Contract
Exhibit 2.1 SHARE PURCHASE AGREEMENT This Share Purchase Agreement (this “Agreement”) is made and entered into as of May 22, 2018 (the “Effective Date”), between Xxxxxx AcquisitionCo Inc., a British Columbia Company (“Buyer”), OnTargetJobs Canada, Inc., a British Columbia company (the “Company”), and DHI Group, Inc., a Delaware corporation (“Seller”). Buyer, the Company and Seller are sometimes individually called a “Party” and collectively called the “Parties.” Seller owns 200 Common Shares without par value in the capital of the Company, which represents all of the issued and outstanding shares in the capital of the Company (collectively, the “Shares”). Buyer wishes to purchase the Shares from Seller, and Seller wishes to sell the Shares to Buyer, in each case pursuant to the terms and conditions in this Agreement. By signing this Agreement, each Party represents and warrants that it has read, understands and agrees to be bound by all terms and conditions of this Agreement. The Parties agree as follows: 1. Definitions. The following terms have the following respective meanings (and capitalized terms not defined in this Section 1 have the meanings set forth in the other sections of this Agreement): “Accounts Receivable” means all accounts receivable, notes receivable and other monies due for sales and deliveries of goods or performances of services by the Company arising out of the conduct of the Business, and the full benefit of all security for such accounts or rights to payment, including all trade, vendor and other accounts receivable representing amounts receivable in respect of goods sold or services rendered to customers of the Business or in respect of amounts refundable or otherwise due to the Company from vendors, suppliers or other Persons. “Acquired Employees” has the meaning set forth in Section 4(e)(i). “Adjustment Amount” has the meaning set forth in Section 3(a). “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. “Ancillary Agreements” has the meaning set forth in Section 4(a)(vii). “Averaged Termination Cost” has the meaning set forth in Section 4(f)(iv). “Business” means the Hcareers business of providing job postings for the hotel, restaurant, food service, casino and assisted living industries, operated by the Company prior to the Closing.
Exhibit 2.1 “Business Employees” means the Acquired Employees and the Offer Employees. “Buyer Parties” means Buyer and its subsidiaries and Affiliates (including the Company after the Closing) and their respective officers, directors, managers, members, employees, representatives, agents, successors and assigns. “Cash” means the aggregate amount of all cash, cash equivalents and marketable securities held by the Company, calculated in accordance with GAAP; provided that Cash shall be calculated net of issued but uncleared checks and drafts but shall include checks and drafts deposited for the account of, or received by, the Company. “Cash Purchase Price” means an amount of Sixteen Million Five Hundred Thousand dollars ($16,500,000). “Closing Date” has the meaning set forth in Section 4(a). “Closing Statement” has the meaning set forth in Section 3(b). “Code” means the Internal Revenue Code of 1986, as amended, or analogous laws of other Governmental Authorities. “Collected Accounts Receivable” means (i) the amount actually collected by the Company from the day after the Effective Date through the Collected Receivables Date on the account of Accounts Receivable of the Company that have been taken into account in the calculation of the Estimated Adjustment Amount, plus (ii) 5% of the amount of the Accounts Receivable of the Company that have been taken into account in calculation of the Estimated Adjustment Amount; provided, that the Collected Accounts Receivable cannot exceed an amount equal to the aggregate amount of Accounts Receivable of the Company that have been taken into account in the calculation of the Estimated Adjustment Amount. “Collected Receivables Date” means the date that is ninety (90) days after the Effective Date. “Company Sites” has the meaning set forth in Section 5(g). “Confidential Information” has the meaning set forth in Section 10. “Credit Agreement” means the Amended and Restated Credit Agreement, dated as of November 24, 2015, among DHI Group, Inc., Dice Inc. and Dice Career Solutions, Inc., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto and the other parties thereto, as may be amended or supplemented from time to time. “Direct Claim” has the meaning set forth in Section 9(c). “Disclosure Schedules” has the meaning set forth in Section 5. 2
Exhibit 2.1 “Dispute Notice” has the meaning set forth in Section 3(b). “Effective Date” has the meaning set forth in the preamble of this Agreement. “Employee Benefit Plan” has the meaning set forth in Section 5(p). “Employment Agreement” means any employment contract, consulting agreement, termination or severance agreement, salary continuation agreement, change of control agreement, non-compete agreement or any other agreement, whether written or oral, respecting the terms and conditions of employment or payment of compensation, or of a consulting or independent contractor relationship in respect to any current or former officer, employee, consultant or independent contractor. “Employment Matters” has the meaning set forth in Section 5(o)(iii). “Encumbrance” means any pledge, lien, charge, security interest, lease, license, title retention, mortgage, restriction, easement, right-of-way, title defect, option, right of first offer or refusal, purchase right, adverse claim or encumbrance of any kind (other than restrictions on transfer under applicable securities Laws). “Environmental Claim” means any Proceeding, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit. “Environmental Law” means any applicable Law, and any governmental order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any analogous Laws of other Governmental Authorities): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; the Occupational Safety and Health Act of 1970, as amended, 3
Exhibit 2.1 29 U.S.C. §§ 651 et seq.; the Canadian Environmental Protection Act, 1999 (S.C. 1999, c. 33); the Transportation of Dangerous Goods Act, 1992 (S.C. 1992, c. 34); the Environmental Management Act [SBC 2003] c. 53; the Water Sustainability Act [SBC 2014] CHAPTER 15; the Water Protection Act [RSBC 1996] CHAPTER 484 and the Workers Compensation Act [RSBC 1996], CHAPTER 492. “Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit. “Environmental Permit” means any permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law. “Escrow Account” has the meaning set forth in Section 3(d). “Escrow Agent” means Wilmington Trust. “Escrow Agreement” means the Escrow Agreement attached hereto as Exhibit A. “Escrow Amount” means One Million Six-Hundred and Fifty Thousand dollars ($1,650,000). “Escrow Period” means the period of time beginning on the Closing Date and ending on the 12-month anniversary thereof. “Estimated Adjustment Amount” has the meaning set forth in Section 3(a). “Estimated Cash” has the meaning set forth in Section 4(a)(ix). “Estimated Closing Payment” means the Cash Purchase Price, plus or minus (as applicable) the Estimated Adjustment Amount. “Final Adjustment Amount” has the meaning set forth in Section 3(b). “Final Closing Payment” means the Cash Purchase Price, plus or minus (as applicable) the Final Adjustment Amount. “Financial Statements” has the meaning set forth in Section 5(d)(i). “FLSA” mans the U.S. Fair Labor Standards Act and the rules and regulations promulgated thereunder, together with any analogous Laws of other Governmental Authorities. “Fundamental Representations” means, with respect to Seller, the representations and warranties set forth in Section 5(a) (Organization; Authority; Enforcement), Section 5(b) (No Conflict; No Consents), Section 5(c) (Capitalization), Section 5(m) (Related Party Transactions), 4
Exhibit 2.1 Section 5(n) (Taxes) and Section 5(r) (Brokers); and, with respect to Buyer, the representations and warranties set forth in Section 6 (Representations and Warranties of Buyer). “GAAP” means generally accepted accounting principles in the United States and Canada, consistently applied. “Governmental Authority” means any federal, state, provincial, municipal, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government (including taxing authorities) or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction. “Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, and polychlorinated biphenyls. “Indebtedness” means, with respect to the Company, (i) indebtedness for borrowed money or evidenced by notes, bonds, debentures or similar instruments, (ii) obligations under letters of credit, (iii) obligations under equipment, vehicle, financing or capital leases, (iv) the deferred purchase price of assets, services or securities (other than ordinary course trade accounts payable that are not past due), (v) obligations with respect to surety bonds and other financial guarantees, (vi) interest rate protection agreements, hedging or swap obligations or similar arrangements, (vii) margin debt, (viii) obligations secured by an Encumbrance on the Company’s assets or equity interests, (ix) amounts owed to Seller or any of Seller’s affiliates, (x) guarantees of the obligations described in clauses (i)-(ix) foregoing of any other person or entity, and (xi) all interest, premiums, penalties, charges, fees and other amounts due in connection with the payment in full of the foregoing and/or required to fully release any Encumbrances on the Company’s assets or equity interests. “Indemnified Party” has the meaning set forth in Section 9(a). “Indemnifying Party” has the meaning set forth in Section 9(a). “Independent Accountant” means Xxxxx Xxxxxxxx LLP. “Intellectual Property Assets” means all of the business names, domain names, trade names, trademarks, service marks, trade dress, branding, goodwill, trade secrets, know-how, patents, inventions, copyrights, works of authorship, moral rights, source code, object code, software, databases, libraries, website content, mobile applications and content, social media and networking accounts, content and assets, and other intellectual property rights and proprietary information used by the Company or the Business, including, without limitation, as more particularly described on Schedule 1. 5
Exhibit 2.1 “IT Assets” means the assets included in the information technology systems used by the Company or the Business (including software, hardware, computer systems, servers, networks, platforms, interfaces, applications, websites, telecommunications systems and related documentation), including, without limitation, as more particularly described on Schedule 1. “Latest Balance Sheet” has the meaning set forth in Section 5(d)(i). “Law” means any federal, state, provincial, municipal and local statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority. “Lenders” has the meaning set forth in Section 4(a)(xiii). “Losses” has the meaning set forth in Section 7. “Material Advertisers” has the meaning set forth in Section 5(l). “Material Contract” has the meaning set forth in Section 5(k). “Material Customers” has the meaning set forth in Section 5(l). “Material Partners” has the meaning set forth in Section 5(l). “Material Vendors” has the meaning set forth in Section 5(l). “Material Adverse Effect” means any event, occurrence, fact, condition or change that has a material adverse effect on (a) the Business, results of operations, financial condition or assets of the Company, or (b) the ability of Seller to consummate the transactions contemplated hereby on a timely basis; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Company operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement; (vi) any changes in applicable Laws or accounting rules, including GAAP; or (vii) the public announcement, pendency or completion of the transactions contemplated by this Agreement or the Ancillary Agreements. “Offset Period” has the meaning set forth in Section 4(f)(i). “Open Matters” has the meaning set forth in Section 3(b). “Paid Termination Cost” has the meaning set forth in Section 4(f)(iv). “Person” means an individual, corporation, partnership, joint venture, limited liability 6
Exhibit 2.1 company, Governmental Authority, unincorporated organization, trust, association or other entity. “Personal Information” means any information that, alone or in combination with other information, identifies or enables the identification of or contact with any individual, including an individual’s name, address, telephone number, email address, date of birth, photograph, social security number or tax identification number, credit card number, bank information, biometric identifiers, national provider identifier, medical education identifier or medical licensure information. “Post-Closing Tax Period” means all taxable periods beginning after the Effective Date and the portion beginning after the Effective Date for any Straddle Period. “Pre-Closing Tax Period” means all taxable periods ending on or before the Effective Date and the portion through the end of the Effective Date for any Straddle Period. “Proceeding” means any action, suit, litigation, arbitration, mediation, hearing, audit, investigation, claim, charge, complaint or proceeding (whether civil, criminal, administrative, Tax, investigative or informal). “Related Parties” has the meaning set forth in Section 5(m). “Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture). “Release Date” has the meaning set forth in Section 9(f). “Restricted Business” means the business of providing job postings specifically for the hotel, restaurant, food service, casino and assisted living industries. “Restricted Period” has the meaning set forth in Section 13. “Review Period” has the meaning set forth in Section 3(b). “Seller Insurance Policies” has the meaning set forth in Section 12. “Straddle Period” means a taxable period that includes (but does not end on) the Effective Date. “Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body or, (if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such 7
Exhibit 2.1 first Person or by another Subsidiary of such first Person. “Target Working Capital” means One Million Eight Hundred Thousand dollars ($1,800,000). “Tax” or “Taxes” means (a) any federal, state, local or foreign income, gross receipts, property, sales, use, license, franchise, employment, payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever that is imposed by any Governmental Authority and includes all interest, penalties, fines or other additional amounts imposed by any Governmental Authority with respect to the foregoing, and (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group, as a transferee or successor, by contract or otherwise. “Tax Act” means the Income Tax Act (Canada), as amended. “Tax Benefit” means any refund or credit of Taxes payable or reduction in the amount of Taxes that otherwise would have been paid. “Tax Claim” has the meaning set forth in Section 11(c). “Tax Return” has the meaning set forth in Section 11(b)(i). “Termination Cost” has the meaning set forth in Section 4(f)(ii). “Termination Notice” has the meaning set forth in Section 4(f)(iii). “Territory” means The United States and Canada. “Third Party Claim” has the meaning set forth in Section 9(b). “Transaction Expenses” means, to the extent not paid by the Company, and without duplication to amounts included as Indebtedness or Working Capital, the Seller or otherwise prior to the Closing Date, the fees, costs and expenses incurred by the Company on or prior to the Closing Date in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, including (i) all fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and any other experts in connection with the Transactions contemplated hereby, (ii) amounts payable (including any stay bonuses or “success fees”, any change of control payments, bonuses, retention obligations or similar amounts due by the Company in connection with the transactions contemplated hereby (and any related employment Taxes payable by the Company) and any amounts payable to offset any excise Taxes imposed under Section 4999 of the Code and any related Taxes) by the Company to or for the benefit of current or former officers, directors or employees of the Company, including accrued and unpaid bonuses as of the Closing Date but excluding, for the avoidance of doubt, any amounts that become payable as a result of any actions taken by the Buyer or the Company 8
Exhibit 2.1 (i) Seller shall deliver to Buyer, accompanied by a duly executed stock power or other instrument of transfer, the certificate(s) representing the Shares. (ii) Seller shall enter into a transition services agreement with Buyer, or an Affiliate of Buyer, in the form agreed to by the Parties and attached hereto as Exhibit B (the “Transition Services Agreement”). (iii) Seller shall deliver to the Buyer a counterpart of the Escrow Agreement, duly executed by the Seller and the Escrow Agent. (iv) Seller shall deliver to Buyer all check books and credit/debit cards of the Company. (v) Seller shall deliver to Buyer (in each case to the extent not accessible by Buyer automatically as a result of the Closing) all tangible assets and all contracts, books and records of the Company and the Business. (vi) Seller shall deliver to Buyer resignations, effective as of the Closing, of each director and officer of the Company. (vii) Seller shall deliver to Buyer a certificate signed by the Secretary of the Company and the Secretary of Seller, dated as of the Effective Date, attaching and certifying as to the following: (i) in the case of the Seller, the certificate of incorporation and bylaws of the Company and Seller and any amendments thereto, (ii) in the case of the Company, the certificate of amalgamation, the notice of articles and the articles of the Company, (iii) the resolutions of the Company’s and Seller’s boards of directors approving the execution, delivery, performance and consummation by the Company and Seller of this Agreement and any other agreement, certificate or instrument entered into or delivered by the Parties in connection with this Agreement (the “Ancillary Agreements”), and (iv) certificates of good standing of the Company and Seller from the British Columbia Registry Services and the Secretary of State of Delaware, respectively, dated May 8, 2018. (viii) Seller shall deliver to Buyer a certificate of the Secretary of Seller, dated as of the Effective Date, certifying the names and signatures of the officers of the Seller authorized to sign this Agreement, the Ancillary Agreements and the other documents to be delivered hereunder and thereunder. (ix) Buyer shall pay to Seller the Estimated Closing Payment less (A) the estimated amount of Cash set forth in Exhibit A (the “Estimated Cash”), which shall be paid in accordance with Section 4(b), and (B) the Escrow Amount, by wire transfer to the accounts provided by Seller to Buyer in writing on or prior to the Effective Date. (x) Buyer shall pay the Escrow Amount to the Escrow Account. 12
Exhibit 2.1 any breach by the Company or Buyer of any contractual or legal obligation to such employee; 2. the Buyer has continued and operated the Business in its ordinary course and has not relocated any of the Business Employees to different locations outside the Vancouver metropolitan area; and 3. the terminated (including by constructive dismissal) employees have executed an enforceable release releasing the Seller from any potential liability to such terminated (including by constructive dismissal) employee. (ii) The Parties have agreed in advance that the indemnification obligation hereunder with respect to each terminated (including by constructive dismissal) Business Employee shall equal the amount set forth in Schedule 4(f)(ii) opposite such employee’s name (the “Termination Cost”). Buyer shall have no further recourse against the Seller for any claims related to the termination (including by constructive dismissal) of any Business Employees by the Company that occurs after Closing, and Seller shall not be liable to the Buyer for any other costs or liabilities related to the termination (including by constructive dismissal) of such employees other than the Termination Cost stipulated in Schedule 4(f)(ii), whether or not the actual cost or liabilities to Buyer or the Company in connection with such termination (including by constructive dismissal) are higher or lower; provided, however, nothing in this subsection (ii) shall negate or limit any liability the Seller has with respect to any representations or warranties made by Seller pursuant to Section 5. (iii) Any request for payment of termination costs pursuant to this Section 4(f) shall be made by Buyer by providing written notice (“Termination Notice”) to the Seller of the termination (including by constructive dismissal) of a Business Employee. The Termination Notice shall include the name of the terminated (including by constructive dismissal) employee and a Joint Instruction Letter (as defined in the Escrow Agreement) executed by the Buyer instructing the Escrow Agent to disburse to the Buyer the Termination Cost set forth in Schedule 4(f)(ii) opposite such employee’s name. No later than ten (10) Business Days after Seller’s receipt of a Termination Notice, the Seller shall execute and submit to the Escrow Agent the Joint Instruction Letter. (iv) If, during the Offset Period, more than 10 Business Employees have been terminated (including by constructive dismissal), no later than 30 days after the expiration of the Offset Period, the Buyer shall prepare and deliver to Seller (A) a statement containing a list of all Business Employees that have been terminated (including by constructive dismissal) by the Company during the Offset Period and the aggregate amount paid out of the Escrow with respect to such employees (the “Paid Termination Cost”) and (B) a calculation of the average Termination Cost per employee, multiplied by 10 (the “Averaged Termination Cost”). The employee mentioned in Schedule 4(f)(i) shall not be counted towards the 10 Business Employees for the purpose of this Section 4(f)(iv). 15
Exhibit 2.1 accurate and complete in all material respects, has been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, has been prepared from and is consistent with the books of account of the Business and the Company (which are accurate and complete in all material respects) and accurately presents in all material respects the financial condition and results of operations of the Business and the Company as of the times and for the periods referred to in the applicable Financial Statements. (ii) All existing Accounts Receivable of the Company (including those Accounts Receivable reflected on the Latest Balance Sheet that have not yet been collected and those Accounts Receivable that have arisen since March 31, 2018 or that have arisen since March 31, 2018 and that have not yet been collected) represent valid obligations arising from bona fide transactions entered into in the ordinary course of business and not in violation of applicable Law and, except to the extent reserved against by the Company as provided in the Latest Balance Sheet, are not subject to any defenses, set-offs or counterclaims. There is no Encumbrance on any of such Accounts Receivable that will not have been discharged on or prior to the Closing Date, and no request or agreement for deduction or discount has been made with respect to any of such Accounts Receivable, except as fully and adequately reflected in reserves for doubtful accounts set forth in the Latest Balance Sheet. The reserve for bad debts shown on the Interim Balance Sheet or, with respect to Accounts Receivable arising after the Latest Balance Sheet Date, on the accounting records of the Company have been determined in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of disclosures normally made in footnotes. (f) No Undisclosed Liabilities. The Company does not have any liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, except for (i) liabilities set forth on the Latest Balance Sheet and (ii) liabilities related to the Business which have arisen since the date of the Latest Balance Sheet in the ordinary course of business consistent with past practices and which are not, individually or in the aggregate, material in amount. (g) Assets and Properties. The Company does not own nor has it ever owned any real property. The tangible assets of the Business are in good condition and repair (except for ordinary wear and tear) and are suitable for their intended use in connection with the ordinary course of business. The Company owns, and has good and marketable title to (or has a legal, valid, binding and enforceable right to use, pursuant to a Material Contract listed on Schedule 5(l) of the Disclosure Schedules), all of the properties and assets (tangible or intangible, including, without limitation, the Intellectual Property Assets and the IT Assets), (i) reflected on the face of the Latest Balance Sheet, or (ii) used in the conduct of the Business, in each case free and clear of any Encumbrances. The assets described in the previous sentence, together with the services provided to Buyer under the Transition Services Agreement, include all of the assets, tangible and intangible, of any kind (including all Intellectual Property Assets and IT Assets) necessary for Buyer to operate the Business after the Closing in the same manner as currently operated, and will be available for use by the Company immediately after the Closing on the same terms and conditions as currently applicable to the Company or its Affiliates. Section 5(g) 18
Exhibit 2.1 of the Disclosure Schedules lists the street address of each parcel of real property leased by the Company. With respect to leased real property, Seller has delivered or made available to Buyer true, complete and correct copies of any leases and amendments or supplements related thereto and affecting the real property. The Company is not a sublessor or grantor under any sublease or other instrument granting to any other person any right to the possession, lease, occupancy or enjoyment of any leased real property. (h) Intellectual Property Assets. Schedule 5(h)(i) of the Disclosure Schedules contains a complete list of all domain names, websites (including mobile versions), mobile applications and social media and networking accounts owned, operated or used by the Company or the Business (collectively, “Company Sites”), and indicates for each Company Site the legal entity that owns such Company Site, the legal entity that operates such Company Site and whether any portion of the Business is operated from such Company Site. Schedule 5(h)(ii) of the Disclosure Schedules contains a complete list and description of all other material Intellectual Property Assets, whether registered, applied for, or in common law, including application and registration numbers (as applicable), and a list of existing agreements conveying rights and interests to any material Intellectual Property Asset, whether registered, applied for, or in common law, (including licenses and covenants not to xxx) that is owned or used by the Company or the Business, and indicates the legal entity that owns each of such Intellectual Property Asset and the legal entity to which any Intellectual property Asset has been licensed to or from, if applicable. The Intellectual Property Assets listed in Schedules 5(h)(i) and 5(h)(ii) of the Disclosure Schedules comprise all Intellectual Property Assets, whether registered, applied for, or in common law, required for the continued conduct of the Business as now being conducted. All material Intellectual Property Assets are in effect, valid and enforceable, and the Company, Seller and their Affiliates have not received any notice or claim related to the validity, enforceability, patentability, registrability, use, ownership or scope of any Intellectual Property Assets. None of the Intellectual Property Assets are subject to any maintenance fee, Tax, renewal, filing or other action due. There has been no act or inaction by the Company, Seller or their Affiliates or any prior owners of the Intellectual Property Assets that has given or could reasonably be expected to give rise to a bar that prevents the enforcement of any material Intellectual Property Assets. Except as indicated in Schedule 5(h)(iii) of the Disclosure Schedules, the Company and the Business have the enforceable right through a valid contractual right or license to use all the Intellectual Property Assets, free and clear of all liens and free from any requirement of any royalty payments, license fees, charges or other payments, or conditions or restrictions. Neither the operation of the Company’s business (including the Business) nor use of Intellectual Property Assets, whether registered, applied for, or in common law, by (or with the permission of) the Company, Seller or their Affiliates has infringed, misappropriated or violated any intellectual property rights of any person or entity, and the Company, Seller and their Affiliates have not received any notice or claim of such matters, including any cease and desist demand or offer or request to license intellectual property. None of the proprietary software of the Company or the Business is subject to any open source or similar license or other arrangement which has or would require any disclosure or distribution of the source code, or impose economic limitations on the commercial exploitation, of such software. Schedule 5(h)(iv) of the Disclosure Schedules contains a complete list of all agreements pursuant to which any Intellectual Property Asset is licensed to the Company or used in the Business or is licensed from the Company. All of the agreements and arrangements set forth on Schedule 5(h)(iv) of the Disclosure Schedules (x) are 19
Exhibit 2.1 federal, state, provincial, municipal, local and foreign income and other material Tax Returns filed by the Company for the past three (3) years have been provided to Buyer. (ii) The Company has not been a member of a consolidated, combined or unitary group for federal, state, provincial, municipal, local or foreign Tax purposes and the Company does not have any liability for the Taxes of any person or entity (other than the Company) as a transferee or successor, as a result of joint and several liability, by contract, by Law or otherwise. (iii) The Company is not a party to any joint venture, partnership or other arrangement that could be treated as a partnership for federal income tax purposes. (iv) The Company has (A) withheld all required amounts from its employees, agents, contractors, creditors, shareholders and any other third parties, and remitted such amounts to the proper Governmental Authority; (B) paid all such withheld amounts to the appropriate Governmental Authority; and (C) filed all federal, state, provincial, municipal, local and foreign returns and reports with respect to such withheld amounts, all in compliance with the withholding tax provisions of applicable Law, as in effect for the applicable year and other applicable federal, state, provincial, local or foreign Laws. (v) The Canadian federal income Tax Returns of the Company have been examined by the Canada Revenue Agency (“CRA”), or have been closed by the applicable statute of limitations, for all periods through December 31, 2012. The provincial Tax Returns of the Company have been examined by the relevant agencies or such returns have been closed by the applicable statute of limitations for all periods through December 31, 2012. No deficiencies or reassessments in respect of any Taxes have been proposed, asserted or assessed against the Company by any federal, state, provincial, municipal, local or foreign taxing authority. No taxing authority is currently challenging or disputing a filing position taken by the Company in any Tax Return. No request to file a Tax Return has ever been made by a taxing authority in a jurisdiction where the Company does not file Tax Returns. (vi) The Company has not executed or filed with any taxing authority (whether federal, state, provincial, municipal, local or foreign) any agreement or other document extending the period for assessment, reassessment or collection of any Taxes. (vii) No federal, state, provincial, municipal, local or foreign Tax audits or other administrative proceedings, discussions, disputes or Proceedings are presently pending with regard to any Taxes or Tax Returns of the Company, and no additional issues are being asserted against the Company in connection with any existing audits of the Company. (viii) The Company is not a party to any Tax allocation or Tax sharing agreement, other than an agreement entered into in the ordinary course of business with a primary purpose that does not relate to Taxes. 23
Exhibit 2.1 (ix) The Company has not at any time during the past 5 years used the cash method of accounting. The Company has not (A) agreed to, and it is not required to, make any adjustment by reason of a change in accounting methods or (B) used an improper method of accounting that affects any taxable year ending after the Effective Date. Neither the CRA nor any other agency has proposed any such adjustment or change in accounting methods that affects any taxable year ending after the Effective Date. The Company has no application pending with any taxing authority requesting permission for any changes in accounting methods that relate to its business or operations and that affects any taxable year ending after the Effective Date. (x) The Company does not hold, and is not treated as holding, any assets that constitute “United States property” within the meaning of Section 956 of the Code. (xi) There are no Tax holidays or other incentives granted by a Governmental Authority to the Company that would terminate or be reduced as a result of the transactions contemplated by this Agreement. (xii) The Company has not acquired property from a Person not dealing at arm’s length (for purposes of the Tax Act) with it in circumstances that would result in the Company becoming liable to pay Taxes of such Person under subsection 160(1) of the Tax Act or any analogous provisions of any comparable Law of any province or territory of Canada. (xiii) There are no circumstances existing at or prior to the Closing Date which could, in themselves, result in the application of any of sections 80 to 80.03 of the Tax Act or equivalent provincial provisions to the Company. (xiv) The Company has not made (and will not, at or prior to the Closing Date, make) any election pursuant to section 80.04 of the Tax Act or any equivalent provincial provision in which it is an eligible transferee. (xv) The Company has not made or agreed to make any Tax elections or designations with any taxing authority with respect to itself or its assets in respect of Taxes. (xvi) For all transactions, if any, between the Company and any other Person that is a non-resident of Canada for purposes of the Tax Act with whom the Company was not dealing at arm’s length and to which subsection 247(3) of the Tax Act would apply, the Company, as applicable, has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Tax Act. (xvii) The representation and warranties in this Section 5(o) are not intended to serve as representations to, nor can they be relied upon for, or with respect to, Taxes attributable to any Tax periods (or portions thereof) beginning after, or Tax positions taken after, the Closing Date, including the availability of any net operating losses or other Tax attributes. 24
Exhibit 2.1 (xviii) The Shares of the Company do not constitute “taxable Canadian property” of the Seller for the purposes of the Tax Act. (p) Employees and Labor. (i) Schedule 5(p) of the Disclosure Schedules contains a correct and complete list of each individual who is an employee, independent contractor, consultant, or leased employee of the Business, and sets forth for each such individual the following: (i) name, position or function, annual base salary, hourly rate of pay, or other compensation (if applicable), (ii) the legal entity employing or engaging such individual, (iii) date of hire or retention, (iv) full or part-time status including number of work hours for part-time employees, (v) classification as eligible or ineligible for overtime, (vi) status as active or on leave (and anticipated return date, if applicable) (vii) target incentive compensation and other benefits provided (if applicable) and (viii) primary work location. Since January 1, 2015, with respect to the Business, none of the Company, Seller or its Affiliates has implemented any plant closing or layoff of employees that would constitute a group termination (mass termination) under applicable Law, no such action is currently planned or anticipated, and no such action will be implemented without advance notification to Buyer. (ii) Seller has provided to Buyer correct and complete copies of each Employment Agreement to which the Company is a party, or by which it is otherwise bound. Each such Employment Agreement is legal, valid, binding and enforceable in accordance with its respective terms. There is no existing default or breach of the Company or the Seller under any Employment Agreement (or, to the Seller’s knowledge, event or condition that, with notice or lapse of time or both could constitute a default or breach) and there is no such default (or, to Seller’s knowledge, event or condition that, with notice or lapse of time or both, could constitute a default or breach) with respect to any third party to any Employment Agreement. Except as set forth on Schedule 5(p) of the Disclosure Schedules, (A) the Company is not a party to or bound by any Employment Agreement; (B) neither the Company nor Seller has made any verbal commitments to any officer, employee, former employee, consultant or independent contractor of the Business with respect to compensation, promotion, retention, termination, severance or similar matters in connection with the transactions contemplated hereby or otherwise; and (C) to the knowledge of Seller, no employee of the Business has notified the Company or Seller that he or she intends to resign or retire as a result of the transactions contemplated by this Agreement or otherwise within one (1) year after the Closing Date. (iii) Since January 1, 2015, (i) the Company and the Business have been in compliance in all material respects with all applicable Laws, contracts, policies, plans and programs relating to employment and employment practices, including those relating to wages, hours, collective bargaining, unemployment insurance, workers’ compensation, equal employment opportunity, discrimination, harassment and retaliation, affirmative action, family and medical leave, the payment, reporting and withholding of Taxes, immigration, background checks, plant closings and mass layoffs, and occupational 25
Exhibit 2.1 (ii) Buyer shall cause to be prepared and filed all Tax Returns for the Company for any Straddle Period. All such Tax Returns shall be prepared on a basis consistent with past practice, except as otherwise required by Law. Buyer shall deliver to Seller for its review and reasonable comment no less than thirty (30) days prior to the applicable filing deadline (taking into account applicable extensions), a copy of any such Tax Return proposed to be filed. Buyer shall consider in good faith any reasonable written comments to any such Tax Return that Seller submits to Buyer no later than ten (10) days following the delivery of such Tax Return to Seller. Seller shall pay Buyer an amount equal to Seller’s share of Taxes due with respect to such Tax Return at least five (5) days before such Tax Return is due except to the extent of Taxes included in the calculation of Working Capital as finally determined. (iii) Any income tax deduction arising from Transaction Expenses, bonuses, option cashouts, restricted share units, or other compensation and transaction expenses incurred by or on behalf of the Company in connection with the transactions contemplated by this Agreement shall be allocable to the Pre-Closing Tax Period, unless otherwise required by Law. (c) Tax Claims. If a claim shall be made by any taxing authority, which, if successful, might result in an indemnity payment to an indemnified party pursuant to this Agreement, then such indemnified party shall give notice to the indemnifying party in writing of such claim and of any counterclaim the indemnified party proposes to assert (a “Tax Claim”); provided, however, the failure to give such notice shall not affect the indemnification provided hereunder except to the extent the indemnifying party has been materially prejudiced as a result of such failure. (i) With respect to any Tax Claim relating to a Pre-Closing Tax Period, Seller shall, solely at its own cost and expense, control all proceedings and may make all decisions taken in connection with such Tax Claim (including selection of counsel) and, without limiting the foregoing, may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any taxing authority with respect thereto, and may, in its sole discretion, either pay the Tax claimed and xxx for a refund where applicable Law permits such refund suits or contest the Tax Claim in any permissible manner; provided, however, that Seller must first consult, in good faith with Buyer before taking any action with respect to the conduct of such Tax Claim. Notwithstanding the foregoing, Seller shall not settle such Tax Claim without the prior written consent of Buyer, which consent shall not be unreasonably withheld, and Buyer, and counsel of its own choosing, shall have the right to participate fully in all aspects of the prosecution or defense of such Tax Claim if it reasonably determines that such Tax Claim could have a material adverse impact on the Taxes of the Company in a Post-Closing Tax Period. (ii) Seller and Buyer shall jointly control and participate in all proceedings taken in connection with any Tax Claim relating to Taxes of the Company for a Straddle Period, and shall bear their own respective costs and expenses. Neither Seller nor Buyer shall settle any such Tax Claim without the prior written consent of the other. (iii) Buyer shall control all proceedings with respect to any Tax Claim relating to a taxable period or portion thereof beginning on or after the Closing Date. Seller shall have no right to participate in the conduct of any such proceeding. 34
Exhibit 2.1 Xxxxxxx, Xxxxx 00000 Facsimile: (000) 000-0000 E-mail:xxxxxxx@xxxxxxx-xxxx.xxx Attention: Xxxxx Shaper with a copy to: King & Spalding LLP 0000 Xxxxxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000 Facsimile: (000) 000-0000 E-mail:xxxxxx@xxxxx.xxx Attention: Xxxxxx X. Xxxxx with a copy to: Xxxxxx Inc. 000 X. 00xx Xxxxxx Xxx Xxxx, XX 00000 Email: xxx@xxxxxxxxxxxxx.xxx Attention: Xxx Xxxxxxxx For Seller: DHI Group, Inc. 0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx Xxx Xxxx, XX 00000 Attention: General Counsel Email: Xxxxx.Xxxxxxxx@xxxxxxxxxxx.xxx with a copy to: Winston & Xxxxxx LLP 000 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Uri Doron Email: xxxxxx@xxxxxxx.xxx (e) Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be governed by and construed in accordance with the Laws of the State of Delaware, without regard to conflict of law principles which would result in the application of the Laws of another jurisdiction. Each Party submits to personal jurisdiction in the State of Delaware and further agrees that any action relating to this Agreement will be brought exclusively in a court in the State of Delaware. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN 38
Exhibit 2.1
Exhibit 2.1
Exhibit 2.1 Exhibit A Estimated Adjustment Amount Cash $ 1,850,000 Working Capital $ 2,000,000 Working Capital in excess of Target Working $ 200,000 Capital Indebtedness $ 0 Transaction Expenses $ 832,629 Estimated Adjustment Amount $ 1,217,371 (increases amount payable to Seller)