Exhibit 99.1
EXECUTION COPY
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SHARE SALE AND PURCHASE AGREEMENT
By and Among
DST SYSTEMS, INC.,
AMDOCS INC.
and
AMDOCS LIMITED
Dated as of July 1, 2005
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TABLE OF CONTENTS
1. DEFINITIONS........................................................... 1
2. PURCHASE AND SALE OF SHARES........................................... 11
2.1. Purchase and Sale of Shares........................................... 11
2.2. Purchase Price........................................................ 11
2.3. [Intentionally Reserved].............................................. 12
2.4. Post-Closing Adjustments.............................................. 12
3. DELIVERIES............................................................ 14
3.1. Deliveries of Shareholder............................................. 14
3.2. Deliveries of Buyer................................................... 15
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER......................... 16
4.1. Organization and Authority............................................ 16
4.2. Non-Contravention..................................................... 17
4.3. Ownership of Shares................................................... 17
4.4. Governmental and other Consents....................................... 17
4.5. Brokers' Fees......................................................... 17
4.6. Intellectual Property................................................. 18
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER RELATING TO THE
COMPANIES............................................................. 18
5.1. Organization.......................................................... 18
5.2. Authority............................................................. 18
5.3. Non-Contravention; No Material Adverse Effect Resulting from Execution
and Performance of Agreement.......................................... 19
5.4. Capitalization; Ownership............................................. 19
5.5. Subsidiaries.......................................................... 20
5.6. Governmental Approvals and other Consents............................. 20
5.7. Companies Financial Statements; No Undisclosed Liabilities............ 21
5.8. Absence of Certain Changes............................................ 22
5.9. Tax Matters........................................................... 23
5.10. Assets and Property................................................... 25
5.11. Intellectual Property................................................. 27
5.12. Contracts............................................................. 28
5.13. Insurance............................................................. 31
5.14. Litigation............................................................ 32
5.15. Employee Matters...................................................... 33
5.16. Legal Compliance...................................................... 35
5.17. Affiliate Transactions................................................ 35
5.18. No Public Offer....................................................... 36
5.19. Brokers' Fees......................................................... 36
5.20. Customers and Suppliers............................................... 36
5.21. Licenses and Permits.................................................. 37
5.22. Non-Competition Agreements............................................ 37
5.23. Indebtedness to Shareholder........................................... 37
5.24. Environmental Matters................................................. 38
6. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT.................... 38
6.1. Organization.......................................................... 38
6.2. Authority............................................................. 38
6.3. Non-Contravention..................................................... 39
6.4. Governmental and other Consents....................................... 39
6.5. Brokers' Fees......................................................... 39
7. COVENANTS............................................................. 39
7.1. Non-Competition....................................................... 39
7.2. Non-Solicitation of Employees......................................... 40
7.3. Confidential Information.............................................. 41
7.4. Public Announcements.................................................. 42
7.5. Income Taxes and Section 338(h)(10) Election.......................... 42
7.6. Release of Officers and Directors..................................... 44
7.7. Further Assurances.................................................... 44
7.8. Employee Benefits..................................................... 45
7.9. Disclaimer of Warranties.............................................. 46
7.10. Release of Companies Obligations...................................... 46
7.11. Use of Name........................................................... 46
8. INDEMNIFICATION....................................................... 47
8.1. Indemnity by Shareholder.............................................. 47
8.2. Indemnity by Buyer and Parent......................................... 48
8.3. Procedures for Indemnification........................................ 49
8.4. Certain Rights and Limitations........................................ 51
8.5. Tax Indemnity......................................................... 52
9. GENERAL PROVISIONS.................................................... 56
9.1. Assignment............................................................ 56
9.2. Parties in Interest................................................... 56
9.3. Amendment............................................................. 56
9.4. Waiver; Remedies...................................................... 56
9.5. Fees and Expenses..................................................... 57
9.6. Notices............................................................... 57
9.7. Captions; Currency.................................................... 58
9.8. Entire Document....................................................... 58
9.9. Severability.......................................................... 59
9.10. Governing Law......................................................... 59
9.11. Jurisdiction, Service of Process...................................... 59
9.12. Schedules and Exhibits; Disclosure.................................... 59
9.13. Counterparts.......................................................... 59
9.14. Specific Performance.................................................. 60
9.15. Construction; Interpretation.......................................... 60
9.16. Withholding Obligations............................................... 60
SHARE SALE AND PURCHASE AGREEMENT
SHARE SALE AND PURCHASE AGREEMENT dated as of July 1, 2005 (the "CLOSING Date")
by and among Amdocs Inc., a Delaware corporation ("BUYER"), Amdocs Limited, an
Island of Guernsey corporation ("PARENT") and DST Systems, Inc., a Delaware
corporation ("SHAREHOLDER").
W I T N E S S E T H :
WHEREAS, Shareholder owns, either directly or indirectly, the Shares
(as defined below) of each of DST Interactive, Inc. ("INTERACTIVE"), a North
Carolina corporation and DST Innovis, Inc. ("INNOVIS"), a California corporation
(each a "COMPANY" and, collectively, the "COMPANIES"); and
WHEREAS, Shareholder wishes to sell the Shares to Buyer, and Buyer
wishes to buy such Shares, on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter contained, the
parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1. "ACTION" means any legal, administrative, governmental or regulatory
proceeding or other action, suit, proceeding, claim, arbitration,
mediation, alternative dispute resolution procedure, inquiry or
investigation by or before any arbitrator, mediator, court or other
Governmental Authority.
1.2. "ADELPHIA PRE-PETITION RECEIVABLE" means the net account receivable
owed by Adelphia Communications Corp. and its Affiliates to the
Companies and their Subsidiaries for services rendered prior to the
commencement of bankruptcy proceedings in respect of Adelphia
Communications Corporation and its Affiliates on June 25, 2002. For
the purposes of the definition of "Current Assets", the parties
agree that the "Adelphia Pre-Petition Receivable" equals Four
Million Two Hundred Thousand dollars ($4,200,000.00).
1.3. "ADJUSTED WORKING CAPITAL" means (x) Current Assets minus (y)
Current Liabilities.
1.4. "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by or under common
Control with such Person. For purposes of this Agreement, the term
"Control" (including, with correlative meanings, the terms
"Controlling", "Controlled by" and "under common Control with"), as
used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of
voting securities or partnership interests, by contract or
otherwise.
1.5. "AFFILIATED GROUP" means any affiliated group within the meaning of
Section 1504(a) of the Code or any similar group defined under an
analogous provision of state, local or foreign law.
1.6. "AGREEMENT" means this Share Sale and Purchase Agreement, including
all Exhibits and Schedules hereto, as the same may be amended,
modified or supplemented from time to time in accordance with its
terms.
1.7. "ANCILLARY DOCUMENTS" means the Specified Ancillary Documents, the
El Dorado 1104 Lease, the El Dorado 1102 Lease, the Asset Transfer
Agreement, the UK Letter of Credit Guarantee, the DDP/F Software
Source Code License Agreement, the Collabrent Function Source Code
License Agreement and any other agreements delivered pursuant to
Section 3.1 or 3.2.
1.8. "BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of Missouri and
the State of New York are not open for the transaction of normal
banking business.
1.9. "BUSINESS INTELLECTUAL PROPERTY" means all Intellectual Property
owned, held, leased, licensed, under development or otherwise used
or provided by any Company or any Subsidiary thereof or used by the
Cable and Satellite Business, including the Principal Products and
any other items listed as being included in Section 5.11.1 of the
Disclosure Schedule, but excluding the Retained Intellectual
Property.
1.10. "CABLE AND SATELLITE BUSINESS" means all of the businesses of
providing billing services or systems that calculate customer bills
for the cable television, satellite television or broadband
industries and markets (x) throughout the world or (y) for purposes
of Section 7.1 only, in North America (in each case, including all
related applications such as Order Management, Product Catalog, and
Customer Management Provision) excluding the following: (i) the
business activities provided by Shareholder to Parent, the Companies
and third parties as described or contemplated in the Specified
Ancillary Documents; and (ii) the calculation of incidental
adjustments, discounts, rebates, add-on fees and the like that are
from record files provided by other parties (and not any records
from a database of Shareholder or any Subsidiary of Shareholder)
that are implemented after the xxxx has been calculated and as a
part of the xxxx printing process or that are reasonably ancillary
thereto.
1.11. "CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required
to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance
with GAAP.
1.12. "CODE" means the U.S. Internal Revenue Code of 1986, as amended.
1.13. "COLLABRENT PRODUCT" means the general customer care and billing
solution and any associated components developed in whole or in part
to service the Cable and Satellite Business and telephony services
including, but not limited to,
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components for providing billing and provisioning services,
telephony services, customer relations management services and
customer value management services and further including any portion
of any Principal Product and the modules known as (i) Product
Catalog, (ii) Xxxx Calculation, (iii) Statement Preparation, (iv)
Customer & Contact Management, (v) Customer, Account & Financial
Management, (vi) Risk and Collection Management, (vii) Target
Management, (viii) Sales & Order Management, (ix) Electronic
Provisioning & Mediation, (x) Transaction Calculation & Rating, (xi)
Enterprise Interface Gateway and (xii) Enterprise Administration
Management.
1.14. "CONFIDENTIAL INFORMATION" means all of each Company's non-public
information, in any and all medium, written or oral, including,
without limitation, data, technology, know-how, inventions,
discoveries, designs, processes, formulations, models, equipment,
algorithms, software programs, documents, systems, specifications,
information concerning research and development work, prices,
proposed transaction terms, current, planned or proposed products,
marketing and business plans, forecasts, projections and analyses,
financial information, customer information and other commercial
information and/or trade and business secrets.
1.15. "CONFIDENTIALITY AGREEMENT" means the Nondisclosure Agreement
entered into between each of the Companies and Buyer dated as of
June 6, 2002, as extended.
1.16. "CONSENTS" means consents, approvals, requirements, exemptions,
orders, waivers, allowances, novations, authorizations,
declarations, filings and registrations.
1.17. "CONTRACTS" means, with respect to any Person, all binding
agreements, undertakings, contracts, leases, obligations,
arrangements, promises, understandings and commitments (whether
written or oral) (other than any Plan) (i) to which such particular
Person is a party, (ii) under which such particular Person has any
rights, (iii) under which such particular Person has any Liability
or (iv) by which such particular Person, or any of the assets or
properties owned, held, leased or licensed by such particular
Person, is bound, including, in each case, all amendments,
modifications and supplements thereto and waivers and consents
thereunder.
1.18. "CONTROL" (including, with correlative meanings, the terms
"Controlling", "Controlled by" and "under common Control with") has
the meaning set forth in the definition of Affiliate.
1.19. "CURRENT ASSETS" means the current assets of the Companies as of the
close of business on June 30, 2005 determined in accordance with
GAAP and in a manner consistent with the Companies Audited Balance
Sheet; provided that "Current Assets" shall not include: (i)
accounts receivable from Shareholder or any of its Affiliates (other
than the Company and its Subsidiaries), (ii) the Adelphia
Pre-Petition Receivable, (iii) any Income Tax assets, (iv) any
account receivable relating to a foreign Tax withholding and (v) any
deferred Taxes.
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1.20. "CURRENT LIABILITIES" means the current liabilities of the Companies
as of the close of business on June 30, 2005 determined in
accordance with GAAP and in a manner consistent with the Companies
Audited Balance Sheet; provided that "Current Liabilities" shall not
include: (i) Income Taxes, (ii) any deferred Tax liabilities and
(iii) deferred revenues and gains.
1.21. "DAMAGES" means any and all losses, Liabilities, claims, damages,
deficiencies, fines, payments, costs and expenses, whenever or
however arising and whether or not resulting from Third Party Claims
(including all reasonable costs and expenses of any and all Actions
or other legal matters; all amounts paid in connection with any
demands, assessments, judgments, settlements and compromises
relating thereto; interest and penalties with respect thereto; and
costs and expenses, including reasonable attorneys', accountants'
and other experts' fees and expenses, incurred in investigating,
preparing for or defending against any such Actions or other legal
matters or in asserting, preserving or enforcing an Indemnitee's
rights hereunder). Damages shall expressly exclude punitive or
consequential damages, except where Damages are based on a claim of
fraud.
1.22. "ENVIRONMENTAL CLAIM" means any and all administrative, regulatory
or judicial actions, suits, orders, demands, directives, claims,
liens, investigations, proceedings or notices of noncompliance or
violation by or from any Person alleging Liability (including
responsibility for the costs of investigations, cleanup,
governmental response or removal, natural resources damages,
property damages, personal injuries, penalties, contribution and
indemnification) arising out of, based on or resulting from (i) the
presence or Release of, or exposure to, any Hazardous Materials at
any location; or (ii) the failure to comply with any Environmental
Law.
1.23. "ENVIRONMENTAL LAWS" means all applicable federal, state, local and
foreign Laws or Licenses issued, promulgated or entered into by or
with any Governmental Authorities, relating to pollution, natural
resources or protection of endangered or threatened species, human
health or the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata).
1.24. "ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended.
1.25. "GAAP" means generally accepted accounting principles in the United
States as in effect at the time covered by the applicable financial
statements.
1.26. "GOVERNMENTAL AUTHORITY" means, in any jurisdiction, any (i)
supranational, national, federal, state, local or foreign
government, (ii) court, arbitral or other governmental or regulatory
tribunal, (iii) governmental or quasi-governmental authority of any
nature (including any political subdivision, instrumentality,
branch, department, official or entity) or (iv) agency, commission,
authority or body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, regulatory or
taxing authority or power of any nature.
1.27. "GUARANTEE" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing
or having the economic
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effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly
or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of
credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of
business.
1.28. "HAZARDOUS MATERIALS" means (i) any petroleum or petroleum products,
radioactive materials or wastes, asbestos in any form and
polychlorinated biphenyls; and (ii) any other chemical, material,
substance or waste that in relevant form or concentration is
prohibited, limited or regulated under any Environmental Law.
1.29. "INCOME TAX" means any federal, state, local or foreign Tax measured
by or imposed on income or profits, including alternative minimum,
profits, franchise, gains, capital gains or other similar Taxes.
1.30. "INCOME TAX RETURN" means any Tax Return relating to Income Taxes.
1.31. "INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person
in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such
Person (provided that the lease obligations set forth in Section
1.31 of the Disclosure Schedule shall not constitute "Capital Lease
Obligations" for any purposes under this Agreement), (i) all
obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty and
(j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent
such Person is liable therefor as a result of such Person's
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ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
1.32. "INDEMNITEE" means any party that may seek indemnification under
this Agreement.
1.33. "INTELLECTUAL PROPERTY" means (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents (including utility and design
patents, industrial designs and utility models), patent applications
and patent and invention disclosures, and all other rights of
inventorship, in all jurisdictions, together with all reissuances,
continuations, continuations-in-part, divisions, revisions,
supplementary protection certificates, extensions and
re-examinations thereof; (ii) all registered and unregistered
trademarks, service marks, trade names, trade dress, logos,
business, corporate and product names and slogans, in all
jurisdictions, and registrations and applications for registration
thereof; (iii) all copyrights in copyrightable works, and all other
rights of authorship, in all jurisdictions, and all applications,
registrations and renewals in connection therewith; (iv) all mask
works and semiconductor chip rights, in all jurisdictions, and all
applications, registrations and renewals in connection therewith;
(v) all trade secrets and confidential business and technical
information (including ideas, research and development, know-how,
formulas, technology, compositions, manufacturing and production
processes and techniques, technical data, engineering, production
and other designs, plans, drawings, engineering notebooks,
industrial models, software and specifications); (vi) all computer
and electronic data, data processing programs, documentation and
software, both source code and object code (including flow charts,
diagrams, descriptive texts and programs, computer print-outs,
underlying tapes, computer databases and similar items), computer
applications and operating programs; (vii) all rights to xxx for and
remedies against past, present and future infringements of any or
all of the foregoing and rights of priority and protection of
interests therein under the Laws of any jurisdiction; (viii) all
copies and tangible embodiments of any or all of the foregoing (in
whatever form or medium, including electronic media); (ix) all other
products and services covered or embodied in or by any of the
foregoing; and (x) all other proprietary, intellectual property and
other rights relating to any or all of the foregoing.
1.34. "KNOWLEDGE" or "AWARE OF" or a similar phrase with respect to
Shareholder or any Company, whether capitalized or not, means the
actual knowledge of those persons set forth in Section 1.34 of the
Disclosure Schedule, after due inquiry with executive officers and
other personnel of the Companies (and assuming that such due inquiry
was conducted), and assuming that such executive officers and other
personnel of the Companies who are so inquired possess such
knowledge as they would be reasonably expected to possess given
their position after due inquiry (and assuming that such due inquiry
was conducted).
1.35. "LAW" OR "LAWS" means all published or written, as the case may be,
laws, statutes, constitutions, rules, regulations, directives,
ordinances, codes, judgments,
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rulings, orders, writs, decrees, stipulations, injunctions, notices,
circulars and determinations of all Governmental Authorities.
1.36. "LEASE" OR "LEASES" means all leases, subleases, licenses, rights to
occupy or use with respect to real property, including, in each
case, all amendments, modifications and supplements thereto and
waivers and consents thereunder.
1.37. "LIABILITY" means any and all claims, debts and liabilities of
whatever nature, accrued or unaccrued, liquidated or unliquidated or
due or to become due, and whenever or however arising (including
those arising out of any Contract or tort, whether based on
negligence, strict liability or otherwise).
1.38. "LICENSES" means all licenses, permits, certificates, variances,
exemptions, franchises, rulings and other approvals or
authorizations issued, granted, given, required or otherwise made
available by any Governmental Authority.
1.39. "LIEN" means any charge, claim, community property interest,
equitable interest, lien, encumbrance, option, proxy, pledge,
security interest, mortgage, right of first refusal, right of
preemption, transfer or retention of title agreement, or restriction
by way of security of any kind or nature, including any restriction
on use, voting, transfer, receipt of income or exercise of any other
attribute of ownership.
1.40. "MATERIAL ADVERSE EFFECT" means any act, omission, fact, occurrence,
circumstance or condition that has had a material adverse effect on
the business, results of operations, assets, liabilities,
intellectual property or the financial condition of the Companies
and their Subsidiaries, taken as a whole, or adverse effect on the
ability of Shareholder or any Company to perform any of their
material obligations under this Agreement or consummate the
Transaction, but shall not include any adverse effect resulting
primarily from effects, changes, events, circumstances or conditions
generally affecting the industry or markets in which the Companies
and their Subsidiaries operate or arising from changes in general
business or economic conditions.
1.41. "OWNED IP" means all Business Intellectual Property owned by the
Companies which includes, without limitation, the Principal
Products.
1.42. "PERSON" means any individual, firm, partnership, joint venture,
trust, corporation, limited liability entity, unincorporated
organization, estate or other entity (including a Governmental
Authority).
1.43. "PLAN" means each plan, including any pension, retirement, cash
balance, money purchase, savings, profit sharing, annuity, deferred
compensation, bonus, incentive (including, without limitation, cash,
stock option, stock bonus, stock appreciation, phantom stock,
restricted stock and stock purchase), medical, dental, vision,
hospitalization, long-term care, prescription drug and other health,
employee assistance, cafeteria, flexible benefits, life insurance,
short and long term disability, vacation pay, severance pay, other
welfare and fringe benefit and similar plans, programs,
understandings, arrangements or agreements and all employee benefit
plans, sponsored or maintained by any Company or to which any
Company is a party or required to contribute or has any Liability,
whether written or oral, direct or indirect, or actual or
contingent.
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1.44. "PRINCIPAL PRODUCTS" means (i) DDP/SQL (including CyberCSR, HSDS,
Techconnect and Stargate), (ii) DDP/F, (iii) DDP/TBOL, (iv) STMS,
(v) InteleCable, (vi) Teletrack, (vii) Mobile Vantage and (viii)
Collabrent Product.
1.45. "RELEASE" means any actual or threatened release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment
(including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or
fixture.
"RETAINED INTELLECTUAL PROPERTY" means (i) all items listed on
Section 1.46 of the Disclosure Schedule and (ii) any Intellectual
Property used in the provision of services as provided for in the
Specified Ancillary Documents.
1.46. "SEC" means the United States Securities and Exchange Commission.
1.47. "SHARES" means all shares of all classes of the capital stock of
each of the Companies and their respective Subsidiaries that are
issued and outstanding as of the date hereof and that, in the case
of the Companies, constitute 100% of all of the equity interest of
the Companies and, in the case of Subsidiaries of the Companies,
constitute the equity interests not owned by a Company, in each
case, on a fully diluted and as converted basis.
"SPECIFIED ANCILLARY DOCUMENTS" means the AWD Agreement, the Xxxx
Canada Agreement, the Datacenter Agreement, the Output Services
Agreement, the Transition Services Agreement, the EComm Core Source
Code License Agreement and the Factory Control Source Code License
Agreement.
1.48. "SUBSIDIARY", when used with respect to any Person, means any other
Person of which a majority of the equity interests having voting
power to elect or direct the election of a majority of the board of
directors or other Persons performing similar functions of such
Person is owned or controlled, directly or indirectly, by such first
Person, by any one or more of its Subsidiaries, or by such first
Person and one or more of its Subsidiaries.
1.49. "TARGET ADJUSTED WORKING CAPITAL" means Twenty One Million Three
Hundred Thousand dollars ($21,300,000.00).
1.50. "TAX" means any U.S. federal, state, local or foreign tax, charge,
duty, fee, levy or other assessment, including income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, property, personal
property, sales, use, transfer, registration, value added, turnover,
goods, services, municipal, real property, capital gain, unclaimed
property, alternative or add-on minimum, estimated, or other tax or
mandatory payments of any kind whatsoever, imposed by any
Governmental Authority, and including any interest, penalty, or
addition thereto, whether disputed or not, including any liability
for the foregoing by reason of membership in an Affiliated Group,
contract, indemnity or otherwise.
1.51. "TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes,
including any schedule or
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attachment thereto, and including any amendment thereof, required to
be filed with any Governmental Authority.
1.52. "TRANSACTION" means the transactions contemplated by the Transaction
Documents.
1.53. "TRANSACTION DOCUMENTS" means this Agreement, the Ancillary
Documents and all other instruments, certificates and agreements
delivered or required to be delivered by Shareholder, any of the
Companies, Buyer, Parent or any of their directors, officers,
employees or other representatives pursuant to this Agreement.
1.54. "U.S. SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
1.55. Terms Generally.
The definitions in Section 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". The words "herein", "hereof" and "hereunder" and words
of similar import refer to this Agreement (including the Exhibits
and Schedules to this Agreement) in its entirety and not to any part
hereof unless the context shall otherwise require. All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require.
Unless the context shall otherwise require, any references to any
agreement or other instrument or statute or regulation are to it as
amended and supplemented from time to time (and, in the case of a
statute or regulation, to any successor provisions). Any reference
to any supranational, national, federal, state, local, foreign or
other statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. Any reference in this Agreement to a "day" or a number of
"days" (without explicit reference to "Business Days") shall be
interpreted as a reference to a calendar day or number of calendar
days. If any action is to be taken or given on or by a particular
calendar day, and such calendar day is not a Business Day, then such
action may be deferred until the next Business Day.
1.56. Other Defined Terms.
The following terms have the meanings defined for such terms in the
Sections set forth below:
Term Section
---- Number/Location
---------------
Allocation Statement 2.2.2
AWD Agreement 3.1.7
Xxxx Canada Agreement 3.1.5
Buyer Preamble
Buyer Group 8.1.1
Closing Date Preamble
9
Term Section
---- Number/Location
---------------
Closing Balance Sheet 2.4.1
Collabrent Function Source Code License Agreement 3.1.16
Companies Audited Balance Sheet 5.7.1
Companies Balance Sheets 5.7.1
Companies Financial Statements 5.7.1
Company/Companies Preamble
Customer Contracts 5.12.1.2
Datacenter Agreement 3.1.8
DDP/F Software Assignment Agreement 3.1.12
DDP/F Software Source Code License Agreement 3.1.13
Disclosure Schedule 4
Dispute Accountants 2.4.4
Dispute Notice 2.4.3
EComm Core Source Code License Agreement 3.1.14
El Dorado 1102 Lease 3.1.10
El Dorado 1104 Lease 3.1.9
Factory Control Source Code License Agreement 3.1.15
Final Closing Balance Sheet 2.4.3
Group Insurance Policies 5.13
Indemnification Period 8.1.2
Indemnified Post Closing Taxes 8.5.2
Indemnified Pre-Closing Taxes 8.5.1
Indemnifying Party 8.3.1
Insurance Policies 5.13
Innovis Preamble
Interactive Preamble
Leased Premises 5.10.2
Major Customers 5.12.1.2
Major Suppliers 5.12.1.2
Material Contracts 5.12.1
Open Source Materials 5.11.2
Output 3.1.9
Output Services Agreement 3.1.4
Parent Preamble
Permits 5.21
Pre-Closing Tax Period 8.5.1
Property Taxes 8.5.3.1
Purchase Price 2.2.1
Relevant Subsidiaries 4.1
Required Consents 4.4
Restricted Business 7.1.1
Section 338(h)(10) Elections 7.5.1
Section 338(g) Elections 7.5.1
Shareholder Preamble
10
Term Section
---- Number/Location
---------------
Shareholder Group 8.2.1
Straddle Period 8.5.3
Tax Claim 8.5.5
Third Party Claim 8.3.1
Third Party IP 5.11.1
Transition Services Agreement 3.1.6
UK Letter of Credit Guarantee 3.1.17
2. PURCHASE AND SALE OF SHARES
2.1. Purchase and Sale of Shares.
Subject to the terms and conditions of this Agreement, and in
reliance on the covenants, representations and warranties of Buyer
and Parent contained herein, contemporaneously with execution of
this Agreement, Shareholder is, or is causing its Subsidiaries to,
hereby sell, convey, transfer, assign and deliver to Buyer or any
nominee the Shares, with all appropriate transfer Tax stamps
affixed, free and clear of all Liens, and Buyer, in reliance on the
covenants, representations and warranties of Shareholder contained
herein, is purchasing and acquiring from Shareholder and its
Subsidiaries the Shares. From and after the date hereof, none of
Shareholder or its Affiliates shall have any rights with respect to
any of the Shares and all of the Shares shall be owned and
registered solely in the name of Buyer or any nominee.
2.2. Purchase Price.
2.2.1. Subject to the terms and conditions of this Agreement and in
reliance on the covenants, representations and warranties of
Shareholder contained herein, in consideration for the sale,
conveyance, transfer and assignment of the Shares by
Shareholder and its Subsidiaries to Buyer or any nominee,
contemporaneously with execution of this Agreement, Buyer is
paying Shareholder the amount in cash of Two Hundred and
Thirty Seven Million, Eight Hundred and Sixty Four Thousand,
Two Hundred and Thirty One dollars and Twenty Cents
($237,864,231.20) (the "PURCHASE PRICE"), subject to the
adjustments as set forth in Section 2.4.
2.2.2. Within ninety (90) days after the Closing Date, Buyer shall
deliver to Shareholder a statement (the "ALLOCATION
STATEMENT") allocating the Purchase Price and applicable
liabilities among the assets acquired pursuant to this
Agreement, including the assets of the Companies (and any
Subsidiaries of the Companies) for which elections are or
will be made under Section 338(h)(10) and Section 338(g) of
the Code and any comparable provisions of state and local
Tax Laws pursuant to Section 7.5.1. If no changes are
proposed in writing to Buyer within thirty (30) days after
delivery of the Allocation Statement, Shareholder shall be
deemed to have agreed to the Allocation Statement. If within
30 days after delivery of the Allocation Statement,
Shareholder notifies Buyer in
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writing that Shareholder objects to an allocation set forth
in the Allocation Statement, Buyer and Shareholder shall use
commercially reasonable efforts to resolve such dispute
within thirty (30) days. If Buyer and Shareholder are unable
to reach agreement within such time period, such allocation
shall be determined by an appraiser mutually agreed upon by
Buyer and Shareholder, and the fees and expenses of such
appraiser shall be borne equally by Buyer and Shareholder.
If the parties are unable to agree on an appraiser, the
procedures in Section 2.4.4 shall apply to the selection of
the appraiser and the fees and expenses of the Dispute
Accountant shall be borne equally by Buyer and Shareholder.
2.3. [Intentionally Reserved]
2.4. Post-Closing Adjustments.
2.4.1. Within sixty (60) days after the date of this Agreement,
Shareholder shall deliver to Buyer an audited consolidated
and combined balance sheet of the Companies and their
Subsidiaries dated as of the date of this Agreement (the
"CLOSING BALANCE SHEET") prepared on a basis consistent with
the Companies Audited Balance Sheets (as defined below) and
GAAP, in each case except as provided in Section 2.4.1 of
the Disclosure Schedule. Buyer and its representatives and
accountants shall grant to Shareholder access as it may
reasonably request to any books, records, work papers or
other information of the Companies reasonably related to the
preparation thereof.
2.4.2. In the event that the Adjusted Working Capital reflected on
the Closing Balance Sheet is less than the Target Adjusted
Working Capital by more than Five Hundred Thousand dollars
($500,000), then Shareholder shall pay to Buyer on a
dollar-for-dollar basis, by wire transfer of immediately
available funds, an amount equal to the total amount by
which Target Adjusted Working Capital exceeds Adjusted
Working Capital. In the event the Adjusted Working Capital
reflected on the Closing Balance Sheet is greater than the
Target Adjusted Working Capital by more than Five Hundred
Thousand dollars ($500,000), then the Parent shall cause the
Buyer to pay to Shareholder, or the Parent shall pay to
Shareholder, an amount equal to the total amount by which
Adjusted Working Capital exceeds Target Adjusted Working
Capital, on a dollar-for-dollar basis, by wire transfer of
immediately available funds. Any payments required pursuant
to this Section 2.4.2 shall be made within ten (10) days
following the receipt by Buyer of the Closing Balance Sheet,
unless a Dispute Notice (as defined below) is delivered.
Shareholder and its representatives and accountants shall
grant to Buyer or Parent access as it may reasonably request
to any books, records, officers and employees, financial and
operating data, advisors, auditor and accountant work
papers, or other information in Shareholder's possession as
reasonably required for the review of the Closing Balance
Sheet and the determination of Adjusted Working Capital.
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2.4.3. If, within thirty (30) calendar days after the date of
receipt by Buyer of the Closing Balance Sheet, Buyer
disputes the amount of the Adjusted Working Capital
reflected therein, then Buyer will give written notice to
Shareholder within such thirty (30) calendar day period
specifying in reasonable detail Buyer's basis for its
dispute (a "DISPUTE NOTICE"). In the event that Buyer
notifies Shareholder in writing that it has accepted the
Closing Balance Sheet, or in the event that Buyer does not
issue a Dispute Notice within thirty (30) calendar days of
receipt of the Closing Balance Sheet, then the Closing
Balance Sheet shall become the Final Closing Balance Sheet
(the "FINAL CLOSING BALANCE SHEET").
2.4.4. If Buyer submits a Dispute Notice to Shareholder within such
thirty (30) day period, Shareholder and Buyer shall work
together in good faith to seek to resolve the dispute over
the correct amount of Adjusted Working Capital. If
Shareholder and Buyer are unable to resolve their
disagreement within fifteen (15) calendar days after
Shareholder's receipt of a Dispute Notice from Buyer, the
dispute shall be referred for determination to an Accounting
Firm mutually selected by Shareholder and Buyer (the
"DISPUTE ACCOUNTANTS") as promptly as practicable. In the
event that Shareholder and Buyer are unable to agree on the
Dispute Accountants, then the parties agree to each select a
nationally known firm of independent public accountants
that, together, will select a third firm of public
accountants to serve as the Dispute Accountants. The Dispute
Accountants will make a determination as to the correct
amount of Adjusted Working Capital, which determination will
be (a) in writing, (b) furnished to each of Shareholder and
Buyer as promptly as practicable after the dispute has been
referred to the Dispute Accountants, (c) made in accordance
with this Agreement and (d) conclusive and binding.
Shareholder and Buyer will use reasonable commercial efforts
to cause the Dispute Accountants to render their decision
within thirty (30) calendar days after submitting such
dispute and shall promptly comply with all reasonable
written requests by the Dispute Accountants for information,
books, records and similar items. Neither party will
disclose to the Dispute Accountants, and the Dispute
Accountants will not consider for any purpose, any
settlement offer made by either party. As part of the
resolution of all outstanding disputes, the parties will
cause the Dispute Accountants to prepare the Final Closing
Balance Sheet, which shall be binding on both parties. Any
payments required upon the determination by the Dispute
Accountants, 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 divided by 365,
from the date hereof to the date of payment, shall be made
within ten (10) days following such determination.
2.4.5. All fees and expenses charged by any Dispute Accountants
retained hereunder shall be borne by Buyer and Shareholder
in inverse proportion as they may prevail on matters
resolved by the Dispute Accountants, which proportionate
allocations shall also be determined by the Dispute
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Accountants at the time the determination of the Dispute
Accountants is rendered on the merits of the matters
submitted.
3. DELIVERIES
3.1. Deliveries of Shareholder.
Simultaneously herewith, Shareholder is delivering, or is causing to
be delivered, to Buyer the following:
3.1.1. Share certificates representing the Shares, accompanied by
duly executed stock powers in the form of Exhibit 3.1.1
transferring the Shares to Buyer or its designee and any
other documents that are necessary to transfer to Buyer or
its designee the Shares, free and clear of any Lien;
3.1.2. Written resignations of all directors of each Company and
any Subsidiary thereof and of all members of each Company's
and each Subsidiary's thereof committees and revocation of
signature rights of each Company and any Subsidiary thereof;
3.1.3. A good standing certificate of each Company as of a date
within three (3) days prior to the date hereof;
3.1.4. Original copy of the Output Services Agreement dated as of
the date hereof by and among Parent and DST Output, LLC (the
"OUTPUT SERVICES AGREEMENT") duly executed by DST Output,
LLC;
3.1.5. Original copy of the Xxxx Canada related agreement dated as
of the date hereof by and among Amdocs Canadian Managed
Services Inc. and Output Canada, Inc. (the "XXXX CANADA
AGREEMENT") duly executed by Output Canada, Inc.;
3.1.6. Original copy of the Transition Services Agreement dated as
of the date hereof by and among Buyer, Parent and
Shareholder (the "TRANSITION SERVICES AGREEMENT") duly
executed by Shareholder;
3.1.7. Original copy of the AWD related agreement dated as of the
date hereof by and among DST Technologies, Inc. and Innovis
(the "AWD AGREEMENT") duly executed by DST Technologies,
Inc. and Innovis;
3.1.8. Original copy of the Datacenter Agreement dated as of the
date hereof by and among Shareholder and Innovis (the
"DATACENTER AGREEMENT") duly executed by Shareholder and
Innovis;
3.1.9. Original copy of the Office Lease dated as of the date
hereof by and among DST Output West, LLC ("OUTPUT"), as
landlord, and Innovis, as tenant, for the property known as
0000 Xxxxxxxxxx Xxxxxxxxx, Xx Xxxxxx Xxxxx, XX (the "EL
DORADO 1104 LEASE") duly executed by Output and Innovis;
3.1.10. Original copy of the Lease dated as of the date hereof by
and among Output, as landlord, and Innovis, as tenant, for
the property known as 0000 Xxxxxxxxxx Xxxxxxxxx, Xx Xxxxxx
Xxxxx, XX (the "EL DORADO 1102 LEASE") duly executed by
Output and Innovis;
14
3.1.11. Original copy of the Asset Transfer Agreement relating to
the assignment of the Adelphia Pre-Petition Receivable and
the related Xxxx of Sale and Instrument of Assignment, each
dated as of the date hereof by and among Shareholder and
Innovis (together, the "ASSET TRANSFER AGREEMENT"), in each
case, duly executed by Shareholder and Innovis.
3.1.12. Original copy of the agreement relating to the assignment of
certain DDP/F software dated as of the date hereof by and
among DST Output, LLC and Innovis (the "DDP/F SOFTWARE
ASSIGNMENT AGREEMENT") duly executed by DST Output, LLC and
Innovis;
3.1.13. Original copy of the license agreement relating to certain
DDP/F programs dated as of the date hereof by and among DST
Output, LLC and Innovis (the "DDP/F SOFTWARE SOURCE CODE
LICENSE AGREEMENT") duly executed by DST Output, LLC and
Innovis;
3.1.14. Original copy of the license agreement relating to certain
EComm Core software and certain other patent rights dated as
of the date hereof by and among Shareholder, DST Systems of
California, Inc. and Interactive (the "ECOMM CORE SOURCE
CODE LICENSE AGREEMENT") duly executed by Shareholder, DST
Systems of California, Inc. and Interactive;
3.1.15. Original copy of the license agreement relating to certain
factory control software dated as of the date hereof by and
among DST Output, LLC and Innovis (the "FACTORY CONTROL
SOURCE CODE LICENSE AGREEMENT") duly executed by DST Output,
LLC and Innovis;
3.1.16. Original copy of the license agreement for certain functions
in the Collabrent Product dated as of the date hereof by and
among Shareholder and Interactive (the "COLLABRENT FUNCTION
SOURCE CODE LICENSE AGREEMENT") duly executed by Shareholder
and Interactive;
3.1.17. Original copy of the agreement to guarantee a letter of
credit dated as of the date hereof by and among Shareholder
and Parent (the "UK LETTER OF CREDIT Guarantee") duly
executed by Shareholder;
3.1.18. Certificates mutually satisfactory to Buyer and Shareholder,
in accordance with applicable Treasury Regulations,
certifying that the transactions contemplated hereby are
exempt from withholding under Section 1445 of the Code; and
3.1.19. All original stock books, registers, minute books and
records of each Company (including the corporate seal
thereof).
3.2. Deliveries of Buyer.
Simultaneously herewith, Buyer is delivering, or is causing to be
delivered, to Shareholder the following:
3.2.1. The Purchase Price to a bank account the details of which
have been provided by Shareholder to Buyer prior to the date
hereof;
15
3.2.2. Original copy of the Output Services Agreement, duly
executed by Parent or any designee;
3.2.3. Original copy of the Xxxx Canada Agreement, duly executed by
Amdocs Canadian Managed Services Inc. or any designee;
3.2.4. Original copy of the Transition Services Agreement, duly
executed by Buyer and Parent or any designee;
3.2.5. Original copy of the UK Letter of Credit Guarantee, duly
executed by Parent;
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Subject to the disclosures set forth in the Disclosure Schedule attached
hereto as Exhibit 4 (the "DISCLOSURE SCHEDULE") (provided that the listing
of an item in one section of the Disclosure Schedule shall be deemed to be
a listing in each section of the Disclosure Schedule and to apply to any
other representation and warranty of Shareholder in this Agreement to the
extent that is reasonably apparent from a reading of such disclosure item
that it would also qualify or apply to such other section or
representation and warranty), Shareholder hereby represents and warrants
to Buyer and Parent as follows:
4.1. Organization and Authority.
Shareholder and each Subsidiary that directly or indirectly owns any
interests in either Company (the "RELEVANT SUBSIDIARIES") are duly
organized, validly existing and in good standing under the laws of
their respective jurisdiction of organization. Shareholder and each
Relevant Subsidiary have all requisite power and authority,
corporate or otherwise, to execute and deliver each Transaction
Document to which it is a party and delivered or to be delivered
thereby and to perform all of its obligations thereunder. The
execution, delivery and performance by Shareholder and each Relevant
Subsidiary of each Transaction Document delivered or to be delivered
thereby and the consummation by Shareholder and each Relevant
Subsidiary of the Transaction have been duly authorized by all
necessary and proper action on the part of Shareholder and each
Relevant Subsidiary, as the case may be. The board of directors or
relevant governing body, as the case may be, of Shareholder and each
Relevant Subsidiary, by resolutions duly adopted at meetings duly
called and held or by the unanimous written consent in lieu of a
meeting, has approved the Transaction Documents and the transactions
contemplated hereunder and under the other Transaction Documents.
This Agreement and each other Transaction Document to be delivered
by Shareholder or the Relevant Subsidiaries have been duly executed
and delivered thereby and constitute the legal, valid and binding
obligation thereof, enforceable against Shareholder and the Relevant
Subsidiary, as the case may be, in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
or affecting the enforcement of creditors' rights in general and by
general principles of equity.
16
4.2. Non-Contravention.
None of the execution, delivery or performance by Shareholder and
each Relevant Subsidiary of any Transaction Document to which they
are parties or the consummation by Shareholder and each Relevant
Subsidiary of the Transaction does or will, with or without the
giving of notice or the lapse of time or both conflict with, or
result in a breach or violation of, or a default under, or give rise
to any other right which may adversely affect the Transaction or the
Transaction Documents under (i) the certificate of incorporation or
bylaws of Shareholder or the certificate of incorporation or
certificate of formation of each Relevant Subsidiary, as the case
may be, (ii) any Contract to which Shareholder and each Relevant
Subsidiary, as the case may be, are a party or to which they are
subject, or (iii) any Law or material License to which Shareholder
and each Relevant Subsidiary, as the case may be, or its respective
properties or assets are subject, which, in the case of clauses (ii)
or (iii) hereof, would, or would reasonably be expected to, result
in a Material Adverse Effect.
4.3. Ownership of Shares.
Shareholder has good and valid title to and is the legal and
beneficial owner (either directly or indirectly) of the Shares, free
and clear of any Liens. Other than the Shares, there are no
outstanding equity interests in either of the Companies.
4.4. Governmental and other Consents.
No Consent of any Governmental Authority or any other Person is
required to be obtained or made by or with respect to Shareholder or
the Relevant Subsidiaries in connection with the execution, delivery
and performance by Shareholder or the Relevant Subsidiaries of any
Transaction Document to which any of them is a party or the
consummation by Shareholder or the Relevant Subsidiaries of the
Transaction (including but not limited to Consents required in
connection with the change in the control of the Companies pursuant
to the sale of the Shares by Shareholder and each Relevant
Subsidiary), other than the Consents of (i) the Major Customers,
(ii) the Major Suppliers, (iii) the parties to any Material Contract
and (iv) as otherwise set forth in Section 4.4 of the Disclosure
Schedule (the "REQUIRED CONSENTS").
4.5. Brokers' Fees.
None of Shareholder or any of its Affiliates has authorized or
retained any Person to act as an investment banker, broker, finder
or other intermediary who is or might be entitled to any fee,
commission or payment from Buyer, Parent or any Company or on their
behalf in connection with the negotiation, preparation, execution or
delivery of any Transaction Document or the consummation of the
Transaction, nor is there to Shareholder's Knowledge any basis for
any such fee, commission or payment to be claimed by any Person
against Buyer, Parent or any Company.
17
4.6. Intellectual Property.
None of Shareholder or its Affiliates (other than the Companies and
any Subsidiaries thereof) owns (i) Intellectual Property used in the
Cable and Satellite Business as presently conducted or (ii) the
Principal Products.
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER RELATING TO THE COMPANIES
Subject to the disclosures set forth in the Disclosure Schedule (provided
that the listing of an item in one section of the Disclosure Schedule
shall be deemed to be a listing in each section of the Disclosure Schedule
and to apply to any other representation and warranty of Shareholder in
this Agreement to the extent that is reasonably apparent from a reading of
such disclosure item that it would also qualify or apply to such other
section or representation and warranty), Shareholder hereby represents and
warrants to Buyer and Parent as follows:
5.1. Organization.
5.1.1. Interactive is duly organized and validly existing under the
laws of the State of North Carolina and is in good standing
under the laws of such state. Innovis is duly organized and
validly existing under the laws of the State of California
and is in good standing under the laws of such state. Each
Company has all requisite corporate power and authority to
carry on its business as it is currently conducted and to
own, lease and operate its assets and properties in the
manner such assets and properties are now owned, leased or
operated. Each Company is duly qualified to transact
business and is in good standing as a foreign company in
each jurisdiction listed in Section 5.1.1 of the Disclosure
Schedule.
5.1.2. True and complete copies of the certificate of incorporation
certified by the Secretary of State of the state of
incorporation, bylaws and share certificate books and share
transfer books, in each case as amended to the date hereof,
of each Company have previously been delivered or made
available to Buyer. Neither Company is in violation of any
of the provisions of its certificate of incorporation or
bylaws. Each Company has properly filed or delivered all
reports, resolutions and other documents that are required
under applicable Laws to be filed with or delivered to any
Governmental Authority, except where the failure to do so
would not, or would not reasonably be expected to, result in
a Material Adverse Effect.
5.1.3. All the minute books of each Company have been made
available to Buyer. No resolutions have been passed,
enacted, consented to or adopted by the directors (or any
committee thereof) or shareholders, except for those
contained in such minute books. The corporate records of
each Company have been maintained in accordance with all
applicable Laws and are accurate in all material respects.
5.2. Authority.
Each Company has all requisite corporate power and authority to
execute and deliver each Transaction Document delivered or to be
delivered by it and to
18
perform all of its obligations thereunder. The Board of Directors of
each Company, by resolutions duly adopted at a meeting duly called
and held or by the unanimous written consent in lieu of meeting, has
determined that the Transaction is advisable and has approved the
Transaction Documents. Each Transaction Document to be delivered by
each Company has been or will be duly executed and delivered by such
Company and, when so executed and delivered, will constitute the
legal, valid and binding obligation thereof, enforceable against it
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors'
rights in general and by general principles of equity.
5.3. Non-Contravention; No Material Adverse Effect Resulting from
Execution and Performance of Agreement.
With respect to each Company, none of the execution, delivery or
performance by it of any Transaction Document to which it is party
or the consummation by it of the Transaction does or will, with or
without the giving of notice or the lapse of time or both, result in
the creation of any Lien upon any of its assets or properties, or
conflict with, or result in a breach or violation of, or a default
under, or trigger any "change of control" right in, or give rise to
a right of amendment, termination, cancellation or acceleration of
any obligation under (i) the certificate of incorporation or bylaws
of such Company, (ii) any Contract to which such Company is party or
(iii) any Law or License to which such Company or its properties or
assets is subject, which, in the case of clauses (ii) or (iii)
hereof, would, or would reasonably be expected to, result in a
Material Adverse Effect. Neither the execution and delivery of this
Agreement by Shareholder or any of the Companies, the performance or
consummation by any of them of the transactions contemplated hereby
nor the change of control of the Companies due to the sale of the
Shares by Shareholder to Buyer will result, immediately following
consummation of the Transaction, in a Material Adverse Effect.
5.4. Capitalization; Ownership.
The authorized share capital of Interactive consists of 50,000
shares of common stock and 50,000 shares of preferred stock, of
which 4,000 shares of common stock and 6,000 shares of preferred
stock are issued and outstanding. The authorized share capital of
Innovis consists of 2,000,000 shares of common stock (voting) and
2,000,000 shares of common stock (non-voting), of which 1000 shares
of common stock (voting) are issued and outstanding. The Shares are
held, beneficially and of record, directly or indirectly, by
Shareholder. The Shares outstanding on the date hereof are duly
authorized and validly issued, fully paid and non-assessable, and
free and clear of any Liens and were not issued in violation of, or
subject to, any preemptive rights applicable to any Company or any
Contract or Law applicable to any Company. There are no bonds,
debentures, notes or other Indebtedness of any type whatsoever of
any Company that are convertible into, exchangeable or exercisable
for Shares or other capital stock of any Company or that have the
right to vote (or are convertible into, or exchangeable or
exercisable for, securities having the right to vote) on any
19
matters on which Shareholder, directly or indirectly, may vote.
Except for the Shares, there are no (i) outstanding shares, options,
convertible securities, warrants, calls, demands, purchase rights,
subscription rights, conversion rights, exchange rights, or other
similar Contracts, commitments, arrangements or understandings
relating to the issuance by any Company of any securities of such
Company, (ii) outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to any Company, (iii)
voting trusts, proxies, or other agreements or understandings with
respect to the voting of any Shares or any other securities of any
Company, and neither Company is obligated, pursuant to any
securities, options, warrants, calls, demands, Contracts
contingently or otherwise, to issue, deliver, sell, purchase or
redeem any share capital of such Company, any other securities of
such Company or any interest in such Company to or from any Person
or to issue, deliver, sell, purchase or redeem any stock
appreciation rights or other Contracts of such Company relating to
any share capital or other securities of either Company to or from
any Person or (iv) instruments representing Indebtedness of either
Company that entitles the holder thereof to vote such Indebtedness
at a meeting of such Company's shareholders.
5.5. Subsidiaries.
Set forth on Section 5.5 of the Disclosure Schedule is a complete
and accurate list of each Subsidiary of each Company and, for each
Subsidiary of each Company: (i) its jurisdiction of incorporation,
formation or other organization, (ii) its authorized capital stock
or share capital, (iii) the number of issued and outstanding shares
or share capital and (iv) the holder or holders of such shares.
Except for the ownership of each Company's Subsidiaries and as set
forth on Section 5.5 of the Disclosure Schedule, neither Company
owns beneficially or otherwise, directly or indirectly, any capital
stock or share capital of, or other securities, equity or ownership
interest in, or has any obligation to form or participate in, any
corporation, company, partnership or other corporate Person. Each
Company is the record and beneficial owner of the equity interests
in the Subsidiaries of such Company set forth on Section 5.5 of the
Disclosure Schedule, which are owned by it free and clear of any
Liens. All of the outstanding shares of capital stock or share
capital of each Subsidiary of each Company are duly authorized,
validly issued, fully paid and non-assessable and none of such
shares were issued in violation of, or are subject to, any
preemptive rights applicable to the relevant Company.
5.6. Governmental Approvals and other Consents.
No Consent of any Governmental Authority or any Consent of any other
Person is required to be obtained or made by or with respect to
either Company in connection with the execution, delivery and
performance of the Transaction Documents by such Company or the
consummation of the Transaction (including but not limited to
Consents required in connection with the change in the control of
the Companies pursuant to the sale of the Shares by Shareholder to
Buyer), other than the Consents of any Governmental Authority set
forth in Section 5.6 of the Disclosure Schedule or the Required
Consents set forth in Section 4.4 of the Disclosure Schedule.
20
5.7. Companies Financial Statements; No Undisclosed Liabilities.
5.7.1. Set forth on Section 5.7.1 of the Disclosure Schedule are
the audited consolidated and combined balance sheet of the
Companies and their Subsidiaries as of December 31, 2004
(the "COMPANIES AUDITED BALANCE SHEET"), the unaudited
consolidated and combined balance sheet of the Companies and
their Subsidiaries as of December 31, 2003 (together with
the Companies Audited Balance Sheet, the "COMPANIES BALANCE
SHEETS") and the related unaudited consolidated and combined
statements of operations and cash flows for the years ended
December 31, 2004 and December 31, 2003 (together with the
Companies Balance Sheets, the "COMPANIES FINANCIAL
STATEMENTS"). Except as set forth on Section 5.7.1 of the
Disclosure Schedule, the Companies Financial Statements were
prepared in accordance with GAAP, consistently applied. The
Companies Financial Statements present fairly in all
material respects the financial position, results of
operations and cash flows of the Companies at the respective
dates set forth therein and for the respective periods
covered thereby. Neither of the Companies nor any of their
Subsidiaries has entered into any transaction involving a
hedge or derivative financial instrument (or any transaction
pursuant to which any of the Companies or any Subsidiary
thereof has waived certain royalties or other payments or
benefits that it would otherwise be entitled to receive from
any customer thereof). All accounts receivable reflected in
the Companies Balance Sheets were actually made in the
ordinary course of the Companies' respective business.
Shareholder has delivered to Buyer a list of all receivables
of the Companies as of December 31, 2004, a copy of which is
attached as Section 5.7.1 of the Disclosure Schedule.
5.7.2. Each Company has given Buyer or its representatives full
access to (i) all records and lists of such Company
pertaining to the assets of such Company, (ii) all records
and lists of such Company pertaining to the personnel of
such Company and (iii) all financial books, ledgers, files
and reports of every kind maintained by such Company.
5.7.3. Neither Company has any Liabilities, of any kind whatsoever,
whether accrued, contingent, absolute, determined,
determinable, known or unknown or otherwise, except for (i)
Liabilities set forth, reflected in, reserved against and
disclosed in the Companies Audited Balance Sheet; (ii)
Liabilities disclosed in the Disclosure Schedule; and (iii)
Liabilities incurred in the ordinary course of such
Company's business consistent with past practice.
5.7.4. As of the Closing Date, neither Company nor any of their
Subsidiaries has any Indebtedness and each Company and its
Subsidiaries has paid in its entirety (x) all bonuses to
employees accrued in respect of 2004 and (y) all invoices
overdue for more than 30 days payable by a Company or its
Subsidiaries to Xxxxxx Computer Services, Ltd. or its
assigns.
21
5.8. Absence of Certain Changes.
Since December 31, 2004, each Company and each of its Subsidiaries
has conducted its business only in the ordinary course consistent
with past practice, and neither Company nor any Subsidiary of a
Company has experienced any event that would, or would reasonably be
expected to, constitute a Material Adverse Effect. Without limiting
the generality of the foregoing, from and after December 31, 2004,
neither Company nor any Subsidiary of a Company has:
5.8.1. Suffered any loss to its property (whether through
destruction, accident, casualty, expropriation, condemnation
or otherwise) or its business, or incurred any liability,
damage, award or judgment for injury to the property or
business of others or for injury to any person (in each
case, whether or not covered by insurance) in each case in
excess of $250,000 in the aggregate;
5.8.2. Made any change outside the ordinary course of such
Companies' or such Subsidiaries' business in the rate of
compensation, commission, bonus or other direct or indirect
remuneration payable or to become payable to any of its
directors, officers, employees or agents, or agreed or
promised (orally or otherwise) to pay, conditionally or
otherwise, any bonus or extra compensation or other employee
benefit to any of such directors, officers, employees or
agents;
5.8.3. Sold, assigned, leased or transferred any material assets or
properties, other than sales of inventory in the ordinary
course of business;
5.8.4. Made any material change in its accounting methods,
policies, practices or principles;
5.8.5. Amended its certificate of incorporation or bylaws;
5.8.6. Issued, delivered, pledged or otherwise encumbered, sold or
disposed of any shares of its capital stock or other
securities, or created, issued, delivered, pledged or
otherwise encumbered, sold or disposed of any securities
convertible into, or rights with respect to, or options or
warrants to purchase or rights to subscribe to, any shares
of its capital stock or other securities, whether as a
result of any exercise thereof or otherwise;
5.8.7. Split, combined or reclassified any of its Shares or issued
or authorized the issuance of any other securities in
respect of, in lieu of or in substitution for any of its
Shares;
5.8.8. (i) entered into any employment agreement with or for the
benefit of any Person or terminated any such employment
agreement; (ii) paid any pension, retirement allowance or
other employee benefit not required by any Plan, agreement
or arrangement existing as of June 30, 2004 to any Person,
or (iii) agreed or made binding promises (orally or
otherwise) to pay (conditionally or otherwise) or otherwise
committed itself (conditionally or otherwise) to any
additional pension, profit sharing, bonus, incentive,
deferred compensation, stock purchase, share option,
22
share appreciation, group insurance, vacation pay, severance
pay, retirement or other employee benefit plan, agreement or
arrangement, or changed the terms of any existing Plan or
employee agreement or arrangement;
5.8.9. Materially changed or modified its general credit,
collection or payment policies, procedures or practices,
including acceleration of collections of receivables,
failure to make or delay in making collections of
receivables, waive or forgive any receivables, provide
credit to customers, acceleration of payment of payables or
other Liabilities or failure to pay or delay in payment of
payables or other Liabilities;
5.8.10. Acquired or agreed to acquire by merging or consolidating
with, or by purchasing a substantial portion of the capital
stock or assets of, or by any other manner, any business or
any corporation, partnership, limited liability entity,
joint venture, association or other business organization or
Person, or division, operating unit or product line thereof;
5.8.11. Revalued for purposes of its accounting records, any of its
assets, including writing down the value of its inventory or
writing off notes or accounts receivable;
5.8.12. Reversed any reserves, accruals or provisions, existing as
of December 31, 2004, that are related to its revenue or
accounts receivable, other than in the ordinary course of
business or as required by GAAP;
5.8.13. Purchased any real property or entered into any Lease
(including any capitalized lease obligations);
5.8.14. Settled or compromised any Action of material value; or
5.8.15. Entered into any agreement or Contract (other than any
Transaction Document) to take any of the types of action
described in sub clauses 5.8.1 through 5.8.14.
5.9. Tax Matters
5.9.1. All Tax Returns required to be filed by or on behalf of each
Company, its Subsidiaries, or any Affiliated Group of which
either Company or any Subsidiary thereof is or has ever been
a member, have been timely filed with the appropriate
Governmental Authorities or extensions have been timely
granted and have not expired. All such Tax Returns were
correct and complete in all material respects, except as
otherwise set forth in Section 5.9.1 of the Disclosure
Schedule.
5.9.2. All Taxes for which either Company or any of its
Subsidiaries is liable that are due have been paid in full
or are being contested in good faith (and such contest is
disclosed in Section 5.9.2 of the Disclosure Schedule) and,
to the extent the liabilities for such Taxes are not yet due
or are being contested in good faith, adequate reserves have
been established on the Companies Audited Balance Sheet in
accordance with GAAP.
23
5.9.3. There are no Liens for Taxes on any of the assets of either
Company or any of its Subsidiaries other than Liens for
Taxes not yet due and payable or that are being contested in
good faith through appropriate proceedings (and such contest
is disclosed on Section 5.9.3 of the Disclosure Schedule).
5.9.4. Except as set forth in Section 5.9.4 of the Disclosure
Schedule, (a) there are no Actions, audits, disputes or
claims in progress, pending or threatened in writing by any
Governmental Authority with respect to any Taxes for which
either Company or any of its Subsidiaries is or may be
liable; and (b) neither Company nor any of its Subsidiaries
has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax
assessment or deficiency.
5.9.5. Except as set forth in Section 5.9.5 of the Disclosure
Schedule, (a) each Company and its Subsidiaries have
delivered to Buyer correct and complete copies of all Tax
Returns (other than those portions of Shareholder's
consolidated U.S. federal Income Tax Returns and other
combined or unitary Tax Returns that do not relate to the
Companies or any Subsidiaries of the Companies) for the past
3 years for which returns have been filed, and statements of
deficiencies assessed against or agreed to by such Company
or Subsidiary for any such period; and (b) from and after
December 31, 2004, neither Company nor any of its
Subsidiaries has changed any annual Tax accounting period,
settled or compromised any Income Tax Liability or entered
into any closing agreement with any Governmental Authority.
5.9.6. Other than a group the common parent of which was
Shareholder, neither Company nor any of their Subsidiaries
is or for the past 5 years has been a member of a
consolidated, combined or similar group filing Tax Returns.
Neither Company nor any of their Subsidiaries is bound by
any Income Tax allocation or sharing agreement with
Shareholder or its Affiliates or with any Governmental
Authority.
5.9.7. Neither Company nor any of their Subsidiaries will be
required to include in a taxable period ending after the
Closing Date taxable income attributable to income that
accrued in a taxable period prior to the Closing Date but
was not recognized in such prior taxable period, including
as a result of the installment method of accounting, the
completed contract method of accounting, the long-term
contract method of accounting, the cash method of accounting
or Section 481 of the Code or any comparable provision of
state or local, domestic or foreign, Tax Law or for any
other reason.
5.9.8. Neither Company nor any of their Subsidiaries has been a
United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of
the Code or made an election under Section 897(i) of
24
the Code to be treated as a domestic corporation for
purposes of Sections 897, 1445 and 6039C of the Code.
5.9.9. Each Company and its Subsidiaries has disclosed on its
federal Income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal
Income Tax within the meaning of Section 6662 of the Code.
5.9.10. Neither Company nor any of their Subsidiaries has ever
participated in any listed transaction, as defined in
Treasury Regulation Section 1.6011-4(b)(2), required to be
reported in a disclosure statement pursuant to Treasury
Regulation Section 1.6011-4 and each of the Companies and
its Subsidiaries has complied with all reporting
requirements under Treasury Regulation Section 1.6011-4 for
any reportable transaction.
5.9.11. No amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as
a result of any of the transactions contemplated by this
Agreement (alone or in combination with any other event) by
any individual employed by either Company or any of its
Subsidiaries who is a "disqualified individual" (as such
term is defined in Treasury Regulation Section 1.280G-1)
under any compensation arrangement currently in effect would
be characterized as an "excess parachute payment" (as such
term is defined in Section 280G(b)(1) of the Code) and no
such disqualified individual is entitled to receive any
additional payment from either Company or any of its
Subsidiaries in the event that the excise tax required by
Section 4999(a) of the Code is imposed on such disqualified
individual.
5.10. Assets and Property.
5.10.1. Each Company and each of its Subsidiaries has good and valid
title to all property, equipment and other assets that it
purports to own, including the Principal Products (whether
personal, tangible or intangible), free and clear of any
Lien and has valid and enforceable leasehold interests in
the premises and the material equipment, furniture and
fixtures purported to be leased by it. Neither Company nor
any Subsidiary of a Company owns any real property.
5.10.2. Section 5.10.2 of the Disclosure Schedule contains a
complete and accurate list of: (i) all real estate and
improvements leased, subleased or occupied by each Company
and each of its Subsidiaries pursuant to a Lease (each, a
"LEASED PREMISES"), indicating the leasehold ownership, full
address and use of each Leased Premises; and (ii) all Leases
to which either Company or any Subsidiary of a Company is a
party (including all Leases and subleases under which such
Company or such Subsidiary has granted any interest in any
of the Leased Premises, or any portion thereof, to any
Person).
25
5.10.3. Each Company and each of its Subsidiaries enjoys peaceful
and undisturbed possession of all of its Leased Premises in
accordance with and subject to the terms of the respective
Leases, copies of which have been provided to Buyer. There
are no restrictions imposed by any Lease or other Contract
or, to the Knowledge of Shareholder, by Law that preclude or
restrict in any material respect the ability to use such
Leased Premises for the purposes for which they are
currently being used. Neither Company nor any Subsidiary of
a Company is in default, and no notice of alleged default
has been received by either Company or any Subsidiary of a
Company, under any such Lease and to the Knowledge of
Shareholder no lessor or sublessee is in default or alleged
default thereunder. Neither the Companies nor any Subsidiary
of a Company has subleased, licensed or otherwise granted
anyone the right to use or occupy any Leased Premises or any
portion thereof, neither the Companies nor any Subsidiary of
a Company has granted any security interest in any Lease or
any interest therein, and there are no Liens on the estate
or interest created by any such Lease, except as may be set
forth in Section 5.10.3 of the Disclosure Schedule.
5.10.4. The Companies and their respective Subsidiaries own and have
good title to, free and clear of any Lien, or a valid
leasehold interest in, license to, or other contractual
right to use, all material assets, property (tangible or
intangible), rights, instruments, Contracts and privileges
(including all Intellectual Property and the Principal
Products) that are required in order to (i) conduct the
Cable and Satellite Business following consummation of the
Transaction in substantially the same manner as it is
conducted on the date hereof and as contemplated to be
conducted subsequent to the date hereof, including with
respect to the Collabrent Product and (ii) service all of
their customers in full compliance with the Companies'
respective agreements with such customers, except, with
respect to both clauses (i) and (ii) of this paragraph, for
certain services and assets that may be utilized in
connection with performing such services that may be
provided to the Companies and their respective Subsidiaries
by Shareholder following the date hereof pursuant to the
Ancillary Documents, including but not limited to the
licenses scheduled in Section 5.10.4 of the Disclosure
Schedule.
5.10.5. The facilities and equipment owned or leased by each Company
and each of its Subsidiaries are in all material respects in
good operating condition and repair and free from any
material defects, reasonable wear and tear excepted, and are
in all material respects suitable for the uses for which
they are being used and are performing the functions for
which they were intended.
5.10.6. Shareholder conducts, directly or indirectly, no Cable and
Satellite Business, other than through its ownership of the
Companies and their Subsidiaries. The Companies' assets,
together with their rights under the Ancillary Documents,
are sufficient to satisfy all obligations under the
26
Customer Contracts in effect as of the date hereof, other
than obligations relating to the future development of
software.
5.11. Intellectual Property.
5.11.1. Set forth in Section 5.11.1 of the Disclosure Schedule are
(i) all patents, patent applications, patent and invention
disclosures awaiting filing, domain names, software, mask
work and material copyright applications and registrations,
and trademarks and material trademark applications and
registrations which constitute Business Intellectual
Property, together with the name of the owner of each
thereof, in each jurisdiction in which registration for any
of the foregoing was made; (ii) a listing of all material
software, products and services under development by the
Companies and the Subsidiaries of the Companies (including
any such products or services that have been developed using
any of the items referred to in clause (i) hereof); (iii)
all Business Intellectual Property licensed by either
Company from another Person ("THIRD PARTY IP") that imposes
annual payment obligations in excess of $250,000; and (iv)
to the extent not otherwise covered in clauses (i), (ii) or
(iii) above, all other Business Intellectual Property
pertaining to the Cable and Satellite Business that imposes
annual payment obligations in excess of $250,000.
5.11.2. Except as set forth in Section 5.11.2 of the Disclosure
Schedule, the Owned IP does not include any software code
that is subject to the terms of any general or limited
public license the terms of which could require or condition
the use or distribution of such Owned IP on the disclosure,
licensing, or distribution of any source code of any portion
of the Owned IP (any of the foregoing, referred to as "OPEN
SOURCE MATERIALS").
5.11.3. Set forth in Section 5.11.3 of the Disclosure Schedule is a
list of all material Contracts of each Company or any
Subsidiary thereof or Shareholder under which such Company
or such Subsidiary or Shareholder has licensed to any Person
any Owned IP or Third Party IP.
5.11.4. As of the date hereof:
5.11.4.1. each Company and its Subsidiaries owns all right,
title and interest in and to the Owned IP and has
complied with all material terms and conditions
of all licenses for the use of the Third Party
IP;
5.11.4.2. the use by the Companies of the Owned IP does not
infringe or has not infringed any Intellectual
Property rights owned or held by any other
Person, or constitute an unlawful use or
misappropriation of, any Intellectual Property
rights owned or held by any other Person;
5.11.4.3. to Shareholder's Knowledge, there is no
infringement or misappropriation by any Person of
any Business Intellectual Property owned by or
licensed exclusively to either Company or any
Subsidiary of a Company;
27
5.11.4.4. neither Company nor any Subsidiary thereof has
agreed with any Person not to xxx or otherwise
enforce any legal rights with respect to any
Business Intellectual Property;
5.11.4.5. all agreements between each Company and its
Subsidiaries and any other Person that provide
for the use, manufacture, supply, distribution,
sale, license, transfer, marketing, promotion,
development, improvement, maintenance or support
of any of the Owned IP are on a non-exclusive
basis; and
5.11.4.6. all Intellectual Property assigned by DST Output,
LLC to Innovis pursuant to the DDP/F Software
Assignment Agreement, together with all rights to
Intellectual Property granted by DST Output, LLC
to Innovis pursuant to the Factory Control Source
Code License Agreement, constitute, in the
aggregate, all Intellectual Property rights that
cover or are otherwise necessary for Innovis to
perform all of the "DDP/F Operations and
Services" (as defined in the Output Services
Agreement) regardless of whether such DDP/F
Operations and Services are performed, in whole
or in part, by DST Output, LLC or Innovis.
5.11.5. Each Company and its Subsidiaries has taken all steps in its
or their reasonable business discretion (including measures
to protect secrecy and confidentiality) to secure, maintain
and protect such Company's or such Subsidiary's right, title
and interest in and to all of its Owned IP, but not
including filing applications for registration of copyright
and applications for patents relating to its Owned IP.
5.11.6. To Shareholder's Knowledge, the Business Intellectual
Property of each Company and its Subsidiaries constitutes
all Intellectual Property necessary to conduct fully the
business of such Company or such Subsidiary in substantially
the same manner as currently conducted, including with
respect to the use and exploitation of the Collabrent
Product.
5.12. Contracts.
5.12.1. Section 5.12.1 of the Disclosure Schedule lists the
following Contracts (per the sub-clause headings referenced
below) to which either Company or any of its Subsidiaries is
a party (other than those set forth on Sections 5.10.2
(Leases) and 5.11.3 (IP licenses) of the Disclosure
Schedule), provided that (except with respect to sub Section
5.12.15) such Company or such Subsidiary has outstanding
rights, Liabilities or obligations thereunder:
5.12.1.1. all Contracts for the lease (whether as lessor or
lessee) of personal property to or from such
Company or such Subsidiary which provide for
lease payments in excess of $250,000 annually;
28
5.12.1.2. all Contracts (i) with suppliers for the purchase
of inventories, supplies, spare parts or real,
personal or mixed property, or for the receipt of
services, which provide for payments from any
Company in excess of $250,000 annually (the
"MAJOR SUPPLIERS") and (ii) with customers (the
"CUSTOMER CONTRACTS") for the sale of products or
for the furnishing of services (the "MAJOR
CUSTOMERS");
5.12.1.3. all Contracts concerning any partnership, joint
venture, joint development or other cooperation
arrangement;
5.12.1.4. all Contracts providing for management services
or services of independent contractors or
consultants (or similar arrangements) providing
for payments from such Company in excess of
$250,000 annually;
5.12.1.5. all Contracts for the purchase or sale of any
business, corporation, partnership, joint
venture, association or other business
organization or any division, material assets,
operating unit or product line thereof;
5.12.1.6. all Contracts relating to or evidencing
Indebtedness for money borrowed by such Company
or such Subsidiary (or the creation, incurrence,
assumption, securing or guarantee thereof) and
all derivative agreements in excess of $250,000
annually;
5.12.1.7. all Contracts under which (i) any Person has
directly or indirectly guaranteed any
Indebtedness for money borrowed or other
Liabilities of such Company or such Subsidiary or
(ii) such Company or such Subsidiary has directly
or indirectly guaranteed any Indebtedness for
money borrowed or other Liabilities of any Person
(in each case other than endorsements for the
purpose of collection in the ordinary course of
business);
5.12.1.8. all Contracts under which such Company or such
Subsidiary has made any material advance, loan,
extension of credit or capital contribution to,
or other material investment in, any Person,
including employees, or which involve a sharing
of material profits, losses, costs or Liabilities
by such Company or such Subsidiary with any other
Person, other than trade accounts payable arising
in the ordinary course of business of such
Company or such Subsidiary;
5.12.1.9. all Contracts providing for or containing any
mortgage, pledge, security agreement or deed of
trust or other Contract granting a Lien upon any
assets or properties of such Company or such
Subsidiary;
29
5.12.1.10. all Contracts that impose annual payment
obligations in excess of $250,000 not otherwise
listed herein providing for indemnification of
any Person with respect to Liabilities relating
to any current or former business of such Company
or such Subsidiary;
5.12.1.11. all Contracts which materially limit or purport
to materially limit the ability of such Company
or such Subsidiary to compete in any line of
business or with any Person or in any geographic
area or which materially limit or purport to
materially limit or restrict the ability of such
Company or such Subsidiary with respect to the
development, manufacture, marketing, sale or
distribution of, or other rights with respect to,
any products or services;
5.12.1.12. all Contracts with any Governmental Authority;
5.12.1.13. all Contracts containing any restrictions with
respect to payment of dividends or any other
distributions in respect of the capital stock of
such Company or such Subsidiary which will
continue in effect after the date hereof;
5.12.1.14. all Contracts between or among such Company or
such Subsidiary, on the one hand, and any
Affiliate, officer, director or shareholder of
such Company or any Affiliate of any thereof, on
the other hand;
5.12.1.15. all foreign currency forward exchange Contracts;
5.12.1.16. all Contracts relating to employment,
termination, bonuses, employee options or
severance;
5.12.1.17. all Contracts concerning the issuance, delivery,
pledge or other encumbrance, sale or disposal of
any shares of capital stock or other securities
of such Company or such Subsidiary or the
creation, issuance, delivery, pledge or other
encumbrance, sale or disposal of any securities
convertible into, or rights with respect to, or
options or warrants to purchase or rights to
subscribe to, any shares of capital stock or
other securities of such Company or such
Subsidiary;
5.12.1.18. all Contracts granting a proxy or relating to a
voting arrangement regarding any of the Shares;
5.12.1.19. all Contracts granting to a third party a power
of attorney to act on behalf of either Company or
any of its Subsidiaries;
5.12.1.20. any Contract between either Company and its Major
Customers involving change in control provisions;
5.12.1.21. any Contract providing for any charitable
contribution in excess of $10,000 or for any
political contribution; and
30
5.12.1.22. all Contracts of the Companies and their
Subsidiaries that impose obligations in excess of
$250,000 and that are not described in any of the
categories specified in this Section 5.12.1.
The Contracts set forth or required to be set forth in
Sections 5.12.1, 5.11.3 (IP licenses) or 5.10.2 (Leases) of
the Disclosure Schedule are referred to herein collectively
as "MATERIAL CONTRACTS". True and complete copies of all of
the Material Contracts have heretofore been made available
to Buyer or its representatives.
5.12.2. Each Material Contract is in full force and effect and is
legal, valid and binding on the applicable Company or
Subsidiary party thereto and to the Knowledge of Shareholder
the other party or parties thereto.
5.12.3. Each Company and its Subsidiaries and each of the other
party or parties thereto have performed in all material
respects all obligations required to be performed by them
under each of such Company's or such Subsidiary's Material
Contract. To the Knowledge of Shareholder, no event has
occurred with respect to such Company or such Subsidiary or
any other Person that (with or without the lapse of time or
the giving of notice or both) contravenes, conflicts with or
results in a violation or breach of, or gives such Company
or such Subsidiary or any other Person the right to declare
a default or exercise any remedy under, or to accelerate the
maturity of, or to cancel or terminate, any Material
Contract to which such Company or such Subsidiary is a
party. To the Knowledge of Shareholder, no party to any
Material Contract has repudiated any provision thereof since
January 1, 2003. No party to any Material Contract has
terminated any Material Contract and neither Company nor any
Subsidiary thereof has received any notice that any other
party or parties to any Material Contract intend to exercise
any right of cancellation or termination thereof.
5.13. Insurance.
Each Company and its Subsidiaries maintains policies of fire and
casualty, liability and other forms of insurance in such amounts,
with such deductibles and against such risks and losses as are, in
such Company's or such Subsidiary's judgment, reasonable for the
business and assets of each Company, respectively. Section 5.13 of
the Disclosure Schedule sets forth a complete and accurate list of
all insurance policies and surety bonds which each Company and its
Subsidiaries currently maintains through Shareholder with respect to
its assets, Liabilities, employees, officers, directors or other
representatives (the "GROUP INSURANCE POLICIES") and all insurance
policies and surety bonds which each Company and its Subsidiaries
currently maintains in its own name with respect to its assets,
Liabilities, employees, officers, directors or other representatives
(together with the Group Insurance Policies, the "INSURANCE
POLICIES"). Each of the Insurance Policies is in full force and
effect immediately prior to the date of this Agreement; provided
that each of the Group Insurance Policies shall lapse upon
31
consummation of the Transaction. Each Company and its Subsidiaries
is current in all premiums or other payments due under its Insurance
Policies and has otherwise performed in all material respects all of
its respective obligations thereunder. Each Company and its
Subsidiaries has given timely notice to the insurer under each of
its Insurance Policies of all claims that may be insured thereby.
Neither Company nor any Subsidiary thereof has received any notice
that any of its Insurance Policies is not in full force and effect
immediately prior to the date of this Agreement. Shareholder has no
Knowledge of any facts that, under the terms of either Company's or
a Subsidiary's thereof Insurance Policies, would cause (or would be
reasonably likely to cause) any such Insurance Policy not to be in
full force and effect; provided that each of the Group Insurance
Policies shall lapse upon consummation of the Transaction. Neither
Company nor any Subsidiary thereof has received during the past
three years from any insurance carrier to which it has applied for
any insurance or with which it has carried any insurance (i) any
refusal of coverage or notice of limitation of coverage or any
notice that a defense will be afforded with reservation of rights
(except for limitations standard in the industry) or (ii) any notice
of cancellation or any other written notice that any insurance
policy is no longer in full force or effect or will not be reviewed
or that the issuer of any insurance policy is not willing or able to
perform its obligations thereunder. No representation or warranty
set forth in this Section 5.13 shall be construed so as to apply to
any Plan maintained by either Company or any of their Subsidiaries.
5.14. Litigation.
5.14.1. As of the date hereof (i) there is no judgment, ruling,
order, writ, decree, stipulation, settlement, injunction or
determination by or with any arbitrator, court or other
Governmental Authority to which either Company or any
Subsidiary thereof or any director or officer thereof in his
or her capacity as such is party or by which either Company
or any director or officer thereof in his or her capacity as
such is bound, and which relates to such Company or such
Subsidiary, the assets, properties, Liabilities or employees
of such Company or such Subsidiary, the business of such
Company or such Subsidiary, any Transaction Document or the
Transaction and (ii) neither any Company nor any Subsidiary
thereof is party to or engaged in or, to the Knowledge of
Shareholder, threatened with any Action which relates to
such Company or such Subsidiary, the assets, properties,
Liabilities or employees of such Company or such Subsidiary,
the business of such Company or such Subsidiary, any
Transaction Document or the Transaction and neither any
Company nor any Subsidiary thereof has any intention of
initiating any Claim against any Person.
5.14.2. None of the officers or directors (in their capacities as
such) of either Company or any Subsidiary thereof is in
default under or with respect to any judgment, ruling,
order, writ, decree, stipulation, settlement, injunction or
determination described in Section 5.14.1. None of the
Actions required to be set forth on Section 5.14.1 of the
Disclosure
32
Schedule, if adversely determined, will result in a Material
Adverse Effect.
5.14.3. No order has been made, petition presented or resolution
passed for the winding-up of either Company or any
Subsidiary thereof and no meeting has been convened for the
purposes of winding-up either Company or any Subsidiary
thereof. No steps have been taken by either Company or any
Subsidiary thereof or by any other Person for the
appointment of an administrator or receiver of all or any
part of any of such Company's or such Subsidiary's assets.
Neither Company nor any Subsidiary thereof has made or
proposed any arrangement or composition with its creditors
or any class of its creditors. Neither Company nor any
Subsidiary thereof has stopped paying its debts as they fall
due.
5.15. Employee Matters.
5.15.1. Neither Company nor any Subsidiary thereof is a party to any
Contract regarding collective bargaining or other Contract
with any labor or trade union or collective bargaining group
representing any employee of such Company or such
Subsidiary, nor does any labor or trade union or collective
bargaining agent represent any employee of such Company or
such Subsidiary. No Contract regarding collective bargaining
has been requested by, or is under discussion between
management of either Company or Subsidiary thereof (or any
association of which either Company is a member or otherwise
a participant) and any group of employees of such Company or
such Subsidiary, nor are there any representation
proceedings or petitions seeking a representation proceeding
presently pending against either Company or Subsidiary
thereof, nor are there any other current activities to
organize any employees of either Company or Subsidiary
thereof into a collective bargaining unit to the Knowledge
of Shareholder. There are no unfair labor practice charges
or complaints pending or, to the Knowledge of Shareholder,
threatened against either Company or Subsidiary thereof.
5.15.2. Section 5.15.2 of the Disclosure Schedule sets forth a true,
accurate and complete list of all of each Company's and each
Subsidiary's thereof directors and officers and includes a
listing of each of such director's and officer's
compensation terms relating to commencement of employment or
directorship, salary, bonuses and fringe benefits, as of the
date hereof. Neither Company nor any Subsidiary thereof is
delinquent in any payment to any of its employees for any
wages, salaries, commissions, bonuses or other direct
compensation for any services performed by any such employee
to the date hereof or amounts required to be reimbursed to
such directors, officers or employees. Upon termination of
the employment of any employees or the directorship of any
director, neither the Company nor any Subsidiary thereof
that is currently the employer of such employee or on whose
board such person acts as a director nor Buyer will by
reason of the Transaction or anything done prior to the date
hereof be liable to any of such employees or
33
directors for severance or any other payments (other than
accrued salary or amounts required to be paid under
applicable Laws, payments under Plans maintained by
Shareholder or payments under employment Contracts for which
Shareholder is responsible).
5.15.3. Each Company and its Subsidiaries has previously delivered
to Buyer or its representatives true, accurate and complete
copies of all employment, consulting, termination and
severance Contracts with or for the benefit of, or otherwise
relating to, any directors, officers, employees, consultants
or independent contractors of such Company or such
Subsidiary. Except for the provisions of the Employment
Contract of the President of the Companies, none of the
execution, delivery or performance of any Transaction
Document or the consummation of the transactions
contemplated hereby or thereby will result in any obligation
to pay any directors, officers, employees, consultants,
independent contractors, former directors, officers,
employees, consultants or independent contractors of either
Company or any Subsidiary thereof severance pay or
termination, retention or other benefits (other than
payments under Plans maintained by Shareholder or payments
under employment Contracts for which Shareholder is
responsible).
5.15.4. Neither any officer nor any other employee listed in Section
5.15.2 of the Disclosure Schedule has given notice to, or
received notice from, such Company or such Subsidiary that
is such officer's or key employee's employer or any of its
representatives that any such officer's or key employee's
employment or service may be terminated or advised such
Company or such Subsidiary of an intention to give such
notice to, or is expected to receive notice from, such
Company or such Subsidiary or any of its representatives
that any such officer's or key employee's employment or
service may be terminated, in each case, at, prior to or
immediately after the date hereof, in or without connection
to the consummation of the Transaction.
5.15.5. Each Company and its Subsidiaries has delivered or made
available to Buyer or its representatives true, accurate and
complete copies of (i) each of such Company's Plans that
have been reduced to writing and all amendments thereto and
(ii) all trust agreements or insurance contracts, maintained
in connection with any such Plan.
5.15.6. Each Company and its Subsidiaries has at all relevant times
complied in all material respects with all of its
obligations under each applicable Law with respect to the
employment of its employees, including with respect to the
health and safety at work of its employees, and there are no
claims pending or, to the Knowledge of Shareholder,
threatened by any party in respect of employment or any
accident or injury. No representation or warranty set forth
in this Section 5.15.6 shall be construed so as to apply to
any Plan maintained by either Company or any of their
Subsidiaries.
34
5.15.7. Neither Shareholder nor any Affiliate of Shareholder has
retained or agreed to retain, as an employee or an
independent contractor, or transferred to the Shareholder or
any Affiliate thereof, any employee of the Companies or
their Subsidiaries.
5.16. Legal Compliance.
5.16.1. As of the date hereof, (i) each Company and its Subsidiaries
is in compliance in all material respects and since its
incorporation has complied in all material respects with all
Laws and Licenses applicable to it, including all Laws
relating to the exportation of goods, services and products
and export compliance and control, (ii) no current claims or
complaints from any Governmental Authorities or other
Persons have been received by either Company, Shareholder or
any Affiliate thereof related to or affecting either Company
or any Subsidiary thereof and, to the Knowledge of
Shareholder, no claims or complaints are threatened, in each
case alleging that either Company or any Affiliate thereof
is in violation of any Laws or Licenses applicable to such
Company or such Subsidiary, and (iii) no investigation,
inquiry, or review by any Governmental Authority with
respect to either Company or any Subsidiary thereof is
pending or, to the Knowledge of Shareholder, threatened.
5.16.2. Neither any Company nor any Subsidiary thereof nor any
director, officer, agent, employee to the Knowledge of
Shareholder, or other Person associated with or acting on
behalf thereof has used any corporate funds for any unlawful
contributions, gifts, entertainment or other unlawful
expenses relating to political activity, made any unlawful
payment to any Governmental Authority or governmental,
administrative or regulatory official or employee or to any
political party or campaign from corporate funds or made any
bribe, unrecorded rebate, payoff, influence payment,
kickback or other unlawful payment to any Governmental
Authority. Neither any Company nor any Subsidiary thereof
nor any director, officer, agent, employee, or to the
Knowledge of Shareholder, any other Person associated with
or acting on behalf thereof, has accepted or received any
unlawful contributions, payments, gifts or expenditures.
5.16.3. No representation or warranty set forth in this Section
5.15.6 shall be construed so as to apply to any Plan
maintained by either Company or any of their Subsidiaries.
5.17. Affiliate Transactions.
There are no Contracts between either Company or an Affiliate of
either Company, on the one hand, and Shareholder or any Affiliate of
Shareholder on the other hand, except for the Ancillary Agreements.
Section 5.17 of the Disclosure Schedule includes (i) a list of all
services that were granted by Shareholder or any Affiliate thereof
(other than any Company or any of Subsidiary of a Company) to any of
the Companies or their Subsidiaries during
35
the 12-month period prior to the date hereof, (ii) a list of all
services that were granted by the Companies or their Subsidiaries to
Shareholder or any Affiliate thereof (other than any Company or any
Subsidiary of a Company) during the 12 month period prior to the
date hereof and (iii) a list of all services and products sold or
provided, as the case may be, by any of the Companies or their
Subsidiaries during the 12-month period prior to the date hereof,
which products and services were, at the time of the sale or
provision thereof, owned by Shareholder or any Affiliate thereof
(other than any Company or any Subsidiary of a Company), in each
case, other than services or products to be provided under the
Ancillary Agreements. As of the Closing Date and thereafter, the
Companies and their Subsidiaries shall have no obligations, direct
or indirect, contingent or otherwise, owing to the Shareholder or
any of its Affiliates, including payables, other than the
obligations contemplated by this Agreement and the Ancillary
Documents.
5.18. No Public Offer.
Neither any Company nor anyone acting on its behalf has offered
securities of such Company or any part thereof for issuance or sale
to, or solicited any offer to acquire any of the same from, anyone
so as to make the sale of the Shares hereunder not exempt from the
registration requirements of any Law. None of either Company's
securities have been offered or sold in such a manner as to make the
sale of such securities not exempt from such registration
requirements, and all such securities have been offered and sold in
compliance with all applicable securities Laws.
5.19. Brokers' Fees.
Neither any Company nor any of its officers, directors or other
Affiliates has authorized or retained any Person to act as an
investment banker, broker, finder or other intermediary who is or
might be entitled to any fee, commission or payment from such
Company, Shareholder, Parent or Buyer in connection with the
negotiation, preparation, execution or delivery of any Transaction
Document or the consummation of the Transaction.
5.20. Customers and Suppliers.
5.20.1. Set forth in Section 5.20.1 of the Disclosure Schedule is a
list of the dollar amount of sales or services to each Major
Customer as of the 12-month period ending December 31, 2004.
Since December 31, 2004, there has not been (i) any change
in any material term (including credit terms) of the sales
agreements or related agreements with any such Major
Customer or (ii) any termination of, or any oral or written
communication from any such Major Customer (or any of its
officers, directors or other representatives) relating to
such Major Customer's consideration of, or determination to,
terminate (including through non-renewal) or modify in a
manner materially adverse to such Company or any Subsidiary
thereof (A) any Contract between any such Major Customer and
such Company or any Subsidiary thereof or (B) its business
relationship with such Company or any Subsidiary thereof. As
36
of the date hereof, none of the Major Customers has notified
either Company of its intent to cease to do business with
any Company, or substantially reduce or delay its business
with any Company. None of the Major Customers has notified
any Company or Shareholder in writing that it is threatened
with bankruptcy or insolvency or that it is unable for any
other reason to continue its business relationship with the
Company as it exists on the date hereof.
5.20.2. As of the date hereof, no Major Supplier has notified either
Company of its intent to cease to do business with any
Company, or substantially reduce or delay its business with
any Company.
5.21. Licenses and Permits.
Each Company and each of its Subsidiaries have all governmental
licenses, authorizations and Consents required to carry on the
business thereof as currently conducted, except as would not have a
Material Adverse Effect. Section 5.21 of the Disclosure Schedule
sets forth a complete and correct list of each license, franchise,
permit, order, registration, certificate, approval or other similar
authorization, in each case, issued by a Governmental Authority and
obtained in connection with operating the business of such Company
and its Subsidiaries (collectively, the "PERMITS"), and each pending
application for any Permit, together with the name of the
Governmental Authority or entity issuing such Permit or with which
such application is pending. Each Permit is valid and in full force
and effect, neither the respective Company nor any of its
Subsidiaries is or has been in material violation of or default
under, and, to Shareholder's Knowledge, no condition exists that
with notice or lapse of time or both would constitute a material
violation of or default under, any Permit, (iii) no proceeding is
pending or, to Shareholder's Knowledge, threatened, to revoke or
limit any Permit, and (iv) none of the Permits will be terminated or
impaired or become terminable, in whole or in part, as a result of
the consummation of the Transaction. All such Permits are renewable
by their terms or in the ordinary course of business without the
need to comply with any special qualification procedures or to pay
any amounts other than routine filing fees. Each Company and its
Subsidiaries are in compliance in all material respects with the
terms of their Permits, and neither any Company nor any of its
Subsidiaries has received written notice of violation of any Permit.
5.22. Non-Competition Agreements.
None of Shareholder or any Affiliate or Subsidiary of Shareholder,
including the Companies and their Subsidiaries, has entered into or
is otherwise a party to any agreement that restricts, or as a result
of the consummation of the Transaction would restrict, the ability
or authority of either Company to compete with the line of
businesses in which the Companies are presently engaged.
5.23. Indebtedness to Shareholder.
As of the date hereof, neither Company is indebted in any manner to
Shareholder or to any Affiliate thereof.
37
5.24. Environmental Matters.
5.24.1. The Companies and each of their Subsidiaries are, and have
been, in compliance in all material respects with all
Environmental Laws, and neither the Companies nor any of
their Subsidiaries has received any written communication
that alleges that the Companies or any of their Subsidiaries
is in violation of, or has liability under, any
Environmental Law.
5.24.2. There are no Environmental Claims pending or, to the
Knowledge of Shareholder, threatened, against the Companies
or any of their Subsidiaries.
5.24.3. There have been no Releases of any Hazardous Material that
could reasonably be expected to form the basis of any
Environmental Claim against the Companies or any of their
Subsidiaries or against any Person whose liabilities for
such Environmental Claims the Companies or any of their
Subsidiaries has, or may have, retained or assumed, either
contractually or by operation of law.
6. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Each of Buyer and Parent hereby jointly and severally represents and
warrants to Shareholder as follows:
6.1. Organization.
Each of Buyer and Parent is a corporation duly organized, validly
existing and (to the extent applicable in its jurisdiction of
incorporation) in good standing under the laws of its jurisdiction
of incorporation. Each of Buyer and Parent has all requisite
corporate power and authority to carry on its business as it is
currently conducted and to own, lease and operate its properties
where such properties are now owned, leased or operated.
6.2. Authority.
Each of Buyer and Parent has all requisite corporate power and
authority to execute and deliver each Transaction Document delivered
or to be delivered by it and to perform all of its obligations
thereunder. The execution, delivery and performance by Buyer or
Parent, as applicable, of each Transaction Document delivered or to
be delivered by Buyer or Parent, as applicable, and the consummation
by Buyer or Parent, as applicable, of the Transaction have been duly
authorized by all necessary and proper action on its part. This
Agreement and each other Transaction Document to which Buyer or
Parent is party has been duly executed and delivered by Buyer or
Parent, as applicable, and constitutes its legal, valid and binding
obligation, enforceable against Buyer or Parent, as applicable, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors'
rights in general and by general principles of equity.
38
6.3. Non-Contravention.
None of the execution, delivery or performance by Buyer or Parent,
as applicable, of any Transaction Document to which it is a party or
the consummation by Buyer or Parent, as applicable, of the
Transaction does or will, with or without the giving of notice or
the lapse of time or both, conflict with, or result in a breach or
violation of, or a default under, or give rise to a right of
amendment, termination, cancellation or acceleration of any
obligation under (i) any organizational or charter document (or
similar organizational documents) of Buyer or Parent, as applicable,
(ii) any Contract of Buyer or Parent, as applicable, or (iii) any
Law or License to which Buyer or Parent, as applicable, or its
properties or assets are subject.
6.4. Governmental and other Consents.
No Consent of any Governmental Authority or any other Person is
required to be obtained or made by or with respect to Buyer or
Parent, as applicable, in connection with the execution, delivery
and performance by Buyer or Parent, as applicable, of any
Transaction Documents to which Buyer or Parent, as applicable, is a
party or the consummation by Buyer or Parent, as applicable, of the
Transaction, other than the Consents set forth on Exhibit 6.4
hereto, all of which Consents have been obtained prior to the date
hereof.
6.5. Brokers' Fees.
Neither Buyer, nor Parent nor any of their respective Affiliates has
authorized or retained any Person to act as an investment banker,
broker, finder or other intermediary who is or might be entitled to
any fee, commission or payment from either Company or from
Shareholder in connection with the negotiation, preparation,
execution or delivery of any Transaction Document or the
consummation of the Transaction.
7. COVENANTS
7.1. Non-Competition.
7.1.1. For a period of four (4) years after the date hereof,
without the prior written consent of Buyer, Shareholder will
not, and Shareholder will cause each of its Affiliates not
to, directly or indirectly, alone or in association with any
other Person, (i) acquire or own in any manner, any interest
in any Person that is engaged, (ii) participate in the
management, as a consultant, advisor or otherwise, of any
Person that is engaged, or (iii) otherwise engage in or make
any of its assets available for use, in the Cable and
Satellite Business (the "RESTRICTED BUSINESS"), including,
but not limited to, through investments in such business or
the licensing of technology for use in, or distribution or
promotion of, such business.
7.1.2. The restriction in Section 7.1.1 shall not operate to
prohibit Shareholder or any of its Affiliates from:
7.1.2.1. acquiring and thereafter managing and operating
any business, company or group which is engaged
in any Restricted Business
39
and in respect of which Shareholder or any of its
Subsidiaries has a majority shareholding or other
controlling interest, if the Restricted Business
is responsible for not more than Ten Percent
(10%) of the aggregate annual operating revenues
of such acquired business, company or group as of
the time of such acquisition);
7.1.2.2. acquiring an interest in a business, company or
group which is engaged in a Restricted Business
in respect of which Shareholder or any of its
Affiliates does not have a shareholding exceeding
5%;
7.1.2.3. continuing with any business or activity carried
on at the date hereof by Shareholder or any of
its Subsidiaries (and not forming part of the
Cable and Satellite Business) and any reasonable
extension of such business or activity in any
market or industry; provided, however, that such
business or activity does not directly compete
with any of the Companies in the Restricted
Business.
7.2. Non-Solicitation of Employees.
7.2.1. For a period of two (2) years hereafter, without the prior
written consent of Buyer, Shareholder will not and
Shareholder will cause each of its Affiliates not to, (i)
directly solicit as an employee, independent contractor or
consultant, any person employed by Company, Buyer or any
Affiliate on the date of this Agreement after giving effect
to the transactions hereunder; (ii) directly induce or
attempt to induce any such employee to terminate his or her
employment or other relationship with either Company, Buyer
or any Affiliate thereof by resignation, retirement or
otherwise. Nothing herein shall limit Shareholder or any of
its Affiliates from employing or offering employment to any
person employed by either Company as of the date hereof,
after such person's employment with such Company is
terminated, or who responds to a general advertisement or
solicitation of employees by Shareholder or any of its
Affiliates.
7.2.2. For a period of two (2) years hereafter, without the prior
written consent of Shareholder, the Buyer will not and will
cause each of the Companies and its Affiliates not to (i)
directly solicit as an employee, independent contractor, or
consultant, any person employed by Shareholder or any
Affiliate on the date of this Agreement after giving effect
to the transactions hereunder; (ii) directly induce or
attempt to induce any such employee, independent contractor
or consultant to terminate his or her employment or other
relationship with Shareholder or any Affiliate thereof by
resignation, retirement or otherwise. Nothing herein shall
limit Buyer, the Companies, or any Affiliates of Buyer from
employing or offering employment to any person employed by
Shareholder or any of its Affiliates as of the date hereof,
after such person's employment with Shareholder or any of
its Affiliates is terminated, or who responds to a
40
general advertisement or solicitation of employees by Buyer,
the Companies or any Affiliates of Buyer. Furthermore,
nothing herein shall limit Buyer, the Companies, or any
Affiliates of Buyer from employing or offering employment to
any person employed by Shareholder or any of its Affiliates
at the Winchester Data Center who, as of the date hereof, is
primarily occupied with servicing the Companies, at such
future time as the Companies no longer use the Winchester
Data Center to operate any portion of the Cable and
Satellite Business.
7.2.3. Neither Shareholder nor any Affiliate of Shareholder will
enforce any non-competition, non-solicitation or similar
agreement that would prevent any employee of the Companies
or their Subsidiaries from working for Buyer or any
Affiliate of Buyer.
7.3. Confidential Information.
7.3.1. For a period of two (2) years after the date hereof,
Shareholder will, and will cause its Affiliates, directors,
officers, employees and other representatives to, maintain
in strict confidence any and all Confidential Information.
It is understood that Shareholder shall not have any
liability hereunder with respect to information that (a) is
in or, through no fault of Shareholder, comes into the
public domain, (b) Shareholder is required to disclose
pursuant to Law or regulation, (c) is independently
developed by Shareholder, without violating the terms of
this Agreement or any other Contract between Shareholder and
either Company, Buyer or Parent or (d) is lawfully disclosed
to Shareholder by a third party who is not in breach of an
obligation of confidentiality.
7.3.2. Shareholder agrees to limit its internal disclosure of
Confidential Information only to those of its employees or
consultants who need to know such information and who have
signed a written agreement binding them to terms and
conditions substantially similar to those set forth in this
Section 7.3 or who are otherwise bound by confidentiality
obligations.
7.3.3. In the event that Shareholder or any of its Affiliates or
its or their respective directors, officers, employees or
other representatives are required by Law to disclose any of
the Confidential Information, Shareholder will promptly
notify Buyer in writing so that Buyer may seek a protective
order and/or other motion to prevent or limit the production
or disclosure of such Confidential Information. If such
motion has been denied, has not been promptly prosecuted or
is pending and unresolved at the time disclosure of such
Confidential Information is required by Law, then the Person
required to disclose such Confidential Information may
disclose only such portion of such Confidential Information
which (i) based on advice of Shareholder's legal counsel is
required to be disclosed (provided that the Person required
to disclose such Confidential Information will use all
reasonable efforts to preserve the confidentiality of the
remainder of such Confidential Information) or (ii) Buyer
consents in writing to having disclosed. Shareholder will
not, and will not permit
41
any of its Affiliates or its or their respective directors,
officers, employees and other representatives to, oppose any
motion for confidentiality brought by Buyer or any Company.
Shareholder will continue to be bound by its obligations
pursuant to this Section 7.3 for any Confidential
Information that is not required to be disclosed, or that
has been afforded protective treatment, pursuant to such
motion. Notwithstanding the foregoing, Shareholder shall be
entitled to disclose Confidential Information to its
regulators if required by Law or regulation without prior
notice, but shall notify the agency to which the
Confidential Information was disclosed of the confidential
nature thereof and notify Buyer as soon as practicable
following the disclosure or, if possible and not in
violation of any Law, prior to the disclosure.
7.4. Public Announcements.
No press release or announcement concerning the Transaction will be
issued by Shareholder without the prior consent of Parent or by
Parent without the prior consent of Shareholder, except as such
release or announcement may be required by Law, in which case the
Person required to make the release or announcement will allow the
Person whose consent would otherwise be required reasonable time to
comment on such release or announcement in advance of such issuance.
For the avoidance of doubt, the foregoing shall not be in limitation
of the parties' obligations hereunder to take such actions as
required for the consummation of the Transaction.
7.5. Income Taxes and Section 338(h)(10) Election.
7.5.1. With respect to the Companies and any domestic Subsidiary of
the Companies, Shareholder shall, or shall cause its
relevant Affiliates to, join with Buyer or Parent, as
applicable, in filing a timely election under Section
338(h)(10) of the Code in accordance with Treasury
Regulation Section 1.338(h)(10)-1 or any successor provision
("SECTION 338(H)(10) ELECTION"). Shareholder and Buyer or
Parent, as applicable, shall also file, or cause the filing
of, timely elections under any comparable provisions of
state or local Tax Laws. Buyer, Parent and Shareholder will
take any and all actions necessary, including providing all
required information on a timely basis, to cause such
elections to become effective. Buyer shall prepare all
applicable forms for such elections for review by
Shareholder at least 30 days before the date such forms are
due to be filed, and Buyer and Shareholder shall negotiate
in good faith to agree on such forms. Buyer or the Companies
may in their discretion make elections under Section 338(g)
of the Code and any comparable provisions of state or local
Tax Laws ("SECTION 338(G) ELECTIONS") with respect to any
foreign Subsidiaries. Shareholder shall, at Buyer's expense
to the extent of third party costs, provide all information
and records that are reasonably necessary for Buyer to
determine the costs and benefits to it of making the Section
338(g) Elections. Buyer, Parent and Shareholder will report
the sale and acquisition, respectively, of the Shares
pursuant to this Agreement consistent with the Section
338(h)(10) Election (and any
42
comparable elections under state or local Tax Laws) and, if
applicable, the Section 338(g) Elections and will take no
position contrary thereto in any Tax Return or in any
proceeding before any Governmental Authority or otherwise.
7.5.2. For any Straddle Period of the Companies and their
Subsidiaries, Buyer shall timely prepare and file all Tax
Returns required to be filed and shall pay all Taxes due;
provided that Shareholder shall reimburse Buyer for any
amount owed by Shareholder pursuant to Section 8.5 (Tax
Indemnity) with respect to the taxable periods covered by
such Tax Returns. For any taxable period of the Companies
and their Subsidiaries that ends on or before the date
hereof, Shareholder shall, consistent with past practice,
timely prepare and file all Tax Returns required to be filed
and shall pay all Taxes due; provided, however, that any
such Tax Return shall be filed consistent with the Section
338(h)(10) Election and any Section 338(g) Elections.
Without limiting the generality of the foregoing,
Shareholder shall include the income and other tax items of
the Companies and their Subsidiaries on Shareholder's
consolidated federal Income Tax Returns (and consolidated or
combined state Income Tax Returns) for all periods through
the end of the date hereof and pay any federal Income Taxes
(and consolidated or combined state Income Taxes)
attributable to such income. The Companies and their
Subsidiaries shall furnish Tax information available to them
to Shareholder for inclusion in the Tax Returns required to
be filed by Shareholder pursuant to this Section 7.5.2 in
accordance with the Companies' past custom and practice. For
purposes of the Tax Returns described in this Section 7.5.2,
the income of the Companies and their Subsidiaries shall be
apportioned to the period up to and including the date
hereof and the period after the date hereof as provided in
Section 8.5.3.2.
7.5.3. Shareholder, Buyer and Parent shall reasonably cooperate,
and shall cause their Affiliates to cooperate, in preparing
and filing all Tax Returns and claims for refunds and in
resolving all disputes and audits with respect to all
taxable periods relating to Taxes, including by maintaining
and making available to each other all records necessary in
connection with Taxes. At Shareholder's request, Buyer shall
cause any of the Companies and their Subsidiaries to make or
join with Shareholder in making any other election if the
making of such election does not have any adverse effect on
Buyer or its Affiliates (including any of the Companies and
their Subsidiaries), as determined by Buyer in its sole
discretion.
7.5.4. All transfer, documentary, sales, use, registration and
other similar Taxes and fees incurred in connection with the
sale of the Shares or otherwise in connection with this
Agreement and the transactions contemplated hereby shall be
borne equally by Shareholder and Buyer.
7.5.5. Any payments that are made under Section 2.4 (Post-Closing
Adjustments) or Section 8 (Indemnification) shall be treated
for all Tax purposes as an adjustment to the Purchase Price,
unless a determination
43
(within the meaning of Section 1313(a) of the Code) causes
any such payments to be otherwise treated for U.S. federal
Income Tax purposes. The allocation of the Purchase Price
and liabilities pursuant to Section 2.2.2 (Allocation of
Purchase Price) shall be appropriately adjusted to reflect
the items to which such payments relate.
7.5.6. Any Tax sharing agreement between Shareholder and any of the
Companies and their Subsidiaries is terminated as of the
date hereof and shall have no further effect for any taxable
year (whether the current year, a future year, or a past
year).
7.5.7. All refunds of Taxes relating to the Companies received by
Shareholder, the Companies, Buyer or any of their Affiliates
with respect to Tax periods ending on or before the date of
this Agreement or relating to Shareholder's consolidated
federal Income Tax Returns, and in each case for which
Shareholder is responsible under Section 8.5, will be for
the account of Shareholder. Any such refunds shall be paid
to Shareholder within thirty (30) days of receipt of such
refund by the Companies, Buyer or any of their Affiliates.
Any refunds for any Straddle Period shall be apportioned
between Shareholder and Buyer in the same manner as provided
in Section 8.5.3.
7.5.8. Shareholder, each Company, Buyer or any of their respective
Affiliates shall file all Tax Returns consistent with the
allocation determined in Section 2.2.2 and shall not take
any Tax position inconsistent with such allocation.
7.6. Release of Officers and Directors.
Buyer and Parent shall release, on behalf of themselves and each of
the Companies, each of the individual directors and officers of
Shareholder and its Subsidiaries from any and all claims by Buyer,
Parent or any of their Subsidiaries with respect to any action taken
or the failure to take any action prior to the date of this
Agreement, by or in their capacity as officers or directors of
Shareholder or any of its Subsidiaries. Notwithstanding the
foregoing, this Section 7.6 shall not limit any rights that Buyer or
any Affiliate of Buyer has against Shareholder pursuant to the terms
of this Agreement or any other Transaction Document.
7.7. Further Assurances.
7.7.1. From time to time after the date hereof, at Buyer's
reasonable request and without further consideration from
Buyer or Parent, Shareholder shall execute and deliver such
other instruments of conveyance and transfer and take such
other action as Buyer reasonably may require to convey,
transfer to and vest in Buyer and to put Buyer in possession
of the Shares in accordance with the terms of this
Agreement. Without limiting the foregoing, from time to time
following the date hereof, Shareholder shall, and shall
cause its Affiliates to, at Shareholder's cost, execute,
acknowledge and deliver to the Companies, in a reasonably
prompt manner, all such properties, rights, titles,
interests, remedies, powers and
44
privileges, and shall take all further actions that may be
commercially reasonably necessary or appropriate to assure
the transfer to the Companies of all of such properties,
rights, titles, interests, remedies, powers and privileges
that are required for the Companies to continue conducting
the Cable and Satellite Business after the date hereof in
the same manner as it is conducted on the date hereof,
except in any case in which this Agreement expressly
contemplates that Shareholder retain any such item.
Furthermore, and without limiting the foregoing, to the
extent that any material assets, property (tangible or
intangible), rights, instruments, Contracts or privileges
form a part of the Cable and Satellite Business but are not
transferred on the date hereof, Shareholder shall cause, as
soon as practicable, such items to be conveyed, transferred
to and vested in Buyer and to put Buyer in possession of
such items without any additional consideration, except in
any case in which this Agreement expressly contemplates that
Shareholder retain any such item.
7.7.2. From time to time after the date hereof, Shareholder shall,
and shall cause its Affiliates to, use its reasonable best
efforts (at its own expense) to obtain, and to cooperate in
obtaining (including by designating employees to work with
Buyer as reasonably necessary to give effect to this Section
7.7.2) all consents or waivers from third parties in respect
of Contracts or Permits necessary or appropriate to permit
Buyer to operate the Cable and Satellite Business as
currently conducted, including Required Consents; provided,
however, that the parties hereto shall not be required to
pay or commit to pay any amount to (or incur any obligation
in favor of) any person from whom any such consent may be
required (other than nominal filing or application fees). If
any consent that is required (for any reason) under a
Contract is not obtained prior to the date hereof,
Shareholder, Parent, Buyer and the Companies shall cooperate
(at their own expense) in any lawful and reasonable
arrangement reasonably proposed by Buyer under which Buyer
shall obtain the economic claims, rights and benefits in
respect of such Contract with respect to which the consent
has not been obtained and perform the obligations relating
to such Contract in accordance with this Agreement. Such
reasonable arrangement may include (i) in the case of a
Lease, the subleasing to Buyer of any and all rights of
Shareholder against the other party to such Lease arising
out of a breach or cancellation thereof by the other party
and (ii) the enforcement by Shareholder of such rights.
7.8. Employee Benefits.
Effective as of the date of this Agreement and for a period of one
(1) year thereafter, Buyer shall use reasonable efforts to cause
each Company to provide to its employees benefits that are
substantially the same as those provided by the Companies to such
employees as of the date hereof (except where, in the reasonable
opinion of Buyer, such benefits are not reasonably comparable to
generally accepted benefits provided to employees of similar
position, seniority and experience engaged in the same or in a
similar business as the Cable and
45
Satellite Business); provided that Buyer shall not be required to
cause any Company to offer to its employees benefits that are
superior to the existing benefits of such employees. With respect to
all benefits provided to Company employees following the date of
this Agreement, Buyer shall provide credit to such employees for
prior service with the Company, the Shareholder or any member of any
controlled group or affiliated service group (as defined in Code
Sections 414(b), (c), (m) or (o)) of which the Company is a member,
for eligibility and vesting purposes only.
7.9. Disclaimer of Warranties.
Notwithstanding anything to the contrary set forth herein, the
express representations and warranties set forth in Sections 4 and 5
hereof are the only representations and warranties concerning the
business or any of the assets of either of the Companies,
Shareholder makes no representation or warranty as to (i) the Open
Source Materials (but without limiting the representations made in
Section 5.11.2) or (ii) the functionality, acceptability, fitness
for any purpose or state of completion of any Business Intellectual
Property, including the Collabrent Product. The representations and
warranties set forth in Sections 4 and 5 hereof are made expressly
in lieu of all other warranties and representations, express or
implied.
7.10. Release of Companies Obligations.
The Shareholder, on behalf of itself and each of its Affiliates,
releases the Companies and each of their Subsidiaries from any and
all obligations, direct or indirect, contingent or otherwise, owing
to the Shareholder or any of its Affiliates, including payables,
other than the obligations contemplated by this Agreement and the
Ancillary Documents.
7.11. Use of Name.
Within 60 days after the Closing Date, Parent shall cause each of
the Companies to change its corporate name to a name that does not
include "DST" or the name of any of Shareholder's Subsidiaries
(other than "Innovis" or "Interactive") and (b) neither Parent nor
any of its Affiliates (including the Companies) shall have any right
to use the name of Shareholder or of any of its Subsidiaries (other
than "Innovis" or "Interactive"), except that, for a period ending
180 days after the Closing Date, Parent and its Affiliates shall
have the right to use any catalogues, sales and promotional
materials and printed forms that use such name and are included in
the Business Intellectual Property as of the Closing Date or that
have been ordered prior to the Closing Date for use in the Cable and
Satellite Business; provided, however, that (i) promptly after the
Closing Date, Parent shall make, or cause the Companies to make, all
filings with the appropriate Governmental Authorities to effectuate
such name change, (ii) each of Parent and the Companies shall use
its reasonable commercial efforts to minimize the usage of the names
referred to in Section (a) hereof, and to discontinue it as soon as
practicable after the Closing and (iii) notwithstanding anything to
the contrary in this Section 7.11, to the extent any approvals of
Governmental Authorities are necessary to
46
effectuate the said name change, the time limits specified in this
Section 7.11 shall be extended by the time period necessary to
obtain such approvals, so long as Parent and/or the Companies begins
the process of seeking such approval within 60 days after the
Closing.
8. INDEMNIFICATION.
8.1. Indemnity by Shareholder.
8.1.1. Subject to Sections 8.1.2 and 8.1.3, Shareholder agrees to
indemnify Buyer and Parent and their Subsidiaries (including
the Companies) and their respective employees, officers,
directors, controlling persons, successors and assigns
(collectively, the "BUYER GROUP"), and hold the Buyer Group
harmless from and with respect to any and all Damages
related to or arising directly or indirectly from (i) any
inaccuracy in any representation or warranty made by
Shareholder in this Agreement or (ii) any failure by
Shareholder to perform any covenant, obligation or
undertaking made by Shareholder in this Agreement.
8.1.2. Except for Damages incurred by any member of the Buyer Group
arising from an inaccuracy in the representations and
warranties set forth in Sections 4.1 (Organization and
Authority of Shareholder), 4.2 (Non-contravention with
respect to Shareholder), 4.3 (Ownership of Shares), 5.1
(Organization of the Companies), 5.2 (Authority of the
Companies), 5.3 (Non-contravention with respect to the
Companies) or 5.9 (Tax Matters) or with respect to any
fraudulent statement made by Shareholder or any Company in
this Agreement, no claim may be made by any member of the
Buyer Group under Section 8.1.1 after the second anniversary
of the date hereof (the "INDEMNIFICATION PERIOD"). The
representations and warranties set forth in Sections 4.1
(Organization and Authority of Shareholder), 4.2
(Non-contravention with respect to Shareholder), 4.3 (Title
to Shares), 5.1 (Organization of the Companies), 5.2
(Authority of the Companies) 5.3 (Non-contravention with
respect to the Companies) or 5.9 (Tax Matters) will survive
the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and
shall continue in full force and effect until ninety (90)
days after all applicable statutes of limitation (including
any extensions thereof) have expired and then expire with
respect to any theretofore unasserted claims arising out of
or otherwise in respect of any breach of such
representations and warranties; provided, however, that as
to each of the foregoing, the obligations of Shareholder to
indemnify, defend and hold harmless each member of the Buyer
Group shall not terminate with respect to (i) any individual
item as to which any member of the Buyer Group shall have,
before the expiration of the applicable period, made a bona
fide claim in good faith by delivering a notice (stating in
reasonable detail the basis of such claim) to Shareholder or
(ii) any act of fraud committed by Shareholder in taking any
actions contemplated by this Agreement.
47
8.1.3. Shareholder shall have no liability under Section 8.1.1 (a)
for any individual claim for Damage incurred by any member
of the Buyer Group of less than One Hundred Thousand dollars
($100,000), (b) until the aggregate of all claims for
Damages exceeds Five Million dollars ($5,000,000), and then
only for the amount by which such Damages exceed Five
Million dollars ($5,000,000), and (c) for any Damages
incurred by any member of the Buyer Group in excess, in the
aggregate for such member and the Buyer Group, of Sixty
Million dollars ($60,000,000); provided, however, that the
foregoing limitations shall not apply to claims in
connection with the failure to comply with any of the
covenants and agreements of Shareholder set forth in Section
2 or pursuant to any inaccuracy in the representations and
warranties and covenants set forth in Sections 4.1
(Organization and Authority of Shareholder), 4.2
(Non-contravention with respect to Shareholder), 4.3 (Title
to Shares), 5.1 (Organization of the Companies), 5.2
(Authority of the Companies), 5.3 (Non-contravention with
respect to the Companies), 5.7.4 (Absence of Indebtedness),
5.9 (Tax Matters), 7.5 (Income Taxes and Section 338(h)(10)
Election) or 7.7 (Further Assurances) or any fraudulent
statement made by Shareholder in this Agreement; and
provided further, however, that in no event shall
Shareholder be liable under Section 8.1.1. for claims for
Damages made under any provision of this Agreement for an
amount that shall exceed, in the aggregate, the total
Purchase Price.
8.2. Indemnity by Buyer and Parent.
8.2.1. Subject to Sections 8.2.2 and 8.2.3, Buyer and Parent agree
to jointly and severally indemnify Shareholder, its
Affiliates and their respective employees, officers,
directors, controlling persons, successors and assigns
(collectively, the "SHAREHOLDER GROUP"), and hold
Shareholder Group harmless from and with respect to any and
all Damages related to or arising directly or indirectly
from (i) any inaccuracy in any representation or warranty
made by Buyer or Parent in this Agreement, or (ii) any
failure by Buyer or Parent to perform any covenant,
obligation or undertaking made by them in this Agreement.
8.2.2. Except for Damages incurred by any member of the Shareholder
Group arising from any fraudulent statement made by Buyer or
Parent in this Agreement, no claim may be made by any member
of the Shareholder Group under Section 8.2.1 after the
expiration of the Indemnification Period; provided, however,
that the obligation of Buyer and Parent to indemnify, defend
and hold harmless each member of the Shareholder Group shall
not terminate with respect to (i) any individual item as to
which any member of the Shareholder Group shall have, before
the expiration of the applicable period, made a bona fide
claim in good faith by delivering a notice (stating in
reasonable detail the basis of such claim) to Buyer or
Parent or (ii) any act of fraud committed by Buyer or Parent
in taking any actions contemplated by this Agreement.
48
8.2.3. Buyer and Parent shall have no liability under Section 8.2.1
(a) for any individual claim for Damage incurred by any
member of Shareholder Group of less than One Hundred
Thousand dollars ($100,000), (b) until the aggregate of all
such claims for Damages exceeds Five Million dollars
($5,000,000), and (c) then only for the amount by which such
Damages exceed Five Million dollars ($5,000,000) and (d) for
any Damages incurred by any member of Shareholder Group in
excess of Sixty Million dollars ($60,000,000); provided,
however, that the foregoing limitations shall not apply to
claims in connection with the failure to comply with any of
the covenants and agreements of Buyer or Parent set forth in
Section 2.
8.3. Procedures for Indemnification.
8.3.1. If a claim or demand is made against an Indemnitee, or an
Indemnitee shall otherwise learn of an assertion, by any
Person who is not a party to this Agreement (and who is not
an Affiliate of a party to this Agreement) (a "THIRD PARTY
CLAIM") as to which a party (the "INDEMNIFYING Party") may
be obligated to provide indemnification pursuant to this
Agreement, such Indemnitee will notify the Indemnifying
Party in writing, and in reasonable detail, of the Third
Party Claim reasonably promptly after becoming aware of such
Third Party Claim; provided, however, that failure to give
any such notification will not affect the indemnification
provided hereunder except to the extent the Indemnifying
Party shall have demonstrated that it has been actually
prejudiced as a result of such failure and to such extent.
8.3.2. If a Third Party Claim is made against an Indemnitee and the
Indemnifying Party agrees to indemnify the Indemnitee
therefor, the Indemnifying Party will be entitled to assume
the defense thereof (at the expense of the Indemnifying
Party) with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnitee. Should the
Indemnifying Party so elect to assume the defense of a Third
Party Claim, the Indemnifying Party will not be liable to
the Indemnitee for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense
thereof as long as the Indemnifying Party diligently
conducts such defense; provided that, if (i) in any
Indemnitee's reasonable judgment a conflict of interest
exists in respect of such claim or (ii) any Indemnifying
Party fails to provide reasonable assurance to the
Indemnitee (upon request of the Indemnitee) of such
Indemnifying Party's financial capacity to defend such Third
Party Claim and provide indemnification with respect
thereto, such Indemnitee will have the right to employ
separate counsel to represent such Indemnitee and in that
event the reasonable fees and expenses of such separate
counsel will be paid by such Indemnifying Party. If the
Indemnifying Party assumes the defense of any such Third
Party Claim, each Indemnitee will have the right to
participate in the defense thereof and to employ counsel, at
its own expense, separate from the counsel employed by the
Indemnifying Party. The Indemnifying Party will be liable
for the reasonable fees and expenses
49
of counsel employed by the Indemnitee for any period during
which the Indemnifying Party has failed to assume the
defense thereof or if it does not expressly elect to assume
the defense thereof (including the agreement by each
Indemnifying Party to indemnify the Indemnitee as
aforesaid). If the Indemnifying Party assumes the defense of
any such Third Party Claim, the Indemnifying Party will
promptly supply to the Indemnitee copies of all
correspondence and documents relating to or in connection
with such Third Party Claim and keep the Indemnitee fully
informed of all developments relating to or in connection
with such Third Party Claim (including, without limitation,
providing to the Indemnitee on request updates and summaries
as to the status thereof). If the Indemnifying Party chooses
to defend a Third Party Claim, all the Indemnitees will
reasonably cooperate with the Indemnifying Party in the
defense thereof if requested by the Indemnifying Party (such
cooperation to be at the expense, including reasonable legal
fees and expenses, of the Indemnifying Party).
8.3.3. No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of
any judgment) of any Third Party Claim without the
Indemnitee's prior written consent, which will not be
unreasonably withheld; provided, that if the Indemnifying
Party agrees to indemnify the Indemnitee for a Third Party
Claim, the Indemnitee will agree to any settlement,
compromise or discharge of such Third Party Claim which the
Indemnifying Party may recommend that unconditionally and
irrevocably releases the Indemnitee (pursuant to a release
which is reasonably satisfactory to the Indemnitee)
completely from all Liability in connection with such Third
Party Claim; provided, however, that the Indemnitee may
refuse to agree to any such settlement, compromise or
discharge that provides for injunctive or other non-monetary
relief affecting the Indemnitee. If an Indemnifying Party
agrees to indemnify the Indemnitee for a Third Party Claim,
the Indemnitee will not (unless required by law) admit any
liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the Indemnifying
Party's prior written consent (which consent will not be
unreasonably withheld).
8.3.4. Any claim on account of Damages which does not involve a
Third Party Claim shall be asserted by written notice given
by the Indemnitee to the Indemnifying Party from whom such
indemnification is sought. The failure by any Indemnitee so
to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability that it may have to
such Indemnitee under this Agreement, except to the extent
that the Indemnifying Party shall have demonstrated that it
has been actually prejudiced as a result of such failure and
to such extent. If the Indemnifying Party does not notify
the Indemnitee prior to the expiration of a 45-calendar-day
period following its receipt of such notice that the
Indemnifying Party disputes its liability to the Indemnitee
under this Agreement, such claim specified by the Indemnitee
in such notice will be conclusively deemed a liability of
the Indemnifying Party under this Agreement and the
Indemnifying Party shall pay the amount of Damages
50
subject to such claim to the Indemnitee on demand or, in the
case of any notice in which the amount of the Damages
subject to such claim (or any portion thereof) is estimated,
on such later date when the amount of such claim (or such
portion thereof) becomes finally determined. If the
Indemnifying Party has timely disputed its liability with
respect to such Damages subject to such claim, as provided
above, the Indemnifying Party and the Indemnitee will
proceed in good faith to negotiate a resolution of such
dispute and, if not resolved through negotiations by the
90th day after notice of such claim was given to the
Indemnifying Party, the Indemnifying Party and the
Indemnitee will be free to pursue such remedies as may be
available under this Agreement or applicable law.
8.3.5. The procedures set forth in this Section 8.3 (Procedures for
Indemnification), shall not govern any claim or demand made
under Section 8.1 (Indemnity by Shareholder) for any
inaccuracy in the representations and warranties set forth
in Section 5.9 (Tax Matters) or any claims made under
Section 8.5 (Tax Indemnity).
8.4. Certain Rights and Limitations.
8.4.1. No loss, Liability, damage or deficiency shall constitute
Damages to any party to the extent of any insurance proceeds
actually received by such party with respect to such loss,
Liability, damage or deficiency (after deducting reasonable
costs and expenses incurred in connection with recovery of
such proceeds). Each party shall use its commercially
reasonable efforts to mitigate any Damages with respect to
which such party might bring, or has brought, a claim for
indemnification under this Section 8; provided that no party
shall be obligated to incur any monetary cost in connection
with such an effort to mitigate.
8.4.2. Subject to Section 8.1.3, the amount of Damages for which
indemnification is provided under this Agreement will be (i)
increased to take account of any Tax cost incurred (grossed
up for such increase) by the Indemnitee arising from the
receipt of indemnity payments hereunder and (ii) reduced to
take account of any Tax benefit realized by the Indemnitee
arising from the incurrence or payment of any such Damages.
In computing the amount of any such Tax cost or Tax benefit,
the Indemnitee will be deemed to be subject to the
applicable federal, state, local and/or local country taxes
at the maximum statutory rate then in effect. Nothing in
this section shall be construed to require the Indemnitee to
make available its Tax Returns (or any other information
relating to its Taxes which it deems confidential) to the
Indemnifying Party or any other Person.
8.4.3. The parties acknowledge and agree that, except for claims
against Shareholder based on fraud on the part of
Shareholder in connection with the Transaction and except
for claims against Buyer or Parent based on fraud on the
part of Buyer or Parent, as the case may be, in connection
with the Transaction, the sole and exclusive monetary remedy
with respect
51
to claims for Damages which may be made hereunder not
excluded from Section 8.1.3, shall be pursuant to the
indemnification provisions set forth in Section 8.2, and in
any event subject to Section 8.1.3. Notwithstanding anything
to the contrary, the claims described in Section 8.1.1,
which are based on fraud as described herein, shall not be
subject to the limitation set forth in Section 8.1.3.
Subject to Section 8.1.3, anything contained in this
Agreement to the contrary notwithstanding, no recovery under
this Agreement shall be available to any party hereto for
its own consequential, incidental or indirect damages;
provided, however, that nothing herein shall prevent any
party hereto from being indemnified for all components of
awards against it in Third Party Claims, including
consequential, incidental or indirect damages components of
such claims.
8.4.4. Buyer, Companies and Shareholder acknowledge and agree that
the indemnification provision in this Section 8 shall be the
exclusive remedy of Buyer and Shareholder with respect to
Companies and their Subsidiaries, and the transactions
contemplated by this Agreement.
8.5. Tax Indemnity.
8.5.1. Shareholder shall indemnify the Buyer Group and hold the
Buyer Group harmless from (i) all liability of the Companies
and their Subsidiaries for Income Taxes for any taxable
period that ends on or before the date hereof (a
"PRE-CLOSING TAX PERIOD"), (ii) all liability of the
Companies and their Subsidiaries for Income Taxes for the
portion of a Straddle Period ending on the date hereof
(excluding any additional Tax liability of Shareholder
resulting from any transaction engaged in by a Company or
its Subsidiary not in the ordinary course of business
occurring on the date hereof after Buyer's purchase of the
Shares) and calculated pursuant to Section 8.5.3, (iii) all
liability for Income Taxes (including liability for Taxes
imposed pursuant to Treasury Regulation Section 1.1502-6 or
any comparable provision of foreign, state or local Tax
Laws) of Shareholder or any other Person (other than a
Company or a Subsidiary) that is or has ever been affiliated
with either a Company or any Subsidiary, (iv) all liability
of Shareholder, its Affiliates, or the Companies and their
Subsidiaries for Income Taxes arising on the sale of the
Shares, including all liability for Income Taxes resulting
from the Section 338(h)(10) Election (or any comparable
elections under state or local Tax Laws) contemplated by
Section 7.5.1 of this Agreement, (v) all liability of the
Companies and their Subsidiaries scheduled in Section 5.9.1
of the Disclosure Schedule for Taxes for the Pre-Closing Tax
Period and any portion of a Straddle Period (calculated
pursuant to Section 8.5.3) ending on the date hereof
(excluding any additional Tax liability of Shareholder
resulting from any transaction engaged in by such Company or
its Subsidiaries not in the ordinary course of business on
the date hereof after Buyer's purchase of the Shares), and
(vi) all liability for reasonable legal, accounting,
appraisal, consulting or similar fees and expenses for any
item attributable to any item in clause (i), (ii), (iii),
(iv) (except to the extent addressed by
52
Section 2.2.2) or (v) above (the sum of (i), (ii), (iii),
(iv) (except to the extent addressed by Section 2.2.2), (v)
and (vi) being referred to herein as "INDEMNIFIED
PRE-CLOSING TAXES"). For the avoidance of doubt, Indemnified
Pre-Closing Taxes shall not include any expenses incurred by
Buyer in making the allocation referred to in Section 2.2.2
or any fees paid to any third party in connection therewith.
8.5.2. Buyer shall, and after the date hereof shall cause the
Companies and their Subsidiaries to, indemnify Shareholder
and each of its Affiliates, officers, directors, employees,
stockholders, agents and representatives and hold them
harmless from all liability for Taxes resulting from any
Section 338(g) Elections contemplated by Section 7.5.1 of
this Agreement and all Taxes of the Companies and their
Subsidiaries (i) for any taxable period beginning after the
date hereof and (ii) for any portion of a Straddle Period
beginning after (but not including) the date hereof,
including any additional Tax liability of Shareholder
resulting from any transaction engaged in by a Company or
its Subsidiary not in the ordinary course of business
occurring on the date hereof after Buyer's purchase of the
Shares ("INDEMNIFIED POST-CLOSING TAXES"), but excluding any
Tax liability of Shareholder arising from the sale of the
Shares, or the Section 338(h)(10) Election.
8.5.3. In the case of any taxable period that includes (but does
not end on) the date hereof (a "STRADDLE PERIOD"):
8.5.3.1. real, personal and intangible property Taxes
("PROPERTY TAXES") of the Companies and their
Subsidiaries for the Straddle Period (other than
Taxes imposed in connection with the sale of the
Shares) shall be equal to the amount of such
Property Taxes for the entire Straddle Period
multiplied by a fraction, the numerator of which
is the number of days during the Straddle Period
that are prior to the date hereof and the
denominator of which is the number of days in the
Straddle Period; and
8.5.3.2. the Taxes of the Companies and their Subsidiaries
(other than Property Taxes) for the Straddle Tax
Period shall be computed as if such taxable
period ended as of the close of business on the
date hereof and, if the Companies and their
Subsidiaries own any equity interest in any
partnership or other "flow through" entity, as if
a taxable period of such partnership or other
"flow through" entity ended as of the close of
business on the date hereof.
8.5.4. Shareholder shall pay the amount of any Indemnified
Pre-Closing Taxes to Buyer, and Buyer shall pay the amount
of any Indemnified Post-Closing Taxes to Shareholder, five
(5) days prior to the date on which the Tax Return with
respect to the liability for such Taxes is required to be
filed or such Taxes are required to be paid; provided that
notice has been given
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pursuant to Section 8.5.5 at least thirty (30) days prior to
such required filing or payment date (for the avoidance of
doubt, failure to give such notice at least thirty days (30)
prior to such required filing or payment date shall not
constitute a waiver of the indemnification obligation). The
payments to be made pursuant to this paragraph shall be
appropriately adjusted to reflect any determination (within
the meaning of Section 1313(a) of the Code) with respect to
Taxes.
8.5.5. If a claim shall be made by any Governmental Authority,
that, if successful, might result in an indemnity payment to
Buyer, Shareholder, one of their respective Affiliates or
any of their respective officers, directors, employees,
stockholders, agents or representatives pursuant to Section
8, or a party otherwise wishes to otherwise assert a claim
against the other party for Indemnified Pre-Closing or
Indemnified Post-Closing Taxes, then the party seeking
indemnification for such claim shall give notice of such
claim (and any proposed counterclaim) within thirty (30)
days of becoming aware of such claim to the Indemnifying
Party in writing (a "TAX CLAIM"). Such notice shall include
supporting schedules and documentation reasonably sufficient
to establish such claim. Failure to provide such notice
shall result in a waiver of the indemnification obligation
with respect to such Tax Claim to the extent the
indemnifying party has been actually prejudiced as a result
of such failure. For the purposes of this Section 8.5.5, a
claim gives rise to the notice requirement when asserted in
writing by a Governmental Authority or one of its
representatives.
8.5.6. With respect to any Tax Claim relating to a taxable period
ending on or prior to the date hereof and for which
Shareholder is obligated to indemnify Buyer, Shareholder
shall control all proceedings and may make all decisions
taken in connection with such Tax Claim (including selection
of counsel) and, without limiting the foregoing, may in its
sole discretion pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with any
Governmental Authority with respect thereto; provided,
however, that Shareholder must first consult in good faith
with Buyer before taking any such action. Notwithstanding
the foregoing, with respect to any portion of such Tax Claim
that could have a Material Adverse Effect on Buyer, (i)
Shareholder shall not settle that portion of such Tax Claim
without the prior written consent of Buyer, which consent
shall not be unreasonably withheld, (ii) Buyer, and counsel
of its own choosing, at Buyer's expense, shall have the
right to participate fully in all aspects of the defense of
that portion of such Tax Claim, (iii) Shareholder shall
inform Buyer, reasonably promptly in advance, of the date,
time and place of all proceedings relating to that portion
of such Tax Claim, (iv) Buyer shall be entitled to have its
representatives attend and participate in any such
proceedings, and (v) Shareholder shall provide to Buyer all
information, correspondence and other documents relating to
that portion of such Tax Claim promptly upon receipt from,
or in advance of submission to (as the case may be), the
relevant Governmental Authority.
54
Buyer shall not settle any Tax Claim referred to in this
Section 8.5.6 without the prior written consent of Seller,
which consent shall not be unreasonably withheld.
8.5.7. Shareholder and Buyer shall jointly control and participate
in all proceedings taken in connection with any Tax Claim
relating to Taxes of a Company or Subsidiary for a Straddle
Period. Neither Shareholder nor Buyer shall settle any such
Tax Claim without the prior written consent of the other.
With respect to any Tax Claim relating to a taxable period
beginning after the date hereof, the Buyer shall control all
proceedings and may make all decisions taken in connection
with such Tax Claim (including selection of counsel) and,
without limiting the foregoing, may in its sole discretion
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any Governmental
Authority with respect thereto. Notwithstanding the
foregoing, with respect to any portion of such Tax Claim
that could have a Material Adverse Effect on Shareholder,
including as a result of an indemnification claim hereunder,
(i) Buyer shall not settle that portion of such Tax Claim
without the prior written consent of Shareholder, which
consent shall not be unreasonably withheld, (ii)
Shareholder, and counsel of its own choosing, at
Shareholder's expense, shall have the right to participate
fully in all aspects of the defense of that portion of such
Tax Claim, (iii) Buyer shall inform Shareholder, reasonably
promptly in advance, of the date, time and place of all
proceedings relating to that portion of such Tax Claim, (iv)
Shareholder shall be entitled to have its representatives
attend and participate in any such proceedings, and (v) the
Buyer shall provide to Shareholder all information,
correspondence and other documents relating to that portion
of such Tax Claim promptly upon receipt from, or in advance
of submission to (as the case may be), the relevant
Governmental Authority.
8.5.8. Buyer, the Companies and each of their respective Affiliates
on the one hand, and Shareholder and its Affiliates on the
other hand, shall reasonably cooperate in contesting any Tax
Claim, which cooperation shall include the retention and,
upon request, the provision to the requesting person of
records and information which are reasonably relevant to
such Tax Claim, and making employees available on a mutually
convenient basis to provide additional information or
explanation of any material provided hereunder or to testify
at proceedings relating to such Tax Claim.
8.5.9. Neither Shareholder nor Buyer shall be obligated to
indemnify under this Section 8.5 to the extent that
Shareholder or Buyer, as applicable, has made an
indemnification payment to Buyer or Shareholder, as
applicable, for the same Taxes pursuant to Section 8.1.
Notwithstanding anything to the contrary in this Section
8.5, Shareholder shall not be obligated to make any
indemnity payments under this Section 8.5 for any payroll
withholding Taxes of the Companies.
55
8.5.10. All indemnification payments under this Section 8.5 shall be
adjusted as provided in Sections 8.4.1 and 8.4.2.
8.5.11. Unless expressly modified by this Section 8.5 or otherwise
expressly rendered inapplicable to Tax Claims, all other
provisions of Section 8 shall apply to Tax Claims.
9. GENERAL PROVISIONS
9.1. Assignment.
No party to this Agreement will convey, assign or otherwise transfer
any of its rights or obligations under the Agreement without the
prior written consent of Shareholder (in the case of an assignment
by Buyer or Parent) or of Buyer (in the case of an assignment by
Shareholder), except that Buyer may (without obtaining any consent)
assign any of its rights, interests or obligations under this
Agreement, in whole or in part, to any direct or indirect Affiliate
of Buyer or Parent or to any successor to all or any portion of its
business. Any conveyance, assignment or transfer requiring prior
written consent that is made without such consent will be void ab
initio. No assignment of this Agreement will relieve the assigning
party of its obligations hereunder.
9.2. Parties in Interest.
This Agreement is binding upon and is for the benefit of the parties
hereto and their respective successors and permitted assigns. This
Agreement is not made for the benefit of any Person not a party
hereto, and no Person other than the parties hereto or their
respective successors and permitted assigns will acquire or have any
benefit, right, remedy or claim under or by reason of this
Agreement, except that members of the Buyer Group and Shareholder
Group will be entitled to the rights to indemnification provided to
the Buyer Group and Shareholder Group, respectively, hereunder.
9.3. Amendment.
This Agreement may not be amended, modified or supplemented except
by a written agreement executed by Buyer, Parent and Shareholder.
9.4. Waiver; Remedies.
No failure or delay on the part of Buyer, Parent or Shareholder in
exercising any right, power or privilege under the Agreement will
operate as a waiver thereof, nor will any waiver on the part of
Buyer, Parent or Shareholder of any right, power or privilege under
the Agreement operate as a waiver of any other right, power or
privilege under this Agreement, nor will any single or partial
exercise of any right, power or privilege thereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege under this Agreement. The rights and
remedies herein provided are cumulative and are not exclusive of any
rights or remedies that the parties may otherwise have at law or in
equity.
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9.5. Fees and Expenses.
Each of Shareholder and Buyer will pay, without right of
reimbursement from the other, all of their respective costs and
expenses incident to the performance of their respective obligations
hereunder, including the fees and disbursements of counsel,
accountants, experts and consultants employed by the respective
parties in connection with the Transaction.
9.6. Notices.
All notices, requests, claims, demands and other communications
required or permitted to be given under this Agreement shall be in
writing and will be delivered by hand or telecopied or sent, postage
prepaid, by registered, certified or express mail or reputable
overnight courier service and will be deemed given when so delivered
by hand or telecopied, or three business days after being so mailed
(one business day in the case of overnight courier service). All
such notices, requests, claims, demands and other communications
will be addressed as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive
such notice in accordance with this Section 9.6:
9.6.1. If to Buyer:
Amdocs Inc.
Timberlake Corporate Center
0000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. X'Xxxxx
Fax: 000-000-0000
with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Cami, Esq.
Fax: 000-000-0000
9.6.2. If to Parent:
Amdocs Limited
Suite 5, Tower Hill House Bordage, POB 000,
Xx. Xxxxx Xxxx Xxxxxxxx, Xxxxxxx Xxxxxxx XX0 0XX,
Fax: +44 (1481) 723-279
with a copy to:
Amdocs Limited
Timberlake Corporate Center
0000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. X'Xxxxx
Fax: 000-000-0000
57
with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Cami, Esq.
Fax: 000-000-0000
9.6.3. If to Shareholder:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
9.7. Captions; Currency.
The article and section captions herein and the table of contents
hereto are for convenience of reference only, do not constitute part
of this Agreement and will not be deemed to limit or otherwise
affect any of the provisions hereof. Unless otherwise specified, all
references herein to numbered articles and sections are to articles
and sections of this Agreement and all references herein to exhibits
or schedules are to exhibits or schedules to this Agreement. Unless
otherwise specified, all references contained in any Transaction
Document, in any exhibit or schedule referred to therein or in any
instrument or document delivered pursuant thereto to dollars or "$"
shall mean United States dollars.
9.8. Entire Document.
This Agreement and the other Transaction Documents collectively
constitute the entire agreement between the parties with respect to
the subject matter hereof and this Agreement and the other
Transaction Documents supersede all prior negotiations, agreements
and understandings of the parties of any nature, whether oral or
written, relating thereto.
58
9.9. Severability.
If any provision of any Transaction Document or the application
thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions thereof, or the application of such provision
to Persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated thereby.
9.10. Governing Law.
This Agreement will be governed by and construed in accordance with
the internal laws of the State of Delaware applicable to contracts
made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
9.11. Jurisdiction, Service of Process.
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the United States District Court for the District of
Delaware, or if such court does not have jurisdiction, the Court of
Chancery of the State of Delaware, for the purposes of any suit,
action or other proceeding arising out of this Agreement. Each of
the parties hereto further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's
respective address set forth in Section 9.6 shall be effective
service of process for any action, suit or proceeding in Delaware
with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding
sentence. Each of the parties hereto irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions
contemplated hereby in (a) the United States District Court for the
District of Delaware or (b) the Court of Chancery of the State of
Delaware, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. Notwithstanding the foregoing,
this Section 9.11 shall not apply to any dispute under Section 2.2
or Section 2.4 that is required to be decided by the Dispute
Accountants.
9.12. Schedules and Exhibits; Disclosure.
All schedules and exhibits attached hereto are hereby incorporated
in and made a part of this Agreement as if set forth in full herein.
Capitalized terms used in any other Transaction Document or in the
schedules or exhibits hereto or thereto but not otherwise defined
therein will have the respective meanings assigned to such terms in
this Agreement.
9.13. Counterparts.
This Agreement may be executed in separate counterparts, each such
counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement.
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9.14. Specific Performance.
In the event of any actual or threatened default in, or breach of,
any of the terms, conditions and provisions of any Transaction
Document, the party or parties who are or are to be thereby
aggrieved will have the right of specific performance and injunctive
relief giving effect to its or their rights under such Transaction
Document, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies will be
cumulative. The parties agree that any such breach or threatened
breach would cause irreparable injury, that the remedies at law for
any such breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any
action for specific performance that a remedy at law would be
adequate is waived.
9.15. Construction; Interpretation.
The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
9.16. Withholding Obligations.
The payment of the Purchase Price pursuant to Section 2 will be in
compliance with all applicable Tax withholding obligations, and,
without derogating from the generality of the foregoing, subject to
the provisions of this Agreement, Buyer will be entitled to either
seek exemption from any Tax withholding obligations or withhold Tax
as required under applicable law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
AMDOCS LIMITED,
By: /s/ Xxxxxx X. X'Xxxxx
___________________________________
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer and Secretary
AMDOCS INC.,
By: /s/ Xxxxxx X. X'Xxxxx
___________________________________
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
DST SYSTEMS, INC.,
By: /s/ Xxxxxxx X. Xxxxx
___________________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Chief Financial Officer
[ Signature Page to Share Sale and Purchase Agreement ]
