of business consistent with past practice;


          (f) any increase in or modification of, or any establishment or adoption
of, any bonus, pension, insurance or other employee benefit plan, program or
arrangement made to, for or with any of its employees, except in the ordinary
course of business consistent with Seller’s past practice;


          (g) any acquisition or sale of a material amount of property or assets of
Seller;








 



15


          (h) any incurrence, assumption or guarantee by Seller of any debt for
borrowed money, except for Seller’s line of credit with First Union National
Bank (the “First Union Line of Credit”) or any replacement line of credit for
same the principal amount of which does not exceed $30 million (the
“Replacement Line of Credit”);


          (i) any creation or assumption by Seller of any mortgage, pledge, security
interest or Lien on any asset (other than liens arising under the First Union
Line of Credit or the Replacement Line of Credit, liens arising under existing
lease financing arrangements, liens arising in the ordinary course of Seller’s
business which in the aggregate are not material and liens for taxes not yet
due and payable);


          (j) any making of any loan, advance or capital contribution to or
investment in any person other than travel loans or advances made to employees
in the ordinary course of business of Seller;


          (k) any entry into, amendment of, relinquishment, termination or
non-renewal by Seller of any contract, lease transaction, commitment or other
right or obligation requiring aggregate payments by Seller in excess of
$250,000 other than (i) in the ordinary course of the Transferred Business or
(ii) in connection with or preparation of this Agreement and the transactions
contemplated herein;


          (l) any transfer or grant of a right under the Seller Intellectual
Property Rights (as defined in Section 5.16), other than those transferred or
granted in the ordinary course of business consistent with past practice;


          (m) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of Seller; or


          (n) any agreement or arrangement made by Seller to take any action which,
if taken prior to the date hereof, would have made any representation or
warranty set forth in this Section 5.09 untrue or incorrect as of the date when
made.


          Section 5.10; Absence of Undisclosed Liabilities. Except as shown in
Schedule 5.10, Seller has no Liabilities of a character which, under GAAP,
should be accrued, shown or disclosed on a balance sheet of Seller (including
the footnotes thereto) except Liabilities (i) adequately provided for in the
Seller Financial Statements, (ii) incurred in the ordinary course of the
Transferred Business and not required under GAAP to be reflected on the Seller
Financial Statements or (iii) incurred in the ordinary course since March 15,
2002 which do not, individually or in the aggregate, have a Material Adverse
Effect on Seller or the Transferred Business.


          Section 5.11; Certain Agreements. Except as shown in Schedule 5.11,
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute,
bonus or otherwise) becoming due to any director or employee of Seller from
Seller or IIT, under any of Seller’s Plans (as defined in








 



16


 Section 5.12.1) or otherwise, (ii) materially increase any benefits or
compensation otherwise payable under any Plan or otherwise, or (iii) result in
the acceleration of the time of payment or vesting of any such benefits or
compensation.


          Section 5.12; ERISA.


          5.12.1 For purposes of this Agreement, the following terms have the
meanings set forth below:


          (a) “Plans” is defined to include any (i) incentive compensation, option,
retention, retirement, pension, group insurance, death benefit, cafeteria,
medical expense reimbursement, dependent care, savings, deferred compensation,
consulting, severance pay or termination pay, vacation pay, welfare or other
employee benefit or fringe benefit plan, program or arrangement; (ii) plan,
program or arrangement which is an “employee pension benefit plan” as such term
is defined in Section 3(2) of ERISA, or (iii) any Welfare Plan (as defined
below).


          (b) “Seller’s Plans” means all Plans sponsored, maintained or contributed
to by Seller or any of its Affiliates that cover any active, former or retired
employee of Seller or any of its Affiliates or with respect to which Seller or
any of its Affiliates has any direct or indirect liability.


          (c) “Welfare Plan” has the meaning given in ERISA Section 3(1).


          5.12.2 Schedule 5.12-A contains a list of all material Seller’s Plans.


          5.12.3 To the extent applicable, the Seller’s Plans comply in all material
respects with the requirements of ERISA and the Code, and any Seller’s Plan
intended to be qualified under Section 401(a) of the Code has either obtained a
favorable determination letter as to its qualified status from the Internal
Revenue Service or still has a remaining period of time under applicable
Treasury Regulations or Internal Revenue Service pronouncements in which to
apply for such determination letter and to make any amendments necessary to
obtain a favorable determination. To the extent any Seller’s Plan with an
existing determination letter from the Internal Revenue Service must be amended
to comply with the applicable requirements of the Tax Reform Act of 1986 and
subsequent legislation, the time period for effecting such amendments will not
expire prior to the Closing Date. No Seller’s Plan is covered by Title IV of
ERISA. Except as set forth in Schedule 5.12-B, neither Seller nor any of its
Affiliates, nor any officer, director or employee of Seller or any of its
Affiliates has incurred any liability or penalty under Sections 4975 through
4980 of the Code or Title I of ERISA, and each Seller’s Plan has been
maintained and administered in all material respects in compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including but not limited to ERISA and the Code, which
are applicable to such Seller’s Plans. No suit, action or other litigation
(excluding claims for benefits incurred in the ordinary course of Seller’s Plan
activities) has been brought, or to the best knowledge of Seller is threatened,
against or with respect to any such Seller’s Plan. All material contributions,
reserves or premium payments required to be made or accrued as of the date
hereof to the Seller’s Plans have been made or accrued. Except to the extent
required under ERISA Section 601 et seq. or Section 4980B of the








 



17


 Code, neither Seller nor any of its Affiliates provides health or welfare
benefits for any retired or former employee or is obligated to provide health
or welfare benefits to any active employee following such employee’s retirement
or other termination of service.


          Section 5.13; Major Contracts. Except as shown in Schedule 5.13 or
Schedule 5.09, Seller is not a party to or subject to:


          (a) any union contract or any employment contract or arrangement providing
for future annual compensation greater than $75,000 per year, written or oral,
with any officer, consultant, director or employee which is not terminable by
it on 30 days’ notice or less without penalty or obligation to make payments
related to such termination, other than (i) (in the case of employees other
than executive officers) such agreements as are not materially different from
standard arrangements offered to employees generally in the ordinary course of
business consistent with Seller’s past practices, copies of which have been
provided to Purchaser and (ii) such agreements as may be imposed or implied by
law;


          (b) any plans, contracts or arrangements which collectively require
aggregate payments by Seller in excess of $20,000 per annum, written or oral,
providing for bonuses, deferred compensation, severance pay or benefits, or the
like;


          (c) any joint venture contract or arrangement or any other agreement which
has involved or is expected to involve a sharing of profits with other persons;


          (d) any agreement under which Seller has granted or received exclusive
rights related to the Transferred Business;


          (e) any lease for real or personal property in which the amount of
payments which Seller is required to make on an annual basis exceeds $100,000;


          (f) except for trade indebtedness incurred in the ordinary course of
business, any instrument evidencing or related in any way to indebtedness of in
the aggregate in excess of $100,000 for borrowed money by way of direct loan,
sale of debt securities, purchase money obligation, conditional sale,
guarantee, or otherwise;


          (g) any material license agreement, either as licensor or licensee
(excluding nonexclusive software licenses granted to sponsors or end-users in
the ordinary course of business) expected by management to involve the payment
of at least $15,000 per year in the aggregate;


          (h) any contract containing covenants purporting to limit Seller’s freedom
to compete in any line of its business in any geographic area; or


          (i) any other agreement, contract or commitment which contains an
obligation for payment by or to Seller of at least $50,000 on a per annum
basis.








 



18


     Each agreement, contract, mortgage, indenture, plan, lease, instrument,
permit, concession, franchise, arrangement, license and commitment listed in
Schedule 5.13 is valid and binding on Seller, as applicable, and is in full
force and effect to the knowledge of Seller, and neither Seller nor, to the
knowledge of Seller, any other party thereto has breached any material
provision of, or is in material default under the terms of, any such agreement,
contract, mortgage, indenture, plan, lease, instrument, permit, concession,
franchise, arrangement, license or commitment.


          Section 5.14; Taxes.


          (a) Except as shown on Schedule 5.14, or as it would not have a Material
Adverse Effect on the Transferred Business or the Transferred Assets, all Tax
Returns (as defined below), statements, reports and forms (including estimated
Tax Returns and reports and information returns and reports) required to be
filed with any Taxing Authority (as defined below) with respect to any Taxable
(as defined below) period ending on or before the Closing Date, by or on behalf
of Seller to the extent such Tax Returns are related to the Transferred
Business or the Transferred Assets (collectively, the “Seller Returns”), have
been or will be filed when due in accordance with all applicable laws
(including any extensions of such due date), and all amounts shown due thereon
have been paid or have been fully accrued on the Seller Financial Statements in
accordance with GAAP. Except to the extent provided for or disclosed in the
Seller Financial Statements (including notes thereto), the Seller Returns
correctly reflect in all material respects (and, as to any Seller Returns not
filed as of the date hereof but filed prior to the Closing Date, will correctly
reflect in all material respects) the Tax liability and status of Seller.
Seller has withheld and paid to the applicable financial institution or
Governmental Body all amounts required to be withheld. Seller (or any member of
any affiliated or combined group of which Seller has been a member) has not
granted any extension or waiver of the limitation period applicable to any
Seller Returns. There is no claim, audit, action, suit, proceeding, or
investigation now pending or (to the best knowledge of Seller) threatened
against or with respect to Seller in connection with the Transferred Business
or the Transferred Assets in respect of any Tax or assessment. No written
notice of deficiency or similar document of any Governmental Body has been
received by Seller with respect to the Transferred Business or the Transferred
Assets, and there are no Liabilities for Taxes (including Liabilities for
interest, additions to tax and penalties thereon and related expenses) with
respect to the issues that have been raised (and are currently pending) by any
Governmental Body that could, if determined adversely, materially affect the
Liability of Seller or Purchaser for Taxes with respect to the Transferred
Business or the Transferred Assets in other Taxable periods. There are no liens
for Taxes upon the assets of Seller except liens for current Taxes not yet due.


          (b) For purposes of this Agreement,



          “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by any
Governmental Body, including, but not limited to, income, excise, property,
sales, use, transfer, franchise, employment, unemployment, railroad retirement,
environmental, payroll, withholding social security, gross receipts, stamp,
real estate, use, business, license, occupation and other taxes, and including
any interest, penalties or additions attributable thereto; and







 



19


          “Tax Return” shall mean any return, report, information return,
declaration, claim for refund or other document (including any schedule or
related or supporting information) required to be supplied to any Governmental
Body with respect to Taxes, including amendments thereto.


          Section 5.15; Interests of Officers and Directors. Except as set forth on
Schedule 5.15, no officer or director of Seller or any “affiliate” or
“associate” (as those terms are defined in Rule 405 promulgated under the
Securities Act) of any such person has had, either directly or indirectly, a
material interest in: (i) any person or entity which purchases from or sells,
licenses or furnishes to the Transferred Business more than $60,000 per year in
goods, property, technology or intellectual or other property rights or
services; (ii) any contract or agreement in an amount greater than $60,000 per
year relating to the Transferred Business; or (iii) any property, real or
personal, tangible or intangible, used in or pertaining to the Transferred
Business, including any interest in the Seller Intellectual Property Rights,
except for rights under any Plan.


          Section 5.16; Seller’s Intellectual Property Rights; Seller’s Software.
Except as shown in Schedule 5.16


          (a) Seller owns or is otherwise entitled to exercise, free and clear of
any liens, encumbrances or security interests, all right, title and interest in
and to the Seller Intellectual Property Rights and the Seller’s Software;


          (b) to the best knowledge of Seller, Seller has no infringement liability
with respect to any patent, trademark, service mark, copyright or other
intellectual property right of another, and no claims with respect to the
Seller Intellectual Property Rights or the Seller’s Software have been asserted
or, to the best knowledge of Seller, after reasonable investigation, are
threatened in writing by any person, and Seller knows of no claims (i) to the
effect that the manufacture, sale or use of any product or service as now used
or offered or proposed for use or sale by Seller infringes any third parties’
copyright, patent, trade secret, or other intellectual property right, (ii)
against the use by Seller of any Seller Intellectual Property Rights or the
Seller’s Software, or (iii) challenging the ownership, validity or
effectiveness of any of the Seller Intellectual Property Rights or the Seller’s
Software;


          (c) to the best knowledge of Seller, there has not been and there is not
now any material unauthorized use, infringement or misappropriation of any of
the Seller Intellectual Property Rights or the Seller’s Software by any third
party, including any employee or former employee of Seller; and


          (d) no Seller Intellectual Property Right nor the Seller’s Software is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting in any manner the licensing thereof by Seller. Seller has not
entered into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise to enforce rights with
respect to, any Seller Intellectual Property Right or the Seller’s Software.
Subject to the march-in rights of any Governmental Body, as applicable, Seller
has the exclusive right to file, prosecute and








 



20



 maintain all applications and registrations with respect to the Seller
Intellectual Property Rights and the Seller’s Software.


          Section 5.17; Restrictions on Business Activities. There is no Seller
Contract, judgment, injunction, order or decree binding upon Seller which has
or could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of Seller regarding the Transferred Business or
the conduct of the Transferred Business by Seller as currently conducted.








 



21


          Section 5.18; Title to Transferred Assets; Liens; Condition of Equipment.


     (a)  Seller has, and upon consummation of the transactions contemplated
hereby, Purchaser will have, good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of the Transferred
Assets, free and clear of any liens, except as reflected in the Seller
Financial Statements, or Schedule 5.18, or except for Permitted Liens. For
purposes of this Agreement, “Permitted Liens” means (i) liens for taxes,
assessments or other governmental charges or levies the payment of which is not
due (other than taxes, assessments or other governmental charges or levies that
are Retained Liabilities); (ii) landlord’s liens in favor of the landlord of
the leased real property and liens of carriers, warehousemen, mechanics,
materialmen and other liens imposed by law incurred in the ordinary course of
business for amounts not yet due or being contested in good faith by
appropriate proceedings; (iii) liens incurred or deposits made in the ordinary
course of business in connection with worker’s compensation, unemployment
insurance and other types of social security; and (iv) such imperfections of
title and encumbrances which are not substantial in character, amount or
extent, and which do not materially detract from the value, or materially
interfere with the present use, of the property subject thereto or affected
thereby.


          (b) The equipment owned or leased by Seller and to be transferred to
Purchaser hereunder, taken as a whole, (i) will enable the Purchaser to conduct
the Transferred Business as currently conducted, (ii) is suitable for the uses
to which it is currently employed, (iii) is in good operating condition, normal
wear and tear excepted, (iv) is regularly and properly maintained, (v) is not
obsolete, dangerous or in need of renewal or replacement, except for renewal or
replacement in the ordinary course of business, and (vi) is free from any
inherent defects, except, with respect to clauses (ii) through (v) above, as
would not in the aggregate have a Material Adverse Effect on Seller or the
Transferred Business.


          Section 5.19; Governmental Authorizations and Licenses. Schedule 5.19
contains a list of all authorizations and licenses by a Governmental Body held
by Seller. Seller is the holder of all licenses, authorizations, permits,
concessions, certificates and other franchises of any Governmental Body
required to operate its business, except where the failure to hold such
licenses, authorizations, permits, concessions, certificates or franchises
would not have a Material Adverse Effect on Seller or the Transferred Business
(collectively, the “Licenses”). The Licenses are in full force and effect.
There is not now pending, and to the best knowledge of Seller, there is not
threatened in writing, any action, suit, investigation or proceeding against
Seller before any Governmental Body with respect to the Licenses, nor is there
any issued or outstanding written notice, order or complaint with respect to
the violation by Seller of the terms of any License or any rule or regulation
applicable thereto.


          Section 5.20; Environmental Matters. Except as listed in Schedule 5.20:


          (a) to the best of knowledge of Seller, there is no substance that is
regulated by any Governmental Body or that has been designated by any
Governmental Body to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment (a “Hazardous








 



22



 Material”) in, on or under any property that Seller has at any time owned,
operated, occupied or leased.


          (b) to the best of knowledge of Seller, Seller has not transported,
stored, used, manufactured, released or exposed its employees or any other
person to any Hazardous Material in violation of any applicable statute, rule,
regulation, order or law.


          (c) Seller has obtained all permits, licenses and other authorizations
(“Environmental Permits”) required to be obtained by any of them under the laws
of any Governmental Body relating to pollution or protection of the environment
(collectively, “Environmental Laws”), except where the failure to comply or
obtain such Environmental Permits would not have a Material Adverse Effect on
Seller or the Transferred Business. All Environmental Permits are in full force
and effect. Seller (i) is in compliance in all material respects with all terms
and conditions of the Environmental Permits and (ii) is in compliance in all
material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws or contained in any regulation, code, plan,
order, decree, judgment, notice or demand letter issued, entered, promulgated
or approved thereunder. Seller has not received any written notice and is not
aware of any past or present condition or practice of the Transferred Business
or the Transferred Assets which forms or could form the basis of any claim,
action, suit, proceeding, hearing or investigation against Seller or the
Transferred Business arising out of the manufacture, processing, distribution,
use, treatment, storage, spill, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
Hazardous Material.


          Section 5.21; Insurance. There is no material claim by Seller pending
under any of the Insurance Policies as to which coverage has been questioned,
denied or disputed in writing by the underwriters of such policies or bonds.
All premiums payable under all such material Insurance Policies have been paid
and Seller is otherwise in compliance with the terms of such policies and bonds
(or other policies and bonds providing substantially similar insurance
coverage). Seller has not received any written notice of any threatened
termination of, or material premium increase with respect to, any of its
material Insurance Policies.


          Section 5.22; Labor Matters. Seller is in compliance in all material
respects with all currently applicable laws and regulations respecting
employment, discrimination in employment, terms and conditions of employment
and wages and hours and occupational safety and health and employment
practices, and is not engaged in any unfair labor practice. In the past three
years, Seller has not received any written notice from any Governmental Body,
and there has not been asserted before any Governmental Body, any claim, action
or proceeding to which Seller is a party or involving Seller or the Transferred
Business, and there is neither pending nor, to Seller’s best knowledge,
threatened any investigation or hearing concerning Seller or the Transferred
Business, in each case arising out of or based upon any such laws, regulations
or practices.


          Section 5.23; Questionable Payments. Neither Seller nor, to its best
knowledge, any director, officer or other employee of Seller, has: (i) made any
payments or provided








 



23


 services or other favors in the United States or in any foreign country in
order to obtain preferential treatment or consideration by any Governmental
Body with respect to any aspect of the business of Seller; or (ii) made any
political contributions which would not be lawful under the laws of the United
States and the foreign country in which such payments were made. Seller nor, to
its best knowledge, any director, officer or other employee of Seller nor, to
the best knowledge of Seller, any sponsor or supplier of Seller has been the
subject of any inquiry or investigation by any Governmental Body in connection
with payments or benefits or other favors to or for the benefit of any
governmental or armed services official, agent, representative or employee with
respect to any aspect of the Transferred Business with respect to any political
contribution.


          Section 5.24; Brokers. Other than Houlihan Lokey Howard & Zukin, no
broker, finder or investment banker engaged by Seller is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement.


          Section 5.25; Relationships. Seller has not been notified by any of the
ten largest sponsors or ten largest suppliers of the Transferred Business (as
listed in Schedule 5.25) that any of them intend to cancel, discontinue,
materially change or curtail their relationships with Seller or the Transferred
Business.


          Section 5.26; Disclosure. No representation or warranty made by Seller in
this Agreement, nor any document, written information, statement, financial
statement, certificate, Schedule or Exhibit prepared and furnished or to be
prepared and furnished by Seller or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, 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 or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished. To the best knowledge of Seller after reasonable inquiry, there is
no event, fact or condition that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect on Seller or the Transferred
Business that has not been set forth in this Agreement or in the Schedule
hereunder or made available to Purchaser.


          Section 5.27; Disclaimer. The representations and warranties set forth in
this Article V are the only representations and warranties made by Seller with
respect to the Transferred Business and none of the representations and
warranties shall include or be deemed to refer to the Retained Assets or the
Retained Liabilities.


ARTICLE VI


REPRESENTATIONS AND WARRANTIES OF PURCHASER


          All representations and warranties contained herein shall survive the
Closing, and shall be subject to the terms and conditions set forth in Article
XIV of this Agreement. As of the Effective Date and as of the Closing Date,
Purchaser represents and warrants to Seller as follows:








 



24


          Section 6.01; Organization; Corporate Standing. Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. Purchaser has full corporate authority to own, lease and
operate its business, and is in good standing and is qualified to transact
business as a foreign corporation in all states in which the nature of its
business or the properties owned by it require it to qualify to transact
business, except for such failures to qualify as would not have a Material
Adverse Effect on Purchaser.


          Section 6.02; Authority. Purchaser has the full corporate power and
authority to enter into, execute, deliver, and perform this Agreement and all
Exhibits hereto to which Purchaser is a party (the “Purchaser Agreements”), and
to perform its obligations hereunder and thereunder. The execution, delivery
and performance of this Agreement and the Purchaser Agreements and the
consummation of all transactions contemplated herein have been duly authorized
by all necessary corporate action of Purchaser. No other corporate proceeding
on the part of Purchaser is necessary to authorize this Agreement and the
Purchaser Agreements or the performance of Purchaser’s obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby. This Agreement and the Purchaser Agreements, when executed and
delivered by Purchaser, shall be valid and binding obligations of Purchaser,
enforceable against it in accordance with the terms hereof and thereof, subject
to bankruptcy, insolvency and other similar laws affecting the rights of
creditors generally and except that the remedies of specific performance,
injunction and other forms of equitable relief may not be available.


          Section 6.03; Conflict. Subject to satisfaction of the conditions set
forth in Articles IX and X, and except as shown in Schedule 6.03, neither the
execution and delivery of this Agreement nor the execution and delivery of the
Purchaser Agreements nor the consummation of the transactions contemplated
hereby or thereby will (i) conflict with or violate, (ii) result in any breach
or default (with or without notice or lapse of time, or both) under, (iii) give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or (iv) result in the creation of a
lien or encumbrance on any of Purchaser’s assets pursuant to:


          (a) any provision of the Certificate of Incorporation or By-laws or other
charter documents of Purchaser;


          (b) to Purchaser’s knowledge, any law, rule, regulation, ordinance, order,
writ, injunction, judgment or decree applicable to Purchaser; or


          (c) any agreement, contract, note, mortgage, indenture, lease, instrument,
permit, concession, franchise or license to which Purchaser is a party or by
which Purchaser or Purchaser’s assets may be bound or affected,


     in each case except where such conflict, violation, breach, default,
termination, cancellation, acceleration, creation or encumbrance would not have
a Material Adverse Effect on Purchaser.








 



25


          Section 6.04; Filings and Authority’s Approvals. Subject to satisfaction
of the conditions set forth in Articles IX and X, and except as shown in
Schedule 6.04 attached hereto, Purchaser is not required to submit any notice,
declaration, report or other filing or registration with, or request the
consent, approval, order or authorization of, any Governmental Body in
connection with the execution, delivery or performance by Purchaser of this
Agreement or the Purchaser Agreements or the consummation of the transactions
contemplated hereby or thereby, except where the failure to make such
submission or request would not have a Material Adverse Effect on Purchaser.


          Section 6.05; Business of Purchaser. Purchaser has been organized for the
purpose of acquiring the Transferred Business and has not engaged in any other
business (other than organizational and financing activities) or succeeded to
the assets, business or liabilities of any other person or entity.


          Section 6.06; Financing. Purchaser and LaSalle Bank, National Association
each have executed and delivered a commitment letter evidencing the terms and
conditions on which LaSalle Bank, National Association would make up to
$60,000,000 of financing available to Purchaser to enable Purchaser to
consummate the transactions hereunder. Purchaser has provided Seller with a
true and correct copy of such commitment letter and shall provide Seller with
any amendments or supplements thereto.


          Section 6.07; Disclaimer. The representations and warranties set forth in
this Article VI are the only representations and warranties made by Purchaser
and none of the representations and warranties shall include or be deemed to
refer to the Transferred Business, the Transferred Assets, the Assumed
Liabilities, the Retained Assets or the Retained Liabilities.



          Section 6.08; Compliance with Law. Purchaser is in compliance and has
conducted its business so as to comply with all laws, rules and regulations,
judgments, decrees or orders of any Governmental Body applicable to its
operations or with respect to which compliance is a condition of engaging in
the business thereof, except to the extent that failure to comply would,
individually or in the aggregate, not have had and is reasonably expected not
to have a Material Adverse Effect on Purchaser or its business. There are no
material judgments or orders, injunctions, decrees, stipulations or awards
(whether rendered by a court or administrative agency or by arbitration)
against Purchaser.


ARTICLE VII


COVENANTS


          Section 7.01; Information and Access. From the Effective Date and
continuing until the Closing Date, Seller and Purchaser each shall afford and,
with respect to clause (ii) below, such Party shall cause its independent
auditors to afford, (i) upon and subject to execution of this Agreement as may
be required by the independent accountants of Purchaser and Seller, to the
officers, independent auditors, counsel and other representatives of the other
Party reasonable access to the properties, books, records (including Tax
Returns filed and those in preparation) and personnel of such Party in order
that the other Party may have a full opportunity to make such investigation as
it reasonably desires to make of such Party and (ii) to the independent
auditors of the other Party, reasonable access to the audit work papers and
other records of the independent auditors of such Party. Additionally, Seller
and Purchaser each will permit the other Party to make such reasonable
inspections of such Party and their respective operations during normal
business hours as the other Party may reasonably require, and Seller and
Purchaser each will cause its officers to furnish the other Party with such
financial and operating data and other information with respect to the business
and properties of such Party as the other Party may from time to time
reasonably request. No investigation pursuant to this Section 7.01 shall affect
or








 



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 otherwise obviate or diminish any representations and warranties of any
Party or conditions to the obligations of any Party.


          Section 7.02; Conduct of Business of the Parties. During the period from
the Effective Date and continuing until the Closing Date, Seller and Purchaser
agree that, except in connection with the transactions contemplated by this
Agreement, Seller shall conduct the Transferred Business and the Life Sciences
Operation in the ordinary and usual course consistent with past practice and
shall use reasonable efforts to maintain and preserve intact its business
organizations, keep available the services of its officers and employees and to
maintain satisfactory relations with licensors, licensees, suppliers,
contractors, distributors, sponsors and others having business relationships
with it. Without limiting the generality of the foregoing and except as
expressly contemplated by this Agreement, prior to the Closing Date, Seller
shall not, without the prior written consent of Purchaser:


               (a) declare, set aside or make any distribution of Cash or assets of
Seller to IIT or any Affiliate of IIT, or enter into any other business
arrangement or contract requiring any payment to IIT or any Affiliate of IIT;


               (b) cause or permit any amendments to its Articles of Association or
Certificate of Incorporation or By-laws or other charter documents;


               (c) acquire or agree to acquire by merging or consolidating with, or by
purchasing any material portion of the capital stock or assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, for a consideration in the
aggregate exceeding $5,000,000;


               (d) sell, lease, pledge, license or otherwise dispose of or encumber any
of the Transferred Assets, except in the ordinary course of business consistent
with past practice (including, without limitation, any indebtedness owed to it
or any claims held by it, except for pledges and encumbrances in connection
with the Replacement Line of Credit;


               (e) except for the Replacement Line of Credit, incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any of its
debt securities or guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of others, or make loans or advances;


               (f) pay, discharge or satisfy any claims, liabilities or obligations for
borrowed money, other than the payment, discharge or satisfaction of
liabilities in the ordinary course of business consistent with past practice
and liabilities reflected or reserved against in the Seller Financial
Statements (or the notes thereto) of Seller, and other than the repayment of
the First Union Line of Credit if it is replaced by the Replacement Line of
Credit, and other than the payment of liabilities under the earn-out provisions
of that certain Asset Purchase Agreement by and between AB Technologies, Inc.
and Seller dated February 7, 2000;


               (g) adopt or amend any Plan, or enter into or amend any employment,
severance, special pay arrangement with respect to termination of employment or
other similar








 



27


 arrangements or agreements with any of its directors, officers or
employees or increase the salaries or wage rates or benefits of its employees
other than pursuant to employee reviews consistent with Seller’s past
practices, and except where the effect of such adoptions, amendments and
enterings do not result in costs to Seller exceeding an amount of $500,000 in
the aggregate;


               (h) except in the ordinary course of business consistent with past
practices, transfer to any person or entity any rights to the Seller
Intellectual Property Rights;


               (i) enter into or amend any agreements pursuant to which any other party
is granted exclusive rights with respect to the Transferred Business or the
Transferred Assets;


               (j) violate, amend or otherwise modify the terms of any of the contracts
set forth on the Schedules, except in the ordinary course of business or if it
does not result in a Material Adverse Effect to the Seller or the Transferred
Business;


               (k) change the accounting methods or practices followed by Seller,
including any change in any assumption underlying, or method of calculating,
any bad debt, contingency or other reserve, except as may be required by
changes in GAAP or by Securities Exchange Commission requirements, make or
change any material Tax election, adopt or change any Tax accounting method,
file any amendment to a material Tax Return, enter into any material closing
agreement, settle any material Tax claim or assessment, or consent to any
extension or waiver of the limitation period applicable to any material Tax
claim or assessment, without the prior consent of Purchaser, which consent will
not be unreasonably withheld (for purposes of this covenant a “material” Tax
Return, closing agreement, Tax claim or assessment shall mean a Tax Liability
with respect to each such item in excess of $50,000);


               (l) take any action that would result in any of the representations and
warranties of Seller set forth in this Agreement becoming untrue and that would
have a Material Adverse Effect on the Seller or the Transferred Business;


               (m) enter into any capital expenditure commitment in excess of $100,000
per annum;


               (n) enter into any contract, agreement, commitment or arrangement to do
any of the foregoing.


          Section 7.03; Advice of Changes. Seller and Purchaser shall confer on a
regular and frequent basis with each other, report on operational matters and
promptly advise the other orally and in writing of any change or event having,
or which, insofar as can reasonably be foreseen, could result in, a Material
Adverse Effect with respect to a Party. Seller and Purchaser shall promptly
provide the other (or its counsel) copies of all filings made by such Party
with any Governmental Body in connection with this Agreement and the
transactions contemplated hereby.








 



28


          Section 7.04; Agreement to Cooperate; Further Assurance.


          (a) Seller shall use its best efforts to comply promptly with all legal
requirements which may be imposed on Seller with respect to this Agreement and
shall take all reasonable actions necessary to cooperate promptly with and
furnish information to Purchaser in connection with any such requirements
imposed upon Purchaser in connection with this Agreement. Seller shall use its
best efforts (i) to obtain (and will take all reasonable actions necessary to
promptly cooperate with Purchaser in obtaining) any consent, authorization,
order or approval of, or any exemption by, any Governmental Body, or other
third party, required to be obtained or made by any Party in connection with
this Agreement or the taking of any action contemplated by this Agreement; (ii)
to lift, rescind or mitigate the effect of any injunction or restraining order
or other order adversely affecting the ability of Seller to consummate the
transactions contemplated hereby; (iii) to fulfill all conditions applicable to
Seller pursuant to this Agreement; and (iv) to prevent, with respect to a
threatened or pending temporary, preliminary or permanent injunction or other
order, decree or ruling or statute, rule, regulation or executive order, the
entry, enactment or promulgation thereof, as the case may be.


          (b) Purchaser shall use its best efforts to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and
shall take all reasonable actions necessary to cooperate promptly with and
furnish information to Seller in connection with any such requirements imposed
upon Seller in connection with the Agreement. Purchaser shall use its best
efforts (i) to obtain (and will take all reasonable actions necessary to
promptly cooperate with Seller in obtaining) any consent, authorization, order
or approval of, or any exemption by, any Governmental Body, or other third
party, required to be obtained or made by any Party in connection with the
taking of any action contemplated by this Agreement; (ii) to lift, rescind or
mitigate the effect of any injunction or restraining order or other order
adversely affecting the ability of Purchaser to consummate the transactions
contemplated hereby; (iii) to fulfill all conditions applicable to Purchaser
pursuant to this Agreement; and (iv) to prevent, with respect to a threatened
or pending temporary, preliminary or permanent injunction or other order,
decree or ruling or statute, rule, regulation or executive order, the entry,
enactment or promulgation thereof, as the case may be; provided, however, that
Purchaser shall not be obligated to dispose of or hold separate or otherwise
relinquish all or a material portion of the Transferred Business or Transferred
Assets or to change its business in any material way.


          (c) Subject to the terms and conditions of this Agreement, each of the
Parties shall use its best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations in order to effect the conditions precedent to
the Closing of this Agreement and to consummate and make effective as promptly
as practicable the transactions contemplated by this Agreement.


          (d) Seller and Purchaser shall negotiate in good faith and use their best
efforts to agree on the definitive documents which are to be delivered and
executed by and between the Parties at the Closing Date in order to consummate
the transactions contemplated in this Agreement (collectively, the “Closing
Documents”).









 



29


          (e) Seller hereby agrees that, from time to time, at Purchaser’s request
and without further consideration, Seller and its Affiliates shall execute and
deliver such further documents, including the novation of certain Seller
Contracts, and take such other action as Purchaser may reasonably require to
more effectively transfer to, and vest in Purchaser, and to put Purchaser in
possession of, the goodwill, assets, properties and contractual and other
rights to be transferred and delivered hereunder.


          Section 7.05; Consents; Other Restrictions.


          (a) Seller and Purchaser shall each use its best efforts to obtain the
consent and approval of, or effect the notification of or filing with, each
person or authority whose consent or approval is required in order to permit
the consummation of the transactions contemplated by this Agreement, including
(i) the final approval of the transactions contemplated under this Agreement by
the independent trustee of the ESOP, and (ii) the consent to assign or novate
any Seller’s Contract, and to enable Purchaser to conduct and operate the
Transferred Business substantially as presently conducted by Seller. Seller and
Purchaser agree that the legal instruments whereby Seller requests the required
consent of the third parties to the assignment of the Seller’s Contracts and of
any other Transferred Asset, as the case may be, to the Purchaser shall be in
the forms attached hereto as Exhibits 12.01.1, 12.01.2, and 12.01.3, and Seller
shall use its best efforts to obtain each such third parties’ consent to such
assignment. Purchaser covenants and agrees to cooperate with Seller and assist
Seller in obtaining such consents and approvals including the furnishing of
financial and other information reasonably required by the person whose consent
or approval is being sought. After the Closing Date, and until such consent has
been obtained, Seller shall continue to hold title to all such non-assigned
Transferred Assets, including the Seller’s Contracts, but Purchaser shall use
such Transferred Assets and perform such non-assigned Seller’s Contracts on
Seller’s behalf, and Purchaser shall be entitled to the benefits of, and shall
be responsible for the Liabilities arising under, such non-assigned Transferred
Assets after the Closing Date. If, nevertheless, the Parties do not obtain the
approval of the third party necessary in order to carry out the transfer of any
Seller’s Contract or other Transferred Asset within a six month period after
the Closing Date, or if there are other restrictions of any reason not allowing
a transfer within that time period, Seller agrees to, upon Purchaser’s request
and subject to its approval, divest, terminate or liquidate such Transferred
Asset in the manner instructed by Purchaser and transfer the funds received
from such divestiture, termination or liquidation to Purchaser immediately
after receipt thereof.


          (b) After the Closing Date, Purchaser shall use the Transferred Assets to
perform the Redstone Arsenal Agreement on Seller’s behalf, and Purchaser shall
be entitled to the benefits of, and shall be responsible for the Liabilities
arising under, the Redstone Arsenal Agreement after the Closing Date.


          Section 7.06; Joint Notice; Confidentiality; Public Announcements. Prior
to the Closing Date, Seller and Purchaser shall cooperate in giving joint
notice of the execution of this Agreement to each sponsor, creditor and
supplier of the Transferred Business. Prior to and after the Closing Date,
Seller shall hold in confidence, and shall cause its employees, agents,
representatives, attorneys and accountants to hold in confidence, all
information (unless required by law) related to the Transferred Business and
Transferred Assets, for as long as such








 



30




 information remains confidential. The Parties shall cooperate with each
other prior to releasing information concerning this Agreement and the
transactions contemplated hereby, shall furnish to the other Parties drafts of
all press releases or other public announcements prior to publication and shall
obtain the consent of the other Parties prior to the issuance of press releases
or the release of other public announcements; provided that any Party hereto
shall have the right, with prior written notice delivered to such other Parties
where a written response is required (i) to furnish any information to any
Governmental Body or (ii) to issue any other release, in each case when in the
reasonable opinion of its counsel it is legally required to do so; and provided
further that Seller shall have the right, without notice to the other Parties,
to furnish any information necessary to obtain the Replacement Line of Credit,
and Purchaser shall have the right, without notice to the other Parties, to
furnish any information necessary to obtain the commercial bank and the ESOP
investment equity referred to in Section 9.08.


          Section 7.07; Notification of Certain Matters. Seller shall give prompt
notice to Purchaser within five (5) business days of its knowledge of, and
Purchaser shall give prompt notice to Seller, within five (5) business days of
its knowledge of the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be likely to cause (a) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Closing
Date, or (b) any material failure of Seller or Purchaser, as the case may be,
or of any officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement.


          Section 7.08; Subsequent Amendments of Schedules. Each Party shall have
the right after the date hereof to deliver to the other Parties written
amendments or updates to the applicable schedules referred to in this Agreement
(“Schedules”), and to create new Schedules for sections not yet providing for a
Schedule; provided, that no Party shall have an obligation to consummate the
transactions contemplated hereby in the event that any such disclosure includes
(i) events or actions occurring prior to the date hereof or occurring
subsequent to the date of such updated Schedule or new Schedule; or (ii) events
or actions that, individually or in the aggregate, could be reasonably likely
to have a Material Adverse Effect on Seller, the Transferred Business or the
Purchaser. To the extent that any such amendment or new Schedule does not
disclose any event or condition that, individually or in the aggregate, could
be reasonably likely to have a Material Adverse Effect on Seller, the
Transferred Business or the Purchaser, as the case may be, such amendment shall
be deemed accepted by the other Party if the other Party does not object within
three (3) days after receipt, and the relevant Schedule shall be deemed amended
or updated accordingly thereby.


          Section 7.09; Transferred and Retained Employees.


          7.09.1 Purchaser shall offer employment to all of Seller’s employees on
the Closing Date, except for those employees working exclusively for or in
support of the Life Sciences Operation. Purchaser shall be entitled to require,
as conditions of employment, that a response to the offers of employment be
received no later than five business days prior to the Closing Date, and that
any employee who has an employment agreement with Seller must voluntarily
terminate such employment agreement with Seller with effect at the Closing
Date; provided, however, that Stephen Trichka shall not be required to terminate
his employment agreement with Seller (the “General Counsel Employment Agreement”),
and Gary Amstutz and James Revetta shall not be required to terminate their employment
agreements with Seller, in order to become Transferred Employees (as defined below).








 



31


Each employee who accepts Purchaser’s offer of employment (hereinafter
referred to as “Transferred Employees”) shall become an employee of Purchaser
as of the Closing Date and shall be given credit for the same years of service
that they have as Seller’s employees, for purpose of all employee benefit
plans, programs, and policies, and fringe benefits of the Purchaser in which
they become participants for purposes of eligibility and vesting. Effective as
of the Closing Date, Purchaser shall credit each Transferred Employee under
Purchaser’s vacation policy with the number of unpaid vacation days accrued as
of the Closing Date for the then current accrual period under Seller’s vacation
policy.


          7.09.2 Purchaser shall include the Transferred Employees and their
eligible dependents in Purchaser’s Welfare Plans (as defined in Section 5.12.1
above) as of the Closing Date and such Welfare Plans shall waive any
preexisting condition limitations and shall honor any deductible and out of
pocket expenses incurred by such Transferred Employees and their eligible
dependents under Seller’s corresponding Welfare Plans during the portion of the
applicable Plan year preceding the Closing Date.


          7.09.3 Effective as of the Closing Date, all Transferred Employees shall
cease to be covered by Seller’s Welfare Plans except to the extent otherwise
provided by the applicable Welfare Plan, or required by applicable law. Seller
shall retain responsibility for providing group health continuation coverage as
required by Section 4980B of the Code (“Continuation Coverage”) to employees
other than Transferred Employees. Effective as of the Closing Date, Purchaser
shall provide such Continuation Coverage to the Transferred Employees who
terminate employment subsequent to the Closing Date to the extent required by
law. Seller shall have no liabilities or obligations to any Transferred
Employees or to the Purchaser with respect to any of Purchaser’s Welfare Plans.


          7.09.4 In order that Seller may comply with the provisions of ERISA and
any other requirements of law or regulation with respect to Seller’s Plans,
Purchaser agrees to provide Seller access to all employment records relating to
the Transferred Employees, as may be necessary for such compliance and
Purchaser agrees to cooperate with Seller in connection with any governmental
audits or reporting requirements of such Seller’s Plans and make available to
Seller for reasonable periods of time, employees of Purchaser who possess
knowledge (if any) concerning the administration of such Seller’s Plans. All
access to records and personnel shall be during the regular business hours of
Purchaser and upon reasonable notice.


          7.09.5 Without limiting the generality of Section 3.02(j) of this
Agreement, after the Closing Date, Seller shall retain (i) the sponsorship of
the IIT Research Institute Employees’ Pension Plan (the “IITRI Pension Plan”),
the IIT Research Institute Employees’ Tax Sheltered Annuity Plan (the “IITRI
Annuity Plan”) and their related trusts and any other trust or funding
arrangement established or maintained with respect to such plans, (ii) all
Liabilities relating to or arising out of benefits accrued or resulting from
claims incurred by or on behalf of any individuals with respect to benefits
under the IITRI Pension Plan and the IITRI Annuity Plan, other than Liabilities described in
Section 2.06 which are assumed by Purchaser, (iii) all Liabilities
relating to the ongoing sponsorship and continuation of the IITRI Pension Plan
and the IITRI Annuity Plan, and (iv) all Liabilities relating to any future
termination of the IITRI Pension Plan and the IITRI Annuity Plan. After the
Closing Date, Seller








 



32



 shall either cause the IITRI Pension Plan to continue to meet the
requirements of a “qualified plan” under Section 401(a) of the Code and a
tax-exempt trust under Section 501(a) of the Code, or cause such Plan to be
terminated in a tax-qualified manner. After the Closing Date, Seller shall
either cause the IITRI Annuity Plan to continue to meet the requirements of a
tax-deferred annuity plan under Section 403(b) of the Code, or cause such Plan
to be terminated in accordance with the requirements of Section 403(b) of the
Code.


          7.09.6 Seller shall cause the account balances of all Transferred
Employees under the IITRI Pension Plan to be immediately fully vested effective
as of the Closing Date.


          7.09.7 Effective as of the Closing Date, Seller shall spin-off and
transfer to Purchaser, and Purchaser shall assume and continue, the portion of
Seller’s Health Care Flexible Spending Plan and Dependent Care Assistance Plan
attributable to Transferred Employees, including the account balances (whether
positive or negative) of the Transferred Employees under Seller’s Health Care
Flexible Spending Plan and Dependent Care Assistance Plan.


          7.09.8 Effective as of the Closing Date, Seller shall transfer to
Purchaser, and Purchaser shall assume and continue, the IIT Research Institute
Flexible Option Plan (the “Flexible Option Plan”). Prior to the Closing Date,
Seller shall take, or cause to be taken, such action as is necessary, including
the preparation and execution of any appropriate amendments of the Flexible
Option Plan, to effectuate the transfer of the Flexible Option Plan to
Purchaser. Purchaser shall have the same right to amend and terminate the
Flexible Option Plan as Seller had immediately before the Closing Date.


          7.09.9 Effective as of the Closing Date, Seller shall assign,
and Purchaser shall assume, all of Seller’s rights, liabilities and obligations under the General Counsel Employment Agreement subject to the consent of
Stephen Trichka, under Seller's employment agreements with Gary Amstutz and James Revetta, subject to such employee's consent.


          7.09.10 Seller shall transfer to Purchaser the assets listed on Schedule
7.09 in connection with Liabilities accrued as of the Closing Date under the
Flexible Option Plan and the Deferred Compensation Plan.


          7.09.11 Seller and Purchaser acknowledge and agree that Human Factors
Applications, Inc. (“HFA”) currently maintains the Human Factors Applications,
Inc. Profit Sharing and 401(k) Plan (the “HFA 401(k) Plan”) and that HFA will
continue to maintain the HFA 401(k) Plan on and after the Closing Date, with
the same right to amend and terminate the HFA 401(k) Plan as HFA had
immediately before the Closing Date.


          Section 7.10; Taxes.


          7.10.1 Seller shall be responsible for and shall pay one-half of all
transfer taxes, if any, on the Transferred Assets conveyed to Purchaser
hereunder, and Purchaser shall be








 



33


responsible for and shall pay one-half of all transfer taxes, if any, on assets
conveyed to Purchaser hereunder. The term “transfer taxes”, as used herein,
shall not include Income Taxes. For purposes of this Agreement, “Income Tax”
means any federal, state, local or foreign tax based upon, measured by or
calculated with respect to net income, profits or receipts (including, without
limitation, gross receipts taxes, capital gains taxes and minimum taxes),
together with any interest, penalties, or additions to such tax.


          7.10.2 After the Closing Date, Seller shall indemnify and hold Purchaser
harmless against any and all costs imposed on Purchaser with respect to any
Taxes, duties or levies, or with respect to any Liability for any Taxes, duties
or levies, that are (i) incurred by the Transferred Business or on any of the
Transferred Assets at or prior to the Closing Date, or (ii) incurred by Seller
or any of its Affiliates whether prior to, at or after the Closing Date. Such
indemnity obligation shall include but not be limited to the costs of the Taxes
due, interest, penalties, attorneys’ fees, and costs of investigation and
defense.


          7.10.3 After the Closing Date, Purchaser shall indemnify and hold Seller
harmless against any and all costs imposed on Seller with respect to any Taxes,
duties or levies, or with respect to any Liability for any Taxes, duties or
levies, that are incurred by the Transferred Business or on any of the
Transferred Assets after the Closing Date (except for those Taxes, duties or
levies described in Section 7.10.2 above). Such indemnity obligation shall
include but not be limited to the costs of the Taxes due, interest, penalties,
attorneys’ fees, and costs of investigation and defense.


          Section 7.11; Lockbox. Seller shall maintain a lockbox in the name of
Purchaser at LaSalle Bank National Association (or such other bank as Purchaser
may designate) which lockbox will be under the sole control of Purchaser, and
the bank in which the lockbox is maintained shall be subject only to
Purchaser’s instruction regarding the lockbox. Seller shall deposit in such
lockbox account all collections of trade accounts receivable existing as of the
Closing Date and other receipts attributable to the Transferred Business which
it receives following the Closing Date. Seller will have no ownership rights in
the lockbox and will have no right to negotiate or assert ownership rights in
and to funds therein. Purchaser will be responsible for all fees associated
with such lockbox. These arrangements are consistent with Seller’s obligation
under this Agreement to merely facilitate billing and collections for
Purchaser, and not negotiate any checks payable to Seller which are Transferred
Assets.


          Section 7.12; Records and Documents. For a period of five years following
the Closing Date, each Party shall grant the other and its representatives, at
the other Party’s request, access to and the right to make copies of such
Party’s records and documents relating to the Transferred Business and the
transactions contemplated under this Agreement, as may be necessary or useful
in connection with the other Party’s business after the Closing Date. If,
during such period, a Party wishes to dispose of any of such records or
documents, such Party shall first give the other Party 60 days prior written
notice during which period the other Party shall have the right to take such
records and documents.


          Section 7.13; Registration Statement. Purchaser shall provide Seller, for
Seller’s review and comment, with drafts of Purchaser’s Form S-1 with respect
to the one-time ESOP investment election (the “Registration Statement”).








 



34


 The Form S-1 shall not be filed
with the Securities Exchange Commission until after comments thereon have been
provided by Seller unless Seller does not provide its comments within 2 (two)
days of its receipt of the draft Form S-1.


          Section 7.14; Trade Name. Under the terms and conditions set forth herein,
Seller hereby grants to Purchaser a non-exclusive, worldwide and royalty-free
right to use the trade names “IIT Research Institute” and “IITRI” solely in
connection with the Transferred Business and only in conjunction with the name
of Purchaser (or any other name of Purchaser) for a period of twelve (12)
months immediately following the Closing Date.


          Section 7.15; Liability for Pre-Closing Breach of Covenants.
Notwithstanding the foregoing provisions, Seller shall not have any liability
after the Closing Date for monetary damages to Purchaser, under Article XIV or
otherwise, for any breach of the covenants contained in this Article VII
committed by Seller prior to the Closing Date, unless such breach was
authorized by, ordered by, or committed by Seller’s board of directors or any
of Seller’s members. Nothing herein shall (i) prevent Purchaser from being able
to enforce its rights to injunctive relief or other equitable relief to the
fullest extent allowed by applicable law, with respect to all of the provisions
of this Article VII and any breaches thereof by Seller, or (ii) otherwise limit
or restrict the rights of Purchaser, including its right not to proceed with
the Closing if any of Seller’s covenants contained in this Article VII are
breached.


          Section 7.16; Assistance with Separation of Life Sciences Operations from
the Transferred Business. Prior to the Closing Date, Seller shall (i) deliver
to Life Sciences Operation all policies, procedures, personnel and employment
records, security clearance information, manuals, files, book, records, and
documents used exclusively in or relating exclusively to the business of the
Life Sciences Operation or the employees engaged exclusively in the Life
Sciences Operation, (ii) assist and cooperate with Life Sciences Operation in
transferring accounting and other information related exclusively to the Life
Sciences Operation from the “JAMIS” accounting system utilized by Seller to
such other accounting system that Life Sciences Operation may elect to
implement, and (iii) assist and cooperate with Life Sciences Operation in
transferring any other information relating exclusively to the Life Sciences
Operation in computer or other accounting systems of Seller to a system to be
used by the Life Sciences Operation following the Closing Date. From time to
time, after the Closing Date, at the Seller’s request, Purchaser and its
employees shall use its reasonable commercial efforts to deliver, or assist
Seller in locating, such files, records and documents Following the Closing
Date, Purchaser also agrees to (i) send Seller copies of information that
relates to the Life Sciences Operation and that is contained in Purchaser’s
computer or accounting systems relating to Life Sciences Operation, and (ii)
make Purchaser’s employees available, with reasonable advance notice and during
normal business hours, to the Seller for the purpose of providing reasonable
assistance in connection with the orderly separation of the Life Sciences
Operation from the Transferred Business.


ARTICLE VIII


RESERVED








 



35


ARTICLE IX


CONDITIONS PRECEDENT TO CLOSING BY PURCHASER


          Purchaser shall not be required to proceed on the Closing Date with the
transactions contemplated by this Agreement unless the following conditions
precedent shall have been fulfilled and satisfied, or shall have been waived in
writing by Purchaser:


          Section 9.01. Each of the representations and warranties of Seller
contained herein shall be true and correct as of the Effective Date and as of
the Closing Date as if then originally made;


          Section 9.02. Seller shall have fully complied with all of its covenants
contained herein, on or prior to the Closing Date;


          Section 9.03. Seller shall have delivered to Purchaser a certificate of an
officer of Seller, dated the Closing Date, certifying to the best of the
knowledge and belief of such officer to the accuracy in all material respects
of Seller’s representations and warranties contained herein, and to the
fulfillment of Seller’s covenants and conditions precedent to the Purchaser’s
obligations to consummate the purchase contemplated by this Agreement;


          Section 9.04. Seller shall have delivered to Purchaser a guarantee, duly
executed by an officer of IIT and dated the Closing Date, in substantially the
form attached hereto as Exhibit 9.04 (the “Guarantee”);


          Section 9.05. Purchaser shall have received the approval of the
transactions contemplated under this Agreement by the independent trustee of
the ESOP;


          Section 9.06. Seller shall not be the subject of a petition for
reorganization or liquidation under the Federal bankruptcy laws, or under state
insolvency laws, nor shall an assignment for the benefit of creditors or any
similar protective proceeding or act or event of bankruptcy have occurred;


          Section 9.07. A Lease Agreement shall have been executed between IIT and
Purchaser (“Lease Agreement”);


          Section 9.08. Purchaser shall have obtained (i) an equity
investment of at least $24,000,000 from the ESOP, and (ii) a loan from a commercial bank of at least 5 years in length and on terms and conditions
satisfactory to it and Seller, such that the sum of the principal amount of the loan and the equity
investment from the ESOP shall be at least $56,000,000;


          Section 9.09. No preliminary or permanent injunction or other order shall
have been issued by any court or by any governmental or regulatory agency, body
or authority which prohibits the consummation of the transactions contemplated
by this Agreement and its Exhibits and which is in effect at the Closing Date;








 



36


          Section 9.10. Purchaser shall not have received from Seller a copy of a
notice or other document giving evidence that the Attorney General of the State
of Illinois disapproves, challenges or reserves its rights with respect to the
transactions contemplated under this Agreement;


          Section 9.11. Purchaser shall have obtained an opinion of McDermott, Will
& Emery, counsel to Seller, addressed to Purchaser and reasonably acceptable to
Purchaser;


          Section 9.12. A website linking agreement shall have executed by and
between Purchaser and Seller, in substantially the form attached hereto as
Exhibit 9.12 (“Linking Agreement”);


          Section 9.13. An agreement providing for registration rights, director
nomination rights and voting rights (“Rights Agreement”) in substantially the
form attached hereto as Exhibit 9.13, shall have been executed by and between
Purchaser and Seller;


          Section 9.14. The parties to each of the employment agreements listed on
Schedule 5.13(a) above have executed written documents terminating such
employment agreements;


          Section 9.15. Seller shall have received a written acknowledgment and
waiver from Bahman Atefi, Stacy Mendler, Steve Trichka, C. Randall Crawford and
Barry S. Watson by which he or she acknowledges that the transactions
contemplated by this Agreement do not entitle him or her to any Value Added
Payment under each respective employee’s employment agreement with Seller and
waives any right to assert any such claim, provided that each of these
employees has been granted a new employment agreement by Purchaser which is
reasonably acceptable to such employee and the parties hereto;



          Section 9.16. Seller shall have received a written acknowledgment and waiver from Stephen Trichka by which he
acknowledges that the transactions contemplated by this Agreement do not entitle him to any Value Added Payment under the General Counsel Employment Agreement and waives any right to assert any
such claim, provided that the General Counsel Employment Agreement has been assigned by Seller to, and assumed by, Purchaser with the consent of Stephen Trichka;


          Section 9.17. Bahman Atefi and Seller shall have executed an agreement by
which Bahman Atefi forfeits his rights to all amounts held by Seller for his
benefit under the Atefi Retention Agreement and the IIT Research Institute Deferred Compensation Plan (the “Deferred Compensation Plan”)
as of 5 p.m. EDT on the third business day prior to the Closing Date, provided
that Bahman Atefi and Purchaser shall have entered into a deferred compensation
arrangement which is reasonably acceptable to Bahman Atefi and the parties
hereto and with payment terms similar to those of the Mezzanine Note Securities
Purchase Agreement and the Mezzanine Note Warrant;


          Section 9.18.
Neither Seller nor Purchaser shall have sent the other a notice, pursuant to Section 4.04(a) or
Section 4.04(b), indicating its desire to renegotiate the terms of this Agreement.








 



37


ARTICLE X


CONDITIONS PRECEDENT TO CLOSING BY SELLER


          Seller shall not be required to proceed on the Closing Date with the
transactions contemplated by this Agreement unless the following conditions
precedent shall have been fulfilled and satisfied, or shall have been waived in
writing by Seller:


          Section 10.01. Each of the representations and warranties of Purchaser
contained herein shall be true and correct as of the Effective Date and as of
the Closing Date as if then originally made;


          Section 10.02. Purchaser shall have fully complied with all of its
covenants contained herein, on or prior to the Closing Date;


          Section 10.03. Purchaser shall have delivered to Seller a certificate of
an officer of Purchaser, dated the Closing Date, certifying to the best of the
knowledge and belief of such officer to the accuracy in all material respects
of the Purchaser’s representations and warranties, and to the fulfillment of
the Purchaser’s covenants and conditions precedent to the Seller’s obligations
to consummate the purchase contemplated by this Agreement;


          Section 10.04. Seller shall have received certificates of Bahman Atefi,
Stacy Mendler, Steve Trichka, C. Randall Crawford, Barry S. Watson, Jack Hughes and Gary
Amstutz, each acting as officers of Seller, dated the Closing Date, certifying
to the best of the knowledge and belief of each of such officer to the accuracy
in all material respects of the Seller’s representations and warranties, and to
the fulfillment of the Seller’s covenants and conditions precedent to the
Seller’s obligations to consummate the purchase contemplated by this Agreement;


          Section 10.05. Seller shall not have received a notice or other document
giving evidence that the Attorney General of the State of Illinois disapproves,
challenges or reserves its rights with respect to the transactions contemplated
under this Agreement;


          Section 10.06. Purchaser shall not be the subject of a petition for
reorganization or liquidation under the Federal bankruptcy laws, or under state
insolvency laws, nor shall an assignment for the benefit of creditors or any
similar protective proceeding or act or event of bankruptcy have occurred;


          Section 10.07. The Lease Agreement shall have been executed by and between
Purchaser and IIT;


          Section 10.08. No preliminary or permanent injunction or other order shall
have been issued by any court or by any governmental or regulatory agency, body
or authority which prohibits the consummation the transactions contemplated by
this Agreement and its Exhibits and which is in effect at the Closing Date;







 



38


          Section 10.09. Seller shall have received from its financial advisor a
fairness opinion with respect to the sale of the Transferred Business;


          Section 10.10. Opinions of Baker & McKenzie, counsel to Purchaser,
addressed to Seller and reasonably acceptable to Seller, including an opinion
in substantially the form attached hereto as Exhibit 10.10-C;


          Section 10.11. The Linking Agreement shall have been executed by and
between Purchaser and Seller;


          Section 10.12. The Rights Agreement shall have executed by and between
Purchaser and Seller;


          Section 10.13. The parties to each of the employment agreements listed on
Schedule 5.13(a) above have executed written documents terminating such
employment agreements;


          Section 10.14. Purchaser shall have received a written acknowledgment and
waiver from Bahman Atefi, Stacy Mendler, C. Randall Crawford and
Barry S. Watson by which he or she acknowledges that the transactions
contemplated by this Agreement do not entitle him or her to any Value Added
Payment of each respective employee’s employment agreement with Seller and
waives any right to assert any such claim, provided that each of these
employees has been granted a new employment agreement by Purchaser which is
reasonably acceptable to such employee and the parties hereto;



          Section 10.15. Purchaser shall have received a written acknowledgment and waiver from Stephen Trichka by which he
acknowledges that the transactions contemplated by this Agreement do not entitle him to any Value Added Payment
under the General Counsel Employment Agreement and waives any right to assert any such claim, provided
that the General Counsel Employment Agreement has been assigned by Seller to, and assumed by, Purchaser with the
consent of Stephen Trichka;



          Section 10.16. Bahman Atefi and Seller shall have executed an agreement by
which Bahman Atefi forfeits his rights to all amounts held by Seller for his
benefit under the Atefi Retention Agreement and the Deferred Compensation Plan
as of 5 p.m. EDT on the third business day prior to the Closing Date, provided
that Bahman Atefi and Purchaser shall have entered into a deferred compensation
arrangement which is reasonably acceptable to Bahman Atefi and the parties
hereto and with payment terms similar to those of the Mezzanine Note Securities
Purchase Agreement and the Mezzanine Note Warrant; and



          
Section 10.17. Neither Seller nor Purchaser shall have sent the other a notice, pursuant to Section 4.04(a) or Section 4.04(b), indicating
its desire to renegotiate the terms of this Agreement; and




          Section 10.18. Purchaser and the Trust shall have
entered into a stock purchase agreement on or before the Closing Date.


ARTICLE XI


CLOSING








 



39


          The actual transfer of title to and possession of the goodwill, assets,
properties and rights to be acquired under this Agreement (the “Closing”) shall
take place on the “Closing Date”, which shall be within five business days
following the last to occur of the conditions set forth in Articles IX and X.
The Closing shall take place at the offices of Baker & McKenzie in Chicago. The
Closing Date may be set at such other date or at such other place as shall be
fixed by written agreement of the parties hereto.


ARTICLE XII


OBLIGATIONS AT THE CLOSING


          Section 12.01; Seller’s Obligations. At the Closing Date Seller shall


          12.01.1 duly execute and deliver to Purchaser a Bill of Sale in
substantially the form attached hereto as Exhibit 12.01.1;


          12.01.2 duly execute and deliver to Purchaser an assignment of Seller’s
Contracts in substantially the form attached hereto as Exhibit 12.01.2;


          12.01.3 duly execute and deliver to Purchaser a patent, copyright and
trademark assignment in substantially the form attached hereto as Exhibit
12.01.3;


          12.01.4 duly execute and deliver to Purchaser assignments of all permits, licenses and
other consents or authorizations and all other necessary endorsements,
assignments and other good and sufficient instruments of transfer, in form and
substance sufficient to effectively vest in Purchaser full right, title and
interest in and to the goodwill, assets, properties and rights to be
transferred hereunder, free and clear of all liens, encumbrances, and adverse
charges or claims by third parties. All such instruments of assignment and
transfer shall contain a warranty of unencumbered title by Seller and shall
provide for full subrogation to the rights of Seller under warranties of title
made by others;


          12.01.5 deliver to Purchaser a certificate signed by an officer of Seller,
to the effect that the representations and warranties made by Seller hereunder
are true and correct as of the Closing Date (or, if any such representation or
warranty is untrue or incorrect, specifying the respect in which it is untrue
or incorrect), and that Seller has fulfilled its covenants hereunder as of the
Closing Date (or, if any such covenant is unfulfilled, specifying the respect
in which it is unfulfilled), and that Seller has fulfilled the conditions
precedent to Purchaser’s obligations to consummate the purchase contemplated by
this Agreement (or, if any such condition is unfulfilled, specifying the
respect in which it is unfulfilled);


          12.01.6 deliver to Purchaser a copy of the resolution adopted by Seller’s
members, certified by its Secretary, authorizing the execution and delivery of
this Agreement and the Seller Agreements and the performance of its obligations
hereunder and thereunder;








 



40


          12.01.7 deliver to Purchaser the Lease Agreement duly executed by IIT for
the lease of the Chemistry Building; and


          12.01.8 deliver to Purchaser the Guarantee referred to in Section 9.04
duly executed by an officer of IIT.


          Section 12.02; Purchaser’s Obligations. At the Closing Date Purchaser
shall


          12.02.1 deliver to Seller $ 56,000,000 in immediately available funds by
wire transfer to an account designated in writing by Seller at least two
business days before Closing;


          12.02.2 duly execute and deliver to Seller the Mezzanine Note Securities
Purchase Agreement;


          12.02.3 duly execute and deliver to Seller the Mezzanine Warrant;


          12.02.4 duly execute and deliver to Seller the Seller Note Securities
Purchase Agreement;


          12.02.5 duly execute and deliver to Seller the Seller Note Warrant;


          12.02.6 deliver to Seller a certificate signed by an officer of Purchaser,
to the effect that the representations and warranties made by Purchaser
hereunder are true and correct as of the Closing Date (or, if any such
representation or warranty is untrue or incorrect, specifying the respect in
which it is untrue or incorrect), and that Purchaser has fulfilled its
covenants hereunder as of the Closing Date (or, if any such covenant is
unfulfilled, specifying the respect in which it is unfulfilled), and that
Purchaser has fulfilled the conditions precedent to Seller’s obligations to
consummate the purchase contemplated by this Agreement (or, if any such
condition is unfulfilled, specifying the respect in which it is unfulfilled);


          12.02.7 deliver to Seller a copy of resolutions adopted by the Board of
Directors of Purchaser certified by its Secretary authorizing the execution and
delivery of this Agreement and the Purchaser Agreements and the performance by
Purchaser of its obligations hereunder and thereunder;


          12.02.8 deliver to Seller the Lease Agreement executed by Purchaser for
the lease of the Chemistry Building; and


          12.02.9 deliver to Seller a copy of the Stock Purchase Agreement between
Purchaser and the ESOP.


ARTICLE XIII


EXPENSES WITH RESPECT TO TRANSACTION








 



41


          Purchaser agrees that it will pay all costs and expenses incurred by it in
connection with this transaction, including the fees and expenses of its
attorneys, accountants and financial advisers. Purchaser further agrees that it
will pay all out-of-pocket costs and expenses incurred by Seller in connection
with this transaction not exceeding $2,300,000 (Two Million Three Hundred Thousand Dollars) in the
aggregate, including the fees and expenses of its attorneys, accountants and
financial advisers (excluding any brokers and finders other than Houlihan Lokey
Howard & Zukin).


ARTICLE XIV


INDEMNIFICATION


          Section 14.01; Mutual Indemnification.


          14.01.1 From and after the Closing Date, Seller hereby indemnifies
Purchaser and its Affiliates against, and agrees to hold Purchaser and its
Affiliates harmless from, all Losses (as hereinafter defined) resulting from
(i) a breach by Seller of any representation, warranty, covenant or agreement
under this Agreement, and/or (ii) any Retained Liabilities.


          14.01.2 From and after the Closing, Purchaser hereby indemnifies Seller
and its Affiliates against, and agrees to hold Seller and its Affiliates
harmless from, all Losses resulting from (i) a breach by Purchaser of any
representation, warranty, covenant or agreement under this Agreement, and/or
(ii) any Assumed Liabilities.


          14.01.3 As used in this Article XIV, the term “Indemnifying Party” shall
mean the person or persons against whom a party (the “Indemnified Party”) makes
a claim for indemnification hereunder. The Indemnified Party shall give written
notice to the Indemnifying Party of any claim or event known to it which does
or may give rise to a claim by the Indemnified Party against the Indemnifying
Party based on this Agreement, stating the nature and basis of said claims or
events and the amounts thereof, to the extent known. Such notice shall be given
in accordance with Article XIV hereof. The giving of such notice shall be a
condition precedent to any liability of the Indemnifying Party hereunder. Such
notice shall be given reasonably promptly, but the fact that the Indemnified
Party failed to give notice with reasonable promptness shall not defeat a claim
made pursuant hereto except to the extent that the Indemnifying Party can
establish that it has been injured by such delay.


          14.01.4 In the event of any claim, action, suit or proceeding made or
brought by third parties against the Indemnified Party, the Indemnified Party
shall give written notice of such claim, action, suit or proceeding as
described in (c) above, with a copy of the claim, process and all legal
pleadings with respect thereto. After notification, the Indemnifying Party
shall participate in, and jointly with any other Indemnifying Party similarly
notified, assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Party at the time of such assumption. The Indemnifying Party
shall have the right to settle or compromise any such








 



42



 claim, action, suit or proceeding. The Indemnified Party shall not be
entitled to settle or compromise any such claim, action, suit or proceeding
without the Indemnifying Party’s prior written consent, such consent not to be
unreasonably withheld. The Indemnified Party shall have the right to employ its
own counsel and such counsel may participate in such action, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party, when
and as incurred, unless (i) the employment of counsel by such Indemnified Party
has been authorized by the Indemnifying Party, or (ii) the Indemnifying Party
shall not in fact have employed counsel to assume the defense of such action
reasonably satisfactory to the Indemnified Party at the time of the
Indemnifying Party’s assumption of the defense, or (iii) the Indemnified Party
has been advised by its counsel that there is or could reasonably be expected
to be a conflict of interest by reason of having common counsel in any such
proceeding. If clause (ii) of the preceding sentence shall be applicable, then
counsel for the Indemnified Party shall have the right to direct the defense of
such claim, action, suit or proceeding on behalf of the Indemnified Party. The
Indemnified Party and the Indemnifying Party, as the case may be, shall be kept
fully informed of such claim, action, suit or proceeding at all stages thereof
whether or not such party is represented by its own counsel.


          14.01.5 As used in this Agreement, “Losses” means any and all claims,
demands, costs, losses, damages and liabilities. The term “Losses” includes
reasonable attorneys’ fees and costs incurred in the investigation and defense
of a claim, demand, cost, loss or liability, provided however that the term
“Losses” does not include remuneration to the Indemnified Party’s employees for
time spent investigating or litigating any claim or demand.


          Section 14.02; Certain Limitations. The liability of Seller or Purchaser,
as applicable, for claims under this Agreement (except for any claims for
adjustments of the Purchase Price pursuant to Section 4.02 above) shall be
limited by the following:


          14.02.1 After the date that is the 18-month anniversary of the Closing
Date, no Party shall have any further obligations under this Article XIV with
regard to a breach of representations and warranties contained in this
Agreement, except for (i) Losses with respect to which the Indemnified Party
has given the Indemnifying Party written notice prior to such date and (ii)
Losses with respect to breaches of the representations and warranties in
Sections 5.01, 5.02, 5.03, 5.12, 5.14, 5.18(a), 5.20, 6.01, 6.02 and 6.03 above
which shall survive until the end of the appropriate statute of limitations
period.


          14.02.2 No claim for indemnification shall be asserted by an Indemnified
Party under this Article XIV with regard to a breach of representations and
warranties contained in this Agreement, until the aggregate amount of all
Losses of that Party relating to such breaches exceeds $750,000 (Seven Hundred
and Fifty-Thousand Dollars), and then only to the extent that such Losses
exceed $750,000, provided that, with respect to those representations and
warranties which contain any materiality, Material Adverse Effect, knowledge or
other qualifying language, Losses shall include not only the amounts exceeding
the materiality, Material Adverse Effect, knowledge or other qualifying
language but all amounts incurred without giving effect to the materiality,
Material Adverse Effect, knowledge or other qualifying language.








 



43


          14.02.3 The aggregate amount of any Party’s Losses actually indemnified by
the other Party under this Article XIV for a breach of representations and
warranties contained in this Agreement, except for a breach of Sections 5.01,
5.02, 5.03, 5.18, 5.20, 6.01, 6.02 and 6.03 above, shall not exceed an amount
of $25,000,000 (Twenty-Five Million Dollars).


          Section 14.03; Reduction of Liability. The calculation of any Losses shall
take into account any insurance, warranty, litigation or settlement proceeds
recoverable by and paid to the Indemnified Party (net of any costs and
expenses, and net of any insurance premium increases resulting from such Losses
or claims relating to such Losses) from any third party relating to the
liability that gave rise to the indemnity.


          Section 14.04; Set-Off Rights. Purchaser shall be entitled to recover any
indemnification payments due hereunder by setting off any such amount against
Purchaser’s obligations to the Seller, IIT or any of their Affiliates under the
cash adjustment of the Purchase Price pursuant to Section 4.02 above, if any,
and the Seller Investment Note, provided that (i) any amount owed under the
cash adjustment of the Purchase Price pursuant to Section 4.02 above, if any,
and the Seller Investment Note, that Purchaser seeks to offset shall be
deposited by Purchaser into an interest bearing escrow account to be released,
together with interest thereon, upon agreement of the Parties or in the absence
of such agreement upon final determination of the amount, if any, of
indemnification owed by Seller to Purchaser by a court from which no appeal may
be taken and (ii) Purchaser may not set off any such amount against Purchaser’s
obligations against the Seller Investment Note to any subsequent holder (other
than Seller, IIT or any of their Affiliates) under the Seller Investment Note.
Any set-off pursuant to this Section 14.04 against the principal amount of the
Seller Investment Note shall be $2.723 of the principal amount of the Seller
Investment Note for any $1.0 of any Loss.


ARTICLE XV


NOTICES


          Section 15.01. All notices required to be given under the terms of this
Agreement or which any of the parties may desire to give hereunder shall be in
writing and delivered personally or sent by express delivery, or by facsimile,
or by registered or certified mail, with proof of receipt, postage and expenses
prepaid, return receipt requested, addressed as follows:




	 	 	 
	(a)	 	
As to Purchaser, addressed to:
 
	 	 	
Alion Science and Technology Corporation, 1750 Tysons
Boulevard, Suite 1300, McLean, Virginia 22102, facsimile
(703) 714-6508, Attention: Stephen J. Trichka, Esq.;
 
	 	 	
with a copy thereof addressed to









 



44




	 	 	 
	 	 	
(i) Baker & McKenzie, 815 Connecticut Avenue, N.W., Suite
900, Washington, D.C. 20006, facsimile (202) 452-7074,
Attention: Marc R. Paul, Esq.,
 
	 	 	
(ii) State Street Bank and Trust Company, Two International
Place, Boston, MA 02110, facsimile (617) 664-2376, Attention:
Kelly Driscoll, and
 
	 	 	
(iii) Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue
of the Americas, New York, N.Y. 10019, facsimile (212)
757-3990, Attention: James Schwab, Esq.;
 
	 	 	
or to such other address or addresses and to the attention of
such other person or persons as Purchaser may from time to
time designate in writing to Seller;
 
	(b)	 	
As to Seller, addressed to:
 
	 	 	
IIT Research Institute, 10 W. 33rd Street, Room 224, Chicago,
IL 60616, facsimile (312) 567-3004, Attention: Lewis
Collens, Chair of the Board of Governors;
 
	 	 	
with a copy thereof addressed to
 
	 	 	
Illinois Institute of Technology, 10 W. 33rd Street, Room
224, Chicago, IL 60616, facsimile (312) 567-3004,
Attention: Mary Anne Smith, Esq.
 
	 	 	
McDermott, Will & Emery, 600 13th Street N.W., Washington,
D.C. 2005, facsimile (202) 756-8087, Attention: Marsha
Matthews, Esq.;
 
	 	 	
or to such other address or addresses and to the attention of
such other person or persons as Seller may from time to time
designate in writing to Purchaser.



          Section 15.02. Any notice given in accordance with this Article XV shall
be deemed to have been given when delivered personally, or when received if
sent via overnight delivery, facsimile, or registered or certified mail, return
receipt requested.


ARTICLE XVI


TERMINATION BY THE PARTIES


          Section 16.01; Events of Termination. This Agreement may be terminated at
any time prior to the Closing:








 



45


          (a) by mutual written agreement of the Seller and the Purchaser;


          (b) by (i) the Purchaser by written notice to the Seller, if any of the
conditions set forth in Article IX shall not have been satisfied, or (ii) the
Seller by written notice to the Purchaser, if any of the conditions set forth
in Article X shall not have been satisfied, and, in either case, such
non-satisfaction shall not have been waived in writing or cured (or by its
nature cannot be cured) on or before December 1, 2002, unless extended by
written agreement of the Parties; provided, however, if such non-satisfaction
can be cured or eliminated, this Agreement shall not be terminated pursuant to
this Section 16.01(b) unless and until


               (A) the Party who is entitled to give notice of termination pursuant to
this Section 16.01(b) has given the other Party written notice of such
non-satisfaction, specifying the nature of same and the action required to cure
such non-satisfaction; and


               (B) the Party receiving such notice shall not have cured such
non-satisfaction within 30 days after such notice is given.


          (c) by either the Purchaser or the Seller by written notice to the other
Party if the Closing shall not have been consummated by December 31, 2002, unless extended by written agreement of the Parties hereto; or



          (d) by either the Purchaser or the Seller in accordance with the
terms of Section 4.04(c).


          16.02; Effect of Termination; Expenses. In the event that this Agreement
shall be terminated pursuant to Section 16.01, all further obligations of the
Parties with respect to this Agreement (other than the obligations in Article
XIII and in this Section 16.02 and Section 16.03) shall terminate without
further obligation of either Party. In the event of termination, Article XIII
shall survive and all out-of-pocket costs and expenses incurred by or on behalf
of the Purchaser and Seller shall be paid by Purchaser subject to the
limitations set forth in Article XIII.


          16.03; Failure to Perform; Remedies. In the event that the Closing is not
consummated by December 31, 2002, by virtue of a default
made by a Party in the observance or in the due and timely performance of any
of its covenants or agreements herein contained, the Party who has performed
and satisfied its conditions precedent shall have such rights and remedies
afforded it at law or in equity by reason of the other Party’s default or
nonperformance.


ARTICLE XVII


UNILATERAL RIGHT TO WAIVE FAILURES OF OTHER PARTIES


          Section 17.01. Any Party may:


               (a) Waive in writing any inaccuracies in the representations and
warranties made to it contained in this Agreement or any Exhibit or Schedule
hereto or any certificate or certificates delivered by any other Party to this
Agreement;








 



46


               (b) Waive in writing the failure in performance of any of the conditions
herein expressed for its benefit; and


               (c) Waive in writing compliance with any of the covenants herein contained
by any other Party.


          Section 17.02. No such waiver or extension shall be valid unless in
writing and signed by the Party granting the waiver or extension, and no such
waiver or extension shall be construed to excuse or mitigate any subsequent
breach or violation of this Agreement not specifically covered by such waiver.


ARTICLE XVIII


GENERAL PROVISIONS


          Section 18.01; Effectiveness and Assignability. This Agreement shall
become effective when executed and delivered by Purchaser and Seller and shall
be binding in all respects upon the respective successors and permitted assigns
of the parties hereto; provided, however, that no Party may assign this
Agreement in whole or in part without first obtaining the written consent of
the other Parties, except that Purchaser may assign its rights under this
Agreement to an Affiliate so long as Purchaser remains responsible for its
performance.


          Section 18.02; Completeness. This Agreement and the Schedules and Exhibits
hereto and further Closing documents represent the entire contract between the
parties with respect to the subject matter hereof, may not be amended except by
a writing signed by all the Parties hereto, and supersede all offers,
proposals, statements, representations and agreements with respect to the
subject matter hereof, including but not limited to the certain letter of
intent, dated December 13, 2001, between Seller, IIT and Purchaser, the
Original Purchase Agreement, the First Restated Purchase Agreement, the Second Restated Purchase Agreement, and the Third Restated Purchase Agreement, which are hereby terminated and of no further
force or effect. The Exhibits and Schedules hereto and further Closing
documents are incorporated herein by reference, and shall be deemed to be
included in any reference to this Agreement.


          Section 18.03; Captions. The captions to the Sections contained in this
Agreement are for reference only, do not form a substantive part of this
Agreement and shall not restrict nor enlarge any substantive provision of this
Agreement.


          Section 18.04; Applicable Law. This Agreement and all other documents
given in connection herewith, shall (except as specified in such other
documents) be construed in accordance with the laws of the State of Illinois,
without regard to the principles of conflicts of laws.


          Section 18.05; Arbitration. Any dispute arising out of or relating to this
Agreement or any transaction contemplated therein, which has not been resolved
by mutual agreement of the Parties after a sixty (60) day negotiation period in
which the Parties try to resolve the claim, shall be referred to and finally
resolved by arbitration. Such arbitration shall be








 



47



 conducted in Chicago in accordance with the Commercial Rules of the
American Arbitration Association Rules then in effect, as modified or
supplemented herein, which are incorporated by reference into this Section. The
tribunal will consist of three arbitrators each of whom shall have been
admitted to the practice of law in any of the United States or the District of
Columbia and who shall decide by majority vote. One arbitrator shall be
designated by Seller and IIT jointly, one arbitrator shall be designated by
Purchaser and the third one shall be designated by the other two designees. The
arbitrators shall base their decision on the facts as presented into evidence
and shall prepare a written memorandum of decision setting forth the findings
of fact and conclusions of law. The decision of the arbitrators shall be final,
and judgment may be entered upon it in accordance with the applicable law in
any court having jurisdiction. All costs of the arbitration shall be borne by
the Party or Parties determined to be the losing Party or Parties by the
arbitration panel.


          Section 18.06; Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered an original but all of which
shall constitute but one and the same Agreement by and among the Parties.


          Section 18.07; Third Party Beneficiary. This Agreement is intended to
inure to the benefit of Purchaser, Seller and the ESOP (which is a named third
party beneficiary of Purchaser’s rights under this Agreement only and no other
party shall have any rights, express or implied, by reason of this Agreement,
except for indemnification rights contemplated for Affiliates of the Parties
under Article XIV.


          Section 18.08; Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the other provisions hereof, and
the Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. Furthermore, upon the request of any
Party hereto, the Parties shall add, in lieu of such invalid or unenforceable
provisions, provisions as similar in terms to such invalid or unenforceable
provisions as may be possible and legal, valid and enforceable.


          Section 18.09; Construction. Any reference in this Agreement to an
“Article,” “Section”, “Exhibit” or “Schedule” refers to the corresponding
Article, Section, Exhibit or Schedule of or to this Agreement, unless the
context indicates otherwise. All words used in this Agreement should be
construed to be of such gender or number as the circumstances require. The
terms “include” and “including” indicate examples of a foregoing general
statement and not a limitation on that general statement. Any reference to a
statute refers to the statute, any amendments or successor legislation, and all
regulations promulgated under or implementing the statute, as in effect at the
relevant time. Any reference to a contract or other document as of a given date
means the contract or other document as amended, supplemented and modified from
time to time through such date.


[signatures on next page]









 



48


          IN WITNESS WHEREOF, the Parties have caused this Fourth Amended and Restated
Asset Purchase Agreement to be executed as of the day and year first above
written.



	 	 	 
	ATTEST:	 	
ALION SCIENCE AND TECHNOLOGY

CORPORATION
	 
	/s/ Manik Rath
_____________________________	 	
By:    /s/ Bahman Atefi
_____________________________
	 
	 	 	
Name:
___________________________
	 
	 	 	
Title:
____________________________
	 
	ATTEST:	 	
IIT RESEARCH INSTITUTE
	 
	/s/ Mary Anne Smith
_____________________________	 	
By:    /s/ Lewis Collens
_____________________________
	 
	 	 	
Name:  Lewis Collens
___________________________
	 
	 	 	
Title:  Chairman of the Board
___________________________









 




TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE I     	 	
SALE AND PURCHASE AND TRANSFER OF ASSETS
	 	 	2	 
	ARTICLE II     	 	
ASSUMPTION OF LIABILITIES
	 	 	4	 
	ARTICLE III     	 	
RETAINED ASSETS AND RETAINED LIABILITIES
	 	 	6	 
	ARTICLE IV     	 	
PURCHASE PRICE AND PURCHASE PROCEDURES
	 	 	8	 
	ARTICLE V     	 	
REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	12	 
	ARTICLE VI     	 	
REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	23	 
	ARTICLE VII     	 	
COVENANTS
	 	 	25	 
	ARTICLE VIII     	 	
RESERVED
	 	 	35	 
	ARTICLE IX     	 	
CONDITIONS PRECEDENT TO CLOSING BY PURCHASER
	 	 	35	 
	ARTICLE X     	 	
CONDITIONS PRECEDENT TO CLOSING BY SELLER
	 	 	37	 
	ARTICLE XI     	 	
CLOSING
	 	 	39	 
	ARTICLE XII     	 	
OBLIGATIONS AT THE CLOSING
	 	 	39	 
	ARTICLE XIII     	 	
EXPENSES WITH RESPECT TO TRANSACTION
	 	 	41	 
	ARTICLE XIV     	 	
INDEMNIFICATION
	 	 	41	 
	ARTICLE XV     	 	
NOTICES
	 	 	44	 
	ARTICLE XVI     	 	
TERMINATION BY THE PARTIES
	 	 	45	 
	ARTICLE XVII     	 	
UNILATERAL RIGHT TO WAIVE FAILURES OF OTHER PARTIES45	 	 	 	 
	ARTICLE XVIII     	 	
GENERAL PROVISIONS
	 	 	47	 










 



EXHIBITS




	 	 	 
	Location	 	Short Title
	 
	4.01-A	 	
Mezzanine Note Securities Purchase Agreement
	4.01-B	 	
Mezzanine Note Warrant
	4.01-C	 	
Seller Note Securities Purchase Agreement
	4.01-D	 	
Seller Note Warrant
	9.04	 	
Guarantee
	9.07	 	
Lease Agreement
	9.12	 	
Linking Agreement
	9.13	 	
Rights Agreement
	10.10-C	 	
B&M Tax Opinion
	12.01.1	 	
Bill of Sale
	12.01.2	 	
Contracts Assignment
	12.01.3	 	
Patent, Copyright and Trademark Assignment



SCHEDULES




	 	 	 
	Location	 	Short Title
	 
	1.01	 	
List of Real Property
	1.02	 	
List of Tangible Personal Property (except Inventories)
	1.05	 	
List of Seller’s Contracts
	1.07	 	
List of Seller’s Intellectual Property Rights
	1.08	 	
List of Insurance Policies
	1.10	 	
List of Prepaid Expenses
	1.11	 	
List of Interests in Other Companies
	3.01(a)	 	
List of Property and Assets of Life Science Operation
	3.01(b)-1	 	
Description of Chemistry Building
	3.01(b)-2	 	
Description of INFAC Building
	3.01(b)-3	 	
Description of KOP
	3.01(b)-4	 	
Description of Life Science Building









 




	 	 	 
	5.03	 	
Comments on Seller’s and IIT’s Conflicts and Change of Control
	5.04	 	
List of Seller’s and IIT’s Governmental Filings or Approvals
	5.08	 	
Comments on Litigation
	5.09	 	
Comments on Material Adverse Effects since September 30, 2001
	5.10	 	
Comments on Undisclosed Liabilities
	5.11	 	
Payments to Directors and Employees
	5.12-A	 	
List of Seller’s Plans
	5.12-B	 	
Comments on Liabilities and Penalties under ERISA
	5.13	 	
List of Major Contracts
	5.14	 	
Comments on Taxes
	5.15	 	
List of Interests of Seller’s Officers
	5.16	 	
Comments on Seller’s Intellectual Property Rights
	5.18	 	
List of Liens
	5.19	 	
List of Governmental Licenses and Authorizations
	5.20	 	
Comments on Environmental Matters
	5.25	 	
List of ten largest sponsors and ten largest suppliers
	6.03	 	
Comments on Purchaser’s Conflicts and Change of Control
	6.04	 	
List of Purchaser’s Governmental Filings or Approvals
	7.09	 	
List of Assets Transferred in Connection with Flexible Option
Plan and Deferred Compensation Plan