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Exhibit 2.1
PURCHASE AGREEMENT
among
ZD INC.,
ZD HOLDINGS (EUROPE) LTD.
and
XXXXX-XXXXX, INC.
Dated as of August 30, 1999
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EXHIBITS AND SCHEDULES
Exhibits
Exhibit A List of Companies
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Trademark Assignment
Exhibit D Form of Assumption Agreement
Exhibit E Form of Sellers' Closing Certificates
Exhibit F Form of Buyer's Closing Certificate
Exhibit G Form of Transition Services Agreement
Exhibit H Form of Opinion of Counsel to Seller
Schedules
Schedule 1.1(b) Software
Schedule 1.1(c) Databases
Schedule 1.3 Excluded Assets
Schedule 1.4 Assumed Liabilities
Schedule 2.2(a) Asset Purchase Price Allocation
Schedule 2.2(b) Stock Purchase Price Allocation
Schedule 4.2 Capitalization
Schedule 4.4 Third Party Consents
Schedule 4.6 Intellectual Property
Schedule 4.7 Insurance Policies
Schedule 4.8 Contracts
Schedule 4.9 Employees/Contractors
Schedule 4.10 Litigation
Schedule 4.11 Real Property Leases
Schedule 4.12(a) Personal Property
Schedule 4.12(b) Leased Personal Property
Schedule 4.13 Transactions with Employees
Schedule 4.14(a) Asset Seller Financial Statements
Schedule 4.14(b) Stock Seller Financial Statements
Schedule 4.16 Absence of Certain Changes
Schedule 4.19(a) Employee Plans
Schedule 4.19(b) General Employee Severance
Schedule 4.19(c) ERISA
Schedule 4.19(e) Vesting
Schedule 4.22 Customers
Schedule 6.6 Trademark Guidelines
Exhibit A:
The Companies
ZD Market Intelligence SARL
ZD Market Intelligence Ltd. (UK)
ZD Market Intelligence GmbH
ZD Market Intelligence Espana LLC
ZD Market Intelligence Ltd. (Ireland)
PURCHASE AGREEMENT
dated August 30, 1999
The parties to this Purchase Agreement (this "Agreement") are ZD INC., a
Delaware corporation with its principal offices at 00 Xxxx 00xx Xxxxxx, XX, XX
00000 ("Asset Seller"), ZD Holdings (Europe) Ltd., a company incorporated under
the laws of the United Kingdom, with its principal office at Xxx Xx. Xxxxxxxxx'x
Xxx, Xxxxxx X0 0XX ("Stock Seller" and, collectively with the Asset Seller, the
"Sellers") and Xxxxx-Xxxxx, Inc., a Delaware corporation with its principal
office at 000 Xxxxxxx Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx 00000 ("Buyer"). Asset
Seller and Stock Seller are sometimes referred to herein individually as the
"Applicable Seller", as the context requires. As used herein the term "Stock
Seller" shall also be deemed to refer to Asset Seller solely with respect to ZD
Market Intelligence Ltd. (Ireland) and ZD Market Intelligence Espana LLC, two of
the Companies, and the sale of the share capital therein.
The Asset Seller, through ZD Market Intelligence (the "Division"), and the
Stock Seller, through its wholly owned corporations, limited liability companies
and other companies listed on Exhibit A hereto (each a "Company" and,
collectively, the "Companies"), develop, compile and distribute information on
installed and planned technology hardware and software purchases and provide
customized service solutions utilizing such information (collectively, the
"Business").
The parties have agreed upon the sale to Buyer of all of the assets
primarily used in the Business as conducted by the Asset Seller and all of the
share capital in the Companies, in each case upon the terms and conditions set
forth in this Agreement.
Accordingly, it is agreed as follows:
1. SALE AND TRANSFER OF ASSETS AND SHARE CAPITAL.
1.1. Assets To Be Sold. Subject to the terms and conditions contained
herein, at the Closing (as defined in Section 3) Asset Seller shall sell, assign
and transfer to Buyer, and Buyer shall purchase and acquire from Asset Seller,
all assets, whether real, personal or mixed, whether tangible or intangible
(including good will), whether accrued, contingent or otherwise, primarily used
in the Business other than the Excluded Assets (as defined in Section 1.3) (the
"Assets"). The transactions contemplated by this Section 1.1 are sometimes
herein referred to as the "Asset Purchase." The Assets shall include, but are
not limited to, the following assets primarily used in the Business:
(a) all domain names, trademarks, trade names, service marks, trade
dress, logos, patents, copyrights, together with the goodwill associated with
the foregoing, and all registrations and applications for registration and all
claims for infringement of the foregoing, and all trade secrets, know-how and
other intellectual property rights, including those set forth on Schedule 4.6;
(b) all software programs, technology and software licenses, whether
developed, purchased or customized by Asset Seller, including any associated
documentation ("Software"), including without limitation the Software listed on
Schedule 1.1(b);
(c) all databases, marketing information, marketing research data and
reports, all prospect, customer and mailing lists, as well as databases and
works in progress with respect to any of the foregoing (the "Databases"),
including without limitation the Databases listed on Schedule 1.1(c);
(d) all records, accounts, files and data, whether existing in print
or on magnetic or other media;
(e) all promotional and advertising materials, whether existing in
print, video, online, magnetic or other media, and stationery, forms, labels and
other materials;
(f) all contracts, purchase or other orders, leases, licenses,
commitments and other agreements and any rights thereunder;
(g) all office equipment, computers and other equipment, vehicles,
furniture, fixtures, supplies, capital improvements and other tangible personal
property;
(h) all prepaid expenses, accounts receivable and other current
assets, including the security deposit under any real estate lease, and other
similar assets;
(i) all licenses, permits and approvals; and
(j) all of Asset Seller's claims or causes of action relating to the
Assets or the Business.
1.2. Share Capital to be Sold. Subject to the terms and conditions
contained herein, at the Closing, Stock Seller shall sell, assign, transfer and
deliver to Buyer, and Buyer shall purchase, acquire and accept from Stock
Seller, all of the share capital in the Companies (the "Share Capital") free
and clear of all liens, charges, pledges, mortgages, privileges, usufructs,
beneficial interests or other dismemberment of share capital or other rights,
restrictions or claims in favor of third parties or the Sellers whatsoever
without limitation (collectively "Liens") and together with all rights attaching
to that share capital but not including the Companies' interest in any Excluded
Assets. The transactions contemplated by this Section 1.2 are sometimes herein
referred to as the "Equity Purchase."
1.3. Excluded Assets. Notwithstanding anything herein to the contrary, the
following assets relating to the Business are being retained by Asset Seller and
Stock Seller, as applicable, and are not being sold, assigned or transferred to
Buyer and Buyer will not purchase, obtain any rights with respect to or accept
any of the following assets (the "Excluded Assets") in connection with the Asset
Purchase or the Equity Purchase:
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(a) all cash, bank accounts, certificates of deposit, commercial
paper, annuities, treasury notes and bills and other marketable securities other
than the Share Capital;
(b) subject to Section 6.3, Asset Seller's rights under any order,
lease, contract or other agreement relating to the Business as to which consent
to assignment has not been obtained;
(c) all intercompany balances, whether or not related to the Business;
(d) all assets primarily used in connection with the Division's former
metric businesses, which included the StoreBoard, InfoBeads, Technology User
Profile (TUP), MicroDesign Resources and Trendata products (whether or not such
assets have been either sold by Asset Seller to third parties or transferred to
Asset Seller's other divisions);
(e) all software, hardware, equipment and other personal property and
other centralized or shared assets used by other businesses of the Asset Seller
or Stock Seller and not primarily used in connection with the Business;
(f) the "Xxxx-Xxxxx", "ZD", any derivation or other variation of such
terms and other trademarks, trade names, service marks, trade dress, domain
names or logos of Asset Seller or its parent, Xxxx-Xxxxx Inc., or any of its
parent's affiliates (as defined in Rule 405 promulgated under the Securities Act
of 1933) or divisions subject to Section 6.6 below; and
(g) the assets specifically described in Schedule 1.3.
1.4. Assumed Liabilities. Buyer hereby assumes Asset Seller's liabilities
for the following: (a) all liabilities and obligations related to the conduct of
the Business arising after the Closing; (b) obligations of Asset Seller to
perform contracts and other commitments with respect to the conduct of the
Business after the Closing; (c) all current liabilities, as reflected on the
Asset Seller's Closing Balance Sheet prepared in accordance with Section 2.3;
(d) any payment obligations from and after the Closing Date to Asset Seller
Employees (as defined in Section 6.5(b)) who become Buyer's employees
("Transferred Employees") arising out of their employment with Buyer, including
the severance arrangements, but excluding the retention bonuses, set forth in
Schedule 4.19(b) and (e) those liabilities set forth in Schedule 1.4
(collectively, the "Assumed Liabilities").
1.5. Retained Liabilities. Except for the liabilities that Buyer is
expressly agreeing to assume pursuant to Section 1.4, Buyer is not assuming and
shall have no obligation to pay, perform or discharge any debts, liabilities,
claims and obligations relating to Sellers' conduct of the Business prior to
the Closing Date, including without limitation: (a) any payment obligations from
and after the Closing Date to Asset Seller Employees who do not become
Transferred Employees, including severance arrangements, and the retention
bonuses payable to Asset Seller's employees set forth in Schedule 4.19(b) and
any obligation to the Companies' employees resulting from any measures taken
prior to the Closing Date, including as a result of any social plans or
redundancies, (b) any liability or obligation of Asset Seller for taxes of any
kind (and any penalties or interest due on account thereof), including any tax
liability and other
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related costs arising from the transfer by any of the Companies of any Excluded
Asset to the Seller or any affiliated or parent company of the Seller; (c) any
liability or obligation with respect to any suits, actions, claims or
proceedings pending or threatened on the Closing Date or which results from
action taken prior to the Closing Date; (d) any long term debt, including
short-term portions thereof, and intercompany liabilities; and (e) any
liabilities related to employees, former employees, or Employee Plans (as
defined in Section 4.19), including without limitation liabilities under the
Xxxx-Xxxxx Retirement & Savings Plan through the Closing Date, except as
expressly provided in Section 6.5 (collectively, the "Retained Liabilities").
Asset Seller shall retain and shall timely pay, perform and discharge the
Retained Liabilities. Furthermore, Buyer is not assuming and shall have no
obligation to pay, perform or discharge any debts, costs, liabilities, expenses
or obligations relating to (a) any value added taxes or similar taxes currently
owed or incurred by the Companies on or prior to the Closing Date (the "VAT
Taxes") or (b) any debts, costs, liabilities, expenses or obligations relating
to the Sellers or the Companies' employee stock options or similar equity
instruments outstanding or proposed or committed to be issued on or prior to the
Closing Date (the "Option Obligations"). Asset Seller shall assume, retain and
pay all debts, costs, liabilities, expenses or obligations related to the VAT
Taxes or the Option Obligations and the VAT Taxes and Option Obligations shall
be part of the Retained Liabilities.
2. CONSIDERATION; ALLOCATION OF PURCHASE PRICES; ADJUSTMENT OF PURCHASE
PRICES.
2.1. Consideration. In consideration for the Assets to be purchased by
Buyer, at the Closing Buyer shall pay to Asset Seller an amount equal to NINETY
FOUR MILLION Dollars ($94,000,000) (the "Asset Purchase Price") in immediately
available funds by wire transfer at the Closing to the account designated by
Asset Seller at least two business days prior to Closing, subject to adjustment
as provided in Section 2.3. In consideration for the Share Capital to be
purchased by Buyer, at the Closing Buyer shall pay to the Stock Seller, an
amount equal to SEVEN MILLION Dollars ($7,000,000) (the "Stock Purchase Price"
and, collectively with the Asset Purchase Price, the "Purchase Prices") in
immediately available funds by wire transfer at the Closing to the account
designated by Stock Seller at least two business days prior to Closing, subject
to adjustment as provided in Section 2.3.
2.2. Allocation of Purchase Prices.
(a) The Asset Purchase Price shall be allocated among the Assets in
accordance with Schedule 2.2(a). Each party shall use such allocation in all tax
and governmental filings, except as may be adjusted by its subsequent agreement
with the Internal Revenue Service in connection with an audit or by court
decision. To the extent that disclosures of this allocation are required to be
made by the parties to the Internal Revenue Service (the "IRS"), Buyer and Asset
Seller will disclose such reports to the other prior to filing with the IRS.
(b) The Stock Purchase Price shall be allocated among the Share
Capital in accordance with Schedule 2.2(b). Each of Buyer and Stock Seller shall
use such allocation in all tax and governmental filings, except as may be
adjusted by its subsequent agreement with the applicable government authority in
connection with an audit or by court decision. To the extent
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that disclosures of this allocation are required to be made by the parties to a
tax authority having jurisdiction over the Companies, Buyer and Stock Seller
will disclose such reports to the other prior to such filing.
2.3. Adjustment of Purchase Prices.
(a) Schedule 4.14(a) contains an unaudited balance sheet of the
Division as of June 30, 1999 ("Asset Seller's Pre-Closing Balance Sheet").
Within thirty days after the Closing, Asset Seller will deliver to Buyer an
unaudited balance sheet of the Division as of the Closing Date prepared on a
basis consistent with Asset Seller's Pre-Closing Balance Sheet ("Asset Seller's
Closing Balance Sheet"). Based upon the Asset Seller's Closing Balance Sheet,
the parties shall determine the Division's Working Capital (as hereinafter
defined). It is the intention of the parties that the Division's Working Capital
shall be zero at the Closing Date. For this purpose, the "Division's Working
Capital" means (a) the sum of prepaid expenses, net accounts receivable and
other current assets purchased by Buyer pursuant to Section 1.l(h) minus (b)
the sum of accounts payable, accrued operating expenses, accrued other expenses
and other current liabilities that are assumed by Buyer pursuant to Section
1.4(c). Notwithstanding the foregoing, the Division Working Capital shall
include deferred revenue associated with (i) Database sales and (ii) unexpired
customer license agreements (but only to the extent deferred revenue exceeds the
balance as of June 30, 1999) but shall not include retention bonuses and
severance arrangements set forth on Schedule 4.19(b), the Retained Liabilities
or the Excluded Assets.
(b) Schedule 4.14(b) contains an unaudited combined balance sheet of
the Companies as of June 30, 1999 ("Stock Seller's Pre-Closing Balance Sheet"
and, collectively with the Asset Seller's Pre-Closing Balance Sheet, the
"Sellers' Pre-Closing Balance Sheets"). Within thirty days after the Closing,
Asset Seller will deliver to Buyer an unaudited combined balance sheet of the
Companies as of the Closing Date prepared on a basis consistent with Stock
Seller's Pre-Closing Balance Sheet ("Stock Seller's Closing Balance Sheet" and,
collectively with the Asset Seller's Closing Balance Sheet, the "Sellers'
Closing Balance Sheets"). Based upon the Stock Seller's Closing Balance Sheet,
the parties shall determine the Companies' Working Capital (as hereinafter
defined). It is the intention of the parties that the Companies' Working Capital
shall be zero at the Closing Date. For this purpose, the "Companies' Working
Capital" means (a) the sum of prepaid expenses, net accounts receivable and
other current assets of the Companies minus (b) the sum of accounts payable,
accrued operating expenses, accrued other expenses and other current liabilities
of the Companies. Notwithstanding the foregoing, the Companies' Working Capital
shall include deferred revenue associated with (i) Database sales and (ii)
unexpired customer license agreements (but only to the extent deferred revenue
exceeds the balance as of June 30, 1999) but shall not include retention bonuses
and severance arrangements set forth on Schedule 4.19(b) or Excluded Assets of
the Companies. The Companies' Working Capital and Division's Working Capital are
sometimes individually referred to herein as the "Applicable Working Capital",
as the context requires.
(c) The Sellers' Pre-Closing Balance Sheets and Sellers' Closing
Balance Sheets shall be prepared by Asset Seller and Stock Seller, respectively,
from the books and records of Asset Seller and the Companies, respectively, on a
basis consistent with U.S. generally accepted accounting principles ("GAAP")
consistently applied to the Division and the
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Companies, respectively. Buyer shall have the right to audit any Sellers'
Closing Balance Sheet. Within forty- five days of Buyer's receipt of any
Sellers' Closing Balance Sheet, Buyer shall either notify the Applicable Seller
of its acceptance of such Sellers' Closing Balance Sheet or present to such
Seller its objections to such Seller's Closing Balance Sheet. In the event that
Buyer fails to notify the Applicable Seller of its acceptance of, or present its
objections to, any Sellers' Balance Sheet within such forty-five day period,
such Sellers' Closing Balance Sheet shall be considered accepted by and final
and binding upon Buyer. If Buyer presents objections to any Sellers' Closing
Balance Sheet and after reasonable, good faith efforts, the parties are unable
to resolve their differences within thirty (30) days after Buyer's presentation
of its objections to the Applicable Seller, Buyer and such Seller shall submit
the differences to a "Big Five" accounting firm having no existing relationship
with Buyer or Sellers, nominated by such Seller and reasonably acceptable to
Buyer, who, acting as an expert and not as an arbitrator, shall review such
Sellers' Closing Balance Sheet and determine all disputed items and such balance
sheet as adjusted by such accounting firm shall be binding upon the parties
hereto. Buyer shall bear the cost and expense for such accounting firm unless
the statement shows an error in the Applicable Seller's calculation of the
Applicable Working Capital which is (i) unfavorable to Buyer and (ii) in excess
of $100,000, in which case the Applicable Seller shall bear the cost and expense
of such accounting firm.
(d) Within five (5) business days after any Sellers' Closing Balance
Sheet becomes final and binding:
(i) if the amount of Applicable Working Capital indicated on
such Sellers' Closing Balance Sheet is less than zero (i.e.,
negative), then the Applicable Seller shall remit to Buyer,
or
(ii) if the amount of Applicable Working Capital indicated on
such Sellers' Closing Balance Sheet is greater than zero,
then Buyer shall remit to the Applicable Seller,
by wire transfer of immediately available funds, a payment equal to such
Applicable Working Capital, together with interest thereon at a rate equal to
the rate of interest from time to time announced publicly by Citibank, N.A., as
its prime rate, calculated on the basis of the actual number of days elapsed
from Closing to the date of payment divided by 365.
3. THE CLOSING. The closing of the Asset Purchase and the Equity Purchase
contemplated by this Agreement (collectively, the "Closing") shall take place at
the offices of Seller at 9:30 AM local time on the second business day following
the first date on which of all waiting periods applicable to Asset Purchase and
the Equity Purchase under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), or other similar applicable waiting periods
(such as those provided under the European Union merger regulations or any
applicable national law), shall have expired or been terminated and all
applicable government approvals have been received and all conditions to Closing
set forth in Section 8 shall have been satisfied or waived, or at such other
time, place and date as Buyer and Sellers may mutually agree. The date of the
Closing is referred to as the "Closing Date."
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4. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers, jointly and severally,
represent and warrant to Buyer that, except as set forth in the disclosure
schedules attached hereto:
4.1. Sellers' Organization and Authority. Each Seller and each Company is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the full corporate, partnership, limited
liability company or other applicable power and authority to enter into and to
perform the transactions contemplated on its part by this Agreement and to carry
on its portion of the Business as now conducted by it and to own, lease and
operate, in the case of the Asset Seller, the Assets or, in the case of the
Companies, its properties, assets (tangible and intangible), rights and goodwill
(collectively for |each Company, such Company's "Company Assets" and,
collectively for all the Companies, the "Companies' Assets") in each case as it
now does. Each of Asset Seller and each Company is duly licensed or qualified to
do business and, to the extent such concept is applicable to it, is in good
standing in each jurisdiction where the character of the properties owned or
leased by it, or the nature of its business, makes such licensing or
qualification necessary, except for such failures to so qualify that would not,
alone or in the aggregate, have a Material Adverse Effect. "Material Adverse
Effect" shall mean any material adverse effect on (i) the operations, financial
condition or results of operations of the Business, (ii) the Assets, the
Companies' Assets and the Companies, taken as a whole, or (iii) the Sellers'
ability to perform under this Agreement. No other parties have any beneficial
ownership, equity or other interest, actual or phantom, in the Business.
4.2. Capitalization. (a) Schedule 4.2 sets forth the outstanding Share
Capital in each Company, all of which is duly authorized, validly issued, fully
paid and nonassessible. All share capital contributions have been validly made
and have not been redeemed or reimbursed by any Company. The Share Capital
represents all of the share capital or equivalent in the Companies. Except for
the Share Capital, there is not, and at the Closing there will not be, any
share capital in any Company issued or outstanding or any subscriptions,
options, warrants, calls, rights, convertible securities or other agreements or
commitments of any character obligating any Company to offer, issue, transfer or
sell or to acquire or retire any of its share capital or any agreements,
arrangements or understandings granting any person any rights in any Company
similar to the Share Capital. All of the Share Capital is owned by Stock Seller
free and clear of any liens, charge, encumbrance, restriction or claim
(collectively, "Liens"). There are not now, and at the Closing there will not
be, any voting trusts or other agreements or understandings to which Stock
Seller or any Company is a party or is bound with respect to the voting of the
Share Capital. All of the Share Capital was issued by the Companies in
compliance with all applicable securities laws.
(b) The consummation of the Equity Purchase will convey to Buyer good
and marketable title to the Share Capital, free and clear of all Liens, except
for those created by Buyer.
4.3. Authority. The execution, delivery and performance by Sellers of (i)
this Agreement and (ii) each other document required by this Agreement to be
executed and delivered by them to Buyer (the "Seller Other Documents") and the
consummation by them of
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the transactions contemplated herein and therein have been duly authorized by
all necessary corporate action of each Seller; this Agreement has been, and when
executed and delivered as required by this Agreement the Seller Other Documents
will be, duly executed by an authorized officer of each Seller; and this
Agreement constitutes, and when executed and delivered as required by this
Agreement the Seller Other Documents will constitute, valid and binding
obligations of each Seller, enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.4. No Conflicts.
(a) The execution, delivery and performance of this Agreement and the
Seller Other Documents and the consummation of the transactions contemplated
herein and therein by each Seller will not: (i) conflict with, or result in a
breach of, violation of or default under, the certificate of incorporation, by-
laws or other organizational documents of such Seller or any of the Companies;
(ii) conflict with, or result in the breach or termination of, or constitute a
default (or any event that, with notice or lapse of time, or both, would
constitute a default) under, or accelerate the performance required by, any
material contract, lease, agreement, commitment or other instrument or
restriction of any kind to which such Seller or any Company is a party or by
which it, any of the Assets or any of the Companies' Assets is bound or
affected; (iii) constitute a violation by such Seller or any Company of any
applicable statute, law, rule, regulation, order, writ, injunction or decree of
any court or governmental authority; or (iv) result in the creation of any lien,
charge, encumbrance, restriction, or claim upon any of the Assets, any Share
Capital or any of the Companies' Assets.
(b) Other than as required under the HSR Act or under the European
Union merger regulations or any other similar applicable national law, no
consent, approval or authorization of, or designation, declaration or filing
with, any governmental or European authority is required on the part of the
Sellers or the Companies in connection with the execution, delivery and
performance of this Agreement and the other documents referred to in this
Agreement and the transactions contemplated herein and therein.
(c) No consent of any third party is required for the transfer of the
Assets or the Share Capital as provided in this Agreement except for those
consents set forth on Schedule 4.4.
4.5. Assets; Companies Assets. Asset Seller has, and at the Closing, Buyer
will receive, good and marketable title to all of the Assets and the Companies
have, and at the Closing by virtue of the Equity Purchase, Buyer will receive,
good and marketable title to all of the Companies' Assets, in each case free and
clear of any Lien, except for such Liens that would not materially interfere
with the ownership or operation of the Business, the Assets or the Companies'
Assets, taken as a whole, and which will not secure any debt as of the Closing
Date. All tangible assets constituting Assets or Companies' Assets are in good
operating condition and repair, ordinary wear and tear excepted. The Assets and
Companies' Assets will constitute all the assets primarily used in the Business
as conducted other than the Excluded Assets. The Assets
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and the Companies' Assets (when taken together with working capital and the
Excluded Assets described in paragraphs (b), (e), (f) and (g) of Section 1.3)
are adequate and sufficient for the operation of the Business as presently
conducted.
4.6. Trademarks; Intellectual Property. Each of Asset Seller and each
Company owns or has the right to use all of the Databases, Software, domain
names, trademarks, trade names, service marks, logos, patents and, copyrights
used by it in the Business (collectively, the "Intellectual Property"),
including those listed on Schedule 4.6. The Business as currently conducted does
not infringe upon any trademark, trade name, service xxxx, logo, patent,
copyright or trade secret. No proceedings have been instituted or, to the best
of Sellers' knowledge, are pending or threatened to the effect that the use by
the Asset Seller or any Company of any Intellectual Property infringes on the
rights of any third party and no claim has been received by Sellers alleging any
such infringement. To the best of Sellers' knowledge, there is no violation by
others of any right of the Business with respect to any Databases, Software,
domain names, trademarks, trade names, service marks, logos, patents,
copyrights, trade secrets or any other rights to be sold or assigned to Buyer by
Asset Seller pursuant to this Agreement or of the Companies. Each of Asset
Seller and each Company has taken commercially reasonable steps to safeguard
the confidentiality of the information comprising the Databases.
4.7. Insurance. Schedule 4.7 sets forth a list of all insurance policies
covering the Business, the Assets and the Companies' Assets. No notice of
cancellation or termination has been received with respect to any such insurance
policies , and such policies are in full force and effect. Sellers have no
knowledge of any act or omission that could result in cancellation or
termination of any such policy prior to its scheduled expiration date. Such
insurance policies are sufficient in all material respects for compliance by
Asset Seller and the Companies with all requirements of law and with the
requirements of all contracts to which Seller or any Company is a party.
4.8. Contracts. Except for those contracts set forth on Schedules 4.9,
4.11 and 4.12(b), Schedule 4.8 hereto contains a list of all of the following
oral and written contracts, agreements and arrangements (and all supplements and
modifications thereto) to which any Seller or any of the Companies is a party:
(i) all contracts, commitments and agreements to which Asset Seller or any
Company is a party or by which it is bound relating to the Business that could
involve more than $50,000 and that are not terminable by Asset Seller or any
Company without penalty to Asset Seller or any Company on notice not exceeding
six months; (ii) any contract or agreement relating to the making of any loan,
advance, or investment in any person or entity; (iii) any guarantee or other
contingent liability in respect of any indebtedness or obligation of any person
or entity; (iv) any material contract or agreement where any person or entity
has agreed not to compete in the Business with either Seller, any Company or any
of their affiliates, (v) any contract or agreement, regardless of dollar amount,
that is material to the Business as presently conducted or to the Assets, the
Companies' Assets and the Companies, taken as a whole; and (vi) any contract,
commitment, or agreement limiting the freedom of either Seller (with respect to
the Business only) or any Company or their successors or assigns from engaging
in any line of business, soliciting employees or customers, or competing with
any person or entity. Sellers have made available copies of each agreement
listed on Schedules 4.8, 4.9, 4.11 and 4.12(b) (or summaries in the case of
oral agreements) for inspection by Buyer.
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Except as set forth in Schedule 4.4, each of the agreements to which Asset
Seller is a party set forth in Schedules 4.8, 4.9, 4.11 and 4.12(b) is fully
assignable to Buyer by Asset Seller without the consent of any third parties.
Each of the agreements set forth in Schedules 4.8, 4.9, 4.11 and 4.12(b) is
presently in full force and effect in accordance with its terms and no condition
exists that, with notice or lapse of time or both, would constitute a breach or
default by Asset Seller or any Company, or to Sellers' knowledge, by any other
party to any of such agreements. Except for such instances that, alone or in the
aggregate, would not have a material adverse effect on the Assets, the
Companies' Assets or the Business, taken as a whole, no party to any of the
agreements has made or asserted any claim of breach, defense, setoff or
counterclaim under any of the agreements or has exercised any option granted to
it to cancel or terminate its agreement.
4.9. Employees/Contractors. Except as set forth on Schedule 4.9 hereto,
neither Asset Seller nor any Company is a party to or bound by any employment
agreement, collective bargaining or other labor agreement in connection with the
Business. Schedule 4.9 hereto contains a complete and correct list of (a) each
employee of Asset Seller who works for the Division and each employee of the
Companies, in each case including job title, compensation and date of hire, and
(b) each independent contractor who works for the Division or any of the
Companies for aggregate annual fees in excess of $20,000. Asset Seller and each
Company is in compliance in all material respects with all laws and regulations
respecting employment and employment practices, terms and conditions of
employment, wages and hours with respect to the Business, and is not engaged in
any unfair or illegal labor practice or subcontracting arrangement, and no claim
or notice has been received by Sellers or any Company asserting that Asset
Seller or any Company is not in such compliance or is engaged in such practices
or, to the best of Sellers' knowledge, has been threatened. Except as set forth
in Schedule 4.9 hereto, with respect to the Business, neither Asset Seller nor
any Company has experienced any labor strike, dispute, union organization
attempts, concerted employee activity or any work stoppage due to labor
disagreements, and there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending against or affecting the
Business or, to the best of Sellers' knowledge, threatened. Except as set forth
in Schedule 4.9, there are no administrative charges or court complaints against
Asset Seller or any Company with respect to the Business concerning alleged
employment discrimination or employment related matters pending or, to the best
of Sellers' knowledge, threatened before the U.S. Equal Employment Opportunity
Commission or any state, federal or foreign court or governmental or regulatory
authority or agency. None of the employees of the Companies may claim payment
for extra hours performed during the five years preceding the date of this
Agreement.
4.10. Litigation; Compliance with Laws; Permits. Except as set forth on
Schedule 4.10:
(a) There are no judicial or administrative actions, suits,
arbitration, proceedings or investigations pending or, to the best of Sellers'
knowledge, threatened, or any orders, injunctions or decrees outstanding,
against or involving the Business or any Asset or Companies' Asset. There are
no proceedings pending or, to the best of Sellers' knowledge, threatened which
seek to restrain, rescind or in any way restrict, delay or prohibit either
Seller's ability to consummate the Asset Purchase or Equity Purchase
contemplated on its part hereby. There are no unpaid judgments, injunctions,
orders, or decrees, or arbitration decisions or awards
10
outstanding against Asset Seller or any Company with respect to the Assets, the
Companies' Assets or the Business.
(b) Neither Asset Seller nor any Company is in violation in any
material respect of any applicable law, regulation, ordinance, or any other
requirement of any governmental body or court applicable to the Business and no
notice has been received by Sellers or any Company alleging any such violation.
(c) Each of Asset Seller and each Company has all permits, licenses,
registrations, franchises, consents and other authorizations (`Permits")
necessary for the conduct of its portion of the Business and is in compliance
with all such Permits in all material respects, and such Permits are in full
force and effect and, in the case of those relating to the Assets, are
assignable to Buyer in accordance with the terms of this Agreement.
4.11. Real Property; Realty Leases. Sellers and the Companies do not own
any real property in connection with the Business. Schedule 4.11 contains a list
of all real property leases or other arrangements relating to the premises used
by the Business. Complete copies of each realty lease listed on Schedule 4.11
have been delivered to Buyer. There is no default of any material term of any
such lease by Asset Seller or any Company or, to the best of Sellers' knowledge,
by the other parties thereto and, to the best of Sellers' knowledge, no event
has occurred which with notice or lapse of time or both would constitute such a
default. Neither of the Sellers nor any Company have received any notice from
any governmental body or owner of the leased properties requiring or calling
attention to the need for any work, repair, construction, alteration or
installation on or in connection with such properties that has not been complied
with or settled. The buildings, offices, and any other structures leased or
occupied by Asset Seller or any Company in connection with the Business are
generally adequate and sufficient for the operation of the Business as currently
conducted.
4.12. Personal Property. The personal property owned, leased or used in
connection with the Business is in good operating condition and repair, ordinary
wear and tear excepted, and is generally adequate and sufficient for the
operation of the Business as currently conducted. All of the personal property
primarily used in the Business and with a fair market value in excess of
$100,000 is set forth on Schedule 4.12(a). All of the leases for the leased
personal property primarily used in the Business and with a fair market value in
excess of $50,000 are set forth on Schedule 4.12(b) and, except as set forth on
Schedule 4.12(b), are in full force and effect. All of the leases set forth on
Schedule 4.12(b) that comprise the Assets are fully assignable to Buyer without
third party consents except as set forth on Schedule 4.12(b). Neither Asset
Seller nor any Company is in breach of or default under (and no event has
occurred which, with due notice or lapse of time or both, may constitute such a
lapse or default under) any lease of any such personal property purported to be
leased by it in connection with the Business.
4.13. Transactions with Employees. Except as set forth on Schedule 4.13,
neither Asset Seller nor any Company has, or is currently, engaged in any
transaction and is not a party to any contract with any employee, manager,
member, director or officer of the Division or any Company or any of their
affiliates, other than employment related agreements entered into in the
ordinary course of business and listed on Schedules 4.8 or 4.9.
11
4.14. Certain Financial Information. Asset Seller has delivered to Buyer
copies of (a) unaudited balance sheets of the Business conducted by Asset Seller
as of December 31, 1998 and June 30, 1999, and (b) unaudited statements of
operations for the Business conducted by Asset Seller for the year ended
December 31, 1998 and for the period beginning January 1, 1999 and ending June
30, 1999, which are attached as Schedule 4.14(a) (collectively, "Asset Seller
Financial Statements"). The Asset Seller Financial Statements have been prepared
in accordance with the books and records of the Business conducted by Asset
Seller on a basis consistent with GAAP, and fairly present the assets,
liabilities, revenue, expenses and financial position of such Business as of
such dates or for the periods indicated. Stock Seller has delivered to Buyer
copies of (i) unaudited combined balance sheets of the Companies as of December
31, 1998 and June 30,, 1999, and (ii) unaudited combined statements of
operations for the Companies for the year ended December 31, 1998 and for the
period beginning January 1, 1999 and ending June 30,, 1999, which are attached
as Schedule 4.14(b) (collectively, "Stock Seller Financial Statements" and,
collectively with the Asset Seller Financial Statements, the "Financial
Statements"). The Stock Seller Financial Statements have been prepared in
accordance with the books and records of the Companies on a basis consistent
with GAAP, and fairly presents the assets, liabilities, revenue, expenses and
financial position of the Companies as of such dates or for the periods
indicated. Except as disclosed in the Schedules to this Agreement or in the
Financial Statements and for the Retained Liabilities, there are no material
undisclosed liabilities relating to the Assets, the Business or any of the
Companies, contingent or absolute, other than current liabilities arising in the
ordinary course of business subsequent to the Financial Statements, which are of
a nature and in amounts consistent with past business practices.
4.15. Accounts Receivable and Payable. Since June 30, 1999, Asset Seller
and the Companies have collected their respective accounts receivable and paid
their respective accounts payable relating to the Business in the ordinary
course of business. All of the accounts receivable of Asset Seller and the
Companies relating to the Business are bona fide accounts receivable that arose
in the ordinary course of business for goods delivered or services rendered or
to be rendered.
4.16. Absence of Certain Changes. Since June 30, 1999, each of Asset
Seller and each Company has operated its portion of the Business in the ordinary
course and consistent with past practice and, except as set forth on Schedule
4.16:
(a) there has not been any material adverse change in the
operations, financial condition or results of operations of the Business or any
material loss, damage or destruction, including, without limitation, any
material reduction in prices charged and received for the Business' products,
goods and services (other than any such reduction made in the ordinary course of
business), affecting the Assets or the Companies' Assets, taken as a whole,
whether or not covered by insurance (collectively, a "Material Adverse Change");
(b) except with respect to retention bonuses and severance
arrangements set forth in Schedule 4.19(b), neither Asset Seller nor any Company
has entered into any material transaction or incurred any material liability or
obligation except in the ordinary course of business with respect to the
Business;
12
(c) neither Asset Seller nor any Company has incurred, assumed or
guaranteed any indebtedness, other than indebtedness to trade creditors incurred
in the ordinary course of business with respect to the Business;
(d) neither Asset Seller nor any Company has made any loan or advance
to any person in connection with the Business including, without limitation, any
officer, director or employee of the Business other than advances to employees
in the ordinary course for travel expenses in accordance with past practice;
(e) there has been no change in the accounting methods or principles
used by Asset Seller or any Company;
(f) there has been no amendment or termination by Asset Seller or any
Company of any material contract, or any waiver of material rights under such
contract, other than in the ordinary course of business with respect to the
Business, or any breach of any obligations or of any rights of the Asset Seller
or any Company under such contracts;
(g) no mortgage, pledge, lien or encumbrance has been made on any
Assets or Companies' Assets; and
(h) no Assets or Companies' Assets have been sold, leased, or
transferred (other than those that have been replaced with Assets or Companies'
Assets of equal or greater value).
4.17. Taxes. All tax returns due by Asset Seller or any Company relating
to the Business have been timely filed and all taxes due from Asset Seller or
any Company relating to the Business have been fully paid and there is no
action, suit, proceeding, audit, claim, lien or assessment pending or, to the
best of Sellers' knowledge, proposed with respect to taxes due or with respect
to any tax return. The provision made for taxes on the Financial Statements is
sufficient for the payment of all taxes and assessments for all periods through
the dates thereof in each jurisdiction in which the Business is operated or
subject to tax. Each of Asset Seller and each Company has duly withheld and paid
all taxes that it is required to withhold and pay relating to salaries, wages
and other compensation, remuneration or benefits paid to the employees.
4.18. Environmental Matters. Each of Asset Seller and each Company is in
compliance in all material respects with all environmental laws and regulations
applicable to it, including approved assessment or remediation plans
(collectively, "Environmental Laws") in connection with the Business and there
are no facts, events, conditions, circumstances, activities, practices,
incidents, actions or omissions that could reasonably be expected to result in a
material liability relating to the Assets, the Companies' Assets, the Business
or any Company under any Environmental Law. None of Asset Seller, any Company,
nor any agent or employee of Asset Seller or any Company acting on its behalf or
at its direction has generated, manufactured, refined, transported, treated,
stored, handled, disposed, transferred, produced or processed any pollutants,
dangerous or toxic substances or hazardous wastes or materials or such similar
13
substances as defined in any Environmental Law in connection with the Business.
Neither Seller nor any Company has received notice of any summons, citation,
directive, order, claim, litigation, investigation, proceeding, judgment, letter
or other written communication from any federal, local or foreign agency or
authority regarding any actual or threatened release, spill, leak, discharge,
disposing or dumping of any such materials in connection with the Business.
4.19. Employee Plans. Schedule 4.19(a) lists each pension, retirement,
profit-sharing, deferred compensation, bonus, phantom stock or other incentive
plan, stock option plan, stock purchase plan, deferred compensation
arrangement, arrangement in relation to the 35-hour week in France, severance
pay arrangement, supplemental executive retirement plan or program, medical,
vision, dental, health, life, disability or other welfare plan, or any other
employee benefit plan, to which (i) Asset Seller contributes or is a party or is
bound with respect to the Division (whether by contract, by collective
bargaining agreement, unilateral decision or customary rules or by law) and
under which it may have liability with respect to employees or former employees
of Asset Seller who worked in the Division (or their dependents or
beneficiaries) ("Asset Seller Employee Plans") or (ii) any Company contributes
or is a party or is bound (whether by contract, by collective bargaining
agreement, unilateral decision or customary rules or by law) and under which it
may have liability with respect to employees or former employees of such Company
(or their dependents or beneficiaries) ("Companies' Employee Plans" and,
collectively with Asset Seller Employee Plans, "Employee Plans"). Sellers have
delivered to Buyer copies of all documents, summary plan descriptions and all
other documentation created to embody all Employee Plans and any related trusts,
insurance contracts or other funding vehicles, plus descriptions of any Employee
Plans that have not been reduced to writing. Schedule 4. 19(b) lists all
retention bonus plans and severance arrangements provided to the Division
employees in connection with the sale of the Business. Except as set forth on
Schedule 4.19(c):
(a) Each Asset Seller Employee Plan is in substantial compliance with
applicable requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and the Internal Revenue Code and, if intended to be tax-
qualified, received a favorable determination letter from the Internal Revenue
Service regarding such Asset Sellers Employee Plan's qualified status under
section 401(a) of the Internal Revenue Code.
(b) Asset Seller has performed all material obligations to which it
is subject under ERISA, the Internal Revenue Code and other applicable laws
with respect to or under the terms of each Asset Seller Employee Plan. The
Companies' Employee Plans are not subject to ERISA, the Internal Revenue Code or
any other United States local, state or federal employee benefits related law,
regulation, order, rule, requirement or Governmental Approval and comply with
the provisions of all applicable national laws. Asset Seller has received no
written notice of the existence of any material default or violation by any
other party of any such obligations with respect to any Asset Seller Employee
Plan.
(c) Neither Asset Seller, any Company, nor any other corporation,
trade or business which is affiliated with Asset Seller or any Company, in the
manner described in section 414(b) or (c) of the Internal Revenue Code or
section 4001(b)(1) of ERISA, has maintained, or made or been obligated to make
contributions to, any plan subject to part 3 of
14
Title I or Title IV of ERISA at any time within the last six years, except for
the ZD Events Inc. defined benefit pension plan. (The ZD Events Inc. defined
benefit pension plan was terminated in a standard termination in 1997 in
accordance with ERISA and all obligations and liabilities thereunder were
satisfied and discharged in full in 1998.)
(d) There are no commitments, obligations, or representations
regarding continuation of welfare benefits after termination of employment under
any of the Employee Plans, except as required by Part 6 of Title I of ERISA or
similar laws.
(e) Except as expressly set forth in Schedules 4.9 and 4.19(e), the
transactions contemplated by this Agreement will not result in the acceleration
of the time of payment or vesting of, or increase the amount of, any
compensation or benefits payable to any employee or former employee of the
Business. Without limiting the foregoing, no excess parachute payments, as
defined in Section 280G of the Internal Revenue Code, will occur in connection
with the transactions contemplated by this agreement, and none of the Employee
Plans or the agreements listed on Schedule 4.9, either singly or in combination,
provide for any such excess parachute payments.
(f) The Companies conform in all material respects with the provisions
of any applicable European or national law or regulations in relation to staff
delegates and workers' committees, and in a more general manner in relation to
the representation of the employees within the Companies.
4.20. Brokers. There is no investment banker, broker, finder,
consultant or other intermediary that has been retained by, or is authorized to
act on behalf of, either Seller or any Company who is entitled to any fee or
commission from Buyer in connection with the transactions contemplated by this
Agreement.
4.21. Year 2000 Compliance. All hardware, firmware, Databases,
Software and computer systems ("Computer Assets") comprising the Assets and the
Companies' Assets and, to the Companies' knowledge, the Computer Assets of the
Companies' suppliers that are used in the Business are, or will be on or prior
to November 30, 1999, Year 2000 Compliant (as defined below) without incurring
more than $250,000 of additional costs or expenses after the Closing Date. As
used herein, "Year 2000 Compliant" means, with respect to any Computer Asset,
(i) that the occurrence in or use by the Computer Asset of dates before, on or
after January 1, 2000 will not adversely affect the performance of the Computer
Asset with respect to date-dependent data, computations, output or other
functions (including without limitation calculating, comparing and sequencing),
(ii) the Computer Assets will not abnormally end or provide invalid or incorrect
results as a result of date-dependent data and (iii) the Computer Assets can
accurately recognize, manage, accommodate and manipulate date-dependent data,
including without limitation single and multi-century formulas and leap years.
4.22 Principal Customers. Schedule 4.22 attached hereto sets forth
the twenty largest customers of the Business based on annual revenues for the
fiscal year ended December 31, 1998 and for the six months ended June 30, 1999.
15
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller as follows:
5.1. Buyer's Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the full corporate power and authority to enter into and to perform the
transactions contemplated by this Agreement. Buyer is duly licensed or qualified
to do business as a foreign corporation, and is in good standing, in each
jurisdiction where the character of the properties owned or leased by it, or the
nature of its business, makes such licensing or qualification necessary, except
for jurisdictions where the failure to qualify would not, individually or in the
aggregate, have a material adverse effect on the business or financial condition
of Buyer or its ability to perform its obligations hereunder or to consummate
the transaction contemplated hereby.
5.2. Authorization of Agreement. The execution, delivery and performance
by Buyer of (i) this Agreement and (ii) each other documents required by this
Agreement to be executed and delivered by it ("Buyer Other Documents") and the
consummation by it of the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action of Buyer, this Agreement has
been, and when executed and delivered as required by this Agreement the Buyer
Other Documents will be, duly executed by an authorized officer of Buyer, and
this Agreement constitutes, and when executed and delivered as required by this
Agreement the Buyer Other Documents will constitute, the valid and binding
obligation of Buyer enforceable against it in accordance with its terms, except
as may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
5.3. No Violation; Consents of Third Parties. The execution, delivery and
performance of this Agreement and the Buyer Other Documents by Buyer and the
consummation of the transactions contemplated herein and therein by Buyer will
not (i) conflict with the certificate of incorporation or by laws of Buyer, or
(ii) constitute a violation by Buyer of any statute, law, rule, regulation,
order, writ, injunction or decree of any court or governmental authority
applicable to Buyer. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental or European authority (other than
under the HSR Act or under the European merger regulations or any other similar
applicable national law) is required on the part of Buyer in connection with the
execution, delivery and performance of this Agreement.
5.4. Brokers. There is no investment banker, broker, finder, consultant
or other intermediary that has been retained by, or is authorized to act on
behalf of, Buyer who is entitled to any fee or commission from either Seller in
connection with the transactions contemplated by this Agreement.
16
6. FURTHER AGREEMENTS OF THE PARTIES.
6.1. Access to Records. Sellers shall give, or cause to be given, to
Buyer and its representatives, during normal business hours, such reasonable and
timely access to the properties, titles, contracts, books, records, files and
documents of any Seller or any Company as is reasonably necessary to allow Buyer
and its representatives to obtain such information as it may reasonably request,
and to make copies of such information to the extent reasonably necessary.
6.2. Record Retention. Buyer agrees that for a period of not less than
five years following the Closing Date, it shall not destroy or otherwise dispose
of any records, accounts or files ("Records") relating to the Business prior to
the Closing Date. Buyer agrees that it shall make available to Sellers all such
Records and permit Sellers and their respective representatives, agents or
attorneys to review and, at Sellers' expense, copy such Records relating to the
Business at any reasonably convenient time during normal business hours for any
proper purpose.
6.3. Consent; Non-Assignable Agreements. Buyer acknowledges that certain
agreements between Asset Seller and third parties require that such third
parties consent to the assignment of such agreements. Sellers shall use
reasonable efforts to obtain all consents and approvals listed in Schedule 4.4
in form and substance reasonably satisfactory to Buyer. Without in any way
limiting the foregoing, Buyer shall reasonably cooperate with and provide
assistance to Sellers in obtaining all such consents and approvals. If any
consent for any agreement is not obtained, such agreement shall not be assigned,
but Sellers shall, to the extent possible without incurring any liability to
any third party, keep the agreement in effect and give Buyer the benefit of the
agreement to the same extent as if it had been assigned including, without
limitation, (a) cooperating with Buyer in holding any rights under agreements
for which no consent to assign rights to Buyer is obtained (Non-Assignable
Rights) in trust for Buyer or acting as an agent for Buyer; (b) enforcing any
rights of the Sellers arising from such Non-Assignable Rights against the
issuers thereof or the other party or parties thereto; (c) taking all such
actions and doing, or causing to be done, all such things at the request of
Buyer as shall be reasonably necessary and proper in order that the value of any
Non-Assignable Rights shall be preserved and shall inure to the benefit of Buyer
and (d) paying over to Buyer all monies or other assets collected by or paid to
the Sellers in respect of such Non-Assignable Rights. Buyer shall perform the
obligations under the agreement relating to the benefit obtained by Buyer.
Nothing in this Agreement shall be construed as an attempt to assign any
agreement or other instrument that is by its terms non-assignable without the
consent of the other party.
17
6.4. Non-Competition; Confidentiality; Non-Solicitation.
(a) Sellers agrees that, for a period commencing on the Closing Date
and ending on the second anniversary of the Closing Date, neither Xxxx-Xxxxx,
Inc. ("Parent") nor Sellers nor any other affiliate of Parent directly or
indirectly controlled by it (each, a "Controlled Affiliate") shall engage,
whether as principal, partner, co-venturer, owner, stockholder, investor or
manager, anywhere in the world, in any business or activity that competes with
the Business as it is conducted on the Closing Date, provided that (i) nothing
contained in this Section 6.4(a) shall restrict (A) any Controlled Affiliate
from and after the date it is sold by Parent to any person or entity not
controlled by Parent (a "Third Party Purchaser"), (B) any Third Party Purchaser
who acquires a Controlled Affiliate or assets from Parent or any Controlled
Affiliate or (C) the publication and distribution of magazines and Internet
sites, production of trade shows or conferences, production of television shows,
provision of training or educational services by Parent or any Controlled
Affiliate; and (ii) this Section shall not apply to the acquisition by Parent
or any Controlled Affiliate of (A) any third party which may engage in
activities materially competitive to the Business, so long as such activities
are less than 15% of that third party's business (B) any investment in publicly
traded securities of any entity constituting less than 5% of the outstanding
voting securities of such entity.
(b) After the Closing Date, Sellers shall keep confidential and shall
not disclose to any third party, or use in any manner other than as specifically
requested by Buyer, any confidential or proprietary information including,
without limitation, all customer, prospect and marketing lists, sales data,
intellectual property, and trade secrets relating to the Business, the Assets or
the Companies' Assets. For purposes of this Agreement, confidential information
shall not be deemed to include information generally available to the public
(other than as a result of the disclosure by a Seller or any of their
affiliates) or information required to be disclosed by law or by court order or
the rules of any stock exchange or quotation service on which any securities of
Xxxx-Xxxxx Inc. are listed or quoted.
(c) Sellers agree that, for a period commencing on the Closing Date
and ending on the second anniversary of the Closing Date, Sellers shall not
solicit or encourage any person who is or becomes an employee of Buyer after the
Closing Date in connection with the Business, to leave Buyer's employ for any
reason whatsoever or hire any such person within three months after they have
left the Buyer's employ. Parent and Asset Seller shall require any buyer of
Parent or Asset Seller's other business units to agree throughout the same
period that such buyers will not employ any Transferred Employee in competition
with the Business.
(d) Sellers acknowledge that the remedy at law for breach of any of
its covenants under this Section 6.4 may be inadequate and, accordingly, in the
event of any breach or threatened breach by Sellers of the provisions of this
Section 6.4, Buyer may be entitled, in addition to all other remedies, to an
injunction restraining any such breach.
6.5. Employees.
(a) Buyer shall comply in all material respects with all laws and
regulations respecting employment and employment practices in connection with
the transfer of any of the
18
Companies' employees to Buyer or the retention of employees by the Companies
after the Closing Date.
(b) Buyer shall offer employment to all of Asset Seller's current
employees (including employees temporarily absent from work for disability,
worker's compensation or Family Medical and Leave Act ("FMLA") reasons) who are
involved primarily in the Business and listed on Schedule 4.9 (each, an "Asset
Seller Employee") for cash compensation substantially comparable to that
currently being provided to them by Asset Seller. Asset Seller shall use its
best efforts to ensure the orderly transfer of the Transferred Employees to
Buyer. In the event that Buyer terminates any of the Transferred Employees
without cause within the first 60 days after the Closing Date (or such longer
periods as may be set forth on Schedule 4.19(b)), Buyer shall provide severance
pay in accordance with the Xxxxx-Xxxxx Communications, Inc. Severance Plan,
except that the amount of severance pay shall be the "Enhanced Severance
Benefit" set forth on Schedule 4.19(b) and the Transferred Employees shall be
credited with their years of service with Asset Seller for this purpose.
(c) Each Transferred Employee shall: (i) be permitted to carry over a
maximum of four (4) weeks of vacation time accrued during his or her employment
with Asset Seller; and (ii) receive credit for the period such Transferred
Employee was employed by Asset Seller for purposes of determining severance,
family leave, eligibility and vesting under Buyer's tax-qualified retirement
plan ("Buyer's Plan"), eligibility for disability benefits, eligibility for
group health plan coverage, and vacation eligibility and accruals after transfer
to Buyer. With respect to any flexible spending accounts maintained by Asset
Seller under sections 104, 125 and 129 of the Internal Revenue Code for the
benefit of Transferred Employees and subject to Buyer's receipt of reasonably
acceptable records and documentation with respect to such accounts, Asset Seller
shall transfer to Buyer, and Buyer shall assume, the contribution and benefit
payment histories pertaining to, and the assets and liabilities associated with,
such accounts, as they appear on the books and records of Asset Seller or their
agent as of the Closing Date.
(d) Buyer shall take all such action as is necessary or appropriate
in order to assure that Transferred Employees and their spouses and dependent
children covered by Asset Seller's group health plans as of the Closing Date
become eligible for coverage under a group health plan of Buyer effective as of
the Closing Date. None of the foregoing shall be construed to require Buyer to
provide group health plan coverage to any person hired by Buyer subsequent to
Closing or Transferred Employees not covered by Asset Seller's group health
plans as of the Closing Date. Furthermore, all short-term, long-term and
extended disability benefit or worker's compensation obligations (if any)
payable to Asset Seller or the Companies' employees and their dependents
(including domestic partners and their dependents) who became disabled, claimed
or proposed to claim worker's compensation or claimed FMLA benefits before the
Closing Date are the responsibility of Sellers and shall be paid directly by the
Sellers or their insurance carriers. Sellers shall be solely responsible for
providing to Sellers' employees any notices under Part 6 of Title I of ERISA and
Internal Revenue Code Section 4980B ("COBRA") that are required with respect to
the termination of their employment with Sellers as a result of the transactions
contemplated by this agreement, for providing any coverage under COBRA to such
employees,
19
and to continue providing any coverages under COBRA to any of Sellers' former
employees or covered dependents currently purchasing benefits under COBRA.
(e) The account balances under the Xxxx-Xxxxx Retirement & Savings
Plan ("ZD Plan") of all Transferred Employees shall become one hundred percent
(100%) vested and non-forfeitable upon the Closing Date. Buyer shall cause its
tax-qualified defined contribution plan ("HH Plan") to accept direct rollovers
of distributions from the ZD Plan to Transferred Employees, to the extent
permitted under section 401(a)(31) of the Internal Revenue Code, and shall use
reasonable efforts to facilitate such rollovers and to publicize to Transferred
Employees the availability of such rollovers. Transferred Employees shall be
permitted to elect direct rollovers of any outstanding plan loans from the ZD
Plan to the HH Plan, subject to Buyer's receipt of reasonably satisfactory
evidence that such loans comply with applicable provisions of ERISA and the
Internal Revenue Code. Asset Seller shall make a discretionary contribution
under the ZD Plan to all eligible Asset Seller Employees for the period in 1999
through the Closing Date. That contribution as a percentage of eligible
earnings shall not be less than the amount the Asset Seller contributes to its
other eligible participants.
(f) Nothing in this Agreement shall be construed to change the "at
will" status of any individual's employment, nor to restrict the right of the
Buyer or the Companies to terminate, discipline, or change the employment terms
of any employee; nor to affect the Buyer's and the Companies' rights to amend
or terminate any of their benefit plans or policies at any time.
6.6. Trademark License.
(a) Asset Seller hereby grant to Buyer a nontransferable, royalty-
free license and right for a period of three months commencing on the Closing
Date to use, reproduce and distribute the "ZD" trademark (the "Xxxx") as part of
the composite "ZD Market Intelligence" trademark solely in connection with the
Business for transition purposes only. Such use shall be in accordance with the
trademark guidelines set forth in Schedule 6.6. In the event that Asset Seller
reasonably modifies or changes the guidelines, and Asset Seller notifies Buyer
of such modification or change, Buyer shall promptly modify its use of the Xxxx.
(b) All rights arising from the use of the Xxxx and/or any similar
names or marks (including logos) shall inure solely to Asset Seller's benefit.
Buyer agrees that neither Buyer, nor any entity that directly or indirectly owns
or controls, is owned or controlled by, or is under common control or ownership
with Buyer (a "Buyer Affiliate"), shall use, directly or indirectly, the Xxxx,
or any marks similar thereto, as part of Buyer's or any Buyer Affiliate's own
trade name, or in any other way that suggests that there is any relation or
affiliation between Asset Seller and Buyer or any Buyer Affiliate other than
that created by this Agreement, or as a trademark, service xxxx or trade name
for any other business, product or service. Buyer shall have no interest in the
Xxxx except as expressly provided in this Agreement and shall not claim any
other rights therein. Buyer's right to use the Xxxx shall automatically cease
upon the earlier of (i) the expiration or termination of the three-month period
following the Closing Date or (ii) Buyer's failure to cure any material breach
with respect to its use of the Xxxx within 15 days' of receipt of written notice
from Asset Seller.
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6.7. Government Consents and Approvals. The parties shall take all
necessary corporate and other action and use all reasonable efforts to obtain
promptly all government consents, approvals, permits, licenses, authorizations,
exemption and waivers required to carry out the Asset Purchase and the Equity
Purchase (collectively "Government Approvals"), including but not limited to
filings required under the HSR Act , the European Union merger regulations or
any other similar applicable national law, and shall provide the other party
such information as the other party may reasonably require to make such filings.
Buyer shall be solely responsible for all fees and expenses associated with any
filings required by the HSR Act, the European Union merger regime or other
similar applicable national law.
6.8. Expenses. Asset Seller shall pay all transfer taxes, recordation
taxes and similar fees associated with the assignment of the realty leases
listed on Schedule 4.11. Except as otherwise provided in this Agreement, Buyer
and Sellers shall bear their own respective expenses incurred in connection with
this Agreement and in connection with all obligations required to be performed
by each of them under this Agreement.
6.9. Cooperation of the Parties. Sellers and Buyer shall use their
reasonable efforts to assist each other in generally effecting an orderly
transition in the transfer of the Business. It is contemplated that Sellers and
Buyer shall provide transition services to each other following the Closing
Date. In connection therewith, at the Closing Sellers and Buyer shall enter into
a transition services agreement in the form of Exhibit G hereto. Any and all
public announcements concerning the transaction contemplated hereunder shall be
jointly agreed upon by Sellers and Buyer.
6.10. Sales Tax. Sellers shall pay any foreign, state or local sales or
transfer tax payable in connection with the Asset Purchase and the Equity
Purchase pursuant to this Agreement.
6.11. Bulk Sale. Buyer and Asset Seller hereby agree to waive the
provisions of any bulk sale law that may relate to the sale of Assets under this
Agreement. Asset Seller will indemnify and hold Buyer harmless from any claims
arising out of such non-compliance in accordance with Section 10.3 below.
6.12. Conduct of Business. Prior to the Closing, unless Buyer otherwise
consents in writing, the Sellers and the Companies will (a) operate the Business
solely in the ordinary course and consistent with past practices and use their
commercially reasonable efforts to preserve the goodwill of the Business, and of
its employees, suppliers, customers, governmental authorities and others having
business dealings with it; (b) not engage in any transaction involving the
Business, the Assets, the Companies or the Companies' Assets, outside the
ordinary course, including without limitation by making any material
expenditure, investment or commitment or entering into any material agreement or
arrangement of any kind; (c) not increase the compensation of any employee
involved in the Business other than in the ordinary course and consistent with
past practice; (d) maintain all insurance policies referred to in Schedule 4.7
and all Permits; and (e) not take any action that could reasonably be expected
to result in a breach of Section 4 of this Agreement.
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6.13 Evaluation Material. Promptly after the Closing Date, Parent will
exercise its contractual rights to require all persons with whom it entered into
confidentiality agreements in connection with the sale of the Assets and the
share capital in the Companies to deliver to Parent all copies of the Evaluation
Material (as defined in the confidentiality agreements) and to destroy all
memoranda, notes and other materials prepared by them or their agents based
thereon.
6.14 Staff Delegates and Works Committees. The staff delegates and works
committees of the Companies will be promptly informed and consulted on the
transfer of the Share Capital and signing of this agreement in accordance with
all relevant provisions of any applicable national law.
6.15 Further Assurances. At any time and from time to time after the
Closing Date, each party shall, without further consideration, execute and
deliver to the other such other instruments of transfer and assumption and shall
take such other action as the other may reasonably request to carry out the
transactions contemplated by this Agreement.
7. ADDITIONAL AGREEMENTS AND DOCUMENTS. At the Closing, the parties will
execute and deliver the following:
7.1. Xxxx of Sale. Asset Seller shall deliver to Buyer a xxxx of sale in
the form of Exhibit B hereto and a trademark assignment in the form of Exhibit C
hereto.
7.2. Assumption Agreement. Buyer shall deliver to Asset Seller an
assumption agreement in the form of Exhibit D hereto
7.3. Certificates or Share Transfer Agreements for Share Capital. Stock
Seller shall, depending on the applicable law, deliver to Buyer certificates
representing the Share Capital, duly endorsed for transfer or accompanied by
duly executed stock powers with all documentary stamps attached, or other
appropriate evidence of ownership of the Share Capital under applicable law and
of the transfer of ownership of the Share Capital to Buyer in accordance with
the terms of this Agreement such as duly executed share transfer agreements in
relation to the Share Capital of the Companies concerned.
7.4. Sellers' Closing Certificate. Each Seller shall deliver to Buyer a
certificate of a duly authorized officer of such Seller in the form of Exhibit E
hereto.
7.5. Buyer's Closing Certificate. Buyer shall deliver to Sellers a
certificate of a duly authorized officer of Buyer in the form of Exhibit F
hereto.
7.6. Opinion of Sellers' Counsel. Asset Seller shall deliver to Buyer an
opinion or opinions of counsel to Asset Seller and Stock Seller in the form of
Exhibit H hereto. Asset Seller shall also deliver opinions of counsel in form
and substance reasonably satisfactory to Buyer that (a) each of the Companies is
validly existing, (b) that at the Closing Date Buyer will receive 100% of the
Share Capital of each of the Companies free and clear of all Liens and (c) that
the
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transfer of the Share Capital of each of the Companies will not violate the law
of the jurisdiction of incorporation.
8. CONDITIONS TO CLOSING. The obligations of each party (treating the Sellers
as one party and Buyer as the other) to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment prior to or at Closing of
each of the following conditions:
(a) All representations and warranties made by the other party in
this Agreement shall be true and correct on the Closing Date as though made as
of the Closing Date; provided, however, that any representation and warranty of
the Sellers shall be deemed to be so true and correct unless its failure to be
so true and correct, individually or together with the failures to be so true
and correct of all representations and warranties, has had or is reasonably
likely to have a Material Adverse Effect; and the other party shall have duly
performed or complied with all the covenants, obligations and conditions to be
performed or complied with by them under the terms of this Agreement prior to
the Closing Date;
(b) The Sellers shall have received any and all necessary regulatory
approvals and the consent of the lessors under the real property leases
described in Schedule 4.11 as pertaining to the U.S. Headquarters and the U.S.
Operations/CallCenter;
(c) No action, suit or proceeding before any court or any
governmental authority shall have been commenced or threatened, and no
investigation by any governmental or regulating authority shall have been
commenced, against Buyer, any Seller or any of the affiliates, officers or
directors of any of them, seeking to restrain, prevent or change the
transactions contemplated hereby, or questioning the validity or legality of any
such transactions, or seeking damages in connect with, or imposing any condition
on, any such transactions.
(d) The parties shall have entered into the transition services
agreement attached hereto as Exhibit G.
(e) On the Closing Date, there shall not have been any Material
Adverse Change since June 30, 1999.
(f) As of the Closing Date, Asset Seller has entered into an
amendment to that certain Subscription Distribution Agreement, dated January 1,
1999 whereby the agreement shall have an initial term lasting through December
31, 2000 and shall continue thereafter subject to either party's right to
terminate on 120 days' notice (it being understood that such notice may be
delivered 120 days before December, 31, 2000.)
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND RELATED MATTERS
9.1. Survival; Remedy For Breach. The representations and warranties
contained herein, in any Schedule hereto or in any other writing delivered by
any party to any other party pursuant hereto shall survive the Closing and
continue in full force and effect for a period of 18 months from and after the
Closing Date, except for the representations and warranties contained
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in Sections 4.2, 4.3, 4.5 (the first sentence thereof), 4.17, and 4.19 which
shall continue until claims thereunder would be barred by the applicable statute
of limitations.
9.2. Warranty Claim. Notwithstanding any contrary provision of this
Agreement, it is expressly agreed that each party's sole remedy for any breach
of any representation and warranty of the other party contained herein shall be
the indemnification provided for in Section 10 (except with respect to claims of
fraud in regard to or willful breach of any such representation or warranty).
10. INDEMNIFICATION AND RELATED MATTERS
10.1. Indemnification By Sellers. From and after the Closing, Sellers
shall, jointly and severally, indemnify and hold harmless Buyer and its
officers, directors, affiliates, stockholders, employees and agents from and
against any and all damages arising from, in connection with or as a result of:
(a) any breach of any representation or warranty of Sellers set forth in this
Agreement, (b) any failure of Sellers to carry out, perform, satisfy and
discharge any of their covenants, agreements, undertakings, liabilities or
obligations under this Agreement; (c) any tax or other liabilities relating to
the Companies interests in the Excluded Assets being retained by Sellers (d) the
failure of Sellers to pay, perform or discharge any of the Retained Liabilities
or (e) claims by third parties against the Buyer relating to the operation and
ownership by Sellers of the Assets or Equity Interests and the conduct of the
Business by Sellers or the Companies prior to the Closing Date. As used
hereinafter in Sections 10.1 and 10.2, the term "damages" means any and all
losses, damages, judgments, liabilities, settlements (but only to the extent
permitted under Section 10.3), expenses, obligations, fines, penalties and other
costs incurred or suffered including, without limitation, reasonable attorneys'
fees.
10.2. Indemnification By Buyer. From and after the Closing, Buyer shall
indemnify and hold harmless each Seller and its officers, directors, affiliates,
stockholders, employees and agents from and against any and all damages arising
from, in connection with or as a result of: (a) any breach of any representation
or warranty of Buyer set forth in this Agreement; (b) any failure of Buyer to
carry out, perform, satisfy and discharge any of its covenants, agreements,
undertakings, liabilities or obligations under this Agreement; (c) Buyer's
ownership and/or operation of the Business, the Share Capital, the Companies'
Assets or the Assets after the Closing; or (d) the failure of Buyer to pay,
perform or discharge any of the Assumed Liabilities.
10.3. Indemnification; Notice and Settlement.
(a) A party seeking indemnification pursuant to Sections 10.1 or
10.2 (an "Indemnified Party") shall promptly give written notice to the party
from whom indemnification is sought (the "Indemnifying Party") of the assertion
of any claim, or the commencement of any action or proceeding in respect of
which indemnity may be sought hereunder, after the Indemnified Party has actual
knowledge of such claim. The written notice shall specify all facts then known
to the Indemnified Party giving rise to the indemnification right. Any failure
to give such notice shall only relieve the Indemnifying Party from its
indemnification obligations to the extent that it is actually prejudiced by such
failure
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(b) The Indemnifying Party shall be entitled, upon its election, by
written notice given to the Indemnified Party within 30 days after the date on
which notice of a claim or demand is given by the Indemnifying Party in
accordance with Section 10.3(a), to assume the defense or prosecution of that
claim and any litigation resulting therefrom at its expense and through counsel
of its own choosing and reasonably acceptable to the Indemnified Party. After
such assumption in any such suit, action or proceeding, the Indemnified Party
shall have the right to participate therein and to retain its own counsel, but
the fees and expenses of such counsel shall be at its own expense. The
Indemnifying Party may settle any claim as it deems fit; provided, however, that
if any settlement shall impose any restriction or affirmative obligation
(including any obligation to make any payments of any kind) upon the Indemnified
Party, no settlement shall be made without its consent, which consent shall not
be unreasonably withheld or delayed. If the Indemnifying Party does not assume
the defense or prosecution of any such Claim or litigation, the Indemnified
Party may defend against or prosecute such Claim or litigation and may settle
such Claim or litigation with the consent of the Indemnifying Party, such
consent shall not be unreasonably withheld or delayed.
(c) The Indemnified Party shall reasonably cooperate with the
Indemnifying Party in contesting any claim that the Indemnifying Party
legitimately elects to contest, or, if appropriate, in the making of any
counterclaim against the person asserting the claim or any cross-complaint
against any person. The Indemnifying Party will promptly reimburse the
Indemnified Party for any reasonable expenses incurred by the Indemnified Party
in cooperating with the Indemnifying Party.
10.4. Certain Limitations. Notwithstanding anything to the contrary
contained herein, no party shall be entitled to recover indemnification under
Section 10.1(a) or Section 10.2(a) in respect of any claim until the aggregate
of all claims by such party exceeds $1 million, in which case the other party
shall only be liable for such excess. In order to be eligible for
indemnification, any claim by a party under Section 10.1(a) or 10.2(a) must be
received by the other party prior to the date on which the representation and
warranty giving rise to the claim ceases to survive pursuant to Section 9.1.
11. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY CONTRARY PROVISION OF THIS
AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE DAMAGES IN
CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. IN NO EVENT SHALL THE SELLERS' OR BUYER'S AGGREGATE LIABILITY UNDER
THE PROVISIONS OF THIS AGREEMENT EXCEED THE PURCHASE PRICES.
12. TERMINATION. This Agreement may be terminated and the transactions may be
abandoned at any time prior to Closing: (a) by the written consent of Buyer and
Sellers; (b) by either Buyer or Sellers if the Closing shall not have occurred
on or before December 31, 1999; provided that the terminating party has not,
through breach of a representation, warranty or covenant, prevented the Closing
from occurring on or before such date. In the event of termination pursuant to
this Section, all obligations of the parties to each other hereunder shall
terminate, and no party shall have any liability to the other party under this
Agreement; provided that such termination shall not relieve either party from
any liability for any breach of this
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Agreement. In the event of such termination, the provisions of the
Confidentiality Agreement dated July 2, 1999 between Buyer and Sellers' agent
shall continue in full force in accordance with its terms.
13. MISCELLANEOUS.
13.1. Entire Agreement. This Agreement, together with the Schedules
hereto, contains and is intended as, a complete statement of all of the terms of
the arrangements among the parties with respect to the matters provided for,
supersedes any previous agreements and understandings between the parties with
respect to those matters, and cannot be changed or terminated orally.
13.2. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in New York and without
application of the conflict of law principles thereof. In connection with any
proceeding arising from this Agreement or the transactions contemplated herein,
the parties hereby irrevocably consent to the exclusive jurisdiction of any
Federal court or state court located in the Borough of Manhattan, The City of
New York, NY.
13.3. No Third Party Beneficiaries. Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties hereto,
respectively, as their interests shall appear, and shall not be deemed to be for
the benefit of any other person or entity or group of persons or entities.
13.4. Headings. The Section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
13.5. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally, or
mailed by certified or registered mail, return receipt requested, or sent by
overnight courier, to the parties at the addresses set forth in the first
paragraph of this Agreement (or to such other address as a party may have
specified by notice given to the other parties pursuant to this provision). In
addition, all notices sent to Sellers shall be sent to the attention of
President with recopy of notices relating to breach or interpretation of this
Agreement to the Legal Department at Xxxx-Xxxxx Inc., 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000.
13.6. Separability. If any provision of this Agreement is held or deemed
to be invalid or unenforceable, in whole or in part, by a court of competent
jurisdiction, such provision shall be automatically reformed and construed so as
to be valid, operative and enforceable to the maximum extent permitted by law or
equity while most nearly preserving its original intent; such invalidity shall
not render invalid or unenforceable the remaining terms and provisions of this
Agreement.
13.7. Waiver. Any party may waive compliance by another with any of the
provisions of this Agreement, provided that such waiver is in writing and signed
by the party against whom enforcement is sought. No waiver of any provision
shall be construed as a waiver of any other provision.
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13.8. Assignment. Neither of the parties hereto may assign any of its
rights or delegate any of its duties under this Agreement without the consent of
the other parties; provided that Buyer may assign any or all of its rights (but
not its obligations) hereunder to one or more of its wholly-owned subsidiaries.
Any attempted assignment in violation of this provision shall be void.
13.9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which,
when taken together) shall constitute one and the same instrument.
13.10. Interpretation Against the Draftsperson. Each party hereto has
reviewed and commented upon or fully participated in the preparation of this
Agreement. In no event will any provision of this Agreement be interpreted to
the disadvantage of any party based on such party's having been the draftsperson
of such provision.
13.11. Parent Guaranty. Parent for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, does hereby
irrevocably, unconditionally and absolutely guaranty the payment and performance
by the Sellers of their obligations hereunder and any extensions, modifications
or substitution thereof, which may be agreed upon by and among the Sellers and
the Buyer. Parent represents and warrants that: (i) it has all the corporate
power and authority to execute this Agreement and perform its obligations
hereunder, (ii) all necessary action, corporate or otherwise, for the
authorization, execution and delivery of this Agreement and the performance of
its obligations hereunder has been taken and (iii) this Agreement constitutes a
legal, valid and binding obligation of Parent, enforceable against Parent in
accordance with its terms, except as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).. Guarantor
hereby waives, to the maximum extent permitted by law, any present or future
facts or circumstances that could constitute a legal or equitable defense to,
or discharge of, a guarantor or surety; provided that the foregoing shall not
constitute a waiver by Parent of any defenses available to the Sellers
[Signature Pages Follow This Page]
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IN WITNESS WHEREOF, the undersigned have executed this Purchase Agreement
as of the date set forth in the first paragraph above.
ZD INC.
By: /s/ XXXXXXX X. X'XXXXX
-------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Chief Financial Officer
ZD HOLDINGS (EUROPE) LTD.
By: /s/ XXX XXXXXX
-------------------------------
Name: Xxx Xxxxxx
Title: Director
XXXX-XXXXX, INC.
By: /s/ XXXXXXX X. X'XXXXX
-------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Chief Financial Officer
XXXXX-XXXXX, INC.
By: /s/ XXXXXX X. XXXXX
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President, Legal
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