Document:

Exhibit
10.29

 

EXECUTION
COPY

 

 

 

 

 

 

 

 

PURCHASE
AND SALE AGREEMENT

by and between

 

REFCO
GROUP LTD., LLC

(as “Purchaser”),

and

CARGILL,
INCORPORATED

(as “Parent”)

June 21, 2005

 

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1.

  	
  DEFINITIONS

  	
  2

  
	
   

  	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
  1.2

  	
  Other Definitions

  	
  10

  
	
   

  	
  1.3

  	
  Interpretation

  	
  12

  
	
   

  	
  1.4

  	
  GAAP and Consistency

  	
  13

  
	
   

  	
  1.5

  	
  Schedules

  	
  13

  
	
  ARTICLE
  2.

  	
  SALE
  AND PURCHASE OF SHARES

  	
  15

  
	
   

  	
  2.1

  	
  Sale and Purchase
  of Shares of CIS Managed Assets, CIS Investments and CIS Cash Management

  	
  15

  
	
   

  	
  2.2

  	
  Sale and Purchase
  of Shares of CIS Limited

  	
  16

  
	
  ARTICLE
  3.

  	
  SALE
  AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS

  	
  16

  
	
   

  	
  3.1

  	
  Purchased Assets

  	
  16

  
	
   

  	
  3.2

  	
  Assignment of
  Contracts and Licenses

  	
  17

  
	
   

  	
  3.3

  	
  Excluded Assets

  	
  19

  
	
   

  	
  3.4

  	
  Assumed Obligations

  	
  20

  
	
   

  	
  3.5

  	
  Prorations

  	
  21

  
	
  ARTICLE 4.

  	
  PURCHASE PRICE;
  OTHER PAYMENTS; ADJUSTMENT; ALLOCATION

  	
  21

  
	
   

  	
  4.1

  	
  Payment of Closing
  Purchase Price

  	
  21

  
	
   

  	
  4.2

  	
  Payment of
  Non-Competition Payment

  	
  22

  
	
   

  	
  4.3

  	
  Purchase Price Adjustment

  	
  22

  
	
   

  	
  4.4

  	
  Post-Closing Payment

  	
  24

  
	
   

  	
  4.5

  	
  Allocation of Purchase
  Price

  	
  25

  
	
   

  	
  4.6

  	
  Conduct of Business
  After Closing

  	
  26

  
	
  ARTICLE 5.

  	
  REPRESENTATIONS AND
  WARRANTIES OF PARENT

  	
  27

  
	
   

  	
  5.1

  	
  Due Incorporation

  	
  27

  
	
   

  	
  5.2

  	
  Due Authorization

  	
  27

  
	
   

  	
  5.3

  	
  Consents and Approvals;
  Authority Relative to this Agreement

  	
  28

  
	
   

  	
  5.4

  	
  Capitalization

  	
  28

  
	
   

  	
  5.5

  	
  Financial Statements;
  Undisclosed Liabilities

  	
  30

  
						

 

-i-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  5.6

  	
  No Adverse Effects or
  Changes

  	
  31

  
	
   

  	
  5.7

  	
  Title to Properties

  	
  33

  
	
   

  	
  5.8

  	
  Condition and
  Sufficiency of Assets

  	
  34

  
	
   

  	
  5.9

  	
  Real Property

  	
  34

  
	
   

  	
  5.10

  	
  Personal Property

  	
  36

  
	
   

  	
  5.11

  	
  Computer System

  	
  36

  
	
   

  	
  5.12

  	
  Intellectual Property

  	
  37

  
	
   

  	
  5.13

  	
  Contracts

  	
  38

  
	
   

  	
  5.14

  	
  Licenses

  	
  40

  
	
   

  	
  5.15

  	
  Insurance

  	
  40

  
	
   

  	
  5.16

  	
  Employee Benefit
  Plans and Employment Agreements

  	
  41

  
	
   

  	
  5.17

  	
  Employment and Labor
  Matters

  	
  44

  
	
   

  	
  5.18

  	
  Capital
  Improvements and Significant Non-Capital Expenditures

  	
  44

  
	
   

  	
  5.19

  	
  Taxes

  	
  44

  
	
   

  	
  5.20

  	
  No Defaults or Violations;
  Registrations

  	
  47

  
	
   

  	
  5.21

  	
  Environmental Matters

  	
  49

  
	
   

  	
  5.22

  	
  Litigation

  	
  49

  
	
   

  	
  5.23

  	
  No Conflict of Interest

  	
  50

  
	
   

  	
  5.24

  	
  Bank Accounts

  	
  50

  
	
   

  	
  5.25

  	
  Customers

  	
  51

  
	
   

  	
  5.26

  	
  Improper and Other
  Payments

  	
  51

  
	
   

  	
  5.27

  	
  Brokers

  	
  51

  
	
   

  	
  5.28

  	
  Accounting and
  Disclosure Controls

  	
  51

  
	
   

  	
  5.29

  	
  Benefit Plan Investors

  	
  52

  
	
   

  	
  5.30

  	
  Reports

  	
  52

  
	
   

  	
  5.31

  	
  Accuracy of Statements

  	
  52

  
	
   

  	
  5.32

  	
  UK Warranties

  	
  52

  
	
  ARTICLE 6.

  	
  REPRESENTATIONS AND
  WARRANTIES OF PURCHASER

  	
  52

  
	
   

  	
  6.1

  	
  Due Organization

  	
  52

  
	
   

  	
  6.2

  	
  Due Authorization

  	
  52

  

 

-ii-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  6.3

  	
  Consents and Approvals;
  Authority Relative to this Agreement

  	
  53

  
	
   

  	
  6.4

  	
  Litigation

  	
  53

  
	
   

  	
  6.5

  	
  Brokers

  	
  53

  
	
  ARTICLE 7.

  	
  COVENANTS

  	
  54

  
	
   

  	
  7.1

  	
  Implementing Agreement

  	
  54

  
	
   

  	
  7.2

  	
  Access to
  Information and Facilities

  	
  54

  
	
   

  	
  7.3

  	
  Preservation of Business

  	
  55

  
	
   

  	
  7.4

  	
  Consents and Approvals

  	
  58

  
	
   

  	
  7.5

  	
  Maintenance of Insurance

  	
  59

  
	
   

  	
  7.6

  	
  Resignation of
  Officers and Directors

  	
  59

  
	
   

  	
  7.7

  	
  Supplemental Information

  	
  59

  
	
   

  	
  7.8

  	
  Confidentiality

  	
  59

  
	
   

  	
  7.9

  	
  Exclusivity

  	
  59

  
	
   

  	
  7.10

  	
  Use of Cargill Marks

  	
  60

  
	
   

  	
  7.11

  	
  Termination of
  Certain Agreements

  	
  60

  
	
   

  	
  7.12

  	
  Employees

  	
  60

  
	
   

  	
  7.13

  	
  Section 338(h)(10) Election

  	
  62

  
	
   

  	
  7.14

  	
  Meeting of CIS Limited

  	
  63

  
	
   

  	
  7.15

  	
  Delivery of 2005
  Financial Statements

  	
  64

  
	
   

  	
  7.16

  	
  Removal of CIS
  Limited from existing VAT group

  	
  64

  
	
  ARTICLE 8.

  	
  CONDITIONS PRECEDENT TO
  OBLIGATIONS OF PURCHASER

  	
  64

  
	
   

  	
  8.1

  	
  Warranties True
  as of Both Present Date and Closing

  	
  64

  
	
   

  	
  8.2

  	
  Compliance with
  Agreements and Covenants

  	
  65

  
	
   

  	
  8.3

  	
  Consents and Approvals

  	
  65

  
	
   

  	
  8.4

  	
  Release of Liens

  	
  65

  
	
   

  	
  8.5

  	
  Estoppel Certificates

  	
  65

  
	
   

  	
  8.6

  	
  Documents

  	
  65

  
	
   

  	
  8.7

  	
  Hart-Scott-Rodino

  	
  65

  
	
   

  	
  8.8

  	
  European
  Commission or Other Antitrust

  	
  65

  
	
   

  	
  8.9

  	
  No Material Adverse Effect

  	
  65

  

 

-iii-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  8.10

  	
  Actions or Proceedings

  	
  65

  
	
   

  	
  8.11

  	
  Employment Agreement

  	
  66

  
	
   

  	
  8.12

  	
  First Capitol

  	
  66

  
	
   

  	
  8.13

  	
  UK Regulatory Approval

  	
  66

  
	
   

  	
  8.14

  	
  2005 Financial Statements

  	
  66

  
	
  ARTICLE 9.

  	
  CONDITIONS PRECEDENT TO
  OBLIGATIONS OF PARENT

  	
  66

  
	
   

  	
  9.1

  	
  Warranties True
  as of Both Present Date and Closing

  	
  66

  
	
   

  	
  9.2

  	
  Compliance with
  Agreements and Covenants

  	
  67

  
	
   

  	
  9.3

  	
  Consents and Approvals

  	
  67

  
	
   

  	
  9.4

  	
  Documents

  	
  67

  
	
   

  	
  9.5

  	
  Hart-Scott-Rodino

  	
  67

  
	
   

  	
  9.6

  	
  European
  Commission or Other Antitrust

  	
  67

  
	
   

  	
  9.7

  	
  Actions or Proceedings

  	
  67

  
	
  ARTICLE 10.

  	
  CLOSING

  	
  67

  
	
   

  	
  10.1

  	
  Closing

  	
  67

  
	
   

  	
  10.2

  	
  Deliveries by Sellers

  	
  68

  
	
   

  	
  10.3

  	
  Deliveries by Purchaser

  	
  69

  
	
  ARTICLE 11.

  	
  TERMINATION

  	
  70

  
	
   

  	
  11.1

  	
  Termination

  	
  70

  
	
   

  	
  11.2

  	
  Effect of Termination

  	
  70

  
	
  ARTICLE 12.

  	
  INDEMNIFICATION

  	
  70

  
	
   

  	
  12.1

  	
  Survival

  	
  70

  
	
   

  	
  12.2

  	
  Indemnification by Parent

  	
  70

  
	
   

  	
  12.3

  	
  Indemnification by
  Purchaser

  	
  72

  
	
   

  	
  12.4

  	
  Limitations on
  Certain Claims for Indemnification

  	
  72

  
	
   

  	
  12.5

  	
  Materiality

  	
  73

  
	
   

  	
  12.6

  	
  Claims

  	
  73

  
	
   

  	
  12.7

  	
  Notice of Third
  Party Claims; Assumption of Defense

  	
  73

  
	
   

  	
  12.8

  	
  Settlement or Compromise

  	
  74

  
	
   

  	
  12.9

  	
  Failure of Indemnitor to
  Act

  	
  74

  

 

-iv-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  12.10

  	
  Set-Off
  Against Post Closing Payment Amount

  	
  74

  
	
   

  	
  12.11

  	
  Purchase Price Adjustments

  	
  74

  
	
   

  	
  12.12

  	
  Indemnity
  Payments in Respect of CIS Limited

  	
  74

  
	
  ARTICLE 13.

  	
  TAX MATTERS

  	
  75

  
	
   

  	
  13.1

  	
  Filing of Tax Returns

  	
  75

  
	
   

  	
  13.2

  	
  Proration of Taxes

  	
  75

  
	
   

  	
  13.3

  	
  Transfer Taxes

  	
  75

  
	
   

  	
  13.4

  	
  Tax Indemnification

  	
  76

  
	
   

  	
  13.5

  	
  Cooperation/Retention
  of Records

  	
  76

  
	
   

  	
  13.6

  	
  Procedures Relating
  to Tax Claims

  	
  76

  
	
  ARTICLE 14.

  	
  NON-COMPETITION

  	
  77

  
	
   

  	
  14.1

  	
  Non-Competition Agreement

  	
  77

  
	
   

  	
  14.2

  	
  Reasonableness of
  Covenants

  	
  78

  
	
   

  	
  14.3

  	
  Specific Performance

  	
  78

  
	
   

  	
  14.4

  	
  Severability

  	
  79

  
	
   

  	
  14.5

  	
  No Limitation of
  Other Provisions

  	
  79

  
	
  ARTICLE 15.

  	
  MISCELLANEOUS

  	
  79

  
	
   

  	
  15.1

  	
  Expenses

  	
  79

  
	
   

  	
  15.2

  	
  Amendment

  	
  79

  
	
   

  	
  15.3

  	
  Notices

  	
  79

  
	
   

  	
  15.4

  	
  Effect of Investigation

  	
  80

  
	
   

  	
  15.5

  	
  Payments in Dollars

  	
  80

  
	
   

  	
  15.6

  	
  Waivers

  	
  80

  
	
   

  	
  15.7

  	
  Counterparts

  	
  80

  
	
   

  	
  15.8

  	
  Assignment

  	
  80

  
	
   

  	
  15.9

  	
  No Third Party
  Beneficiaries

  	
  81

  
	
   

  	
  15.10

  	
  Publicity

  	
  81

  
	
   

  	
  15.11

  	
  Further Assurances

  	
  81

  
	
   

  	
  15.12

  	
  Severability

  	
  81

  
	
   

  	
  15.13

  	
  Specific Performance

  	
  82

  

 

-v-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  15.14

  	
  Remedies Cumulative

  	
  82

  
	
   

  	
  15.15

  	
  Entire Understanding

  	
  82

  
	
   

  	
  15.16

  	
  Applicable Law

  	
  82

  
	
   

  	
  15.17

  	
  Jurisdiction of Disputes;
  Waiver of Jury Trial

  	
  82

  

 

-vi-

 

TABLE
OF CONTENTS

(continued)

 

Page

 

LIST OF DISCLOSURE
SCHEDULES

	
  Schedule 1.1(a)

  	
  Creditors and Debt

  
	
  Schedule 1.1(b)

  	
  Non-Fund Entities May 31, 2005 Balance Sheet

  
	
  Schedule 1.1(c)

  	
  Non-Fund Entities May 31, 2005 Related Statements of
  Operations and Retained Earnings (Deficit)

  
	
  Schedule 1.1(d)

  	
  Non-Fund Entities May 31, 2005 Related Statements of
  Cash Flows

  
	
  Schedule 1.1(e)

  	
  Net Assets — Other Asset Types

  
	
  Schedule 1.1(f)

  	
  Pro Forma Calculation Principles

  
	
  Schedule 1.1(g)

  	
  Details of CIS Limited

  
	
  Schedule 1.1(h)

  	
  Description of UK Property

  
	
  Schedule 3.1(a)

  	
  Transferred Contracts

  
	
  Schedule 3.1(b)

  	
  Transferred Fixed Assets

  
	
  Schedule 3.1(e)

  	
  Transferred Owned Intellectual Property

  
	
  Schedule 3.2(a)(i)

  	
  Transferred Personal Property Leases

  
	
  Schedule 3.2(a)(ii)

  	
  Transferred Customer Contracts

  
	
  Schedule 3.2(a)(iii)

  	
  Transferred Vendor Contracts

  
	
  Schedule 3.2(a)(iv)

  	
  Transferred Intellectual Property Licenses

  
	
  Schedule 3.2(a)(ix)

  	
  Transferred Other Contracts

  
	
  Schedule 3.2(b)

  	
  Assumed Licenses

  
	
  Schedule 3.3(f)

  	
  Excluded Exchange Seats

  
	
  Schedule 3.3(h)

  	
  Other Excluded Assets

  
	
  Schedule 3.3(i)

  	
  Excluded Contracts

  
	
  Schedule 4.5(a)

  	
  Allocation of Purchase Price among Shares and Assets
  

  
	
  Schedule 4.5(b)

  	
  Allocation of Purchase Price among Entities Selling
  Shares and Shareholders

  
	
  Schedule 4.5(d)

  	
  Allocation of for Non-Competition Payment

  
	
  Schedule 5.1(a)

  	
  Jurisdictions of Incorporation and Foreign
  Qualification

  
	
  Schedule 5.1(b)

  	
  Subsidiaries

  
	
  Schedule 5.3

  	
  Sellers Consents

  
	
  Schedule 5.4(c)

  	
  Ownership of Shares of the Acquired Corporation
  Subsidiaries

  
	
  Schedule 5.4(f)

  	
  First Capitol

  
	
  Schedule 5.5(a)

  	
  2004 Financial Statements

  
	
  Schedule 5.5(b)

  	
  Interim Financial Statements

  
	
  Schedule 5.6

  	
  Adverse Effects or Changes

  
	
  Schedule 5.9(b)

  	
  Leased Real Property and Real Property Leases

  
	
  Schedule 5.9(h)

  	
  Liens 

  
	
  Schedule 5.9(g)

  	
  Customers in Office Space

  
	
  Schedule 5.10(a)

  	
  Owned Personal Property

  
	
  Schedule 5.10(b)

  	
  Leased Personal Property

  
	
  Schedule 5.11

  	
  Computer System

  
	
  Schedule 5.12(a)

  	
  Intellectual Property

  
	
  Schedule 5.12(b)

  	
  Representations Covering Intellectual Property

  
	
  Schedule 5.13

  	
  Contracts

  
	
  Schedule 5.14

  	
  Licenses

  
	
  Schedule 5.15

  	
  Insurance Policies

  
	
  Schedule 5.16

  	
  Employee Benefit Plans and Employment Agreements

  
	
  Schedule 5.17(a)

  	
  Employees

  
	
  Schedule 5.18(a)

  	
  Capital Improvements

  
	
  Schedule 5.18(b)

  	
  Significant Non-Capital Expenditures

  
	
  Schedule 5.19

  	
  Taxes

  
	
  Schedule 5.19(e)

  	
  Nondeductible Payments

  
	
  Schedule 5.19(i)

  	
  Tax Rulings or Closings

  
	
  Schedule 5.20

  	
  Defaults and Violations

  
	
  Schedule 5.20(e)

  	
  Registrations

  

 

-vii-

 

	
  Schedule 5.21

  	
  Environmental Matters

  
	
  Schedule 5.22(a)

  	
  Litigation

  
	
  Schedule 5.22(b)

  	
  Litigation with respect to this Agreement

  
	
  Schedule 5.23

  	
  Conflicts of Interest

  
	
  Schedule 5.24

  	
  Bank Accounts

  
	
  Schedule 5.25(a)

  	
  Major Customers

  
	
  Schedule 5.25(b)

  	
  Customer Complaints

  
	
  Schedule 5.25(c)

  	
  Adverse Changes in Customer Relationships

  
	
  Schedule 5.32

  	
  UK Warranty Exceptions

  
	
  Schedule 6.3

  	
  Purchaser Consents

  
	
  Schedule 7.3(a)

  	
  Preservation of Business

  
	
  Schedule 7.3(b)(iv)

  	
  Waivers, Releases, Settlements or Cancellations

  
	
  Schedule 7.3(c)

  	
  Permitted Corporate Changes

  
	
  Schedule 7.11

  	
  Non-Terminated Contracts

  
	
  Schedule 7.12(a)

  	
  CIS France Employees

  
	
  Schedule 7.12(b)

  	
  Severance Policy

  
	
  Schedule 10.2(m)

  	
  UK-Specific Deliverables

  

 

-viii-

 

PURCHASE
AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as
of the 21st  day of June, 2005, by and between Refco Group
Ltd., LLC, a Delaware limited liability company (“Purchaser”), and
Cargill, Incorporated, a Delaware corporation (the “Parent”).  Certain capitalized terms used herein are
defined in Article I.

W
I T N E S S E T H:

WHEREAS, each of Cargill Investor Services, Inc., a Delaware
corporation (“CIS”), CIS Holdings, Inc., a Delaware corporation (“CIS
Holdings” and, together with CIS, the “US Entity Shareholders”),
Cargill PLC, a private limited company organized in the United Kingdom (“Cargill
PLC” or the “UK Entity Shareholder” and, together with the US Entity
Shareholders, the “Shareholders”), Cargill Investor Services (Singapore)
Pte. Ltd., a Singapore corporation (“CIS Singapore”), CIS Financial
Services, Inc., a Delaware corporation (“CIS Financial”), CIS Management
Inc., a Delaware corporation (“CIS Management”), CIS Securities, Inc., a
Delaware corporation (“CIS Securities” and, together with CIS, CIS
Singapore, CIS Financial and CIS Management, the “Asset Sellers”) are
direct or indirect wholly owned (or in the case of Cargill PLC, majority owned)
subsidiaries of Parent;

WHEREAS, subject to the terms and conditions of this Agreement,
Purchaser wishes to purchase from the US Entity Shareholders, and Parent wishes
to procure that the US Entity Shareholders shall sell to Purchaser, all of the
issued and outstanding shares of capital stock of each of CIS Investments,
Inc., a Delaware corporation (“CIS Investments”), CIS Managed Assets,
Inc., a Delaware corporation (“CIS Managed Assets”) and CIS Cash
Management, Inc., a Delaware Corporation (“CIS Cash Management”);

WHEREAS, subject to the terms and conditions of this Agreement, Purchaser
wishes to purchase from Cargill PLC, and Parent wishes to procure that Cargill
PLC shall sell to Purchaser, all of the issued and outstanding shares of
capital stock of Cargill Investor Services Limited, a corporation organized
under the laws of England and Wales (“CIS Limited”); 

WHEREAS, subject to the terms and conditions of this Agreement,
Purchaser wishes to purchase from the Asset Sellers, and Parent wishes to
procure that the Asset Sellers shall sell to Purchaser, all of the Assets, and
Purchaser is willing to assume all of the Assumed Obligations; and

WHEREAS, as a condition to the Purchaser’s willingness to enter into
this Agreement, Parent is willing to make certain representations and
warranties and undertake certain covenants, agreements and other obligations,
in each case as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:

 

1

 

ARTICLE 1.

DEFINITIONS

1.1           Definitions.  The following terms shall have the following
meanings for the purposes of this Agreement:

“2004 Balance Sheets” shall mean the separate balance sheets of
each of the Non-Fund Entities as of May 31, 2004, including the notes thereto,
that are included in the 2004 Financial Statements.

“2004 Financial Statements” shall mean the financial statements
of each of the Non-Fund Entities as of and for the twelve (12) months ended May
31, 2004, consisting of (a) the balance sheets of such Subject Entities as of
May 31, 2004, (b) the related statements of operations and retained earnings
(deficit) for the twelve (12) months ended May 31, 2004 and (c) the related
statements of cash flows for the twelve (12) months ended May 31, 2004 (in the
case of each of clauses (a), (b) and (c), including the notes thereto).

“2005 Balance Sheets” shall mean the separate balance sheets of
each of the Non-Fund Entities as of May 31, 2005, including the notes thereto,
that are included in the 2005 Financial Statements.

“2005 Financial Statements” shall mean the financial statements
of each of the Non-Fund Entities as of and for the twelve (12) months ended May
31, 2005, consisting of (a) the balance sheets of such Subject Entities as of
May 31, 2005, (b) the related statements of operations and retained earnings
(deficit) for the twelve (12) months ended May 31, 2005 and (c) the related
statements of cash flows for the twelve (12) months ended May 31, 2005 (in the
case of each of clauses (a), (b) and (c), including the notes thereto).

“Acquired Corporations” shall mean CIS Investments, CIS Managed
Assets, CIS Cash Management and CIS Limited.

“Acquired Corporation Financial Statements” shall mean the
audited consolidated financial statements of each of the Acquired Corporations
and their respective Acquired Corporation Subsidiaries as of and for the twelve
(12) months ended May 31, 2004, consisting of (a) the consolidated balance
sheet as of May 31, 2004, (b) the related consolidated statement of operations
and retained earnings (deficit) for the twelve (12) months ended May 31, 2004
and (c) the related consolidated statement of cash flows for the twelve (12)
months ended May 31, 2004 (in each case, including the notes thereto).

“Acquired Corporation Subsidiaries” shall mean First Capitol.

“Adjusted Purchase Price” shall mean:

the amount of the Closing Date Seller Payment, adjusted for:

(a)           the
Purchase Price Increase Amount or Purchase Price Reduction Amount, as
calculated pursuant to Section 4.5;

 

2

 

(b)           any
adjustment provided for in Section 12.11; and

(c)           the
Post Closing Payment.

“Affiliate” shall mean, with respect to any specified Person,
(a) any other Person that, directly or indirectly, owns or controls, is under
common ownership or control with, or is owned or controlled by, such specified
Person, (b) any other Person that is a director, officer or partner, or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more of
any class of equity securities, of the specified Person or a Person described
in clause (a) of this paragraph, (c) another Person of which the
specified Person is a director, officer or partner or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities, (d) another Person in which the specified Person has a
substantial beneficial interest or as to which the specified Person serves as
trustee or in a similar capacity or (e) any relative or spouse of the specified
Person or any of the foregoing Persons, any relative of any such spouse or any
spouse of any such relative.

“Agreed Terms” shall mean, in relation to any document, that
document in the terms agreed between the parties and signed and initialed for
identification purposes only by or on behalf of such parties prior to the
execution of this Agreement.

“Agreement” shall mean this Purchase and Sale Agreement,
including all exhibits and schedules hereto, as it may be amended from time to time
in accordance with its terms.

“Assignment and Assumption Agreement” shall mean the assignment
and assumption agreement, to be entered by and among each Asset Seller and
Purchaser, substantially in the form agreed to by Parent and Purchaser.

“Assignment and Assumption of Lease” shall mean the assignment
and assumption agreement, to be entered into with respect to each Real Property
Lease to which any Asset Seller is party, by and between Purchaser and the
applicable Subject Entity, substantially in the form agreed to by Parent and
Purchaser.

“Bill of Sale” shall mean the bill of sale, to be executed by
each Asset Seller in favor of Purchaser, substantially in the form agreed to by
Parent and Purchaser.

“Business” shall mean the business, as previously, currently and
proposed to be conducted by any of the Subject Entities, of (a) clearing or
executing futures, options on futures, and securities, (b) acting as
broker/dealer of foreign exchange transactions, (c) operating collective
investment vehicles principally engaged in the trading of futures, options on
futures, and foreign exchange, (d) financing of futures, options on futures,
and foreign exchange transactions for unaffiliated Persons, and (e) operating
cash management programs.

“Business Day” shall mean any day of the year other than (a) any
Saturday or Sunday or (b) any other day on which banks located in New York and
London are authorized or obligated to be closed for business.

“Cash” shall mean all cash, certificates of deposits and bank
deposits, together with all accrued but unpaid interest thereon.

 

3

 

“Cash Equivalents” shall mean all securities and other
instruments eligible for investment of customer funds under the Commodity
Exchange Act and the rules and regulations promulgated thereunder.

“CERCLA” shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

“Closing” shall mean the consummation of the transactions
contemplated herein in accordance with Article 10.

“Closing Date” shall mean the date on which the Closing occurs
or is to occur.

“Code” shall mean the United States Internal Revenue Code of
1986, as amended.

“Contract” shall mean any contract, lease, sales order, purchase
order, agreement, warranty, indenture, mortgage, note, bond, right, warrant or
instrument, whether written or verbal (and any and all amendments thereto).

“Current Liabilities” means all current liabilities of the
Subject Entities that would appear on a balance sheet of each such Subject
Entity prepared in accordance with GAAP.

“Debt” shall mean any (a) indebtedness for borrowed money or any
obligations evidenced by bonds, debentures, notes or other similar instruments,
any bank overdrafts or any capitalized lease obligations (including all such
indebtedness for borrowed money, obligations and bank overdrafts set forth on Schedule
1.1(a)(i)), and all interest thereon and fees and other expenses related
thereto, (b) obligations issued or assumed as the deferred purchase price of
property or services (including all such obligations set forth on Schedule
1.1(a)(ii)), and all interest thereon and fees and other expenses related
thereto, and (c) severance amounts payable to any current or former employee of
any Subject Entity (including all such severance amounts set forth on Schedule
1.1(a)(iii)) and all interest thereon and fees and other expenses related
thereto, in the case of each of clauses (a), (b) and (c),
that (i) is owed to any Person by any Subject Entity, or (ii) is secured by a
Lien on any Shares, any assets or properties of the Subject Entities, or any
Assets.

“Dollars” or numbers preceded by the symbol “$” shall mean
amounts in United States Dollars.

“Draft 2005 Financial Statements” shall mean the unaudited
financial statements of each of the Non-Fund Entities as of and for the twelve
(12) month period ended May 31, 2005, consisting of (a) the balance sheets of
such Non-Fund Entities as of May 31, 2005 as set forth on Schedule 1.1(b),
(b) the related statements of operations and retained earnings (deficit) for
the twelve (12) month period ended May 31, 2005 as set forth on Schedule
1.1(c), and (c) the related statements of cash flows for the twelve(12)
month period ended May 31, 2005 as set forth on Schedule 1.1(d) (in the
case of each of clauses (a), (b) and (c), including
narratives discussing the results of operations for the aforementioned
periods).

“Employees” shall mean all individuals employed by the Asset
Sellers primarily in connection with the operation of the Business and all
individuals employed by the Acquired

 

4

 

Corporations or any Acquired Corporation Subsidiary
(including, in each case, those who are actively employed or on leave,
disability or other absence from employment) immediately prior to Closing.

“Environmental Law” shall mean any Law that imposes liability or
standards of conduct concerning, or otherwise relates to, discharges,
emissions, releases or threatened releases of noises, odors or any pollutants,
contaminants or hazardous or toxic wastes, substances or materials, whether as
matter or energy, into ambient air, water or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants or
hazardous or toxic wastes, substances or materials, including CERCLA, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, as amended, the Clean Water Act of 1977, as amended, any so-called “Superfund”
or “Superlien” Law (including those already referenced in this definition) and
any other Law having a similar subject matter.

“ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended.

“ERISA Affiliate” shall mean, with respect to any Person, any
corporation, trade or business that, together with such Person, is a member of
a controlled group of corporations or a group of trades or businesses under
common control within the meaning of sections 414(b) or (c) of the Code.

“Expense Synergy Amount” shall mean an amount equal to: (i) the
sum of the sales, general and administrative expenses and employee compensation
expenses of the Business, in each case as reflected on the compiled, combined,
consolidating statements of operations and retained earnings (deficit) for the
twelve (12) months ended May 31, 2005 (as derived from the statement of
operations and retained earnings (deficit) of the Non-Fund Entities for the
twelve (12) months ended May 31, 2005 included within the 2005 Financial
Statements) (the “2005 Combined Earnings Statement”), as adjusted in
accordance with the Pro Forma Calculation Principles, minus (ii) the
expenses associated with the operation of the Business by Purchaser for the
twelve (12) month period ending on the second anniversary of the Closing Date; provided,
however, that if such amount is a negative number, the Expense Synergy
Amount shall be deemed to be zero.  For
the avoidance of doubt, employee compensation expenses attributable to
Transferred Employees that are not engaged in the Business after the Closing
shall be excluded from the amount calculated pursuant to clause (ii) of
the preceding sentence.

“Financial Statements” shall mean (a) the 2004 Financial
Statements, (b) the Interim Financial Statements and (c) the 2005 Financial
Statements.

“FSA” shall mean the Financial Services Authority.

“FSA Rules” shall mean the rules and regulations issued by the
FSA from time to time

“FSMA” shall mean the Financial Services and Markets Act 2000.

 

5

 

“Funds” shall mean each of IDS Managed Futures, L.P., a Delaware
limited partnership, IDS Managed Futures II, L.P., a Delaware limited
partnership, JWH Global Trust, a Delaware statutory trust, Strategic Partners
Diversified Fund, LLC, a Delaware limited liability company, Strategic Partners
Diversified Master Fund, Ltd., a British Virgin Islands company, and Strategic
Partners Diversified (BVI) Fund, Ltd., a British Virgin Islands company.

“GAAP” shall mean United States generally accepted accounting
principles as in effect on any applicable date.

“Governmental Authority” shall mean the government of the United
States or any foreign country or any state or political subdivision thereof and
any entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including any court, tribunal, grand jury, arbitrator, Self-Regulatory
Organization or any other quasi-governmental entity established to perform such
functions.

“Hazardous Substance” shall mean any material, substance,
constituent, waste, compound or other matter that (a) constitutes a hazardous
substance, toxic substance or pollutant (as such terms are defined by, pursuant
to, or result in liability under, any Environmental Law) or (b) is regulated or
controlled as a hazardous substance, toxic substance, pollutant or other
regulated or controlled material, substance or matter pursuant to any
Environmental Law.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

“Indemnitee” shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article 12.

“Indemnitor” shall mean the Person or Persons claimed by the
Indemnitee to be obligated to provide indemnification under Article 12.

“Information and Records” of any Person shall mean all books and
records (other than minute books and corporate records and including accounting
and other financial books and records), files, databases, plans,
specifications, technical information, confidential information, price lists,
promotional materials, advertising copy and data, marketing research and
information, competitive analyses, customer impact analyses, sales records,
service records, Tax records, customer lists and files (including customer
credit, collection, deposit and complaint information), customer profiles and
other customer information, vendor lists and files, and all other proprietary
information of such Person.

“Intellectual Property” shall mean all United States and foreign
patents (including continuations, continuations-in-part, reissues and
re-examinations thereof) and patent applications; Marks; copyrights and
copyright registrations (and applications for registration of the same); domain
names; trade secrets; computer data (including formulations and analyses),
computer programs and software (in source code and object code form) and
firmware and all related programming, user and systems documentation;
inventions, processes and designs (whether or not patentable or reduced to
practice); know-how and formulae; and all other intellectual property rights
and assets.

 

6

 

“Interim Financial Statements” shall mean the unaudited
financial statements of each of the Non-Fund Entities as of and for the nine (9)
month period ended February 28, 2005, consisting of (a) the balance sheets of
such Subject Entities as of February 28, 2005, (b) the related statements of
operations and retained earnings (deficit) for the nine (9) month period ended
February 28, 2005, and (c) the related statements of cash flows for the nine
(9) month period ended February 28, 2005 (in the case of each of clauses (a),
(b) and (c), including narratives discussing the results of
operations for the aforementioned periods).

“IRS” shall mean the United States Internal Revenue Service.

“Law” shall mean any law, statute, regulation, ordinance, rule,
order, decree, judgment, injunction, common law, consent decree, settlement
agreement or governmental requirement enacted, promulgated, entered into,
agreed or imposed by any Governmental Authority.

“License” shall mean any permit, license, approval, consent or
other authorization required or granted by any Governmental Authority.

“Lien” shall mean any lien (except for any lien for Taxes not
yet due and payable), encumbrance, mortgage, charge, restriction, pledge,
security interest, option, lease, sublease or right of any third party.

“Loss” or “Losses” shall mean any and all losses,
liabilities, costs, claims, damages, penalties and expenses (including
attorneys’ fees and expenses and costs of investigation and litigation).  In the event any of the foregoing are
indemnifiable hereunder, the terms “Loss” and “Losses” shall include any and
all attorneys’ fees and expenses and costs of investigation and litigation
incurred by the Indemnitee in enforcing such indemnity.

“Marks” shall mean registered and unregistered trade names,
trademarks, service names, service marks and logos (and applications for
registration of the same) and all goodwill associated therewith.

“Material Adverse Effect” shall mean an effect (or circumstance
involving a prospective effect) on the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of any of the Acquired Corporations, together with the
Acquired Corporation Subsidiaries, the Funds, the Assets or the Business, taken
as a whole, that is materially adverse or that reduces any such entity’s
ability to consummate the transactions contemplated hereby; provided,
that in each case a “Material Adverse Effect” will not be deemed to include
effects or circumstances resulting from (a) general economic, business,
political or financial conditions that do not have a materially
disproportionate effect on any Asset Seller, the Assets or the Business, (b)
the announcement of the transactions contemplated by this Agreement or (c) any
action taken or omitted to be taken pursuant to the terms of this Agreement.

“Measurement EBITDA” shall mean the earnings before long-term interest,
taxes, depreciation and amortization derived from the operation of the Business
as conducted by Purchaser for the twelve month period ending on the second
anniversary of the Closing Date.  For the
avoidance of doubt, returns on investment relating to First Capitol shall be
excluded from the calculation of Measurement EBITDA.

 

7

 

“Net Asset Amount” shall mean, as of any date, the result of (i)
the sum of (A) the Cash, Cash Equivalents and assets of the type listed on Schedule
1.1(e) attached hereto of the Acquired Corporations and the Acquired
Corporation Subsidiaries (other than First Capitol) and (B) the Cash, Cash
Equivalents and assets of the type listed on Schedule 1.1(e) attached
hereto of the Asset Sellers that are included within the Assets, minus
(ii) the sum of (A) the Current Liabilities of the Acquired Corporations and
the Acquired Corporation Subsidiaries (other than First Capitol) and (b) the
Current Liabilities of the Asset Sellers included within the Assumed
Obligations.

“Non-Fund Entities” shall mean, collectively, the Asset Sellers,
the Acquired Corporations and the Acquired Corporation Subsidiaries.

“Person” shall mean any individual, corporation, proprietorship,
firm, partnership, limited partnership, limited liability company, trust,
association, Governmental Authority or other entity.

“Post Closing Enterprise Value” shall mean an amount equal to:
(i) the sum of (A) the Measurement EBITDA, minus (B) an amount equal to
50% of the Expense Synergy Amount; multiplied by (ii) eight.

“Post Closing Payment Amount” shall mean an amount equal to: (i)
the Post Closing Enterprise Value; minus (ii) $208 million; provided,
however, that in the event that such result is (A) less than $67
million, the Post Closing Payment Amount shall be, and shall be deemed to be,
$67 million, and (B) greater than $192 million, the Post Closing Payment Amount
shall be, and shall be deemed to be, $192 million.

“Pre-Closing Tax Period” 
shall mean (a) any Tax period ending on or before the close of business
on the Closing Date and (b) in the case of any Tax period that includes, but
does not end on, the Closing Date, the portion of such period up to and
including the Closing Date.

“Pro Forma Calculation Principles” shall mean the principles set
forth on Schedule 1.1(f).

“Purchaser Indemnified Parties” shall mean Purchaser and each of
its Affiliates (including, after the Closing, the Acquired Corporations, the
Acquired Corporation Subsidiaries and the Funds), and their respective
officers, directors, employees, agents and representatives; provided, that in no event shall any Seller or
Parent be deemed a Purchaser Indemnified Party.

“Related Agreement” shall mean any Contract that is or is to be
entered into at the Closing or otherwise pursuant to this Agreement.  The Related Agreements executed by a
specified Person shall be referred to as “such Person’s Related Agreements,” “its
Related Agreements” or another similar expression.

“Representatives” shall mean, with respect to any Person, such
Person’s Affiliates and its officers, directors, managers, advisors and other
representatives.

“Restricted Business” shall mean the business of (a) clearing or
executing futures, options on futures, and securities, (b) acting as broker/dealer
of foreign exchange transactions, (c) operating collective investment vehicles
principally engaged in the trading of futures, options on futures, and foreign

 

8

 

exchange, (d) financing of futures, options on
futures, and foreign exchange transactions for unaffiliated Persons, and (e)
operating cash management programs in connection with any of the foregoing.

“Self-Regulatory Organization” shall mean the National
Association of Securities Dealers, Inc., the American Stock Exchange, the
National Futures Association, the Chicago Mercantile Exchange, the Chicago
Board of Trade, the New York Stock Exchange, Inc., any national securities
exchange (as defined in the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder), any other securities
exchange, futures exchange, contract market, commodities market, clearinghouse
or corporation or other similar federal, state or foreign self-regulatory body
or organization.

“Sellers” shall mean, collectively, the Shareholders and the
Asset Sellers.

“Shares” shall mean, collectively, (a) all of the issued and
outstanding shares of common stock, $100.00 par value per share, of the CIS
Managed Assets, (b) all of the issued and outstanding shares of common stock,
$100.00 par value per share, of CIS Investments, (c) all of the issued and
outstanding shares of common stock,$.01 par value per share, of CIS Cash
Management, and (d) all of the issued shares in the capital of CIS Limited, details
of which are given in Schedule 1.1(g).

“Subject Entities” shall mean, collectively, the Asset Sellers,
the Acquired Corporations, the Acquired Corporation Subsidiaries and the Funds.

“Subsidiary” means, with respect to any Person, any corporation
or other organization, whether incorporated or unincorporated, of which (i)
such Person or any other Subsidiary of such Person is a general partner or (ii)
at least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is, directly or indirectly, owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and any one or more
of its Subsidiaries.

“Taxes” shall mean all taxes, charges, fees, duties, levies or
other assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, unclaimed property, escheat, value added, license, payroll,
unemployment, environmental, customs duties, capital stock, disability, stamp,
leasing, lease, user, transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, severance and employees’ income withholding and
Social Security taxes imposed by any Governmental Authority, and such term
shall include all applicable interest, penalties or additions to tax including
any penalties and additions to taxes relating to the failure to comply with tax
reporting obligations including the reporting obligations described in Treasury
Regulation Section 1.6011-4.

“Tax Return” shall mean any report, return, registration,
document, declaration, payee statement or other information or filing required
to be filed or provided to any Governmental Authority or any Person with
respect to Taxes.

 

9

 

“Tax Statute of Limitations Date” shall mean the close of
business on the 60th day after the expiration of the applicable statute of
limitations with respect to Taxes, including any extensions thereof (or if such
date is not a Business Day, the next Business Day).

“Tax and Benefits Warranty” shall mean a representation or
warranty in Section 5.16 or 5.21.

“Title and Authorization Warranty” shall mean a representation
or warranty in Section 5.1, 5.2, 5.3, 5.4, 5.7, 5.27, 6.1, 6.2, 6.3 or 6.5 and the representations and warranties set forth
in Parts 1 and 2 of the UK Warranties Schedule.

“Transition Services Agreement” shall mean a transition services
agreement to be entered into by and between Parent and Purchaser as a condition
to the Closing, pursuant to which Parent will, or will cause its Affiliates to,
provide, for a term of 120 days after Closing, such services (i) as Parent
and/or its Affiliates currently provide to the Subject Entities and (ii) as
Purchaser may reasonably request.  The
Transition Services Agreement shall provide that all services provided by
Parent and/or its Affiliates shall be provided at cost, and shall otherwise
contain usual and customary terms.

“UK Auditors” shall mean KPMG Audit PLC.

“UK Companies Act” shall mean the UK Companies Act of 1985.

“UK Employees” shall mean the Employees of CIS Limited.

“UK Pension Scheme” shall mean the Cargill Pension Plan.

“UK Property” shall mean the leasehold property located at Level
5, 2 More London Riverside, London SE1, as more particularly described in Schedule
1.1(h).

“UK Warranties Schedule” shall mean the schedule attached hereto
setting forth the representations and warranties of Purchaser as to CIS Limited
and the Shares of CIS Limited.

1.2           Other Definitions.  In addition to the terms defined in Section
1.1, certain other terms are defined elsewhere in this Agreement, and, whenever
such terms are used in this Agreement, they shall have their respective defined
meanings, unless the context expressly or by necessary implication otherwise
requires.  The definitions of terms of general
applicability are set forth in the sections listed below.

	
  Term

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2005 Combined Earnings Statement

  	
   

  	
  1.1

  	
   

  
	
  Accounting Firm

  	
   

  	
  4.3(d)

  	
   

  
	
  Acquired US Corporations

  	
   

  	
  2.1

  	
   

  
	
  AGUB

  	
   

  	
  7.13(c)

  	
   

  
	
  Allocation Schedule

  	
   

  	
  7.13(c)

  	
   

  
	
  Arrangements

  	
   

  	
  5.16(a)

  	
   

  
	
  Asset Allocation Schedule

  	
   

  	
  4.5(c)

  	
   

  

 

10

 

	
  Assets

  	
   

  	
  3.1

  	
   

  
	
  Asset Sellers

  	
   

  	
  Recitals

  	
   

  
	
  Assumed Contracts

  	
   

  	
  3.2(a)

  	
   

  
	
  Assumed Licenses

  	
   

  	
  3.2(b)

  	
   

  
	
  Assumed Obligations

  	
   

  	
  3.4

  	
   

  
	
  Benefit Plans

  	
   

  	
  5.16(b)

  	
   

  
	
  Cargill PLC

  	
   

  	
  Recitals

  	
   

  
	
  CIS

  	
   

  	
  Recitals

  	
   

  
	
  CIS Cash Management

  	
   

  	
  Recitals

  	
   

  
	
  CIS Financial

  	
   

  	
  Recitals

  	
   

  
	
  CIS France Employee

  	
   

  	
  7.12(a)

  	
   

  
	
  CIS Investments

  	
   

  	
  Recitals

  	
   

  
	
  CIS Limited

  	
   

  	
  Recitals

  	
   

  
	
  CIS Managed Assets

  	
   

  	
  Recitals

  	
   

  
	
  CIS Management

  	
   

  	
  Recitals

  	
   

  
	
  CIS Securities

  	
   

  	
  Recitals

  	
   

  
	
  CIS Singapore

  	
   

  	
  Recitals

  	
   

  
	
  Closing Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Closing Date Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Closing Date Seller Payment

  	
   

  	
  4.1

  	
   

  
	
  Computer System

  	
   

  	
  5.11

  	
   

  
	
  Deductible Amount

  	
   

  	
  12.4(a)

  	
   

  
	
  Deferred Schedules

  	
   

  	
  1.5(b)

  	
   

  
	
  Employment Agreements

  	
   

  	
  5.16(a)

  	
   

  
	
  Estimated Closing Date Balance Sheet

  	
   

  	
  4.3(a)

  	
   

  
	
  Estimated Closing Date Purchase Price

  	
   

  	
  4.1(b)

  	
   

  
	
  Excluded Assets

  	
   

  	
  3.3

  	
   

  
	
  Excluded Contracts

  	
   

  	
  3.3(i)

  	
   

  
	
  Excluded Customer Accounts

  	
   

  	
  3.3(j)

  	
   

  
	
  Excluded Obligations

  	
   

  	
  3.4(c)

  	
   

  
	
  Final Closing Date Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Final Net Asset Amount

  	
   

  	
  4.3(e)

  	
   

  
	
  Final Post Closing Payment Amount

  	
   

  	
  4.4(d)

  	
   

  
	
  First Capitol Interests

  	
   

  	
  5.4(f)

  	
   

  
	
  First Capitol Interests

  	
   

  	
  3.1(k)

  	
   

  
	
  Intellectual Property Licenses

  	
   

  	
  5.12(a)

  	
   

  
	
  Leased Real Property

  	
   

  	
  5.9(b)

  	
   

  
	
  Licensed Intellectual Property

  	
   

  	
  5.12(a)

  	
   

  
	
  Major Customers

  	
   

  	
  5.25(a)

  	
   

  
	
  Net Asset Objection Notice

  	
   

  	
  4.3(c)

  	
   

  
	
  Non-Competition Covenant

  	
   

  	
  14.2

  	
   

  
	
  Non-Competition Payment

  	
   

  	
  4.2

  	
   

  
	
  Non-Competition Period

  	
   

  	
  14.1(a)

  	
   

  
	
  Owned Intellectual Property

  	
   

  	
  5.12(a)

  	
   

  
	
  Parent

  	
   

  	
  Preamble

  	
   

  
	
  Plans

  	
   

  	
  5.16(a)

  	
   

  

 

11

 

	
  Post Closing Payment

  	
   

  	
  4.4(e)

  	
   

  
	
  Post Closing Payment Objection Notice

  	
   

  	
  4.4(b)

  	
   

  
	
  Property Taxes

  	
   

  	
  13.2

  	
   

  
	
  Purchase Price Increase Amount

  	
   

  	
  4.3(f)

  	
   

  
	
  Purchase Price Reduction Amount

  	
   

  	
  4.3(f)

  	
   

  
	
  Purchaser

  	
   

  	
  Preamble

  	
   

  
	
  Purchaser’s DC Plan

  	
   

  	
  7.12(c(iv)

  	
   

  
	
  Real Property Leases

  	
   

  	
  5.9(b)

  	
   

  
	
  Recipient

  	
   

  	
  13.6(a)

  	
   

  
	
  Reports

  	
   

  	
  5.30

  	
   

  
	
  Section 338 Forms

  	
   

  	
  7.13(b)

  	
   

  
	
  Section 338(h)(10) Elections

  	
   

  	
  7.13(a)

  	
   

  
	
  Severance Period

  	
   

  	
  7.12(b)

  	
   

  
	
  Shareholders

  	
   

  	
  Recitals

  	
   

  
	
  Stock Powers

  	
   

  	
  10.2(a)

  	
   

  
	
  Straddle Period

  	
   

  	
  13.2

  	
   

  
	
  Subject Entity Assets

  	
   

  	
  5.8(b)

  	
   

  
	
  Tax Claim

  	
   

  	
  13.6(a)

  	
   

  
	
  Transfer Taxes

  	
   

  	
  13.3

  	
   

  
	
  Transferred Customer Contracts

  	
   

  	
  3.2(a(ii)

  	
   

  
	
  Transferred Employee

  	
   

  	
  7.12(a)

  	
   

  
	
  Transferred Fixed Assets

  	
   

  	
  3.1(b)

  	
   

  
	
  Transferred Information and Records

  	
   

  	
  3.1(d)

  	
   

  
	
  Transferred Intellectual Property Licenses

  	
   

  	
  3.2(a(iv)

  	
   

  
	
  Transferred Receivables

  	
   

  	
  3.1(c)

  	
   

  
	
  Transferred Owned Intellectual Property

  	
   

  	
  3.1(e)

  	
   

  
	
  Transferred Personal Property Leases

  	
   

  	
  3.2(a(i)

  	
   

  
	
  Transferred Vendor Contracts

  	
   

  	
  3.2(a(iii)

  	
   

  
	
  UK Entity Shareholder

  	
   

  	
  Recitals

  	
   

  
	
  US Entity Shareholders

  	
   

  	
  Recitals

  	
   

  
	
  US Shares

  	
   

  	
  2.1

  	
   

  

 

1.3           Interpretation.  The headings preceding the text of Articles
and Sections included in this Agreement and the headings to Schedules attached
to this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement.  The use of the masculine, feminine or neuter
gender or the singular or plural form of words herein shall not limit any
provision of this Agreement.  The use of
the terms “including” or “include” shall in all cases herein mean “including,
without limitation” or “include, without limitation,” respectively.  Reference to any Person includes such Person’s
successors and assigns to the extent such successors and assigns are permitted
by the terms of any applicable agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually.  Reference to any agreement
(including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect at the time that

 

12

 

is applicable to such reference in accordance with the terms thereof
and, if applicable, the terms hereof. 
Reference to any Law means such Law as amended, modified, codified,
replaced or re-enacted, in whole or in part, at the time that is applicable to
such reference, including rules, regulations, enforcement procedures and any
interpretations promulgated thereunder. 
Underscored references to Articles, Sections, Subsections or Schedules
shall refer to those portions of this Agreement.  The use of the terms “hereunder,” “hereof,” “hereto”
and words of similar import shall refer to this Agreement as a whole and not to
any particular Article, Section or clause of or Exhibit or Schedule to this
Agreement.  No specific representation,
warranty or covenant contained herein shall limit the generality or
applicability of a more general representation, warranty or covenant contained
herein.  A breach of or inaccuracy in any
representation, warranty or covenant shall not be affected by the fact that any
more general or less general representation, warranty or covenant was not also
breached or inaccurate.

1.4           GAAP and Consistency.  For the avoidance of doubt, with respect to
those provisions herein relating to the Closing Balance Sheets, if there is any
conflict between GAAP (on the one hand) and the practices used to prepare the
2004 Balance Sheets (on the other hand), GAAP shall prevail.

1.5           Schedules.

(a)           To
the extent applicable, the information set forth on each Schedule to this
Agreement shall be organized and categorized by reference to the particular
entity or entities to which such scheduled information pertains.

(b)           The
following Schedules shall be delivered by Parent to Purchaser within fifteen
(15) Business Days from the date of this Agreement and shall be referred to
herein as the “Deferred Schedules”:

(i)                                    Schedule 1.1(c), Non-Fund
Entities May 31, 2005 Related Statements of Operations and Retained Earnings
(Deficit)

(ii)                                 Schedule 1.1(d), Non-Fund Entities May 31,
2005 Related Statements of Cash Flows

(iii)          Schedule
1.1(g), Details of CIS Limited

(iv)          Schedule
1.1(h), Description of UK Property

(v)           Schedule  3.1(a), Transferred Contracts;

(vi)          Schedule  3.1(b), Transferred Fixed Assets;

(vii)         Schedule  3.1(e), Transferred Owned Intellectual
Property;

(viii)        Schedule  3.2(a)(i), Transferred Personal Property
Leases;

(ix)           Schedule  3.2(a)(ii), Transferred Customer
Contracts;

(x)            Schedule  3.2(a)(iii), Transferred Vendor
Contracts;

 

13

 

(xi)           Schedule  3.2(a)(iv), Transferred Intellectual
Property Licenses;

(xii)          Schedule  3.2(a)(ix), Transferred Other Contracts;

(xiii)         Schedule  3.2(b), Assumed Licenses;

(xiv)        Schedule
5.3, Consents and Approvals;

(xv)         Schedule
5.4(f), First Capitol;

(xvi)        Schedule  5.9(h), Liens;

(xvii)       Schedule
5.9(g), Customers in Office Space

(xviii)      Schedule  5.10(a), Owned Personal Property;

(xix)         Schedule  5.10(b), Leased Personal Property;

(xx)          Schedule  5.12(a), Intellectual Property;

(xxi)         Schedule  5.12(b),
Representations Covering Intellectual Property;

(xxii)        Schedule
5.13, Contracts;

(xxiii)       Schedule
5.14, Licenses;

(xxiv)       Schedule
5.15, Insurance Policies;

(xxv)                      Schedule 5.16, Employee Benefit Plans and Employment Agreements;

(xxvi)       Schedule
5.17(a), Employees

(xxvii)      Schedule
5.18(a), Capital Improvements;

(xxviii)     Schedule
5.18(b), Significant Non-Capital Expenditures;

(xxix)       Schedule
5.20(e), Registrations

(xxx)        Schedule
5.21, Environmental Matters

(xxxi)       Schedule
5.23, Conflicts of Interest

(xxxii)      Schedule
5.24, Bank Accounts;

(xxxiii)     Schedule
5.25(a), Major Customers;

(xxxiv)     Schedule
5.32, UK Warranties Schedules;

(xxxv)      Schedule
7.3(a), Preservation of Business; and

 

14

 

(xxxvi)     Schedule
7.3(c), Permitted Corporate Changes.

(c)           The
following Schedules shall be agreed upon between Parent and Purchaser prior to
the Closing:

(i)                                    Schedule 4.5(a), Allocation of Purchase Price among
Shares and Assets;

(ii)                                 Schedule 4.5(b), Allocation of Purchase Price among
Entities Selling Shares and Shareholders; and

(iii)          Schedule
4.5(d), Allocation of Non-Competition Payment.

(d)           Neither
the specification of any item or matter in any Deferred Schedule shall be
deemed to modify any representation or warranty contained in this Agreement nor
correct any matter that would constitute a breach of any representation,
warranty, covenant or obligation contained herein or qualify any rights or
remedies of Purchaser hereunder.  Any
information set forth in a Deferred Schedule that constitutes new or revised
information and that has or could reasonably be expected to have a Material
Adverse Effect in the commercially reasonable opinion of Purchaser will permit
Purchaser to terminate this Agreement and not to effect the Closing hereunder,
in addition to Purchaser’s rights under Section 7.11 and the indemnity
provisions hereof.  Notwithstanding
anything to the contrary set forth in this Agreement, each item listed on Schedule
5.3, which is required to be delivered by Parent as provided pursuant to Section
1.5(b), shall be marked with an asterisk (*) for purposes of this
Agreement.

ARTICLE 2.

SALE AND PURCHASE OF SHARESError! Bookmark not defined.

2.1           Sale and Purchase of
Shares of CIS Managed Assets, CIS Investments and CIS Cash Management.  Subject to the terms and conditions of this
Agreement, at and as of the Closing, Parent shall cause the US Entity
Shareholders to sell to Purchaser (with Purchaser relying on representations
and warranties of Parent contained in this Agreement) the Shares of CIS Managed
Assets, CIS Investments and CIS Cash Management (the “Acquired US
Corporations”, and such Shares, the “US Shares”), and Purchaser
shall purchase the US Shares and the entire legal and beneficial ownership of
such US Shares, in each case free and clear of all Liens.1  After the Closing, the Purchaser shall be
entitled to exercise all rights attached or accruing to the Shares of CIS
Managed Assets, CIS Investments and CIS Cash Management, including the right to
receive all dividends, distributions or any return of capital declared, paid or
made by CIS Managed Assets, CIS Investments or CIS Cash Management on or after
the Closing Date.  Purchaser shall not be
obliged to complete the purchase of any of the Shares of CIS Managed Assets,
CIS Investments or CIS Cash Management unless the sale of all of the Shares is
completed simultaneously.

 

1   US Shares to be purchased by a US
corporate affiliate of Purchaser.

15

 

2.2           Sale and Purchase of
Shares of CIS Limited.  Subject to
the terms and conditions of this Agreement, at and as of the Closing, Parent
shall cause the UK Entity Shareholder to sell to Purchaser (with Purchaser
relying on the representations and warranties and the other obligations of the
UK Entity Shareholder under this Agreement) and the Purchaser shall purchase
the entire legal and beneficial ownership of such Shares, free and clear of all
Liens.  After the Closing, the Purchaser
shall be entitled to exercise all rights attached or accruing to the Shares of
CIS Limited including the right to receive all dividends, distributions or any
return of capital declared, paid or made by CIS Limited on or after the Closing
Date.  Purchase shall not be obliged to
complete the purchase of any of the Shares of CIS Limited unless the sale of
all of the Shares is completed simultaneously.

ARTICLE 3.

SALE AND PURCHASE OF ASSETS;

ASSUMPTION OF ASSUMED OBLIGATIONS

3.1           Purchased Assets.  Except as provided in Section 3.3, and
subject to the terms and conditions of this Agreement, at and as of the
Closing, Parent shall cause the Asset Sellers to sell, assign, convey, transfer
and deliver to Purchaser, and Purchaser shall purchase, acquire and take
assignment and delivery of, all of the Asset Sellers’ title, right and interest
in and to all of the assets, properties and rights (wherever located) that are
used or held for use in, primarily related to or necessary for the Business,
including the following:

(a)           Contracts.  The Contracts that Purchaser has reviewed and
agreed to accept as set forth on Schedule 3.1(a);

(b)           Fixed
Assets.  All machinery, equipment,
storage racking, fixed assets, furniture, tools, spare and replacement parts,
maintenance equipment, materials, computers, printers, servers and other items
of personal property of every kind and description that are used or held for
use in, primarily related to or necessary for the Business, other than the
Transferred Inventory (collectively, the “Transferred Fixed Assets”),
including the Transferred Equipment set forth on Schedule 3.1(b);

(c)           Receivables.  All receivables to the extent arising out of
or from the operation of the Business, including trade receivables, rebates,
allowances and other receivables from suppliers (“Transferred Receivables”);

(d)           Information
and Records.  All Information and
Records that are used or held for use in, primarily related to or necessary for
the Business, other than the Transferred Owned Intellectual Property
(collectively, the “Transferred Information and Records”);

(e)           Owned
Intellectual Property.  All
Intellectual Property owned by any Subject Entity, including all rights to sue
and recover for past infringement or misappropriation thereof and to receive
all income, royalties, damages and payments for past and future infringements
thereof, but excluding Intellectual Property that will be provided by Parent
pursuant to the Transition Services Agreement (the “Transferred

 

16

 

Owned Intellectual Property”), including the Transferred Owned Intellectual
Property set forth on Schedule 3.1(e);

(f)            Customer
Goodwill.  All of the goodwill
relating to customer relationships  to
the extent resulting from the conduct of the Business by any Asset Seller;

(g)           Prepaid
Expenses.  All prepaid expenses,
including ad valorem Taxes and lease and rental payments;

(h)           Rights
of Set-Off, etc.  All claims, causes
of action, rights of recovery and rights of set-off of any kind relating to or
arising out of the Assets or the Business, including any claims against
insurance companies;

(i)            Leasehold
Improvements.  All improvements to
any real property leased by any Asset Seller pursuant to any Asset Seller Real
Property Lease made by or for the benefit of the tenant;

(j)            Bank
Accounts and Certain Cash.  All bank
accounts that are used or held for use in, primarily related to or necessary
for the Business and Cash to the extent such Cash cannot be withdrawn from such
bank accounts or is not “available” (as such term is generally used by banks)
at and as of the Closing or is otherwise required for the operation of the
Business at and as of the Closing;

(k)           Interests
in First Capitol Group, LLC.  Subject
to the satisfaction of the condition precedent contained in Section 8.12(i),
all of the equity interests in First Capitol Group, LLC, a Delaware limited
liability company, held by CIS Management (the “First Capitol Interests”);
and

(l)            Other
Assets.  All other assets and rights
of every kind and description not of a type specifically identified in this Section
3.1, wherever located, personal or mixed, tangible or intangible, known or
unknown, that are used or held for use in, primarily related to or necessary
for the Business, including (i) all assets of any Asset Seller reflected on the
2004 Balance Sheets, other than those assets so reflected that have been sold
or otherwise disposed of in the ordinary course of business not in violation of
any provisions of this Agreement during the period from the date of the
2004  Balance Sheets until the Closing
Date and (ii) all assets acquired after the date of the 2004 Balance Sheets by
any Asset Seller primarily in connection with the Business, but excluding, in
any case, (A) any Contract or License (it being understood that the only
Contracts or Licenses to be transferred to Purchaser shall be the Assumed
Contracts and Assumed Licenses) and (B) the Excluded Assets.

All
of the foregoing assets described in this Section 3.1, together with the
Assumed Contracts and the Assumed Licenses, are referred to herein collectively
as the “Assets”.

3.2           Assignment of Contracts
and Licenses.

(a)           Assignment
of Contracts.  Except as provided in Section
3.3, and subject to the terms and conditions of this Agreement, at and as
of the Closing, Parent shall cause

 

17

 

the Asset Sellers to assign and transfer to Purchaser, and Purchaser
shall take assignment of, all of the Asset Sellers’ title, right and interest
in and to all of the Contracts to which the Asset Sellers are a party and that
relate to, in whole or in part, other Assets or that are used or held for use
in, primarily related to or necessary for the Business and that Purchaser has
reviewed and agreed to accept (all such Contracts are referred to herein
collectively as the “Assumed Contracts”), including the following:

(i)            Personal
Property Leases.  All leases to or by
any Asset Seller of personal property, which leases or leased personal property
relate to, in whole or in part, other Assets or are used or held for use in,
primarily related to or necessary for the Business (collectively, the “Transferred
Personal Property Leases”), including the Transferred Personal Property
Leases set forth on Schedule 3.2(a)(i);

(ii)           Customer
Contracts.  All customer Contracts
and other Contracts for the sale or provision by any Asset Seller of goods
and/or services, which Contracts or goods and/or services relate to, in whole
or in part, other Assets or are used or held for use in, primarily related to or
necessary for the Business (collectively, the “Transferred Customer
Contracts”), including the Transferred Customer Contracts set forth on Schedule
3.2(a)(ii), but excluding the customer Contracts relating to the Excluded
Customer Accounts;

(iii)          Vendor
Contracts.  All purchase orders and
other Contracts for the purchase by any Asset Seller of goods and/or services,
which Contracts or goods and/or services relate to, in whole or in part, other
Assets or are used or held for use in, primarily related to or necessary for
the Business (collectively, the “Transferred Vendor Contracts”),
including the Transferred Vendor Contracts set forth on Schedule 3.2(a)(iii);

(iv)          Intellectual
Property Licenses.  All agreements
for the license to or by any Asset Seller of any Intellectual Property, which
agreements or Intellectual Property are held for use in, primarily related to
or necessary for the Business and set forth on Schedule 3.2(a)(iv)  (collectively, the “Transferred
Intellectual Property Licenses”);

(v)           Real
Property Leases.  The Real Property
Leases to which any Asset Seller is party;

(vi)          Non-Disclosure
Obligations.  All non-disclosure,
confidentiality and similar obligations owed to any Asset Seller to the extent
related to the Assets or used or held for use in, primarily related to or
necessary for the Business, including all rights with respect to any obligation
of any current or former employee of the Business owed to any Asset Seller to
maintain the confidentiality of proprietary information of the Business;

(vii)         Claims.  All warranties, indemnities, claims and
rights against third parties given to, assigned to or benefiting any Asset
Seller in connection with the Assets or the Business;

 

18

 

(viii)        Employee
Non-Compete Obligations.  All rights
with respect to any obligation of any current employee or former employee of
the Business owed to any Asset Seller to refrain from competing with the
Business; and

(ix)           Other
Contracts.  All other Contracts set
forth on Schedule 3.2(a)(ix).

(b)           Assignment
of Licenses.  Except as provided in Section
3.3, and subject to the terms and conditions of this Agreement, at and as
of the Closing, the Asset Sellers shall assign and transfer to Purchaser, and
Purchaser shall take assignment of, all of the Asset Sellers’ title, right and
interest in and to all of the Licenses that relate to, in whole or in part,
other Assets or are used or held for use in, primarily related to or necessary
for the Business (collectively, the “Assumed Licenses”), including the
Assumed Licenses set forth on Schedule 3.2(b).

Notwithstanding
anything contained herein or otherwise to the contrary, this Agreement shall
not constitute an agreement to assign any Contract or License or any claim or
right or any benefit or obligation thereunder or resulting therefrom if an
assignment thereof, without the consent of a third party thereto, would
constitute a breach or violation thereof and if such a consent is not obtained
at or prior to the Closing, in which case the provisions of Section 7.4(b)
shall apply, provided that this sentence shall not limit or otherwise
affect the terms of Section 5.3, 6.3, 8.4 or 9.4.

3.3           Excluded Assets.  Notwithstanding the terms of Sections 3.1
and 3.2 or anything else contained herein or otherwise to the contrary,
the following assets of the Asset Sellers shall be retained by the Asset
Sellers, are not being sold or assigned to Purchaser hereunder and do not
constitute Assets, Assumed Contracts or Assumed Licenses (all of the following
are referred to herein collectively as the “Excluded Assets”):

(a)           Cash.  All Cash, except as provided in Section
3.1(j);

(b)           Corporate
Records.  All minute books and
corporate records of the Asset Sellers;

(c)           Intercompany
Agreements.  All Contracts between
any Asset Seller (on the one hand) and any other Asset Seller or any Affiliate
of any other Asset Seller, including the Parent (on the other hand) (other than
those Contracts explicitly set forth on Schedule 3.2(a)(ix) prepared by
Purchaser and delivered to Parent not later than the later of (i) 30 Business
Days after the date hereof or (ii) 15 Business Days after Parent’s delivery of
all of the Deferred Schedules);

(d)           Intercompany
Accounts Receivables.  All accounts
receivable owed to any Asset Seller by any other Asset Seller or any Affiliate
of any other Asset Seller, including the Parent, other than those accounts
receivable incurred in the ordinary course of business;

 

19

 

(e)           Cargill
Marks.  All rights to names which
include “Cargill” and any symbols, logos and marks that include “Cargill”,
together with any combinations or derivatives thereof.

(f)            Exchange
Memberships and Seats.  All exchange
memberships and exchange seats, except for those exchange seats required to
carry on the Business as currently conducted and listed on Schedule 3.3(f);

(g)           Financing
Agreements.  All Contracts relating
to the borrowing of funds by, or extension of credit or financing to, any Asset
Seller.

(h)           Other
Excluded Assets.  All assets of the
Asset Sellers set forth on Schedule 3.3(h) prepared by Purchaser and
delivered to Parent not later than the later of (i) 30 Business Days after the
date hereof or (ii) 15 Business Days after Parent’s delivery of all of the
Deferred Schedules;

(i)            Excluded
Contracts.  All Contracts of the
Asset Sellers set forth on Schedule 3.3(i) prepared by Purchaser and
delivered to Parent not later than the later of (i) 30 Business Days after the
date hereof or (ii) 15 Business Days after Parent’s delivery of all of the
Deferred Schedules (the “Excluded Contracts”);

(j)            Excluded
Customer Accounts.  All customer
accounts and customer Contracts relating thereto (i) that have an unsecured
debit balance at the Closing, and (ii) that are not in compliance at the
Closing with applicable Laws relating to margin or with the Purchaser’s margin
requirements (the “Excluded Customer Accounts”);

(k)           Contracts
Not Conforming to this Agreement. 
Unless Purchaser elects otherwise by notice to Parent, (i) any Contracts
not disclosed pursuant to Section 5.12 or Section 5.13 that
should have been disclosed pursuant thereto, and (ii) any Contracts entered
into in violation of Section 7.3(b); and

(l)            Certain
Contract Rights.  All rights under
the Assumed Contracts to the extent related to any Excluded Obligations.

3.4           Assumed Obligations.  At and as of the Closing, subject to the
terms and conditions of this Agreement (including Section 3.5),
Purchaser shall assume, and agree to pay, perform, fulfill and discharge, the following
obligations of the Asset Sellers (the “Assumed Obligations”):

(a)           Assumed
Contracts.  The obligations of the
Asset Sellers that are required to be performed, and that accrue, after the
Closing under the Assumed Contracts and Assumed Licenses (but excluding any
liabilities of the Asset Sellers in respect of a breach by any Asset Seller of
or default by any Asset Seller under such Assumed Contracts or Assumed Licenses
and any liabilities or obligations arising on or prior to the Closing Date), to
the extent such Assumed Contracts and Assumed Licenses, and all rights of the
Asset Sellers thereunder, are effectively assigned to Purchaser at the Closing
pursuant to Section 3.2; and

 

20

 

(b)           Accounts
Payable.  All obligations with
respect to accounts payable of the Asset Sellers arising in the ordinary course
of business and relating to the Business as of the Closing to the extent set
forth on the Closing Balance Sheets (as finalized pursuant to Section 4.4)
(other than accounts payable relating to Excluded Assets and accounts payable
that are payable to any other Asset Sellers or any Affiliate of any other Asset
Seller).

(c)           No
Other Liabilities Assumed. 
Notwithstanding anything contained herein or otherwise to the contrary,
except as specifically set forth in Section 3.4, neither Purchaser nor
any of its Affiliates shall assume or otherwise be liable in respect of, or be
deemed to have assumed or otherwise be liable in respect of, any debt, claim,
obligation or liability of the Asset Sellers or any of their Affiliates
whatsoever, including (for the avoidance of doubt) any liability for Taxes
related to the Assets or the Business for any Pre-Closing Tax Period (the “Excluded
Obligations”).

3.5           Prorations.

(a)           Parent
and Purchaser agree that all of the items set forth in this Section 3.5
relating to the Assets will be prorated as of the Closing Date, with the Asset
Sellers liable or entitled to receive payment to the extent such items relate
to any time period up to and including the Closing Date and Purchaser liable or
entitled to receive payment to the extent such items relate to periods
subsequent to the Closing Date:  rents,
royalties, maintenance fees, charges and other amounts that in any case are
payable periodically by or to any Asset Seller or Purchaser under any of the
Assumed Contracts or Assumed Licenses.

(b)           Parent
agrees to provide Purchaser with such documents and other records as Purchaser
reasonably requests in order to confirm all adjustment and proration
calculations made pursuant to this Section 3.5.  Final payments with respect to prorations
contemplated by this Section 3.5 that are not ascertainable on or before
the Closing Date shall be settled between the parties as soon as practicable
after they are ascertainable.

(c)           The
parties hereto agree that any and all prorations of Taxes among the parties
shall be effected pursuant to Section 13.2.

ARTICLE 4.

PURCHASE PRICE; OTHER PAYMENTS; ADJUSTMENT;
ALLOCATION

4.1           Payment of Closing Purchase
Price.  In consideration for the
transfer of the Shares and the Assets to Purchaser at and as of the Closing,
Purchaser shall assume the Assumed Obligations and pay the Parent (as
representative for the Asset Sellers and Shareholders) an amount equal to:

(i)            $214,500,000
(the “Estimated Closing Date Purchase Price”); minus

(ii)           the
Non-Competition Payment (the Estimated Closing Date Purchase Price, as so
reduced, is hereinafter referred to as the “Closing Date Seller Payment”).

 

21

 

4.2           Payment of Non-Competition
Payment.  In consideration for
Sellers’ and Parent’s agreement to be bound by the Non-Competition Covenants in
accordance with Article 14, at and as of the Closing, Purchaser shall
pay the Parent an amount equal to $12,500,000 (the “Non-Competition Payment”).

4.3           Purchase Price Adjustment.

(a)           One
Business Day prior to the Closing Date, Parent shall deliver to Purchaser the
following items: (i) a compiled, combined, consolidating balance sheet of the
Non-Fund Entities as of the close of business on the Business Day immediately
preceding the Closing Date prepared in accordance with GAAP consistent with the
practices used to prepare the 2004 Balance Sheets (the “Estimated Closing
Date Balance Sheet”) and an adjusted version of the Estimated Closing Date
Balance Sheet, adjusted in accordance with the Pro Forma Calculation
Principles, and (ii) a certificate of Parent setting forth Parent’s calculation
of the Net Asset Amount as of such date along with a schedule setting forth the
components thereof.

(b)           As
promptly as practicable, but no later than 60 days after the Closing Date,
Purchaser will cause to be prepared and delivered to Parent the following
items: (i) a compiled, combined, consolidating balance sheet of the Non-Fund
Entities as of the close of business on the Closing Date prepared in accordance
with GAAP consistent with the practices used to prepare the 2004 Balance Sheets
(the “Closing Date Balance Sheet”) and an adjusted version of the
Closing Date Balance Sheet, adjusted in accordance with the Pro Forma
Calculation Principles (as so adjusted, the “Final Closing Date Balance
Sheets” and, together with the Closing Date Balance Sheet, the “Closing
Balance Sheet”), and (ii) a certificate of Purchaser setting forth
Purchaser’s calculation of the Net Asset Amount as of such date along with a
schedule setting forth the components thereof. 
The Closing Balance Sheets shall be prepared in accordance with the same
accounting policies and practices used to prepare the 2004 Balance Sheets,
except as would be inconsistent with GAAP, and in the case of the Final Date
Balance Sheet, subject to the Pro Forma Calculation Principles.

(c)           Parent
may dispute Purchaser’s calculation of the Net Asset Amount (including any aspect
of the preparation of the Closing Balance Sheets) by delivering a notice of its
objection (the “Net Asset Objection Notice”) to Purchaser within 30 days
following delivery of the Closing Balance Sheets.  Any Net Asset Objection Notice delivered
pursuant to this Section shall specify in reasonable detail the nature and
dollar amount of any disagreement.

(d)           During
the 15 days following delivery of a Net Asset Objection Notice, the parties
shall use good faith, commercially reasonable efforts to resolve in writing any
differences they may have with respect to the matters specified in the Net
Asset Objection Notice.  At the end of
such 15-day period, the parties shall submit to Ernst & Young, LLP, or such
other nationally recognized independent accounting firm mutually agreeable to
Purchaser and Parent (the “Accounting Firm”), for review and resolution
of all matters that were included in the Net Asset Objection Notice and remain
unresolved notwithstanding efforts undertaken pursuant to this Section
4.3(d), and the Accounting

 

22

 

Firm shall make a final determination as to whether the Closing Balance
Sheets or the Net Asset Amount requires adjustment.  The Accounting Firm shall deliver its
determination to Purchaser and Parent as promptly as practicable but in any
event within 45 days.  Such report shall
be final and binding upon Parent and Purchaser, in the absence of manifest
error.  The costs, fees and expenses of
the Accounting Firm retained pursuant to this Section 4.3(d) shall be
split equally between the Parent and Purchaser.

(e)           The
“Final Net Asset Amount” shall be:

(i)            The
Net Asset Amount in the event that (x) no Net Asset Objection Notice is timely
delivered to Purchaser pursuant to Section 4.3(c), or (y) the
parties so agree;

(ii)           The
Net Asset Amount, adjusted in accordance with the Net Asset Objection Notice,
in the event that (x) Purchaser does not respond to such Net Asset Objection
Notice within the 15-day period following receipt by Purchaser of such Notice,
or (y) the parties so agree; or

(iii)          The
Net Asset Amount, as adjusted by either (x) the agreement of the parties, or
(y) the Accounting Firm in accordance with Section 4.3(d).

(f)            Within
three (3) Business Days after the date on which the Final Net Asset Amount is
determined:

(i)            if
(A) the Final Net Asset Amount is greater than $150 million, and (B) the Net
Asset Amount minus the aggregate amount of assets of the type reflected on Schedule
1.1(b) is equal to or greater than $110 million (in such event, the amount
by which the Final Net Asset Amount exceeds $150 million being hereinafter
referred to as the “Purchase Price Increase Amount”), then Purchaser
shall pay to the Parent (as representative for the Asset Sellers and
Shareholders) the Purchase Price Increase Amount; or

(ii)           if
either (A) the Final Net Asset Amount is less than $150 million, or (B) the Net
Asset Amount minus the aggregate amount of assets of the type reflected on Schedule
1.1(b) is less than $110 million (the greater of the deficiencies
calculated in (A) or (B) being hereinafter referred to as the “Purchase
Price Reduction Amount”), then Parent shall pay to Purchaser the Purchase
Price Reduction Amount.

(g)           Parent
agrees to pay to Purchaser any and all amounts payable to Purchaser by Parent
or Sellers pursuant to this Section 4.3.

(h)           All
payments made hereunder shall be made in accordance with Section 15.5 and to such account or accounts as the receiving party
shall designate in writing to the paying party.

(i)            The
parties hereto agree that the finalization of the Closing Date Adjustment
Materials pursuant to this Section 4.3 shall in no way limit any right
of any

 

23

 

Purchaser Indemnified Party to be indemnified by Parent pursuant to Section
12.2 (including the right of any Purchaser Indemnified Party to be
indemnified by Parent for any breach of or any inaccuracy in any representation
or warranty set forth in Section 5.5).

4.4           Post-Closing Payment.

(a)           As
promptly as practicable, but no later than 60 days after the second anniversary
of the Closing Date, Purchaser will cause to be prepared and delivered to
Parent a certificate of Purchaser setting forth Purchaser’s calculation of the
Post Closing Payment Amount.  Within 15 days
following the delivery of the certificate, Parent may request that the
Accounting Firm audit the calculation of the Post Closing Payment Amount.  The Accounting Firm shall deliver an audit
report to Purchaser and Parent as promptly as practicable but in any event
within 45 days of the request for the audit. 
The cost of such audit shall be borne equally by both Purchaser and
Parent; provided, however, that if Parent disputes Purchaser’s
calculation of the Post Closing Payment Amount and delivers a Post Closing
Payment Objection Notice to Purchaser pursuant to Section 4.4(b), the
cost associated with such audit shall be allocated as set forth in clauses (i)
and (ii) of the last sentence of Section 4.4(c).

(b)           Parent
may dispute Purchaser’s calculation of the Post Closing Payment Amount by
delivering a notice of its objection (the “Post Closing Payment Objection
Notice”) to Purchaser within (i) 30 days following delivery of the
certificate described above in Section 4.4(a) or (ii) if Parent requests
an audit of the Post Closing Payment Amount, 10 days following the Accounting
Firm’s delivery of the audit report to Purchaser and Parent.  Any Post Closing Payment Objection Notice
delivered pursuant to this Section shall specify in reasonable detail the
nature and dollar amount of any disagreement.

(c)           During
the 15 days following delivery of a Post Closing Payment Objection Notice, the
parties shall use good faith, commercially reasonable efforts to resolve in
writing any differences they may have with respect to the matters specified in
the Post Closing Payment Objection Notice. 
At the end of such 15-day period, the parties shall submit to the
Accounting Firm for review and resolution of all matters that were included in
the Post Closing Payment Objection Notice and remain unresolved notwithstanding
efforts undertaken pursuant to this Section 4.4(c), and the Accounting
Firm shall make a final determination as to whether the Post Closing Payment
Amount requires adjustment.  The
Accounting Firm shall deliver its determination to Purchaser and Parent as
promptly as practicable but in any event within 45 days.  Such report shall be final and binding upon
Parent and Purchaser, in the absence of manifest error.  The cost of such review and report shall be
borne (i) by Purchaser, if the Post Closing Payment Amount, as set forth
in Purchaser’s calculation thereof delivered pursuant to Section 4.4(a),
is greater than the Post Closing Payment Amount, or (ii) by Parent, if the
Post Closing Payment Amount, as set forth in Purchaser’s calculation thereof
delivered pursuant to Section 4.4(a), is equal to or less than the Final
Post Closing Payment Amount.

 

24

 

(d)           The
“Final Post Closing Payment Amount” shall be:

(i)            The
Post Closing Payment Amount in the event that (x) no Post Closing Payment
Objection Notice is timely delivered to Purchaser pursuant to Section 4.4(b),
or (y) the parties so agree;

(ii)           The
Post Closing Payment Amount, adjusted in accordance with the Post Closing Payment
Objection Notice, in the event that (x) Purchaser does not respond to such Post
Closing Payment Objection Notice within the 15-day period following receipt by
Purchaser of such Notice, or (y) the parties so agree; or

(iii)          The
Post Closing Payment Amount, as adjusted by either (x) the agreement of the
parties, or (y) the Accounting Firm in accordance with Section 4.4(c).

(e)           Within
three (3) Business Days after the date on which the Final Post Closing Payment
Amount is determined, Purchaser shall pay (the “Post Closing Payment”)
to the Parent (as representative for the Asset Sellers and Shareholders) the
Post Closing Payment Amount.

4.5           Allocation of Purchase Price.

(a)           The
Closing Date Seller Payment shall be allocated among the Shares and the Assets
as agreed upon and set forth on Schedule 4.5(a) prepared by the
Purchaser and agreed upon by the parties.

(b)           The
Closing Date Seller Payment with respect to the Shares shall be allocated to
the Shares of CIS Managed Assets, CIS Investments, CIS Cash Management and CIS
Limited, and among the respective Shareholders, as agreed upon and set forth on
Schedule 4.5(b) prepared by the Purchaser and agreed upon by the
parties.

(c)           The
Closing Date Seller Payment with respect to the Assets shall be allocated among
the Assets and among the Asset Sellers in accordance with a schedule delivered
by Purchaser to the Parent within sixty (60) days after the Closing Date,
allocating the Closing Date Seller Payment (including the amount of any Assumed
Obligations) among the Assets of the Asset Sellers in accordance with Section
1060 of the Code and the regulations thereunder (the “Asset Allocation
Schedule”).  If within thirty (30)
days of receipt of the Asset Allocation Schedule, the Parent notifies Purchaser
in writing that Parent objects to one or more items reflected in the Asset
Allocation Schedule, Parent and Purchaser shall negotiate in good faith to
resolve such dispute.  If Parent and
Purchaser fail to resolve any such dispute within thirty (30) days of Purchaser’s
receipt of Parent’s notice, the parties shall submit the dispute for resolution
to the Accounting Firm for resolution of the dispute, which resolution shall be
final and binding on all parties.  The
fees and expenses of the Accounting Firm shall be apportioned between the
parties by the Accounting Firm based on the degree to which each party’s claims
were unsuccessful and shall be paid by the parties in accordance with such
determination.

 

25

 

(d)           The
Non-Competition Payment shall be allocated among Parent and Sellers as agreed
upon and set forth on Schedule 4.5(d) prepared by the Purchaser and
agreed upon by the parties.

(e)           The
parties hereto agree to make appropriate adjustments to Schedule 4.5(a),
Schedule 4.5(b) and the Asset Allocation Schedule to reflect any
adjustments to the Adjusted Purchase Price (or the Assumed Obligations).  Any such adjustment to the purchase price
shall be allocated as provided by Treasury Regulation Section 1.1060-1(c).  Following the Closing, Purchaser and Parent
and their respective Affiliates, in connection with their respective U.S.
federal, state and local income Tax Returns and other filings (including
Internal Revenue Service Form 8594), shall not (and shall cause their Affiliates
not to) take any position inconsistent with the allocations set forth on Schedule
4.5(a), Schedule 4.5(b), the Asset Allocation Schedule (as such
schedules may be adjusted as contemplated in this Section 4.5(e)) or Schedule
4.5(d).

4.6           Conduct of Business After
Closing.

(a)           During
the period beginning on the Closing Date and ending on the date of the
determination of the Final Post Closing Payment Amount, Purchaser shall:

(i)            use
reasonable best efforts to maintain the Information and Records relating to the
Business in a manner consistent with good commercial practices and in a manner
that will enable Purchaser to calculate the Expense Synergy Amount; and

(ii)           allocate
selling, general and administrative expenses to the Business in a manner
consistent with the current allocations among Purchaser’s subsidiaries and
business units.

(b)           During
the period beginning on the Closing Date and ending on the second anniversary
of the Closing Date, Purchaser shall provide Parent, no later than 30 days
after the last day of each fiscal quarter of the Business, a report of the
earnings before long-term interest, taxes, depreciation and amortization
derived from the Business during such fiscal quarter, and shall provide Parent
with reasonable documentation relating to such report.  In the event that Parent reasonably believes
that any report provided pursuant to the immediately preceding sentence is
materially deficient, Parent shall have the right, at any time after the first anniversary
of the Closing Date, to review the Information and Records solely to enable
Parent to assess such reports.

(c)           During
the period beginning on the second anniversary of the Closing Date and ending
on the date of the determination of the Final Closing Payment Amount, and
solely to enable Parent to review Purchaser’s calculation of the Post Closing
Payment Amount, Purchaser shall allow Parent reasonable access to the
Information and Records relating to the Business.

 

26

 

ARTICLE 5.

REPRESENTATIONS AND
WARRANTIES OF PARENT

Parent represents and warrants to Purchaser, as of the date of this
Agreement and as of the Closing (as if such representations and warranties were
remade as of the Closing), as follows:

5.1           Due Incorporation.

(a)           Parent,
each Seller and each Subject Entity is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization,
with all requisite power and authority to own, lease and operate its properties
and to carry on its business as they are now being owned, leased, operated and
conducted.  Parent, each Seller and each
Subject Entity is licensed or qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of the properties
owned, leased or operated by it or the business transacted by it require such
licensing or qualification.  The
jurisdictions in which Parent, each Seller and each Subject Entity is
incorporated and licensed or qualified to do business as a foreign corporation
are set forth on Schedule 5.1(a).

(b)           Except
as set forth on Schedule 5.1(b), no Subject Entity has any direct or
indirect Subsidiaries, either wholly or partially owned, and no Subject Entity
holds any direct or indirect economic, voting or management interest in any
Person or directly or indirectly owns any security issued by any Person.

(c)           True,
correct and complete copies of the Articles of Incorporation and by-laws (or
similar organizational instruments), and all minutes of all meetings (or written
consents in lieu of meetings) of the Board of Directors (and all committees
thereof) and shareholders, of Parent and each Subject Entity for the past 3
years have been delivered to Purchaser. 
All action taken by the Boards of Directors (and all committees thereof)
and shareholders of Parent and each Subject Entity is reflected in such minutes
and written consents.

5.2           Due Authorization.  Parent has full power and authority to
execute, deliver and perform this Agreement and Parent, Sellers and each Subject
Entity will have at the Closing, full power and authority to execute, deliver
and perform their respective Related Agreements and to consummate the
transactions contemplated hereby (in the case of Parent only) and thereby.  The execution, delivery and performance by
Parent of this Agreement and the execution, delivery and performance by Parent,
each Seller and each Subject Entity of its respective Related Agreements, and
the consummation by Parent, such Seller or such Subject Entity of the transactions
contemplated hereby and thereby, have been, or in the case of Sellers and the
Subject Entities, will have been at the Closing, duly and validly approved by
Parent’s, such Seller’s and such Subject Entity’s board of directors and, to
the extent required by applicable Law, by all shareholders of Parent, such
Seller and such Subject Entity entitled to vote thereon, and no other actions
or proceedings on the part of Parent, such Seller or such Subject Entity are or
will be necessary to authorize the execution, delivery and performance by
Parent of this Agreement, or Parent, such Seller or such Subject Entity of its
respective Related Agreements or the

 

27

 

transactions contemplated hereby (in the case of Parent only) and
thereby, as applicable.  Parent has duly
and validly executed and delivered this Agreement and Parent, each Seller and
each Subject Entity has duly and validly executed and delivered (or prior to or
at the Closing will duly and validly execute and deliver) their Related
Agreements.  This Agreement constitutes a
legal, valid and binding obligation of Parent, and Parent’s, each Seller’s and
each Subject Entity’s Related Agreements upon execution and delivery by Parent,
such Seller or such Subject Entity will constitute legal, valid and binding
obligations of Parent, such Seller or such Subject Entity, in each case,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect that 
affect the enforcement of creditors’ rights generally, and by equitable
limitations on the availability of specific remedies and by principles of
equity.

5.3           Consents and Approvals; Authority
Relative to this Agreement.

(a)           Except
as set forth on Schedule 5.3, no consent, authorization or approval of,
filing or registration with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery and performance by Parent of this Agreement and the
execution, delivery and performance by Parent, each Seller and each Subject
Entity of its respective Related Agreements or the consummation by Parent, each
Seller and each Subject Entity of the transactions contemplated hereby or
thereby, as applicable.

(b)           Except
as set forth on Schedule 5.3, the execution, delivery and performance by
Parent of this Agreement and the execution, delivery and performance by Parent,
each Seller and each Subject Entity of its respective Related Agreements, and
the consummation by Parent, each Seller and each Subject Entity of the
transactions contemplated hereby and thereby, do not and will not (i) violate
any Law applicable to or binding on Parent, any Seller or any Subject Entity or
any of their respective assets or properties; (ii) violate or conflict with,
result in a breach or termination of, constitute a default or give any third
party any additional right (including a termination right) under, permit
cancellation of, result in the creation of any Lien upon any of the assets or
properties of Parent, any Seller or any Subject Entity under, or result in or
constitute a circumstance that, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any Contract to which
Parent, any Seller or any Subject Entity is a party or by which Parent, any
Seller or any Subject Entity or any of their respective assets or properties
are bound; (iii) permit the acceleration of the maturity of any indebtedness of
Parent, any Seller or any Subject Entity or indebtedness secured by their
respective assets or properties; or (iv) violate or conflict with any provision
of any of the Articles of Incorporation, by-laws or similar organizational
instruments of Parent, any Seller or any Subject Entity.

5.4           Capitalization.

(a)           The
authorized capital stock of CIS Managed Assets consists of 500 shares of common
stock, par value $100.00 per share, of which 500 shares are currently issued
and outstanding, all of which are held beneficially and of record by CIS.  The authorized capital stock of CIS
Investments consists of 30,000 shares of common stock,

 

28

 

par value $100.00 per share, of which 10 shares are currently issued
and outstanding, all of which are held beneficially and of record by CIS.  The authorized capital stock of CIS Cash
Management consists of 100 shares of common stock, par value $0.01 per share,
of which 100 shares are currently issued and outstanding, all of which are held
beneficially and of record by CIS Holdings. 
The shares of CIS Managed Assets, CIS Investments and CIS Cash
Management included within the Shares constitute all of the issued and
outstanding shares of capital stock of CIS Managed Assets, CIS Investments and
CIS Cash Management, respectively.

(b)           All
of the Shares (i) are validly issued, fully paid and nonassessable and (ii)
are, and when issued were, free of preemptive rights.  The Shares are owned beneficially and of
record by the Shareholders, free and clear of any and all Liens, in the amounts
set forth above.  There are no shares of
capital stock of any Acquired Corporation held in the treasury of such Acquired
Corporation and no shares of capital stock of any Acquired Corporation are
currently reserved for issuance for any purpose or upon the occurrence of any
event or condition.

(c)           The
authorized capital stock of each Acquired Corporation Subsidiary, the
outstanding shares of capital stock of each Acquired Corporation Subsidiary and
the legal and beneficial ownership thereof are accurately set forth on Schedule
5.4(c).  All of the outstanding
shares of capital stock of each Acquired Corporation Subsidiary (i) are validly
issued, fully paid and nonassessable, (ii) are, and when issued were, free of
preemptive rights and (iii) are free and clear of any and all Liens.  CIS Investments is the legal and beneficial
owner of all of the general partnership interests in the Funds, free and clear
of all Liens, and has good and marketable title to the general partnership
interests in the Funds.  The general
partnership interests in the Funds were duly authorized and validly issued and
are, and when issued were, free of preemptive rights.  The general partnership interests in the
Funds are not represented in physical form by any certificate or other similar
instrument.  There is no general
partnership interest in any Fund currently reserved for issuance for any
purpose or issuable upon the occurrence of any event or condition, and there
exists no obligation to admit any Person as a general partner of any Fund.

(d)           Except
as set forth in Section 5.4(b) and on Schedule 5.4(c), there are
no shares of capital stock or other securities (whether or not such securities
have voting rights) of the Acquired Corporations or any Acquired Corporation
Subsidiary issued or outstanding or any subscriptions, options, warrants,
calls, rights, convertible securities or other agreements or commitments of any
character obligating the Shareholders, Acquired Corporations or any Acquired
Corporation Subsidiary, or obligating the Shareholders or any of their
Affiliates to cause the Acquired Corporations or any Acquired Corporation
Subsidiary, to issue, transfer or sell, or cause the issuance, transfer or sale
of, any shares of capital stock or other securities (whether or not such
securities have voting rights) of the Acquired Corporations or any Acquired
Corporation Subsidiary.  There are no
outstanding contractual obligations of any Shareholders, any Acquired
Corporation or any Acquired Corporation Subsidiary that relate to the purchase,
sale, issuance, repurchase, redemption, acquisition, transfer, disposition,
holding or voting of any shares of capital stock or other securities of any
Acquired Corporations or any Acquired

 

29

 

Corporation Subsidiary or the management or operation of any Acquired
Corporation or any Acquired Corporation Subsidiary.  Except for the Shareholders’ rights as holder
of Shares, no Person has any right to participate in, or receive any payment
based on any amount relating to, the revenue, income, value or net worth of any
Acquired Corporation or any Acquired Corporation Subsidiary or any component or
portion thereof, or any increase or decrease in any of the foregoing.

(e)           The
assignments, endorsements, stock powers and other instruments of transfer
delivered by the Shareholders to Purchaser at the Closing will be sufficient to
transfer to Purchaser the entire interest, legal and beneficial, in the Shares
and in the general partnership interests in the Funds.  The Shareholders have, and at the Closing
will have, full power and authority to convey good and marketable title to all
of the Shares and to the general partnership interests in the Funds, and upon
transfer by the Shareholders to Purchaser of the certificates representing such
Shares and such general partnership interests, Purchaser will receive good and
marketable title to such Shares and such general partnership interests, free
and clear of any and all Liens.

(f)            The
authorized capital stock of First Capitol Group, LLC, a Delaware limited
liability company (“First Capitol”), is shown on Schedule 5.4(f).  The Sellers have, prior to the date hereof,
provided Purchaser with a true and correct copy of the limited liability
company agreement of First Capitol.

5.5           Financial Statements; Undisclosed
Liabilities.

(a)           A
true, correct and complete copy of the 2004 Financial Statements is set forth
on Schedule 5.5(a).  The 2004
Financial Statements (A) have been prepared in accordance with GAAP
consistently applied and (B) present fairly in all material respects the
financial position, assets and liabilities of each of the Non-Fund Entities as
of the date thereof and the results of operations, revenues, expenses and cash
flows of each Non-Fund Entity for the respective periods covered thereby.

(b)           A
true, correct and complete copy of the Interim Financial Statements is set
forth on Schedule 5.5(b).  The
Interim Financial Statements (i) have been prepared in accordance with internal
financial reporting policies of the Non-Fund Entities consistent with past
practice and (ii) present fairly in all material respects the financial
position, assets and liabilities of each Non-Fund Entity as of the respective
dates thereof and the results of operations, revenues, expenses and cash flows
of each Non-Fund Entity for the respective periods covered thereby.

(c)           Once
delivered pursuant to Section 7.15, the 2005 Financial Statements (A)
will have been prepared in accordance with GAAP consistently applied and (B)
will present fairly in all material respects the financial position, assets and
liabilities of each of the Non-Fund Entities as of the date thereof and the
results of operations, revenues, expenses and cash flows of each Non-Fund
Entity for the respective periods covered thereby.

 

30

 

(d)           The
Financial Statements are (or will be, in the case of the 2005 Financial
Statements) in accordance with the books and records of the Non-Fund Entities,
do not reflect any transactions that are not bona fide transactions and do not
contain any untrue information or disclosures of a material nature or omit any
material fact necessary to make the information and disclosures contained
therein, in light of the circumstances in which they were made, not misleading.

(e)           Except
as set forth in the audited balance sheets included in the Financial
Statements, the Non-Fund Entities have no liabilities, debts, claims or obligations,
whether accrued, absolute, contingent or otherwise, whether due or to become
due, other than trade payables and accrued expenses incurred in the ordinary
course of business and consistent with past practice since December 31, 2004.

(f)            There
is no Debt outstanding.

5.6           No Adverse Effects or Changes.

(a)           Except
as set forth on Schedule 5.6, since February 28, 2005, the Subject
Entities have conducted their businesses only in the ordinary course and
consistent with past practices.

(b)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since February 28, 2005, no Subject Entity has:

(i)            suffered
any Material Adverse Effect;

(ii)           suffered
any damage, destruction or Loss (other than trading losses in the case of the
Funds) to any of its assets or properties (whether or not covered by
insurance);

(iii)          taken
any action or entered into or authorized any Contract or transaction other than
in the ordinary course of business and consistent with past practice;

(iv)          sold,
transferred, conveyed, assigned or otherwise disposed of any of its assets or
properties, except sales of inventory in the ordinary course of business and
consistent with past practice;

(v)           waived,
released, settled or canceled any claims against third parties or debts owing
to it, or any rights that have any value;

(vi)          made
any changes in its accounting systems, policies, principles, practices or
methods;

(vii)         entered
into, authorized or permitted any transaction with any other Subject Entity or
Parent, or any Affiliate of any of them, other than in the ordinary course of
business and consistent with past practice;

 

31

 

(viii)        suffered
or permitted the creation of any Lien over any of its assets (including, with
respect to the Asset Sellers, any of the Assets);

(ix)           made
any borrowings, incurred any debt (other than trade payables in the ordinary
course of business and consistent with past practice), or assumed, guaranteed,
endorsed (except for the negotiation or collection of negotiable instruments in
transactions in the ordinary course of business and consistent with past
practice) or otherwise become liable (whether directly, contingently or
otherwise) for the obligations of any other Person, or made any payment or
repayment in respect of any indebtedness (other than trade payables,
indebtedness pursuant to subordinated loans, or accrued expenses in the
ordinary course of business and consistent with past practice);

(x)            made
any loans, advances or capital contributions to, or investments in, any other
Person;

(xi)           entered
into, adopted, amended or terminated any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee, or
increased in any manner the compensation or fringe benefits of any director,
officer or employee or paid any benefit not required by any existing plan and
arrangement or entered into any Contract, agreement, commitment or arrangement
to do any of the foregoing;

(xii)          acquired
or leased any assets outside the ordinary course of business;

(xiii)         acquired,
leased or encumbered any assets that are material to any Subject Entity other
than in the ordinary course of business and consistent with past practice;

(xiv)        filed
any amended Tax Return or any claim for refund of Taxes, amended any payment of
Taxes paid by or on behalf of any Subject Entity, waived or extended the
statute of limitations in respect of any Taxes, made, revoked, or amended any
Tax election (other than the contemplated election to treat CIS Limited as a
branch of Cargill PLC for United States federal income tax purposes), changed
any method of Tax accounting or Tax procedure or practice, or settled or
compromised any claim relating to Taxes;

(xv)         paid
any amount, performed any obligation or agreed to pay any amount or perform any
obligation, in settlement or compromise of any suit or claim of liability
against any Subject Entity or any of its respective directors, officers,
employees or agents;

 

32

 

(xvi)        terminated,
modified, amended or otherwise altered or changed any of the terms or
provisions of any Contract, or paid any amount not required by Law or by any
Contract; or

(xvii)       agreed,
whether in writing or otherwise, to do any of the foregoing.

(c)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since February 28, 2005, no Acquired Corporation or Acquired
Corporation Subsidiary has:

(i)            authorized
for issuance, issued, sold, delivered or agreed or committed to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
convertible or exchangeable securities, commitments, subscriptions, rights to
purchase or otherwise) any shares of its capital stock or any other securities
of the Acquired Corporation or any Acquired Corporation Subsidiary, or amended
any of the terms of any such capital stock or other securities;

(ii)           split,
combined or reclassified any shares of its capital stock, declared, set aside
or, except as expressly permitted pursuant to Section 7.3, paid any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or redeemed or otherwise
acquired any capital stock or other securities of the Acquired Corporation or
any Acquired Corporation Subsidiary; or

(iii)          agreed,
whether in writing or otherwise, to do any of the foregoing.

(d)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since December 31, 2004, no Fund has:

(i)            declared,
set aside, or paid any distribution (excluding redemptions); or

(ii)           made
any material changes in the customary methods of operations of the Fund,
including trading strategy, marketing and selling.

5.7           Title to Properties.

(a)           The
Acquired Corporations, Acquired Corporation Subsidiaries and Funds, at and as
of the Closing, will have good and marketable title to, and will be the lawful
owners of, all of the tangible and intangible assets, properties and rights to
be reflected in the Final Balance Sheets (as finalized pursuant to Section
4.3), free and clear of any and all Liens.

(b)           The
Asset Sellers, at and as of the Closing, will have good and marketable title
to, and will be the lawful owners of, all of the Assets, free and clear of any
and all Liens.  The Asset Sellers have or
will have the full right to sell, convey, transfer, assign and deliver the
Assets to Purchaser, subject to obtaining all consents set forth in Schedule

 

33

 

5.3, and,
at and as of the Closing, each Asset Seller will, except as provided in the
last sentence of Section 3.2, convey the Assets to Purchaser by deeds,
bills of sale, certificates of title and instruments of assignment and transfer
effective to vest in Purchaser, and Purchaser shall have, good and marketable
and valid title to all of the Assets, free and clear of any and all Liens.

5.8           Condition and Sufficiency
of Assets.

(a)           To
the knowledge of Parent and Sellers, all of the tangible assets and properties
of the Acquired Corporations, the Acquired Corporation Subsidiaries and the
Funds, and all of the tangible Assets, in each case, whether real or personal,
owned or leased, have been well maintained and are in good operating condition
and repair (with the exception of normal wear and tear), and are free from
defects other than such minor defects as do not interfere with the intended use
thereof in the conduct of normal operations.

(b)           The
Assets, together with all of the assets, properties and rights of the Acquired
Corporation, the Acquired Corporation Subsidiaries and the Funds (collectively,
the “Subject Entity Assets”), constitute all of the assets, properties
and rights (except for the Excluded Assets) that are currently used in
connection with the conduct of the businesses of the Subject Entities and the
Funds as they are presently conducted and have been conducted since February
28, 2005.  The Subject Entity Assets,
together with the Excluded Assets, were sufficient to produce the income for the
nine (9) month period ended February 28, 2005 as shown on the statement of
earnings for that period set forth in the Combined Financial Statements.

5.9           Real Property.

(a)           No
Subject Entity owns any real property.

(b)           Schedule
5.9(b) sets forth a true, correct and complete list of all real estate held
by any Subject Entity under real property leases (the “Leased Real Property”)
and all leases covering the Leased Real Property, including all amendments
thereto (the “Real Property Leases”). 
The Leased Real Property constitutes all of the real property interests
held by the Subject Entities and required for or currently used in connection
with the operation of their respective businesses as they are presently
conducted and have been conducted since December 31, 2004.  Parent or Sellers have delivered to Purchaser
true, correct and complete copies of all Real Property Leases together with
copies of all reports (if any) of any engineers, environmental consultants or
other consultants in their possession or under their control or in the
possession or control of the Acquired Corporations or any Acquired Corporation
Subsidiary relating to any of the Leased Real Property.

(c)           The
Leased Real Property has at all times been maintained and repaired by the
Subject Entities as required under the Real Property Leases and in a manner in
accordance with sound property management practice.  To the extent that a Subject Entity has
constructed or caused to be constructed any improvements to any Leased Real

 

34

 

Property, such entity represents and warrants to Purchaser that, to the
knowledge of Parent and Sellers, such improvements were constructed in a manner
in accordance with sound construction practice and that there are no material
defects or deficiencies in the design, construction, fabrication, manufacture
or installation of any such improvements in the Leased Real Property.  To the knowledge of Parent and Sellers, all
systems, elements and components of the Leased Real Property (including all
machinery, fixtures and equipment, the roof, foundation and structural
elements, and the elevator, mechanical, electrical and life safety systems) are
in good working order and repair and sound operating condition, subject to
ordinary wear and tear and routine maintenance.

(d)           To
the knowledge of Parent and Sellers, each Leased Real Property and the
activities carried on in all buildings, warehouses, plants, facilities,
installations, fixtures and other structures or improvements included as part
of, or located on or at, each such Leased Real Property, complies with, is not
in violation of, or in conflict with, any Law applicable to or binding on such
Leased Real Property or any Subject Entity or any of its respective assets or
properties.

(e)           To
the knowledge of Parent and Sellers, none of the Leased Real Property is
subject to any Lien, easement, right-of-way, building or use restriction,
exception, variance, reservation or limitation that might interfere with or
impair the present and continued use thereof in the usual and normal conduct of
the business and operations of any Subject Entity.

(f)            To
the knowledge of Parent and Sellers, each separate parcel included in the
Leased Real Property has adequate water supply, storm and sanitary sewer
facilities, access to telephone, gas and electrical connections, fire
protection, drainage and other public utilities, and has adequate parking
facilities that meet all requirements imposed by Laws applicable to or binding
on any Asset Seller or any of its respective assets or properties.

(g)           All
the Real Property Leases are in full force and effect, valid and enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors’ rights
generally and by equitable limitations on the availability of specific
remedies.  No Subject Entity has received
any notice of any, and there exists no, dispute, claim, event of default or
event that constitutes or would constitute (with notice or lapse of time or
both) a default under any Real Property Lease, except for such defaults or
breaches that may arise from, or otherwise be caused by, the occupancy of the
respective leased premises by customers (or other similar third parties).  Schedule 5.9(g) lists the customers of
the Business and other similar Persons occupying space on the premises leased
under each Real Property Lease.  All rent
and other amounts due and payable with respect to the Real Property Leases have
been paid.  Except for the Real Property
Lease relating to the Minneapolis property (which consists of a month to month
tenancy), none of the Real Property Leases are expected to expire or terminate
during the year following the Closing Date.

 

35

 

(h)           Except
as set forth on Schedule 5.9(h), no work has been performed or is in
progress at, and no materials have been furnished to any Subject Entity for use
at, any of the Leased Real Property that may give rise to any mechanic’s,
materialmen’s or other Lien against any of the Leased Real Property.

5.10         Personal Property.

(a)           Schedule
5.10(a), when delivered by Parent pursuant to Section 1.5, will set
forth a true and correct (in all material respects) list as of June 30, 2005 of
(i) all of the tangible personal property owned by the Acquired Corporations or
any Acquired Corporation Subsidiary and (ii) all of the tangible personal
property owned by any Asset Seller and included in the Assets (excluding, in
the case of each of clauses (i) and (ii), tangible personal
property set forth on Schedule 5.10(b)). 
All of such owned tangible personal property is utilized by the Subject
Entities in the ordinary course of business.

(b)           Schedule
5.10(b), when delivered by Parent pursuant to Section 1.5, will sets
forth a true and correct (in all material respects) list as of June 30, 2005 of
(i) all leases of tangible personal property (including the Transferred
Personal Property Leases) binding upon any Asset Seller or any of its
respective assets or properties and (ii) all items of tangible personal
property covered thereby.  All of such
leased tangible personal property is utilized by the Subject Entities in the
ordinary course of business.  Sellers
have made available to Purchaser true, correct and complete copies of all such
personal property leases.

5.11         Computer System.  To the knowledge of Sellers and Parent, all
computer hardware and software and related materials currently used by any
Subject Entity in its respective business, including all such computer
hardware, software and related materials included in the Assets (herein
collectively referred to as the “Computer System”) are in good working
order and condition, no Subject Entity has experienced any significant defect
in design, workmanship or material of the Computer System.  Except as set forth on Schedule 5.11,
the use of the Computer System by the Subject Entities (including any software
modifications) (a) has not violated or infringed upon and will not violate or
infringe upon the rights of any third parties and (b) has not resulted in and
will not result in the termination of any maintenance, service or support
agreement relating to any part of the Computer System (including any Assumed
Contract) or any reduction in the services provided to any Subject Entity,
warranties available to any Subject Entity or rights of any Subject
Entity.  The Subject Entity Assets
include adequate user and service documentation for the Computer System.  Each Subject Entity maintains Computer System
back-up and recovery.  Each Subject
Entity maintains Computer System and network security controls designed to
safeguard such Computer System against the risk of business disruption arising
from virus attacks, unauthorized activities of any employee or contractor of
any Subject Entity, hackers or any other Person.  To the knowledge of Sellers and Parent, any
Owned Intellectual Property licensed to third-parties does not include any open
source software or source code that is subject to any public license (e.g., the
“GNU General Public License”).

 

36

 

5.12         Intellectual Property.

(a)           Schedule
5.12(a) sets forth a true, correct and complete list of  all of applications and registrations for the
Marks, patents, patent applications, copyright registrations and copyright
applications and domain names  owned by
any Subject Entity (collectively, the “Registered
And Applied For
Owned Intellectual Property”, which, together with all other Intellectual
Property owned by any Subject Entity, shall constitute the “Owned
Intellectual Property”), (ii) all Intellectual Property used in or
necessary for the purpose of the Business licensed to any Subject Entity,
including the Intellectual Property licensed to any Subject Entity pursuant to
any Transferred Intellectual Property License (the “Licensed Intellectual
Property”) and (iii) all Contracts used in or necessary for the purpose of
the Business to which a Subject Entity is a party or by which a Subject Entity
is bound providing for the license of Owned Intellectual Property or Licensed
Intellectual Property or otherwise relating to Owned Intellectual Property or
Licensed Intellectual Property (such Contracts are hereinafter referred to as “Intellectual
Property Licenses”).

(b)           Except
as set forth on Schedule 5.12(b):

(i)            all
of the Owned Intellectual Property is owned by a Subject Entity free and clear
of any and all Liens, and is not subject to any license, royalty or other
agreement;

(ii)           at
the Closing, all of the Transferred Owned Intellectual Property will be owned
by Purchaser (excluding the Transferred Intellectual Property Licenses) free
and clear of any and all Liens, and will not be subject to any license, royalty
or other agreement;

(iii)          none
of the Owned Intellectual Property or the Licensed Intellectual Property has
been or is the subject of any pending, or to the knowledge of Sellers and
Parent, threatened litigation or claim of infringement, and there is no basis
for making any such claim;

(iv)          no
Subject Entity has breached any provision of, or is in default under the terms
of, any Intellectual Property License to which it is a party or under which it
has any rights or by which it is bound, no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a breach of, or a default under, any such Intellectual Property
License by any Subject Entity and no other party to any such Intellectual
Property License has breached any provision of, or is in default under the
terms of, any such Intellectual Property License;

(v)           to
the knowledge of Sellers and Parent, each product or service sold or provided
by any Subject Entity under a Mark owned by any Subject Entity, each process,
method, part, design, material or other Intellectual Property employed by any
Subject Entity, and the marketing, performance and use by any Subject Entity of
any product, service or other Intellectual Property, does not infringe or

 

37

 

misappropriate any Intellectual Property or confidential or proprietary
rights of any other Person, and no Subject Entity has received any notice
making or threatening to make any claim of infringement or misappropriation of
any Intellectual Property of another Person or contesting any Subject Entity’s
right to market or use any such product, service, process, method, part,
design, material or other Intellectual Property, and there is no basis for
making such a claim;

(vi)          no
Subject Entity has made or threatened to make any, and there exists no, claim
that any product or service sold or provided by any Person, or any process,
method, part, design, material or other Intellectual Property employed by any
Person, or any marketing or use by any Person of any such product or service,
infringes or misappropriates any Owned Intellectual Property or Licensed
Intellectual Property;

(vii)         each
Subject Entity owns or possesses adequate rights in and to all Intellectual
Property necessary to conduct its respective business as presently conducted,
and the Subject Entity Assets include ownership or adequate rights in all
Intellectual Property required for or currently used in connection with the
conduct of the businesses of the Subject Entities as they are presently
conducted and have been conducted since May 31, 2004;

(viii)        each
Subject Entity has taken all reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all Transferred Owned Intellectual Property, and there have been no
material breaches of any Subject Entity’s secrecy, confidentiality of, or its
proprietary rights in, any Transferred Owned Intellectual Property;

(ix)           no
Subject Entity is party to an intra-group arrangement with Parent or otherwise
with respect to any material Intellectual Property;

(x)            no
item of Registered and Applied For Owned Intellectual Property has lapsed,
expired, or been abandoned or cancelled, and no Owned Intellectual Property is
subject to any pending, or to the knowledge of Sellers and Parent, threatened
in writing, opposition, cancellation, interference, domain name dispute or
other proceeding.  To the knowledge of
Sellers and Parent, the Intellectual Property Licenses are in full force and
effect and no party of any such licenses has exercised any termination rights
thereto; and

(xi)           there
are no royalties, honoraria, fees or other payments payable by any Subject
Entity to any Person relating to any Intellectual Property other than in connection
with Licensed Intellectual Property.

5.13         Contracts. 
Schedule 5.13 sets forth a true, correct and complete list of all
the Contracts (including the Assumed Contracts) of the following types to which
any Subject Entity is a party or by which any Subject Entity is bound, or to
which any Subject Entity’s assets or properties is subject:

 

38

 

(a)           any
Contract that either (i) requires a payment by any party in excess of, or a
series of payments that in the aggregate exceed, $100,000 or provides for the
delivery of goods or performance of services, or any combination thereof,
having a value in excess of $100,000, or (ii) has a term of, or requires the
performance of any obligations by any party over a period in excess of, six (6)
months (excluding, in the case of each of clauses (i) and (ii),
purchase orders that are received from customers or issued to suppliers in the
ordinary course of business);

(b)           any
Contract (including any purchase order received from a customer in the ordinary
course) pursuant to which any Subject Entity is committed to deliver goods or
perform services, or provide any combination thereof, to or for any customer,
having a value in excess of $100,000;

(c)           any
Contract (including any purchase order issued to a supplier in the ordinary
course) pursuant to which any Subject Entity is committed to purchase goods or
services, or any combination thereof, from any supplier, having a value in
excess of $100,000;

(d)           any
Contract pursuant to which any Subject Entity is obligated to provide any
customer with equal or preferred pricing terms as compared to the pricing terms
offered by such Subject Entity to any or all of the other customers of any
Subject Entity;

(e)           any
Contract pursuant to which any third party agrees to perform any services for
any Subject Entity or Fund that are required to be performed by any Subject
Entity under any other Contract;

(f)            any
collective bargaining agreement;

(g)           any
Contract of any kind with any employee, officer or director of any Subject
Entity, or any Affiliate of any such individual;

(h)           any
Contract of any kind with any Affiliate of any Subject Entity, or with any
Shareholder or any Affiliate of any Shareholder;

(i)            any
Contract with a sales representative, manufacturer’s representative,
distributor, dealer, broker, sales agency, advertising agency or other Person
engaged in sales, distributing or promotional activities, or any Contract to
act as one of the foregoing on behalf of any Person (excluding purchase orders
that are entered into with customers or suppliers in the ordinary course of
business);

(j)            any
Contract pursuant to which any Subject Entity has made or will make loans or
advances, or has or will have incurred debts or become a guarantor or surety or
pledged its credit on or otherwise become responsible with respect to any
undertaking of another (except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of business);

 

39

 

(k)           any
indenture, credit agreement, loan agreement, note, mortgage, security
agreement, lease, loan commitment or other Contract relating to the borrowing
of funds, an extension of credit or financing;

(l)            any
Contract involving any marketing or purchasing groups or associations in which
any Subject Entity is a member;

(m)          any
Contract involving a partnership, joint venture or other cooperative
undertaking;

(n)           any
Contract involving any restrictions with respect to the geographical area of
operations or scope or type of business of any Subject Entity;

(o)           any
power of attorney or agency agreement or arrangement with any Person pursuant
to which such Person is granted the authority to act for or on behalf of any
Subject Entity or any Subject Entity is granted the authority to act for or on
behalf of any Person;

(p)           any
Contract relating to the Computer System;

(q)           any
Contract, whether or not fully performed, relating to any acquisition or
disposition of any capital stock or other security of any Subject Entity or
Fund or any predecessor in interest of any Subject Entity, or any acquisition
or disposition of any subsidiary, division, line of business, material assets
or real property;

(r)            any
Contract not made in the ordinary course of business and consistent with past
practice that is to be performed in whole or in part at or after the date of
this Agreement; and

(s)           any
Contract not specified above that is material to any Subject Entity.

Sellers have delivered to Purchaser true, correct and complete copies
of each document set forth on Schedules 5.12(a) and 5.13 and a
true, correct and complete written description of each oral arrangement so
listed, including all rights, obligations and other material terms.  Sellers have delivered to Purchaser accurate
copies of each form used by any Subject Entity in the conduct of its respective
businesses.

5.14         Licenses. 
Schedule 5.14 sets forth a true, correct and complete list of all
Licenses held by any Subject Entity (including the Assumed Licenses).  All the Licenses so listed are in full force
and effect and no Subject Entity has received any notice that any such License
may be revoked or canceled.  None of the
Licenses have been modified in any way that is reasonably likely to have a
Material Adverse Effect.  Except for the
Licenses set forth on Schedule 5.14, there are no Licenses, whether
federal, state, local or foreign, that are necessary for the lawful operation
of the respective businesses of the Subject Entities.

5.15         Insurance. 
Schedule 5.15 sets forth a true, correct and complete list of all
policies of fire, liability, medical, workers’ compensation, title and other
forms of insurance owned, held by or applicable to any Subject Entity or any of
its respective assets or businesses, and Sellers

 

40

 

have heretofore
delivered to Purchaser true, correct and complete copies of all such policies,
including all occurrence-based policies applicable to any Subject Entity or its
respective assets or businesses for all periods prior to the Closing Date.  All such policies are valid, in full force
and effect and enforceable, all premiums with respect thereto covering all
periods up to and including the Closing Date have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.

5.16         Employee Benefit Plans
and Employment Agreements.

(a)           General.  Except as set forth on Schedule 5.16,
none of the Subject Entities or any of their ERISA Affiliates maintains, sponsors,
is a party to, participates in, has a commitment to create or has any liability
or contingent liability with respect to:

(i)                              any “employee welfare benefit plan” or “employee
pension benefit plan” as those terms are respectively defined in sections 3(1)
and 3(2) of ERISA, other than a “multiemployer plan” (as defined in section
3(37) of ERISA) (referred to collectively herein as “Plans”);

(ii)                           any retirement or deferred compensation
plan, incentive compensation plan, stock plan, retention plan or agreement,
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance (including health, life or disability insurance) or
hospitalization program or any other fringe benefit arrangement for any current
or former employee, director, consultant or agent, whether pursuant to
Contract, arrangement, custom or informal understanding, that does not
constitute an “employee benefit plan” (as defined in section 3(3) of ERISA)
(referred to collectively herein as “Arrangements”);
or

(iii)                        any employment agreement or consulting agreement of
any type, including any noncompete or severance agreements (referred to
collectively herein as “Employment Agreements”).

(b)           Plan
Documents and Reports.  A true,
correct and complete copy of each of the Plans, Arrangements and Employment
Agreements set forth on Schedule 5.16 (collectively, the “Benefit
Plans”), and all Contracts relating thereto, or to the funding thereof,
including all trust agreements, insurance contracts, administration contracts, investment
management agreements, subscription and participation agreements and record
keeping agreements, each as currently in effect, has been provided to
Purchaser.  In the case of any Benefit
Plan that is not in written form, Purchaser has been supplied with a true,
correct and complete description of such Benefit Plan as currently in effect,
including all material terms of such Benefit Plan.  A true, correct and complete copy of the most
recent annual report, actuarial report, accountant’s opinion of the plan’s
financial statements, summary plan description and IRS determination letter
with respect to each Benefit Plan, to the extent applicable, and a current
schedule of assets (and the fair market value thereof assuming liquidation of
any asset that is not readily tradable)

 

41

 

held with respect to any funded Benefit Plan has been supplied to
Purchaser, and there have been no material changes in the financial condition
in the respective Benefit Plans from that stated in the annual reports and
actuarial reports supplied.

(c)           Compliance
with Laws; Liabilities.  As to all
Benefit Plans:

(i)                              each Benefit Plan complies and has been
administered in form and in operation in all material respects in accordance
with its terms and with all requirements of Law applicable thereto (including,
in the case of any Benefit Plan that is an employee pension benefit plan, the
requirements of sections 401(a) and 501(a) of the Code), and no event has
occurred that will or could cause any such Benefit Plan to fail to comply with
such requirements and no notice has been issued by any Governmental Authority
questioning or challenging such compliance;

(ii)                           each Benefit Plan that is an employee
pension benefit plan (as defined in section 3(2) of ERISA) is the subject of a
favorable determination letter issued by the IRS with respect to the qualified
status of such plan under section 401(a) of the Code and the tax-exempt status
of any trust that forms a part of such plan under section 501(a) of the Code;
and no event has occurred that will or could give rise to disqualification of
any such plan under such sections or to a Tax under section 511 of the Code;

(iii)                        there are no outstanding, unresolved “prohibited
transactions” (as described in section 406 of ERISA or section 4975 of the
Code) with respect to any Benefit Plan and none of the Subject Entities or any
of their ERISA Affiliates has engaged in any prohibited transaction;

(iv)                       there have been no acts or omissions by
any of the Subject Entities or any of their ERISA affiliates that have given
rise to or may give rise to fines, penalties, taxes or related charges under
section 502 of ERISA or Chapters 43, 47, 68 or 100 of the Code for which any of
the Subject Entities or any of their ERISA Affiliates may be liable;

(v)                          none of the payments contemplated by the
Benefit Plans would, in the aggregate, constitute excess parachute payments as
defined in section 280G of the Code affecting any employee of the Subject
Entities (without regard to subsection (b)(4) thereof) or would exceed the
amount deductible pursuant to section 162(m) of the Code;

(vi)                       Except as set forth in Schedule
5.16(c), there are no actions, suits or claims (other than routine claims
for benefits) pending or

 

42

 

threatened involving any Benefit Plan or the assets thereof, and no
facts exist that could give rise to any such actions, suits or claims (other
than routine claims for benefits);

(vii)                    with respect to each Benefit Plan subject to Title IV of ERISA;

1.             no
steps have been taken to terminate any
such Benefit Plan;

2.             there
has been no withdrawal (within the meaning of section 4063 of ERISA) of a “substantial
employer” (as defined in section 4001(a)(2) of ERISA);

3.             no
event or condition has occurred which might constitute grounds under section
4042 of ERISA for the termination of or the appointment of a trustee to
administer any such Benefit Plan; and

4.             if each such Benefit Plan were terminated
immediately after the Closing, there would be no unfunded liabilities with
respect to any such Benefit Plan, its participants or beneficiaries or the
Pension Benefit Guaranty Corporation (the “PBGC”).

(viii)        each
Benefit Plan that constitutes a “group
health plan” (as defined in section 607(1) of ERISA or section 4980B(g)(2) of
the Code), including any plans of current and former Affiliates that must be
taken into account under section 4980B and 414(t) of the Code or sections
601-608 of ERISA, have been operated in compliance with applicable Laws,
including the continuation coverage requirements of section 4980B of the Code
and section 601 of ERISA and the portability and nondiscrimination requirements
of sections 9801 and 9802 of the Code and sections 701-707 of ERISA, to the extent
such requirements are applicable;

(ix)           actuarially
adequate accruals for all obligations
under the Benefit Plans are reflected in the Financial Statements;

(x)            there
has been no act or omission that would
impair the right or ability of any of the Subject Entities or any of their
ERISA Affiliates (or any successor thereto) to unilaterally amend or terminate
any Benefit Plan; and

(xi)           Sellers
have satisfied all of the reporting and disclosure requirements of Title I of
ERISA with respect to each Benefit Plan.

(d)           Multiemployer
Plans.  None of the Subject Entities
is a party to, participates in, contributes to , has contributed to or has any
liability or contingent liability with respect to any multiemployer plan (as
defined in section 3(37) of ERISA) and no event has occurred which is
reasonably likely to cause any of the Subject Entities to have any liability
with respect to any multiemployer plan.

 

43

 

5.17         Employment and Labor Matters.

(a)           Schedule
5.17(a) sets forth a true, correct and complete list of the names, titles
or job descriptions, full-time or part time status, annual compensation or
hourly rate schedule and all bonuses and similar payments made with respect to
each such individual for the preceding fiscal year for all directors, officers
and employees of any Asset Seller.

(b)           All
Employees are employed by the Subject Entities.

(c)           Each
Subject Entity has conducted and currently is conducting its respective
business in compliance with all Laws relating to employment and employment
practices, terms and conditions of employment, wages and hours and
nondiscrimination in employment.

(d)           Since
December 31, 2001 there has been, no labor strike, dispute, slow-down, work
stoppage or other labor difficulty pending, or to the knowledge of Parent and
Sellers, threatened against or involving any Subject Entity.

(e)           No
employee of any Subject Entity is covered by any collective bargaining
agreement, no collective bargaining agreement is currently being negotiated and
no attempt is currently being made or since December 31, 2001 has been made to
organize any employees of any Subject Entity to form or enter a labor union or
similar organization.

5.18         Capital Improvements and
Significant Non-Capital Expenditures.

(a)           Set
forth on Schedule 5.18(a) is a true, correct and complete list of all of
the capital improvements or purchases or other capital expenditures that any
Subject Entity has committed to or contracted for and that have not been
completed prior to the date hereof and the cost and expense reasonably
estimated to complete such work and purchases.

(b)           Set
forth on Schedule 5.18(b) is a true, correct and complete list of each
non-capital expenditure or purchase in excess of $100,000 (excluding
non-capital expenditures in the ordinary course) that any Subject Entity has
committed to or contracted for and that has not been completed prior to the
date hereof and the cost and expense reasonably estimated to complete such work
and purchases.

5.19         Taxes.

(a)           Each
Subject Entity has timely filed all Tax Returns that it is required to file,
and each such Tax Return was true and correct in all material respects when
filed.  All Taxes due and payable have
been timely paid or shall be timely paid by each Subject Entity or, if not yet
payable, such Taxes have been or will be adequately accrued and reflected in
the Financial Statements and the Closing Balance Sheets.

(b)           Except
as set forth on Schedule 5.19:

 

44

 

(i)            there
is no action, suit, proceeding, investigation, audit, claim or assessment
presently pending or, to the knowledge of Parent and Sellers, threatened, with
regard to any Taxes that relate to any Subject Entity;

(ii)           no
issue has arisen in any examination of any Subject Entity by any Governmental
Authority that if raised with respect to any other period not so examined would
result in a material deficiency for any other period, if upheld;

(iii)          no
position has been taken on any Tax Return (for a taxable period for which the
statute of limitations for the assessment of tax has not expired) of any
Subject Entity that is contrary to any publicly announced position of a
Governmental Authority;

(iv)          all
Taxes that any Subject Entity is required by Law to withhold or collect, including
sales and use Taxes, and amounts required to be withheld for Taxes of
employees, have been duly withheld or collected and, to the extent required,
have been paid over to the proper Governmental Authorities or are held in
separate bank accounts for such purpose;

(v)           no
Subject Entity is a party to any Tax sharing agreement, nor is any Subject
Entity (other than First Capitol and the Funds) subject to any joint venture,
cooperative, partnership or other arrangement or contract that is treated as an
entity (including a partnership) for Federal income tax purposes; and

(vi)          Sellers
and the Acquired Corporations have taken such action as necessary with respect
to all Benefit Plans to ensure that no Employee is subject to taxes or
penalties under Section 409A of the Code.

(c)           None
of the assets of the Subject Entities constitute tax-exempt bond financed
property or tax-exempt use property within the meaning of Section 168 of the
Code, and none of the assets reflected on the Financial Statements is subject
to a lease, safe harbor lease or other arrangement as a result of which an
entity other than a Subject Entity is treated as the owner of the asset for
Federal income tax purposes.

(d)           No
US Entity Shareholder is a “foreign person” as defined in Section 1445(f)(3) of
the Code.  None of the Assets to be sold
by any Asset Seller that is a “foreign person” as defined in Section 1445(f)(3)
of the Code constitutes a “United States real property interest” as defined in
Treasury Regulation Section 1.897-1(c).

(e)           Except
as set forth on Schedule 5.19(e), No Subject Entity has made or become
obligated to make, and no Subject Entity will as a result of any event
connected with any transaction contemplated herein become obligated to make,
any payments that could be nondeductible by reason of Section 280G or 162(m) of
the Code.

(f)            None
of the Acquired Corporations, Acquired Corporation Subsidiaries or Funds is
required to include in income any adjustment pursuant to Section 481(a) of the
Code by reason of a voluntary change in accounting method initiated by any
Acquired Corporation, any Acquired Corporation Subsidiary or any Fund, and to
the knowledge of

 

45

 

Parent and Sellers, the IRS has not proposed any such adjustment or
change in accounting method.

(g)           None
of the Funds has or could have any liability for Taxes of any Person other than
itself under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law).

(h)           All
transactions between any Subject Entity and any Affiliate of any Subject Entity
have been conducted on an arm’s length basis.

(i)            Except
as set forth on Schedule 5.19(i), none of the Acquired Corporations, any
Acquired Corporation Subsidiary or any Fund has requested or received a ruling
related to Tax from any Governmental Authority or signed a closing or other
agreement related to Tax with any Governmental Authority that would affect any
taxable period after the Closing Date.

(j)            No
Subject Entity has engaged in, or is a party to, (i) any “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4, or a
transaction substantially similar to a reportable transaction or (ii) any “tax
shelter” within the meaning of Section 6662 of the Code.

(k)           Each
of the Subject Entities has obtained appropriate exemption certificates for all
material transactions treated as nontaxable for sales Tax purposes.

(l)            None
of the Acquired Corporations, any Acquired Corporation Subsidiary or any Fund
has entered into any transaction or arrangement outside the normal course of
business that would have the effect of deferring recognition of income for Tax
purposes to periods ending after the Closing Date or accelerating deductions to
periods ending on or prior to the Closing Date.

(m)          Each
Fund is classified as a partnership and not as an association taxable as a
corporation for U.S. federal income Tax purposes, and no election has ever been
made to treat any Fund as a corporation for state or federal income Tax
purposes.

(n)           In the
past five years, no Acquired Corporation or Acquired Corporation Subsidiary has
been a party to a transaction that has been reported as a reorganization within
the meaning of Section 368 of the Code, or distributed a corporation (or been
distributed) in a transaction that is reported to qualify under Section 355 of
the Code.

(o)           No
claim has ever been made by a Governmental Authority in a jurisdiction  where any Acquired Corporation, Acquired
Corporation Subsidiary or Fund does not file Tax Returns that such Acquired
Corporation, Acquired Corporation Subsidiary or Fund is or may be subject to
Tax in that jurisdiction.

 

46

 

5.20         No Defaults or Violations;
Registrations. 
Except as set forth on Schedule 5.20:

(a)           since
January 1, 2003, no Subject Entity has materially breached any provision of, or
is in material default under the terms of, any Contract or License to which it
is a party or under which it has any rights or by which it is bound (including
the Assumed Contracts and Assumed Licenses), no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a material breach of, or a material default under, any such Contract
or License by any Subject Entity and, to the knowledge of Parent and Sellers,
no other party to any such Contract or License has materially breached any
provision of, or is in material default under the terms of, any such Contract
or License;

(b)           each
Subject Entity is in material compliance with all Laws applicable to or binding
on such Subject Entity or any of its respective assets or properties
(including, as applicable, the Assets), and no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a material violation under any such Law; and

(c)           since
January 1, 2003, no notice from any Governmental Authority has been received by
any Subject Entity claiming any violation of any Law (including any building,
zoning or other ordinance) or requiring any work, construction or expenditure,
or asserting any Tax, assessment or penalty.

(d)           Without
limiting the generality of the preceding paragraphs, each Subject Entity:

(i)            has,
since January 1, 2003, complied in all material respects with all federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders and decrees applicable to the Business or to the employees
thereof and with the applicable rules of all Self-Regulatory Organizations including
(A) all applicable regulatory net capital requirements, including SEC Rule
15c3-1 and, as applicable, the “early warning” and “expansion-contraction”
capital requirements of any Governmental Entity, including Self-Regulatory
Organizations, (B) the provisions of the Foreign Corrupt Practices Act of 1977,
as amended, and the rules and regulations thereunder, (C) the provisions of the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and the rules
and regulations thereunder, and (D) the Currency and Foreign Transactions
Reporting Act of 1970 (Bank Secrecy Act) and the rules and regulations
thereunder;

(ii)           is
not the subject of any pending or threatened, material investigation, review or
disciplinary proceedings of any Governmental Authority or Self-Regulatory
Organization that relates to any Subject Entity or any of its respective
directors, officers or employees; and

 

47

 

(iii)          is
not subject to a “statutory disqualification” as defined in Section 3(a)(39) of
the Exchange Act, and none of the Transferred Employees is subject to such a
statutory disqualification, and the transfer of the Transferred Employees will
not subject Purchaser to such a statutory disqualification.  There is no current investigation, whether
formal or informal, preliminary or otherwise, that is reasonably likely to
result in any such statutory disqualification in respect of any of the subjects
covered by this Section 5.22.

(e)           Schedule
5.20(e) lists each current registration of each Subject Entity as (i) a
broker-dealer with the SEC, the securities commission or similar authority of
any State and any Self-Regulatory Organization and (ii) as a futures commission
merchant.  Each such registration is in
full force and effect.  The Subject
Entities have made available to Purchaser a true and complete copy of the
Subject Entities’ currently effective Forms BD as filed with the SEC, currently
effective Forms 7-R registration with the United States Commodity Futures
Trading Commission, current composite Forms BD filings with the SEC, Focus
Reports and annual audits and all other material reports filed by the Asset
Sellers with the SEC or any Self-Regulatory Organization within the last three
years, and will make available to Purchaser such material forms and reports as
are filed from and after the date hereof and prior to the Closing Date.  To the knowledge of Parent and Sellers, the
information contained in such forms and reports was true and complete in all
material respects as of the time of filing.

(f)            No
Subject Entity is subject to registration under the Investment Advisers Act
except for CIS Cash Management, or the Investment Company Act.  No Subject Entity except for CIS Cash
Management is, or has been during the past five years, an “investment adviser”
or a “commodity trading advisor” within the meaning of the Investment Advisers
Act and the Commodity Exchange Act, respectively, required to be registered,
licensed or qualified as an investment adviser under the Investment Advisers
Act or any similar applicable state law or subject to any material liability or
disability by reason of any failure to be so registered, licensed or qualified.

(g)           To
the knowledge of Parent and Sellers, each Fund has conducted its operations in
accordance with the material provisions of the Fund’s constituent documents,
and the material descriptions included in the Fund’s Offering Memorandum.

(h)           CIS
Investments is registered as a commodity pool operator with the CFTC and is a
duly qualified member in good standing of the National Futures Association (the
“NFA”).

(i)            To
the knowledge of Parent and Sellers, each Fund is in material compliance with
all applicable statutes, ordinances, orders, rules, regulations, by-laws and
policies promulgated by any Governmental Authority or Self-Regulatory
Organization, including the NFA, which apply to the Fund’s conduct or to the
employees conducting the Fund’s activities. 
No Fund has, since January 1, 2003, entered into or been subject to any
judgment, consent decree, or administrative order with respect to any aspect of
the business, affairs, properties or assets of the Fund or, as of the date
hereof, received any notice of the institution against the Fund of any civil,
criminal or

 

48

 

administrative action, suit, proceeding or investigation from any
Governmental Authority or Self-Regulatory Organization with respect to any
aspect of the business, affairs, properties or assets of the Fund.

(j)            No
“principals” of CIS Investments (as defined in Section 8a(2) of the Commodity
Exchange Act), are subject to any of the provisions of Section 8a that would
permit the CFTC to refuse to register or to suspend or revoke the registration
of any of them or their respective principals. 
There is no current investigation by the CFTC, whether formal or
informal, or whether preliminary or otherwise, that is reasonably likely to
result in, any such censure, limitations, suspension or revocation.

(k)           CIS
Investments has established written supervisory procedures that are reasonably
designed to prevent and detect any violation of Laws relating to the Funds’
current operation, as applicable, and that include financial, operational,
trading, money laundering, internal control and risk control procedures.  A true and correct copy of such procedures
will be provided to Purchaser.  Each Fund
has at all times maintained and continues to maintain, all books and records
required by applicable Laws and has at all times filed all reports required by
applicable Laws.

5.21         Environmental Matters.  Except as set forth on Schedule 5.21,
each Subject Entity is in material compliance with, and in the last two years
has been in compliance with, all Environmental Laws, and no condition exists or
event has occurred that, with or without notice or the passage of time or both,
would constitute a violation of or give rise to any liability, obligation,
material expenditure or Lien under any Environmental Law.  There are no, and no Subject Entity or
predecessor of any Subject Entity has used, generated, treated, handled,
transported, stored or disposed of, or arranged for disposal or treatment of,
any Hazardous Substances in, on, or at any of the Leased Real Property, or any
real property formerly owned, leased or operated by any Subject Entity or any
predecessor of any Subject Entity, and no Hazardous Substances have been used
in the construction or repair of, or any alterations or additions to, any of
the Leased Real Property;

5.22         Litigation.

(a)           Except
as set forth on Schedule 5.22(a), there are no claims, actions, suits,
proceedings, arbitrations, investigations or other litigation pending or, to
the knowledge of Parent or Sellers, threatened against or affecting any Subject
Entity or any of its officers, directors, partners, employees, agents or
shareholders in their capacity as such, or any of its respective properties
(including the Assets) or businesses, and none of Parent nor any Seller is
aware of any facts or circumstances that may give rise to any of the
foregoing.  Except as set forth on Schedule
5.22(a), all of the proceedings, pending or, to the knowledge of Parent or
Sellers, threatened, against any Subject Entity are fully covered by insurance
policies (or other indemnification agreements with third parties) and are being
defended by the insurers (or such third parties), subject to such deductibles
as are set forth on such Schedule. 
Except as set forth on Schedule 5.22(a), no Subject Entity is
subject to any order, judgment, decree, injunction, stipulation or consent
order of or with any court or other Governmental Authority.  No Subject Entity has entered into any
agreement to settle or compromise any proceeding pending or threatened against
it

 

49

 

that has involved any obligation other than the payment of money or for
which any Subject Entity has any continuing obligation.

(b)           Except
as set forth on Schedule 5.22(b), there are no claims, actions, suits,
proceedings, arbitrations, investigations or other litigation pending or, to
the knowledge of Parent or Sellers, threatened by or against any Subject
Entity, or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby, and none of Parent nor any Seller has any reason to believe that there
is a valid basis for any such claim, action, suit, proceeding,
arbitration,  investigation or other
litigation.

(c)           The
Business (i) is not subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or commitment letter or similar
submission to, and (ii) has not received any sanction or extraordinary
supervisory letter from, or adopted any board resolutions at the request of,
any Self-Regulatory Organization or Governmental Authority charged with the
supervision or regulation of broker-dealers or the supervision of the Business
(each such item referred to in clauses (i) and (ii) of this Section 5.22(c),
a “Regulatory Order”) including any such Regulatory Order that restricts
the conduct of the Business, or in any manner relates to its capital adequacy,
credit policies or management.  With
respect to the Business, none of Parent nor any Sellers has been advised by any
Governmental Authority or Self-Regulatory Organization that such authority or
organization is contemplating issuing or requesting any such Regulatory Order.

 

5.23         No Conflict of Interest.  Except as set forth on Schedule 5.23,
no Seller nor any of its or his Affiliates has or claims to have any direct or
indirect interest in any tangible or intangible property used in the business
of any Subject Entity, except for the Shareholders as holders of Shares or each
Asset Seller as an owner of Assets. 
Except as set forth on Schedule 5.23, no Seller nor any of its
Affiliates has any direct or indirect interest in any other Person that
conducts a business similar to, has any Contract or arrangement with, or does
business or is involved in any way with, any Subject Entity or Fund, except for
the ownership of less than one percent (1%) of the outstanding shares of any
class of capital stock of any Person listed on a national securities exchange
or quoted on the National Association of Securities Dealers Automated Quotation
System or over-the-counter.  Schedule
5.23 sets forth a true, correct and complete description of all such
Persons, interests, Contracts, arrangements and other matters.

5.24         Bank Accounts.  Schedule 5.24 sets forth a true,
correct and complete list of the names and locations of each bank or other
financial institution at which the Acquired Corporations or any  Acquired Corporation Subsidiary has an
account (giving the account numbers) or safe deposit box and the names of all
Persons authorized to draw thereon or have access thereto, and the names of all
Persons, if any, now holding powers of attorney or comparable delegation of
authority from the Acquired Corporation or any Acquired Corporation Subsidiary
and a summary statement thereof.

 

50

 

5.25         Customers.

(a)           Schedule
5.25(a) sets forth a true, correct and complete list of the one hundred
(100) largest customers of the Subject Entities taken as a whole, in terms of
revenue in the period from January 1, 2005 through May 31, 2005 (collectively,
the “Major Customers”), showing the total revenue received in each such
period from each such Major Customer.

(b)           Except
as set forth on Schedule 5.25(b), there have been no customer complaints
received by any Subject Entity during each of the 2003, 2004 and 2005 calendar
years.

(c)           Except
as set forth on Schedule 5.25(c), since December 31, 2004, there has
been no adverse change in the business relationship, and there has been no
material dispute, between any Subject Entity (on the one hand) and any Major
Customer (on the other hand), and there are no indications or reasons to
believe that (A) there will be any such adverse change or dispute or (B) any
Major Customer intends to reduce the scope or volume of its relationship with
any Subject Entity or the Business.

5.26         Improper and Other Payments.  (a) No Subject Entity, or director, officer,
employee, agent or representative of any Subject Entity, or  Person acting on behalf of any of them, has
made, paid or received any bribes, kickbacks or other similar payments to or
from any Person, whether lawful or unlawful, (b) no contributions have been
made by any Subject Entity, directly or indirectly, to a domestic or foreign
political party or candidate, (c) no improper foreign payment (as defined in
the Foreign Corrupt Practices Act) has been made by any Subject Entity or any
director, officer, employee, agent or representative of any Subject Entity, or
any Person acting on behalf of any of them, and (d) the internal accounting
controls of the Subject Entity are adequate to detect any of the foregoing.

5.27         Brokers. 
None of Parent or any Subject Entities has used any broker or finder in
connection with the transactions contemplated hereby, and neither Purchaser nor
any Affiliate of Purchaser (including, from and after the Closing, the Acquired
Corporations and any Acquired Corporation Subsidiary) has or shall have any
liability or otherwise suffer or incur any Loss as a result of or in connection
with any brokerage or finder’s fee or other commission of any Person retained
by Parent, Sellers or any Subject Entity or any of their Affiliates in
connection with any of the transactions contemplated by this Agreement or the
Related Agreements.

5.28         Accounting and Disclosure
Controls.  Each Subject Entity
maintains and complies with a system of controls sufficient to provide
reasonable assurances that: (a) the Business is operated in accordance with
management’s general or specific authorization; (b) transactions are recorded
as necessary to permit preparation of the consolidated financial statements of
the Acquired Corporations and the Acquired Corporation Subsidiaries or the
consolidated financial statements of the Asset Sellers, as applicable, in each
case, in conformity with GAAP and to maintain accountability for assets; (c)
access to assets is permitted only in accordance with management’s general or
specific authorization; (d) the reporting of assets is compared with existing
assets at regular intervals and appropriate action is taken with respect to any
differences; (e) material information relating to such Subject Entity is
promptly made known to the officers

 

51

 

responsible for establishing and maintaining the system of internal
control over financial reporting; and (f) any significant deficiencies or
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to materially and adversely
affect the ability to record, process, summarize and report financial
information, and any fraud whether or not material that involves management or
other employees who have a significant role in respect of internal control over
financial reporting, are adequately and promptly disclosed to the independent
accountants and management of such Subject Entity.

5.29         Benefit Plan Investors.  Participation in each Fund by “benefit plan
investors” is not “significant”, as such terms are defined in 29 C.F.R.
2510.3-101.

5.30         Reports. 
Each Fund has timely filed all reports, registrations, offering
memoranda, statements and other filings, together with any amendments required
to be made with respect thereto concerning the Fund, that were required to be
filed with any Governmental Authority or any Self-Regulatory Organization (all
such reports, and statements being collectively referred to herein as the “Reports”).  To the knowledge of Parent, each of the
Reports, when filed, complied as to form with all applicable statutes, rules,
regulations and orders (whether or not enforced or promulgated by the
Governmental Authority with which they were filed) and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

5.31         Accuracy of Statements.  To the knowledge of Parent or Sellers,
neither this Agreement nor any schedule or certificate provided or to be
provided by or on behalf of any Seller or any Asset Seller to Purchaser or any
representative or Affiliate of Purchaser in connection with this Agreement, any
Related Agreement or any of the transactions contemplated hereby or thereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.

5.32         UK Warranties.  Except as set forth on Schedule 5.32,
each of the representations and warranties set forth on the UK Warranties
Schedule is true and correct.

ARTICLE 6.

REPRESENTATIONS AND
WARRANTIES OF PURCHASER

Purchaser represents and warrants to each Parent, as of the date of
this Agreement and as of the Closing (as if such representations and warranties
were remade at and as of the Closing), as follows:

6.1           Due Organization.  Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all requisite power and authority to own, lease and operate its
properties and to carry on its business as they are now being owned, leased,
operated and conducted.

6.2           Due Authorization.  Purchaser has full power and authority to
enter into this Agreement and its Related Agreements and to consummate the transactions
contemplated hereby

 

52

 

and thereby.  The execution,
delivery and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly approved by the board of
directors of Purchaser, and no other actions or proceedings on the part of
Purchaser are necessary to authorize this Agreement, its Related Agreements and
the transactions contemplated hereby and thereby.  Purchaser has duly and validly executed and
delivered this Agreement and has duly and validly executed and delivered (or
prior to or at the Closing will duly and validly execute and deliver) its
Related Agreements.  This Agreement
constitutes legal, valid and binding obligations of Purchaser, and Purchaser’s
Related Agreements upon execution and delivery by Purchaser will constitute
legal, valid and binding obligations of Purchaser, in each case, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors’ rights
generally, and by equitable limitations on the availability of specific
remedies.

6.3           Consents and Approvals; Authority
Relative to this Agreement.

(a)           Except
as set forth on Schedule 6.3, no consent, authorization or approval of,
filing or registration with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery and performance by Purchaser of this Agreement and its
Related Agreements and the consummation by Purchaser of the transactions
contemplated hereby and thereby.

(b)           Except
as set forth on Schedule 6.3, the execution, delivery and performance by
Purchaser of this Agreement and its Related Agreements, and the consummation by
Purchaser of the transactions contemplated hereby and thereby, do not and will
not (i) violate any Law applicable to or binding on Purchaser or any of its
assets or properties; (ii) violate or conflict with, result in a breach or
termination of, constitute a default or give any third party any additional
right (including a termination right) under, permit cancellation of, result in
the creation of any Lien upon any of the assets or properties of Purchaser
under, or result in or constitute a circumstance that, with or without notice
or lapse of time or both, would constitute any of the foregoing under, any
Contract to which Purchaser is a party or by which Purchaser or any of its
assets or properties are bound; (iii) permit the acceleration of the maturity
of any indebtedness of Purchaser or indebtedness secured by its assets or
properties; or (iv) violate or conflict with any provision of Purchaser’s
Articles of Incorporation or by-laws.

6.4           Litigation.  There are no claims,
actions, suits, proceedings, arbitrations, investigations or other litigation
pending or, to the knowledge of Purchaser, threatened by or against Purchaser
or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby, and Purchaser has no reason to believe that there is a valid basis for
any such claim, action, suit, proceeding, arbitration, investigation or other
litigation.

6.5           Brokers. 
Purchaser has used no broker or finder in connection with the
transactions contemplated hereby, and none of Parent, Sellers nor their
respective Affiliates has or shall have any liability or otherwise suffer or
incur any Loss as a result of or in connection

 

53

 

with any brokerage or finder’s fee or other commission of any Person
retained by Purchaser or any of its Affiliates in connection with any of the
transactions contemplated by this Agreement or the Related Agreements.

ARTICLE 7.

COVENANTS

7.1           Implementing Agreement.  Subject to the terms and conditions hereof,
each party hereto shall take all action required of it to fulfill its
obligations under the terms of this Agreement and shall otherwise use all
reasonable best efforts to facilitate the consummation of the transactions
contemplated hereby.  Sellers and Parent
agree that unless this Agreement is terminated in accordance with the
provisions of Section 11.1, Sellers and Parent will not take any action
that would have the effect of preventing or impairing the performance by Parent
of its respective obligations under this Agreement.  Without limiting the generality of the
foregoing, (i) Parent shall cause the Shareholders and the Acquired
Corporations to execute at its own cost and expense such documents as Purchaser
considers necessary to transfer the legal and beneficial ownership in the
Shares to Purchaser and secure Purchaser the rights attaching to the Shares and
(ii) Parent shall cause the Shareholders to irrevocably waive and procure the
waiver of all rights of preemption over or other rights to restrict the
transfer of the Shares conferred either by the articles of incorporation,
articles of association or similar constituent documents of the Acquired
Corporations or in any other way.

7.2           Access to Information and
Facilities.

(a)           From
and after the date of this Agreement until the Closing, Parent shall cause the
Subject Entities to (i) upon reasonable notice to Parent, give Purchaser and
Purchaser’s representatives reasonable access to all of the facilities,
properties, books, records and Contracts of the Subject Entities, (ii) upon
reasonable notice to Parent, make the directors, officers and employees of the
Subject Entities available to Purchaser and its representatives as Purchaser
and its representatives shall from time to time reasonably request and (iii)
provide Purchaser and its representatives with any and all information
concerning the Subject Entities that Purchaser or its representatives
reasonably request.

(b)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, Parent shall cause the Subject Entities to
permit Purchaser’s officers, executives and other Representatives to meet with
the officers, executives and other Representatives of any Subject Entity
responsible for (i) the consolidated financial statements of the Subject
Entities (including, in each case, any notes thereto) or (ii) the internal
controls of any Subject Entity and the disclosure controls and procedures of
any Subject Entity for the purpose of discussing such matters as Purchaser may
deem reasonably necessary or appropriate.

(c)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, upon reasonable notice to Parent, Parent
shall cause the Subject Entities to, permit Purchaser’s Representatives to have
access to any of the facilities of any Subject Entity or any remote location where
any information and records

 

54

 

of any such Person are maintained or processed for the purposes of
training personnel, gathering information about the Business and preparing for
the consummation of the transactions contemplated by this Agreement.  Purchaser agrees that Parent shall not be
required to cause the Subject Entities to permit any actions by Purchaser under
this Section 7.2(c) that would materially disrupt the operations of any
Subject Entity.

(d)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, Parent shall cause the Subject Entities to
give Purchaser and its Representatives reasonable access during normal business
hours and upon reasonable notice to Parent to the Leased Real Property to
perform such environmental and other tests, at Purchaser’s sole expense, as
Purchaser or its representatives may reasonably determine.

7.3           Preservation of Business.

(a)           From
the date of this Agreement until the Closing, Parent shall cause the Subject Entities
to operate only in the ordinary and usual course of business and consistent
with past practice, and shall use reasonable best efforts to (i) preserve
intact the present business organization and personnel of the Subject Entities
and the Funds, (ii) preserve the goodwill and advantageous relationships of the
Subject Entities and Funds with customers, suppliers, employees, independent
contractors and other Persons material to the operation of their respective
businesses, (iii) prevent any event that could have a Material Adverse Effect
and (iv) not permit any action or omission that would cause any of the
representations or warranties of any Seller or Parent contained herein or in
any of its Related Agreements to become inaccurate or any of the covenants of
any Seller or Parent contained herein or in any of its Related Agreements to be
breached; provided, however, that anything contained in this Section
7.3 notwithstanding, (x) the Asset Sellers and Shareholders shall be
entitled to distribute to Parent, immediately prior to the Closing, an amount
in Cash equal to the Sellers’ good faith estimate of the amount by which the
Net Asset Amount will exceed $150 million as of the Closing and (y) the Asset
Sellers and Shareholders shall be entitled to take such actions, after
consultation with and upon the prior approval of Purchaser, as are outlined on Schedule
7.3(a) hereto in order to effect the transfer of certain Assets into CIS
Limited prior to the Closing.

(b)           Without
limiting the generality of Section 7.3(a), prior to the Closing, Parent
shall not permit any Asset Seller, any Acquired Corporation, any Acquired
Corporation Subsidiary or any Fund to, without the prior written consent of
Purchaser:

(i)            incur
any obligation or enter into any Contract that would be required to be
disclosed on Schedule 5.14 or Schedule 5.15;

(ii)           take
any action, or enter into or authorize any Contract or transaction, other than
in the ordinary course of business and consistent with past practice;

 

55

 

(iii)          sell,
transfer, convey, assign or otherwise dispose of any of its assets or
properties, except sales of inventory in the ordinary course of business and
consistent with past practice;

(iv)          except
as set forth on Schedule 7.3(b)(iv), waive, release, settle or cancel
any claims against third parties or debts owing to it, or any rights that have
any value;

(v)           make
any changes in its accounting systems, policies, principles, practices or
methods;

(vi)          enter
into, authorize or permit any transaction with any other Subject Entity or any
Affiliate of any Subject Entity other than in the ordinary course of business
and consistent with past practice;

(vii)         suffer
or permit the creation of any Lien over any assets of any Subject Entity (including,
with respect to the Asset Sellers, any of the Assets);

(viii)        make
any borrowings, incur any debt (other than trade payables in the ordinary
course of business and consistent with past practice), or assume, guarantee,
endorse (except for the negotiation or collection of negotiable instruments in
the ordinary course of business and consistent with past practice) or otherwise
become liable (whether directly, contingently or otherwise) for the obligations
of any other Person, or make any payment or repayment in respect of any
indebtedness (other than trade payables, indebtedness pursuant to subordinated
loans, and accrued expenses in the ordinary course of business and consistent
with past practice);

(ix)           make
any loans, advances or capital contributions to, or investments in, any other
Person;

(x)            terminate
any employee or hire any individual to be employed by any Subject Entity;

(xi)           enter
into, adopt, amend or terminate any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee, or
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any existing plan and
arrangement or enter into any Contract, agreement, commitment or arrangement to
do any of the foregoing;

(xii)          except
for capital expenditures contemplated by clause (xiii) below, acquire,
lease or encumber any assets outside the ordinary course of business or any
assets that are material to any Subject Entity;

 

56

 

(xiii)         authorize
or make any capital expenditures that individually or in the aggregate are in
excess of $100,000;

(xiv)        file
any amended Tax Return or any claim for refund of Taxes, amend any payment of
Taxes paid by or on behalf of any Subject Entity or any Fund, waive or extend
the statute of limitations in respect of any Taxes, make, revoke, or amend any
Tax election (other than the contemplated election to treat CIS Limited as a
branch of Cargill PLC for United States federal income tax purposes), change
any method of Tax accounting or Tax procedure or practice, or settle or
compromise any claim relating to Taxes;

(xv)         pay
any amount, perform any obligation or agree to pay any amount or perform any
obligation, in settlement or compromise of any suit or claim of liability
against any Subject Entity or any of its directors, officers, employees or
agents;

(xvi)        terminate,
modify, amend or otherwise alter or change any of the terms or provisions of
any Contract (other than immaterial modifications to customer contracts in the
ordinary course of business and consistent with past practice), or pay any
amount not required by Law or by any Contract; or

(xvii)       agree,
whether in writing or otherwise, to do any of the foregoing.

(c)           Without
limiting the generality of Section 7.3(a), except as set forth on Schedule
7.3(c), prior to the Closing, Parent shall not permit any Acquired
Corporation or any Acquired Corporation Subsidiary to, without the prior
written consent of Purchaser:

(i)            authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, convertible or
exchangeable securities, commitments, subscriptions, rights to purchase or
otherwise) any shares of its capital stock or any other securities of the
Acquired Corporations or any Acquired Corporation Subsidiary, or amend any of
the terms of any such capital stock or other securities;

(ii)           split,
combine or reclassify any shares of its capital stock, declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock, or redeem or
otherwise acquire any capital stock or other securities of the Acquired
Corporations or any Acquired Corporation Subsidiary;

(iii)          merge
into or with or consolidate with any other Person;

(iv)          make
any change in the Articles of Incorporation, by-laws or similar organizational
instruments of the Acquired Corporations or any Acquired Corporation Subsidiary;
or

(v)           agree,
whether in writing or otherwise, to do any of the foregoing.

 

57

 

7.4           Consents and Approvals.

(a)           From
the date of this Agreement until the Closing, Parent shall, and shall cause
each Seller to, use all reasonable best efforts to obtain all consents,
approvals, certificates and other documents required in connection with the
performance of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby, including all consents and
approvals set forth on Schedule 5.3 (and Purchaser shall cooperate with
Sellers and Parent in obtaining all such consents, approvals, certificates and
other documents); provided, that no contact
will be made by any Subject Entity (or any Representative thereof) with any
third party to obtain any such consent or approval except in accordance with a
plan previously agreed to in writing by Purchaser.  Parent shall promptly make or cause to be
made all filings, applications, statements and reports to all Governmental
Authorities and other Persons that are required to be made prior to the Closing
by or on behalf of any Subject Entity, or any of their respective Affiliates
pursuant to any applicable Law or Contract in connection with this Agreement,
the Related Agreements and the transactions contemplated hereby and thereby,
including all filings, applications, statements and reports set forth on Schedule
5.3 (and Purchaser shall cooperate with Sellers and Parent in making all such
filings, applications, statements and reports). 
Parent shall be obligated to pay any and all fees and other payments
that are required in order to obtain or make (i) all consents, approvals,
certificates and other documents and (ii) all filings, applications, statements
and reports, in the case of each of clauses (i) and (ii), that
are required to be obtained or made by Sellers or Parent in connection with the
performance of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby.  In furtherance and not in limitation of this Section
7.4(a), each party hereto agrees to make the appropriate HSR Act filings
and filings with the European Commission or other relevant jurisdiction for
regulatory or governmental clearance or approval required prior to Closing
under any competition, antitrust, control or other similar Law.  Notwithstanding the preceding sentences, the
parties hereto agree and acknowledge that Purchaser is responsible for payment
of the filing fees required by the HSR Act or by the European Commission or
other jurisdiction under any competition, antitrust, control or similar Law in
connection with the filings to be made by Purchaser and Sellers thereunder.

(b)           Without
limiting the generality of Section 7.4(a), if a consent or approval is
required by any party under any Assumed Contract or Assumed License and is not
obtained on or before the Closing or if an attempted assignment is ineffective,
the Subject Entities shall cooperate with Purchaser at Sellers’ and Parent’s
expense in any commercially reasonable arrangement requested by Purchaser to
provide for Purchaser the benefits under any such Contract or License.

(c)           Purchaser
shall promptly make all filings, applications, statements and reports to all
Governmental Authorities and other Persons that are required to be made prior
to the Closing by or on behalf of Purchaser or any of its Affiliates pursuant
to any applicable Law or Contract in connection with this Agreement, the
Related Agreements and the transactions contemplated hereby and thereby (and
Sellers shall cooperate, and shall cause the Acquired Corporations and the
Acquired Corporation Subsidiaries to

 

58

 

cooperate, with Purchaser in making all such filings, applications,
statements and reports).

7.5           Maintenance of Insurance.  From the date of this Agreement until the
Closing, Parent shall (a) cause the existing insurance coverage relating to the
Subject Entities or the Assets to continue through the Closing, and (b) not
allow any breach, default, termination or cancellation of such insurance
policies or agreements to occur or exist.

7.6           Resignation of Officers
and Directors.  Parent shall cause
each officer and member of the Board of Directors of the Acquired Corporations
and each Acquired Corporation Subsidiary to tender his resignation from such
position effective as of the Closing.

7.7           Supplemental Information.  From time to time prior to the Closing,
Parent shall disclose in writing to Purchaser any matter hereafter arising that
becomes known to Parent or any Subject Entity and any of its Affiliates and
that, if existing, occurring or known at the date of this Agreement would have
been required to be disclosed to Purchaser in connection with any of the
representations or warranties of Parent set forth in this Agreement.  No information provided to a party pursuant
to this Section 7.7 shall be deemed to cure any breach of any
representation, warranty or covenant made in this Agreement.

7.8           Confidentiality.  After the Closing, Parent shall, and shall
cause each of its and each Sellers’ Affiliates to, maintain all non-public or
confidential information, relating to any period of time before, at or after
the Closing, with respect to any Subject Entity or its  respective operations in strict confidence
and not disclose to any Person or use any such information for any purpose; provided, that such restrictions shall not
apply to (i) any information that becomes generally available to the public
after the Closing through no fault of any Seller, Parent or any of their
respective Affiliates, (ii) any information that after the Closing is
legitimately received by any Seller or Parent or any of their respective
Affiliates from a third party (provided such third party is not known by any
Seller, Parent or any of their respective Affiliates to be bound by an
obligation of secrecy) or (iii) any disclosure required by Law or any
Governmental Authority, so long as notice of such disclosure is given to
Purchaser prior to making such disclosure and Sellers and Parent cooperate with
Purchaser as Purchaser may reasonably request to resist such disclosure.

7.9           Exclusivity.  During the period from the date of this
Agreement to the earlier of the Closing or the date this Agreement is
terminated pursuant to Article 11, Parent shall not, and shall not
permit any Subject Entity (and Parent shall not permit any of its or the
Subject Entities’ Affiliates, directors, employees, officers, agents or
representatives to), directly or indirectly, solicit, initiate, condone,
knowingly encourage or respond to any inquiries, proposals or offers from, or
participate in any discussions or negotiations with, or provide any non-public
information to, or otherwise cooperate in any way with, any Person (other than
Purchaser and its directors, officers, employees, representatives and agents)
regarding (a) any merger, consolidation or sale or other disposition of any
capital stock of any Subject Entity or any of its Affiliates (including any
sale of any of the Shares) or (b) any sale or other disposition of all or any
substantial portion of the assets or properties of any Subject Entity or any of
Affiliates (or any unit or division thereof) (including any sale of any Assets
but excluding the sale of any inventory of any Subject Entity in the ordinary
course of business).  Parent shall
promptly advise

 

59

 

Purchaser of, and communicate to Purchaser the terms and conditions of
(and the identity of the Person making), any such inquiry, proposal or offer
received.

7.10         Use of Cargill Marks.  As promptly as reasonably practicable
following the Closing, Purchaser shall cause CIS Limited to take all necessary
action (including filing an amendment to its articles of organization or
similar organizational documents with all relevant Governmental Authorities) to
change its formal name so as to remove the word “Cargill”.  For not more than 90 days after the Closing
Date, each Subject Entity may, and Purchaser shall be permitted to, (i)
identify itself as “formerly known as” the respective name of the applicable
Subject Entity, and (ii) use such letterhead, stationery, forms, invoices,
receipts and such other similar documents containing the names of the Subject
Entities.

7.11         Termination of Certain
Agreements.  After consultation,
review and the prior approval by Purchaser, Parent shall cause each Subject
Entity (and each of such entity’s Affiliates), effective as of the Closing,
without any cost to, payment by or liability of any Subject Entity, terminate,
rescind, cancel and render void and of no effect any and all Contracts between
any Subject Entity (on the one hand) and any such Person or any Affiliate of
any such Person (on the other hand) as designated by Purchaser in Schedule
7.11; provided, that this Section
7.11 shall not apply to this Agreement or any Related Agreement.  Schedule 7.11 may be updated in
Purchaser’s sole discretion to include Contracts entered into prior to the
Closing pursuant to Section 7.3(b)(vi) or disclosed by Parent in a
Deferred Schedule.

7.12         Employees.

(a)           Employment
of Employees.  Prior to the Closing,
Purchaser shall take such action as it deems necessary or appropriate in order
to allow each person who is an Employee (other than a UK Employee) on the day
immediately prior to the Closing Date (including persons on vacation, temporary
layoff, approved leave of absence, sick leave, family medical leave under the
Family Medical Leave Act, or short term disability, but excluding, at the
Purchaser’s option, Employees on long term disability under Sellers’ long term
disability plan), to become, effective upon the Closing, an employee of
Purchaser, except in the case of UK Employees who shall remain employed by CIS
Limited as of the Closing.  Each Employee
who becomes an employee of Purchaser pursuant to the immediately preceding
sentence, or is employed by the Acquired Corporation or the Acquired
Corporation Subsidiaries at or immediately after the Closing shall be referred
to as a “Transferred Employee”. 
Transferred Employees shall be provided total compensation and benefits
packages that are substantially comparable in the aggregate to those provided
to similarly situated employees of Purchaser. 
Prior to the Closing, Purchaser shall list the names of the individuals
that it will offer employment to on Schedule 7.12(a) and shall offer
employment to each such individual listed on Schedule 7.12(a) hereof
(each, a “CIS France Employee”). 
In addition, Purchaser shall use its reasonable efforts to cause Refco
France, SA to enter into an employment agreement with each such CIS France
Employee that is acceptable to Purchaser in its discretion.

(b)           Severance
Benefits.  In the event that, during
the twelve (12) month period immediately following the Closing (the “Severance
Period”), the employment with

 

60

 

Purchaser of a
Transferred Employee is terminated by Purchaser without “cause” (in accordance
with the terms of Purchaser’s written policies, as applicable (for the purposes of this Agreement, reductions in force and job elimination
shall not constitute a “for cause” termination), such Transferred Employee will
be entitled to receive from Purchaser the greater of (x) severance pay as calculated
under Parent’s or in the case of UK Employees, CIS Limited’s severance policy
in respect of cash severance payments and payment for accrued vacation days as
in effect on the date hereof as
set forth in Schedule 7.12(b) (which benefits shall be paid in the form
of salary continuation); or (y)
severance pay calculated under Purchaser’s severance pay plan.

(c)           Benefit
Plans.

(i)            Except
as otherwise specifically provided in this Section 7.12, Purchaser shall
not assume any obligation, liability, or contingent liability with respect to
(A) any employee benefit plan, program, or arrangement sponsored or maintained
by Parent, any Subject Entity, or the Shareholders or (B) any employee benefit
plan, program or arrangement in which any Transferred Employee participated
prior to the Closing.

(ii)           Transferred
Employees shall cease to accrue benefits under the Benefit Plans as of the
Closing.

(iii)          Effective
as of the Closing, Purchaser shall give past service credit to all the
Transferred Employees for purposes of determining vesting, eligibility and
benefit accruals under all employee benefit programs, including vacation,
severance, bonus, incentive, compensation and employee welfare benefit plans of
Purchaser, with the sole exception of benefit accruals for pension and profit
sharing plans, except as otherwise stated in this Section 7.12, equal to
that which such Transferred Employees were credited with by the Asset Sellers
as of the Closing for service with the Asset Sellers or any predecessor
employer.

(iv)          Purchaser
agrees that a defined contribution plan designated by Purchaser (“Purchaser’s
DC Plan”) shall accept direct rollover contributions of Transferred
Employees account balances from the Cargill Partnership Plan provided, however, (i) no such direct rollover contribution
shall be accepted to the extent such contribution would adversely affect the
tax qualified status of Purchaser’s DC Plan and (ii) in no event shall a direct
rollover contribution be accepted by Purchaser’s DC Plan unless such
contribution is made in cash or a cash equivalent (e.g. check or wire
transfer).

(d)           No
Transfer of Assets.  No pension or
other employee benefit plan assets held by the Asset Sellers shall be
transferred to the Purchaser.

(e)           Termination/WARN
Act Notification.  The Purchaser
shall be responsible for sending timely and appropriate notices to all persons
required under all applicable Laws relating to plant or facility closings or
otherwise regulating the termination of employees with respect to events
occurring on or after the Closing.  In
the event that any

 

61

 

liability is incurred under any such Laws based on the Purchaser’s
failure to hire employees or the Purchaser’s termination of employees after the
Closing, the Purchaser will be solely and exclusively responsible for all
obligations and liabilities incurred under such laws relating to this
transaction.

(f)            Employee
Records.  Parent shall cause the
Asset Sellers to make available to the Purchaser records which provide
information regarding employees’ names, Social Security numbers, dates of hire
by the Seller, date of birth, number of hours worked each calendar year and
salary histories for all Transferred Employees. 
Parent shall not permit the Asset Sellers to provide records pertaining
to performance ratings and evaluations, disciplinary records and medical
records.

(g)           UK
Pension Scheme.  Immediately
following Closing, the UK Entity Shareholder shall instruct Mercers (the
actuaries to the UK Pension Scheme) to produce and copy to the Purchaser a
certificate in accordance with the Occupational Pension Schemes (Deficiency on
Winding up etc) Regulations 1996 in respect of the cessation of participation
of CIS Limited in the UK Pension Scheme. 
For the avoidance of doubt, no assets will be transferred from the UK
Pension Scheme to any Plan of the Purchaser pursuant to this Agreement and the
Purchaser has no obligation to past or future service credits for the UK
Employees.

(h)           General
Employment Provisions.

(i)            Parent
and the Purchaser shall give any notices requested by Law and take whatever
other actions with respect to the plans, programs and policies described in
this Section 7.12 as may be necessary to carry out the arrangements
contemplated hereby.

(ii)           Parent
shall cause the Asset Sellers to provide the Purchaser, and Purchaser shall
provide to Parent, with such plan documents and summary plan descriptions,
employee data or other information as may be reasonably required to carry out
the arrangements described in this Section 7.12.

(iii)          If
any of the arrangements described in this Section 7.12 are determined by
the IRS or other Governmental Authority to be prohibited by law, Parent and the
Purchaser shall modify such arrangements to as closely as possible reflect their
expressed intent and retain the allocation of economic benefits and burdens to
the parties contemplated herein in a manner not otherwise prohibited by Law.

 

7.13         Section 338(h)(10) Election.

(a)           Parent
and Purchaser shall, and to the extent required, shall cause their Affiliates
to, (i) join in making an election under 338(h)(10) of the Code (and any
election corresponding to section 338(h)(10) of the Code under state or local
laws) with respect to the purchase of the US Shares (the “Section 338(h)(10)
Elections”), (ii) provide

 

62

 

to one another the necessary information to permit the Section
338(h)(10) Elections to be made; and (iii) take all actions necessary and
appropriate (including filing any necessary forms, returns, elections,
schedules and other documents) as may be required to effect and preserve timely
the Section 338(h)(10) Elections in accordance with the provisions of Treas.
Reg. §1.338(h)(10)-1 (or any provisions comparable to section 338(h)(10) of
state or local Tax law).

(b)           Purchaser
shall be responsible for preparing drafts of all forms, attachments and
schedules necessary to effectuate the Section 
338(h)(10) Elections (including Internal Revenue Service Forms 8023 and  8883 and any similar forms under applicable
state or local income tax laws (the “Section 338 Forms”)).  The parties shall cause Internal Revenue
Service Form 8023 to be executed and delivered no later than 10 days following
the Closing Date.

(c)           In
accordance with the amount of purchase price allocated to the US Shares on Schedule
4.5(b) (as may be adjusted pursuant to Section 4.5(e)), the “aggregate
deemed sales price” (as defined in Treas. Reg. §1.338-4) and the “adjusted
grossed-up basis” (as defined in Treas. Reg. §1.338-5) (the “AGUB”)
shall be allocated among the assets of the Acquired US Corporations in
accordance with Treas. Reg. §1.338-6. 
Within 90 days of Closing, Purchaser shall deliver to Parent a schedule
allocating the AGUB among the assets of the Acquired US Corporations (the “Allocation
Schedule”).  If Parent disputes any
item on the Allocation Schedule, Purchaser and Parent shall cooperate in good
faith to resolve any dispute.  Should the
parties fail to reach an agreement with thirty (30) days after the Purchaser’s
delivery of the Allocation Schedule, the determination of the allocation shall
be made by the Accounting Firm, whose decision shall be final and made within
90 days after the Closing Date.  The
Allocation Schedule shall be adjusted in accordance with the Accounting Firm’s
resolution of the dispute.  Parent and
Purchaser shall, and Parent shall cause Sellers to, file the Section 338 Forms
in accordance with the Allocation Schedule. 
The Allocation Schedule shall be appropriately adjusted, in accordance
with Treasury Regulation Section 1.1060-1(c), as a result of any adjustment to Schedule
4.5(b).  The parties agree not to and
agree to cause their Affiliates not to take any position inconsistent with the
Allocation Schedule for Tax reporting purposes.

7.14         Meeting of CIS Limited.  Parent shall cause to be held a meeting of
the board of directors of CIS Limited validly to effect:

(a)           the
approval of the transfer of the Shares of CIS Limited to the Purchaser, the
issue to the Purchaser of share certificates in respect of those Shares and the
registration of the Purchaser as holders of those Shares (subject only to those
transfers being represented duly stamped);

(b)           the
appointment as directors and secretary of CIS Limited of such persons as the
Purchaser may nominate, subject to those persons consenting to such appointment
and not being disqualified in law or under the articles of association of CIS
Limited from holding those offices;

 

63

 

(c)           the
revocation of all existing bank mandates and the issue of new mandates in
relation to CIS Limited to such bank or banks and in such form as the Purchaser
may direct;

(d)           the
acceptance of the resignation of the UK Auditors and the appointment as
auditors of CIS Limited of such person or firm as the Purchaser may nominate,
subject to the provisions of the UK Companies Act;

(e)           the
acceptance of the resignation of the existing secretary and directors of CIS
Limited;

(f)            the
change in the names of CIS Limited by the substitution of the name[s]
designated by Purchaser;

(g)           the
change in the registered office of CIS Limited to such address as may be
nominated by the Purchaser;

(h)           the
change in the accounting reference date of CIS Limited to a date nominated by
the Purchaser; and

(i)            any
other business which may be necessary or desirable to give full and valid
effect to the sale and purchase provided for in this Agreement or as the
Purchaser may reasonably require,

and
Parent shall supply duly signed minutes of the meetings to the Purchaser on
Closing.

7.15         Delivery of 2005
Financial Statements.  As soon as
such items are available to Parent or its Affiliates, and in any event no later
than August 26, 2005, Parent shall deliver to Purchaser the following items:
(i) the 2005 Financial Statements, including the 2005 Balance Sheets, and (ii)
an unqualified audit report thereon by the independent accounting firm
historically retained by Parent.

7.16         Removal of CIS Limited
from existing VAT group.  Parent
shall, immediately after Closing, procure the making of an application for CIS
Limited to be excluded, from Closing or, if later, from the earliest date which
the relevant Governmental Authority will allow, from the VAT group of which CIS
Limited is a part immediately before Closing and Parent shall provide a copy of
that application to Purchaser within five days of the date on which that
application is submitted to the relevant Governmental Authority.

ARTICLE 8.

CONDITIONS PRECEDENT TO
OBLIGATIONS OF PURCHASER

The obligations of Purchaser under Articles 2, 3 and 4
are subject to the satisfaction or waiver by Purchaser of the following
conditions precedent on or before the Closing:

8.1           Warranties True as of
Both Present Date and Closing.  The
representations and warranties of Parent contained herein and in the Related
Agreements shall be accurate, true and

 

64

 

correct in all material respects (except that those representations and
warranties that are limited by materiality shall be true and correct in all
respects) (a) on and as of the date of this Agreement and of the Related
Agreements, respectively, and (b) at and as of the Closing with the same force
and effect as though made by Parent at and as of the Closing.

8.2           Compliance with Agreements
and Covenants.  Parent shall have
performed and complied with all of its respective covenants and obligations
contained in this Agreement and in its Related Agreements to be performed and
complied with by it at or prior to the Closing.

8.3           Consents and Approvals.  Purchaser shall have received written
evidence satisfactory to Purchaser that all consents and approvals set forth on
Schedule 5.3 and marked with an asterisk (*) have been obtained and
Purchaser shall have obtained all consents and approvals set forth on Schedule
6.3 (as the same may be amended as provided therein).

8.4           Release of Liens.  Any and all Liens on the Shares, the assets
and properties of the Acquired Corporations and the Acquired Corporation
Subsidiaries, and the Assets, shall have been terminated and released pursuant
to documentation satisfactory to Purchaser.

8.5           Estoppel Certificates.  Purchaser shall have received estoppel
certificates reasonably satisfactory to Purchaser duly executed by each lessor
under each Real Property Lease.

8.6           Documents. 
Purchaser shall have received all of the agreements, documents and items
set forth in Section 10.2.

8.7           Hart-Scott-Rodino.  The applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of the
transactions contemplated by this Agreement.

8.8           European
Commission or Other Antitrust.  Any and all regulatory or governmental
clearance or approval required prior to Closing under Council Regulation (EC)
No 139/2004 on the control of concentrations between undertakings or under any
competition, antitrust, control or other similar Law of any other relevant
jurisdiction shall have been obtained, any required notice or filing there
under shall have been made and any applicable waiting period there under shall
have expired or been earlier terminated so as to allow consummation of the
transaction contemplated by this Agreement.

8.9           No Material Adverse Effect.  No event shall have occurred or circumstance
shall have come into effect that, in the reasonable judgment of Purchaser, has
had or is reasonably likely to have a Material Adverse Effect.

8.10         Actions or Proceedings.  No action or proceeding by any Governmental
Authority or other Person (other than Purchaser or any of its Affiliates) shall
have been instituted or threatened that (a) causes or may cause a Material
Adverse Effect or (b) enjoins, restrains, prohibits or results in substantial
damages in respect of, or could enjoin, restrain, prohibit or result in
substantial damages in respect of, any provision of this Agreement or any
Related Agreement or the consummation of the transactions contemplated hereby
or thereby or any

 

65

 

integration of any operations of any Asset Seller, any Acquired
Corporation or any Acquired Corporation Subsidiary with those of Purchaser and
its Affiliates.

8.11         Employment AgreementError!
Bookmark not defined.. 
The employment agreement entered into as of the date hereof (which
employment agreement is conditioned on the consummation of the transactions
contemplated by this Agreement) shall remain in full force and effect and shall
not have been repudiated by the employee party thereto.

8.12         First CapitolError!
Bookmark not defined.. 
Either (i) that certain Noncompete Agreement, dated as of October 19,
2000, by and among efutures.com, LLC, CIS Management and CIS shall have been
terminated and Parent shall have provided Purchaser with reasonable evidence of
such termination, and all consents and approvals (including from the First
Capitol Board of Directors) necessary to transfer the First Capitol Interests
to Purchaser shall have been obtained and Purchaser shall have received satisfactory
evidence thereof or (ii) Parent shall have caused CIS Management to dispose of
the equity interests of First Capitol to a third party which is not an
Affiliate of Parent and Parent shall have provided Purchaser with reasonable
evidence of such disposition; provided, however, that in the
event that this condition precedent is satisfied at Closing pursuant to clause
(ii), the First Capitol Interests shall be deemed to be Excluded Assets
hereunder and the Estimated Closing Date Purchase Price shall be reduced by an
amount equal to $6.5 million.

8.13         UK Regulatory Approval.  Purchaser shall have received an approval
notice from the FSA in accordance with FSMA confirming that there is no
objection to Purchaser or its designee becoming a controller or CIS Limited; or
(where the approval notices issued by the FSA referred to above are expressly
subject to the fulfillment of certain conditions) upon the fulfillment of those
conditions (as may be varied or cancelled) to the satisfaction of the FSA; or
(in the absence of such notification) the period during which the FSA may serve
an approval notice or a decision notice pursuant to FSMA in relation to such
acquisitions of control having elapsed without the FSA having served any such
notices.

8.14         2005 Financial Statements.  The 2005 Financial Statements, as delivered
pursuant to Section 7.15, shall, as compared to the Draft 2005 Financial
Statements delivered to Purchaser prior to the date hereof, consistently
reflect the financial position, assets and liabilities of each of the Subject
Entities.

ARTICLE 9.

CONDITIONS PRECEDENT TO
OBLIGATIONS OF PARENT

The obligations of Parent under Articles 2, 3 and 4
are subject to the satisfaction or waiver by Parent of the following conditions
precedent at or before the Closing:

9.1           Warranties True as of
Both Present Date and Closing.  The
representations and warranties of Purchaser contained herein and in its Related
Agreements shall be accurate, true and correct in all material respects (except
that those representations and warranties that are limited by materiality shall
be true and correct in all respects) (a) on and as of the date of this

 

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Agreement and of the Related Agreements, respectively, and (b) at and
as of the Closing with the same force and effect as though made by Purchaser at
and as of the Closing.

9.2           Compliance with
Agreements and Covenants.  Purchaser
shall have performed and complied with all of its covenants and obligations
contained in this Agreement and in its Related Agreements to be performed and
complied with by it at or prior to the Closing.

9.3           Consents and Approvals.  Parent shall have received written evidence
satisfactory to Parent that all consents and approvals set forth on Schedule
6.3 and marked with an asterisk (*) have been obtained in form and
substance reasonably acceptable to Purchaser and, with regard to the FSA change
of control consent, without unreasonable restrictions, requirements, or
obligations.

9.4           Documents. 
Parent shall have received all of the agreements, documents and items
set forth in Section 10.3.

9.5           Hart-Scott-Rodino.  The applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent the consummation of the
transactions contemplated by this Agreement.

9.6           European Commission or
Other Antitrust.  Any and all regulatory or governmental clearance or approval required
prior to Closing under Council Regulation (EC) No 139/2004 on the control of
concentrations between undertakings or under any competition, antitrust,
control or other similar Law of any other relevant jurisdiction shall have been
obtained, any required notice or filing there under shall have been made and
any applicable waiting period there under shall have expired or been earlier
terminated so as to allow consummation of the transaction contemplated by this
Agreement.

9.7           Actions or ProceedingsError!
Bookmark not defined.. 
No action or proceeding by any Governmental Authority or other Person
(other than any Subject Entity or any of their Affiliates) shall have been
instituted or threatened that enjoins, restrains, prohibits or results in
substantial damages in respect of, or could enjoin, restrain, prohibit or
result in substantial damages in respect of, any provision of this Agreement or
any Related Agreement or the consummation of the transactions contemplated
hereby or thereby.

ARTICLE 10.

CLOSING

10.1         Closing. 
The Closing shall take place at the offices of Parent, at the principal
executive offices of Parent, at 10:00 a.m. (Central Standard Time) on the last
Business Day of the month in which on the last condition to closing set forth
in Articles 8 and 9 has been satisfied or waived (other than
those conditions that by their terms cannot be satisfied until the Closing but
subject to the satisfaction of such conditions), or such other date as is
mutually agreed upon in writing by Purchaser and Parent.  The Closing, and all transactions to occur at
the Closing, shall be deemed to have taken place at, and shall be effective as
of, 11:59 p.m. (Eastern Standard Time) on the Closing Date.

 

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10.2         Deliveries by Sellers.  At the Closing, in addition to any other
documents or agreements required under this Agreement, Parent shall deliver or
cause to be delivered to Purchaser the following:

(a)           certificates
evidencing all of the Shares, which certificates shall be duly endorsed in
blank or accompanied by stock powers duly executed by each of the applicable
Shareholders (the “Stock Powers”) substantially in the form requested by
Purchaser;

(b)           the
resignations of all directors and officers of, and each non-corporate trustee
or fiduciary of any plan or arrangement involving employee benefits of, each
Acquired Corporation and each Acquired Corporation Subsidiary;

(c)           the
Bill of Sale, duly executed by each Asset Seller;

(d)           the
Assignment and Assumption Agreement, duly executed by each Asset Seller;

(e)           a
certificate duly executed by an authorized officer of Parent, each Shareholder
and each Asset Seller, certifying as to compliance with Section 8.1 and Section
8.2;

(f)            an
Assignment and Assumption of Lease with respect to each Real Property Lease,
duly executed by the Subject Entity that is the lessee under such Real Property
Lease;

(g)           the
Transition Services Agreement, duly executed by Parent;

(h)           a
certificate of the secretary or assistant secretary of each Asset Seller
certifying resolutions of the Board of Directors of such Asset Seller, and the
shareholders of such Asset Seller, approving and authorizing the execution,
delivery and performance of this Agreement and such Asset Seller’s Related
Agreements and the consummation of the transactions contemplated hereby and
thereby (together with an incumbency and signature certificate regarding the
officer(s) signing on behalf of such Asset Seller);

(i)            the
Articles of Incorporation of each Acquired Corporation and each Acquired
Corporation Subsidiary, certified by the Secretary of State or equivalent
Person of its jurisdiction of incorporation, and the by-laws or similar
instrument of each Acquired Corporation and each Acquired Corporation
Subsidiary, certified by its Secretary;

(j)            certificates
of good standing from (i) the jurisdiction of incorporation for each Acquired
Corporation and each Acquired Corporation Subsidiary and (ii) the jurisdiction
where each Acquired Corporation and each Acquired Corporation Subsidiary is
qualified to do business;

(k)           an
exclusivity agreement, duly executed by Parent on behalf of it and its
Affiliates in the form attached hereto as Exhibit 10.2(k).

 

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(l)            a
certificate of non-foreign status from each Seller that is not a “foreign person”
as defined in Section 1445(f)(3) of the Code (including, but not necessarily
limited to, CIS, CIS Financial and CIS Securities) that complies with Treasury
Regulation §1.1445-2(b)(2);

(m)          such
other documents and instruments set forth in Schedule 10.2(m) prepared
by Purchaser and delivered to Parent not later than the later of (i) 30
Business Days after the date hereof or (ii) 15 Business Days after Parent’s
delivery of all of the Deferred Schedules; and

(n)           such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as Purchaser may reasonably require
to consummate the transactions contemplated by this Agreement and the Related
Agreements.

10.3         Deliveries by Purchaser.  At the Closing, Purchaser shall deliver to
Parent the following:

(a)           the
Closing Date Seller Payment payable to the Parent (as representative for the
Asset Sellers and Shareholders) at and as of the Closing pursuant to Section
4.1;

(b)           the
Non-Competition Payment payable to Parent at and as of the Closing pursuant to Section
4.3;

(c)           the
Assignment and Assumption Agreement, duly executed by Purchaser;

(d)           a
certificate duly executed by an authorized officer of Purchaser, certifying as
to compliance with Section 9.1 and Section 9.2;

(e)           an
Assignment and Assumption of Lease with respect to each Real Property Lease,
duly executed by Purchaser;

(f)            the
Transition Services Agreement, duly executed by Purchaser;

(g)           a
certificate of the secretary or assistant secretary of Purchaser certifying
resolutions of the Board of Directors of Purchaser approving this Agreement and
its Related Agreements and the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of Purchaser); and

(h)           such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as may reasonably be required to
consummate the transactions contemplated by this Agreement and the Related
Agreements.

 

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ARTICLE 11.

TERMINATION

11.1         Termination.  This Agreement may be terminated at any time
prior to the Closing:

(a)           with
the mutual consent of Parent and Purchaser;

(b)           by
Parent or Purchaser, if the Closing shall not have taken place on or before
December 31, 2005; provided, that the right
to terminate this Agreement under this Section 11.1(b) shall not be
available to (i) Parent if the failure of Parent or any Seller to fulfill any
obligation under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date or (ii) Purchaser if the
failure of Purchaser to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before
such date;

(c)           by
Purchaser, if there shall have been a material breach of any covenant,
obligation, representation or warranty of Parent or any Seller hereunder, and
such breach shall not have been remedied within ten (10) Business Days after
receipt by Parent of a notice in writing from Purchaser specifying the breach
and requesting such breach be remedied;

(d)           by
Parent, if there shall have been a material breach of any covenant, obligation,
representation or warranty of Purchaser hereunder, and such breach shall not
have been remedied within ten (10) Business Days after receipt by Purchaser of
notice in writing from Parent specifying the breach and requesting such breach
be remedied; or

(e)           by
Purchaser pursuant to Section 1.5(d).

11.2         Effect of Termination.  If this Agreement is terminated pursuant to Section
11.1, all obligations of the parties hereunder shall terminate, except for
the obligations set forth in Sections 5.27 (brokers), 6.5
(brokers), 15.1 (expenses) and 15.10 (publicity), which shall
survive the termination of this Agreement, and except that no such termination
shall relieve any party from liability for any prior breach of this Agreement.

ARTICLE 12.

INDEMNIFICATION

12.1         Survival. 
The representations and warranties of the parties hereto contained
herein shall survive the Closing for a period of two (2) years, except that the
Tax and Benefits Warranties shall survive until the Tax Statute of Limitations
Date and the Title and Authorization Warranties shall survive forever.

12.2         Indemnification by Parent.  Parent agrees to indemnify each of the
Purchaser Indemnified Parties against, and agrees to hold each of them harmless
from, any and all Losses incurred or suffered by them relating to or arising
out of or in connection with any of the following:

 

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(a)           any
breach of or any inaccuracy in any representation or warranty made by Parent in
this Agreement or any Related Agreement or any document delivered by Parent or
any Seller at the Closing; provided, that
(i) in the case of all representations and warranties, except for Title and
Authorization Warranties and Tax and Benefits Warranties, a notice of the
Purchaser Indemnified Party’s claim shall have been given to Parent not later
than the close of business on the second anniversary of the Closing Date and
(ii) in the case of Tax and Benefit Warranties, a notice of the Purchaser
Indemnified Party’s claim shall have been given to Parent not later than the
close of business on the Tax Statute of Limitations Date;

(b)           any
breach by Parent of or failure by Parent to perform any covenant, obligation or
agreement of Parent set forth or contemplated in this Agreement or any Related
Agreement or any document delivered by Parent or any Seller at the Closing;

(c)           the
Excluded Assets, the Excluded Obligations or, other than the Assumed
Obligations, any other obligations or liabilities relating to or arising out of
the ownership or operation of the Assets on or prior to the Closing Date;

(d)           any
obligations or liabilities relating to or arising from any product liability or
warranty claims based on products or services sold by any Asset Seller on or
prior to the Closing Date;

(e)           any
obligations or liabilities relating to or arising out of the ownership or
operation of any Affiliate of any Seller that is not a Asset Seller;

(f)            the
occupancy by customers of the Business or similar third-parties of any of the
Leased Real Property in violation of the terms and conditions of the Real
Property Lease application to any such Leased Real Property;

(g)           any
liability (including its costs) which CIS Limited shall be required to pay to
the UK Pension Scheme by virtue of s75 Pensions Act 1995 (as modified by
regulations), s38 Pensions Act 2004 or s43 Pensions Act 2004 or by virtue of
any demand by the trustees of the UK Pension Scheme for an additional
contribution as a result of the withdrawal of CIS Limited from that Scheme;

(h)           any
claim made by an employee of CIS Limited which arises because a provision of
the UK Pension Scheme or its predecessor did not prior to the Closing treat
that person equally with a person of the opposite sex whether such claim arises
pursuant to the provisions of the Equal Pay Act 1970, the Sex Discrimination
Act 1975, Article 141 (formerly Article 119) Treaty of Rome, s62 Pensions Act
1995 or otherwise;

(i)            any
acts or omissions of, or breach of relevant Law by, CIS Limited prior to the
Closing, including to the extent arising out of any investigation or regulatory
action by any Governmental Authority;

(j)            any
obligation arising under Section 13.4; and

(k)           the
client claim against CIS SNC described in item 4 of Schedule 5.22.

 

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12.3         Indemnification by Purchaser.  Purchaser agrees to indemnify Parent against,
and agrees to hold it harmless from, any and all Losses incurred or suffered by
it relating to or arising out of or in connection with any of the following:

(a)           any
breach of or any inaccuracy in any representation or warranty made by Purchaser
in this Agreement or any Related Agreement or any document delivered by
Purchaser at the Closing; provided, that in
the case of all representations and warranties, except for Title and
Authorization Warranties, a notice of the Parent’s claim shall have been given
to Purchaser not later than the close of business on the second anniversary of
the Closing Date;

(b)           any
breach by Purchaser of or failure by Purchaser to perform any covenant or
obligation of Purchaser set out or contemplated in this Agreement or any
Related Agreement or any document delivered by Purchaser at the Closing;

(c)           any Losses incurred or suffered by Cargill plc in its
capacity as surety under the Real Property Lease relating to the UK Property as
a result of any breach by CIS Limited after the Closing of its obligations to
make rental payments under such Real Property Lease; and

(d)           the
Assumed Liabilities.

12.4         Limitations on Certain
Claims for Indemnification.

(a)           Basket.  Parent shall not have any liability pursuant
to Section 12.2(a) (other than with respect to any breach of or
inaccuracy in any of the Title and Authorization Warranties, and the Tax and
Benefits Warranties made by Parent) unless and until the aggregate amount of all
Losses incurred or suffered by the Purchaser Indemnified Parties exceeds
$2,000,000 (the “Deductible Amount”). 
In the event such Losses exceed the Deductible Amount, Parent shall be
liable and responsible to the Purchaser Indemnified Parties only for the amount
by which such Losses exceed the Deductible Amount (subject to Section
12.4(b)).  Purchaser shall not have
any liability pursuant to Section 12.3(a) (other than with respect to
any breach of or inaccuracy in any of the Title and Authorization Warranties
made by Purchaser) unless and until the aggregate amount of all Losses incurred
or suffered by Parent exceeds the Deductible Amount.  In the event such Losses exceed the
Deductible Amount, Purchaser shall be liable and responsible to Parent only for
the amount by which such Losses exceed the Deductible Amount (subject to Section
12.4(b)).

(b)           Maximum.  In no event shall Parent’s aggregate
liability pursuant to Section 12.2(a) for Losses incurred or suffered by
the Purchaser Indemnified Parties (other than with respect to any breach of or
inaccuracy in any of the Title and Authorization Warranties and the Tax and
Benefits Warranties made by Parent) exceed $50,000,000.  In no event shall Purchaser’s aggregate
liability pursuant to Section 12.3(a) for Losses incurred or suffered by
Parent (other than with respect to any breach of or inaccuracy in any of the
Title and Authorization Warranties made by Purchaser) exceed the sum of
$50,000,000.

 

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(c)           Claims
Based on Fraud or Intentional Misrepresentation.  Notwithstanding anything contained herein or
otherwise to the contrary, including Sections 12.4(a) and 12.4(b),
nothing herein shall be deemed to limit any party’s rights to recover any or
all Losses incurred or suffered by it relating to or arising out of or in
connection with fraud or intentional misrepresentation, it being understood and
agreed that the right to recover such Losses shall survive forever.

12.5         Materiality.  For purposes of Sections 12.2, 12.3
and 12.4, the representations and warranties herein shall be deemed to
have been made without any qualifications as to materiality and, accordingly,
for such purposes, all references therein to “material”, “in all material
respects” and similar qualifications as to materiality shall be deemed to be
deleted therefrom (except where any such provision requires disclosure of lists
of items of a material nature or above a specified threshold).

12.6         Claims. 
As soon as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement not involving a claim (or the commencement
of any suit, action or proceeding) of the type described in Section 12.7
or 13.6, the Indemnitee shall give notice
to the Indemnitor of such claim; provided,
that the failure of the Indemnitee to give notice shall not relieve the
Indemnitor of its obligations under this Article 12 except to the extent
(if any) that the Indemnitor shall have been prejudiced thereby.  If the Indemnitor does not object in writing
to such indemnification claim within thirty (30) calendar days of receiving
notice thereof, the Indemnitee shall be entitled to recover promptly from the
Indemnitor and the Indemnitor shall promptly pay to the Indemnitee the amount
of such claim (but such recovery shall not limit the amount of any additional
indemnification to which the Indemnitee may be entitled pursuant to Section
12.2 or 12.3), and no later objection
by the Indemnitor shall be permitted.  If
within such thirty (30) day period the Indemnitor agrees that it has an
indemnification obligation but objects that it is obligated to pay only a
lesser amount, the Indemnitee shall nevertheless be entitled to recover from
the Indemnitor and the Indemnitor shall promptly pay to the Indemnitee the lesser
amount, without prejudice to the Indemnitee’s claim for the difference.

12.7         Notice of Third Party
Claims; Assumption of Defense.  The
Indemnitee shall give notice as promptly as is reasonably practicable to the
Indemnitor of the assertion of any claim (or the commencement of any suit,
action or proceeding, by any Person not a party hereto) (other than by a
Governmental Authority with respect to Taxes, which shall be governed by Section
13.6) in respect of which indemnity may be sought under this Agreement; provided, that the failure of the Indemnitee
to give notice shall not relieve the Indemnitor of its obligations under this Article
12 except to the extent (if any) that the Indemnitor shall have been
prejudiced thereby.  The Indemnitor may,
at its own expense, (a) participate in the defense of any such claim, suit,
action or proceeding and (b) upon notice to the Indemnitee and the Indemnitor’s
delivering to the Indemnitee a written agreement that the Indemnitee is
entitled to indemnification pursuant to Section 12.2 or 12.3 for all Losses arising out of such claim,
suit, action or proceeding and that the Indemnitor shall be liable for the
entire amount of any Loss resulting therefrom, at any time during the course of
any such claim, suit, action or proceeding, assume the defense thereof; provided, that (i) the Indemnitor shall
provide written evidence reasonably satisfactory to the Indemnitee
demonstrating that the Indemnitor has a sufficient amount of assets for
purposes of such assumption of defense, (ii) the Indemnitor’s counsel is
reasonably satisfactory to the Indemnitee and (iii) the Indemnitor shall
thereafter consult with the

 

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Indemnitee upon the Indemnitee’s reasonable request for such consultation
from time to time with respect to such claim, suit, action or proceeding.  If the Indemnitor assumes such defense, the
Indemnitee shall have the right (but not the duty) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnitor.  If,
however, the Indemnitee reasonably determines in its judgment that
representation by the Indemnitor’s counsel of both the Indemnitor and the
Indemnitee would present such counsel with a conflict of interest, then such
Indemnitee may employ separate counsel to represent or defend it in any such
claim, action, suit or proceeding and the Indemnitor shall pay the fees and
disbursements of such separate counsel.  Whether
or not the Indemnitor chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.

12.8         Settlement or Compromise.  Any settlement or compromise made or caused
to be made by the Indemnitee or the Indemnitor, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 12.7
shall also be binding upon the Indemnitor or the Indemnitee, as the case may
be, in the same manner as if a final judgment or decree had been entered by a
court of competent jurisdiction in the amount of such settlement or compromise;
provided, that (a) no obligation, restriction or Loss shall be imposed
on the Indemnitee as a result of such settlement without its prior written
consent, and (b) the Indemnitee shall not compromise or settle any claim, suit,
action or proceeding without the prior written consent of the Indemnitor, which
consent shall not be unreasonably withheld.

12.9         Failure of Indemnitor to Act.  In the event that the Indemnitor does not
elect to assume the defense of any claim, suit, action or proceeding, then any
failure of the Indemnitee to defend or to participate in the defense of any
such claim, suit, action or proceeding or to cause the same to be done, shall
not relieve the Indemnitor of its obligations hereunder.

12.10       Set-Off Against
Post Closing Payment Amount.  In the
event any Purchaser Indemnified Party is entitled to receive any amount from
Parent under this Agreement, including any indemnification payment under this
Agreement, without limiting the Purchaser Indemnified Party’s rights to seek
recovery against Parent directly for amounts in excess of the Post Closing
Payment Amount, the Purchaser Indemnified Party may recover from the Post
Closing Payment Amount.

12.11       Purchase Price Adjustments.  Any amounts payable under Section 12.2
or Section 12.3 shall be treated by Purchaser and Parent as an
adjustment to the Adjusted Purchase Price.

12.12       Indemnity Payments in
Respect of CIS Limited. 
Notwithstanding any provision to the contrary in this Agreement, Parent
shall cause Cargill PLC to pay any amount which is required to protect, defend,
indemnify or hold harmless CIS Limited under any provision of this Agreement to
Purchaser and not to CIS Limited.  For
the avoidance of doubt, any such payment shall be treated as an adjustment to
the Adjusted Purchase Price pursuant to Section 12.11.

 

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ARTICLE 13.

TAX MATTERS

13.1         Filing of Tax Returns.  Purchaser shall prepare or cause to be
prepared and file or cause to be filed all Tax Returns for the Funds, the
Acquired Corporations and Acquired Corporation Subsidiaries for all (a) taxable
years ending on or prior to the Closing Date that are filed after the Closing
Date (but not including any Tax Return for such period filed as part of a
consolidated, combined or unitary Tax group), (b) taxable years beginning prior
to the Closing Date and ending after the Closing Date (but not including any
Tax Return for such period filed as part of a consolidated, combined or unitary
Tax group), (c) taxable years beginning after the Closing Date.  Purchaser shall provide to Parent for review
and comment each Tax Return described in clauses (a) and (b) of
this Section 13.1 at least fifteen (15) days prior to the due date for
filing such return (or, if required to be filed within fifteen (15) days of the
Closing Date, as soon as reasonably practicable following the Closing).  Sellers shall reimburse Purchaser for Taxes
paid in clauses (a) and (b) above within fifteen (15) days of
payment by Purchaser or Affiliate of Purchaser to the extent such Taxes are
subject to Parent’s obligation to indemnify Purchaser pursuant to Section
13.4.

13.2         Proration of Taxes.  For purposes of allocating liability for
Taxes under Section 3.5 and Section 13.4, in the case of any
taxable period that includes (but does not end on) the Closing Date (a “Straddle
Period”), (a) real, personal and intangible property Taxes (“Property
Taxes”) of the Acquired Corporations and the Acquired Corporation
Subsidiaries or related to the Assets or the Business allocable to the
Pre-Closing Tax Period shall be equal to the amount of such Property Taxes for
the entire Straddle Period multiplied by a fraction, the numerator of which is
the number of days during the Straddle Period that are in the Pre-Closing Tax
Period and the denominator of which is the number of days in the Straddle
Period; and  (b) Taxes (other than
Property Taxes) of the Acquired Corporations, and the Acquired Corporation
Subsidiaries or related to the Assets or the Business allocable to the
Pre-Closing Tax Period shall be computed as if such taxable period ended as of
the close of business on the Closing Date, provided that exemptions, allowances
or deductions that are calculated on an annual basis (including depreciation
and amortization deductions) shall be allocated between the period ending on
the Closing Date and the period after the Closing Date in proportion to the
number of days in each period.

13.3         Transfer Taxes.  All sales, use and transfer Taxes, including
any value added, stock transfer, gross receipts, stamp duty and real, personal,
or intangible property transfer Taxes, arising from the transactions
contemplated hereby or in the Related Agreements, including any interest or
penalties in respect thereof (the “Transfer Taxes”) shall be apportioned
fifty percent (50%) to Parent and fifty percent (50%) to the Purchaser.  The Tax Returns relating to such Transfer
Taxes shall be timely prepared and filed by the party legally obligated to make
such filing, and Parent agrees to cause Sellers to make any such necessary
filings.  Parent and Purchaser agree to,
and to cause their Affiliates to, reasonably cooperate with one another in
connection with the preparation and filing of such Tax Returns, in obtaining
all available exemptions from, reductions in, offsets to, or refunds or credits
of such Transfer Taxes and in timely providing each other with resale
certificates and any other documents necessary to obtain any such exemptions,
reductions, offsets, refunds or credits.

 

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13.4         Tax Indemnification.  From and after the Closing Date, Parent shall
protect, defend, indemnify and hold harmless Purchaser, the Acquired Corporations
and the Acquired Corporation Subsidiaries from (a) any and all Taxes of or
payable by the Acquired Corporations or the Acquired Corporation Subsidiaries
attributable to any Pre-Closing Tax Period; (b) all Taxes of any Person for
which the Acquired Corporations or any Acquired Corporation Subsidiary may be
liable under Treasury Regulation §1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract, or otherwise;
(c) all Transfer Taxes allocable to Parent under Section 13.3; (d) any
and all Taxes payable in the UK by the Acquired Corporations and the Acquired
Corporation Subsidiaries attributable (i) to the holding or disposal of any
shares acquired on or before Closing; or (ii) to the ownership or cancellation
of, or to the acquisition of shares pursuant to, any right to acquire shares
granted on or before Closing; and (e) any and all amounts of value added tax
payable by CIS Limited solely by reference to CIS Limited being a member of a
VAT group between Closing and the date on which the application referred to in Section
7.16 takes effect.

13.5         Cooperation/Retention of
Records.  After the Closing, upon
reasonable written notice, Purchaser and Parent shall, and Parent shall cause
Sellers to, furnish or cause to be furnished to one another, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Acquired Corporations, the Acquired Corporation
Subsidiaries, the Assets or the Business (including access to books and
records) as is reasonably requested for the filing of all Tax Returns, the
making of any election related to Taxes, the preparation for any audit by any
Governmental Authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax Return.

13.6         Procedures Relating to Tax
Claims.

(a)           After
the Closing, each of Purchaser, on the one hand, and Parent, on the other hand
(the “Recipient”), shall promptly notify the other party in writing upon
receipt by the Recipient or any of its Affiliates of any written notice of any
pending or threatened audit or assessment, suit, proposed adjustment,
deficiency, dispute, administrative 
judicial proceeding or other similar Claim relating to Taxes (“Tax
Claim”) received by the Recipient from any Governmental Authority or any
other party to the extent such Tax Claim may give rise to an indemnification
right under Section 12.2, Section 12.3 or Section 13.4
under this Agreement; provided, however, that a failure by  Purchaser or the Parent to give such notice
shall not affect the other party’s rights to indemnification under Article
12 or Article 13 unless the other party is materially adversely
prejudiced as a consequence of such failure.

(b)           Parent
may elect to control the conduct, through counsel of the Parent’s own choosing
and at the Parent’s sole expense and with the participation of Purchaser if
Purchaser so elects, of any Tax Claim involving any asserted liability with
respect to or relating to any Pre-Closing Tax Period (other than a Tax Claim
involving any Straddle Period).  If the
Parent desires to elect to control any such Tax Claim, Parent shall within ten
(10) calendar days of receipt of the notice of such Tax Claim notify Purchaser
in writing of its intent to do so.  If
the Parent properly elects to control such Tax Claim, then the Parent shall
have all rights to settle, compromise and/or concede such asserted liability
and Purchaser shall reasonably cooperate and shall cause the Acquired

 

76

 

Corporations and the Acquired Corporation Subsidiaries to reasonably
cooperate; provided, however, that the Parent shall not settle,
compromise and/or concede such asserted liability without the written consent
of Purchaser (whose consent shall not be unreasonably withheld) if such
settlement, compromise or concession could increase the Tax liability of any of
Purchaser (or any of its Affiliates), any Acquired Corporation or any Acquired
Corporation Subsidiary for any other taxable period.  If the Parent does not elect to control a Tax
Claim for a Pre-Closing Tax Period pursuant to this Section 13.6(b) (or,
after assuming control, the Parent fails to reasonably defend against such Tax
Claim), Purchaser, or its Affiliates may, without affecting Purchaser’s or any
other indemnified party’s rights to indemnification under Article 12 and
Article 13, assume sole control of the defense of such Tax Claim (at the
Parent’s and Sellers expense).

(c)           With
respect to any Tax Claim that involves any Straddle Period, Purchaser shall
notify the Parent of such Tax Claim and Purchaser shall control the conduct of
any such Tax Claim, through counsel of Purchaser’s own choosing with
participation by the Parent (at Parent’s expense) and Purchaser shall have all
rights to settle, compromise and/or concede such Tax Claim with the consent of
Parent (which shall not be unreasonably withheld or delayed).

ARTICLE 14.

NON-COMPETITION

14.1         Non-Competition Agreement.

(a)           Parent
agrees that from and after the Closing Date until the date that is five (5)
years after the Closing Date (the “Non-Competition Period”), neither it
nor any Seller nor any of their respective Affiliates shall, directly or
indirectly:

(i)            engage
in, or own any interest in, control, advise, manage, operate, serve as a
director, officer or employee of, act as a lender or consultant to, render
services for, receive any economic benefit from or exert any influence upon any
Person that engages wholly or partly in, the Restricted Business;

(ii)           solicit,
divert or attempt to solicit or divert any Person who is, was or was solicited
to become, a customer or supplier of any Subject Entity in connection with the
Business at any time prior to the Closing;

(iii)          impair,
or attempt to impair, any business relationship or potential business
relationship between any third party and Purchaser or any of its Affiliates
(including the Acquired Corporations or any Acquired Corporation Subsidiary) in
connection with the Restricted Business;

(iv)          make
any statement to any third party, including the press or media, likely to
result in adverse publicity for Purchaser or any of its Affiliates (including
the Acquired Corporations or any Acquired Corporation Subsidiary) in connection
with the Restricted Business; or

 

77

 

(v)           employ,
solicit for employment or encourage to leave his or her employment, on its
behalf or on behalf of any other Person, any individual who was during the two
(2) year period prior to such employment, solicitation or encouragement or is
an officer or employee of Purchaser or any of its Affiliates (including the
Acquired Corporations or any Acquired Corporation Subsidiary) involved in the
Restricted Business as conducted by Purchaser and its Affiliates after the
Closing; provided, however, that Parent, Sellers and their
Affiliates may engage in discussions or negotiations with, and employ, any
Person responding to general advertising for employees not specifically
targeted at the employees of the Business.

(b)           Notwithstanding
anything to the contrary herein, Parent and its Affiliates may (i) in the
ordinary course of business of Parent and its Affiliates and not for the
purpose of competing, directly or indirectly, with the Business, own less than
5% of any class of the capital stock of any corporation engaged in any business
that competes, directly or indirectly, with the Business without violating the
provisions of this Section, provided, that, Parent or its
Affiliates does not have the power to control or direct the management or
affairs of such corporation. 
Notwithstanding the preceding sentence, Parent’s Affiliates that are
registered investment advisers shall not be subject to the restrictions
contained in this Agreement with respect to investments that they make on
behalf of funds or managed accounts, including funds in which Parent owns a
minority of the equity interests.

14.2         Reasonableness of Covenants.  Purchaser and Parent
have independently consulted with their respective counsel and after such
consultation agree that the covenants set forth in Section 14.1 (each a “Non-Competition Covenant” and
collectively the “Non-Competition
Covenants”), including the time limitation, geographic area and
scope of activity of such Non-Competition Covenants, are appropriate and
reasonable when considered in light of the nature and extent of the
transactions contemplated by this Agreement and the Related Agreements.  Parent further agrees and acknowledges that
(a) the Non-Competition Covenants are of the essence of this Agreement, (b)
Purchaser is relying upon Parent’s agreements in this Article 14 and,
but for the agreement of Parent to comply with the Non-Competition Covenants,
Purchaser would not have entered into this Agreement or any of the Related
Agreements, and (c) each Non-Competition Covenant is reasonable and necessary
to protect and preserve the interests and properties of Purchaser.

14.3         Specific Performance.  Parent recognizes and affirms that in the
event of breach by it of any of the provisions of this Article 14, money
damages would be inadequate and Purchaser would have no adequate remedy at
law.  Accordingly, Parent agrees that
Purchaser shall have the right, in addition to any other rights and remedies
existing in its favor, to enforce its rights and Parent’s obligations under
this Article 14 not only by an action or actions for damages, but also
by an action or actions for specific performance, injunction and/or other
equitable relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions of this Article 14.  In the event of a breach or violation by
Parent of any of the provisions of this Article 14, the Non-Competition
Period shall be extended as to such individual by a period equal to (a) the
length of the breach or violation of this Article 14 plus (b) the length
of any court proceedings necessary to stop such breach or violation.  If a bond is

 

78

 

required to be posted in order for Purchaser to secure an injunction,
the parties agree that such bond need not exceed the sum of $1,000.

14.4         Severability.  If at any time any of the provisions of this Article
14 shall be determined to be invalid or unenforceable by reason of being
vague or unreasonable as to duration, area or scope of activity, or otherwise,
then this Article 14 shall be considered divisible (with the other
provisions to remain in full force and effect) and the invalid or unenforceable
provisions shall become and be deemed to be immediately amended to include only
such maximum time limitation, geographic area, scope of activity and other
restrictions, as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter, and Parent expressly
agrees that this Agreement, as so amended, shall be valid and binding as though
any invalid or unenforceable provision had not been included herein.

14.5         No Limitation of Other
Provisions.  The provisions of this Article
14 shall be in addition to, and not in limitation of, any other provisions
contained in any other agreement restricting competition by Purchaser or any
Seller.

ARTICLE 15.

MISCELLANEOUS

15.1         Expenses. 
Except as provided in Sections 7.4(a) and 13.3, each party
hereto shall bear its own fees and expenses with respect to the transactions
contemplated hereby.

15.2         Amendment. 
This Agreement may be amended, modified or supplemented but only in
writing signed by Purchaser and Parent.

15.3         Notices. 
Any notice, request, instruction or other document to be given hereunder
by a party hereto shall be in writing and shall be deemed to have been given,
(a) when received if given in person or by courier or a courier service, (b) on
the date of transmission if sent by telex, facsimile or other wire transmission
(receipt confirmed) or (c) three (3) Business Days after being deposited in the
U.S. mail, certified or registered mail, postage prepaid:

	
   

  	
  i.

  	
  If to Parent, addressed as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cargill, Incorporated

  
	
   

  	
   

  	
  15615 McGinty Road West

  
	
   

  	
   

  	
  Wayzata, Minnesota 55391

  
	
   

  	
   

  	
  Attention: James Haymaker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cargill, Incorporated

  
	
   

  	
   

  	
  15615 McGinty Road West

  
	
   

  	
   

  	
  Wayzata, Minnesota 55391

  
	
   

  	
   

  	
  Attention: Linda Cutler

  

 

79

 

	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  If to Purchaser, addressed as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Refco Group Ltd., LLC

  
	
   

  	
   

  	
  One World Financial Center

  
	
   

  	
   

  	
  200 Liberty Street

  
	
   

  	
   

  	
  New York, New York 10281

  
	
   

  	
   

  	
  Attention: Phillip R. Bennett

  
	
   

  	
   

  	
  Facsimile No.: (212) 262-1910

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mayer, Brown, Rowe & Maw LLP

  
	
   

  	
   

  	
  71 South Wacker Drive

  
	
   

  	
   

  	
  Chicago, Illinois 60603-3441

  
	
   

  	
   

  	
  Attention: Joseph P. Collins

  
	
   

  	
   

  	
  Facsimile No.: (312) 701-9101

  

 

or
to such other individual or address as a party hereto may designate for itself
by notice given as herein provided.

15.4         Effect of Investigation.  Any due diligence review, audit or other
investigation or inquiry undertaken or performed by or on behalf of Purchaser
shall not limit, qualify, modify or amend the representations, warranties,
covenants or obligations of (including indemnities by) any Seller made or
undertaken pursuant to this Agreement or any of their Related Agreements,
irrespective of the knowledge and information received (or that should have
been received) therefrom by Purchaser.

15.5         Payments in Dollars.  Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto shall be made by wire transfer
in U.S. Dollars in same day or immediately available funds.

15.6         Waivers. 
The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same.  No
waiver by a party of any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement shall be effective
unless in writing, and no waiver in any one or more instances shall be deemed
to be a further or continuing waiver of any such condition or breach in other
instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty.

15.7         Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

15.8         Assignment. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and legal
representatives; provided, that no
assignment of any rights or obligations hereunder shall be made by Parent to
any Person without the written consent of Purchaser and no assignment of any
rights or obligations

 

80

 

hereunder shall be made by Purchaser to any Person without the written
consent of Parent.  Notwithstanding the
foregoing, Purchaser shall, without the obligation to obtain the written
consent of any other party hereto (including Parent), be entitled to assign
this Agreement or all or any part of its rights or obligations hereunder to any
Affiliate of Purchaser.  If any party
hereto assigns any of its rights or obligations under this Agreement pursuant
to this Section 15.8, the parties hereto shall, as appropriate, modify
the exhibits and other documents to be delivered at or prior to the Closing to
either add the assignee as a party to such document or substitute the assignee
for the assignor as the party to such document.

15.9         No Third Party Beneficiaries.  This Agreement is solely for the benefit of
the parties hereto and, to the extent provided herein, their respective
Affiliates, directors, officers, employees, agents and representatives, and no
provision of this Agreement shall be deemed to confer upon other third parties
any remedy, claim, liability, reimbursement, cause of action or other right.

15.10       Publicity. 
Prior to the Closing, no public announcement or other publicity
regarding the existence of this Agreement or its contents or the transactions
contemplated hereby shall be made by Purchaser, Parent, any Seller or any of
its respective Affiliates, officers, directors, employees, representatives or
agents, without the prior written agreement of Purchaser and Parent, in any
case, as to form, content, timing and manner of distribution or publication; provided, that nothing in this Section
15.10 shall prevent (a) Parent or Purchaser from filing a Form 8-K with the
U.S. Securities and Exchange Commission or publicly issuing a press release, in
each case, with respect to this Agreement or its contents or the transactions
contemplated hereby (the contents of which Form 8-K and press release shall be
determined by Parent and its Affiliates in their sole discretion) or (b) any
party from (i) making any public announcement required by Law or the rules of
any stock exchange, (ii) discussing this Agreement or its contents or the
transactions contemplated hereby with those Persons whose approval, agreement
or opinion, as the case may be, is required for consummation of such particular
transaction or transactions or (iii) enforcing its rights hereunder; provided
further, that if any party makes any disclosure pursuant to the
foregoing proviso, such party shall use reasonable best efforts to provide such
disclosure to the other parties hereto at least one Business Day prior to such
disclosure and shall consult with such other parties in good faith as to the
contents of such disclosure.

15.11       Further Assurances.  Upon the reasonable request of Purchaser,
Parent shall, and shall cause the Sellers and their respective Affiliates to,
on and after the Closing Date, execute and deliver to Purchaser such other
documents, releases, assignments and other instruments as may be required to
effectuate completely the transfer and assignment to Purchaser of, and to vest
fully in Purchaser title to, the Shares or the Assets, and to otherwise carry
out the purposes of this Agreement.

15.12       Severability.  If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions hereof shall not be affected thereby,
and there shall be deemed substituted for the provision at issue a valid, legal
and enforceable provision as similar as possible to the provision at issue.

 

81

 

15.13       Specific Performance.  Each party recognizes and affirms that in the
event of breach by him or it of any of the provisions of Section 7.8 or Section
7.10 money damages would be inadequate and the other parties would have no
adequate remedy at law.  Accordingly,
each party agrees that the other parties shall have the right, in addition to
any other rights and remedies existing in their favor, to enforce their
respective rights and the breaching party’s obligations under Section 7.8
and Section 7.10 not only by an action or actions for damages, but also
by an action or actions for specific performance, injunction and/or other
equitable relief in order to enforce or prevent any violations (whether
anticipatory, continuing or future) of the provisions of Section 7.8 or Section
7.10.  If a bond is required to be
posted in order for any party to secure an injunction, the parties agree that
such bond need not exceed the sum of $1,000.

15.14       Remedies Cumulative.  The remedies provided in this Agreement shall
be cumulative and shall not preclude the assertion or exercise of any other
rights or remedies available by Law, in equity or otherwise.

15.15       Entire Understanding.  This Agreement and the Related Agreements set
forth the entire agreement and understanding of the parties hereto with respect
to the transactions contemplated hereby and supersede any and all prior
agreements, arrangements and understandings among the parties relating to the
subject matter hereof, but excluding the letter agreement, dated as of March
11, 2005, between CIS and Purchaser, which remains in full force and effect.

15.16       Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal Laws of the State of New
York without giving effect to the principles of conflicts of law thereof.

15.17       Jurisdiction of Disputes; Waiver of
Jury Trial.  In the event any party
to this Agreement commences any litigation, proceeding or other legal action in
connection with or relating to this Agreement, any Related Agreement or any
matters described or contemplated herein or therein, the parties to this
Agreement hereby (a) agree that any such litigation, proceeding or other legal
action shall be brought exclusively in a court of competent jurisdiction
located within the County of New York, New York, whether a state or federal
court; (b) agree that in connection with any such litigation, proceeding or
action, such parties will consent and submit to personal jurisdiction in any
such court described in clause (a) of this Section 15.17 and to
service of process upon them in accordance with the rules and statutes
governing service of process; (c) agree to waive to the full extent permitted
by law any objection that they may now or hereafter have to the venue of any
such litigation, proceeding or action in any such court or that any such
litigation, proceeding or action was brought in an inconvenient forum; (d)
designate, appoint and direct CT Corporation System as their authorized agent
to receive on their behalf service of any and all process and documents in any
legal proceeding in the State of New York; (e) agree to notify the other
parties to this Agreement immediately if such agent shall refuse to act, or be
prevented from acting, as agent and, in such event, promptly to designate
another agent in the State of New York to serve in place of such agent and
deliver to the other parties written evidence of such substitute agent’s
acceptance of such designation; (f) agree as an alternative method of service
to service of process in any litigation, proceeding or action by mailing of
copies thereof to the parties at their addresses set forth in Section 15.3;
(g) agree that any service made as provided herein shall be effective and
binding service in every respect; and (h) agree

 

82

 

that nothing herein shall affect the rights of any party to effect
service of process in any other manner permitted by Law.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN,
AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.

* * *

 

83

 

IN WITNESS WHEREOF, the parties hereto have caused this Purchase and
Sale Agreement to be executed and delivered as of the date first above written.

 

	
   

  	
  REFCO
  GROUP LTD., LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  PHILLIP BENNETT

  
	
   

  	
  Name:

  	
  Phillip
  Bennett

  
	
   

  	
  Title:

  	
  Pres.
  & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CARGILL,
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/WARREN
  R. STALEY

  
	
   

  	
  Name:

  	
  Warren
  R. Staley

  
	
   

  	
  Title:

  	
  Chairman
  and CEO

  

 

84Exhibit
10.30

 

EXECUTION
COPY

 

 

 

 

 

 

 

 

PURCHASE
AND SALE AGREEMENT

by and between

 

REFCO
GROUP LTD., LLC

(as “Purchaser”),

and

CARGILL,
INCORPORATED

(as “Parent”)

June 21, 2005

 

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1.

  	
  DEFINITIONS

  	
  2

  
	
   

  	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
  1.2

  	
  Other Definitions

  	
  10

  
	
   

  	
  1.3

  	
  Interpretation

  	
  12

  
	
   

  	
  1.4

  	
  GAAP and Consistency

  	
  13

  
	
   

  	
  1.5

  	
  Schedules

  	
  13

  
	
  ARTICLE
  2.

  	
  SALE
  AND PURCHASE OF SHARES

  	
  15

  
	
   

  	
  2.1

  	
  Sale and Purchase
  of Shares of CIS Managed Assets, CIS Investments and CIS Cash Management

  	
  15

  
	
   

  	
  2.2

  	
  Sale and Purchase
  of Shares of CIS Limited

  	
  16

  
	
  ARTICLE
  3.

  	
  SALE
  AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS

  	
  16

  
	
   

  	
  3.1

  	
  Purchased Assets

  	
  16

  
	
   

  	
  3.2

  	
  Assignment of
  Contracts and Licenses

  	
  17

  
	
   

  	
  3.3

  	
  Excluded Assets

  	
  19

  
	
   

  	
  3.4

  	
  Assumed Obligations

  	
  20

  
	
   

  	
  3.5

  	
  Prorations

  	
  21

  
	
  ARTICLE 4.

  	
  PURCHASE PRICE;
  OTHER PAYMENTS; ADJUSTMENT; ALLOCATION

  	
  21

  
	
   

  	
  4.1

  	
  Payment of Closing
  Purchase Price

  	
  21

  
	
   

  	
  4.2

  	
  Payment of
  Non-Competition Payment

  	
  22

  
	
   

  	
  4.3

  	
  Purchase Price Adjustment

  	
  22

  
	
   

  	
  4.4

  	
  Post-Closing Payment

  	
  24

  
	
   

  	
  4.5

  	
  Allocation of Purchase
  Price

  	
  25

  
	
   

  	
  4.6

  	
  Conduct of Business
  After Closing

  	
  26

  
	
  ARTICLE 5.

  	
  REPRESENTATIONS AND
  WARRANTIES OF PARENT

  	
  27

  
	
   

  	
  5.1

  	
  Due Incorporation

  	
  27

  
	
   

  	
  5.2

  	
  Due Authorization

  	
  27

  
	
   

  	
  5.3

  	
  Consents and Approvals;
  Authority Relative to this Agreement

  	
  28

  
	
   

  	
  5.4

  	
  Capitalization

  	
  28

  
	
   

  	
  5.5

  	
  Financial Statements;
  Undisclosed Liabilities

  	
  30

  
						

 

-i-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  5.6

  	
  No Adverse Effects or
  Changes

  	
  31

  
	
   

  	
  5.7

  	
  Title to Properties

  	
  33

  
	
   

  	
  5.8

  	
  Condition and
  Sufficiency of Assets

  	
  34

  
	
   

  	
  5.9

  	
  Real Property

  	
  34

  
	
   

  	
  5.10

  	
  Personal Property

  	
  36

  
	
   

  	
  5.11

  	
  Computer System

  	
  36

  
	
   

  	
  5.12

  	
  Intellectual Property

  	
  37

  
	
   

  	
  5.13

  	
  Contracts

  	
  38

  
	
   

  	
  5.14

  	
  Licenses

  	
  40

  
	
   

  	
  5.15

  	
  Insurance

  	
  40

  
	
   

  	
  5.16

  	
  Employee Benefit
  Plans and Employment Agreements

  	
  41

  
	
   

  	
  5.17

  	
  Employment and Labor
  Matters

  	
  44

  
	
   

  	
  5.18

  	
  Capital
  Improvements and Significant Non-Capital Expenditures

  	
  44

  
	
   

  	
  5.19

  	
  Taxes

  	
  44

  
	
   

  	
  5.20

  	
  No Defaults or Violations;
  Registrations

  	
  47

  
	
   

  	
  5.21

  	
  Environmental Matters

  	
  49

  
	
   

  	
  5.22

  	
  Litigation

  	
  49

  
	
   

  	
  5.23

  	
  No Conflict of Interest

  	
  50

  
	
   

  	
  5.24

  	
  Bank Accounts

  	
  50

  
	
   

  	
  5.25

  	
  Customers

  	
  51

  
	
   

  	
  5.26

  	
  Improper and Other
  Payments

  	
  51

  
	
   

  	
  5.27

  	
  Brokers

  	
  51

  
	
   

  	
  5.28

  	
  Accounting and
  Disclosure Controls

  	
  51

  
	
   

  	
  5.29

  	
  Benefit Plan Investors

  	
  52

  
	
   

  	
  5.30

  	
  Reports

  	
  52

  
	
   

  	
  5.31

  	
  Accuracy of Statements

  	
  52

  
	
   

  	
  5.32

  	
  UK Warranties

  	
  52

  
	
  ARTICLE 6.

  	
  REPRESENTATIONS AND
  WARRANTIES OF PURCHASER

  	
  52

  
	
   

  	
  6.1

  	
  Due Organization

  	
  52

  
	
   

  	
  6.2

  	
  Due Authorization

  	
  52

  

 

-ii-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  6.3

  	
  Consents and Approvals;
  Authority Relative to this Agreement

  	
  53

  
	
   

  	
  6.4

  	
  Litigation

  	
  53

  
	
   

  	
  6.5

  	
  Brokers

  	
  53

  
	
  ARTICLE 7.

  	
  COVENANTS

  	
  54

  
	
   

  	
  7.1

  	
  Implementing Agreement

  	
  54

  
	
   

  	
  7.2

  	
  Access to
  Information and Facilities

  	
  54

  
	
   

  	
  7.3

  	
  Preservation of Business

  	
  55

  
	
   

  	
  7.4

  	
  Consents and Approvals

  	
  58

  
	
   

  	
  7.5

  	
  Maintenance of Insurance

  	
  59

  
	
   

  	
  7.6

  	
  Resignation of
  Officers and Directors

  	
  59

  
	
   

  	
  7.7

  	
  Supplemental Information

  	
  59

  
	
   

  	
  7.8

  	
  Confidentiality

  	
  59

  
	
   

  	
  7.9

  	
  Exclusivity

  	
  59

  
	
   

  	
  7.10

  	
  Use of Cargill Marks

  	
  60

  
	
   

  	
  7.11

  	
  Termination of
  Certain Agreements

  	
  60

  
	
   

  	
  7.12

  	
  Employees

  	
  60

  
	
   

  	
  7.13

  	
  Section 338(h)(10) Election

  	
  62

  
	
   

  	
  7.14

  	
  Meeting of CIS Limited

  	
  63

  
	
   

  	
  7.15

  	
  Delivery of 2005
  Financial Statements

  	
  64

  
	
   

  	
  7.16

  	
  Removal of CIS
  Limited from existing VAT group

  	
  64

  
	
  ARTICLE 8.

  	
  CONDITIONS PRECEDENT TO
  OBLIGATIONS OF PURCHASER

  	
  64

  
	
   

  	
  8.1

  	
  Warranties True
  as of Both Present Date and Closing

  	
  64

  
	
   

  	
  8.2

  	
  Compliance with
  Agreements and Covenants

  	
  65

  
	
   

  	
  8.3

  	
  Consents and Approvals

  	
  65

  
	
   

  	
  8.4

  	
  Release of Liens

  	
  65

  
	
   

  	
  8.5

  	
  Estoppel Certificates

  	
  65

  
	
   

  	
  8.6

  	
  Documents

  	
  65

  
	
   

  	
  8.7

  	
  Hart-Scott-Rodino

  	
  65

  
	
   

  	
  8.8

  	
  European
  Commission or Other Antitrust

  	
  65

  
	
   

  	
  8.9

  	
  No Material Adverse Effect

  	
  65

  

 

-iii-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  8.10

  	
  Actions or Proceedings

  	
  65

  
	
   

  	
  8.11

  	
  Employment Agreement

  	
  66

  
	
   

  	
  8.12

  	
  First Capitol

  	
  66

  
	
   

  	
  8.13

  	
  UK Regulatory Approval

  	
  66

  
	
   

  	
  8.14

  	
  2005 Financial Statements

  	
  66

  
	
  ARTICLE 9.

  	
  CONDITIONS PRECEDENT TO
  OBLIGATIONS OF PARENT

  	
  66

  
	
   

  	
  9.1

  	
  Warranties True
  as of Both Present Date and Closing

  	
  66

  
	
   

  	
  9.2

  	
  Compliance with
  Agreements and Covenants

  	
  67

  
	
   

  	
  9.3

  	
  Consents and Approvals

  	
  67

  
	
   

  	
  9.4

  	
  Documents

  	
  67

  
	
   

  	
  9.5

  	
  Hart-Scott-Rodino

  	
  67

  
	
   

  	
  9.6

  	
  European
  Commission or Other Antitrust

  	
  67

  
	
   

  	
  9.7

  	
  Actions or Proceedings

  	
  67

  
	
  ARTICLE 10.

  	
  CLOSING

  	
  67

  
	
   

  	
  10.1

  	
  Closing

  	
  67

  
	
   

  	
  10.2

  	
  Deliveries by Sellers

  	
  68

  
	
   

  	
  10.3

  	
  Deliveries by Purchaser

  	
  69

  
	
  ARTICLE 11.

  	
  TERMINATION

  	
  70

  
	
   

  	
  11.1

  	
  Termination

  	
  70

  
	
   

  	
  11.2

  	
  Effect of Termination

  	
  70

  
	
  ARTICLE 12.

  	
  INDEMNIFICATION

  	
  70

  
	
   

  	
  12.1

  	
  Survival

  	
  70

  
	
   

  	
  12.2

  	
  Indemnification by Parent

  	
  70

  
	
   

  	
  12.3

  	
  Indemnification by
  Purchaser

  	
  72

  
	
   

  	
  12.4

  	
  Limitations on
  Certain Claims for Indemnification

  	
  72

  
	
   

  	
  12.5

  	
  Materiality

  	
  73

  
	
   

  	
  12.6

  	
  Claims

  	
  73

  
	
   

  	
  12.7

  	
  Notice of Third
  Party Claims; Assumption of Defense

  	
  73

  
	
   

  	
  12.8

  	
  Settlement or Compromise

  	
  74

  
	
   

  	
  12.9

  	
  Failure of Indemnitor to
  Act

  	
  74

  

 

-iv-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  12.10

  	
  Set-Off
  Against Post Closing Payment Amount

  	
  74

  
	
   

  	
  12.11

  	
  Purchase Price Adjustments

  	
  74

  
	
   

  	
  12.12

  	
  Indemnity
  Payments in Respect of CIS Limited

  	
  74

  
	
  ARTICLE 13.

  	
  TAX MATTERS

  	
  75

  
	
   

  	
  13.1

  	
  Filing of Tax Returns

  	
  75

  
	
   

  	
  13.2

  	
  Proration of Taxes

  	
  75

  
	
   

  	
  13.3

  	
  Transfer Taxes

  	
  75

  
	
   

  	
  13.4

  	
  Tax Indemnification

  	
  76

  
	
   

  	
  13.5

  	
  Cooperation/Retention
  of Records

  	
  76

  
	
   

  	
  13.6

  	
  Procedures Relating
  to Tax Claims

  	
  76

  
	
  ARTICLE 14.

  	
  NON-COMPETITION

  	
  77

  
	
   

  	
  14.1

  	
  Non-Competition Agreement

  	
  77

  
	
   

  	
  14.2

  	
  Reasonableness of
  Covenants

  	
  78

  
	
   

  	
  14.3

  	
  Specific Performance

  	
  78

  
	
   

  	
  14.4

  	
  Severability

  	
  79

  
	
   

  	
  14.5

  	
  No Limitation of
  Other Provisions

  	
  79

  
	
  ARTICLE 15.

  	
  MISCELLANEOUS

  	
  79

  
	
   

  	
  15.1

  	
  Expenses

  	
  79

  
	
   

  	
  15.2

  	
  Amendment

  	
  79

  
	
   

  	
  15.3

  	
  Notices

  	
  79

  
	
   

  	
  15.4

  	
  Effect of Investigation

  	
  80

  
	
   

  	
  15.5

  	
  Payments in Dollars

  	
  80

  
	
   

  	
  15.6

  	
  Waivers

  	
  80

  
	
   

  	
  15.7

  	
  Counterparts

  	
  80

  
	
   

  	
  15.8

  	
  Assignment

  	
  80

  
	
   

  	
  15.9

  	
  No Third Party
  Beneficiaries

  	
  81

  
	
   

  	
  15.10

  	
  Publicity

  	
  81

  
	
   

  	
  15.11

  	
  Further Assurances

  	
  81

  
	
   

  	
  15.12

  	
  Severability

  	
  81

  
	
   

  	
  15.13

  	
  Specific Performance

  	
  82

  

 

-v-

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  15.14

  	
  Remedies Cumulative

  	
  82

  
	
   

  	
  15.15

  	
  Entire Understanding

  	
  82

  
	
   

  	
  15.16

  	
  Applicable Law

  	
  82

  
	
   

  	
  15.17

  	
  Jurisdiction of Disputes;
  Waiver of Jury Trial

  	
  82

  

 

-vi-

 

TABLE
OF CONTENTS

(continued)

 

Page

 

LIST OF DISCLOSURE
SCHEDULES

	
  Schedule 1.1(a)

  	
  Creditors and Debt

  
	
  Schedule 1.1(b)

  	
  Non-Fund Entities May 31, 2005 Balance Sheet

  
	
  Schedule 1.1(c)

  	
  Non-Fund Entities May 31, 2005 Related Statements of
  Operations and Retained Earnings (Deficit)

  
	
  Schedule 1.1(d)

  	
  Non-Fund Entities May 31, 2005 Related Statements of
  Cash Flows

  
	
  Schedule 1.1(e)

  	
  Net Assets — Other Asset Types

  
	
  Schedule 1.1(f)

  	
  Pro Forma Calculation Principles

  
	
  Schedule 1.1(g)

  	
  Details of CIS Limited

  
	
  Schedule 1.1(h)

  	
  Description of UK Property

  
	
  Schedule 3.1(a)

  	
  Transferred Contracts

  
	
  Schedule 3.1(b)

  	
  Transferred Fixed Assets

  
	
  Schedule 3.1(e)

  	
  Transferred Owned Intellectual Property

  
	
  Schedule 3.2(a)(i)

  	
  Transferred Personal Property Leases

  
	
  Schedule 3.2(a)(ii)

  	
  Transferred Customer Contracts

  
	
  Schedule 3.2(a)(iii)

  	
  Transferred Vendor Contracts

  
	
  Schedule 3.2(a)(iv)

  	
  Transferred Intellectual Property Licenses

  
	
  Schedule 3.2(a)(ix)

  	
  Transferred Other Contracts

  
	
  Schedule 3.2(b)

  	
  Assumed Licenses

  
	
  Schedule 3.3(f)

  	
  Excluded Exchange Seats

  
	
  Schedule 3.3(h)

  	
  Other Excluded Assets

  
	
  Schedule 3.3(i)

  	
  Excluded Contracts

  
	
  Schedule 4.5(a)

  	
  Allocation of Purchase Price among Shares and Assets
  

  
	
  Schedule 4.5(b)

  	
  Allocation of Purchase Price among Entities Selling
  Shares and Shareholders

  
	
  Schedule 4.5(d)

  	
  Allocation of for Non-Competition Payment

  
	
  Schedule 5.1(a)

  	
  Jurisdictions of Incorporation and Foreign
  Qualification

  
	
  Schedule 5.1(b)

  	
  Subsidiaries

  
	
  Schedule 5.3

  	
  Sellers Consents

  
	
  Schedule 5.4(c)

  	
  Ownership of Shares of the Acquired Corporation
  Subsidiaries

  
	
  Schedule 5.4(f)

  	
  First Capitol

  
	
  Schedule 5.5(a)

  	
  2004 Financial Statements

  
	
  Schedule 5.5(b)

  	
  Interim Financial Statements

  
	
  Schedule 5.6

  	
  Adverse Effects or Changes

  
	
  Schedule 5.9(b)

  	
  Leased Real Property and Real Property Leases

  
	
  Schedule 5.9(h)

  	
  Liens 

  
	
  Schedule 5.9(g)

  	
  Customers in Office Space

  
	
  Schedule 5.10(a)

  	
  Owned Personal Property

  
	
  Schedule 5.10(b)

  	
  Leased Personal Property

  
	
  Schedule 5.11

  	
  Computer System

  
	
  Schedule 5.12(a)

  	
  Intellectual Property

  
	
  Schedule 5.12(b)

  	
  Representations Covering Intellectual Property

  
	
  Schedule 5.13

  	
  Contracts

  
	
  Schedule 5.14

  	
  Licenses

  
	
  Schedule 5.15

  	
  Insurance Policies

  
	
  Schedule 5.16

  	
  Employee Benefit Plans and Employment Agreements

  
	
  Schedule 5.17(a)

  	
  Employees

  
	
  Schedule 5.18(a)

  	
  Capital Improvements

  
	
  Schedule 5.18(b)

  	
  Significant Non-Capital Expenditures

  
	
  Schedule 5.19

  	
  Taxes

  
	
  Schedule 5.19(e)

  	
  Nondeductible Payments

  
	
  Schedule 5.19(i)

  	
  Tax Rulings or Closings

  
	
  Schedule 5.20

  	
  Defaults and Violations

  
	
  Schedule 5.20(e)

  	
  Registrations

  

 

-vii-

 

	
  Schedule 5.21

  	
  Environmental Matters

  
	
  Schedule 5.22(a)

  	
  Litigation

  
	
  Schedule 5.22(b)

  	
  Litigation with respect to this Agreement

  
	
  Schedule 5.23

  	
  Conflicts of Interest

  
	
  Schedule 5.24

  	
  Bank Accounts

  
	
  Schedule 5.25(a)

  	
  Major Customers

  
	
  Schedule 5.25(b)

  	
  Customer Complaints

  
	
  Schedule 5.25(c)

  	
  Adverse Changes in Customer Relationships

  
	
  Schedule 5.32

  	
  UK Warranty Exceptions

  
	
  Schedule 6.3

  	
  Purchaser Consents

  
	
  Schedule 7.3(a)

  	
  Preservation of Business

  
	
  Schedule 7.3(b)(iv)

  	
  Waivers, Releases, Settlements or Cancellations

  
	
  Schedule 7.3(c)

  	
  Permitted Corporate Changes

  
	
  Schedule 7.11

  	
  Non-Terminated Contracts

  
	
  Schedule 7.12(a)

  	
  CIS France Employees

  
	
  Schedule 7.12(b)

  	
  Severance Policy

  
	
  Schedule 10.2(m)

  	
  UK-Specific Deliverables

  

 

-viii-

 

PURCHASE
AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as
of the 21st  day of June, 2005, by and between Refco Group
Ltd., LLC, a Delaware limited liability company (“Purchaser”), and
Cargill, Incorporated, a Delaware corporation (the “Parent”).  Certain capitalized terms used herein are
defined in Article I.

W
I T N E S S E T H:

WHEREAS, each of Cargill Investor Services, Inc., a Delaware
corporation (“CIS”), CIS Holdings, Inc., a Delaware corporation (“CIS
Holdings” and, together with CIS, the “US Entity Shareholders”),
Cargill PLC, a private limited company organized in the United Kingdom (“Cargill
PLC” or the “UK Entity Shareholder” and, together with the US Entity
Shareholders, the “Shareholders”), Cargill Investor Services (Singapore)
Pte. Ltd., a Singapore corporation (“CIS Singapore”), CIS Financial
Services, Inc., a Delaware corporation (“CIS Financial”), CIS Management
Inc., a Delaware corporation (“CIS Management”), CIS Securities, Inc., a
Delaware corporation (“CIS Securities” and, together with CIS, CIS
Singapore, CIS Financial and CIS Management, the “Asset Sellers”) are
direct or indirect wholly owned (or in the case of Cargill PLC, majority owned)
subsidiaries of Parent;

WHEREAS, subject to the terms and conditions of this Agreement,
Purchaser wishes to purchase from the US Entity Shareholders, and Parent wishes
to procure that the US Entity Shareholders shall sell to Purchaser, all of the
issued and outstanding shares of capital stock of each of CIS Investments,
Inc., a Delaware corporation (“CIS Investments”), CIS Managed Assets,
Inc., a Delaware corporation (“CIS Managed Assets”) and CIS Cash
Management, Inc., a Delaware Corporation (“CIS Cash Management”);

WHEREAS, subject to the terms and conditions of this Agreement, Purchaser
wishes to purchase from Cargill PLC, and Parent wishes to procure that Cargill
PLC shall sell to Purchaser, all of the issued and outstanding shares of
capital stock of Cargill Investor Services Limited, a corporation organized
under the laws of England and Wales (“CIS Limited”); 

WHEREAS, subject to the terms and conditions of this Agreement,
Purchaser wishes to purchase from the Asset Sellers, and Parent wishes to
procure that the Asset Sellers shall sell to Purchaser, all of the Assets, and
Purchaser is willing to assume all of the Assumed Obligations; and

WHEREAS, as a condition to the Purchaser’s willingness to enter into
this Agreement, Parent is willing to make certain representations and
warranties and undertake certain covenants, agreements and other obligations,
in each case as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:

 

1

 

ARTICLE 1.

DEFINITIONS

1.1           Definitions.  The following terms shall have the following
meanings for the purposes of this Agreement:

“2004 Balance Sheets” shall mean the separate balance sheets of
each of the Non-Fund Entities as of May 31, 2004, including the notes thereto,
that are included in the 2004 Financial Statements.

“2004 Financial Statements” shall mean the financial statements
of each of the Non-Fund Entities as of and for the twelve (12) months ended May
31, 2004, consisting of (a) the balance sheets of such Subject Entities as of
May 31, 2004, (b) the related statements of operations and retained earnings
(deficit) for the twelve (12) months ended May 31, 2004 and (c) the related
statements of cash flows for the twelve (12) months ended May 31, 2004 (in the
case of each of clauses (a), (b) and (c), including the notes thereto).

“2005 Balance Sheets” shall mean the separate balance sheets of
each of the Non-Fund Entities as of May 31, 2005, including the notes thereto,
that are included in the 2005 Financial Statements.

“2005 Financial Statements” shall mean the financial statements
of each of the Non-Fund Entities as of and for the twelve (12) months ended May
31, 2005, consisting of (a) the balance sheets of such Subject Entities as of
May 31, 2005, (b) the related statements of operations and retained earnings
(deficit) for the twelve (12) months ended May 31, 2005 and (c) the related
statements of cash flows for the twelve (12) months ended May 31, 2005 (in the
case of each of clauses (a), (b) and (c), including the notes thereto).

“Acquired Corporations” shall mean CIS Investments, CIS Managed
Assets, CIS Cash Management and CIS Limited.

“Acquired Corporation Financial Statements” shall mean the
audited consolidated financial statements of each of the Acquired Corporations
and their respective Acquired Corporation Subsidiaries as of and for the twelve
(12) months ended May 31, 2004, consisting of (a) the consolidated balance
sheet as of May 31, 2004, (b) the related consolidated statement of operations
and retained earnings (deficit) for the twelve (12) months ended May 31, 2004
and (c) the related consolidated statement of cash flows for the twelve (12)
months ended May 31, 2004 (in each case, including the notes thereto).

“Acquired Corporation Subsidiaries” shall mean First Capitol.

“Adjusted Purchase Price” shall mean:

the amount of the Closing Date Seller Payment, adjusted for:

(a)           the
Purchase Price Increase Amount or Purchase Price Reduction Amount, as
calculated pursuant to Section 4.5;

 

2

 

(b)           any
adjustment provided for in Section 12.11; and

(c)           the
Post Closing Payment.

“Affiliate” shall mean, with respect to any specified Person,
(a) any other Person that, directly or indirectly, owns or controls, is under
common ownership or control with, or is owned or controlled by, such specified
Person, (b) any other Person that is a director, officer or partner, or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more of
any class of equity securities, of the specified Person or a Person described
in clause (a) of this paragraph, (c) another Person of which the
specified Person is a director, officer or partner or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities, (d) another Person in which the specified Person has a
substantial beneficial interest or as to which the specified Person serves as
trustee or in a similar capacity or (e) any relative or spouse of the specified
Person or any of the foregoing Persons, any relative of any such spouse or any
spouse of any such relative.

“Agreed Terms” shall mean, in relation to any document, that
document in the terms agreed between the parties and signed and initialed for
identification purposes only by or on behalf of such parties prior to the
execution of this Agreement.

“Agreement” shall mean this Purchase and Sale Agreement,
including all exhibits and schedules hereto, as it may be amended from time to time
in accordance with its terms.

“Assignment and Assumption Agreement” shall mean the assignment
and assumption agreement, to be entered by and among each Asset Seller and
Purchaser, substantially in the form agreed to by Parent and Purchaser.

“Assignment and Assumption of Lease” shall mean the assignment
and assumption agreement, to be entered into with respect to each Real Property
Lease to which any Asset Seller is party, by and between Purchaser and the
applicable Subject Entity, substantially in the form agreed to by Parent and
Purchaser.

“Bill of Sale” shall mean the bill of sale, to be executed by
each Asset Seller in favor of Purchaser, substantially in the form agreed to by
Parent and Purchaser.

“Business” shall mean the business, as previously, currently and
proposed to be conducted by any of the Subject Entities, of (a) clearing or
executing futures, options on futures, and securities, (b) acting as
broker/dealer of foreign exchange transactions, (c) operating collective
investment vehicles principally engaged in the trading of futures, options on
futures, and foreign exchange, (d) financing of futures, options on futures,
and foreign exchange transactions for unaffiliated Persons, and (e) operating
cash management programs.

“Business Day” shall mean any day of the year other than (a) any
Saturday or Sunday or (b) any other day on which banks located in New York and
London are authorized or obligated to be closed for business.

“Cash” shall mean all cash, certificates of deposits and bank
deposits, together with all accrued but unpaid interest thereon.

 

3

 

“Cash Equivalents” shall mean all securities and other
instruments eligible for investment of customer funds under the Commodity
Exchange Act and the rules and regulations promulgated thereunder.

“CERCLA” shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

“Closing” shall mean the consummation of the transactions
contemplated herein in accordance with Article 10.

“Closing Date” shall mean the date on which the Closing occurs
or is to occur.

“Code” shall mean the United States Internal Revenue Code of
1986, as amended.

“Contract” shall mean any contract, lease, sales order, purchase
order, agreement, warranty, indenture, mortgage, note, bond, right, warrant or
instrument, whether written or verbal (and any and all amendments thereto).

“Current Liabilities” means all current liabilities of the
Subject Entities that would appear on a balance sheet of each such Subject
Entity prepared in accordance with GAAP.

“Debt” shall mean any (a) indebtedness for borrowed money or any
obligations evidenced by bonds, debentures, notes or other similar instruments,
any bank overdrafts or any capitalized lease obligations (including all such
indebtedness for borrowed money, obligations and bank overdrafts set forth on Schedule
1.1(a)(i)), and all interest thereon and fees and other expenses related
thereto, (b) obligations issued or assumed as the deferred purchase price of
property or services (including all such obligations set forth on Schedule
1.1(a)(ii)), and all interest thereon and fees and other expenses related
thereto, and (c) severance amounts payable to any current or former employee of
any Subject Entity (including all such severance amounts set forth on Schedule
1.1(a)(iii)) and all interest thereon and fees and other expenses related
thereto, in the case of each of clauses (a), (b) and (c),
that (i) is owed to any Person by any Subject Entity, or (ii) is secured by a
Lien on any Shares, any assets or properties of the Subject Entities, or any
Assets.

“Dollars” or numbers preceded by the symbol “$” shall mean
amounts in United States Dollars.

“Draft 2005 Financial Statements” shall mean the unaudited
financial statements of each of the Non-Fund Entities as of and for the twelve
(12) month period ended May 31, 2005, consisting of (a) the balance sheets of
such Non-Fund Entities as of May 31, 2005 as set forth on Schedule 1.1(b),
(b) the related statements of operations and retained earnings (deficit) for
the twelve (12) month period ended May 31, 2005 as set forth on Schedule
1.1(c), and (c) the related statements of cash flows for the twelve(12)
month period ended May 31, 2005 as set forth on Schedule 1.1(d) (in the
case of each of clauses (a), (b) and (c), including
narratives discussing the results of operations for the aforementioned
periods).

“Employees” shall mean all individuals employed by the Asset
Sellers primarily in connection with the operation of the Business and all
individuals employed by the Acquired

 

4

 

Corporations or any Acquired Corporation Subsidiary
(including, in each case, those who are actively employed or on leave,
disability or other absence from employment) immediately prior to Closing.

“Environmental Law” shall mean any Law that imposes liability or
standards of conduct concerning, or otherwise relates to, discharges,
emissions, releases or threatened releases of noises, odors or any pollutants,
contaminants or hazardous or toxic wastes, substances or materials, whether as
matter or energy, into ambient air, water or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants or
hazardous or toxic wastes, substances or materials, including CERCLA, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, as amended, the Clean Water Act of 1977, as amended, any so-called “Superfund”
or “Superlien” Law (including those already referenced in this definition) and
any other Law having a similar subject matter.

“ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended.

“ERISA Affiliate” shall mean, with respect to any Person, any
corporation, trade or business that, together with such Person, is a member of
a controlled group of corporations or a group of trades or businesses under
common control within the meaning of sections 414(b) or (c) of the Code.

“Expense Synergy Amount” shall mean an amount equal to: (i) the
sum of the sales, general and administrative expenses and employee compensation
expenses of the Business, in each case as reflected on the compiled, combined,
consolidating statements of operations and retained earnings (deficit) for the
twelve (12) months ended May 31, 2005 (as derived from the statement of
operations and retained earnings (deficit) of the Non-Fund Entities for the
twelve (12) months ended May 31, 2005 included within the 2005 Financial
Statements) (the “2005 Combined Earnings Statement”), as adjusted in
accordance with the Pro Forma Calculation Principles, minus (ii) the
expenses associated with the operation of the Business by Purchaser for the
twelve (12) month period ending on the second anniversary of the Closing Date; provided,
however, that if such amount is a negative number, the Expense Synergy
Amount shall be deemed to be zero.  For
the avoidance of doubt, employee compensation expenses attributable to
Transferred Employees that are not engaged in the Business after the Closing
shall be excluded from the amount calculated pursuant to clause (ii) of
the preceding sentence.

“Financial Statements” shall mean (a) the 2004 Financial
Statements, (b) the Interim Financial Statements and (c) the 2005 Financial
Statements.

“FSA” shall mean the Financial Services Authority.

“FSA Rules” shall mean the rules and regulations issued by the
FSA from time to time

“FSMA” shall mean the Financial Services and Markets Act 2000.

 

5

 

“Funds” shall mean each of IDS Managed Futures, L.P., a Delaware
limited partnership, IDS Managed Futures II, L.P., a Delaware limited
partnership, JWH Global Trust, a Delaware statutory trust, Strategic Partners
Diversified Fund, LLC, a Delaware limited liability company, Strategic Partners
Diversified Master Fund, Ltd., a British Virgin Islands company, and Strategic
Partners Diversified (BVI) Fund, Ltd., a British Virgin Islands company.

“GAAP” shall mean United States generally accepted accounting
principles as in effect on any applicable date.

“Governmental Authority” shall mean the government of the United
States or any foreign country or any state or political subdivision thereof and
any entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including any court, tribunal, grand jury, arbitrator, Self-Regulatory
Organization or any other quasi-governmental entity established to perform such
functions.

“Hazardous Substance” shall mean any material, substance,
constituent, waste, compound or other matter that (a) constitutes a hazardous
substance, toxic substance or pollutant (as such terms are defined by, pursuant
to, or result in liability under, any Environmental Law) or (b) is regulated or
controlled as a hazardous substance, toxic substance, pollutant or other
regulated or controlled material, substance or matter pursuant to any
Environmental Law.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

“Indemnitee” shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article 12.

“Indemnitor” shall mean the Person or Persons claimed by the
Indemnitee to be obligated to provide indemnification under Article 12.

“Information and Records” of any Person shall mean all books and
records (other than minute books and corporate records and including accounting
and other financial books and records), files, databases, plans,
specifications, technical information, confidential information, price lists,
promotional materials, advertising copy and data, marketing research and
information, competitive analyses, customer impact analyses, sales records,
service records, Tax records, customer lists and files (including customer
credit, collection, deposit and complaint information), customer profiles and
other customer information, vendor lists and files, and all other proprietary
information of such Person.

“Intellectual Property” shall mean all United States and foreign
patents (including continuations, continuations-in-part, reissues and
re-examinations thereof) and patent applications; Marks; copyrights and
copyright registrations (and applications for registration of the same); domain
names; trade secrets; computer data (including formulations and analyses),
computer programs and software (in source code and object code form) and
firmware and all related programming, user and systems documentation;
inventions, processes and designs (whether or not patentable or reduced to
practice); know-how and formulae; and all other intellectual property rights
and assets.

 

6

 

“Interim Financial Statements” shall mean the unaudited
financial statements of each of the Non-Fund Entities as of and for the nine (9)
month period ended February 28, 2005, consisting of (a) the balance sheets of
such Subject Entities as of February 28, 2005, (b) the related statements of
operations and retained earnings (deficit) for the nine (9) month period ended
February 28, 2005, and (c) the related statements of cash flows for the nine
(9) month period ended February 28, 2005 (in the case of each of clauses (a),
(b) and (c), including narratives discussing the results of
operations for the aforementioned periods).

“IRS” shall mean the United States Internal Revenue Service.

“Law” shall mean any law, statute, regulation, ordinance, rule,
order, decree, judgment, injunction, common law, consent decree, settlement
agreement or governmental requirement enacted, promulgated, entered into,
agreed or imposed by any Governmental Authority.

“License” shall mean any permit, license, approval, consent or
other authorization required or granted by any Governmental Authority.

“Lien” shall mean any lien (except for any lien for Taxes not
yet due and payable), encumbrance, mortgage, charge, restriction, pledge,
security interest, option, lease, sublease or right of any third party.

“Loss” or “Losses” shall mean any and all losses,
liabilities, costs, claims, damages, penalties and expenses (including
attorneys’ fees and expenses and costs of investigation and litigation).  In the event any of the foregoing are
indemnifiable hereunder, the terms “Loss” and “Losses” shall include any and
all attorneys’ fees and expenses and costs of investigation and litigation
incurred by the Indemnitee in enforcing such indemnity.

“Marks” shall mean registered and unregistered trade names,
trademarks, service names, service marks and logos (and applications for
registration of the same) and all goodwill associated therewith.

“Material Adverse Effect” shall mean an effect (or circumstance
involving a prospective effect) on the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of any of the Acquired Corporations, together with the
Acquired Corporation Subsidiaries, the Funds, the Assets or the Business, taken
as a whole, that is materially adverse or that reduces any such entity’s
ability to consummate the transactions contemplated hereby; provided,
that in each case a “Material Adverse Effect” will not be deemed to include
effects or circumstances resulting from (a) general economic, business,
political or financial conditions that do not have a materially
disproportionate effect on any Asset Seller, the Assets or the Business, (b)
the announcement of the transactions contemplated by this Agreement or (c) any
action taken or omitted to be taken pursuant to the terms of this Agreement.

“Measurement EBITDA” shall mean the earnings before long-term interest,
taxes, depreciation and amortization derived from the operation of the Business
as conducted by Purchaser for the twelve month period ending on the second
anniversary of the Closing Date.  For the
avoidance of doubt, returns on investment relating to First Capitol shall be
excluded from the calculation of Measurement EBITDA.

 

7

 

“Net Asset Amount” shall mean, as of any date, the result of (i)
the sum of (A) the Cash, Cash Equivalents and assets of the type listed on Schedule
1.1(e) attached hereto of the Acquired Corporations and the Acquired
Corporation Subsidiaries (other than First Capitol) and (B) the Cash, Cash
Equivalents and assets of the type listed on Schedule 1.1(e) attached
hereto of the Asset Sellers that are included within the Assets, minus
(ii) the sum of (A) the Current Liabilities of the Acquired Corporations and
the Acquired Corporation Subsidiaries (other than First Capitol) and (b) the
Current Liabilities of the Asset Sellers included within the Assumed
Obligations.

“Non-Fund Entities” shall mean, collectively, the Asset Sellers,
the Acquired Corporations and the Acquired Corporation Subsidiaries.

“Person” shall mean any individual, corporation, proprietorship,
firm, partnership, limited partnership, limited liability company, trust,
association, Governmental Authority or other entity.

“Post Closing Enterprise Value” shall mean an amount equal to:
(i) the sum of (A) the Measurement EBITDA, minus (B) an amount equal to
50% of the Expense Synergy Amount; multiplied by (ii) eight.

“Post Closing Payment Amount” shall mean an amount equal to: (i)
the Post Closing Enterprise Value; minus (ii) $208 million; provided,
however, that in the event that such result is (A) less than $67
million, the Post Closing Payment Amount shall be, and shall be deemed to be,
$67 million, and (B) greater than $192 million, the Post Closing Payment Amount
shall be, and shall be deemed to be, $192 million.

“Pre-Closing Tax Period” 
shall mean (a) any Tax period ending on or before the close of business
on the Closing Date and (b) in the case of any Tax period that includes, but
does not end on, the Closing Date, the portion of such period up to and
including the Closing Date.

“Pro Forma Calculation Principles” shall mean the principles set
forth on Schedule 1.1(f).

“Purchaser Indemnified Parties” shall mean Purchaser and each of
its Affiliates (including, after the Closing, the Acquired Corporations, the
Acquired Corporation Subsidiaries and the Funds), and their respective
officers, directors, employees, agents and representatives; provided, that in no event shall any Seller or
Parent be deemed a Purchaser Indemnified Party.

“Related Agreement” shall mean any Contract that is or is to be
entered into at the Closing or otherwise pursuant to this Agreement.  The Related Agreements executed by a
specified Person shall be referred to as “such Person’s Related Agreements,” “its
Related Agreements” or another similar expression.

“Representatives” shall mean, with respect to any Person, such
Person’s Affiliates and its officers, directors, managers, advisors and other
representatives.

“Restricted Business” shall mean the business of (a) clearing or
executing futures, options on futures, and securities, (b) acting as broker/dealer
of foreign exchange transactions, (c) operating collective investment vehicles
principally engaged in the trading of futures, options on futures, and foreign

 

8

 

exchange, (d) financing of futures, options on
futures, and foreign exchange transactions for unaffiliated Persons, and (e)
operating cash management programs in connection with any of the foregoing.

“Self-Regulatory Organization” shall mean the National
Association of Securities Dealers, Inc., the American Stock Exchange, the
National Futures Association, the Chicago Mercantile Exchange, the Chicago
Board of Trade, the New York Stock Exchange, Inc., any national securities
exchange (as defined in the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder), any other securities
exchange, futures exchange, contract market, commodities market, clearinghouse
or corporation or other similar federal, state or foreign self-regulatory body
or organization.

“Sellers” shall mean, collectively, the Shareholders and the
Asset Sellers.

“Shares” shall mean, collectively, (a) all of the issued and
outstanding shares of common stock, $100.00 par value per share, of the CIS
Managed Assets, (b) all of the issued and outstanding shares of common stock,
$100.00 par value per share, of CIS Investments, (c) all of the issued and
outstanding shares of common stock,$.01 par value per share, of CIS Cash
Management, and (d) all of the issued shares in the capital of CIS Limited, details
of which are given in Schedule 1.1(g).

“Subject Entities” shall mean, collectively, the Asset Sellers,
the Acquired Corporations, the Acquired Corporation Subsidiaries and the Funds.

“Subsidiary” means, with respect to any Person, any corporation
or other organization, whether incorporated or unincorporated, of which (i)
such Person or any other Subsidiary of such Person is a general partner or (ii)
at least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is, directly or indirectly, owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and any one or more
of its Subsidiaries.

“Taxes” shall mean all taxes, charges, fees, duties, levies or
other assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, unclaimed property, escheat, value added, license, payroll,
unemployment, environmental, customs duties, capital stock, disability, stamp,
leasing, lease, user, transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, severance and employees’ income withholding and
Social Security taxes imposed by any Governmental Authority, and such term
shall include all applicable interest, penalties or additions to tax including
any penalties and additions to taxes relating to the failure to comply with tax
reporting obligations including the reporting obligations described in Treasury
Regulation Section 1.6011-4.

“Tax Return” shall mean any report, return, registration,
document, declaration, payee statement or other information or filing required
to be filed or provided to any Governmental Authority or any Person with
respect to Taxes.

 

9

 

“Tax Statute of Limitations Date” shall mean the close of
business on the 60th day after the expiration of the applicable statute of
limitations with respect to Taxes, including any extensions thereof (or if such
date is not a Business Day, the next Business Day).

“Tax and Benefits Warranty” shall mean a representation or
warranty in Section 5.16 or 5.21.

“Title and Authorization Warranty” shall mean a representation
or warranty in Section 5.1, 5.2, 5.3, 5.4, 5.7, 5.27, 6.1, 6.2, 6.3 or 6.5 and the representations and warranties set forth
in Parts 1 and 2 of the UK Warranties Schedule.

“Transition Services Agreement” shall mean a transition services
agreement to be entered into by and between Parent and Purchaser as a condition
to the Closing, pursuant to which Parent will, or will cause its Affiliates to,
provide, for a term of 120 days after Closing, such services (i) as Parent
and/or its Affiliates currently provide to the Subject Entities and (ii) as
Purchaser may reasonably request.  The
Transition Services Agreement shall provide that all services provided by
Parent and/or its Affiliates shall be provided at cost, and shall otherwise
contain usual and customary terms.

“UK Auditors” shall mean KPMG Audit PLC.

“UK Companies Act” shall mean the UK Companies Act of 1985.

“UK Employees” shall mean the Employees of CIS Limited.

“UK Pension Scheme” shall mean the Cargill Pension Plan.

“UK Property” shall mean the leasehold property located at Level
5, 2 More London Riverside, London SE1, as more particularly described in Schedule
1.1(h).

“UK Warranties Schedule” shall mean the schedule attached hereto
setting forth the representations and warranties of Purchaser as to CIS Limited
and the Shares of CIS Limited.

1.2           Other Definitions.  In addition to the terms defined in Section
1.1, certain other terms are defined elsewhere in this Agreement, and, whenever
such terms are used in this Agreement, they shall have their respective defined
meanings, unless the context expressly or by necessary implication otherwise
requires.  The definitions of terms of general
applicability are set forth in the sections listed below.

	
  Term

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2005 Combined Earnings Statement

  	
   

  	
  1.1

  	
   

  
	
  Accounting Firm

  	
   

  	
  4.3(d)

  	
   

  
	
  Acquired US Corporations

  	
   

  	
  2.1

  	
   

  
	
  AGUB

  	
   

  	
  7.13(c)

  	
   

  
	
  Allocation Schedule

  	
   

  	
  7.13(c)

  	
   

  
	
  Arrangements

  	
   

  	
  5.16(a)

  	
   

  
	
  Asset Allocation Schedule

  	
   

  	
  4.5(c)

  	
   

  

 

10

 

	
  Assets

  	
   

  	
  3.1

  	
   

  
	
  Asset Sellers

  	
   

  	
  Recitals

  	
   

  
	
  Assumed Contracts

  	
   

  	
  3.2(a)

  	
   

  
	
  Assumed Licenses

  	
   

  	
  3.2(b)

  	
   

  
	
  Assumed Obligations

  	
   

  	
  3.4

  	
   

  
	
  Benefit Plans

  	
   

  	
  5.16(b)

  	
   

  
	
  Cargill PLC

  	
   

  	
  Recitals

  	
   

  
	
  CIS

  	
   

  	
  Recitals

  	
   

  
	
  CIS Cash Management

  	
   

  	
  Recitals

  	
   

  
	
  CIS Financial

  	
   

  	
  Recitals

  	
   

  
	
  CIS France Employee

  	
   

  	
  7.12(a)

  	
   

  
	
  CIS Investments

  	
   

  	
  Recitals

  	
   

  
	
  CIS Limited

  	
   

  	
  Recitals

  	
   

  
	
  CIS Managed Assets

  	
   

  	
  Recitals

  	
   

  
	
  CIS Management

  	
   

  	
  Recitals

  	
   

  
	
  CIS Securities

  	
   

  	
  Recitals

  	
   

  
	
  CIS Singapore

  	
   

  	
  Recitals

  	
   

  
	
  Closing Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Closing Date Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Closing Date Seller Payment

  	
   

  	
  4.1

  	
   

  
	
  Computer System

  	
   

  	
  5.11

  	
   

  
	
  Deductible Amount

  	
   

  	
  12.4(a)

  	
   

  
	
  Deferred Schedules

  	
   

  	
  1.5(b)

  	
   

  
	
  Employment Agreements

  	
   

  	
  5.16(a)

  	
   

  
	
  Estimated Closing Date Balance Sheet

  	
   

  	
  4.3(a)

  	
   

  
	
  Estimated Closing Date Purchase Price

  	
   

  	
  4.1(b)

  	
   

  
	
  Excluded Assets

  	
   

  	
  3.3

  	
   

  
	
  Excluded Contracts

  	
   

  	
  3.3(i)

  	
   

  
	
  Excluded Customer Accounts

  	
   

  	
  3.3(j)

  	
   

  
	
  Excluded Obligations

  	
   

  	
  3.4(c)

  	
   

  
	
  Final Closing Date Balance Sheet

  	
   

  	
  4.3(b)

  	
   

  
	
  Final Net Asset Amount

  	
   

  	
  4.3(e)

  	
   

  
	
  Final Post Closing Payment Amount

  	
   

  	
  4.4(d)

  	
   

  
	
  First Capitol Interests

  	
   

  	
  5.4(f)

  	
   

  
	
  First Capitol Interests

  	
   

  	
  3.1(k)

  	
   

  
	
  Intellectual Property Licenses

  	
   

  	
  5.12(a)

  	
   

  
	
  Leased Real Property

  	
   

  	
  5.9(b)

  	
   

  
	
  Licensed Intellectual Property

  	
   

  	
  5.12(a)

  	
   

  
	
  Major Customers

  	
   

  	
  5.25(a)

  	
   

  
	
  Net Asset Objection Notice

  	
   

  	
  4.3(c)

  	
   

  
	
  Non-Competition Covenant

  	
   

  	
  14.2

  	
   

  
	
  Non-Competition Payment

  	
   

  	
  4.2

  	
   

  
	
  Non-Competition Period

  	
   

  	
  14.1(a)

  	
   

  
	
  Owned Intellectual Property

  	
   

  	
  5.12(a)

  	
   

  
	
  Parent

  	
   

  	
  Preamble

  	
   

  
	
  Plans

  	
   

  	
  5.16(a)

  	
   

  

 

11

 

	
  Post Closing Payment

  	
   

  	
  4.4(e)

  	
   

  
	
  Post Closing Payment Objection Notice

  	
   

  	
  4.4(b)

  	
   

  
	
  Property Taxes

  	
   

  	
  13.2

  	
   

  
	
  Purchase Price Increase Amount

  	
   

  	
  4.3(f)

  	
   

  
	
  Purchase Price Reduction Amount

  	
   

  	
  4.3(f)

  	
   

  
	
  Purchaser

  	
   

  	
  Preamble

  	
   

  
	
  Purchaser’s DC Plan

  	
   

  	
  7.12(c(iv)

  	
   

  
	
  Real Property Leases

  	
   

  	
  5.9(b)

  	
   

  
	
  Recipient

  	
   

  	
  13.6(a)

  	
   

  
	
  Reports

  	
   

  	
  5.30

  	
   

  
	
  Section 338 Forms

  	
   

  	
  7.13(b)

  	
   

  
	
  Section 338(h)(10) Elections

  	
   

  	
  7.13(a)

  	
   

  
	
  Severance Period

  	
   

  	
  7.12(b)

  	
   

  
	
  Shareholders

  	
   

  	
  Recitals

  	
   

  
	
  Stock Powers

  	
   

  	
  10.2(a)

  	
   

  
	
  Straddle Period

  	
   

  	
  13.2

  	
   

  
	
  Subject Entity Assets

  	
   

  	
  5.8(b)

  	
   

  
	
  Tax Claim

  	
   

  	
  13.6(a)

  	
   

  
	
  Transfer Taxes

  	
   

  	
  13.3

  	
   

  
	
  Transferred Customer Contracts

  	
   

  	
  3.2(a(ii)

  	
   

  
	
  Transferred Employee

  	
   

  	
  7.12(a)

  	
   

  
	
  Transferred Fixed Assets

  	
   

  	
  3.1(b)

  	
   

  
	
  Transferred Information and Records

  	
   

  	
  3.1(d)

  	
   

  
	
  Transferred Intellectual Property Licenses

  	
   

  	
  3.2(a(iv)

  	
   

  
	
  Transferred Receivables

  	
   

  	
  3.1(c)

  	
   

  
	
  Transferred Owned Intellectual Property

  	
   

  	
  3.1(e)

  	
   

  
	
  Transferred Personal Property Leases

  	
   

  	
  3.2(a(i)

  	
   

  
	
  Transferred Vendor Contracts

  	
   

  	
  3.2(a(iii)

  	
   

  
	
  UK Entity Shareholder

  	
   

  	
  Recitals

  	
   

  
	
  US Entity Shareholders

  	
   

  	
  Recitals

  	
   

  
	
  US Shares

  	
   

  	
  2.1

  	
   

  

 

1.3           Interpretation.  The headings preceding the text of Articles
and Sections included in this Agreement and the headings to Schedules attached
to this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement.  The use of the masculine, feminine or neuter
gender or the singular or plural form of words herein shall not limit any
provision of this Agreement.  The use of
the terms “including” or “include” shall in all cases herein mean “including,
without limitation” or “include, without limitation,” respectively.  Reference to any Person includes such Person’s
successors and assigns to the extent such successors and assigns are permitted
by the terms of any applicable agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually.  Reference to any agreement
(including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect at the time that

 

12

 

is applicable to such reference in accordance with the terms thereof
and, if applicable, the terms hereof. 
Reference to any Law means such Law as amended, modified, codified,
replaced or re-enacted, in whole or in part, at the time that is applicable to
such reference, including rules, regulations, enforcement procedures and any
interpretations promulgated thereunder. 
Underscored references to Articles, Sections, Subsections or Schedules
shall refer to those portions of this Agreement.  The use of the terms “hereunder,” “hereof,” “hereto”
and words of similar import shall refer to this Agreement as a whole and not to
any particular Article, Section or clause of or Exhibit or Schedule to this
Agreement.  No specific representation,
warranty or covenant contained herein shall limit the generality or
applicability of a more general representation, warranty or covenant contained
herein.  A breach of or inaccuracy in any
representation, warranty or covenant shall not be affected by the fact that any
more general or less general representation, warranty or covenant was not also
breached or inaccurate.

1.4           GAAP and Consistency.  For the avoidance of doubt, with respect to
those provisions herein relating to the Closing Balance Sheets, if there is any
conflict between GAAP (on the one hand) and the practices used to prepare the
2004 Balance Sheets (on the other hand), GAAP shall prevail.

1.5           Schedules.

(a)           To
the extent applicable, the information set forth on each Schedule to this
Agreement shall be organized and categorized by reference to the particular
entity or entities to which such scheduled information pertains.

(b)           The
following Schedules shall be delivered by Parent to Purchaser within fifteen
(15) Business Days from the date of this Agreement and shall be referred to
herein as the “Deferred Schedules”:

(i)                                    Schedule 1.1(c), Non-Fund
Entities May 31, 2005 Related Statements of Operations and Retained Earnings
(Deficit)

(ii)                                 Schedule 1.1(d), Non-Fund Entities May 31,
2005 Related Statements of Cash Flows

(iii)          Schedule
1.1(g), Details of CIS Limited

(iv)          Schedule
1.1(h), Description of UK Property

(v)           Schedule  3.1(a), Transferred Contracts;

(vi)          Schedule  3.1(b), Transferred Fixed Assets;

(vii)         Schedule  3.1(e), Transferred Owned Intellectual
Property;

(viii)        Schedule  3.2(a)(i), Transferred Personal Property
Leases;

(ix)           Schedule  3.2(a)(ii), Transferred Customer
Contracts;

(x)            Schedule  3.2(a)(iii), Transferred Vendor
Contracts;

 

13

 

(xi)           Schedule  3.2(a)(iv), Transferred Intellectual
Property Licenses;

(xii)          Schedule  3.2(a)(ix), Transferred Other Contracts;

(xiii)         Schedule  3.2(b), Assumed Licenses;

(xiv)        Schedule
5.3, Consents and Approvals;

(xv)         Schedule
5.4(f), First Capitol;

(xvi)        Schedule  5.9(h), Liens;

(xvii)       Schedule
5.9(g), Customers in Office Space

(xviii)      Schedule  5.10(a), Owned Personal Property;

(xix)         Schedule  5.10(b), Leased Personal Property;

(xx)          Schedule  5.12(a), Intellectual Property;

(xxi)         Schedule  5.12(b),
Representations Covering Intellectual Property;

(xxii)        Schedule
5.13, Contracts;

(xxiii)       Schedule
5.14, Licenses;

(xxiv)       Schedule
5.15, Insurance Policies;

(xxv)                      Schedule 5.16, Employee Benefit Plans and Employment Agreements;

(xxvi)       Schedule
5.17(a), Employees

(xxvii)      Schedule
5.18(a), Capital Improvements;

(xxviii)     Schedule
5.18(b), Significant Non-Capital Expenditures;

(xxix)       Schedule
5.20(e), Registrations

(xxx)        Schedule
5.21, Environmental Matters

(xxxi)       Schedule
5.23, Conflicts of Interest

(xxxii)      Schedule
5.24, Bank Accounts;

(xxxiii)     Schedule
5.25(a), Major Customers;

(xxxiv)     Schedule
5.32, UK Warranties Schedules;

(xxxv)      Schedule
7.3(a), Preservation of Business; and

 

14

 

(xxxvi)     Schedule
7.3(c), Permitted Corporate Changes.

(c)           The
following Schedules shall be agreed upon between Parent and Purchaser prior to
the Closing:

(i)                                    Schedule 4.5(a), Allocation of Purchase Price among
Shares and Assets;

(ii)                                 Schedule 4.5(b), Allocation of Purchase Price among
Entities Selling Shares and Shareholders; and

(iii)          Schedule
4.5(d), Allocation of Non-Competition Payment.

(d)           Neither
the specification of any item or matter in any Deferred Schedule shall be
deemed to modify any representation or warranty contained in this Agreement nor
correct any matter that would constitute a breach of any representation,
warranty, covenant or obligation contained herein or qualify any rights or
remedies of Purchaser hereunder.  Any
information set forth in a Deferred Schedule that constitutes new or revised
information and that has or could reasonably be expected to have a Material
Adverse Effect in the commercially reasonable opinion of Purchaser will permit
Purchaser to terminate this Agreement and not to effect the Closing hereunder,
in addition to Purchaser’s rights under Section 7.11 and the indemnity
provisions hereof.  Notwithstanding
anything to the contrary set forth in this Agreement, each item listed on Schedule
5.3, which is required to be delivered by Parent as provided pursuant to Section
1.5(b), shall be marked with an asterisk (*) for purposes of this
Agreement.

ARTICLE 2.

SALE AND PURCHASE OF SHARESError! Bookmark not defined.

2.1           Sale and Purchase of
Shares of CIS Managed Assets, CIS Investments and CIS Cash Management.  Subject to the terms and conditions of this
Agreement, at and as of the Closing, Parent shall cause the US Entity
Shareholders to sell to Purchaser (with Purchaser relying on representations
and warranties of Parent contained in this Agreement) the Shares of CIS Managed
Assets, CIS Investments and CIS Cash Management (the “Acquired US
Corporations”, and such Shares, the “US Shares”), and Purchaser
shall purchase the US Shares and the entire legal and beneficial ownership of
such US Shares, in each case free and clear of all Liens.1  After the Closing, the Purchaser shall be
entitled to exercise all rights attached or accruing to the Shares of CIS
Managed Assets, CIS Investments and CIS Cash Management, including the right to
receive all dividends, distributions or any return of capital declared, paid or
made by CIS Managed Assets, CIS Investments or CIS Cash Management on or after
the Closing Date.  Purchaser shall not be
obliged to complete the purchase of any of the Shares of CIS Managed Assets,
CIS Investments or CIS Cash Management unless the sale of all of the Shares is
completed simultaneously.

 

1   US Shares to be purchased by a US
corporate affiliate of Purchaser.

15

 

2.2           Sale and Purchase of
Shares of CIS Limited.  Subject to
the terms and conditions of this Agreement, at and as of the Closing, Parent
shall cause the UK Entity Shareholder to sell to Purchaser (with Purchaser
relying on the representations and warranties and the other obligations of the
UK Entity Shareholder under this Agreement) and the Purchaser shall purchase
the entire legal and beneficial ownership of such Shares, free and clear of all
Liens.  After the Closing, the Purchaser
shall be entitled to exercise all rights attached or accruing to the Shares of
CIS Limited including the right to receive all dividends, distributions or any
return of capital declared, paid or made by CIS Limited on or after the Closing
Date.  Purchase shall not be obliged to
complete the purchase of any of the Shares of CIS Limited unless the sale of
all of the Shares is completed simultaneously.

ARTICLE 3.

SALE AND PURCHASE OF ASSETS;

ASSUMPTION OF ASSUMED OBLIGATIONS

3.1           Purchased Assets.  Except as provided in Section 3.3, and
subject to the terms and conditions of this Agreement, at and as of the
Closing, Parent shall cause the Asset Sellers to sell, assign, convey, transfer
and deliver to Purchaser, and Purchaser shall purchase, acquire and take
assignment and delivery of, all of the Asset Sellers’ title, right and interest
in and to all of the assets, properties and rights (wherever located) that are
used or held for use in, primarily related to or necessary for the Business,
including the following:

(a)           Contracts.  The Contracts that Purchaser has reviewed and
agreed to accept as set forth on Schedule 3.1(a);

(b)           Fixed
Assets.  All machinery, equipment,
storage racking, fixed assets, furniture, tools, spare and replacement parts,
maintenance equipment, materials, computers, printers, servers and other items
of personal property of every kind and description that are used or held for
use in, primarily related to or necessary for the Business, other than the
Transferred Inventory (collectively, the “Transferred Fixed Assets”),
including the Transferred Equipment set forth on Schedule 3.1(b);

(c)           Receivables.  All receivables to the extent arising out of
or from the operation of the Business, including trade receivables, rebates,
allowances and other receivables from suppliers (“Transferred Receivables”);

(d)           Information
and Records.  All Information and
Records that are used or held for use in, primarily related to or necessary for
the Business, other than the Transferred Owned Intellectual Property
(collectively, the “Transferred Information and Records”);

(e)           Owned
Intellectual Property.  All
Intellectual Property owned by any Subject Entity, including all rights to sue
and recover for past infringement or misappropriation thereof and to receive
all income, royalties, damages and payments for past and future infringements
thereof, but excluding Intellectual Property that will be provided by Parent
pursuant to the Transition Services Agreement (the “Transferred

 

16

 

Owned Intellectual Property”), including the Transferred Owned Intellectual
Property set forth on Schedule 3.1(e);

(f)            Customer
Goodwill.  All of the goodwill
relating to customer relationships  to
the extent resulting from the conduct of the Business by any Asset Seller;

(g)           Prepaid
Expenses.  All prepaid expenses,
including ad valorem Taxes and lease and rental payments;

(h)           Rights
of Set-Off, etc.  All claims, causes
of action, rights of recovery and rights of set-off of any kind relating to or
arising out of the Assets or the Business, including any claims against
insurance companies;

(i)            Leasehold
Improvements.  All improvements to
any real property leased by any Asset Seller pursuant to any Asset Seller Real
Property Lease made by or for the benefit of the tenant;

(j)            Bank
Accounts and Certain Cash.  All bank
accounts that are used or held for use in, primarily related to or necessary
for the Business and Cash to the extent such Cash cannot be withdrawn from such
bank accounts or is not “available” (as such term is generally used by banks)
at and as of the Closing or is otherwise required for the operation of the
Business at and as of the Closing;

(k)           Interests
in First Capitol Group, LLC.  Subject
to the satisfaction of the condition precedent contained in Section 8.12(i),
all of the equity interests in First Capitol Group, LLC, a Delaware limited
liability company, held by CIS Management (the “First Capitol Interests”);
and

(l)            Other
Assets.  All other assets and rights
of every kind and description not of a type specifically identified in this Section
3.1, wherever located, personal or mixed, tangible or intangible, known or
unknown, that are used or held for use in, primarily related to or necessary
for the Business, including (i) all assets of any Asset Seller reflected on the
2004 Balance Sheets, other than those assets so reflected that have been sold
or otherwise disposed of in the ordinary course of business not in violation of
any provisions of this Agreement during the period from the date of the
2004  Balance Sheets until the Closing
Date and (ii) all assets acquired after the date of the 2004 Balance Sheets by
any Asset Seller primarily in connection with the Business, but excluding, in
any case, (A) any Contract or License (it being understood that the only
Contracts or Licenses to be transferred to Purchaser shall be the Assumed
Contracts and Assumed Licenses) and (B) the Excluded Assets.

All
of the foregoing assets described in this Section 3.1, together with the
Assumed Contracts and the Assumed Licenses, are referred to herein collectively
as the “Assets”.

3.2           Assignment of Contracts
and Licenses.

(a)           Assignment
of Contracts.  Except as provided in Section
3.3, and subject to the terms and conditions of this Agreement, at and as
of the Closing, Parent shall cause

 

17

 

the Asset Sellers to assign and transfer to Purchaser, and Purchaser
shall take assignment of, all of the Asset Sellers’ title, right and interest
in and to all of the Contracts to which the Asset Sellers are a party and that
relate to, in whole or in part, other Assets or that are used or held for use
in, primarily related to or necessary for the Business and that Purchaser has
reviewed and agreed to accept (all such Contracts are referred to herein
collectively as the “Assumed Contracts”), including the following:

(i)            Personal
Property Leases.  All leases to or by
any Asset Seller of personal property, which leases or leased personal property
relate to, in whole or in part, other Assets or are used or held for use in,
primarily related to or necessary for the Business (collectively, the “Transferred
Personal Property Leases”), including the Transferred Personal Property
Leases set forth on Schedule 3.2(a)(i);

(ii)           Customer
Contracts.  All customer Contracts
and other Contracts for the sale or provision by any Asset Seller of goods
and/or services, which Contracts or goods and/or services relate to, in whole
or in part, other Assets or are used or held for use in, primarily related to or
necessary for the Business (collectively, the “Transferred Customer
Contracts”), including the Transferred Customer Contracts set forth on Schedule
3.2(a)(ii), but excluding the customer Contracts relating to the Excluded
Customer Accounts;

(iii)          Vendor
Contracts.  All purchase orders and
other Contracts for the purchase by any Asset Seller of goods and/or services,
which Contracts or goods and/or services relate to, in whole or in part, other
Assets or are used or held for use in, primarily related to or necessary for
the Business (collectively, the “Transferred Vendor Contracts”),
including the Transferred Vendor Contracts set forth on Schedule 3.2(a)(iii);

(iv)          Intellectual
Property Licenses.  All agreements
for the license to or by any Asset Seller of any Intellectual Property, which
agreements or Intellectual Property are held for use in, primarily related to
or necessary for the Business and set forth on Schedule 3.2(a)(iv)  (collectively, the “Transferred
Intellectual Property Licenses”);

(v)           Real
Property Leases.  The Real Property
Leases to which any Asset Seller is party;

(vi)          Non-Disclosure
Obligations.  All non-disclosure,
confidentiality and similar obligations owed to any Asset Seller to the extent
related to the Assets or used or held for use in, primarily related to or
necessary for the Business, including all rights with respect to any obligation
of any current or former employee of the Business owed to any Asset Seller to
maintain the confidentiality of proprietary information of the Business;

(vii)         Claims.  All warranties, indemnities, claims and
rights against third parties given to, assigned to or benefiting any Asset
Seller in connection with the Assets or the Business;

 

18

 

(viii)        Employee
Non-Compete Obligations.  All rights
with respect to any obligation of any current employee or former employee of
the Business owed to any Asset Seller to refrain from competing with the
Business; and

(ix)           Other
Contracts.  All other Contracts set
forth on Schedule 3.2(a)(ix).

(b)           Assignment
of Licenses.  Except as provided in Section
3.3, and subject to the terms and conditions of this Agreement, at and as
of the Closing, the Asset Sellers shall assign and transfer to Purchaser, and
Purchaser shall take assignment of, all of the Asset Sellers’ title, right and
interest in and to all of the Licenses that relate to, in whole or in part,
other Assets or are used or held for use in, primarily related to or necessary
for the Business (collectively, the “Assumed Licenses”), including the
Assumed Licenses set forth on Schedule 3.2(b).

Notwithstanding
anything contained herein or otherwise to the contrary, this Agreement shall
not constitute an agreement to assign any Contract or License or any claim or
right or any benefit or obligation thereunder or resulting therefrom if an
assignment thereof, without the consent of a third party thereto, would
constitute a breach or violation thereof and if such a consent is not obtained
at or prior to the Closing, in which case the provisions of Section 7.4(b)
shall apply, provided that this sentence shall not limit or otherwise
affect the terms of Section 5.3, 6.3, 8.4 or 9.4.

3.3           Excluded Assets.  Notwithstanding the terms of Sections 3.1
and 3.2 or anything else contained herein or otherwise to the contrary,
the following assets of the Asset Sellers shall be retained by the Asset
Sellers, are not being sold or assigned to Purchaser hereunder and do not
constitute Assets, Assumed Contracts or Assumed Licenses (all of the following
are referred to herein collectively as the “Excluded Assets”):

(a)           Cash.  All Cash, except as provided in Section
3.1(j);

(b)           Corporate
Records.  All minute books and
corporate records of the Asset Sellers;

(c)           Intercompany
Agreements.  All Contracts between
any Asset Seller (on the one hand) and any other Asset Seller or any Affiliate
of any other Asset Seller, including the Parent (on the other hand) (other than
those Contracts explicitly set forth on Schedule 3.2(a)(ix) prepared by
Purchaser and delivered to Parent not later than the later of (i) 30 Business
Days after the date hereof or (ii) 15 Business Days after Parent’s delivery of
all of the Deferred Schedules);

(d)           Intercompany
Accounts Receivables.  All accounts
receivable owed to any Asset Seller by any other Asset Seller or any Affiliate
of any other Asset Seller, including the Parent, other than those accounts
receivable incurred in the ordinary course of business;

 

19

 

(e)           Cargill
Marks.  All rights to names which
include “Cargill” and any symbols, logos and marks that include “Cargill”,
together with any combinations or derivatives thereof.

(f)            Exchange
Memberships and Seats.  All exchange
memberships and exchange seats, except for those exchange seats required to
carry on the Business as currently conducted and listed on Schedule 3.3(f);

(g)           Financing
Agreements.  All Contracts relating
to the borrowing of funds by, or extension of credit or financing to, any Asset
Seller.

(h)           Other
Excluded Assets.  All assets of the
Asset Sellers set forth on Schedule 3.3(h) prepared by Purchaser and
delivered to Parent not later than the later of (i) 30 Business Days after the
date hereof or (ii) 15 Business Days after Parent’s delivery of all of the
Deferred Schedules;

(i)            Excluded
Contracts.  All Contracts of the
Asset Sellers set forth on Schedule 3.3(i) prepared by Purchaser and
delivered to Parent not later than the later of (i) 30 Business Days after the
date hereof or (ii) 15 Business Days after Parent’s delivery of all of the
Deferred Schedules (the “Excluded Contracts”);

(j)            Excluded
Customer Accounts.  All customer
accounts and customer Contracts relating thereto (i) that have an unsecured
debit balance at the Closing, and (ii) that are not in compliance at the
Closing with applicable Laws relating to margin or with the Purchaser’s margin
requirements (the “Excluded Customer Accounts”);

(k)           Contracts
Not Conforming to this Agreement. 
Unless Purchaser elects otherwise by notice to Parent, (i) any Contracts
not disclosed pursuant to Section 5.12 or Section 5.13 that
should have been disclosed pursuant thereto, and (ii) any Contracts entered
into in violation of Section 7.3(b); and

(l)            Certain
Contract Rights.  All rights under
the Assumed Contracts to the extent related to any Excluded Obligations.

3.4           Assumed Obligations.  At and as of the Closing, subject to the
terms and conditions of this Agreement (including Section 3.5),
Purchaser shall assume, and agree to pay, perform, fulfill and discharge, the following
obligations of the Asset Sellers (the “Assumed Obligations”):

(a)           Assumed
Contracts.  The obligations of the
Asset Sellers that are required to be performed, and that accrue, after the
Closing under the Assumed Contracts and Assumed Licenses (but excluding any
liabilities of the Asset Sellers in respect of a breach by any Asset Seller of
or default by any Asset Seller under such Assumed Contracts or Assumed Licenses
and any liabilities or obligations arising on or prior to the Closing Date), to
the extent such Assumed Contracts and Assumed Licenses, and all rights of the
Asset Sellers thereunder, are effectively assigned to Purchaser at the Closing
pursuant to Section 3.2; and

 

20

 

(b)           Accounts
Payable.  All obligations with
respect to accounts payable of the Asset Sellers arising in the ordinary course
of business and relating to the Business as of the Closing to the extent set
forth on the Closing Balance Sheets (as finalized pursuant to Section 4.4)
(other than accounts payable relating to Excluded Assets and accounts payable
that are payable to any other Asset Sellers or any Affiliate of any other Asset
Seller).

(c)           No
Other Liabilities Assumed. 
Notwithstanding anything contained herein or otherwise to the contrary,
except as specifically set forth in Section 3.4, neither Purchaser nor
any of its Affiliates shall assume or otherwise be liable in respect of, or be
deemed to have assumed or otherwise be liable in respect of, any debt, claim,
obligation or liability of the Asset Sellers or any of their Affiliates
whatsoever, including (for the avoidance of doubt) any liability for Taxes
related to the Assets or the Business for any Pre-Closing Tax Period (the “Excluded
Obligations”).

3.5           Prorations.

(a)           Parent
and Purchaser agree that all of the items set forth in this Section 3.5
relating to the Assets will be prorated as of the Closing Date, with the Asset
Sellers liable or entitled to receive payment to the extent such items relate
to any time period up to and including the Closing Date and Purchaser liable or
entitled to receive payment to the extent such items relate to periods
subsequent to the Closing Date:  rents,
royalties, maintenance fees, charges and other amounts that in any case are
payable periodically by or to any Asset Seller or Purchaser under any of the
Assumed Contracts or Assumed Licenses.

(b)           Parent
agrees to provide Purchaser with such documents and other records as Purchaser
reasonably requests in order to confirm all adjustment and proration
calculations made pursuant to this Section 3.5.  Final payments with respect to prorations
contemplated by this Section 3.5 that are not ascertainable on or before
the Closing Date shall be settled between the parties as soon as practicable
after they are ascertainable.

(c)           The
parties hereto agree that any and all prorations of Taxes among the parties
shall be effected pursuant to Section 13.2.

ARTICLE 4.

PURCHASE PRICE; OTHER PAYMENTS; ADJUSTMENT;
ALLOCATION

4.1           Payment of Closing Purchase
Price.  In consideration for the
transfer of the Shares and the Assets to Purchaser at and as of the Closing,
Purchaser shall assume the Assumed Obligations and pay the Parent (as
representative for the Asset Sellers and Shareholders) an amount equal to:

(i)            $214,500,000
(the “Estimated Closing Date Purchase Price”); minus

(ii)           the
Non-Competition Payment (the Estimated Closing Date Purchase Price, as so
reduced, is hereinafter referred to as the “Closing Date Seller Payment”).

 

21

 

4.2           Payment of Non-Competition
Payment.  In consideration for
Sellers’ and Parent’s agreement to be bound by the Non-Competition Covenants in
accordance with Article 14, at and as of the Closing, Purchaser shall
pay the Parent an amount equal to $12,500,000 (the “Non-Competition Payment”).

4.3           Purchase Price Adjustment.

(a)           One
Business Day prior to the Closing Date, Parent shall deliver to Purchaser the
following items: (i) a compiled, combined, consolidating balance sheet of the
Non-Fund Entities as of the close of business on the Business Day immediately
preceding the Closing Date prepared in accordance with GAAP consistent with the
practices used to prepare the 2004 Balance Sheets (the “Estimated Closing
Date Balance Sheet”) and an adjusted version of the Estimated Closing Date
Balance Sheet, adjusted in accordance with the Pro Forma Calculation
Principles, and (ii) a certificate of Parent setting forth Parent’s calculation
of the Net Asset Amount as of such date along with a schedule setting forth the
components thereof.

(b)           As
promptly as practicable, but no later than 60 days after the Closing Date,
Purchaser will cause to be prepared and delivered to Parent the following
items: (i) a compiled, combined, consolidating balance sheet of the Non-Fund
Entities as of the close of business on the Closing Date prepared in accordance
with GAAP consistent with the practices used to prepare the 2004 Balance Sheets
(the “Closing Date Balance Sheet”) and an adjusted version of the
Closing Date Balance Sheet, adjusted in accordance with the Pro Forma
Calculation Principles (as so adjusted, the “Final Closing Date Balance
Sheets” and, together with the Closing Date Balance Sheet, the “Closing
Balance Sheet”), and (ii) a certificate of Purchaser setting forth
Purchaser’s calculation of the Net Asset Amount as of such date along with a
schedule setting forth the components thereof. 
The Closing Balance Sheets shall be prepared in accordance with the same
accounting policies and practices used to prepare the 2004 Balance Sheets,
except as would be inconsistent with GAAP, and in the case of the Final Date
Balance Sheet, subject to the Pro Forma Calculation Principles.

(c)           Parent
may dispute Purchaser’s calculation of the Net Asset Amount (including any aspect
of the preparation of the Closing Balance Sheets) by delivering a notice of its
objection (the “Net Asset Objection Notice”) to Purchaser within 30 days
following delivery of the Closing Balance Sheets.  Any Net Asset Objection Notice delivered
pursuant to this Section shall specify in reasonable detail the nature and
dollar amount of any disagreement.

(d)           During
the 15 days following delivery of a Net Asset Objection Notice, the parties
shall use good faith, commercially reasonable efforts to resolve in writing any
differences they may have with respect to the matters specified in the Net
Asset Objection Notice.  At the end of
such 15-day period, the parties shall submit to Ernst & Young, LLP, or such
other nationally recognized independent accounting firm mutually agreeable to
Purchaser and Parent (the “Accounting Firm”), for review and resolution
of all matters that were included in the Net Asset Objection Notice and remain
unresolved notwithstanding efforts undertaken pursuant to this Section
4.3(d), and the Accounting

 

22

 

Firm shall make a final determination as to whether the Closing Balance
Sheets or the Net Asset Amount requires adjustment.  The Accounting Firm shall deliver its
determination to Purchaser and Parent as promptly as practicable but in any
event within 45 days.  Such report shall
be final and binding upon Parent and Purchaser, in the absence of manifest
error.  The costs, fees and expenses of
the Accounting Firm retained pursuant to this Section 4.3(d) shall be
split equally between the Parent and Purchaser.

(e)           The
“Final Net Asset Amount” shall be:

(i)            The
Net Asset Amount in the event that (x) no Net Asset Objection Notice is timely
delivered to Purchaser pursuant to Section 4.3(c), or (y) the
parties so agree;

(ii)           The
Net Asset Amount, adjusted in accordance with the Net Asset Objection Notice,
in the event that (x) Purchaser does not respond to such Net Asset Objection
Notice within the 15-day period following receipt by Purchaser of such Notice,
or (y) the parties so agree; or

(iii)          The
Net Asset Amount, as adjusted by either (x) the agreement of the parties, or
(y) the Accounting Firm in accordance with Section 4.3(d).

(f)            Within
three (3) Business Days after the date on which the Final Net Asset Amount is
determined:

(i)            if
(A) the Final Net Asset Amount is greater than $150 million, and (B) the Net
Asset Amount minus the aggregate amount of assets of the type reflected on Schedule
1.1(b) is equal to or greater than $110 million (in such event, the amount
by which the Final Net Asset Amount exceeds $150 million being hereinafter
referred to as the “Purchase Price Increase Amount”), then Purchaser
shall pay to the Parent (as representative for the Asset Sellers and
Shareholders) the Purchase Price Increase Amount; or

(ii)           if
either (A) the Final Net Asset Amount is less than $150 million, or (B) the Net
Asset Amount minus the aggregate amount of assets of the type reflected on Schedule
1.1(b) is less than $110 million (the greater of the deficiencies
calculated in (A) or (B) being hereinafter referred to as the “Purchase
Price Reduction Amount”), then Parent shall pay to Purchaser the Purchase
Price Reduction Amount.

(g)           Parent
agrees to pay to Purchaser any and all amounts payable to Purchaser by Parent
or Sellers pursuant to this Section 4.3.

(h)           All
payments made hereunder shall be made in accordance with Section 15.5 and to such account or accounts as the receiving party
shall designate in writing to the paying party.

(i)            The
parties hereto agree that the finalization of the Closing Date Adjustment
Materials pursuant to this Section 4.3 shall in no way limit any right
of any

 

23

 

Purchaser Indemnified Party to be indemnified by Parent pursuant to Section
12.2 (including the right of any Purchaser Indemnified Party to be
indemnified by Parent for any breach of or any inaccuracy in any representation
or warranty set forth in Section 5.5).

4.4           Post-Closing Payment.

(a)           As
promptly as practicable, but no later than 60 days after the second anniversary
of the Closing Date, Purchaser will cause to be prepared and delivered to
Parent a certificate of Purchaser setting forth Purchaser’s calculation of the
Post Closing Payment Amount.  Within 15 days
following the delivery of the certificate, Parent may request that the
Accounting Firm audit the calculation of the Post Closing Payment Amount.  The Accounting Firm shall deliver an audit
report to Purchaser and Parent as promptly as practicable but in any event
within 45 days of the request for the audit. 
The cost of such audit shall be borne equally by both Purchaser and
Parent; provided, however, that if Parent disputes Purchaser’s
calculation of the Post Closing Payment Amount and delivers a Post Closing
Payment Objection Notice to Purchaser pursuant to Section 4.4(b), the
cost associated with such audit shall be allocated as set forth in clauses (i)
and (ii) of the last sentence of Section 4.4(c).

(b)           Parent
may dispute Purchaser’s calculation of the Post Closing Payment Amount by
delivering a notice of its objection (the “Post Closing Payment Objection
Notice”) to Purchaser within (i) 30 days following delivery of the
certificate described above in Section 4.4(a) or (ii) if Parent requests
an audit of the Post Closing Payment Amount, 10 days following the Accounting
Firm’s delivery of the audit report to Purchaser and Parent.  Any Post Closing Payment Objection Notice
delivered pursuant to this Section shall specify in reasonable detail the
nature and dollar amount of any disagreement.

(c)           During
the 15 days following delivery of a Post Closing Payment Objection Notice, the
parties shall use good faith, commercially reasonable efforts to resolve in
writing any differences they may have with respect to the matters specified in
the Post Closing Payment Objection Notice. 
At the end of such 15-day period, the parties shall submit to the
Accounting Firm for review and resolution of all matters that were included in
the Post Closing Payment Objection Notice and remain unresolved notwithstanding
efforts undertaken pursuant to this Section 4.4(c), and the Accounting
Firm shall make a final determination as to whether the Post Closing Payment
Amount requires adjustment.  The
Accounting Firm shall deliver its determination to Purchaser and Parent as
promptly as practicable but in any event within 45 days.  Such report shall be final and binding upon
Parent and Purchaser, in the absence of manifest error.  The cost of such review and report shall be
borne (i) by Purchaser, if the Post Closing Payment Amount, as set forth
in Purchaser’s calculation thereof delivered pursuant to Section 4.4(a),
is greater than the Post Closing Payment Amount, or (ii) by Parent, if the
Post Closing Payment Amount, as set forth in Purchaser’s calculation thereof
delivered pursuant to Section 4.4(a), is equal to or less than the Final
Post Closing Payment Amount.

 

24

 

(d)           The
“Final Post Closing Payment Amount” shall be:

(i)            The
Post Closing Payment Amount in the event that (x) no Post Closing Payment
Objection Notice is timely delivered to Purchaser pursuant to Section 4.4(b),
or (y) the parties so agree;

(ii)           The
Post Closing Payment Amount, adjusted in accordance with the Post Closing Payment
Objection Notice, in the event that (x) Purchaser does not respond to such Post
Closing Payment Objection Notice within the 15-day period following receipt by
Purchaser of such Notice, or (y) the parties so agree; or

(iii)          The
Post Closing Payment Amount, as adjusted by either (x) the agreement of the
parties, or (y) the Accounting Firm in accordance with Section 4.4(c).

(e)           Within
three (3) Business Days after the date on which the Final Post Closing Payment
Amount is determined, Purchaser shall pay (the “Post Closing Payment”)
to the Parent (as representative for the Asset Sellers and Shareholders) the
Post Closing Payment Amount.

4.5           Allocation of Purchase Price.

(a)           The
Closing Date Seller Payment shall be allocated among the Shares and the Assets
as agreed upon and set forth on Schedule 4.5(a) prepared by the
Purchaser and agreed upon by the parties.

(b)           The
Closing Date Seller Payment with respect to the Shares shall be allocated to
the Shares of CIS Managed Assets, CIS Investments, CIS Cash Management and CIS
Limited, and among the respective Shareholders, as agreed upon and set forth on
Schedule 4.5(b) prepared by the Purchaser and agreed upon by the
parties.

(c)           The
Closing Date Seller Payment with respect to the Assets shall be allocated among
the Assets and among the Asset Sellers in accordance with a schedule delivered
by Purchaser to the Parent within sixty (60) days after the Closing Date,
allocating the Closing Date Seller Payment (including the amount of any Assumed
Obligations) among the Assets of the Asset Sellers in accordance with Section
1060 of the Code and the regulations thereunder (the “Asset Allocation
Schedule”).  If within thirty (30)
days of receipt of the Asset Allocation Schedule, the Parent notifies Purchaser
in writing that Parent objects to one or more items reflected in the Asset
Allocation Schedule, Parent and Purchaser shall negotiate in good faith to
resolve such dispute.  If Parent and
Purchaser fail to resolve any such dispute within thirty (30) days of Purchaser’s
receipt of Parent’s notice, the parties shall submit the dispute for resolution
to the Accounting Firm for resolution of the dispute, which resolution shall be
final and binding on all parties.  The
fees and expenses of the Accounting Firm shall be apportioned between the
parties by the Accounting Firm based on the degree to which each party’s claims
were unsuccessful and shall be paid by the parties in accordance with such
determination.

 

25

 

(d)           The
Non-Competition Payment shall be allocated among Parent and Sellers as agreed
upon and set forth on Schedule 4.5(d) prepared by the Purchaser and
agreed upon by the parties.

(e)           The
parties hereto agree to make appropriate adjustments to Schedule 4.5(a),
Schedule 4.5(b) and the Asset Allocation Schedule to reflect any
adjustments to the Adjusted Purchase Price (or the Assumed Obligations).  Any such adjustment to the purchase price
shall be allocated as provided by Treasury Regulation Section 1.1060-1(c).  Following the Closing, Purchaser and Parent
and their respective Affiliates, in connection with their respective U.S.
federal, state and local income Tax Returns and other filings (including
Internal Revenue Service Form 8594), shall not (and shall cause their Affiliates
not to) take any position inconsistent with the allocations set forth on Schedule
4.5(a), Schedule 4.5(b), the Asset Allocation Schedule (as such
schedules may be adjusted as contemplated in this Section 4.5(e)) or Schedule
4.5(d).

4.6           Conduct of Business After
Closing.

(a)           During
the period beginning on the Closing Date and ending on the date of the
determination of the Final Post Closing Payment Amount, Purchaser shall:

(i)            use
reasonable best efforts to maintain the Information and Records relating to the
Business in a manner consistent with good commercial practices and in a manner
that will enable Purchaser to calculate the Expense Synergy Amount; and

(ii)           allocate
selling, general and administrative expenses to the Business in a manner
consistent with the current allocations among Purchaser’s subsidiaries and
business units.

(b)           During
the period beginning on the Closing Date and ending on the second anniversary
of the Closing Date, Purchaser shall provide Parent, no later than 30 days
after the last day of each fiscal quarter of the Business, a report of the
earnings before long-term interest, taxes, depreciation and amortization
derived from the Business during such fiscal quarter, and shall provide Parent
with reasonable documentation relating to such report.  In the event that Parent reasonably believes
that any report provided pursuant to the immediately preceding sentence is
materially deficient, Parent shall have the right, at any time after the first anniversary
of the Closing Date, to review the Information and Records solely to enable
Parent to assess such reports.

(c)           During
the period beginning on the second anniversary of the Closing Date and ending
on the date of the determination of the Final Closing Payment Amount, and
solely to enable Parent to review Purchaser’s calculation of the Post Closing
Payment Amount, Purchaser shall allow Parent reasonable access to the
Information and Records relating to the Business.

 

26

 

ARTICLE 5.

REPRESENTATIONS AND
WARRANTIES OF PARENT

Parent represents and warrants to Purchaser, as of the date of this
Agreement and as of the Closing (as if such representations and warranties were
remade as of the Closing), as follows:

5.1           Due Incorporation.

(a)           Parent,
each Seller and each Subject Entity is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization,
with all requisite power and authority to own, lease and operate its properties
and to carry on its business as they are now being owned, leased, operated and
conducted.  Parent, each Seller and each
Subject Entity is licensed or qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of the properties
owned, leased or operated by it or the business transacted by it require such
licensing or qualification.  The
jurisdictions in which Parent, each Seller and each Subject Entity is
incorporated and licensed or qualified to do business as a foreign corporation
are set forth on Schedule 5.1(a).

(b)           Except
as set forth on Schedule 5.1(b), no Subject Entity has any direct or
indirect Subsidiaries, either wholly or partially owned, and no Subject Entity
holds any direct or indirect economic, voting or management interest in any
Person or directly or indirectly owns any security issued by any Person.

(c)           True,
correct and complete copies of the Articles of Incorporation and by-laws (or
similar organizational instruments), and all minutes of all meetings (or written
consents in lieu of meetings) of the Board of Directors (and all committees
thereof) and shareholders, of Parent and each Subject Entity for the past 3
years have been delivered to Purchaser. 
All action taken by the Boards of Directors (and all committees thereof)
and shareholders of Parent and each Subject Entity is reflected in such minutes
and written consents.

5.2           Due Authorization.  Parent has full power and authority to
execute, deliver and perform this Agreement and Parent, Sellers and each Subject
Entity will have at the Closing, full power and authority to execute, deliver
and perform their respective Related Agreements and to consummate the
transactions contemplated hereby (in the case of Parent only) and thereby.  The execution, delivery and performance by
Parent of this Agreement and the execution, delivery and performance by Parent,
each Seller and each Subject Entity of its respective Related Agreements, and
the consummation by Parent, such Seller or such Subject Entity of the transactions
contemplated hereby and thereby, have been, or in the case of Sellers and the
Subject Entities, will have been at the Closing, duly and validly approved by
Parent’s, such Seller’s and such Subject Entity’s board of directors and, to
the extent required by applicable Law, by all shareholders of Parent, such
Seller and such Subject Entity entitled to vote thereon, and no other actions
or proceedings on the part of Parent, such Seller or such Subject Entity are or
will be necessary to authorize the execution, delivery and performance by
Parent of this Agreement, or Parent, such Seller or such Subject Entity of its
respective Related Agreements or the

 

27

 

transactions contemplated hereby (in the case of Parent only) and
thereby, as applicable.  Parent has duly
and validly executed and delivered this Agreement and Parent, each Seller and
each Subject Entity has duly and validly executed and delivered (or prior to or
at the Closing will duly and validly execute and deliver) their Related
Agreements.  This Agreement constitutes a
legal, valid and binding obligation of Parent, and Parent’s, each Seller’s and
each Subject Entity’s Related Agreements upon execution and delivery by Parent,
such Seller or such Subject Entity will constitute legal, valid and binding
obligations of Parent, such Seller or such Subject Entity, in each case,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect that 
affect the enforcement of creditors’ rights generally, and by equitable
limitations on the availability of specific remedies and by principles of
equity.

5.3           Consents and Approvals; Authority
Relative to this Agreement.

(a)           Except
as set forth on Schedule 5.3, no consent, authorization or approval of,
filing or registration with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery and performance by Parent of this Agreement and the
execution, delivery and performance by Parent, each Seller and each Subject
Entity of its respective Related Agreements or the consummation by Parent, each
Seller and each Subject Entity of the transactions contemplated hereby or
thereby, as applicable.

(b)           Except
as set forth on Schedule 5.3, the execution, delivery and performance by
Parent of this Agreement and the execution, delivery and performance by Parent,
each Seller and each Subject Entity of its respective Related Agreements, and
the consummation by Parent, each Seller and each Subject Entity of the
transactions contemplated hereby and thereby, do not and will not (i) violate
any Law applicable to or binding on Parent, any Seller or any Subject Entity or
any of their respective assets or properties; (ii) violate or conflict with,
result in a breach or termination of, constitute a default or give any third
party any additional right (including a termination right) under, permit
cancellation of, result in the creation of any Lien upon any of the assets or
properties of Parent, any Seller or any Subject Entity under, or result in or
constitute a circumstance that, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any Contract to which
Parent, any Seller or any Subject Entity is a party or by which Parent, any
Seller or any Subject Entity or any of their respective assets or properties
are bound; (iii) permit the acceleration of the maturity of any indebtedness of
Parent, any Seller or any Subject Entity or indebtedness secured by their
respective assets or properties; or (iv) violate or conflict with any provision
of any of the Articles of Incorporation, by-laws or similar organizational
instruments of Parent, any Seller or any Subject Entity.

5.4           Capitalization.

(a)           The
authorized capital stock of CIS Managed Assets consists of 500 shares of common
stock, par value $100.00 per share, of which 500 shares are currently issued
and outstanding, all of which are held beneficially and of record by CIS.  The authorized capital stock of CIS
Investments consists of 30,000 shares of common stock,

 

28

 

par value $100.00 per share, of which 10 shares are currently issued
and outstanding, all of which are held beneficially and of record by CIS.  The authorized capital stock of CIS Cash
Management consists of 100 shares of common stock, par value $0.01 per share,
of which 100 shares are currently issued and outstanding, all of which are held
beneficially and of record by CIS Holdings. 
The shares of CIS Managed Assets, CIS Investments and CIS Cash
Management included within the Shares constitute all of the issued and
outstanding shares of capital stock of CIS Managed Assets, CIS Investments and
CIS Cash Management, respectively.

(b)           All
of the Shares (i) are validly issued, fully paid and nonassessable and (ii)
are, and when issued were, free of preemptive rights.  The Shares are owned beneficially and of
record by the Shareholders, free and clear of any and all Liens, in the amounts
set forth above.  There are no shares of
capital stock of any Acquired Corporation held in the treasury of such Acquired
Corporation and no shares of capital stock of any Acquired Corporation are
currently reserved for issuance for any purpose or upon the occurrence of any
event or condition.

(c)           The
authorized capital stock of each Acquired Corporation Subsidiary, the
outstanding shares of capital stock of each Acquired Corporation Subsidiary and
the legal and beneficial ownership thereof are accurately set forth on Schedule
5.4(c).  All of the outstanding
shares of capital stock of each Acquired Corporation Subsidiary (i) are validly
issued, fully paid and nonassessable, (ii) are, and when issued were, free of
preemptive rights and (iii) are free and clear of any and all Liens.  CIS Investments is the legal and beneficial
owner of all of the general partnership interests in the Funds, free and clear
of all Liens, and has good and marketable title to the general partnership
interests in the Funds.  The general
partnership interests in the Funds were duly authorized and validly issued and
are, and when issued were, free of preemptive rights.  The general partnership interests in the
Funds are not represented in physical form by any certificate or other similar
instrument.  There is no general
partnership interest in any Fund currently reserved for issuance for any
purpose or issuable upon the occurrence of any event or condition, and there
exists no obligation to admit any Person as a general partner of any Fund.

(d)           Except
as set forth in Section 5.4(b) and on Schedule 5.4(c), there are
no shares of capital stock or other securities (whether or not such securities
have voting rights) of the Acquired Corporations or any Acquired Corporation
Subsidiary issued or outstanding or any subscriptions, options, warrants,
calls, rights, convertible securities or other agreements or commitments of any
character obligating the Shareholders, Acquired Corporations or any Acquired
Corporation Subsidiary, or obligating the Shareholders or any of their
Affiliates to cause the Acquired Corporations or any Acquired Corporation
Subsidiary, to issue, transfer or sell, or cause the issuance, transfer or sale
of, any shares of capital stock or other securities (whether or not such
securities have voting rights) of the Acquired Corporations or any Acquired
Corporation Subsidiary.  There are no
outstanding contractual obligations of any Shareholders, any Acquired
Corporation or any Acquired Corporation Subsidiary that relate to the purchase,
sale, issuance, repurchase, redemption, acquisition, transfer, disposition,
holding or voting of any shares of capital stock or other securities of any
Acquired Corporations or any Acquired

 

29

 

Corporation Subsidiary or the management or operation of any Acquired
Corporation or any Acquired Corporation Subsidiary.  Except for the Shareholders’ rights as holder
of Shares, no Person has any right to participate in, or receive any payment
based on any amount relating to, the revenue, income, value or net worth of any
Acquired Corporation or any Acquired Corporation Subsidiary or any component or
portion thereof, or any increase or decrease in any of the foregoing.

(e)           The
assignments, endorsements, stock powers and other instruments of transfer
delivered by the Shareholders to Purchaser at the Closing will be sufficient to
transfer to Purchaser the entire interest, legal and beneficial, in the Shares
and in the general partnership interests in the Funds.  The Shareholders have, and at the Closing
will have, full power and authority to convey good and marketable title to all
of the Shares and to the general partnership interests in the Funds, and upon
transfer by the Shareholders to Purchaser of the certificates representing such
Shares and such general partnership interests, Purchaser will receive good and
marketable title to such Shares and such general partnership interests, free
and clear of any and all Liens.

(f)            The
authorized capital stock of First Capitol Group, LLC, a Delaware limited
liability company (“First Capitol”), is shown on Schedule 5.4(f).  The Sellers have, prior to the date hereof,
provided Purchaser with a true and correct copy of the limited liability
company agreement of First Capitol.

5.5           Financial Statements; Undisclosed
Liabilities.

(a)           A
true, correct and complete copy of the 2004 Financial Statements is set forth
on Schedule 5.5(a).  The 2004
Financial Statements (A) have been prepared in accordance with GAAP
consistently applied and (B) present fairly in all material respects the
financial position, assets and liabilities of each of the Non-Fund Entities as
of the date thereof and the results of operations, revenues, expenses and cash
flows of each Non-Fund Entity for the respective periods covered thereby.

(b)           A
true, correct and complete copy of the Interim Financial Statements is set
forth on Schedule 5.5(b).  The
Interim Financial Statements (i) have been prepared in accordance with internal
financial reporting policies of the Non-Fund Entities consistent with past
practice and (ii) present fairly in all material respects the financial
position, assets and liabilities of each Non-Fund Entity as of the respective
dates thereof and the results of operations, revenues, expenses and cash flows
of each Non-Fund Entity for the respective periods covered thereby.

(c)           Once
delivered pursuant to Section 7.15, the 2005 Financial Statements (A)
will have been prepared in accordance with GAAP consistently applied and (B)
will present fairly in all material respects the financial position, assets and
liabilities of each of the Non-Fund Entities as of the date thereof and the
results of operations, revenues, expenses and cash flows of each Non-Fund
Entity for the respective periods covered thereby.

 

30

 

(d)           The
Financial Statements are (or will be, in the case of the 2005 Financial
Statements) in accordance with the books and records of the Non-Fund Entities,
do not reflect any transactions that are not bona fide transactions and do not
contain any untrue information or disclosures of a material nature or omit any
material fact necessary to make the information and disclosures contained
therein, in light of the circumstances in which they were made, not misleading.

(e)           Except
as set forth in the audited balance sheets included in the Financial
Statements, the Non-Fund Entities have no liabilities, debts, claims or obligations,
whether accrued, absolute, contingent or otherwise, whether due or to become
due, other than trade payables and accrued expenses incurred in the ordinary
course of business and consistent with past practice since December 31, 2004.

(f)            There
is no Debt outstanding.

5.6           No Adverse Effects or Changes.

(a)           Except
as set forth on Schedule 5.6, since February 28, 2005, the Subject
Entities have conducted their businesses only in the ordinary course and
consistent with past practices.

(b)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since February 28, 2005, no Subject Entity has:

(i)            suffered
any Material Adverse Effect;

(ii)           suffered
any damage, destruction or Loss (other than trading losses in the case of the
Funds) to any of its assets or properties (whether or not covered by
insurance);

(iii)          taken
any action or entered into or authorized any Contract or transaction other than
in the ordinary course of business and consistent with past practice;

(iv)          sold,
transferred, conveyed, assigned or otherwise disposed of any of its assets or
properties, except sales of inventory in the ordinary course of business and
consistent with past practice;

(v)           waived,
released, settled or canceled any claims against third parties or debts owing
to it, or any rights that have any value;

(vi)          made
any changes in its accounting systems, policies, principles, practices or
methods;

(vii)         entered
into, authorized or permitted any transaction with any other Subject Entity or
Parent, or any Affiliate of any of them, other than in the ordinary course of
business and consistent with past practice;

 

31

 

(viii)        suffered
or permitted the creation of any Lien over any of its assets (including, with
respect to the Asset Sellers, any of the Assets);

(ix)           made
any borrowings, incurred any debt (other than trade payables in the ordinary
course of business and consistent with past practice), or assumed, guaranteed,
endorsed (except for the negotiation or collection of negotiable instruments in
transactions in the ordinary course of business and consistent with past
practice) or otherwise become liable (whether directly, contingently or
otherwise) for the obligations of any other Person, or made any payment or
repayment in respect of any indebtedness (other than trade payables,
indebtedness pursuant to subordinated loans, or accrued expenses in the
ordinary course of business and consistent with past practice);

(x)            made
any loans, advances or capital contributions to, or investments in, any other
Person;

(xi)           entered
into, adopted, amended or terminated any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee, or
increased in any manner the compensation or fringe benefits of any director,
officer or employee or paid any benefit not required by any existing plan and
arrangement or entered into any Contract, agreement, commitment or arrangement
to do any of the foregoing;

(xii)          acquired
or leased any assets outside the ordinary course of business;

(xiii)         acquired,
leased or encumbered any assets that are material to any Subject Entity other
than in the ordinary course of business and consistent with past practice;

(xiv)        filed
any amended Tax Return or any claim for refund of Taxes, amended any payment of
Taxes paid by or on behalf of any Subject Entity, waived or extended the
statute of limitations in respect of any Taxes, made, revoked, or amended any
Tax election (other than the contemplated election to treat CIS Limited as a
branch of Cargill PLC for United States federal income tax purposes), changed
any method of Tax accounting or Tax procedure or practice, or settled or
compromised any claim relating to Taxes;

(xv)         paid
any amount, performed any obligation or agreed to pay any amount or perform any
obligation, in settlement or compromise of any suit or claim of liability
against any Subject Entity or any of its respective directors, officers,
employees or agents;

 

32

 

(xvi)        terminated,
modified, amended or otherwise altered or changed any of the terms or
provisions of any Contract, or paid any amount not required by Law or by any
Contract; or

(xvii)       agreed,
whether in writing or otherwise, to do any of the foregoing.

(c)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since February 28, 2005, no Acquired Corporation or Acquired
Corporation Subsidiary has:

(i)            authorized
for issuance, issued, sold, delivered or agreed or committed to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
convertible or exchangeable securities, commitments, subscriptions, rights to
purchase or otherwise) any shares of its capital stock or any other securities
of the Acquired Corporation or any Acquired Corporation Subsidiary, or amended
any of the terms of any such capital stock or other securities;

(ii)           split,
combined or reclassified any shares of its capital stock, declared, set aside
or, except as expressly permitted pursuant to Section 7.3, paid any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or redeemed or otherwise
acquired any capital stock or other securities of the Acquired Corporation or
any Acquired Corporation Subsidiary; or

(iii)          agreed,
whether in writing or otherwise, to do any of the foregoing.

(d)           Without
limiting the generality of Section 5.6(a), except as set forth on Schedule
5.6, since December 31, 2004, no Fund has:

(i)            declared,
set aside, or paid any distribution (excluding redemptions); or

(ii)           made
any material changes in the customary methods of operations of the Fund,
including trading strategy, marketing and selling.

5.7           Title to Properties.

(a)           The
Acquired Corporations, Acquired Corporation Subsidiaries and Funds, at and as
of the Closing, will have good and marketable title to, and will be the lawful
owners of, all of the tangible and intangible assets, properties and rights to
be reflected in the Final Balance Sheets (as finalized pursuant to Section
4.3), free and clear of any and all Liens.

(b)           The
Asset Sellers, at and as of the Closing, will have good and marketable title
to, and will be the lawful owners of, all of the Assets, free and clear of any
and all Liens.  The Asset Sellers have or
will have the full right to sell, convey, transfer, assign and deliver the
Assets to Purchaser, subject to obtaining all consents set forth in Schedule

 

33

 

5.3, and,
at and as of the Closing, each Asset Seller will, except as provided in the
last sentence of Section 3.2, convey the Assets to Purchaser by deeds,
bills of sale, certificates of title and instruments of assignment and transfer
effective to vest in Purchaser, and Purchaser shall have, good and marketable
and valid title to all of the Assets, free and clear of any and all Liens.

5.8           Condition and Sufficiency
of Assets.

(a)           To
the knowledge of Parent and Sellers, all of the tangible assets and properties
of the Acquired Corporations, the Acquired Corporation Subsidiaries and the
Funds, and all of the tangible Assets, in each case, whether real or personal,
owned or leased, have been well maintained and are in good operating condition
and repair (with the exception of normal wear and tear), and are free from
defects other than such minor defects as do not interfere with the intended use
thereof in the conduct of normal operations.

(b)           The
Assets, together with all of the assets, properties and rights of the Acquired
Corporation, the Acquired Corporation Subsidiaries and the Funds (collectively,
the “Subject Entity Assets”), constitute all of the assets, properties
and rights (except for the Excluded Assets) that are currently used in
connection with the conduct of the businesses of the Subject Entities and the
Funds as they are presently conducted and have been conducted since February
28, 2005.  The Subject Entity Assets,
together with the Excluded Assets, were sufficient to produce the income for the
nine (9) month period ended February 28, 2005 as shown on the statement of
earnings for that period set forth in the Combined Financial Statements.

5.9           Real Property.

(a)           No
Subject Entity owns any real property.

(b)           Schedule
5.9(b) sets forth a true, correct and complete list of all real estate held
by any Subject Entity under real property leases (the “Leased Real Property”)
and all leases covering the Leased Real Property, including all amendments
thereto (the “Real Property Leases”). 
The Leased Real Property constitutes all of the real property interests
held by the Subject Entities and required for or currently used in connection
with the operation of their respective businesses as they are presently
conducted and have been conducted since December 31, 2004.  Parent or Sellers have delivered to Purchaser
true, correct and complete copies of all Real Property Leases together with
copies of all reports (if any) of any engineers, environmental consultants or
other consultants in their possession or under their control or in the
possession or control of the Acquired Corporations or any Acquired Corporation
Subsidiary relating to any of the Leased Real Property.

(c)           The
Leased Real Property has at all times been maintained and repaired by the
Subject Entities as required under the Real Property Leases and in a manner in
accordance with sound property management practice.  To the extent that a Subject Entity has
constructed or caused to be constructed any improvements to any Leased Real

 

34

 

Property, such entity represents and warrants to Purchaser that, to the
knowledge of Parent and Sellers, such improvements were constructed in a manner
in accordance with sound construction practice and that there are no material
defects or deficiencies in the design, construction, fabrication, manufacture
or installation of any such improvements in the Leased Real Property.  To the knowledge of Parent and Sellers, all
systems, elements and components of the Leased Real Property (including all
machinery, fixtures and equipment, the roof, foundation and structural
elements, and the elevator, mechanical, electrical and life safety systems) are
in good working order and repair and sound operating condition, subject to
ordinary wear and tear and routine maintenance.

(d)           To
the knowledge of Parent and Sellers, each Leased Real Property and the
activities carried on in all buildings, warehouses, plants, facilities,
installations, fixtures and other structures or improvements included as part
of, or located on or at, each such Leased Real Property, complies with, is not
in violation of, or in conflict with, any Law applicable to or binding on such
Leased Real Property or any Subject Entity or any of its respective assets or
properties.

(e)           To
the knowledge of Parent and Sellers, none of the Leased Real Property is
subject to any Lien, easement, right-of-way, building or use restriction,
exception, variance, reservation or limitation that might interfere with or
impair the present and continued use thereof in the usual and normal conduct of
the business and operations of any Subject Entity.

(f)            To
the knowledge of Parent and Sellers, each separate parcel included in the
Leased Real Property has adequate water supply, storm and sanitary sewer
facilities, access to telephone, gas and electrical connections, fire
protection, drainage and other public utilities, and has adequate parking
facilities that meet all requirements imposed by Laws applicable to or binding
on any Asset Seller or any of its respective assets or properties.

(g)           All
the Real Property Leases are in full force and effect, valid and enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors’ rights
generally and by equitable limitations on the availability of specific
remedies.  No Subject Entity has received
any notice of any, and there exists no, dispute, claim, event of default or
event that constitutes or would constitute (with notice or lapse of time or
both) a default under any Real Property Lease, except for such defaults or
breaches that may arise from, or otherwise be caused by, the occupancy of the
respective leased premises by customers (or other similar third parties).  Schedule 5.9(g) lists the customers of
the Business and other similar Persons occupying space on the premises leased
under each Real Property Lease.  All rent
and other amounts due and payable with respect to the Real Property Leases have
been paid.  Except for the Real Property
Lease relating to the Minneapolis property (which consists of a month to month
tenancy), none of the Real Property Leases are expected to expire or terminate
during the year following the Closing Date.

 

35

 

(h)           Except
as set forth on Schedule 5.9(h), no work has been performed or is in
progress at, and no materials have been furnished to any Subject Entity for use
at, any of the Leased Real Property that may give rise to any mechanic’s,
materialmen’s or other Lien against any of the Leased Real Property.

5.10         Personal Property.

(a)           Schedule
5.10(a), when delivered by Parent pursuant to Section 1.5, will set
forth a true and correct (in all material respects) list as of June 30, 2005 of
(i) all of the tangible personal property owned by the Acquired Corporations or
any Acquired Corporation Subsidiary and (ii) all of the tangible personal
property owned by any Asset Seller and included in the Assets (excluding, in
the case of each of clauses (i) and (ii), tangible personal
property set forth on Schedule 5.10(b)). 
All of such owned tangible personal property is utilized by the Subject
Entities in the ordinary course of business.

(b)           Schedule
5.10(b), when delivered by Parent pursuant to Section 1.5, will sets
forth a true and correct (in all material respects) list as of June 30, 2005 of
(i) all leases of tangible personal property (including the Transferred
Personal Property Leases) binding upon any Asset Seller or any of its
respective assets or properties and (ii) all items of tangible personal
property covered thereby.  All of such
leased tangible personal property is utilized by the Subject Entities in the
ordinary course of business.  Sellers
have made available to Purchaser true, correct and complete copies of all such
personal property leases.

5.11         Computer System.  To the knowledge of Sellers and Parent, all
computer hardware and software and related materials currently used by any
Subject Entity in its respective business, including all such computer
hardware, software and related materials included in the Assets (herein
collectively referred to as the “Computer System”) are in good working
order and condition, no Subject Entity has experienced any significant defect
in design, workmanship or material of the Computer System.  Except as set forth on Schedule 5.11,
the use of the Computer System by the Subject Entities (including any software
modifications) (a) has not violated or infringed upon and will not violate or
infringe upon the rights of any third parties and (b) has not resulted in and
will not result in the termination of any maintenance, service or support
agreement relating to any part of the Computer System (including any Assumed
Contract) or any reduction in the services provided to any Subject Entity,
warranties available to any Subject Entity or rights of any Subject
Entity.  The Subject Entity Assets
include adequate user and service documentation for the Computer System.  Each Subject Entity maintains Computer System
back-up and recovery.  Each Subject
Entity maintains Computer System and network security controls designed to
safeguard such Computer System against the risk of business disruption arising
from virus attacks, unauthorized activities of any employee or contractor of
any Subject Entity, hackers or any other Person.  To the knowledge of Sellers and Parent, any
Owned Intellectual Property licensed to third-parties does not include any open
source software or source code that is subject to any public license (e.g., the
“GNU General Public License”).

 

36

 

5.12         Intellectual Property.

(a)           Schedule
5.12(a) sets forth a true, correct and complete list of  all of applications and registrations for the
Marks, patents, patent applications, copyright registrations and copyright
applications and domain names  owned by
any Subject Entity (collectively, the “Registered
And Applied For
Owned Intellectual Property”, which, together with all other Intellectual
Property owned by any Subject Entity, shall constitute the “Owned
Intellectual Property”), (ii) all Intellectual Property used in or
necessary for the purpose of the Business licensed to any Subject Entity,
including the Intellectual Property licensed to any Subject Entity pursuant to
any Transferred Intellectual Property License (the “Licensed Intellectual
Property”) and (iii) all Contracts used in or necessary for the purpose of
the Business to which a Subject Entity is a party or by which a Subject Entity
is bound providing for the license of Owned Intellectual Property or Licensed
Intellectual Property or otherwise relating to Owned Intellectual Property or
Licensed Intellectual Property (such Contracts are hereinafter referred to as “Intellectual
Property Licenses”).

(b)           Except
as set forth on Schedule 5.12(b):

(i)            all
of the Owned Intellectual Property is owned by a Subject Entity free and clear
of any and all Liens, and is not subject to any license, royalty or other
agreement;

(ii)           at
the Closing, all of the Transferred Owned Intellectual Property will be owned
by Purchaser (excluding the Transferred Intellectual Property Licenses) free
and clear of any and all Liens, and will not be subject to any license, royalty
or other agreement;

(iii)          none
of the Owned Intellectual Property or the Licensed Intellectual Property has
been or is the subject of any pending, or to the knowledge of Sellers and
Parent, threatened litigation or claim of infringement, and there is no basis
for making any such claim;

(iv)          no
Subject Entity has breached any provision of, or is in default under the terms
of, any Intellectual Property License to which it is a party or under which it
has any rights or by which it is bound, no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a breach of, or a default under, any such Intellectual Property
License by any Subject Entity and no other party to any such Intellectual
Property License has breached any provision of, or is in default under the
terms of, any such Intellectual Property License;

(v)           to
the knowledge of Sellers and Parent, each product or service sold or provided
by any Subject Entity under a Mark owned by any Subject Entity, each process,
method, part, design, material or other Intellectual Property employed by any
Subject Entity, and the marketing, performance and use by any Subject Entity of
any product, service or other Intellectual Property, does not infringe or

 

37

 

misappropriate any Intellectual Property or confidential or proprietary
rights of any other Person, and no Subject Entity has received any notice
making or threatening to make any claim of infringement or misappropriation of
any Intellectual Property of another Person or contesting any Subject Entity’s
right to market or use any such product, service, process, method, part,
design, material or other Intellectual Property, and there is no basis for
making such a claim;

(vi)          no
Subject Entity has made or threatened to make any, and there exists no, claim
that any product or service sold or provided by any Person, or any process,
method, part, design, material or other Intellectual Property employed by any
Person, or any marketing or use by any Person of any such product or service,
infringes or misappropriates any Owned Intellectual Property or Licensed
Intellectual Property;

(vii)         each
Subject Entity owns or possesses adequate rights in and to all Intellectual
Property necessary to conduct its respective business as presently conducted,
and the Subject Entity Assets include ownership or adequate rights in all
Intellectual Property required for or currently used in connection with the
conduct of the businesses of the Subject Entities as they are presently
conducted and have been conducted since May 31, 2004;

(viii)        each
Subject Entity has taken all reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all Transferred Owned Intellectual Property, and there have been no
material breaches of any Subject Entity’s secrecy, confidentiality of, or its
proprietary rights in, any Transferred Owned Intellectual Property;

(ix)           no
Subject Entity is party to an intra-group arrangement with Parent or otherwise
with respect to any material Intellectual Property;

(x)            no
item of Registered and Applied For Owned Intellectual Property has lapsed,
expired, or been abandoned or cancelled, and no Owned Intellectual Property is
subject to any pending, or to the knowledge of Sellers and Parent, threatened
in writing, opposition, cancellation, interference, domain name dispute or
other proceeding.  To the knowledge of
Sellers and Parent, the Intellectual Property Licenses are in full force and
effect and no party of any such licenses has exercised any termination rights
thereto; and

(xi)           there
are no royalties, honoraria, fees or other payments payable by any Subject
Entity to any Person relating to any Intellectual Property other than in connection
with Licensed Intellectual Property.

5.13         Contracts. 
Schedule 5.13 sets forth a true, correct and complete list of all
the Contracts (including the Assumed Contracts) of the following types to which
any Subject Entity is a party or by which any Subject Entity is bound, or to
which any Subject Entity’s assets or properties is subject:

 

38

 

(a)           any
Contract that either (i) requires a payment by any party in excess of, or a
series of payments that in the aggregate exceed, $100,000 or provides for the
delivery of goods or performance of services, or any combination thereof,
having a value in excess of $100,000, or (ii) has a term of, or requires the
performance of any obligations by any party over a period in excess of, six (6)
months (excluding, in the case of each of clauses (i) and (ii),
purchase orders that are received from customers or issued to suppliers in the
ordinary course of business);

(b)           any
Contract (including any purchase order received from a customer in the ordinary
course) pursuant to which any Subject Entity is committed to deliver goods or
perform services, or provide any combination thereof, to or for any customer,
having a value in excess of $100,000;

(c)           any
Contract (including any purchase order issued to a supplier in the ordinary
course) pursuant to which any Subject Entity is committed to purchase goods or
services, or any combination thereof, from any supplier, having a value in
excess of $100,000;

(d)           any
Contract pursuant to which any Subject Entity is obligated to provide any
customer with equal or preferred pricing terms as compared to the pricing terms
offered by such Subject Entity to any or all of the other customers of any
Subject Entity;

(e)           any
Contract pursuant to which any third party agrees to perform any services for
any Subject Entity or Fund that are required to be performed by any Subject
Entity under any other Contract;

(f)            any
collective bargaining agreement;

(g)           any
Contract of any kind with any employee, officer or director of any Subject
Entity, or any Affiliate of any such individual;

(h)           any
Contract of any kind with any Affiliate of any Subject Entity, or with any
Shareholder or any Affiliate of any Shareholder;

(i)            any
Contract with a sales representative, manufacturer’s representative,
distributor, dealer, broker, sales agency, advertising agency or other Person
engaged in sales, distributing or promotional activities, or any Contract to
act as one of the foregoing on behalf of any Person (excluding purchase orders
that are entered into with customers or suppliers in the ordinary course of
business);

(j)            any
Contract pursuant to which any Subject Entity has made or will make loans or
advances, or has or will have incurred debts or become a guarantor or surety or
pledged its credit on or otherwise become responsible with respect to any
undertaking of another (except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of business);

 

39

 

(k)           any
indenture, credit agreement, loan agreement, note, mortgage, security
agreement, lease, loan commitment or other Contract relating to the borrowing
of funds, an extension of credit or financing;

(l)            any
Contract involving any marketing or purchasing groups or associations in which
any Subject Entity is a member;

(m)          any
Contract involving a partnership, joint venture or other cooperative
undertaking;

(n)           any
Contract involving any restrictions with respect to the geographical area of
operations or scope or type of business of any Subject Entity;

(o)           any
power of attorney or agency agreement or arrangement with any Person pursuant
to which such Person is granted the authority to act for or on behalf of any
Subject Entity or any Subject Entity is granted the authority to act for or on
behalf of any Person;

(p)           any
Contract relating to the Computer System;

(q)           any
Contract, whether or not fully performed, relating to any acquisition or
disposition of any capital stock or other security of any Subject Entity or
Fund or any predecessor in interest of any Subject Entity, or any acquisition
or disposition of any subsidiary, division, line of business, material assets
or real property;

(r)            any
Contract not made in the ordinary course of business and consistent with past
practice that is to be performed in whole or in part at or after the date of
this Agreement; and

(s)           any
Contract not specified above that is material to any Subject Entity.

Sellers have delivered to Purchaser true, correct and complete copies
of each document set forth on Schedules 5.12(a) and 5.13 and a
true, correct and complete written description of each oral arrangement so
listed, including all rights, obligations and other material terms.  Sellers have delivered to Purchaser accurate
copies of each form used by any Subject Entity in the conduct of its respective
businesses.

5.14         Licenses. 
Schedule 5.14 sets forth a true, correct and complete list of all
Licenses held by any Subject Entity (including the Assumed Licenses).  All the Licenses so listed are in full force
and effect and no Subject Entity has received any notice that any such License
may be revoked or canceled.  None of the
Licenses have been modified in any way that is reasonably likely to have a
Material Adverse Effect.  Except for the
Licenses set forth on Schedule 5.14, there are no Licenses, whether
federal, state, local or foreign, that are necessary for the lawful operation
of the respective businesses of the Subject Entities.

5.15         Insurance. 
Schedule 5.15 sets forth a true, correct and complete list of all
policies of fire, liability, medical, workers’ compensation, title and other
forms of insurance owned, held by or applicable to any Subject Entity or any of
its respective assets or businesses, and Sellers

 

40

 

have heretofore
delivered to Purchaser true, correct and complete copies of all such policies,
including all occurrence-based policies applicable to any Subject Entity or its
respective assets or businesses for all periods prior to the Closing Date.  All such policies are valid, in full force
and effect and enforceable, all premiums with respect thereto covering all
periods up to and including the Closing Date have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.

5.16         Employee Benefit Plans
and Employment Agreements.

(a)           General.  Except as set forth on Schedule 5.16,
none of the Subject Entities or any of their ERISA Affiliates maintains, sponsors,
is a party to, participates in, has a commitment to create or has any liability
or contingent liability with respect to:

(i)                              any “employee welfare benefit plan” or “employee
pension benefit plan” as those terms are respectively defined in sections 3(1)
and 3(2) of ERISA, other than a “multiemployer plan” (as defined in section
3(37) of ERISA) (referred to collectively herein as “Plans”);

(ii)                           any retirement or deferred compensation
plan, incentive compensation plan, stock plan, retention plan or agreement,
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance (including health, life or disability insurance) or
hospitalization program or any other fringe benefit arrangement for any current
or former employee, director, consultant or agent, whether pursuant to
Contract, arrangement, custom or informal understanding, that does not
constitute an “employee benefit plan” (as defined in section 3(3) of ERISA)
(referred to collectively herein as “Arrangements”);
or

(iii)                        any employment agreement or consulting agreement of
any type, including any noncompete or severance agreements (referred to
collectively herein as “Employment Agreements”).

(b)           Plan
Documents and Reports.  A true,
correct and complete copy of each of the Plans, Arrangements and Employment
Agreements set forth on Schedule 5.16 (collectively, the “Benefit
Plans”), and all Contracts relating thereto, or to the funding thereof,
including all trust agreements, insurance contracts, administration contracts, investment
management agreements, subscription and participation agreements and record
keeping agreements, each as currently in effect, has been provided to
Purchaser.  In the case of any Benefit
Plan that is not in written form, Purchaser has been supplied with a true,
correct and complete description of such Benefit Plan as currently in effect,
including all material terms of such Benefit Plan.  A true, correct and complete copy of the most
recent annual report, actuarial report, accountant’s opinion of the plan’s
financial statements, summary plan description and IRS determination letter
with respect to each Benefit Plan, to the extent applicable, and a current
schedule of assets (and the fair market value thereof assuming liquidation of
any asset that is not readily tradable)

 

41

 

held with respect to any funded Benefit Plan has been supplied to
Purchaser, and there have been no material changes in the financial condition
in the respective Benefit Plans from that stated in the annual reports and
actuarial reports supplied.

(c)           Compliance
with Laws; Liabilities.  As to all
Benefit Plans:

(i)                              each Benefit Plan complies and has been
administered in form and in operation in all material respects in accordance
with its terms and with all requirements of Law applicable thereto (including,
in the case of any Benefit Plan that is an employee pension benefit plan, the
requirements of sections 401(a) and 501(a) of the Code), and no event has
occurred that will or could cause any such Benefit Plan to fail to comply with
such requirements and no notice has been issued by any Governmental Authority
questioning or challenging such compliance;

(ii)                           each Benefit Plan that is an employee
pension benefit plan (as defined in section 3(2) of ERISA) is the subject of a
favorable determination letter issued by the IRS with respect to the qualified
status of such plan under section 401(a) of the Code and the tax-exempt status
of any trust that forms a part of such plan under section 501(a) of the Code;
and no event has occurred that will or could give rise to disqualification of
any such plan under such sections or to a Tax under section 511 of the Code;

(iii)                        there are no outstanding, unresolved “prohibited
transactions” (as described in section 406 of ERISA or section 4975 of the
Code) with respect to any Benefit Plan and none of the Subject Entities or any
of their ERISA Affiliates has engaged in any prohibited transaction;

(iv)                       there have been no acts or omissions by
any of the Subject Entities or any of their ERISA affiliates that have given
rise to or may give rise to fines, penalties, taxes or related charges under
section 502 of ERISA or Chapters 43, 47, 68 or 100 of the Code for which any of
the Subject Entities or any of their ERISA Affiliates may be liable;

(v)                          none of the payments contemplated by the
Benefit Plans would, in the aggregate, constitute excess parachute payments as
defined in section 280G of the Code affecting any employee of the Subject
Entities (without regard to subsection (b)(4) thereof) or would exceed the
amount deductible pursuant to section 162(m) of the Code;

(vi)                       Except as set forth in Schedule
5.16(c), there are no actions, suits or claims (other than routine claims
for benefits) pending or

 

42

 

threatened involving any Benefit Plan or the assets thereof, and no
facts exist that could give rise to any such actions, suits or claims (other
than routine claims for benefits);

(vii)                    with respect to each Benefit Plan subject to Title IV of ERISA;

1.             no
steps have been taken to terminate any
such Benefit Plan;

2.             there
has been no withdrawal (within the meaning of section 4063 of ERISA) of a “substantial
employer” (as defined in section 4001(a)(2) of ERISA);

3.             no
event or condition has occurred which might constitute grounds under section
4042 of ERISA for the termination of or the appointment of a trustee to
administer any such Benefit Plan; and

4.             if each such Benefit Plan were terminated
immediately after the Closing, there would be no unfunded liabilities with
respect to any such Benefit Plan, its participants or beneficiaries or the
Pension Benefit Guaranty Corporation (the “PBGC”).

(viii)        each
Benefit Plan that constitutes a “group
health plan” (as defined in section 607(1) of ERISA or section 4980B(g)(2) of
the Code), including any plans of current and former Affiliates that must be
taken into account under section 4980B and 414(t) of the Code or sections
601-608 of ERISA, have been operated in compliance with applicable Laws,
including the continuation coverage requirements of section 4980B of the Code
and section 601 of ERISA and the portability and nondiscrimination requirements
of sections 9801 and 9802 of the Code and sections 701-707 of ERISA, to the extent
such requirements are applicable;

(ix)           actuarially
adequate accruals for all obligations
under the Benefit Plans are reflected in the Financial Statements;

(x)            there
has been no act or omission that would
impair the right or ability of any of the Subject Entities or any of their
ERISA Affiliates (or any successor thereto) to unilaterally amend or terminate
any Benefit Plan; and

(xi)           Sellers
have satisfied all of the reporting and disclosure requirements of Title I of
ERISA with respect to each Benefit Plan.

(d)           Multiemployer
Plans.  None of the Subject Entities
is a party to, participates in, contributes to , has contributed to or has any
liability or contingent liability with respect to any multiemployer plan (as
defined in section 3(37) of ERISA) and no event has occurred which is
reasonably likely to cause any of the Subject Entities to have any liability
with respect to any multiemployer plan.

 

43

 

5.17         Employment and Labor Matters.

(a)           Schedule
5.17(a) sets forth a true, correct and complete list of the names, titles
or job descriptions, full-time or part time status, annual compensation or
hourly rate schedule and all bonuses and similar payments made with respect to
each such individual for the preceding fiscal year for all directors, officers
and employees of any Asset Seller.

(b)           All
Employees are employed by the Subject Entities.

(c)           Each
Subject Entity has conducted and currently is conducting its respective
business in compliance with all Laws relating to employment and employment
practices, terms and conditions of employment, wages and hours and
nondiscrimination in employment.

(d)           Since
December 31, 2001 there has been, no labor strike, dispute, slow-down, work
stoppage or other labor difficulty pending, or to the knowledge of Parent and
Sellers, threatened against or involving any Subject Entity.

(e)           No
employee of any Subject Entity is covered by any collective bargaining
agreement, no collective bargaining agreement is currently being negotiated and
no attempt is currently being made or since December 31, 2001 has been made to
organize any employees of any Subject Entity to form or enter a labor union or
similar organization.

5.18         Capital Improvements and
Significant Non-Capital Expenditures.

(a)           Set
forth on Schedule 5.18(a) is a true, correct and complete list of all of
the capital improvements or purchases or other capital expenditures that any
Subject Entity has committed to or contracted for and that have not been
completed prior to the date hereof and the cost and expense reasonably
estimated to complete such work and purchases.

(b)           Set
forth on Schedule 5.18(b) is a true, correct and complete list of each
non-capital expenditure or purchase in excess of $100,000 (excluding
non-capital expenditures in the ordinary course) that any Subject Entity has
committed to or contracted for and that has not been completed prior to the
date hereof and the cost and expense reasonably estimated to complete such work
and purchases.

5.19         Taxes.

(a)           Each
Subject Entity has timely filed all Tax Returns that it is required to file,
and each such Tax Return was true and correct in all material respects when
filed.  All Taxes due and payable have
been timely paid or shall be timely paid by each Subject Entity or, if not yet
payable, such Taxes have been or will be adequately accrued and reflected in
the Financial Statements and the Closing Balance Sheets.

(b)           Except
as set forth on Schedule 5.19:

 

44

 

(i)            there
is no action, suit, proceeding, investigation, audit, claim or assessment
presently pending or, to the knowledge of Parent and Sellers, threatened, with
regard to any Taxes that relate to any Subject Entity;

(ii)           no
issue has arisen in any examination of any Subject Entity by any Governmental
Authority that if raised with respect to any other period not so examined would
result in a material deficiency for any other period, if upheld;

(iii)          no
position has been taken on any Tax Return (for a taxable period for which the
statute of limitations for the assessment of tax has not expired) of any
Subject Entity that is contrary to any publicly announced position of a
Governmental Authority;

(iv)          all
Taxes that any Subject Entity is required by Law to withhold or collect, including
sales and use Taxes, and amounts required to be withheld for Taxes of
employees, have been duly withheld or collected and, to the extent required,
have been paid over to the proper Governmental Authorities or are held in
separate bank accounts for such purpose;

(v)           no
Subject Entity is a party to any Tax sharing agreement, nor is any Subject
Entity (other than First Capitol and the Funds) subject to any joint venture,
cooperative, partnership or other arrangement or contract that is treated as an
entity (including a partnership) for Federal income tax purposes; and

(vi)          Sellers
and the Acquired Corporations have taken such action as necessary with respect
to all Benefit Plans to ensure that no Employee is subject to taxes or
penalties under Section 409A of the Code.

(c)           None
of the assets of the Subject Entities constitute tax-exempt bond financed
property or tax-exempt use property within the meaning of Section 168 of the
Code, and none of the assets reflected on the Financial Statements is subject
to a lease, safe harbor lease or other arrangement as a result of which an
entity other than a Subject Entity is treated as the owner of the asset for
Federal income tax purposes.

(d)           No
US Entity Shareholder is a “foreign person” as defined in Section 1445(f)(3) of
the Code.  None of the Assets to be sold
by any Asset Seller that is a “foreign person” as defined in Section 1445(f)(3)
of the Code constitutes a “United States real property interest” as defined in
Treasury Regulation Section 1.897-1(c).

(e)           Except
as set forth on Schedule 5.19(e), No Subject Entity has made or become
obligated to make, and no Subject Entity will as a result of any event
connected with any transaction contemplated herein become obligated to make,
any payments that could be nondeductible by reason of Section 280G or 162(m) of
the Code.

(f)            None
of the Acquired Corporations, Acquired Corporation Subsidiaries or Funds is
required to include in income any adjustment pursuant to Section 481(a) of the
Code by reason of a voluntary change in accounting method initiated by any
Acquired Corporation, any Acquired Corporation Subsidiary or any Fund, and to
the knowledge of

 

45

 

Parent and Sellers, the IRS has not proposed any such adjustment or
change in accounting method.

(g)           None
of the Funds has or could have any liability for Taxes of any Person other than
itself under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law).

(h)           All
transactions between any Subject Entity and any Affiliate of any Subject Entity
have been conducted on an arm’s length basis.

(i)            Except
as set forth on Schedule 5.19(i), none of the Acquired Corporations, any
Acquired Corporation Subsidiary or any Fund has requested or received a ruling
related to Tax from any Governmental Authority or signed a closing or other
agreement related to Tax with any Governmental Authority that would affect any
taxable period after the Closing Date.

(j)            No
Subject Entity has engaged in, or is a party to, (i) any “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4, or a
transaction substantially similar to a reportable transaction or (ii) any “tax
shelter” within the meaning of Section 6662 of the Code.

(k)           Each
of the Subject Entities has obtained appropriate exemption certificates for all
material transactions treated as nontaxable for sales Tax purposes.

(l)            None
of the Acquired Corporations, any Acquired Corporation Subsidiary or any Fund
has entered into any transaction or arrangement outside the normal course of
business that would have the effect of deferring recognition of income for Tax
purposes to periods ending after the Closing Date or accelerating deductions to
periods ending on or prior to the Closing Date.

(m)          Each
Fund is classified as a partnership and not as an association taxable as a
corporation for U.S. federal income Tax purposes, and no election has ever been
made to treat any Fund as a corporation for state or federal income Tax
purposes.

(n)           In the
past five years, no Acquired Corporation or Acquired Corporation Subsidiary has
been a party to a transaction that has been reported as a reorganization within
the meaning of Section 368 of the Code, or distributed a corporation (or been
distributed) in a transaction that is reported to qualify under Section 355 of
the Code.

(o)           No
claim has ever been made by a Governmental Authority in a jurisdiction  where any Acquired Corporation, Acquired
Corporation Subsidiary or Fund does not file Tax Returns that such Acquired
Corporation, Acquired Corporation Subsidiary or Fund is or may be subject to
Tax in that jurisdiction.

 

46

 

5.20         No Defaults or Violations;
Registrations. 
Except as set forth on Schedule 5.20:

(a)           since
January 1, 2003, no Subject Entity has materially breached any provision of, or
is in material default under the terms of, any Contract or License to which it
is a party or under which it has any rights or by which it is bound (including
the Assumed Contracts and Assumed Licenses), no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a material breach of, or a material default under, any such Contract
or License by any Subject Entity and, to the knowledge of Parent and Sellers,
no other party to any such Contract or License has materially breached any
provision of, or is in material default under the terms of, any such Contract
or License;

(b)           each
Subject Entity is in material compliance with all Laws applicable to or binding
on such Subject Entity or any of its respective assets or properties
(including, as applicable, the Assets), and no condition exists or event has
occurred that, with or without notice or the passage of time or both, would
constitute a material violation under any such Law; and

(c)           since
January 1, 2003, no notice from any Governmental Authority has been received by
any Subject Entity claiming any violation of any Law (including any building,
zoning or other ordinance) or requiring any work, construction or expenditure,
or asserting any Tax, assessment or penalty.

(d)           Without
limiting the generality of the preceding paragraphs, each Subject Entity:

(i)            has,
since January 1, 2003, complied in all material respects with all federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders and decrees applicable to the Business or to the employees
thereof and with the applicable rules of all Self-Regulatory Organizations including
(A) all applicable regulatory net capital requirements, including SEC Rule
15c3-1 and, as applicable, the “early warning” and “expansion-contraction”
capital requirements of any Governmental Entity, including Self-Regulatory
Organizations, (B) the provisions of the Foreign Corrupt Practices Act of 1977,
as amended, and the rules and regulations thereunder, (C) the provisions of the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and the rules
and regulations thereunder, and (D) the Currency and Foreign Transactions
Reporting Act of 1970 (Bank Secrecy Act) and the rules and regulations
thereunder;

(ii)           is
not the subject of any pending or threatened, material investigation, review or
disciplinary proceedings of any Governmental Authority or Self-Regulatory
Organization that relates to any Subject Entity or any of its respective
directors, officers or employees; and

 

47

 

(iii)          is
not subject to a “statutory disqualification” as defined in Section 3(a)(39) of
the Exchange Act, and none of the Transferred Employees is subject to such a
statutory disqualification, and the transfer of the Transferred Employees will
not subject Purchaser to such a statutory disqualification.  There is no current investigation, whether
formal or informal, preliminary or otherwise, that is reasonably likely to
result in any such statutory disqualification in respect of any of the subjects
covered by this Section 5.22.

(e)           Schedule
5.20(e) lists each current registration of each Subject Entity as (i) a
broker-dealer with the SEC, the securities commission or similar authority of
any State and any Self-Regulatory Organization and (ii) as a futures commission
merchant.  Each such registration is in
full force and effect.  The Subject
Entities have made available to Purchaser a true and complete copy of the
Subject Entities’ currently effective Forms BD as filed with the SEC, currently
effective Forms 7-R registration with the United States Commodity Futures
Trading Commission, current composite Forms BD filings with the SEC, Focus
Reports and annual audits and all other material reports filed by the Asset
Sellers with the SEC or any Self-Regulatory Organization within the last three
years, and will make available to Purchaser such material forms and reports as
are filed from and after the date hereof and prior to the Closing Date.  To the knowledge of Parent and Sellers, the
information contained in such forms and reports was true and complete in all
material respects as of the time of filing.

(f)            No
Subject Entity is subject to registration under the Investment Advisers Act
except for CIS Cash Management, or the Investment Company Act.  No Subject Entity except for CIS Cash
Management is, or has been during the past five years, an “investment adviser”
or a “commodity trading advisor” within the meaning of the Investment Advisers
Act and the Commodity Exchange Act, respectively, required to be registered,
licensed or qualified as an investment adviser under the Investment Advisers
Act or any similar applicable state law or subject to any material liability or
disability by reason of any failure to be so registered, licensed or qualified.

(g)           To
the knowledge of Parent and Sellers, each Fund has conducted its operations in
accordance with the material provisions of the Fund’s constituent documents,
and the material descriptions included in the Fund’s Offering Memorandum.

(h)           CIS
Investments is registered as a commodity pool operator with the CFTC and is a
duly qualified member in good standing of the National Futures Association (the
“NFA”).

(i)            To
the knowledge of Parent and Sellers, each Fund is in material compliance with
all applicable statutes, ordinances, orders, rules, regulations, by-laws and
policies promulgated by any Governmental Authority or Self-Regulatory
Organization, including the NFA, which apply to the Fund’s conduct or to the
employees conducting the Fund’s activities. 
No Fund has, since January 1, 2003, entered into or been subject to any
judgment, consent decree, or administrative order with respect to any aspect of
the business, affairs, properties or assets of the Fund or, as of the date
hereof, received any notice of the institution against the Fund of any civil,
criminal or

 

48

 

administrative action, suit, proceeding or investigation from any
Governmental Authority or Self-Regulatory Organization with respect to any
aspect of the business, affairs, properties or assets of the Fund.

(j)            No
“principals” of CIS Investments (as defined in Section 8a(2) of the Commodity
Exchange Act), are subject to any of the provisions of Section 8a that would
permit the CFTC to refuse to register or to suspend or revoke the registration
of any of them or their respective principals. 
There is no current investigation by the CFTC, whether formal or
informal, or whether preliminary or otherwise, that is reasonably likely to
result in, any such censure, limitations, suspension or revocation.

(k)           CIS
Investments has established written supervisory procedures that are reasonably
designed to prevent and detect any violation of Laws relating to the Funds’
current operation, as applicable, and that include financial, operational,
trading, money laundering, internal control and risk control procedures.  A true and correct copy of such procedures
will be provided to Purchaser.  Each Fund
has at all times maintained and continues to maintain, all books and records
required by applicable Laws and has at all times filed all reports required by
applicable Laws.

5.21         Environmental Matters.  Except as set forth on Schedule 5.21,
each Subject Entity is in material compliance with, and in the last two years
has been in compliance with, all Environmental Laws, and no condition exists or
event has occurred that, with or without notice or the passage of time or both,
would constitute a violation of or give rise to any liability, obligation,
material expenditure or Lien under any Environmental Law.  There are no, and no Subject Entity or
predecessor of any Subject Entity has used, generated, treated, handled,
transported, stored or disposed of, or arranged for disposal or treatment of,
any Hazardous Substances in, on, or at any of the Leased Real Property, or any
real property formerly owned, leased or operated by any Subject Entity or any
predecessor of any Subject Entity, and no Hazardous Substances have been used
in the construction or repair of, or any alterations or additions to, any of
the Leased Real Property;

5.22         Litigation.

(a)           Except
as set forth on Schedule 5.22(a), there are no claims, actions, suits,
proceedings, arbitrations, investigations or other litigation pending or, to
the knowledge of Parent or Sellers, threatened against or affecting any Subject
Entity or any of its officers, directors, partners, employees, agents or
shareholders in their capacity as such, or any of its respective properties
(including the Assets) or businesses, and none of Parent nor any Seller is
aware of any facts or circumstances that may give rise to any of the
foregoing.  Except as set forth on Schedule
5.22(a), all of the proceedings, pending or, to the knowledge of Parent or
Sellers, threatened, against any Subject Entity are fully covered by insurance
policies (or other indemnification agreements with third parties) and are being
defended by the insurers (or such third parties), subject to such deductibles
as are set forth on such Schedule. 
Except as set forth on Schedule 5.22(a), no Subject Entity is
subject to any order, judgment, decree, injunction, stipulation or consent
order of or with any court or other Governmental Authority.  No Subject Entity has entered into any
agreement to settle or compromise any proceeding pending or threatened against
it

 

49

 

that has involved any obligation other than the payment of money or for
which any Subject Entity has any continuing obligation.

(b)           Except
as set forth on Schedule 5.22(b), there are no claims, actions, suits,
proceedings, arbitrations, investigations or other litigation pending or, to
the knowledge of Parent or Sellers, threatened by or against any Subject
Entity, or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby, and none of Parent nor any Seller has any reason to believe that there
is a valid basis for any such claim, action, suit, proceeding,
arbitration,  investigation or other
litigation.

(c)           The
Business (i) is not subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or commitment letter or similar
submission to, and (ii) has not received any sanction or extraordinary
supervisory letter from, or adopted any board resolutions at the request of,
any Self-Regulatory Organization or Governmental Authority charged with the
supervision or regulation of broker-dealers or the supervision of the Business
(each such item referred to in clauses (i) and (ii) of this Section 5.22(c),
a “Regulatory Order”) including any such Regulatory Order that restricts
the conduct of the Business, or in any manner relates to its capital adequacy,
credit policies or management.  With
respect to the Business, none of Parent nor any Sellers has been advised by any
Governmental Authority or Self-Regulatory Organization that such authority or
organization is contemplating issuing or requesting any such Regulatory Order.

 

5.23         No Conflict of Interest.  Except as set forth on Schedule 5.23,
no Seller nor any of its or his Affiliates has or claims to have any direct or
indirect interest in any tangible or intangible property used in the business
of any Subject Entity, except for the Shareholders as holders of Shares or each
Asset Seller as an owner of Assets. 
Except as set forth on Schedule 5.23, no Seller nor any of its
Affiliates has any direct or indirect interest in any other Person that
conducts a business similar to, has any Contract or arrangement with, or does
business or is involved in any way with, any Subject Entity or Fund, except for
the ownership of less than one percent (1%) of the outstanding shares of any
class of capital stock of any Person listed on a national securities exchange
or quoted on the National Association of Securities Dealers Automated Quotation
System or over-the-counter.  Schedule
5.23 sets forth a true, correct and complete description of all such
Persons, interests, Contracts, arrangements and other matters.

5.24         Bank Accounts.  Schedule 5.24 sets forth a true,
correct and complete list of the names and locations of each bank or other
financial institution at which the Acquired Corporations or any  Acquired Corporation Subsidiary has an
account (giving the account numbers) or safe deposit box and the names of all
Persons authorized to draw thereon or have access thereto, and the names of all
Persons, if any, now holding powers of attorney or comparable delegation of
authority from the Acquired Corporation or any Acquired Corporation Subsidiary
and a summary statement thereof.

 

50

 

5.25         Customers.

(a)           Schedule
5.25(a) sets forth a true, correct and complete list of the one hundred
(100) largest customers of the Subject Entities taken as a whole, in terms of
revenue in the period from January 1, 2005 through May 31, 2005 (collectively,
the “Major Customers”), showing the total revenue received in each such
period from each such Major Customer.

(b)           Except
as set forth on Schedule 5.25(b), there have been no customer complaints
received by any Subject Entity during each of the 2003, 2004 and 2005 calendar
years.

(c)           Except
as set forth on Schedule 5.25(c), since December 31, 2004, there has
been no adverse change in the business relationship, and there has been no
material dispute, between any Subject Entity (on the one hand) and any Major
Customer (on the other hand), and there are no indications or reasons to
believe that (A) there will be any such adverse change or dispute or (B) any
Major Customer intends to reduce the scope or volume of its relationship with
any Subject Entity or the Business.

5.26         Improper and Other Payments.  (a) No Subject Entity, or director, officer,
employee, agent or representative of any Subject Entity, or  Person acting on behalf of any of them, has
made, paid or received any bribes, kickbacks or other similar payments to or
from any Person, whether lawful or unlawful, (b) no contributions have been
made by any Subject Entity, directly or indirectly, to a domestic or foreign
political party or candidate, (c) no improper foreign payment (as defined in
the Foreign Corrupt Practices Act) has been made by any Subject Entity or any
director, officer, employee, agent or representative of any Subject Entity, or
any Person acting on behalf of any of them, and (d) the internal accounting
controls of the Subject Entity are adequate to detect any of the foregoing.

5.27         Brokers. 
None of Parent or any Subject Entities has used any broker or finder in
connection with the transactions contemplated hereby, and neither Purchaser nor
any Affiliate of Purchaser (including, from and after the Closing, the Acquired
Corporations and any Acquired Corporation Subsidiary) has or shall have any
liability or otherwise suffer or incur any Loss as a result of or in connection
with any brokerage or finder’s fee or other commission of any Person retained
by Parent, Sellers or any Subject Entity or any of their Affiliates in
connection with any of the transactions contemplated by this Agreement or the
Related Agreements.

5.28         Accounting and Disclosure
Controls.  Each Subject Entity
maintains and complies with a system of controls sufficient to provide
reasonable assurances that: (a) the Business is operated in accordance with
management’s general or specific authorization; (b) transactions are recorded
as necessary to permit preparation of the consolidated financial statements of
the Acquired Corporations and the Acquired Corporation Subsidiaries or the
consolidated financial statements of the Asset Sellers, as applicable, in each
case, in conformity with GAAP and to maintain accountability for assets; (c)
access to assets is permitted only in accordance with management’s general or
specific authorization; (d) the reporting of assets is compared with existing
assets at regular intervals and appropriate action is taken with respect to any
differences; (e) material information relating to such Subject Entity is
promptly made known to the officers

 

51

 

responsible for establishing and maintaining the system of internal
control over financial reporting; and (f) any significant deficiencies or
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to materially and adversely
affect the ability to record, process, summarize and report financial
information, and any fraud whether or not material that involves management or
other employees who have a significant role in respect of internal control over
financial reporting, are adequately and promptly disclosed to the independent
accountants and management of such Subject Entity.

5.29         Benefit Plan Investors.  Participation in each Fund by “benefit plan
investors” is not “significant”, as such terms are defined in 29 C.F.R.
2510.3-101.

5.30         Reports. 
Each Fund has timely filed all reports, registrations, offering
memoranda, statements and other filings, together with any amendments required
to be made with respect thereto concerning the Fund, that were required to be
filed with any Governmental Authority or any Self-Regulatory Organization (all
such reports, and statements being collectively referred to herein as the “Reports”).  To the knowledge of Parent, each of the
Reports, when filed, complied as to form with all applicable statutes, rules,
regulations and orders (whether or not enforced or promulgated by the
Governmental Authority with which they were filed) and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

5.31         Accuracy of Statements.  To the knowledge of Parent or Sellers,
neither this Agreement nor any schedule or certificate provided or to be
provided by or on behalf of any Seller or any Asset Seller to Purchaser or any
representative or Affiliate of Purchaser in connection with this Agreement, any
Related Agreement or any of the transactions contemplated hereby or thereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.

5.32         UK Warranties.  Except as set forth on Schedule 5.32,
each of the representations and warranties set forth on the UK Warranties
Schedule is true and correct.

ARTICLE 6.

REPRESENTATIONS AND
WARRANTIES OF PURCHASER

Purchaser represents and warrants to each Parent, as of the date of
this Agreement and as of the Closing (as if such representations and warranties
were remade at and as of the Closing), as follows:

6.1           Due Organization.  Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all requisite power and authority to own, lease and operate its
properties and to carry on its business as they are now being owned, leased,
operated and conducted.

6.2           Due Authorization.  Purchaser has full power and authority to
enter into this Agreement and its Related Agreements and to consummate the transactions
contemplated hereby

 

52

 

and thereby.  The execution,
delivery and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly approved by the board of
directors of Purchaser, and no other actions or proceedings on the part of
Purchaser are necessary to authorize this Agreement, its Related Agreements and
the transactions contemplated hereby and thereby.  Purchaser has duly and validly executed and
delivered this Agreement and has duly and validly executed and delivered (or
prior to or at the Closing will duly and validly execute and deliver) its
Related Agreements.  This Agreement
constitutes legal, valid and binding obligations of Purchaser, and Purchaser’s
Related Agreements upon execution and delivery by Purchaser will constitute
legal, valid and binding obligations of Purchaser, in each case, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors’ rights
generally, and by equitable limitations on the availability of specific
remedies.

6.3           Consents and Approvals; Authority
Relative to this Agreement.

(a)           Except
as set forth on Schedule 6.3, no consent, authorization or approval of,
filing or registration with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery and performance by Purchaser of this Agreement and its
Related Agreements and the consummation by Purchaser of the transactions
contemplated hereby and thereby.

(b)           Except
as set forth on Schedule 6.3, the execution, delivery and performance by
Purchaser of this Agreement and its Related Agreements, and the consummation by
Purchaser of the transactions contemplated hereby and thereby, do not and will
not (i) violate any Law applicable to or binding on Purchaser or any of its
assets or properties; (ii) violate or conflict with, result in a breach or
termination of, constitute a default or give any third party any additional
right (including a termination right) under, permit cancellation of, result in
the creation of any Lien upon any of the assets or properties of Purchaser
under, or result in or constitute a circumstance that, with or without notice
or lapse of time or both, would constitute any of the foregoing under, any
Contract to which Purchaser is a party or by which Purchaser or any of its
assets or properties are bound; (iii) permit the acceleration of the maturity
of any indebtedness of Purchaser or indebtedness secured by its assets or
properties; or (iv) violate or conflict with any provision of Purchaser’s
Articles of Incorporation or by-laws.

6.4           Litigation.  There are no claims,
actions, suits, proceedings, arbitrations, investigations or other litigation
pending or, to the knowledge of Purchaser, threatened by or against Purchaser
or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby, and Purchaser has no reason to believe that there is a valid basis for
any such claim, action, suit, proceeding, arbitration, investigation or other
litigation.

6.5           Brokers. 
Purchaser has used no broker or finder in connection with the
transactions contemplated hereby, and none of Parent, Sellers nor their
respective Affiliates has or shall have any liability or otherwise suffer or
incur any Loss as a result of or in connection

 

53

 

with any brokerage or finder’s fee or other commission of any Person
retained by Purchaser or any of its Affiliates in connection with any of the
transactions contemplated by this Agreement or the Related Agreements.

ARTICLE 7.

COVENANTS

7.1           Implementing Agreement.  Subject to the terms and conditions hereof,
each party hereto shall take all action required of it to fulfill its
obligations under the terms of this Agreement and shall otherwise use all
reasonable best efforts to facilitate the consummation of the transactions
contemplated hereby.  Sellers and Parent
agree that unless this Agreement is terminated in accordance with the
provisions of Section 11.1, Sellers and Parent will not take any action
that would have the effect of preventing or impairing the performance by Parent
of its respective obligations under this Agreement.  Without limiting the generality of the
foregoing, (i) Parent shall cause the Shareholders and the Acquired
Corporations to execute at its own cost and expense such documents as Purchaser
considers necessary to transfer the legal and beneficial ownership in the
Shares to Purchaser and secure Purchaser the rights attaching to the Shares and
(ii) Parent shall cause the Shareholders to irrevocably waive and procure the
waiver of all rights of preemption over or other rights to restrict the
transfer of the Shares conferred either by the articles of incorporation,
articles of association or similar constituent documents of the Acquired
Corporations or in any other way.

7.2           Access to Information and
Facilities.

(a)           From
and after the date of this Agreement until the Closing, Parent shall cause the
Subject Entities to (i) upon reasonable notice to Parent, give Purchaser and
Purchaser’s representatives reasonable access to all of the facilities,
properties, books, records and Contracts of the Subject Entities, (ii) upon
reasonable notice to Parent, make the directors, officers and employees of the
Subject Entities available to Purchaser and its representatives as Purchaser
and its representatives shall from time to time reasonably request and (iii)
provide Purchaser and its representatives with any and all information
concerning the Subject Entities that Purchaser or its representatives
reasonably request.

(b)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, Parent shall cause the Subject Entities to
permit Purchaser’s officers, executives and other Representatives to meet with
the officers, executives and other Representatives of any Subject Entity
responsible for (i) the consolidated financial statements of the Subject
Entities (including, in each case, any notes thereto) or (ii) the internal
controls of any Subject Entity and the disclosure controls and procedures of
any Subject Entity for the purpose of discussing such matters as Purchaser may
deem reasonably necessary or appropriate.

(c)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, upon reasonable notice to Parent, Parent
shall cause the Subject Entities to, permit Purchaser’s Representatives to have
access to any of the facilities of any Subject Entity or any remote location where
any information and records

 

54

 

of any such Person are maintained or processed for the purposes of
training personnel, gathering information about the Business and preparing for
the consummation of the transactions contemplated by this Agreement.  Purchaser agrees that Parent shall not be
required to cause the Subject Entities to permit any actions by Purchaser under
this Section 7.2(c) that would materially disrupt the operations of any
Subject Entity.

(d)           Without
limiting the generality of Section 7.2(a), from and after the date of
this Agreement until the Closing, Parent shall cause the Subject Entities to
give Purchaser and its Representatives reasonable access during normal business
hours and upon reasonable notice to Parent to the Leased Real Property to
perform such environmental and other tests, at Purchaser’s sole expense, as
Purchaser or its representatives may reasonably determine.

7.3           Preservation of Business.

(a)           From
the date of this Agreement until the Closing, Parent shall cause the Subject Entities
to operate only in the ordinary and usual course of business and consistent
with past practice, and shall use reasonable best efforts to (i) preserve
intact the present business organization and personnel of the Subject Entities
and the Funds, (ii) preserve the goodwill and advantageous relationships of the
Subject Entities and Funds with customers, suppliers, employees, independent
contractors and other Persons material to the operation of their respective
businesses, (iii) prevent any event that could have a Material Adverse Effect
and (iv) not permit any action or omission that would cause any of the
representations or warranties of any Seller or Parent contained herein or in
any of its Related Agreements to become inaccurate or any of the covenants of
any Seller or Parent contained herein or in any of its Related Agreements to be
breached; provided, however, that anything contained in this Section
7.3 notwithstanding, (x) the Asset Sellers and Shareholders shall be
entitled to distribute to Parent, immediately prior to the Closing, an amount
in Cash equal to the Sellers’ good faith estimate of the amount by which the
Net Asset Amount will exceed $150 million as of the Closing and (y) the Asset
Sellers and Shareholders shall be entitled to take such actions, after
consultation with and upon the prior approval of Purchaser, as are outlined on Schedule
7.3(a) hereto in order to effect the transfer of certain Assets into CIS
Limited prior to the Closing.

(b)           Without
limiting the generality of Section 7.3(a), prior to the Closing, Parent
shall not permit any Asset Seller, any Acquired Corporation, any Acquired
Corporation Subsidiary or any Fund to, without the prior written consent of
Purchaser:

(i)            incur
any obligation or enter into any Contract that would be required to be
disclosed on Schedule 5.14 or Schedule 5.15;

(ii)           take
any action, or enter into or authorize any Contract or transaction, other than
in the ordinary course of business and consistent with past practice;

 

55

 

(iii)          sell,
transfer, convey, assign or otherwise dispose of any of its assets or
properties, except sales of inventory in the ordinary course of business and
consistent with past practice;

(iv)          except
as set forth on Schedule 7.3(b)(iv), waive, release, settle or cancel
any claims against third parties or debts owing to it, or any rights that have
any value;

(v)           make
any changes in its accounting systems, policies, principles, practices or
methods;

(vi)          enter
into, authorize or permit any transaction with any other Subject Entity or any
Affiliate of any Subject Entity other than in the ordinary course of business
and consistent with past practice;

(vii)         suffer
or permit the creation of any Lien over any assets of any Subject Entity (including,
with respect to the Asset Sellers, any of the Assets);

(viii)        make
any borrowings, incur any debt (other than trade payables in the ordinary
course of business and consistent with past practice), or assume, guarantee,
endorse (except for the negotiation or collection of negotiable instruments in
the ordinary course of business and consistent with past practice) or otherwise
become liable (whether directly, contingently or otherwise) for the obligations
of any other Person, or make any payment or repayment in respect of any
indebtedness (other than trade payables, indebtedness pursuant to subordinated
loans, and accrued expenses in the ordinary course of business and consistent
with past practice);

(ix)           make
any loans, advances or capital contributions to, or investments in, any other
Person;

(x)            terminate
any employee or hire any individual to be employed by any Subject Entity;

(xi)           enter
into, adopt, amend or terminate any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee, or
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any existing plan and
arrangement or enter into any Contract, agreement, commitment or arrangement to
do any of the foregoing;

(xii)          except
for capital expenditures contemplated by clause (xiii) below, acquire,
lease or encumber any assets outside the ordinary course of business or any
assets that are material to any Subject Entity;

 

56

 

(xiii)         authorize
or make any capital expenditures that individually or in the aggregate are in
excess of $100,000;

(xiv)        file
any amended Tax Return or any claim for refund of Taxes, amend any payment of
Taxes paid by or on behalf of any Subject Entity or any Fund, waive or extend
the statute of limitations in respect of any Taxes, make, revoke, or amend any
Tax election (other than the contemplated election to treat CIS Limited as a
branch of Cargill PLC for United States federal income tax purposes), change
any method of Tax accounting or Tax procedure or practice, or settle or
compromise any claim relating to Taxes;

(xv)         pay
any amount, perform any obligation or agree to pay any amount or perform any
obligation, in settlement or compromise of any suit or claim of liability
against any Subject Entity or any of its directors, officers, employees or
agents;

(xvi)        terminate,
modify, amend or otherwise alter or change any of the terms or provisions of
any Contract (other than immaterial modifications to customer contracts in the
ordinary course of business and consistent with past practice), or pay any
amount not required by Law or by any Contract; or

(xvii)       agree,
whether in writing or otherwise, to do any of the foregoing.

(c)           Without
limiting the generality of Section 7.3(a), except as set forth on Schedule
7.3(c), prior to the Closing, Parent shall not permit any Acquired
Corporation or any Acquired Corporation Subsidiary to, without the prior
written consent of Purchaser:

(i)            authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, convertible or
exchangeable securities, commitments, subscriptions, rights to purchase or
otherwise) any shares of its capital stock or any other securities of the
Acquired Corporations or any Acquired Corporation Subsidiary, or amend any of
the terms of any such capital stock or other securities;

(ii)           split,
combine or reclassify any shares of its capital stock, declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock, or redeem or
otherwise acquire any capital stock or other securities of the Acquired
Corporations or any Acquired Corporation Subsidiary;

(iii)          merge
into or with or consolidate with any other Person;

(iv)          make
any change in the Articles of Incorporation, by-laws or similar organizational
instruments of the Acquired Corporations or any Acquired Corporation Subsidiary;
or

(v)           agree,
whether in writing or otherwise, to do any of the foregoing.

 

57

 

7.4           Consents and Approvals.

(a)           From
the date of this Agreement until the Closing, Parent shall, and shall cause
each Seller to, use all reasonable best efforts to obtain all consents,
approvals, certificates and other documents required in connection with the
performance of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby, including all consents and
approvals set forth on Schedule 5.3 (and Purchaser shall cooperate with
Sellers and Parent in obtaining all such consents, approvals, certificates and
other documents); provided, that no contact
will be made by any Subject Entity (or any Representative thereof) with any
third party to obtain any such consent or approval except in accordance with a
plan previously agreed to in writing by Purchaser.  Parent shall promptly make or cause to be
made all filings, applications, statements and reports to all Governmental
Authorities and other Persons that are required to be made prior to the Closing
by or on behalf of any Subject Entity, or any of their respective Affiliates
pursuant to any applicable Law or Contract in connection with this Agreement,
the Related Agreements and the transactions contemplated hereby and thereby,
including all filings, applications, statements and reports set forth on Schedule
5.3 (and Purchaser shall cooperate with Sellers and Parent in making all such
filings, applications, statements and reports). 
Parent shall be obligated to pay any and all fees and other payments
that are required in order to obtain or make (i) all consents, approvals,
certificates and other documents and (ii) all filings, applications, statements
and reports, in the case of each of clauses (i) and (ii), that
are required to be obtained or made by Sellers or Parent in connection with the
performance of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby.  In furtherance and not in limitation of this Section
7.4(a), each party hereto agrees to make the appropriate HSR Act filings
and filings with the European Commission or other relevant jurisdiction for
regulatory or governmental clearance or approval required prior to Closing
under any competition, antitrust, control or other similar Law.  Notwithstanding the preceding sentences, the
parties hereto agree and acknowledge that Purchaser is responsible for payment
of the filing fees required by the HSR Act or by the European Commission or
other jurisdiction under any competition, antitrust, control or similar Law in
connection with the filings to be made by Purchaser and Sellers thereunder.

(b)           Without
limiting the generality of Section 7.4(a), if a consent or approval is
required by any party under any Assumed Contract or Assumed License and is not
obtained on or before the Closing or if an attempted assignment is ineffective,
the Subject Entities shall cooperate with Purchaser at Sellers’ and Parent’s
expense in any commercially reasonable arrangement requested by Purchaser to
provide for Purchaser the benefits under any such Contract or License.

(c)           Purchaser
shall promptly make all filings, applications, statements and reports to all
Governmental Authorities and other Persons that are required to be made prior
to the Closing by or on behalf of Purchaser or any of its Affiliates pursuant
to any applicable Law or Contract in connection with this Agreement, the
Related Agreements and the transactions contemplated hereby and thereby (and
Sellers shall cooperate, and shall cause the Acquired Corporations and the
Acquired Corporation Subsidiaries to

 

58

 

cooperate, with Purchaser in making all such filings, applications,
statements and reports).

7.5           Maintenance of Insurance.  From the date of this Agreement until the
Closing, Parent shall (a) cause the existing insurance coverage relating to the
Subject Entities or the Assets to continue through the Closing, and (b) not
allow any breach, default, termination or cancellation of such insurance
policies or agreements to occur or exist.

7.6           Resignation of Officers
and Directors.  Parent shall cause
each officer and member of the Board of Directors of the Acquired Corporations
and each Acquired Corporation Subsidiary to tender his resignation from such
position effective as of the Closing.

7.7           Supplemental Information.  From time to time prior to the Closing,
Parent shall disclose in writing to Purchaser any matter hereafter arising that
becomes known to Parent or any Subject Entity and any of its Affiliates and
that, if existing, occurring or known at the date of this Agreement would have
been required to be disclosed to Purchaser in connection with any of the
representations or warranties of Parent set forth in this Agreement.  No information provided to a party pursuant
to this Section 7.7 shall be deemed to cure any breach of any
representation, warranty or covenant made in this Agreement.

7.8           Confidentiality.  After the Closing, Parent shall, and shall
cause each of its and each Sellers’ Affiliates to, maintain all non-public or
confidential information, relating to any period of time before, at or after
the Closing, with respect to any Subject Entity or its  respective operations in strict confidence
and not disclose to any Person or use any such information for any purpose; provided, that such restrictions shall not
apply to (i) any information that becomes generally available to the public
after the Closing through no fault of any Seller, Parent or any of their
respective Affiliates, (ii) any information that after the Closing is
legitimately received by any Seller or Parent or any of their respective
Affiliates from a third party (provided such third party is not known by any
Seller, Parent or any of their respective Affiliates to be bound by an
obligation of secrecy) or (iii) any disclosure required by Law or any
Governmental Authority, so long as notice of such disclosure is given to
Purchaser prior to making such disclosure and Sellers and Parent cooperate with
Purchaser as Purchaser may reasonably request to resist such disclosure.

7.9           Exclusivity.  During the period from the date of this
Agreement to the earlier of the Closing or the date this Agreement is
terminated pursuant to Article 11, Parent shall not, and shall not
permit any Subject Entity (and Parent shall not permit any of its or the
Subject Entities’ Affiliates, directors, employees, officers, agents or
representatives to), directly or indirectly, solicit, initiate, condone,
knowingly encourage or respond to any inquiries, proposals or offers from, or
participate in any discussions or negotiations with, or provide any non-public
information to, or otherwise cooperate in any way with, any Person (other than
Purchaser and its directors, officers, employees, representatives and agents)
regarding (a) any merger, consolidation or sale or other disposition of any
capital stock of any Subject Entity or any of its Affiliates (including any
sale of any of the Shares) or (b) any sale or other disposition of all or any
substantial portion of the assets or properties of any Subject Entity or any of
Affiliates (or any unit or division thereof) (including any sale of any Assets
but excluding the sale of any inventory of any Subject Entity in the ordinary
course of business).  Parent shall
promptly advise

 

59

 

Purchaser of, and communicate to Purchaser the terms and conditions of
(and the identity of the Person making), any such inquiry, proposal or offer
received.

7.10         Use of Cargill Marks.  As promptly as reasonably practicable
following the Closing, Purchaser shall cause CIS Limited to take all necessary
action (including filing an amendment to its articles of organization or
similar organizational documents with all relevant Governmental Authorities) to
change its formal name so as to remove the word “Cargill”.  For not more than 90 days after the Closing
Date, each Subject Entity may, and Purchaser shall be permitted to, (i)
identify itself as “formerly known as” the respective name of the applicable
Subject Entity, and (ii) use such letterhead, stationery, forms, invoices,
receipts and such other similar documents containing the names of the Subject
Entities.

7.11         Termination of Certain
Agreements.  After consultation,
review and the prior approval by Purchaser, Parent shall cause each Subject
Entity (and each of such entity’s Affiliates), effective as of the Closing,
without any cost to, payment by or liability of any Subject Entity, terminate,
rescind, cancel and render void and of no effect any and all Contracts between
any Subject Entity (on the one hand) and any such Person or any Affiliate of
any such Person (on the other hand) as designated by Purchaser in Schedule
7.11; provided, that this Section
7.11 shall not apply to this Agreement or any Related Agreement.  Schedule 7.11 may be updated in
Purchaser’s sole discretion to include Contracts entered into prior to the
Closing pursuant to Section 7.3(b)(vi) or disclosed by Parent in a
Deferred Schedule.

7.12         Employees.

(a)           Employment
of Employees.  Prior to the Closing,
Purchaser shall take such action as it deems necessary or appropriate in order
to allow each person who is an Employee (other than a UK Employee) on the day
immediately prior to the Closing Date (including persons on vacation, temporary
layoff, approved leave of absence, sick leave, family medical leave under the
Family Medical Leave Act, or short term disability, but excluding, at the
Purchaser’s option, Employees on long term disability under Sellers’ long term
disability plan), to become, effective upon the Closing, an employee of
Purchaser, except in the case of UK Employees who shall remain employed by CIS
Limited as of the Closing.  Each Employee
who becomes an employee of Purchaser pursuant to the immediately preceding
sentence, or is employed by the Acquired Corporation or the Acquired
Corporation Subsidiaries at or immediately after the Closing shall be referred
to as a “Transferred Employee”. 
Transferred Employees shall be provided total compensation and benefits
packages that are substantially comparable in the aggregate to those provided
to similarly situated employees of Purchaser. 
Prior to the Closing, Purchaser shall list the names of the individuals
that it will offer employment to on Schedule 7.12(a) and shall offer
employment to each such individual listed on Schedule 7.12(a) hereof
(each, a “CIS France Employee”). 
In addition, Purchaser shall use its reasonable efforts to cause Refco
France, SA to enter into an employment agreement with each such CIS France
Employee that is acceptable to Purchaser in its discretion.

(b)           Severance
Benefits.  In the event that, during
the twelve (12) month period immediately following the Closing (the “Severance
Period”), the employment with

 

60

 

Purchaser of a
Transferred Employee is terminated by Purchaser without “cause” (in accordance
with the terms of Purchaser’s written policies, as applicable (for the purposes of this Agreement, reductions in force and job elimination
shall not constitute a “for cause” termination), such Transferred Employee will
be entitled to receive from Purchaser the greater of (x) severance pay as calculated
under Parent’s or in the case of UK Employees, CIS Limited’s severance policy
in respect of cash severance payments and payment for accrued vacation days as
in effect on the date hereof as
set forth in Schedule 7.12(b) (which benefits shall be paid in the form
of salary continuation); or (y)
severance pay calculated under Purchaser’s severance pay plan.

(c)           Benefit
Plans.

(i)            Except
as otherwise specifically provided in this Section 7.12, Purchaser shall
not assume any obligation, liability, or contingent liability with respect to
(A) any employee benefit plan, program, or arrangement sponsored or maintained
by Parent, any Subject Entity, or the Shareholders or (B) any employee benefit
plan, program or arrangement in which any Transferred Employee participated
prior to the Closing.

(ii)           Transferred
Employees shall cease to accrue benefits under the Benefit Plans as of the
Closing.

(iii)          Effective
as of the Closing, Purchaser shall give past service credit to all the
Transferred Employees for purposes of determining vesting, eligibility and
benefit accruals under all employee benefit programs, including vacation,
severance, bonus, incentive, compensation and employee welfare benefit plans of
Purchaser, with the sole exception of benefit accruals for pension and profit
sharing plans, except as otherwise stated in this Section 7.12, equal to
that which such Transferred Employees were credited with by the Asset Sellers
as of the Closing for service with the Asset Sellers or any predecessor
employer.

(iv)          Purchaser
agrees that a defined contribution plan designated by Purchaser (“Purchaser’s
DC Plan”) shall accept direct rollover contributions of Transferred
Employees account balances from the Cargill Partnership Plan provided, however, (i) no such direct rollover contribution
shall be accepted to the extent such contribution would adversely affect the
tax qualified status of Purchaser’s DC Plan and (ii) in no event shall a direct
rollover contribution be accepted by Purchaser’s DC Plan unless such
contribution is made in cash or a cash equivalent (e.g. check or wire
transfer).

(d)           No
Transfer of Assets.  No pension or
other employee benefit plan assets held by the Asset Sellers shall be
transferred to the Purchaser.

(e)           Termination/WARN
Act Notification.  The Purchaser
shall be responsible for sending timely and appropriate notices to all persons
required under all applicable Laws relating to plant or facility closings or
otherwise regulating the termination of employees with respect to events
occurring on or after the Closing.  In
the event that any

 

61

 

liability is incurred under any such Laws based on the Purchaser’s
failure to hire employees or the Purchaser’s termination of employees after the
Closing, the Purchaser will be solely and exclusively responsible for all
obligations and liabilities incurred under such laws relating to this
transaction.

(f)            Employee
Records.  Parent shall cause the
Asset Sellers to make available to the Purchaser records which provide
information regarding employees’ names, Social Security numbers, dates of hire
by the Seller, date of birth, number of hours worked each calendar year and
salary histories for all Transferred Employees. 
Parent shall not permit the Asset Sellers to provide records pertaining
to performance ratings and evaluations, disciplinary records and medical
records.

(g)           UK
Pension Scheme.  Immediately
following Closing, the UK Entity Shareholder shall instruct Mercers (the
actuaries to the UK Pension Scheme) to produce and copy to the Purchaser a
certificate in accordance with the Occupational Pension Schemes (Deficiency on
Winding up etc) Regulations 1996 in respect of the cessation of participation
of CIS Limited in the UK Pension Scheme. 
For the avoidance of doubt, no assets will be transferred from the UK
Pension Scheme to any Plan of the Purchaser pursuant to this Agreement and the
Purchaser has no obligation to past or future service credits for the UK
Employees.

(h)           General
Employment Provisions.

(i)            Parent
and the Purchaser shall give any notices requested by Law and take whatever
other actions with respect to the plans, programs and policies described in
this Section 7.12 as may be necessary to carry out the arrangements
contemplated hereby.

(ii)           Parent
shall cause the Asset Sellers to provide the Purchaser, and Purchaser shall
provide to Parent, with such plan documents and summary plan descriptions,
employee data or other information as may be reasonably required to carry out
the arrangements described in this Section 7.12.

(iii)          If
any of the arrangements described in this Section 7.12 are determined by
the IRS or other Governmental Authority to be prohibited by law, Parent and the
Purchaser shall modify such arrangements to as closely as possible reflect their
expressed intent and retain the allocation of economic benefits and burdens to
the parties contemplated herein in a manner not otherwise prohibited by Law.

 

7.13         Section 338(h)(10) Election.

(a)           Parent
and Purchaser shall, and to the extent required, shall cause their Affiliates
to, (i) join in making an election under 338(h)(10) of the Code (and any
election corresponding to section 338(h)(10) of the Code under state or local
laws) with respect to the purchase of the US Shares (the “Section 338(h)(10)
Elections”), (ii) provide

 

62

 

to one another the necessary information to permit the Section
338(h)(10) Elections to be made; and (iii) take all actions necessary and
appropriate (including filing any necessary forms, returns, elections,
schedules and other documents) as may be required to effect and preserve timely
the Section 338(h)(10) Elections in accordance with the provisions of Treas.
Reg. §1.338(h)(10)-1 (or any provisions comparable to section 338(h)(10) of
state or local Tax law).

(b)           Purchaser
shall be responsible for preparing drafts of all forms, attachments and
schedules necessary to effectuate the Section 
338(h)(10) Elections (including Internal Revenue Service Forms 8023 and  8883 and any similar forms under applicable
state or local income tax laws (the “Section 338 Forms”)).  The parties shall cause Internal Revenue
Service Form 8023 to be executed and delivered no later than 10 days following
the Closing Date.

(c)           In
accordance with the amount of purchase price allocated to the US Shares on Schedule
4.5(b) (as may be adjusted pursuant to Section 4.5(e)), the “aggregate
deemed sales price” (as defined in Treas. Reg. §1.338-4) and the “adjusted
grossed-up basis” (as defined in Treas. Reg. §1.338-5) (the “AGUB”)
shall be allocated among the assets of the Acquired US Corporations in
accordance with Treas. Reg. §1.338-6. 
Within 90 days of Closing, Purchaser shall deliver to Parent a schedule
allocating the AGUB among the assets of the Acquired US Corporations (the “Allocation
Schedule”).  If Parent disputes any
item on the Allocation Schedule, Purchaser and Parent shall cooperate in good
faith to resolve any dispute.  Should the
parties fail to reach an agreement with thirty (30) days after the Purchaser’s
delivery of the Allocation Schedule, the determination of the allocation shall
be made by the Accounting Firm, whose decision shall be final and made within
90 days after the Closing Date.  The
Allocation Schedule shall be adjusted in accordance with the Accounting Firm’s
resolution of the dispute.  Parent and
Purchaser shall, and Parent shall cause Sellers to, file the Section 338 Forms
in accordance with the Allocation Schedule. 
The Allocation Schedule shall be appropriately adjusted, in accordance
with Treasury Regulation Section 1.1060-1(c), as a result of any adjustment to Schedule
4.5(b).  The parties agree not to and
agree to cause their Affiliates not to take any position inconsistent with the
Allocation Schedule for Tax reporting purposes.

7.14         Meeting of CIS Limited.  Parent shall cause to be held a meeting of
the board of directors of CIS Limited validly to effect:

(a)           the
approval of the transfer of the Shares of CIS Limited to the Purchaser, the
issue to the Purchaser of share certificates in respect of those Shares and the
registration of the Purchaser as holders of those Shares (subject only to those
transfers being represented duly stamped);

(b)           the
appointment as directors and secretary of CIS Limited of such persons as the
Purchaser may nominate, subject to those persons consenting to such appointment
and not being disqualified in law or under the articles of association of CIS
Limited from holding those offices;

 

63

 

(c)           the
revocation of all existing bank mandates and the issue of new mandates in
relation to CIS Limited to such bank or banks and in such form as the Purchaser
may direct;

(d)           the
acceptance of the resignation of the UK Auditors and the appointment as
auditors of CIS Limited of such person or firm as the Purchaser may nominate,
subject to the provisions of the UK Companies Act;

(e)           the
acceptance of the resignation of the existing secretary and directors of CIS
Limited;

(f)            the
change in the names of CIS Limited by the substitution of the name[s]
designated by Purchaser;

(g)           the
change in the registered office of CIS Limited to such address as may be
nominated by the Purchaser;

(h)           the
change in the accounting reference date of CIS Limited to a date nominated by
the Purchaser; and

(i)            any
other business which may be necessary or desirable to give full and valid
effect to the sale and purchase provided for in this Agreement or as the
Purchaser may reasonably require,

and
Parent shall supply duly signed minutes of the meetings to the Purchaser on
Closing.

7.15         Delivery of 2005
Financial Statements.  As soon as
such items are available to Parent or its Affiliates, and in any event no later
than August 26, 2005, Parent shall deliver to Purchaser the following items:
(i) the 2005 Financial Statements, including the 2005 Balance Sheets, and (ii)
an unqualified audit report thereon by the independent accounting firm
historically retained by Parent.

7.16         Removal of CIS Limited
from existing VAT group.  Parent
shall, immediately after Closing, procure the making of an application for CIS
Limited to be excluded, from Closing or, if later, from the earliest date which
the relevant Governmental Authority will allow, from the VAT group of which CIS
Limited is a part immediately before Closing and Parent shall provide a copy of
that application to Purchaser within five days of the date on which that
application is submitted to the relevant Governmental Authority.

ARTICLE 8.

CONDITIONS PRECEDENT TO
OBLIGATIONS OF PURCHASER

The obligations of Purchaser under Articles 2, 3 and 4
are subject to the satisfaction or waiver by Purchaser of the following
conditions precedent on or before the Closing:

8.1           Warranties True as of
Both Present Date and Closing.  The
representations and warranties of Parent contained herein and in the Related
Agreements shall be accurate, true and

 

64

 

correct in all material respects (except that those representations and
warranties that are limited by materiality shall be true and correct in all
respects) (a) on and as of the date of this Agreement and of the Related
Agreements, respectively, and (b) at and as of the Closing with the same force
and effect as though made by Parent at and as of the Closing.

8.2           Compliance with Agreements
and Covenants.  Parent shall have
performed and complied with all of its respective covenants and obligations
contained in this Agreement and in its Related Agreements to be performed and
complied with by it at or prior to the Closing.

8.3           Consents and Approvals.  Purchaser shall have received written
evidence satisfactory to Purchaser that all consents and approvals set forth on
Schedule 5.3 and marked with an asterisk (*) have been obtained and
Purchaser shall have obtained all consents and approvals set forth on Schedule
6.3 (as the same may be amended as provided therein).

8.4           Release of Liens.  Any and all Liens on the Shares, the assets
and properties of the Acquired Corporations and the Acquired Corporation
Subsidiaries, and the Assets, shall have been terminated and released pursuant
to documentation satisfactory to Purchaser.

8.5           Estoppel Certificates.  Purchaser shall have received estoppel
certificates reasonably satisfactory to Purchaser duly executed by each lessor
under each Real Property Lease.

8.6           Documents. 
Purchaser shall have received all of the agreements, documents and items
set forth in Section 10.2.

8.7           Hart-Scott-Rodino.  The applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of the
transactions contemplated by this Agreement.

8.8           European
Commission or Other Antitrust.  Any and all regulatory or governmental
clearance or approval required prior to Closing under Council Regulation (EC)
No 139/2004 on the control of concentrations between undertakings or under any
competition, antitrust, control or other similar Law of any other relevant
jurisdiction shall have been obtained, any required notice or filing there
under shall have been made and any applicable waiting period there under shall
have expired or been earlier terminated so as to allow consummation of the
transaction contemplated by this Agreement.

8.9           No Material Adverse Effect.  No event shall have occurred or circumstance
shall have come into effect that, in the reasonable judgment of Purchaser, has
had or is reasonably likely to have a Material Adverse Effect.

8.10         Actions or Proceedings.  No action or proceeding by any Governmental
Authority or other Person (other than Purchaser or any of its Affiliates) shall
have been instituted or threatened that (a) causes or may cause a Material
Adverse Effect or (b) enjoins, restrains, prohibits or results in substantial
damages in respect of, or could enjoin, restrain, prohibit or result in
substantial damages in respect of, any provision of this Agreement or any
Related Agreement or the consummation of the transactions contemplated hereby
or thereby or any

 

65

 

integration of any operations of any Asset Seller, any Acquired
Corporation or any Acquired Corporation Subsidiary with those of Purchaser and
its Affiliates.

8.11         Employment AgreementError!
Bookmark not defined.. 
The employment agreement entered into as of the date hereof (which
employment agreement is conditioned on the consummation of the transactions
contemplated by this Agreement) shall remain in full force and effect and shall
not have been repudiated by the employee party thereto.

8.12         First CapitolError!
Bookmark not defined.. 
Either (i) that certain Noncompete Agreement, dated as of October 19,
2000, by and among efutures.com, LLC, CIS Management and CIS shall have been
terminated and Parent shall have provided Purchaser with reasonable evidence of
such termination, and all consents and approvals (including from the First
Capitol Board of Directors) necessary to transfer the First Capitol Interests
to Purchaser shall have been obtained and Purchaser shall have received satisfactory
evidence thereof or (ii) Parent shall have caused CIS Management to dispose of
the equity interests of First Capitol to a third party which is not an
Affiliate of Parent and Parent shall have provided Purchaser with reasonable
evidence of such disposition; provided, however, that in the
event that this condition precedent is satisfied at Closing pursuant to clause
(ii), the First Capitol Interests shall be deemed to be Excluded Assets
hereunder and the Estimated Closing Date Purchase Price shall be reduced by an
amount equal to $6.5 million.

8.13         UK Regulatory Approval.  Purchaser shall have received an approval
notice from the FSA in accordance with FSMA confirming that there is no
objection to Purchaser or its designee becoming a controller or CIS Limited; or
(where the approval notices issued by the FSA referred to above are expressly
subject to the fulfillment of certain conditions) upon the fulfillment of those
conditions (as may be varied or cancelled) to the satisfaction of the FSA; or
(in the absence of such notification) the period during which the FSA may serve
an approval notice or a decision notice pursuant to FSMA in relation to such
acquisitions of control having elapsed without the FSA having served any such
notices.

8.14         2005 Financial Statements.  The 2005 Financial Statements, as delivered
pursuant to Section 7.15, shall, as compared to the Draft 2005 Financial
Statements delivered to Purchaser prior to the date hereof, consistently
reflect the financial position, assets and liabilities of each of the Subject
Entities.

ARTICLE 9.

CONDITIONS PRECEDENT TO
OBLIGATIONS OF PARENT

The obligations of Parent under Articles 2, 3 and 4
are subject to the satisfaction or waiver by Parent of the following conditions
precedent at or before the Closing:

9.1           Warranties True as of
Both Present Date and Closing.  The
representations and warranties of Purchaser contained herein and in its Related
Agreements shall be accurate, true and correct in all material respects (except
that those representations and warranties that are limited by materiality shall
be true and correct in all respects) (a) on and as of the date of this

 

66

 

Agreement and of the Related Agreements, respectively, and (b) at and
as of the Closing with the same force and effect as though made by Purchaser at
and as of the Closing.

9.2           Compliance with
Agreements and Covenants.  Purchaser
shall have performed and complied with all of its covenants and obligations
contained in this Agreement and in its Related Agreements to be performed and
complied with by it at or prior to the Closing.

9.3           Consents and Approvals.  Parent shall have received written evidence
satisfactory to Parent that all consents and approvals set forth on Schedule
6.3 and marked with an asterisk (*) have been obtained in form and
substance reasonably acceptable to Purchaser and, with regard to the FSA change
of control consent, without unreasonable restrictions, requirements, or
obligations.

9.4           Documents. 
Parent shall have received all of the agreements, documents and items
set forth in Section 10.3.

9.5           Hart-Scott-Rodino.  The applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent the consummation of the
transactions contemplated by this Agreement.

9.6           European Commission or
Other Antitrust.  Any and all regulatory or governmental clearance or approval required
prior to Closing under Council Regulation (EC) No 139/2004 on the control of
concentrations between undertakings or under any competition, antitrust,
control or other similar Law of any other relevant jurisdiction shall have been
obtained, any required notice or filing there under shall have been made and
any applicable waiting period there under shall have expired or been earlier
terminated so as to allow consummation of the transaction contemplated by this
Agreement.

9.7           Actions or ProceedingsError!
Bookmark not defined.. 
No action or proceeding by any Governmental Authority or other Person
(other than any Subject Entity or any of their Affiliates) shall have been
instituted or threatened that enjoins, restrains, prohibits or results in
substantial damages in respect of, or could enjoin, restrain, prohibit or
result in substantial damages in respect of, any provision of this Agreement or
any Related Agreement or the consummation of the transactions contemplated
hereby or thereby.

ARTICLE 10.

CLOSING

10.1         Closing. 
The Closing shall take place at the offices of Parent, at the principal
executive offices of Parent, at 10:00 a.m. (Central Standard Time) on the last
Business Day of the month in which on the last condition to closing set forth
in Articles 8 and 9 has been satisfied or waived (other than
those conditions that by their terms cannot be satisfied until the Closing but
subject to the satisfaction of such conditions), or such other date as is
mutually agreed upon in writing by Purchaser and Parent.  The Closing, and all transactions to occur at
the Closing, shall be deemed to have taken place at, and shall be effective as
of, 11:59 p.m. (Eastern Standard Time) on the Closing Date.

 

67

 

10.2         Deliveries by Sellers.  At the Closing, in addition to any other
documents or agreements required under this Agreement, Parent shall deliver or
cause to be delivered to Purchaser the following:

(a)           certificates
evidencing all of the Shares, which certificates shall be duly endorsed in
blank or accompanied by stock powers duly executed by each of the applicable
Shareholders (the “Stock Powers”) substantially in the form requested by
Purchaser;

(b)           the
resignations of all directors and officers of, and each non-corporate trustee
or fiduciary of any plan or arrangement involving employee benefits of, each
Acquired Corporation and each Acquired Corporation Subsidiary;

(c)           the
Bill of Sale, duly executed by each Asset Seller;

(d)           the
Assignment and Assumption Agreement, duly executed by each Asset Seller;

(e)           a
certificate duly executed by an authorized officer of Parent, each Shareholder
and each Asset Seller, certifying as to compliance with Section 8.1 and Section
8.2;

(f)            an
Assignment and Assumption of Lease with respect to each Real Property Lease,
duly executed by the Subject Entity that is the lessee under such Real Property
Lease;

(g)           the
Transition Services Agreement, duly executed by Parent;

(h)           a
certificate of the secretary or assistant secretary of each Asset Seller
certifying resolutions of the Board of Directors of such Asset Seller, and the
shareholders of such Asset Seller, approving and authorizing the execution,
delivery and performance of this Agreement and such Asset Seller’s Related
Agreements and the consummation of the transactions contemplated hereby and
thereby (together with an incumbency and signature certificate regarding the
officer(s) signing on behalf of such Asset Seller);

(i)            the
Articles of Incorporation of each Acquired Corporation and each Acquired
Corporation Subsidiary, certified by the Secretary of State or equivalent
Person of its jurisdiction of incorporation, and the by-laws or similar
instrument of each Acquired Corporation and each Acquired Corporation
Subsidiary, certified by its Secretary;

(j)            certificates
of good standing from (i) the jurisdiction of incorporation for each Acquired
Corporation and each Acquired Corporation Subsidiary and (ii) the jurisdiction
where each Acquired Corporation and each Acquired Corporation Subsidiary is
qualified to do business;

(k)           an
exclusivity agreement, duly executed by Parent on behalf of it and its
Affiliates in the form attached hereto as Exhibit 10.2(k).

 

68

 

(l)            a
certificate of non-foreign status from each Seller that is not a “foreign person”
as defined in Section 1445(f)(3) of the Code (including, but not necessarily
limited to, CIS, CIS Financial and CIS Securities) that complies with Treasury
Regulation §1.1445-2(b)(2);

(m)          such
other documents and instruments set forth in Schedule 10.2(m) prepared
by Purchaser and delivered to Parent not later than the later of (i) 30
Business Days after the date hereof or (ii) 15 Business Days after Parent’s
delivery of all of the Deferred Schedules; and

(n)           such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as Purchaser may reasonably require
to consummate the transactions contemplated by this Agreement and the Related
Agreements.

10.3         Deliveries by Purchaser.  At the Closing, Purchaser shall deliver to
Parent the following:

(a)           the
Closing Date Seller Payment payable to the Parent (as representative for the
Asset Sellers and Shareholders) at and as of the Closing pursuant to Section
4.1;

(b)           the
Non-Competition Payment payable to Parent at and as of the Closing pursuant to Section
4.3;

(c)           the
Assignment and Assumption Agreement, duly executed by Purchaser;

(d)           a
certificate duly executed by an authorized officer of Purchaser, certifying as
to compliance with Section 9.1 and Section 9.2;

(e)           an
Assignment and Assumption of Lease with respect to each Real Property Lease,
duly executed by Purchaser;

(f)            the
Transition Services Agreement, duly executed by Purchaser;

(g)           a
certificate of the secretary or assistant secretary of Purchaser certifying
resolutions of the Board of Directors of Purchaser approving this Agreement and
its Related Agreements and the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of Purchaser); and

(h)           such
other documents and instruments as may be required by any other provision of
this Agreement or any Related Agreement or as may reasonably be required to
consummate the transactions contemplated by this Agreement and the Related
Agreements.

 

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ARTICLE 11.

TERMINATION

11.1         Termination.  This Agreement may be terminated at any time
prior to the Closing:

(a)           with
the mutual consent of Parent and Purchaser;

(b)           by
Parent or Purchaser, if the Closing shall not have taken place on or before
December 31, 2005; provided, that the right
to terminate this Agreement under this Section 11.1(b) shall not be
available to (i) Parent if the failure of Parent or any Seller to fulfill any
obligation under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date or (ii) Purchaser if the
failure of Purchaser to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before
such date;

(c)           by
Purchaser, if there shall have been a material breach of any covenant,
obligation, representation or warranty of Parent or any Seller hereunder, and
such breach shall not have been remedied within ten (10) Business Days after
receipt by Parent of a notice in writing from Purchaser specifying the breach
and requesting such breach be remedied;

(d)           by
Parent, if there shall have been a material breach of any covenant, obligation,
representation or warranty of Purchaser hereunder, and such breach shall not
have been remedied within ten (10) Business Days after receipt by Purchaser of
notice in writing from Parent specifying the breach and requesting such breach
be remedied; or

(e)           by
Purchaser pursuant to Section 1.5(d).

11.2         Effect of Termination.  If this Agreement is terminated pursuant to Section
11.1, all obligations of the parties hereunder shall terminate, except for
the obligations set forth in Sections 5.27 (brokers), 6.5
(brokers), 15.1 (expenses) and 15.10 (publicity), which shall
survive the termination of this Agreement, and except that no such termination
shall relieve any party from liability for any prior breach of this Agreement.

ARTICLE 12.

INDEMNIFICATION

12.1         Survival. 
The representations and warranties of the parties hereto contained
herein shall survive the Closing for a period of two (2) years, except that the
Tax and Benefits Warranties shall survive until the Tax Statute of Limitations
Date and the Title and Authorization Warranties shall survive forever.

12.2         Indemnification by Parent.  Parent agrees to indemnify each of the
Purchaser Indemnified Parties against, and agrees to hold each of them harmless
from, any and all Losses incurred or suffered by them relating to or arising
out of or in connection with any of the following:

 

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(a)           any
breach of or any inaccuracy in any representation or warranty made by Parent in
this Agreement or any Related Agreement or any document delivered by Parent or
any Seller at the Closing; provided, that
(i) in the case of all representations and warranties, except for Title and
Authorization Warranties and Tax and Benefits Warranties, a notice of the
Purchaser Indemnified Party’s claim shall have been given to Parent not later
than the close of business on the second anniversary of the Closing Date and
(ii) in the case of Tax and Benefit Warranties, a notice of the Purchaser
Indemnified Party’s claim shall have been given to Parent not later than the
close of business on the Tax Statute of Limitations Date;

(b)           any
breach by Parent of or failure by Parent to perform any covenant, obligation or
agreement of Parent set forth or contemplated in this Agreement or any Related
Agreement or any document delivered by Parent or any Seller at the Closing;

(c)           the
Excluded Assets, the Excluded Obligations or, other than the Assumed
Obligations, any other obligations or liabilities relating to or arising out of
the ownership or operation of the Assets on or prior to the Closing Date;

(d)           any
obligations or liabilities relating to or arising from any product liability or
warranty claims based on products or services sold by any Asset Seller on or
prior to the Closing Date;

(e)           any
obligations or liabilities relating to or arising out of the ownership or
operation of any Affiliate of any Seller that is not a Asset Seller;

(f)            the
occupancy by customers of the Business or similar third-parties of any of the
Leased Real Property in violation of the terms and conditions of the Real
Property Lease application to any such Leased Real Property;

(g)           any
liability (including its costs) which CIS Limited shall be required to pay to
the UK Pension Scheme by virtue of s75 Pensions Act 1995 (as modified by
regulations), s38 Pensions Act 2004 or s43 Pensions Act 2004 or by virtue of
any demand by the trustees of the UK Pension Scheme for an additional
contribution as a result of the withdrawal of CIS Limited from that Scheme;

(h)           any
claim made by an employee of CIS Limited which arises because a provision of
the UK Pension Scheme or its predecessor did not prior to the Closing treat
that person equally with a person of the opposite sex whether such claim arises
pursuant to the provisions of the Equal Pay Act 1970, the Sex Discrimination
Act 1975, Article 141 (formerly Article 119) Treaty of Rome, s62 Pensions Act
1995 or otherwise;

(i)            any
acts or omissions of, or breach of relevant Law by, CIS Limited prior to the
Closing, including to the extent arising out of any investigation or regulatory
action by any Governmental Authority;

(j)            any
obligation arising under Section 13.4; and

(k)           the
client claim against CIS SNC described in item 4 of Schedule 5.22.

 

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12.3         Indemnification by Purchaser.  Purchaser agrees to indemnify Parent against,
and agrees to hold it harmless from, any and all Losses incurred or suffered by
it relating to or arising out of or in connection with any of the following:

(a)           any
breach of or any inaccuracy in any representation or warranty made by Purchaser
in this Agreement or any Related Agreement or any document delivered by
Purchaser at the Closing; provided, that in
the case of all representations and warranties, except for Title and
Authorization Warranties, a notice of the Parent’s claim shall have been given
to Purchaser not later than the close of business on the second anniversary of
the Closing Date;

(b)           any
breach by Purchaser of or failure by Purchaser to perform any covenant or
obligation of Purchaser set out or contemplated in this Agreement or any
Related Agreement or any document delivered by Purchaser at the Closing;

(c)           any Losses incurred or suffered by Cargill plc in its
capacity as surety under the Real Property Lease relating to the UK Property as
a result of any breach by CIS Limited after the Closing of its obligations to
make rental payments under such Real Property Lease; and

(d)           the
Assumed Liabilities.

12.4         Limitations on Certain
Claims for Indemnification.

(a)           Basket.  Parent shall not have any liability pursuant
to Section 12.2(a) (other than with respect to any breach of or
inaccuracy in any of the Title and Authorization Warranties, and the Tax and
Benefits Warranties made by Parent) unless and until the aggregate amount of all
Losses incurred or suffered by the Purchaser Indemnified Parties exceeds
$2,000,000 (the “Deductible Amount”). 
In the event such Losses exceed the Deductible Amount, Parent shall be
liable and responsible to the Purchaser Indemnified Parties only for the amount
by which such Losses exceed the Deductible Amount (subject to Section
12.4(b)).  Purchaser shall not have
any liability pursuant to Section 12.3(a) (other than with respect to
any breach of or inaccuracy in any of the Title and Authorization Warranties
made by Purchaser) unless and until the aggregate amount of all Losses incurred
or suffered by Parent exceeds the Deductible Amount.  In the event such Losses exceed the
Deductible Amount, Purchaser shall be liable and responsible to Parent only for
the amount by which such Losses exceed the Deductible Amount (subject to Section
12.4(b)).

(b)           Maximum.  In no event shall Parent’s aggregate
liability pursuant to Section 12.2(a) for Losses incurred or suffered by
the Purchaser Indemnified Parties (other than with respect to any breach of or
inaccuracy in any of the Title and Authorization Warranties and the Tax and
Benefits Warranties made by Parent) exceed $50,000,000.  In no event shall Purchaser’s aggregate
liability pursuant to Section 12.3(a) for Losses incurred or suffered by
Parent (other than with respect to any breach of or inaccuracy in any of the
Title and Authorization Warranties made by Purchaser) exceed the sum of
$50,000,000.

 

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(c)           Claims
Based on Fraud or Intentional Misrepresentation.  Notwithstanding anything contained herein or
otherwise to the contrary, including Sections 12.4(a) and 12.4(b),
nothing herein shall be deemed to limit any party’s rights to recover any or
all Losses incurred or suffered by it relating to or arising out of or in
connection with fraud or intentional misrepresentation, it being understood and
agreed that the right to recover such Losses shall survive forever.

12.5         Materiality.  For purposes of Sections 12.2, 12.3
and 12.4, the representations and warranties herein shall be deemed to
have been made without any qualifications as to materiality and, accordingly,
for such purposes, all references therein to “material”, “in all material
respects” and similar qualifications as to materiality shall be deemed to be
deleted therefrom (except where any such provision requires disclosure of lists
of items of a material nature or above a specified threshold).

12.6         Claims. 
As soon as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement not involving a claim (or the commencement
of any suit, action or proceeding) of the type described in Section 12.7
or 13.6, the Indemnitee shall give notice
to the Indemnitor of such claim; provided,
that the failure of the Indemnitee to give notice shall not relieve the
Indemnitor of its obligations under this Article 12 except to the extent
(if any) that the Indemnitor shall have been prejudiced thereby.  If the Indemnitor does not object in writing
to such indemnification claim within thirty (30) calendar days of receiving
notice thereof, the Indemnitee shall be entitled to recover promptly from the
Indemnitor and the Indemnitor shall promptly pay to the Indemnitee the amount
of such claim (but such recovery shall not limit the amount of any additional
indemnification to which the Indemnitee may be entitled pursuant to Section
12.2 or 12.3), and no later objection
by the Indemnitor shall be permitted.  If
within such thirty (30) day period the Indemnitor agrees that it has an
indemnification obligation but objects that it is obligated to pay only a
lesser amount, the Indemnitee shall nevertheless be entitled to recover from
the Indemnitor and the Indemnitor shall promptly pay to the Indemnitee the lesser
amount, without prejudice to the Indemnitee’s claim for the difference.

12.7         Notice of Third Party
Claims; Assumption of Defense.  The
Indemnitee shall give notice as promptly as is reasonably practicable to the
Indemnitor of the assertion of any claim (or the commencement of any suit,
action or proceeding, by any Person not a party hereto) (other than by a
Governmental Authority with respect to Taxes, which shall be governed by Section
13.6) in respect of which indemnity may be sought under this Agreement; provided, that the failure of the Indemnitee
to give notice shall not relieve the Indemnitor of its obligations under this Article
12 except to the extent (if any) that the Indemnitor shall have been
prejudiced thereby.  The Indemnitor may,
at its own expense, (a) participate in the defense of any such claim, suit,
action or proceeding and (b) upon notice to the Indemnitee and the Indemnitor’s
delivering to the Indemnitee a written agreement that the Indemnitee is
entitled to indemnification pursuant to Section 12.2 or 12.3 for all Losses arising out of such claim,
suit, action or proceeding and that the Indemnitor shall be liable for the
entire amount of any Loss resulting therefrom, at any time during the course of
any such claim, suit, action or proceeding, assume the defense thereof; provided, that (i) the Indemnitor shall
provide written evidence reasonably satisfactory to the Indemnitee
demonstrating that the Indemnitor has a sufficient amount of assets for
purposes of such assumption of defense, (ii) the Indemnitor’s counsel is
reasonably satisfactory to the Indemnitee and (iii) the Indemnitor shall
thereafter consult with the

 

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Indemnitee upon the Indemnitee’s reasonable request for such consultation
from time to time with respect to such claim, suit, action or proceeding.  If the Indemnitor assumes such defense, the
Indemnitee shall have the right (but not the duty) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnitor.  If,
however, the Indemnitee reasonably determines in its judgment that
representation by the Indemnitor’s counsel of both the Indemnitor and the
Indemnitee would present such counsel with a conflict of interest, then such
Indemnitee may employ separate counsel to represent or defend it in any such
claim, action, suit or proceeding and the Indemnitor shall pay the fees and
disbursements of such separate counsel.  Whether
or not the Indemnitor chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.

12.8         Settlement or Compromise.  Any settlement or compromise made or caused
to be made by the Indemnitee or the Indemnitor, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 12.7
shall also be binding upon the Indemnitor or the Indemnitee, as the case may
be, in the same manner as if a final judgment or decree had been entered by a
court of competent jurisdiction in the amount of such settlement or compromise;
provided, that (a) no obligation, restriction or Loss shall be imposed
on the Indemnitee as a result of such settlement without its prior written
consent, and (b) the Indemnitee shall not compromise or settle any claim, suit,
action or proceeding without the prior written consent of the Indemnitor, which
consent shall not be unreasonably withheld.

12.9         Failure of Indemnitor to Act.  In the event that the Indemnitor does not
elect to assume the defense of any claim, suit, action or proceeding, then any
failure of the Indemnitee to defend or to participate in the defense of any
such claim, suit, action or proceeding or to cause the same to be done, shall
not relieve the Indemnitor of its obligations hereunder.

12.10       Set-Off Against
Post Closing Payment Amount.  In the
event any Purchaser Indemnified Party is entitled to receive any amount from
Parent under this Agreement, including any indemnification payment under this
Agreement, without limiting the Purchaser Indemnified Party’s rights to seek
recovery against Parent directly for amounts in excess of the Post Closing
Payment Amount, the Purchaser Indemnified Party may recover from the Post
Closing Payment Amount.

12.11       Purchase Price Adjustments.  Any amounts payable under Section 12.2
or Section 12.3 shall be treated by Purchaser and Parent as an
adjustment to the Adjusted Purchase Price.

12.12       Indemnity Payments in
Respect of CIS Limited. 
Notwithstanding any provision to the contrary in this Agreement, Parent
shall cause Cargill PLC to pay any amount which is required to protect, defend,
indemnify or hold harmless CIS Limited under any provision of this Agreement to
Purchaser and not to CIS Limited.  For
the avoidance of doubt, any such payment shall be treated as an adjustment to
the Adjusted Purchase Price pursuant to Section 12.11.

 

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ARTICLE 13.

TAX MATTERS

13.1         Filing of Tax Returns.  Purchaser shall prepare or cause to be
prepared and file or cause to be filed all Tax Returns for the Funds, the
Acquired Corporations and Acquired Corporation Subsidiaries for all (a) taxable
years ending on or prior to the Closing Date that are filed after the Closing
Date (but not including any Tax Return for such period filed as part of a
consolidated, combined or unitary Tax group), (b) taxable years beginning prior
to the Closing Date and ending after the Closing Date (but not including any
Tax Return for such period filed as part of a consolidated, combined or unitary
Tax group), (c) taxable years beginning after the Closing Date.  Purchaser shall provide to Parent for review
and comment each Tax Return described in clauses (a) and (b) of
this Section 13.1 at least fifteen (15) days prior to the due date for
filing such return (or, if required to be filed within fifteen (15) days of the
Closing Date, as soon as reasonably practicable following the Closing).  Sellers shall reimburse Purchaser for Taxes
paid in clauses (a) and (b) above within fifteen (15) days of
payment by Purchaser or Affiliate of Purchaser to the extent such Taxes are
subject to Parent’s obligation to indemnify Purchaser pursuant to Section
13.4.

13.2         Proration of Taxes.  For purposes of allocating liability for
Taxes under Section 3.5 and Section 13.4, in the case of any
taxable period that includes (but does not end on) the Closing Date (a “Straddle
Period”), (a) real, personal and intangible property Taxes (“Property
Taxes”) of the Acquired Corporations and the Acquired Corporation
Subsidiaries or related to the Assets or the Business allocable to the
Pre-Closing Tax Period shall be equal to the amount of such Property Taxes for
the entire Straddle Period multiplied by a fraction, the numerator of which is
the number of days during the Straddle Period that are in the Pre-Closing Tax
Period and the denominator of which is the number of days in the Straddle
Period; and  (b) Taxes (other than
Property Taxes) of the Acquired Corporations, and the Acquired Corporation
Subsidiaries or related to the Assets or the Business allocable to the
Pre-Closing Tax Period shall be computed as if such taxable period ended as of
the close of business on the Closing Date, provided that exemptions, allowances
or deductions that are calculated on an annual basis (including depreciation
and amortization deductions) shall be allocated between the period ending on
the Closing Date and the period after the Closing Date in proportion to the
number of days in each period.

13.3         Transfer Taxes.  All sales, use and transfer Taxes, including
any value added, stock transfer, gross receipts, stamp duty and real, personal,
or intangible property transfer Taxes, arising from the transactions
contemplated hereby or in the Related Agreements, including any interest or
penalties in respect thereof (the “Transfer Taxes”) shall be apportioned
fifty percent (50%) to Parent and fifty percent (50%) to the Purchaser.  The Tax Returns relating to such Transfer
Taxes shall be timely prepared and filed by the party legally obligated to make
such filing, and Parent agrees to cause Sellers to make any such necessary
filings.  Parent and Purchaser agree to,
and to cause their Affiliates to, reasonably cooperate with one another in
connection with the preparation and filing of such Tax Returns, in obtaining
all available exemptions from, reductions in, offsets to, or refunds or credits
of such Transfer Taxes and in timely providing each other with resale
certificates and any other documents necessary to obtain any such exemptions,
reductions, offsets, refunds or credits.

 

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13.4         Tax Indemnification.  From and after the Closing Date, Parent shall
protect, defend, indemnify and hold harmless Purchaser, the Acquired Corporations
and the Acquired Corporation Subsidiaries from (a) any and all Taxes of or
payable by the Acquired Corporations or the Acquired Corporation Subsidiaries
attributable to any Pre-Closing Tax Period; (b) all Taxes of any Person for
which the Acquired Corporations or any Acquired Corporation Subsidiary may be
liable under Treasury Regulation §1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract, or otherwise;
(c) all Transfer Taxes allocable to Parent under Section 13.3; (d) any
and all Taxes payable in the UK by the Acquired Corporations and the Acquired
Corporation Subsidiaries attributable (i) to the holding or disposal of any
shares acquired on or before Closing; or (ii) to the ownership or cancellation
of, or to the acquisition of shares pursuant to, any right to acquire shares
granted on or before Closing; and (e) any and all amounts of value added tax
payable by CIS Limited solely by reference to CIS Limited being a member of a
VAT group between Closing and the date on which the application referred to in Section
7.16 takes effect.

13.5         Cooperation/Retention of
Records.  After the Closing, upon
reasonable written notice, Purchaser and Parent shall, and Parent shall cause
Sellers to, furnish or cause to be furnished to one another, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Acquired Corporations, the Acquired Corporation
Subsidiaries, the Assets or the Business (including access to books and
records) as is reasonably requested for the filing of all Tax Returns, the
making of any election related to Taxes, the preparation for any audit by any
Governmental Authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax Return.

13.6         Procedures Relating to Tax
Claims.

(a)           After
the Closing, each of Purchaser, on the one hand, and Parent, on the other hand
(the “Recipient”), shall promptly notify the other party in writing upon
receipt by the Recipient or any of its Affiliates of any written notice of any
pending or threatened audit or assessment, suit, proposed adjustment,
deficiency, dispute, administrative 
judicial proceeding or other similar Claim relating to Taxes (“Tax
Claim”) received by the Recipient from any Governmental Authority or any
other party to the extent such Tax Claim may give rise to an indemnification
right under Section 12.2, Section 12.3 or Section 13.4
under this Agreement; provided, however, that a failure by  Purchaser or the Parent to give such notice
shall not affect the other party’s rights to indemnification under Article
12 or Article 13 unless the other party is materially adversely
prejudiced as a consequence of such failure.

(b)           Parent
may elect to control the conduct, through counsel of the Parent’s own choosing
and at the Parent’s sole expense and with the participation of Purchaser if
Purchaser so elects, of any Tax Claim involving any asserted liability with
respect to or relating to any Pre-Closing Tax Period (other than a Tax Claim
involving any Straddle Period).  If the
Parent desires to elect to control any such Tax Claim, Parent shall within ten
(10) calendar days of receipt of the notice of such Tax Claim notify Purchaser
in writing of its intent to do so.  If
the Parent properly elects to control such Tax Claim, then the Parent shall
have all rights to settle, compromise and/or concede such asserted liability
and Purchaser shall reasonably cooperate and shall cause the Acquired

 

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Corporations and the Acquired Corporation Subsidiaries to reasonably
cooperate; provided, however, that the Parent shall not settle,
compromise and/or concede such asserted liability without the written consent
of Purchaser (whose consent shall not be unreasonably withheld) if such
settlement, compromise or concession could increase the Tax liability of any of
Purchaser (or any of its Affiliates), any Acquired Corporation or any Acquired
Corporation Subsidiary for any other taxable period.  If the Parent does not elect to control a Tax
Claim for a Pre-Closing Tax Period pursuant to this Section 13.6(b) (or,
after assuming control, the Parent fails to reasonably defend against such Tax
Claim), Purchaser, or its Affiliates may, without affecting Purchaser’s or any
other indemnified party’s rights to indemnification under Article 12 and
Article 13, assume sole control of the defense of such Tax Claim (at the
Parent’s and Sellers expense).

(c)           With
respect to any Tax Claim that involves any Straddle Period, Purchaser shall
notify the Parent of such Tax Claim and Purchaser shall control the conduct of
any such Tax Claim, through counsel of Purchaser’s own choosing with
participation by the Parent (at Parent’s expense) and Purchaser shall have all
rights to settle, compromise and/or concede such Tax Claim with the consent of
Parent (which shall not be unreasonably withheld or delayed).

ARTICLE 14.

NON-COMPETITION

14.1         Non-Competition Agreement.

(a)           Parent
agrees that from and after the Closing Date until the date that is five (5)
years after the Closing Date (the “Non-Competition Period”), neither it
nor any Seller nor any of their respective Affiliates shall, directly or
indirectly:

(i)            engage
in, or own any interest in, control, advise, manage, operate, serve as a
director, officer or employee of, act as a lender or consultant to, render
services for, receive any economic benefit from or exert any influence upon any
Person that engages wholly or partly in, the Restricted Business;

(ii)           solicit,
divert or attempt to solicit or divert any Person who is, was or was solicited
to become, a customer or supplier of any Subject Entity in connection with the
Business at any time prior to the Closing;

(iii)          impair,
or attempt to impair, any business relationship or potential business
relationship between any third party and Purchaser or any of its Affiliates
(including the Acquired Corporations or any Acquired Corporation Subsidiary) in
connection with the Restricted Business;

(iv)          make
any statement to any third party, including the press or media, likely to
result in adverse publicity for Purchaser or any of its Affiliates (including
the Acquired Corporations or any Acquired Corporation Subsidiary) in connection
with the Restricted Business; or

 

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(v)           employ,
solicit for employment or encourage to leave his or her employment, on its
behalf or on behalf of any other Person, any individual who was during the two
(2) year period prior to such employment, solicitation or encouragement or is
an officer or employee of Purchaser or any of its Affiliates (including the
Acquired Corporations or any Acquired Corporation Subsidiary) involved in the
Restricted Business as conducted by Purchaser and its Affiliates after the
Closing; provided, however, that Parent, Sellers and their
Affiliates may engage in discussions or negotiations with, and employ, any
Person responding to general advertising for employees not specifically
targeted at the employees of the Business.

(b)           Notwithstanding
anything to the contrary herein, Parent and its Affiliates may (i) in the
ordinary course of business of Parent and its Affiliates and not for the
purpose of competing, directly or indirectly, with the Business, own less than
5% of any class of the capital stock of any corporation engaged in any business
that competes, directly or indirectly, with the Business without violating the
provisions of this Section, provided, that, Parent or its
Affiliates does not have the power to control or direct the management or
affairs of such corporation. 
Notwithstanding the preceding sentence, Parent’s Affiliates that are
registered investment advisers shall not be subject to the restrictions
contained in this Agreement with respect to investments that they make on
behalf of funds or managed accounts, including funds in which Parent owns a
minority of the equity interests.

14.2         Reasonableness of Covenants.  Purchaser and Parent
have independently consulted with their respective counsel and after such
consultation agree that the covenants set forth in Section 14.1 (each a “Non-Competition Covenant” and
collectively the “Non-Competition
Covenants”), including the time limitation, geographic area and
scope of activity of such Non-Competition Covenants, are appropriate and
reasonable when considered in light of the nature and extent of the
transactions contemplated by this Agreement and the Related Agreements.  Parent further agrees and acknowledges that
(a) the Non-Competition Covenants are of the essence of this Agreement, (b)
Purchaser is relying upon Parent’s agreements in this Article 14 and,
but for the agreement of Parent to comply with the Non-Competition Covenants,
Purchaser would not have entered into this Agreement or any of the Related
Agreements, and (c) each Non-Competition Covenant is reasonable and necessary
to protect and preserve the interests and properties of Purchaser.

14.3         Specific Performance.  Parent recognizes and affirms that in the
event of breach by it of any of the provisions of this Article 14, money
damages would be inadequate and Purchaser would have no adequate remedy at
law.  Accordingly, Parent agrees that
Purchaser shall have the right, in addition to any other rights and remedies
existing in its favor, to enforce its rights and Parent’s obligations under
this Article 14 not only by an action or actions for damages, but also
by an action or actions for specific performance, injunction and/or other
equitable relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions of this Article 14.  In the event of a breach or violation by
Parent of any of the provisions of this Article 14, the Non-Competition
Period shall be extended as to such individual by a period equal to (a) the
length of the breach or violation of this Article 14 plus (b) the length
of any court proceedings necessary to stop such breach or violation.  If a bond is

 

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required to be posted in order for Purchaser to secure an injunction,
the parties agree that such bond need not exceed the sum of $1,000.

14.4         Severability.  If at any time any of the provisions of this Article
14 shall be determined to be invalid or unenforceable by reason of being
vague or unreasonable as to duration, area or scope of activity, or otherwise,
then this Article 14 shall be considered divisible (with the other
provisions to remain in full force and effect) and the invalid or unenforceable
provisions shall become and be deemed to be immediately amended to include only
such maximum time limitation, geographic area, scope of activity and other
restrictions, as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter, and Parent expressly
agrees that this Agreement, as so amended, shall be valid and binding as though
any invalid or unenforceable provision had not been included herein.

14.5         No Limitation of Other
Provisions.  The provisions of this Article
14 shall be in addition to, and not in limitation of, any other provisions
contained in any other agreement restricting competition by Purchaser or any
Seller.

ARTICLE 15.

MISCELLANEOUS

15.1         Expenses. 
Except as provided in Sections 7.4(a) and 13.3, each party
hereto shall bear its own fees and expenses with respect to the transactions
contemplated hereby.

15.2         Amendment. 
This Agreement may be amended, modified or supplemented but only in
writing signed by Purchaser and Parent.

15.3         Notices. 
Any notice, request, instruction or other document to be given hereunder
by a party hereto shall be in writing and shall be deemed to have been given,
(a) when received if given in person or by courier or a courier service, (b) on
the date of transmission if sent by telex, facsimile or other wire transmission
(receipt confirmed) or (c) three (3) Business Days after being deposited in the
U.S. mail, certified or registered mail, postage prepaid:

	
   

  	
  i.

  	
  If to Parent, addressed as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cargill, Incorporated

  
	
   

  	
   

  	
  15615 McGinty Road West

  
	
   

  	
   

  	
  Wayzata, Minnesota 55391

  
	
   

  	
   

  	
  Attention: James Haymaker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cargill, Incorporated

  
	
   

  	
   

  	
  15615 McGinty Road West

  
	
   

  	
   

  	
  Wayzata, Minnesota 55391

  
	
   

  	
   

  	
  Attention: Linda Cutler

  

 

79

 

	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  If to Purchaser, addressed as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Refco Group Ltd., LLC

  
	
   

  	
   

  	
  One World Financial Center

  
	
   

  	
   

  	
  200 Liberty Street

  
	
   

  	
   

  	
  New York, New York 10281

  
	
   

  	
   

  	
  Attention: Phillip R. Bennett

  
	
   

  	
   

  	
  Facsimile No.: (212) 262-1910

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mayer, Brown, Rowe & Maw LLP

  
	
   

  	
   

  	
  71 South Wacker Drive

  
	
   

  	
   

  	
  Chicago, Illinois 60603-3441

  
	
   

  	
   

  	
  Attention: Joseph P. Collins

  
	
   

  	
   

  	
  Facsimile No.: (312) 701-9101

  

 

or
to such other individual or address as a party hereto may designate for itself
by notice given as herein provided.

15.4         Effect of Investigation.  Any due diligence review, audit or other
investigation or inquiry undertaken or performed by or on behalf of Purchaser
shall not limit, qualify, modify or amend the representations, warranties,
covenants or obligations of (including indemnities by) any Seller made or
undertaken pursuant to this Agreement or any of their Related Agreements,
irrespective of the knowledge and information received (or that should have
been received) therefrom by Purchaser.

15.5         Payments in Dollars.  Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto shall be made by wire transfer
in U.S. Dollars in same day or immediately available funds.

15.6         Waivers. 
The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same.  No
waiver by a party of any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement shall be effective
unless in writing, and no waiver in any one or more instances shall be deemed
to be a further or continuing waiver of any such condition or breach in other
instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty.

15.7         Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

15.8         Assignment. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and legal
representatives; provided, that no
assignment of any rights or obligations hereunder shall be made by Parent to
any Person without the written consent of Purchaser and no assignment of any
rights or obligations

 

80

 

hereunder shall be made by Purchaser to any Person without the written
consent of Parent.  Notwithstanding the
foregoing, Purchaser shall, without the obligation to obtain the written
consent of any other party hereto (including Parent), be entitled to assign
this Agreement or all or any part of its rights or obligations hereunder to any
Affiliate of Purchaser.  If any party
hereto assigns any of its rights or obligations under this Agreement pursuant
to this Section 15.8, the parties hereto shall, as appropriate, modify
the exhibits and other documents to be delivered at or prior to the Closing to
either add the assignee as a party to such document or substitute the assignee
for the assignor as the party to such document.

15.9         No Third Party Beneficiaries.  This Agreement is solely for the benefit of
the parties hereto and, to the extent provided herein, their respective
Affiliates, directors, officers, employees, agents and representatives, and no
provision of this Agreement shall be deemed to confer upon other third parties
any remedy, claim, liability, reimbursement, cause of action or other right.

15.10       Publicity. 
Prior to the Closing, no public announcement or other publicity
regarding the existence of this Agreement or its contents or the transactions
contemplated hereby shall be made by Purchaser, Parent, any Seller or any of
its respective Affiliates, officers, directors, employees, representatives or
agents, without the prior written agreement of Purchaser and Parent, in any
case, as to form, content, timing and manner of distribution or publication; provided, that nothing in this Section
15.10 shall prevent (a) Parent or Purchaser from filing a Form 8-K with the
U.S. Securities and Exchange Commission or publicly issuing a press release, in
each case, with respect to this Agreement or its contents or the transactions
contemplated hereby (the contents of which Form 8-K and press release shall be
determined by Parent and its Affiliates in their sole discretion) or (b) any
party from (i) making any public announcement required by Law or the rules of
any stock exchange, (ii) discussing this Agreement or its contents or the
transactions contemplated hereby with those Persons whose approval, agreement
or opinion, as the case may be, is required for consummation of such particular
transaction or transactions or (iii) enforcing its rights hereunder; provided
further, that if any party makes any disclosure pursuant to the
foregoing proviso, such party shall use reasonable best efforts to provide such
disclosure to the other parties hereto at least one Business Day prior to such
disclosure and shall consult with such other parties in good faith as to the
contents of such disclosure.

15.11       Further Assurances.  Upon the reasonable request of Purchaser,
Parent shall, and shall cause the Sellers and their respective Affiliates to,
on and after the Closing Date, execute and deliver to Purchaser such other
documents, releases, assignments and other instruments as may be required to
effectuate completely the transfer and assignment to Purchaser of, and to vest
fully in Purchaser title to, the Shares or the Assets, and to otherwise carry
out the purposes of this Agreement.

15.12       Severability.  If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions hereof shall not be affected thereby,
and there shall be deemed substituted for the provision at issue a valid, legal
and enforceable provision as similar as possible to the provision at issue.

 

81

 

15.13       Specific Performance.  Each party recognizes and affirms that in the
event of breach by him or it of any of the provisions of Section 7.8 or Section
7.10 money damages would be inadequate and the other parties would have no
adequate remedy at law.  Accordingly,
each party agrees that the other parties shall have the right, in addition to
any other rights and remedies existing in their favor, to enforce their
respective rights and the breaching party’s obligations under Section 7.8
and Section 7.10 not only by an action or actions for damages, but also
by an action or actions for specific performance, injunction and/or other
equitable relief in order to enforce or prevent any violations (whether
anticipatory, continuing or future) of the provisions of Section 7.8 or Section
7.10.  If a bond is required to be
posted in order for any party to secure an injunction, the parties agree that
such bond need not exceed the sum of $1,000.

15.14       Remedies Cumulative.  The remedies provided in this Agreement shall
be cumulative and shall not preclude the assertion or exercise of any other
rights or remedies available by Law, in equity or otherwise.

15.15       Entire Understanding.  This Agreement and the Related Agreements set
forth the entire agreement and understanding of the parties hereto with respect
to the transactions contemplated hereby and supersede any and all prior
agreements, arrangements and understandings among the parties relating to the
subject matter hereof, but excluding the letter agreement, dated as of March
11, 2005, between CIS and Purchaser, which remains in full force and effect.

15.16       Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal Laws of the State of New
York without giving effect to the principles of conflicts of law thereof.

15.17       Jurisdiction of Disputes; Waiver of
Jury Trial.  In the event any party
to this Agreement commences any litigation, proceeding or other legal action in
connection with or relating to this Agreement, any Related Agreement or any
matters described or contemplated herein or therein, the parties to this
Agreement hereby (a) agree that any such litigation, proceeding or other legal
action shall be brought exclusively in a court of competent jurisdiction
located within the County of New York, New York, whether a state or federal
court; (b) agree that in connection with any such litigation, proceeding or
action, such parties will consent and submit to personal jurisdiction in any
such court described in clause (a) of this Section 15.17 and to
service of process upon them in accordance with the rules and statutes
governing service of process; (c) agree to waive to the full extent permitted
by law any objection that they may now or hereafter have to the venue of any
such litigation, proceeding or action in any such court or that any such
litigation, proceeding or action was brought in an inconvenient forum; (d)
designate, appoint and direct CT Corporation System as their authorized agent
to receive on their behalf service of any and all process and documents in any
legal proceeding in the State of New York; (e) agree to notify the other
parties to this Agreement immediately if such agent shall refuse to act, or be
prevented from acting, as agent and, in such event, promptly to designate
another agent in the State of New York to serve in place of such agent and
deliver to the other parties written evidence of such substitute agent’s
acceptance of such designation; (f) agree as an alternative method of service
to service of process in any litigation, proceeding or action by mailing of
copies thereof to the parties at their addresses set forth in Section 15.3;
(g) agree that any service made as provided herein shall be effective and
binding service in every respect; and (h) agree

 

82

 

that nothing herein shall affect the rights of any party to effect
service of process in any other manner permitted by Law.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN,
AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.

* * *

 

83

 

IN WITNESS WHEREOF, the parties hereto have caused this Purchase and
Sale Agreement to be executed and delivered as of the date first above written.

 

	
   

  	
  REFCO
  GROUP LTD., LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  PHILLIP BENNETT

  
	
   

  	
  Name:

  	
  Phillip
  Bennett

  
	
   

  	
  Title:

  	
  Pres.
  & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CARGILL,
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/WARREN
  R. STALEY

  
	
   

  	
  Name:

  	
  Warren
  R. Staley

  
	
   

  	
  Title:

  	
  Chairman
  and CEO

  

 

84

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